however, limited.
The legal protection granted to such right to
fRight to Self-Organization
The right to self-organization includes the right to:
1. Form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. (Art.
253 Labor Code)
Art. 253 [243]. Coverage and employees’ right to self-
organization. All persons employed in commercial,
industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions, whether
operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations
of their own choosing for purposes of collective
bargaining.
2. Not to join any union.
Victoriano vs. Elizalde Rope Workers’ Union
Freedom of association
Both the Constitution and Republic Act No. 875 (Repealed by
P.D 442 or the Labor Code) recognize freedom of association.
Section 1 (6) of Article III of the Constitution of 1935, as well as
Section 7 of Article IV of the Constitution of 1973, provide that
the right to form associations or societies for purposes not
contrary to law shall not be abridged.
Right to self-organization
Section 3 of Republic Act No. 875 provides that employees
shall have the right to self-organization and to form, join of
assist labor organizations of their own choosing for the purpose
of collective bargaining and to engage in concerted activities
for the purpose of collective bargaining and other mutual aid or
protection.
What the Constitution and the 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
without being prevented by law; and 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, he himself makes up his mind as to
which association he would 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.
It is clear, therefore, that the right to join a union includes
the right to abstain from joining any union. Inasmuch as
what both the Constitution and the Industrial Peace Act have
recognized, and 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.
Close shop agreement
The right to refrain from joining labor organizations
recognized by Section 3 of the Industrial Peace Act is,
Erika Cristel Diaz | LABOR RELATIONS
refrain from joining is withdrawn by operation of law, where a
labor union and an employer have agreed on a closed
shop, by virtue of which the employer may employ only
member of the collective bargaining union, and the employees
must continue to be members of the union for the duration of
the contract in order to keep their jobs.
Thus Section 4 (a) (4) of the Industrial Peace Act, before its
amendment by Republic Act No. 3350, provides that although it
would be an unfair labor practice for an employer to
discriminate in regard to hire or tenure of employment or any
term or condition of employment to encourage or discourage
membership in any labor organization the employer is,
however, not precluded from making an agreement with a
labor organization to require as a condition of employment
membership therein, if such labor organization is the
representative of the employees".
By virtue, therefore, of a closed shop agreement, before the
enactment of Republic Act No. 3350, if any person, regardless
of his religious beliefs, wishes to be employed or to keep his
employment, he must become a member of the collective
bargaining union. Hence, the right of said employee not to
join the labor union is curtailed and withdrawn.
To that all-embracing coverage of the closed shop
arrangement, Republic Act No. 3350 introduced an exception,
when it added to Section 4 (a) (4) of the Industrial Peace Act
the following proviso: "but such agreement shall not cover
members of any religious sects which prohibit affiliation of their
members in any such labor organization".
Exception to the closed shop agreement
Republic Act No. 3350 merely excludes ipso jure from the
application and coverage of the closed shop agreement
the employees belonging to any religious sects which
prohibit affiliation of their members with any labor
organization. What the exception provides, therefore, is that
members of said religious sects cannot be compelled or
coerced to join labor unions even when said unions have
closed shop agreements with the employers; that in spite of
any closed shop agreement, members of said religious sects
cannot be refused employment or dismissed from their jobs on
the sole ground that they are not members of the collective
bargaining union.
It is clear, therefore, that the assailed Act, far from infringing
the constitutional provision on freedom of association, upholds
and reinforces it. It does not prohibit the members of said
religious sects from affiliating with labor unions. It still
leaves to said members the liberty and the power to
affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said
religious sects prefer to sign up with the labor union, they can
do so.
If in deference and fealty to their religious faith, they refuse to
sign up, they can do so; the law does not coerce them to join;
neither does the law prohibit them from joining; and neither
may the employer or labor union compel them to join. Republic
Act No. 3350, therefore, does not violate the constitutional
provision on freedom of association.
Abo, et. al vs. PHILAME (KG) Employees Union
It should be noted in this connection that Section 3 of our
Industrial Peace Act was taken from Section 7 of the Wagner
 Act. This Wagner Act provision was amended in 1947 by the
Taft-Hartley Act, so that, as it now stands, Section 7 reads:
Employees shall have the right to self-organization, to form,
join, or assist labor organizations to bargain collectively
through representatives of their own choosing, and to engage
in concerted activities for the purpose of collective bargaining
or other mutual aid or protection, and shall also have the
right to refrain from any or all of such activities except to
the extent that such right may be affected by an
agreement requiring membership in a labor organization
as a condition of employment as authorized in section
8(a).
The italicized portions represent the amendment. According to
Teller, the amendment as to refraining from joining activities is
nothing more than a statement of what the National Labor
Relations Board should have held under the original law.
According to Rothenberg, although the latter right of
abstention from union affiliation was not contained in the
original Act and was newly introduced in the legislative form by
the amended Act, this right was freely recognized by the
courts prior to the enactment of the amended Act. It has
long been held that in making their choice, whatever it be,
whether to join an existing affiliated or unaffiliated union, or to
form a new union, or in choosing to abstain from joining or
aiding any union, the employees are entitled to the full
protection of the Act.
3. Vote by 2/3 majority of the general membership to
cancel the registration of its union in a meeting duly
called for the purpose. (Art. 248 Labor Code)
Art. 248. [239-A]. Voluntary Cancellation of Registration.
The registration of a legitimate labor organization may be
cancelled by the organization itself: Provided, That at least
2/3 of its general membership votes, in a meeting duly
called for that purpose to dissolve the organization:
Provided, further, That an application to cancel registration
is thereafter submitted by the board of the organization,
attested to by the president thereof.
- The cancellation of registration is with or without just
cause by 2/3 general membership votes.
4. File a petition for cancellation of union registration
and or/de-certification of the union on the grounds
provided by law. (Art. 247 Labor Code)
Art. 247. [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.
Air Phils Corporation vs. BLR
The inclusion in a union of disqualified employees is not
among the grounds for cancellation, unless such inclusion
Erika Cristel Diaz | LABOR RELATIONS
is due to misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) and (c) of Article
23915 of the Labor Code.
Clearly then, for the purpose of de-certifying a union, it is not
enough to establish that the rank-and-file union includes
ineligible employees in its membership. Pursuant to Article
239(a) and (c) of the Labor Code, 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, 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.
In its Petition for De-certification and Cancellation of Union
Registration, APC did not impute on APFLAA such
misrepresentation of the character necessitated under Article
239 (a) and (c) of the Labor Code. APC merely argued that
APFLAA was not qualified to become a legitimate labor
organization by reason of its mixed composition of rank-
and-file and supervisory employees; and that APFLAA
committed misrepresentation by making it appear that its
composition was composed purely of rank-and-file employees.
Such misrepresentation (if it can be called as such) as alleged
by APC, is not conformable to Article 239 (a) and (c) of the
Labor Code. Indeed, it appears from the record that APC
instead devoted the bulk of its arguments in establishing that
supervisory employees comprised part of the membership of
APFLAA, a ground which is not sufficient to cause the
cancellation of union registration.
And this is of course all under the assumption that Lead Cabin
Attendants are indeed supervisory employees, a claim
consistently denied by APFLAA and which was not confirmed
by either the DOLE-NCR or the BLR.
There may be remedies available to enforce the proscription
set forth in Article 245 of the Labor Code on supervisory
employees joining the union of rank-and-file employees. But
consistent with jurisprudence, the rule under Article 245
barring supervisory employees from joining the union of
rank-and-file employees is not a ground for cancellation of
union registration. Accordingly, we see no error on the part of
the DOLE-NCR and the BLR in having dismissed APC’s
petition, and thus no cause to compel the Court of Appeals to
disregard APC’s procedural errors and accept the petition for
certiorari.
Employees in the Private Sector
1. Managerial employees;
2. Supervisory employees;
3. Confidential employees; and
4. Rank-and-File employees.
Managerial employees
Art. 255. [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 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 supervisors' union operating
within the same establishment may join the same federation
or national union.
Managerial employees in labor standards law
Art. 82. Coverage. – The provisions of this Title shall apply
to employees in all establishments and undertakings
whether for profit or not, but not to government employees,
managerial employees, field personnel, members of the
family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service
of another, and workers who are paid by results as
determined by the Secretary of Labor in appropriate
regulations.
As used herein, "managerial employees” refer to those
whose primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other officers or
members of the managerial staff. xxx
Managerial employee in labor relations vis-a-vis in
labor standards
- In labor standards laws, supervisors are included in the
category of managerial employee. They are not entitled to
overtime pay. They are not entitled to the different benefits
that are proper to a rank-and-file employee.
- In labor relations, a managerial employee is much
narrower. A managerial employee cannot exercise right to
self-organization.
- Whereas supervisory employees in labor relations may
exercise a limited right to self-organization.
- They can form their own union and belong to that limited
bargaining unit composed only of supervisors. They
cannot join the union of rank and file employees.
United Pepsi Cola Supervisory Union vs. Laguesma
Historical development of the Labor Relations
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
after the NLRA and LMRA of the United States. Most of the
basic principles of the NLRA have been carried over to the
Industrial Peace Act and the Labor Code. This is significant
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.
The Industrial Peace Act did not carry any provision
prohibiting managerial employees from joining labor
organizations. Section 3 of said law merely provided:
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.
Erika Cristel Diaz | LABOR RELATIONS
Significantly, the Industrial Peace Act did not define a
manager or managerial employee. It defined a
"supervisor" but not a "manager." Thus:
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.
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.
Article 246 of the Labor Code expressly 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 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.
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:
Art. 246. 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.
Right of association reiterated in the Labor Code
The right of association flows from freedom of expression. Like
the right of expression, the 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.
Exceptions to the right to self-organization
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:
1. Article 244 of the Labor Code mandates that all
employees in the civil service, i.e, those not 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.
2. 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 with himself or his co-owners.
3. Employees in foreign embassies or consulates or in
foreign international organizations granted international
immunities are also excluded from the right to form labor
organizations.
International organizations are organized mainly as a
means 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.
4. 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 we held:
Erika Cristel Diaz | LABOR RELATIONS
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.
The disqualification of managerial employees 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
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.
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.
Article 245 of the Labor Code is constitutional
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. 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
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.
PAFLU vs. Secretary
Freedom of assembly and association may be exercised
without registration
The theory to the effect that Section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association
guaranteed in the Bill of Rights is devoid of factual basis. The
registration prescribed in paragraph (b) of said section 1 is not
a limitation to the right of assembly or association, which may
be exercised with or without said registration.
The latter is merely a condition sine qua non for the acquisition
of legal personality by labor organizations, associations or
unions and the possession of the rights and privileges granted
by law to legitimate labor organizations. The Constitution does
not guarantee these rights and privileges, much less said
personality, which are mere statutory creations, for the
possession and exercise of which registration is required to
protect both labor and the public against abuses, fraud, or
impostors who pose as organizers, although not truly
accredited agents of the union they purport to represent.
Such requirement is a valid exercise of the police power,
because the activities in which labor organizations,
associations and union of workers are engaged affect public
interest, which should be protected.
Furthermore, the obligation to submit financial statements, as a
condition for the non-cancellation of a certificate of registration,
is a reasonable regulation for the benefit of the members of the
organization, considering that the same generally solicits funds
or membership, as well as oftentimes collects, on behalf of its
Erika Cristel Diaz | LABOR RELATIONS
members, huge amounts of money due to them or to the
organization.
For the same reasons, said Section 23 does not impinge upon
the right of organization guaranteed in the Declaration of
Human Rights, or run counter to Articles 2, 4, 7 and Section 2
of Article 8 of the ILO-Convention No. 87, which provide that
workers and employers, shall have the right to establish
and ..join organizations of their own choosing, without previous
authorization; that workers and employers organizations shall
not be liable to be dissolved or suspended by administrative
authority"; that "the acquisition of legal personality by workers'
and employers' organizations shall not be made subject to
conditions of such a character as to restrict the application of
the provisions" above mentioned; and that "the guarantees
provided for in" said Convention shall not be impaired by the
law of the land.
There is no incompatibility between Republic Act No. 875 and
the Universal Declaration of Human Rights. Upon the other
hand, the cancellation of the SSSEA's registration
certificate would not entail a dissolution of said
association or its suspension. The existence of the SSSEA
would not be affected by said cancellation, although its juridical
personality and its statutory rights and privileges — as
distinguished from those conferred by the Constitution —
would be suspended thereby.
Franklin Baker vs. Trajano
Test of supervisory or managerial status
The test of supervisory or managerial status depends on
whether a person possesses authority to act in the interest
of his employer in the matter specified in Article 212(k) of the
Labor Code and Section 1(m) of its Implementing Rules and
whether such authority is not merely routinary or clerical in
nature but requires the use of independent judgment.
Thus, where such recommendatory powers as in the case at
bar, are subject to evaluation, review and final action by the
department heads and other higher executives of the company,
the same, although present, are not effective and not an
exercise of independent judgment as required by law.
It will be noted, however, that in the performance of their duties
and functions and in the exercise of their recommendatory
powers, subject employees may only recommend, as the
ultimate power to hire, fire or suspend as the case may be,
rests upon the plant personnel manager.
Furthermore, in line with the ruling of this Court, subject
employees are not managerial employees because as borne
by the records, they do not participate in policy making but
are given ready policies to execute and standard practices
to observe, thus having little freedom of action.
Petitioner's contention that the Director of the Bureau of Labor
Relations acted with abuse of discretion amounting to lack of
jurisdiction in holding that the 76 employees are not managerial
employees and must be included in the certification election
has no basis in fact and in law.
Neither is its contention that the use of the word's "and/or"
categorically shows that performance of the functions
enumerated in the law qualifies an employee as a managerial
employee.
 Even if We regard the employees concerned as "managerial
employees," they can still join the union of the rank and file
employees. They cannot however form their own exclusive
union as "managerial employees".
Managerial employee
A managerial employee is defined as 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.
Confidential employees
Republic Planters Bank Supervisors Chapter vs.
Secretary
Art. 212, par.(m), of the Labor Code is explicit. A managerial
employee is (a) one who is vested with powers or prerogatives
to lay down and execute management policies, or to hire,
transfer, suspend, lay off, recall, discharge, assign or discipline
employees; or (b) one who is vested with both powers or
prerogatives.
A supervisory employee is different from a managerial
employee in the sense that the supervisory employee, in the
interest of the employer, effectively recommends such
managerial actions, if the exercise of such managerial authority
is not routinary in nature but requires the use of independent
judgment.
Branch Managers, Cashiers and Controllers of respondent
Bank are not managerial employees but supervisory
employees. The finding of public respondent that bank policies
are laid down and/or executed through the collective action of
these employees is simply erroneous. His discussion on the
division of their duties and responsibilities does not logically
lead to the conclusion that they are managerial employees, as
the term is defined in Art. 212, par.(m).
Among the general duties and responsibilities of a Branch
Manager is to discharge his duties and authority with a high
sense of responsibility and integrity and shall at all times be
guided by prudence like a good father of the family, and sound
judgment in accordance with and within the limitations of the
policy/policies promulgated by the Board of Directors and
implemented by the Management until suspended,
superseded, revoked or modified.
Similarly, the job summary of a Controller states: "Supervises
the Accounting Unit of the branch; sees to the compliance by
the Branch with established procedures, policies, rules and
regulations of the Bank and external supervising authorities;
sees to the strict implementation of control procedures.
The job description of a Cashier does not mention any
authority on his part to lay down policies, either. On the basis
of the foregoing evidence, it is clear that subject employees do
not participate in policy-making but are given approved
and established policies to execute and standard practices
to observe, leaving little or no discretion at all whether to
implement said policies or not. It is the nature of the
employee's functions, and not the nomenclature or title given to
his job, which determines whether he has rank-and-file,
supervisory or managerial status.
Erika Cristel Diaz | LABOR RELATIONS
Neither do the Branch Managers, Cashiers and Controllers
have the power to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees. The Senior
Manager of the Human Resource Management Department of
respondent Bank stated that the power to hire, fire, suspend,
transfer, assign or otherwise impose discipline among
subordinates within their respective jurisdictions is lodged with
the heads of the various departments, the branch managers
and officers-in-charge, the branch cashiers and the branch
controllers.
Inherent as it is in the aforementioned positions, the authority
to hire, fire, suspend, transfer, assign or otherwise discipline
employees within their respective domains was deemed
unnecessary to be incorporated in their individual job
descriptions. Clearly, those officials or employees possess only
recommendatory powers subject to evaluation, review and final
action by higher officials.
We analyzed the evidence submitted by respondent Bank in
support of its claim that Department Managers are managerial
employees and concluded that they are not. Like Branch
Managers, Cashiers and Controllers, Department Managers
do not possess the power to lay down policies nor to hire,
transfer, suspend, lay off, recall, discharge, assign or
discipline employees.
They occupy supervisory positions, charged with the duty
among others to recommend proposals to improve and
streamline operations. With respect to Assistant Managers,
there is absolutely no evidence submitted to substantiate public
respondent's finding that they are managerial employees;
understandably so, because this position is not included in the
appeal of respondent Bank.
Confidential employees are disqualified to join any labor
organization by doctrine of necessary implication
As regards the other claim of respondent Bank that Branch
Managers/OICs, Cashiers and Controllers are confidential
employees, having control, custody and/or access to
confidential matters, e.g., the branch's cash position,
statements of financial condition, vault combination, cash
codes for telegraphic transfers, demand drafts and other
negotiable instruments, pursuant to Sec. 116 of the Central
Bank Manual regarding joint custody, this claim is not even
disputed by petitioner.
A confidential employee is one entrusted with confidence on
delicate matters, or with the custody, handling, or care and
protection of the employer's property. While Art. 245 of the
Labor Code singles out managerial employees as ineligible to
join, assist or form any labor organization, under the doctrine of
necessary implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in a
statute is as much a part thereof as that which is expressed.
In applying the doctrine of necessary implication, we took into
consideration the rationale behind the disqualification of
managerial employees. 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."
Stated differently, 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 Art. 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.
Confidential employees such as accounting personnel, radio
and telegraph operators who, having access to confidential
information, may become the source of undue advantage. Said
employees may act as spy or spies of either party to a
collective bargaining agreement.
In fine, only the Branch Managers/OICs, Cashiers and
Controllers of respondent Bank, being confidential
employees, are disqualified from joining or assisting
petitioner Union, or joining, assisting or forming any other
labor organization. But this ruling should be understood to
apply only to the present case based on the evidence of the
parties, as well as to those similarly situated. It should not be
understood in any way to apply to banks in general.
Tunay na Pagkakaisa ng Mangggawa sa Asia Brewery
vs. Asia Brewery Inc.
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 company-denominated 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.16
In Philips Industrial Development, Inc. v. NLRC, this Court held
that petitioner’s "division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems" are
confidential employees not included within the rank-and-file
bargaining unit.
Erika Cristel Diaz | LABOR RELATIONS
Earlier, in Pier Arrastre & Stevedoring Services, Inc. v. Roldan-
Confesor, we declared that legal secretaries who are tasked
with, among others, the typing of legal documents, memoranda
and correspondence, the keeping of records and files, the
giving of and receiving notices, and such other duties as
required by the legal personnel of the corporation, fall under
the category of confidential employees and hence excluded
from the bargaining unit composed of rank-and-file employees.
Also considered having access to "vital labor information" are
the executive secretaries of the General Manager and the
executive secretaries of the Quality Assurance Manager,
Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager,
Marketing Director, Engineering Manager, Materials Manager
and Production Manager.
As can be gleaned from the above listing, it is rather curious
that there would be several secretaries/clerks for just one (1)
department/division performing tasks which are mostly routine
and clerical. Respondent insisted they fall under the
"Confidential and Executive Secretaries" expressly excluded by
the CBA from the rank-and-file bargaining unit.
Secretaries and clerks
However, perusal of the job descriptions of these
secretaries/clerks reveals that their assigned duties and
responsibilities involve routine activities of recording and
monitoring, and other paper works for their respective
departments while secretarial tasks such as receiving
telephone calls and filing of office correspondence appear to
have been commonly imposed as additional duties.
Respondent failed to indicate who among these numerous
secretaries/clerks have access to confidential data relating
to management policies that could give rise to potential
conflict of interest with their Union membership. Clearly,
the rationale under our previous rulings for the exclusion of
executive secretaries or division secretaries would have little or
no significance considering the lack of or very limited access to
confidential information of these secretaries/clerks.
It is not even farfetched that the job category may exist only on
paper since they are all daily-paid workers. Quite
understandably, petitioner had earlier expressed the view that
the positions were just being "reclassified" as these employees
actually discharged routine functions. We thus hold that the
secretaries/clerks, numbering about 40 are rank-and-file
employees and not confidential employees.
Quality control staff
With respect to the Sampling Inspectors/Inspectresses and
the Gauge Machine Technician, there seems no dispute that
they form part of the Quality Control Staff who, under the
express terms of the CBA, fall under a distinct category. But we
disagree with respondent’s contention that the 20 checkers are
similarly confidential employees being "quality control staff"
entrusted with the handling and custody of company properties
and sensitive information.
Again, the job descriptions of these checkers assigned in the
storeroom section of the Materials Department, finishing
section of the Packaging Department, and the decorating and
glass sections of the Production Department plainly showed
that they perform routine and mechanical tasks preparatory
to the delivery of the finished products.
While it may be argued that quality control extends to post-
production phase -- proper packaging of the finished products
 -- no evidence was presented by the respondent to prove that
these daily-paid checkers actually form part of the company’s
Quality Control Staff who as such were exposed to sensitive,
vital and confidential information about company’s products"
or "have knowledge of mixtures of the products, their defects,
and even their formulas" which are considered ‘trade secrets’.
Such allegations of respondent must be supported by
evidence.
Consequently, we hold that the 20 checkers may not be
considered confidential employees under the category of
Quality Control Staff who were expressly excluded from the
CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who:
(1) assist or act in a confidential capacity;
(2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations.
The 2 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.
Confidential employee rule
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.
There is no showing in this case that the secretaries/clerks and
checkers assisted or acted in a confidential capacity to
managerial employees and obtained confidential information
relating to labor relations policies. And even assuming that they
had exposure to internal business operations of the company,
respondent claimed, this is not per se ground for their
exclusion in the bargaining unit of the daily-paid rank-and-file
employees.
Not being confidential employees, the secretaries/clerks and
checkers are not disqualified from membership in the Union of
respondent’s rank-and-file employees.
Unfair labor practice
Petitioner argues that respondent’s act of unilaterally stopping
the deduction of union dues from these employees constitutes
unfair labor practice as it restrained the workers’ exercise of
their right to self-organization, as provided in Article 248(a) of
the Labor Code.
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. For a
charge of unfair labor practice to prosper, it must be shown that
ABI 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 from
ABI’s act in discontinuing the union dues deduction from those
employees it believed were excluded by the CBA.
Considering that the herein dispute arose from a simple
disagreement in the interpretation of the CBA provision on
excluded employees from the bargaining unit, respondent
cannot be said to have committed unfair labor practice that
restrained its employees in the exercise of their right to self-
Erika Cristel Diaz | LABOR RELATIONS
organization, nor have thereby demonstrated an anti-union
stance.
Supervisory employees
Toyota Motors vs. TMPCLU
Appropriate bargaining unit
According to Rothenberg, an appropriate bargaining unit is a
group of employees of a given employer, composed of all or
less than the entire body of employees, which the collective
interests of all the employees, consistent with equity to the
employer indicate to be best suited to serve reciprocal rights
and duties of the parties under the collective bargaining
provisions of law.
We defined the bargaining unit as the legal collectivity for
collective bargaining purposes whose members have
substantially mutual bargaining interests in terms and
conditions of employment as will assure to all employees their
collective bargaining rights. This in mind, the Labor Code has
made it a clear statutory policy to prevent supervisory
employees from joining labor organizations consisting of rank-
and-file employees as the concerns which involve members of
either group are normally disparate and contradictory.
Article 245 provides:
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.
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.
While there may be a genuine divergence of opinion as to
whether or not union members occupying Level 4 positions are
supervisory employees, it is fairly obvious, from a reading of
the Labor Code's definition of the term that those occupying
Level 5 positions are unquestionably supervisory employees.
Supervisory employees
Supervisory employees, as defined above, are those who, in
the interest of the employer, effectively recommend managerial
actions if the exercise of such authority is not merely routinary
or clerical in nature but require the use of independent
judgment.
Under the job description for level five employees, such
personnel — all engineers — having a number of personnel
under them, not only oversee production of new models but
 also determine manpower requirements, thereby influencing
important hiring decisions at the highest levels. This
determination is neither routine nor clerical but involves the
independent assessment of factors affecting production, which
in turn affect decisions to hire or transfer workers. The use of
independent judgment in making the decision to hire, fire or
transfer in the identification of manpower requirements would
be greatly impaired if the employee's loyalties are torn between
the interests of the union and the interests of management.
A supervisory employee occupying a level five position would
therefore find it difficult to objectively identify the exact
manpower requirements dictated by production demands.
This is precisely what the Labor Code, in requiring separate
unions among rank-and-file employees on one hand, and
supervisory employees on the other, seeks to avoid. The
rationale behind the Code's exclusion of supervisors from
unions of rank-and-file employees is that such employees,
while in the performance of supervisory functions, become the
alter ego of management in the making and the implementing
of key decisions at the sub-managerial level.
Certainly, it would be difficult to find unity or mutuality of
interests in a bargaining unit consisting of a mixture of rank-
and-file and supervisory employees. And this is so because the
fundamental test of a bargaining unit's acceptability is whether
or not such a unit will best advance to all employees within the
unit the proper exercise of their collective bargaining rights.
The Code itself has recognized this, in preventing supervisory
employees from joining unions of rank-and-file employees.
In the case at bar, as respondent union's membership list
contains the names of at least twenty-seven (27) supervisory
employees in Level Five positions. the union could not, prior to
purging itself of its supervisory employee members, attain the
status of a legitimate labor organization. Not being one, it
cannot possess the requisite personality to file a petition for
certification election.
The foregoing discussion, therefore, renders entirely irrelevant,
the technical issue raised as to whether or not respondent
union was in possession of the status of a legitimate labor
organization at the time of filing, when, as petitioner vigorously
claims, the former was still at the stage of processing of its
application for recognition as a legitimate labor organization.
The union's composition being in violation of the Labor
Code's Prohibition of unions composed of supervisory
and rank-and-file employees, it could not possess the
requisite personality to file for recognition as a legitimate
labor organization.
The holding of a certification election is based on clear
statutory policy which cannot be circumvented. Its rules, strictly
construed by this Court, are designed to eliminate fraud and
manipulation. The Court's conclusion should not be interpreted
as impairing any union's right to be certified as the employees'
bargaining agent in the petitioner's establishment. Workers of
an appropriate bargaining unit must be allowed to freely
express their choice in an election where everything is open to
sound judgment and the possibility for fraud and
misrepresentation is absent.
Dunlop Slazenger (Phils) vs. Secretary
We agree with the public respondent that supervisors can be
an appropriate bargaining unit. This is in accord with our
repeated ruling that an appropriate bargaining unit is a group of
Erika Cristel Diaz | LABOR RELATIONS
employees of a given employer, composed of all or less than
the entire body of employees, which the collective interests of
all the employees, consistent with equity to the employer,
indicate to be best suited to serve reciprocal rights and duties
of the parties under the collective bargaining provisions of law.
Otherwise stated, it is a legal collectivity for collective
bargaining purposes whose members have substantially
mutual bargaining interests in terms and conditions of
employment as will assure to all employees their collective
bargaining rights. A unit to be appropriate must effect a
grouping of employees who have substantial, mutual interests
in wages, hours, working conditions and other subjects of
collective bargaining.
Determining the status of supervisory and rank-and-file
employees is not a hard row to hoe in labor law. The test of
supervisory status as we have repeatedly ruled is whether an
employee possesses authority to act in the interest of his
employer, which authority should not be merely routinary or
clerical in nature but requires the use of independent judgment.
Corrollarily, what determines the nature of employment is
not the employee's title, but his job description.
In the instant case, the list of monthly paid employees
submitted by the petitioner company contains the names of
about 27 supervisory employees, 6 managerial employees, 1
confidential employee and 26 office and technical employees
holding various positions.
The list reveals that the positions occupied by the 26 office and
technical employees are in fact rank-and-file positions, i.e., A/C
mechanic, draftsmen, storemen, motorpool mechanic,
secretaries, accounts clerk, company nurses, industrial
mechanic, boiler men, laboratory technicians, payroll clerk;
welder, purchasing clerk, company drivers and electricians.
It is fairly obvious that these positions cannot be considered as
supervisory positions for they do not carry the authority to act
in the interest of the employer or to recommend managerial
actions. It is not decisive that these employees are monthly
paid employees. Their mode of compensation is usually a
matter of convenience and does not necessarily determine the
nature and character of their job.
We also do not agree with the ruling of the respondent
Secretary of Labor that the infirmity in the membership of
the respondent union can be remedied in "the pre-election
conference thru the exclusion-inclusion proceedings
wherein those employees who are occupying rank-and-file
positions will be excluded from the list of eligible voters.
Public respondent gravely misappreciates the basic antipathy
between the interest of supervisors and the interest of rank-
and-file employees. Due to the irreconcilability of their interests
we held in Toyota Motor Philippines v. Toyota Motors
Philippines Corporation Labor Union viz:
Clearly, based on this provision [Article 245, Labor Code], 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 appetition 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.
Needless to stress, the respondent union has no legal right to
file a certification election to represent a bargaining unit
composed of supervisors for so long as it counts rank-and-file
employees among its members.
The new provision of Art. 255 (245-A) (RA 9481)
overturned the ruling in Toyota Motors vs. TMPCLU:
Samahang Manggagawa sa Charter Chemical Solidarity
of Unions in the Philippines for Empowerment and
Reforms (SMCC-SUPER) vs. Charter Chemical and
Coating Corporation
The mixture of rank-and-file and supervisory employees in
petitioner union does not nullify its legal personality as a
legitimate labor organization.
The right to file a petition for certification election is accorded to
a labor organization provided that it complies with the
requirements of law for proper registration. The inclusion of
supervisory employees in a labor organization seeking to
represent the bargaining unit of rank-and-file employees does
not divest it of its status as a legitimate labor organization. We
apply these principles to this case.
The appellate court’s reliance on Toyota is misplaced in view of
this Court’s subsequent ruling in Republic v. Kawashima
Textile Mfg., Philippines, Inc. (hereinafter Kawashima). In
Kawashima, we explained at length how and why the
Toyota doctrine no longer holds sway under the altered
state of the law and rules applicable to this case, viz:
R.A. No. 6715 omitted specifying the exact effect any
violation of the prohibition on the co-mingling of
supervisory and rank-and-file employees would bring
about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715
(1989 Amended Omnibus Rules) which supplied the deficiency
by introducing the following amendment to Rule II (Registration
of Unions):
"Sec. 1. Who may join unions. - x x x Supervisory employees
and security guards shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own;
Provided, that those supervisory employees who are
included in an existing rank-and-file bargaining unit, upon
the effectivity of Republic Act No. 6715, shall remain in that
unit.
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
Erika Cristel Diaz | LABOR RELATIONS
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
Sec. 4. Forms and contents of petition. - The petition shall
be in writing and under oath and shall contain, among others,
the following: (c) The description of the bargaining unit.
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion
to uphold the validity of the 1997 Amended Omnibus Rules,
although the specific provision involved therein was only Sec.
1, Rule VI, to wit:
Section. 1. Chartering and creation of a local/chapter.- A
duly registered federation or national union may directly create
a local/chapter by submitting to the Regional Office or to the
Bureau two (2) copies of the following: a) a charter certificate
issued by the federation or national union indicating the
creation or establishment of the local/chapter; (b) the names of
the local/chapter's officers, their addresses, and the principal
office of the local/chapter; and (c) the local/ chapter's
constitution and by-laws; provided that where the
local/chapter's constitution and by-laws is the same as that of
the federation or national union, this fact shall be indicated
accordingly.
All the foregoing supporting requirements shall be certified
under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President which does not
require that, for its creation and registration, a local or chapter
submit a list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v.
Tagaytay Highlands Employees Union-PGTWO in which the
core issue was whether mingling affects the legitimacy of a
labor organization and its right to file a petition for certification
election.
This time, given the altered legal milieu, the Court abandoned
the view in Toyota and 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.
The applicable law and rules in the instant case are the same
as those in Kawashima because the present petition for
certification election was filed in 1999 when D.O. No. 9,
series of 1997, was still in effect. Hence, Kawashima applies
with equal force here. As a result, petitioner union was not
divested of its status as a legitimate labor organization
even if some of its members were supervisory employees;
it had the right to file the subject petition for certification
election.
Doctrine of Separation of Unions is overturned by Art. 254
of the Labor Code as amended
Article 254[245] as amended by R.A 9481
Article 245 of the Labor Code is hereby amended to
read as follows:
ART. [254]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 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 supervisors' union
operating within the same establishment may join the
same federation or national union.
Cases prior to amendment: Doctrine of Separation
of Unions
Atlas Lithographic vs. Laguesma
Under the Industrial Peace Act of 1953, employees were
classified into three groups, namely: (1) managerial
employees; (2) supervisors; and (3) rank-and file
employees. Supervisors, who were considered employees in
Erika Cristel Diaz | LABOR RELATIONS
relation to their employer could join a union but not a union of
rank-and-file employees.
With the enactment in 1974 of the Labor Code (Pres Decree
No. 442), employees were classified into managerial and
rank-and-file employees. Neither the category of supervisors
nor their right to organize under the old statute were
recognized. So that, in Bulletin Publishing Corporation v.
Sanchez, the Court interpreted the superseding labor law to
have removed from supervisors the right to unionize among
themselves. The Court ruled:
In the light of the factual background of this case, We are
constrained to hold that the supervisory employees of
petitioner firm may not, under the law, form a supervisors
union, separate and distinct from the existing bargaining unit
(BEU), composed of the rank-and-file employees of the Bulletin
Publishing Corporation. It is evident that most of the private
respondents are considered managerial employees.
Also, it is distinctly stated in Section 11, Rule II, of the Omnibus
Rules Implementing the Labor Code, that supervisory unions
are presently no longer recognized nor allowed to exist and
operate as such.
In Section 11, Rule II, Book V of the Omnibus Rules
implementing Pres. Decree No. 442, the supervisory unions
existing since the effectivity of the New Code in January 1,
1975 ceased to operate as such and the members who did not
qualify as managerial employees under this definition in Article
212 (k) therein became eligible to form, to join or assist a rank-
and-file union.
A revision of the Labor Code undertaken by the bicameral
Congress brought about the enactment of Rep. Act No. 6715
in March 1989 in which employees were reclassified into three
groups, namely: (1) the managerial employees; (2)
supervisors; and (3) the rank and file employees. Under the
present law, the category of supervisory employees is once
again recognized. Hence, Art. 212 (m) states:
(m) 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.
The rationale for the amendment is the government's
recognition of the right of supervisors to organize with the
qualification that they shall not join or assist in the
organization of rank-and-file employees. The reason behind
the Industrial Peace Act provision on the same subject matter
has been adopted in the present statute.
The interests of supervisors on the one hand, and the
rank-and-file employees on the other, are separate and
distinct. The functions of supervisors, being recommendatory
in nature, are more identified with the interests of the employer.
The performance of those functions may, thus, run counter to
the interests of the rank-and-file.
This intent of the law is made clear in the deliberations of the
legislators on then Senate Bill 530 now enacted as Rep. Act
No. 6715.
The definition of managerial employees was limited to those
having authority to hire and fire while those who only
recommend effectively the hiring or firing or transfers of
 personnel would be considered as closer to rank-and-file
employees.
The exclusion, therefore, of middle level executives from the
category of managers brought about a third classification, the
supervisory employees. These supervisory employees are
allowed to form their own union but they are not allowed
to join the rank-and-file union because of conflict of
interest.
In terms of classification, however, while they are more closely
identified with the rank-and-file they are still not allowed to join
the union of rank-and-file employees.
The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing
management policy or ask for the discipline or dismissal of
subordinates, they identify with the interests of the employer
and may act contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of
interest may arise in the areas of discipline, collective
bargaining and strikes. Members of the supervisory union
might refuse to carry out disciplinary measures against their
co-member rank-and-file employees.
In the area of bargaining, their interests cannot be considered
identical. The needs of one are different from those of the
other. Moreover, in the event of a strike, the national federation
might influence the supervisors' union to conduct a sympathy
strike on the sole basis of affiliation.
The contemplation of the law in Sec. 3 of the Industrial Peace
Act is to prohibit supervisors from joining a labor
organization of employees under their supervision.
Sec. 3 of the Industrial Peace Act provides:
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.
Meanwhile, Article 245 of the Labor Code as amended by
Rep. Act No. 6715 provides:
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.
The Court construes Article 245 to mean that, as in Section 3
of the Industrial Peace Act, supervisors shall not be given an
occasion to bargain together with the rank-and-file against the
interests of the employer regarding terms and conditions of
work.
Erika Cristel Diaz | LABOR RELATIONS
In the present case, the local union is actively represented by
the national federation. In fact, it was the national federation,
the KAMPIL-KATIPUNAN, which initially filed a petition for
certification in behalf of the respondent union.
Thus, if the intent of the law is to avoid a situation where
supervisors would merge with the rank and-file or where the
supervisors' labor organization would represent conflicting
interests, then a local supervisors' union should not be
allowed to affiliate with the national federation of union of
rank-and-file employees where that federation actively
participates in union activity in the company.
The prohibition against a supervisors' union joining a local
union of rank-and-file is replete with jurisprudence. The Court
emphasizes that the limitation is not confined to a case of
supervisors wanting to join a rank-and-file local union. The
prohibition extends to a supervisors' local union applying
for membership in a national federation the members of
which include local unions of rank-and-file employees. The
intent of the law is clear especially where, as in the case at bar,
the supervisors will be co-mingling with those employees
whom they directly supervise in their own bargaining unit.
Technicalities should not be allowed to stand in the way of
equitably and completely resolving the rights and obligations of
the parties. What should be paramount is the intent behind the
law, not its literal construction. Where one interpretation would
result in mischievous consequences while another would bring
about equity, justice, and the promotion of labor peace, there
can be no doubt as to what interpretation shall prevail.
Finally, the respondent contends that the law prohibits the
employer from interfering with the employees' right to self-
organization.
There is no question about this intendment of the law. There is,
however, in the present case, no violation of such a guarantee
to the employee. Supervisors are not prohibited from forming
their own union. What the law prohibits is their membership
in a labor organization of rank-and-file employees (Art. 245,
Labor Code) or their joining a national federation of rank-
and-file employees that includes the very local union which
they are not allowed to directly join.
The petitioner has knuckled under to the respondents'
pressures and agreed to let the national federation KAMPIL-
KATIPUNAN represent its supervisors in negotiating a
collective bargaining agreement. Against the advise of its own
counsel and on the basis of alleged "industrial peace", the
petitioner expressed a loss of interest in pursuing this action.
The petitioner is, of course, free to grant whatever concessions
it wishes to give to its employees unilaterally or through
negotiations but we cannot allow the resulting validation of an
erroneous ruling and policy of the Department of Labor and
Employment (DOLE) to remain on the basis of the petitioner's
loss of interest. The December 14, 1990 order and the
November 21, 1990 resolution of DOLE are contrary to law and
must be declared as such.
WHEREFORE, the petition is hereby GRANTED. The private
respondent is disqualified from affiliating with a national
federation of labor organizations which includes the
petitioner's rank-and-file employees.
De La Salle University vs. Laguesma
 Supervisory employees have the right to self-organization as
do other classes of employees save only managerial ones. The
Constitution states that 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.
Conformably with the constitutional mandate, Art. 245 of the
Labor Code now provides for the right of supervisory
employees to self-organization, subject to the limitation
that they cannot join an organization of rank-and-file
employees:
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.
The reason for the segregation of supervisory and rank-and-file
employees of a company with respect to the exercise of the
right to self-organization is the difference in their interests.
Supervisory employees are more closely identified with the
employer than with the rank-and-file employees. If supervisory
and rank-and-file employees in a company are allowed to form
a single union, the conflicting interests of these groups impair
their relationship and adversely affect discipline, collective
bargaining and strikes.
These consequences can obtain not only in cases where
supervisory and rank-and-file employees in the same company
belong to a single union but also where unions formed
independently by supervisory and rank-and-file employees of a
company are allowed to affiliate with the same national
federation.
Consequently, this Court has held in Atlas Lithographic
Services Inc. v. Laguesma that—
To avoid a situation where supervisors would merge with the
rank-and-file or where the supervisors' labor organization
would represent conflicting interests, then a local supervisors'
union should not be allowed to affiliate with a national
federation of unions of rank-and-file employees where that
federation actively participates in union activities in the
company.
As we explained in that case, however, such a situation
would obtain only where two conditions concur: First, the
rank-and-file employees are directly under the authority of
supervisory employees. Second, the national federation is
actively involved in union activities in the company.
The affiliation of two local unions in a company with the same
national federation is not by itself a negation of their
independence since in relation to the employer, the local
unions are considered as the principals, while the federation is
deemed to be merely their agent.
This conclusion is in accord with the policy that any limitation
on the exercise by employees of the right to self-organization
guaranteed in the Constitution must be construed strictly.
Workers should be allowed the practice of this freedom to the
extent recognized in the fundamental law.
The locals are separate and distinct units primarily designed to
secure and maintain an equality of bargaining power between
the employer and their employee members in the economic
struggle for the fruits of the joint productive effort of labor and
Erika Cristel Diaz | LABOR RELATIONS
capital; and the association of locals into the national union
was in furtherance of the same end.
These associations are consensual entities capable of entering
into such legal relations with their members. The essential
purpose was the affiliation of the local unions into a common
enterprise to increase by collective action the common
bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association,
free to serve their own and the common interest of all, and free
also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it to existence.
Although private respondent FFW-DLSUMCCMSUC and
another union composed of rank-and-file employees of
petitioner DLSUMCCM are indeed affiliated with the same
national federation, the FFW, petitioner DLSUMCCM has not
presented any evidence showing that the rank-and-file
employees composing the other union are directly under the
authority of the supervisory employees.
The fact that the two groups of workers are employed by the
same company and the fact that they are affiliated with a
common national federation are not sufficient to justify the
conclusion that their organizations are actually just one. Their
immediate professional relationship must be established.
We find without merit the contention of petitioner that if
affiliation will be allowed, only one union will in fact represent
both supervisors and rank-and-file employees of the petitioner;
that there would be an indirect affiliation of supervisors and
rank-and-file employees with one labor organization; that there
would be a merging of the two bargaining units; and that the
respondent union will lose its independence because it
becomes an alter ego of the federation.
Employees in the Public Sector/Government
employees
Executive Order no. 180
Sec. 1. This Executive Order applies to all employees of all
branches, subdivisions, instrumentalities, and agencies, of
the Government, including government-owned or controlled
corporations with original charters. For this purpose,
employees, covered by this Executive Order shall be
referred to as "government employees".
Sec. 2. All government employees can form, join or
assist employees' organizations of their own choosing
for the furtherance and protection of their interests. They
can also form, in conjunction with appropriate government
authorities, labor-management committees, works councils
and other forms of workers' participation schemes to
achieve the same objectives.
Sec. 3. High-level employees whose functions are
normally considered as policy-making or managerial or
whose duties are of a highly confidential nature shall not be
eligible to join the organization of rank-and-file government
employees.
Sec. 4. The Executive Order shall not apply to the
members of the Armed Forces of the Philippines,
including police officers, policemen, firemen and jail
guards.
 Employees in the public sector not eligible to join,
form or assist in a labor union:
1. High-level employees whose functions are normally
considered as:
- Policy-making;
- Managerial; or
- Highly confidential.
2. Members of the Armed Forces of the Philippines;
3. Police officers;
4. Policemen;
5. Firemen; and
6. Jail guards.
Registration of Employees' Organization
Sec. 7. Government employees' organizations shall register
with the Civil Service Commission and the Department
of Labor and Employment. The application shall be filed
with the Bureau of Labor Relations of the Department which
shall process the same in accordance with the provisions of
the Labor Code of the Philippines, as amended.
Applications may also be filed with the Regional Offices of
the Department of Labor and Employment which shall
immediately transmit the said applications to the Bureau of
Labor Relations within three (3) days from receipt thereof.
Sec. 8. Upon approval of the application, a registration
certificate be issued to the organization recognizing it as a
legitimate employees' organization with the right to
represent its members and undertake activities to further
and defend its interest.
The corresponding certificates of registration shall be
jointly approved by the Chairman of the Civil Service
Commission and Secretary of Labor and Employment.
Sole and Exclusive Employees' Representatives
Sec. 9. The appropriate organizational unit shall be the
employers unit consisting of rank-and-file employees
unless circumstances otherwise require.
Sec. 10. The duly registered employees' organization
having the support of the majority of the employees in the
appropriate organizational unit shall be designated as the
sole and exclusive representative of the employees.
Sec. 11. A duly registered employees' organization shall
be accorded voluntary recognition upon a showing that no
other employees' organization is registered or is
seeking registration, based on records of the Bureau of
Labor Relations, and that the said organizations has the
majority support of the rank-and-file employees in the
organizational unit.
Terms and Conditions of Employment in Government
Services
Sec. 13. Terms and conditions of employment or
improvements thereof, except those that are fixed by
law, may be the subject of negotiations between duly
recognized employees' organizations and appropriate
government authorities.
Peaceful Concerted Activities and Strikes
Sec. 14. The Civil Service laws and rules governing
concerted activities and strikes in the government service
Erika Cristel Diaz | LABOR RELATIONS
shall be observed, subject to any legislation that may be
enacted by Congress.
Public Sector Labor-Management Council
Sec. 15. A Public Sector Labor Management Council,
hereinafter referred to as the Council, is hereby constituted
to be composed of the following:
1. Chairman – Civil Service Commission Chairman;
2. Vice-chairman – Secretary of Labor;
Members
Secretaries of:
3. Department of Finance;
4. Department of Justice; and
5. Department of Budget and Management.
The Council shall implement and administer the provisions
of this Executive Order. For this purpose, the Council shall
promulgate the necessary rules and regulations to
implement this Executive Order.
Jurisdiction of Public Sector Labor Management
Council (PLMC) over violations of government
employees’ right to self-organization
Pamantasan ng Lungsod ng Maynila v. Civil Service
Commission
Petitioner stresses that the CSC and the PSLMC both exercise
quasi-judicial functions but not on identical issues and subject
matter; that the PSLMC possesses jurisdiction only over the
unfair labor practice aspect of private respondents' complaint
but that it is the CSC which alone can take cognizance over the
question of illegal dismissal; and that, therefore, when the CSC
has simply adopted the recommendations of the PSLMC in the
unfair labor practice case in resolving the issue of illegal
dismissal and ordering the reinstatement of private
respondents without conducting further proceedings of its own,
it has effectively denied petitioner of its right to due process.
PSLMC's jurisdiction over the unfair labor practice case
filed by private respondents against petitioner is not disputed.
The PSLMC has conducted its proceedings in accordance
with its legal mandate. The proceedings before Med-Arbiter
Valenzuela, who had been deputized to so act as the hearing
officer, conform with the Rules and Regulations to Govern
the Exercise of the Right of Government Employees to Self
Organization:
Sec. 3. The Council may call on any officer or agency for
assistance. It may deputize officers to hear and recommend
action on complaints or grievances filed with the council.
Sec. 4. The procedure in the Council shall be non-adversarial
in nature. The parties may be required to submit their
respective position papers, together with all evidences
available in support of their respective positions within 15 days
from receipt of notices.
Sec. 5. The decision of the Council shall be final.
The conclusion of the PSLMC regarding petitioner's
alleged commission of unfair labor practice against private
respondents can no longer be considered a proper issue either
before the CSC or in this instance since this particular matter
 has already been adjudged with finality in accordance with this
Court's resolution.
Petitioner insists that when CSC has ruled on the matter of
illegal dismissal without conducting any further hearing of
its own, relying, instead, on PSLMC's finding of unfair labor
practice on the part of petitioner, the latter has thereby been
denied due process.
Unfortunately for petitioner, however, the two supposed
independent issues, the unfair labor practice charge and the
complaint for illegal dismissal both filed by private respondents,
are, in fact, here unavoidably interlinked. The non-renewal of
an employment contract with a term, it is true, is ordinarily a
valid mode of removal at the end of each
period.
This rule, however, must yield to the superior constitutional
right of employees, permanent or temporary, to self-
organization. While, a temporary employment may be ended
with or without cause, it certainly may not, however, be
terminated for an illegal cause.
Bureau of Labor Relations (BLR) has jurisdiction
over all all inter-union and intra-union conflicts
Bautista vs. CA
The BLR has jurisdiction to call for and conduct the
election of officers of an employee’s association in the
public sector
The authority of the BLR in assuming jurisdiction over a
certification election, or any inter-union or intra-union conflicts,
is found in Article 226 of the Labor Code of the Philippines,
which reads:
Art. 226. BUREAU OF LABOR RELATIONS. – The Bureau
of Labor Relations and the Labor Relations Division 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
nonagricultural, 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 15 working days to act on labor cases
before it, subject to extension by agreement of the parties.
It is quite clear from this provision that BLR has the original and
exclusive jurisdiction on all inter-union and intra-union conflicts.
An intra-union conflict would refer to a conflict within or
inside a labor union, and an inter-union controversy or
dispute, one occurring or carried on between or among
unions.
The subject of the case at bar, which is the election of the
officers and members of the board of KMKK-MWSS, is, clearly,
an intra-union conflict, being within or inside a labor union. It is
well within the powers of the BLR to act upon.
The petitioner is asking us to make an illogical edict by
declaring that our ruling in the ACAE case, considering that it
involved an inter-union conflict, should not apply to the instant
Erika Cristel Diaz | LABOR RELATIONS
case for the reason that the latter involves an intra-union
conflict. This, we cannot do because the law is very clear on
this matter.
Executive Order No. 180 (1987), particularly Section 16
thereof, is completely lucid as to the settlement of disputes
involving government employees, viz:
SEC. 16. The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in the resolution of
complaints, grievances and cases involving government
employees.
Since Article 226 of the Labor Code has declared that the BLR
shall have original and exclusive authority to act on all inter-
union and intra-union conflicts, then there should be no more
doubt as to its jurisdiction.
Republic of the Philippines cannot be covered by
the general term “Employer”
Alliance of Government Workers vs. Minister of Labor
and Employment
According to the petitioners, P.D. No. 851 requires all
employers to pay the 13th-month pay to their employees with
one sole exception found in Section 2 which states that
“Employers already paying their employees a 13th month pay
or its equivalent are not covered by this Decree.”
The petitioners contend that Section 3 of the Rules and
Regulations Implementing Presidential Decree No. 851
included other types of employers not exempted by the decree.
They state that nowhere in the decree is the secretary, now
Minister of Labor and Employment, authorized to exempt other
types of employers from the requirement.
The Republic of the Philippines, as sovereign, cannot be
covered by a general term like "employer" unless the
language used in the law is clear and specific to that effect.
Government employees not covered by P.D 851
What the P.D. No. 851 intended to cover, as explained in the
prefatory statement of the Decree, are only those in the private
sector whose real wages require protection from world-wide
inflation. This is emphasized by the "whereas" clause which
states that 'there has been no increase in the legal minimum
wage rates since 1970'.
This could only refer to the private sector, and not to those in
the government service because at the time of the enactment
of Presidential Decree No. 851 in 1975, only the employees in
the private sector had not been given any increase in their
minimum wage. The employees in the government service had
already been granted in 1974 a ten percent across-the-board
increase on their salaries as stated in P.D. No. 525, Section 4.
The workers in the respondent institutions have not directly
petitioned the heads of their respective offices nor their
representatives in the Batasang Pambansa. They have acted
through a labor federation and its affiliated unions. In other
words, the workers and employees of these state firms,
college, and university are taking collective action through a
labor federation which uses the bargaining power of organized
labor to secure increased compensation for its members.
 The general rule in the past and up to the present is that the
terms and conditions of employment in the Government,
including any political subdivision or instrumentality
thereof are governed by law (Section 11, the Industrial Peace
Act, R.A. No. 875, as amended and Article 277, the Labor
Code, P.D. No. 442, as amended).
On the Right to self-organization
Since the terms and conditions of government employment
are fixed by law, government workers cannot use the same
weapons employed by workers in the private sector to
secure concessions from their employers. The principle
behind labor unionism in private industry is that industrial
peace cannot be secured through compulsion by law.
Relations between private employers and their employees rest
on an essentially voluntary basis. Subject to the minimum
requirements of wage laws and other labor and welfare
legislation, the terms and conditions of employment in the
unionized private sector are settled through the process of
collective bargaining.
In government employment, however, it is the legislature and,
where properly given delegated power, the administrative
heads of government which fix the terms and conditions of
employment. And this is effected through statutes or
administrative circulars, rules, and regulations, not through
collective bargaining agreements.
The very Labor Code, P.D. No. 442 as amended, which
governs the registration and provides for the rights of legitimate
labor organizations states:
ART. 277. Government employees. The terms and
conditions of employment of all government employees,
including employees of government-owned and controlled
corporations, shall be governed by the Civil Service Law, rules
and regulations.
Their salaries shall be standardized by the National Assembly
as provided for in the new constitution. However, there shall be
no reduction of existing wages, benefits, and other terms and
conditions of employment being enjoyed by them at the time of
the adoption of this code.
Section 6, Article XII-B of the Constitution gives added
reasons why the government employees represented by the
petitioners cannot expect treatment in matters of salaries
different from that extended to all others government
personnel. The provision states:
SEC. 6. The National Assembly shall provide for the
standardization of compensation of government officials and
employees, including those in government-owned or controlled
corporations, taking into account the nature of the
responsibilities pertaining to, and the qualifications required for
the positions concerned.
It is the legislature or, in proper cases, the administrative heads
of government and not the collective bargaining process nor
the concessions wrung by labor unions from management that
determine how much the workers in government-owned or
controlled corporations may receive in terms of salaries, 13th
month pay, and other conditions or terms of employment.
There are government institutions which can afford to pay two
weeks, three weeks, or even 13th-month salaries to their
personnel from their budgetary appropriations. However, these
Erika Cristel Diaz | LABOR RELATIONS
payments must be pursuant to law or regulation. Presidential
Decree No. 985 as amended provides:
SEC. 2. Declaration of Policy.- It is hereby declared to be the
policy, of the national government to provide equal pay for
substantially, equal work and to base differences in pay upon
substantive differences in duties and responsibilities, and
qualification requirements of the positions. In determining rates
of pay, due regard shall be given to, among others, prevailing
rates in private industry for comparable work.
For this purpose, there is hereby established a system of
compensation standardization and position classification in the
national government for all departments, bureaus, agencies,
and officers including government-owned or controlled
corporations and financial institutions: Provided, That
notwithstanding a standardized salary system established for
all employees, additional financial incentives may be
established by government corporations and financial
institutions for their employees to be supported fully from their
corporate funds and for such technical positions as may be
approved by the President in critical government agencies.
The Solicitor-General correctly points out that to interpret P.D.
No. 851 as including government employees would upset
the compensation levels of government employees in
violation of those fixed according to P.D. No. 985.
Presidential Decree No. 807, the Civil Service Decree of the
Philippines has implemented the 1973 Constitutional
amendment. It is categorical about the inclusion of personnel
of government-owned or controlled corporations in the
civil service and their being subject to civil service
requirements:
SECTION 56. Government-owned or Controlled
Corporations Personnel. All permanent personnel of
government- owned or controlled corporations whose positions
are now embraced in the civil service shall continue in the
service until they have been given a chance to qualify in an
appropriate examination, but in the meantime, those who do
not possess the appropriate civil service eligibility shall not be
promoted until they qualify in an appropriate civil service
examination. Services of temporary personnel may be
terminated any time.
Personnel of government-owned or controlled
corporations are now part of the civil service. It would not
be fair to allow them to engage in concerted activities to wring
higher salaries or fringe benefits from Government even as
other civil service personnel such as the hundreds of
thousands of public school teachers, soldiers, policemen,
health personnel, and other government workers are denied
the right to engage in similar activities.
To say that the words "all employers" in P.D. No. 851 includes
the Government and all its agencies, instrumentalities, and
government-owned or controlled corporations would also result
in nightmarish budgetary problems.
Government employees have no right to strike
It is the stand, therefore, of this Commission that by reason of
the nature of the public employer and the peculiar character of
the public service, it must necessarily regard the right to strike
given to unions in private industry as not applying to public
employees and civil service employees.
 It has been stated that the Government, in contrast to the
private employer, protects the interests of all people in the
public service, and that accordingly, such conflicting interests
as are present in private labor relations could not exist in the
relations between government and those whom they employ.
Moreover, determination of employment conditions as well as
supervision of the management of the public service is in the
hands of legislative bodies. It is further emphasized that
government agencies in the performance of their duties have a
right to demand undivided allegiance from their workers and
must always maintain a pronounced esprit de corps or firm
discipline among their staff members.
It would be highly incompatible with these requirements of the
public service, if personnel took orders from union leaders or
put solidarity with members of the working class above
solidarity with the Government. This would be inimical to the
public interest.
Moreover, it is asserted that public employees by joining labor
unions may be compelled to support objectives which are
political in nature and thus jeopardize the fundamental principle
that the governmental machinery must be impartial and non-
political in the sense of party politics.
GSIS Family Bank Employees Union vs. Villanueva
Officers and employees of government-owned or controlled
corporations without original charters are covered by the Labor
Code, not the Civil Service Law. However, non-chartered
government-owned or controlled corporations are limited by
law in negotiating economic terms with their employees. This is
because the law has provided the Compensation and Position
Classification System, which applies to all government-owned
or controlled corporations, chartered or non-chartered.
In March 22, 2016, President Aquino issued Executive Order
No. 203, which approved the compensation and classification
standards and the Index of Occupational Services Framework
developed and submitted by the Governance Commission.
On the right to self-organization
The right of workers to self-organization, collective
bargaining, and negotiations is guaranteed by the
Constitution under Article XIII, Section 3:
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.
They shall be entitled to security of tenure, humane conditions
of work, and a living wage.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation, and
shall enforce their mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the
Erika Cristel Diaz | LABOR RELATIONS
fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth.
The right to self-organization is not limited to private
employees and encompasses all workers in both the
public and private sectors, as shown by the clear declaration
in Article IX(B), Section 2(5) that "the right to self-organization
shall not be denied to government employees."
Article III, Section 8 of the Bill of Rights likewise states, 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.
While the right to self-organization is absolute, the right of
government employees to collective bargaining and negotiation
is subject to limitations.
Collective bargaining is a series of negotiations between an
employer and a representative of the employees to regulate
the various aspects of the employer-employee relationship
such as working hours, working conditions, benefits, economic
provisions, and others.
Relations between private employers and their employees are
subject to the minimum requirements of wage laws, labor, and
welfare legislation. Beyond these requirements, private
employers and their employees are at liberty to establish the
terms and conditions of their employment relationship. In
contrast with the private sector, the terms and conditions of
employment of government workers are fixed by the
legislature; thus, the negotiable matters in the public sector are
limited to terms and conditions of employment that are not
fixed by law.
When it comes to collective bargaining agreements and
collective negotiation agreements in government-owned or
controlled corporations, Executive Order No. 203 unequivocally
stated that while it recognized the right of workers to organize,
bargain, and negotiate with their employers, "the Governing
Boards of all covered [government-owned or controlled
corporations], whether Chartered or Non-chartered, may not
negotiate with their officers and employees the economic terms
of their collective bargaining agreements.
Thus, considering the existing law at the time, GSIS Family
Bank could not be faulted for refusing to enter into a new
collective bargaining agreement with petitioner as it lacked the
authority to negotiate economic terms with its employees.
Charter Test
Art. IX-B Sec. 2(1), 1987 Constitution
Section 2(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled
corporations with original charters.
Camporedondo vs. NLRC
At issue in this case is whether the Philippine National Red
Cross (PNRC) is a government owned and controlled
corporation or it has been impliedly converted to a private
organization subject to the jurisdiction of labor tribunals in a
complaint filed by petitioner, a former PNRC chapter
administrator in Surigao del Norte, for illegal dismissal and
damages, as he was forced to "retire" after he was required to
 restitute shortages and unremitted collections in the total sum
of P135,927.78.
We rule that the Philippine National Red Cross (PNRC) is a
government owned and controlled corporation, with an
original charter under Republic Act No. 95, as amended. The
test to determine whether a corporation is government
owned or controlled, or private in nature is simple:
1. Is it created by its own charter for the exercise of a public
function, or by incorporation under the general corporation
law?
2. Those with special charters are government corporations
subject to its provisions, and its employees are under the
jurisdiction of the Civil Service Commission, and are
compulsory members of the Government Service
Insurance System.
The PNRC was not impliedly converted to a private
corporation" simply because its charter was amended to vest in
it the authority to secure loans, be exempted from payment of
all duties, taxes, fees and other charges of all kinds on all
importations and purchases for its exclusive use, on donations
for its disaster relief work and other services and in its benefits
and fund raising drives, and be alloted one lottery draw a year
by the Philippine Charity Sweepstakes Office for the support of
its disaster relief operation in addition to its existing lottery
draws for blood program.
Having served in the Philippine National Red Cross for a
number of years since his initial employment, he must know
that it is a government corporation with its own charter and that
he was covered by compulsory membership in the Government
Service Insurance System, which is why he could apply, as he
did, for "early" retirement from the service under Presidential
Decree No. 1146 or Republic Act No. 1616.
Veterans Federation of the Philippines vs. Reyes
Veterans Federation of the Philippines is a Public
Corporation
Having in their possession public funds, the officers of the VFP,
especially its fiscal officers, must indeed share in the fiscal
responsibility to the greatest extent.
As to petitioner’s allegation that VFP was intended as a self-
governing autonomous body with a Supreme Council as
governing authority, we find that the provisions of Rep. Act No.
2640 concerning the control and supervision of the Secretary
of National Defense clearly withholds from the VFP complete
autonomy. To say, however, that such provisions render the
VFP inutile is an exaggeration.
An office is not rendered inutile by the fact that it is placed
under the control of a higher office. These subordinate offices,
such as the executive offices under the control of the
President, exercise discretion at the first instance. While their
acts can be altered or even set aside by the superior, these
acts are effective and are deemed the acts of the superior until
they are modified. Surely, we cannot say that the offices of all
the Department Secretaries are worthless positions.
In sum, the assailed DND Department Circular No. 04 does not
supplant nor modify and is, on the contrary, perfectly in
consonance with Rep. Act No. 2640. Petitioner VFP is a public
corporation. As such, it can be placed under the control and
supervision of the Secretary of National Defense, who
consequently has the power to conduct an extensive
management audit of petitioner corporation.
Erika Cristel Diaz | LABOR RELATIONS
1. Petitioner claims that the VFP does not possess the
elements which would qualify it as a public office,
particularly the possession/delegation of a portion of
sovereign power of government to be exercised for the
benefit of the public:
In the case at bar, the functions of petitioner corporation
enshrined in Section 4 of Rep. Act No. 2640 should most
certainly fall within the category of sovereign functions. The
protection of the interests of war veterans is not only meant
to promote social justice, but is also intended to reward
patriotism.
All of the functions in Section 4 concern the well-being of war
veterans, our countrymen who risked their lives and lost their
limbs in fighting for and defending our nation. It would be
injustice of catastrophic proportions to say that it is beyond
sovereignty’s power to reward the people who defended her.
Like the holding of the National Centennial Celebrations, the
functions of the VFP are executive functions, designed to
implement not just the provisions of Rep. Act No. 2640, but
also, and more importantly, the Constitutional mandate for the
State to provide immediate and adequate care, benefits
and other forms of assistance to war veterans and
veterans of military campaigns, their surviving spouses
and orphans.
2. Petitioner claims that its funds are not public funds
because no budgetary appropriations or government funds
have been released to the VFP directly or indirectly from
the DBM, and because VFP funds come from membership
dues and lease rentals earned from administering
government lands reserved for the VFP.
The fact that no budgetary appropriations have been released
to the VFP does not prove that it is a private corporation. The
DBM indeed did not see it fit to propose budgetary
appropriations to the VFP, having itself believed that the VFP is
a private corporation.
If the DBM, however, is mistaken as to its conclusion regarding
the nature of VFP’s incorporation, its previous assertions will
not prevent future budgetary appropriations to the VFP. The
erroneous application of the law by public officers does not bar
a subsequent correct application of the law.
Nevertheless, funds in the hands of the VFP from whatever
source are public funds, and can be used only for public
purposes. This is mandated by the following provisions of Rep.
Act No. 2640.
In the case at bar, some of the funds were raised by even more
special means, as the contributions from affiliate organizations
of the VFP can hardly be regarded as enforced contributions
as to be considered taxes. They are more in the nature of
donations which have always been recognized as a source of
public funding.
Affiliate organizations of the VFP cannot complain of their
contributions becoming public funds upon the receipt by the
VFP, since they are presumed aware of the provisions of Rep.
Act No. 2640 which not only specifies the exclusive purposes
for which VFP funds can be used, but also provides for the
regulation of such funds by the national government through
the Secretary of National Defense.

3. Petitioner claims that the Secretary of National
Defense historically did not indulge in the direct or
‘micromanagement’ of the VFP precisely because it is
essentially a civilian organization where membership is
voluntary.
Neither is the civilian nature of VFP relevant in this case. The
Constitution does not contain any prohibition, express or
implied, against the grant of control and/or supervision to the
Secretary of National Defense over a civilian organization.
The Office of the Secretary of National Defense is itself a
civilian office, its occupant being an alter ego of the civilian
Commander-in-Chief. This set-up is the manifestation of the
constitutional principle that civilian authority is, at all times,
supreme over the military. There being no such constitutional
prohibition, the creation of a civilian public organization by Rep.
Act No. 2640 is not rendered invalid by its being placed under
the control and supervision of the Secretary of National
Defense.
Petitioner’s stand that the VFP is a private corporation because
membership thereto is voluntary is likewise erroneous. As
stated above, the membership of the VFP is not the individual
membership of the affiliate organizations, but merely the
aggregation of the heads of such affiliate organizations. These
heads forming the VFP then elect the Supreme Council and
the other officers, of this public corporation.
4. Petitioner claims that the Administrative Code of 1987
does not provide that the VFP is an attached agency,
and nor does it provide that it is an entity under the control
and supervision of the DND in the context of the provisions
of said code.
The Administrative Code, by giving definitions of the various
entities covered by it, acknowledges that its enumeration is not
exclusive. The Administrative Code could not be said to have
repealed nor enormously modified Rep. Act No. 2640 by
implication, as such repeal or enormous modification by
implication is not favored in statutory construction.
5. Petitioner offers as evidence the DBM opinion that the
VFP is a non-government organization in its
certification that the VFP "has not been a direct recipient
of any funds released by the DBM."
On this score, though, we disagree with respondents and hold
that the DBM’s appraisal is considered persuasive. The DBM
opinion furthermore suffers from its lack of explanation and
justification in the "certification of non-receipt" where said
opinion was given. The DBM has not furnished, in said
certification or elsewhere, an explanation for its opinion that
VFP is a non-government organization.
Exceptions to the charter test: GOCCs with original
charters within the coverage of the Labor Code
1. Philippine Society for the Prevention of Cruelty to
Animals (PSPCA);
2. Government Security Insurance Services (GSIS); and
3. Philippine National Red Cross (PNRC).
1. Philippine Society for the Prevention of Cruelty to
Animals (PPSCA);
Phil. Society for the Prevention of Cruelty to Animals
Erika Cristel Diaz | LABOR RELATIONS
(PSPCA) vs. COA
Prospective application of the Charter Test
The petitioner is correct in stating that the charter test is
predicated, at best, on the legal regime established by the
1935 Constitution, Section 7, Article XIII, which states:
Sec. 7. The National Assembly shall not, except by general
law, provide for the formation, organization, or regulation of
private corporations, unless such corporations are owned or
controlled by the Government or any subdivision or
instrumentality thereof.
The foregoing proscription has been carried over to the 1973
and the 1987 Constitutions. Section 16 of Article XII of the
present Constitution provides:
Sec. 16. The Congress shall not, except by general law,
provide for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations
may be created or established by special charters in the
interest of the common good and subject to the test of
economic viability.
Section 16 is essentially a re-enactment of Section 7 of Article
XVI of the 1935 Constitution and Section 4 of Article XIV of the
1973 Constitution.
During the formulation of the 1935 Constitution, the Committee
on Franchises recommended the foregoing proscription to
prevent the pressure of special interests upon the lawmaking
body in the creation of corporations or in the regulation of the
same.
To permit the lawmaking body by special law to provide for the
organization, formation, or regulation of private corporations
would be in effect to offer to it the temptation in many cases to
favor certain groups, to the prejudice of others or to the
prejudice of the interests of the country.
And since the underpinnings of the charter test had been
introduced by the 1935 Constitution and not earlier, it
follows that the test cannot apply to the petitioner, which
was incorporated by virtue of Act No. 1285, enacted on
January 19, 1905. Settled is the rule that laws in general have
no retroactive effect, unless the contrary is provided.
All statutes are to be construed as having only a prospective
operation, unless the purpose and intention of the legislature to
give them a retrospective effect is expressly declared or is
necessarily implied from the language used. In case of doubt,
the doubt must be resolved against the retrospective effect.
There are a few exceptions. Statutes can be given retroactive
effect in the following cases: (1) when the law itself so
expressly provides; (2) in case of remedial statutes; (3) in case
of curative statutes; (4) in case of laws interpreting others; and
(5) in case of laws creating new rights. None of the exceptions
is present in the instant case.
PSPCA is declared a private domestic corporation subject
to the jurisdiction of the Securities and Exchange
Commission. COA is enjoined from investigating, examining
and auditing the petitioner's fiscal and financial affairs.
A reading of petitioner’s charter shows that it is not subject
to control or supervision by any agency of the State, unlike
government-owned and controlled corporations. No
 government representative sits on the board of trustees of
the petitioner. Like all private corporations, the successors of
its members are determined voluntarily and solely by the
petitioner in accordance with its by-laws, and may exercise
those powers generally accorded to private corporations, such
as the powers to hold property, to sue and be sued, to use a
common seal, and so forth.
The employees of the petitioner are registered and
covered by the Social Security System at the latter’s
initiative, and not through the Government Service Insurance
System, which should be the case if the employees are
considered government employees. This is another indication
of petitioner’s nature as a private entity.
The fact that a certain juridical entity is impressed With
public interest does not, by that circumstance alone make
the entity a public corporation
The respondents contend that the petitioner is a body politic
because its primary purpose is to secure the protection and
welfare of animals which, in turn, redounds to the public good.
This argument, is, at best, specious.
A corporation may be private although its charter contains
provisions of a public character, incorporated solely for the
public good. This class of corporations may be considered
quasi-public corporations, which are private corporations that
render public service.
The true criterion, therefore, to determine whether a
corporation is public or private is found in the totality of the
relation of the corporation to the State. If the corporation is
created by the State as the latter’s own agency or
instrumentality to help it in carrying out its governmental
functions, then that corporation is considered public; otherwise,
it is private.
The respondents argue that since the charter of the
petitioner requires the latter to render periodic reports to
the Civil Governor, whose functions have been inherited
by the President, the petitioner is, therefore, a government
instrumentality.
This contention is inconclusive. By virtue of the fiction that all
corporations owe their very existence and powers to the State,
the reportorial requirement is applicable to all
corporations of whatever nature, whether they are public,
quasi-public, or private corporations as creatures of the
State.
The corporation is a creature of the state. It is presumed to be
incorporated for the benefit of the public. It received certain
special privileges and franchises, and holds them subject to the
laws of the state and the limitations of its charter. Its powers
are limited by law. It can make no contract not authorized by its
charter.
Its rights to act as a corporation are only preserved to it so long
as it obeys the laws of its creation. There is a reserve[d] right in
the legislature to investigate its contracts and find out whether
it has exceeded its powers. It would be a strange anomaly to
hold that a state, having chartered a corporation to make use
of certain franchises, could not, in the exercise of sovereignty,
inquire how these franchises had been employed, and whether
they had been abused, and demand the production of the
corporate books and papers for that purpose. The defense
amounts to this, that an officer of the corporation which is
charged with a criminal violation of the statute may plead the
Erika Cristel Diaz | LABOR RELATIONS
criminality of such corporation as a refusal to produce its
books.
To state this proposition is to answer it. While an individual
may lawfully refuse to answer incriminating questions unless
protected by an immunity statute, it does not follow that a
corporation vested with special privileges and franchises may
refuse to show its hand when charged with an abuse of such
privileges.
2. Government Security Insurance Services (GSIS)
GSIS vs. NLRC
Government agencies & corporations, even if with original
charters are covered by Art. 106-107 on the Joint & Several
liability of the contractor
The GSIS avers that it cannot twice be held liable for
complainants' salary differentials since it fully paid
complainants' salaries by incorporating in the Security Service
Contract the salary rate increases mandated by Wage Order
Nos. 1 and 2; otherwise, it would be unjust enrichment on the
part of complainants and/or LSWA at its expense. It submits
that Articles 106 and 107 of the Labor Code were not
contemplated by its framers to cover principals or clients of
service contractors who had already paid for the wages of the
contractor or subcontractor.
LSWA maintains that the GSIS is jointly and severally liable
with LSWA because Articles 106 and 107 of the Labor Code
provide so and these provisions were intended to ensure that
employees are paid the wages due them in case of violation of
the Labor Code of either the contractor or the principal; that the
GSIS cannot claim that holding it jointly and severally liable
with LSWA would result in grave injustice since the law did not
leave it without recourse as the GSIS has the right of
reimbursement from its co-debtor under Article 1217 of the
Civil Code.
Articles 106 and 107 of the Labor Code provide:
ART. 106. Contractor or subcontractor. - Whenever an
employer enters into contract with another person for the
performance of the former's work, the employees of the
contractor and of the latter's subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the
wage of his employees in accordance with this Code, the
employer shall be jointly and severally liable with his contractor
or subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
ART. 107 Indirect employer. - The provisions of the
immediately preceding Article shall likewise apply to any
person, partnership, association or corporation which, not
being an employer, contracts with an independent contractor
for the performance of any work, task, job or project.
In this case, the GSIS cannot evade liability by claiming that it
had fully paid complainants' salaries by incorporating in the
Security Service Contract the salary rate increases mandated
by Wage Order Nos. 1 and 2 by increasing the contract price
from P3,000.00 to P3,176.07 per guard per month effective
November 1, 1990 to January 7, 1991, and P4,200.00 effective
January 8, 1991 to May 31, 1991.
 The joint and several liability of the employer or principal
was enacted to ensure compliance with the provisions of
the Code, principally those on statutory minimum wage.
The contractor or subcontractor is made liable by virtue of his
or her status as a direct employer, and the principal as the
indirect employer of the contractor's employees.
This liability facilitates, if not guarantees, payment of the
workers' compensation, thus, giving the workers ample
protection as mandated by the 1987 Constitution. This is not
unduly burdensome to the employer. Should the indirect
employer be constrained to pay the workers, it can recover
whatever amount it had paid in accordance with the terms of
the service contract between itself and the contractor.
Thus, the Court does not agree with the GSIS's claim that a
double burden would be imposed upon the latter because it
would be paying twice for complainants' services. Such fears
are unfounded. Under Article 1217 of the Civil Code, if the
GSIS should pay the money claims of complainants, it has the
right to recover from LSWA whatever amount it has paid in
accordance with the terms of the service contract between the
LSWA and the GSIS.
Joint and solidary liability is simply meant to assure aggrieved
workers of immediate and sufficient payment of what is due
them. This is in line with the policy of the State to protect and
alleviate the plight of the working class.
GSIS must pay security guards for pay differential arising from
the wage order even if GSIS has already paid the increase to
the security agency which did not pass on the increase to the
security guards. Joint & solidary liability is for guards benefit
and is paramount notwithstanding GSIS being government.
This payment is without prejudice to reimbursement from the
security agency.
3. Philippine National Red Cross (PNRC)
Liban vs. Gordon
The auxiliary status of Red Cross Society means that it is at
one and the same time a private institution and a public
service organization because the very nature of its work
implies cooperation with the authorities, a link with the
State. In carrying out their major functions, Red Cross
Societies give their humanitarian support to official bodies, in
general having larger resources than the Societies, working
towards comparable ends in a given sector.
It is in recognition of this sui generis character of the
PNRC that R.A. No. 95 has remained valid and effective from
the time of its enactment in March 22, 1947 under the 1935
Constitution and during the effectivity of the 1973 Constitution
and the 1987 Constitution.
The purpose of the constitutional provision prohibiting
Congress from creating private corporations was to
prevent the granting of special privileges to certain
individuals, families, or groups, which were denied to other
groups. Based on the above discussion, it can be seen that the
PNRC Charter does not come within the spirit of this
constitutional provision, as it does not grant special
privileges to a particular individual, family, or group, but creates
an entity that strives to serve the common good.
The PNRC is a non-profit, donor-funded, voluntary,
humanitarian organization, whose mission is to bring timely,
Erika Cristel Diaz | LABOR RELATIONS
effective, and compassionate humanitarian assistance for the
most vulnerable without consideration of nationality, race,
religion, gender, social status, or political affiliation.
So must this Court recognize too the country’s adherence
to the Geneva Convention and respect the unique status
of the PNRC in consonance with its treaty obligations. The
Geneva Convention has the force and effect of law.
Under the Constitution, the Philippines adopts the generally
accepted principles of international law as part of the law of the
land. This constitutional provision must be reconciled and
harmonized with Article XII, Section 16 of the Constitution,
instead of using the latter to negate the former.
By requiring the PNRC to organize under the Corporation Code
just like any other private corporation, the Decision of July 15,
2009 lost sight of the PNRC’s special status under international
humanitarian law and as an auxiliary of the State, designated
to assist it in discharging its obligations under the Geneva
Conventions.
Although the PNRC is called to be independent under its
Fundamental Principles, it interprets such independence as
inclusive of its duty to be the government’s humanitarian
partner. To be recognized in the International Committee, the
PNRC must have an autonomous status, and carry out its
humanitarian mission in a neutral and impartial manner.
However, in accordance with the Fundamental Principle of
Voluntary Service of National Societies of the Movement, the
PNRC must be distinguished from private and profit-making
entities. It is the main characteristic of National Societies that
they are not inspired by the desire for financial gain but by
individual commitment and devotion to a humanitarian purpose
freely chosen or accepted as part of the service that National
Societies through its volunteers and/or members render to the
Community.
The PNRC, as a National Society of the International Red
Cross and Red Crescent Movement, can neither be
classified as an instrumentality of the State, so as not to
lose its character of neutrality as well as its independence,
nor strictly as a private corporation since it is regulated by
international humanitarian law and is treated as an auxiliary of
the State.
Based on the above, the sui generis status of the PNRC is now
sufficiently established. Although it is neither a subdivision,
agency, or instrumentality of the government, nor a
government-owned or controlled corporation or a
subsidiary thereof, as succinctly explained in the Decision of
July 15, 2009, so much so that respondent, under the Decision,
was correctly allowed to hold his position as Chairman thereof
concurrently while he served as a Senator, such a conclusion
does not ipso facto imply that the PNRC is a private
corporation within the contemplation of the provision of the
Constitution, that must be organized under the Corporation
Code.
The sui generis character of PNRC requires us to approach
controversies involving the PNRC on a case-to-case basis. In
sum, the PNRC enjoys a special status as an important ally
and auxiliary of the government in the humanitarian field in
accordance with its commitments under international law. This
Court cannot all of a sudden refuse to recognize its existence,
especially since the issue of the constitutionality of the PNRC
Charter was never raised by the parties.
 It bears emphasizing that the PNRC has responded to almost
all national disasters since 1947, and is widely known to
provide a substantial portion of the country’s blood
requirements. Its humanitarian work is unparalleled. The Court
should not shake its existence to the core in an untimely and
drastic manner that would not only have negative
consequences to those who depend on it in times of disaster
and armed hostilities but also have adverse effects on the
image of the Philippines in the international community. The
sections of the PNRC Charter that were declared void must
therefore stay.
The constitutionality of R.A. No. 95, as amended, the charter of
the Philippine National Red Cross, was not raised by the
parties as an issue and should not have been passed upon by
this Court. The structure of the PNRC is sui generis¸ being
neither strictly private nor public in nature. R.A. No. 95
remains valid and constitutional in its entirety. The
dispositive portion of the Decision should therefore be
MODIFIED by deleting the second sentence, to now read as
follows:
WHEREFORE, we declare that the office of the Chairman
of the Philippine National Red Cross is not a government
office or an office in a government-owned or controlled
corporation for purposes of the prohibition in Section 13,
Article VI of the 1987 Constitution.
Examples of government corporations covered by
Civil Service Laws:
1. Boy Scouts of the Philippines (BSP);
2. Local Water Districts;
3. Philippine Amusement Gaming Corporation
(PAGCOR);
4. Philippine International Trading Corporation (PITC).
1. Boy Scouts of the Philippines (BSP)
Boy Scouts of the Philippines vs. NLRC
Examining the relevant statutory provisions and the arguments
outlined above, the Court considers that the following need to
be considered in arriving at the appropriate legal
characterization of the BSP for purposes of determining
whether its officials and staff members are embraced in the
Civil Service.
While the BSP may be seen to be a mixed type of entity,
combining aspects of both public and private entities, we
believe that considering the character of its purposes and its
functions, the statutory designation of the BSP as "a public
corporation" and the substantial participation of the
Government in the selection of members of the National
Executive Board of the BSP, the BSP, as presently
constituted under its charter, is a government-controlled
corporation within the meaning of Article IX. (B) (2) (1) of
the Constitution.
We are fortified in this conclusion when we note that the
Administrative Code of 1987 designates the BSP as one of the
attached agencies of the Department of Education, Culture and
Sports ("DECS"). We believe that the BSP is appropriately
regarded as "a government instrumentality" under the 1987
Administrative Code.
It thus appears that the BSP may be regarded as both a
"government controlled corporation with an original
Erika Cristel Diaz | LABOR RELATIONS
charter" and as an "instrumentality" of the Government
within the meaning of Article IX (B) (2) (1) of the Constitution.
It follows that the employees of petitioner BSP are
embraced within the Civil Service and are accordingly
governed by the Civil Service Law and Regulations.
The Civil Service embraces every branch, agency, subdivision
and instrumentality of the Government, including every
government-owned or controlled corporation. The 1935
Constitution had a similar provision in its Section 1,
Article XII which stated:
A Civil Service embracing all branches and subdivisions of the
Government shall be provided by law.
The inclusion of "government-owned or controlled
corporations" within the embrace of the civil service shows a
deliberate effort of the framers to plug an earlier loophole which
allowed government-owned or controlled corporations to avoid
the full consequences of the all encompassing coverage of the
civil service system.
The same explicit intent is shown by the addition of "agency"
and "instrumentality" to branches and subdivisions of the
Government. All offices and firms of the government are
covered. The amendments introduced in 1973 are not idle
exercises or meaningless gestures.
They carry the strong message that civil service coverage is
broad and all-embracing insofar as employment in the
government in any of its governmental or corporate arms is
concerned.
The complaint in NLRC Case No. 1637-84 having been filed on
13 November 1984, when the 1973 Constitution was still in
force, our ruling in Juco applies in the case at bar.
In view of the foregoing, we hold that both the Labor Arbiter
and public respondent NLRC had no jurisdiction over the
complaint filed by private respondents in NLRC Case No.
1637-84; neither labor agency had before it any matter which
could validly have been passed upon by it in the exercise of
original or appellate jurisdiction.
2. Local Water Districts
Tanjay vs. Gabaton
Petitioner Josefino Datuin filed a complaint for illegal dismissal
against respondent Tarlac Water District in the Department of
Labor and Employment (DOLE) which decided in his favor.
However, upon respondent's motion for reconsideration, the
National Labor Relations Commission (NLRC) reversed the
decision and dismissed the complaint for lack of jurisdiction,
holding that as the respondent Tarlac Water District is a
corporation created by a special law (PD No. 198), its officers
and employees belong to the civil service and their separation
from office should be governed by Civil Service Rules and
Regulations.
The only question here is whether or not local water districts
are government owned or controlled corporations whose
employees are subject to the provisions of the Civil Service
Law.
The Labor Arbiter failed to take into account the provisions of
Presidential, Decree No. 1479, which went into effect on 11
June 1978. P.D. No. 1479 wiped away Section 25 of P.D.
 198 quoted above, and Section 26 of P.D. 198 was
renumbered as Section 25 in the following manner:
Section 26. of the same decree P.D. 198 is hereby
amended to read as Section 25 as follows:
Section 25. Authorization. — The district may exercise all the
powers which are expressly granted by this Title or which are
necessarily implied from or incidental to the powers and
purposes herein stated. For the purpose of carrying out the
objectives of this Act, a district is hereby granted the power of
eminent domain, the exercise thereof shall, however, be
subject to review by the Administration.
Thus, Section 25 of P.D. 198 exempting the employees of
water districts from the application of the Civil Service
Law was removed from the statute books.
The hiring and firing of employees of government-owned or
controlled corporations are governed by the Civil Service Law
and Civil Service Rules and Regulations.
Our determination in the earlier cases that water districts are
government instrumentalities and that their employees
belong to the civil service, disposes of Datuin's petition in
G.R. No. 84300. The National Labor Relations Commission
has no jurisdiction over his complaint for illegal dismissal.
3. Philippine Amusements and Gaming Corporation
(PAGCOR)
PAGCOR vs. CA
On May 3, 1988, the Philippine Amusement & Gaming
Corporation (PAGCOR) terminated the services of private
respondent Joel Montoya as Table Supervisor at Casino
Filipino on the ground of loss of confidence.
The movant contended that, being a money claim arising from
the plaintiff’s alleged illegal dismissal, the complaint was
cognizable only by the labor arbiter and the National Labor
Relations Commission. Montoya insisted, however, that
PAGCOR was a government-controlled corporation created
under PD 1869 and therefore not covered by the Labor Code.
It is now settled that, conformably to Article IX-B, Section 2(1),
government-owned or controlled corporations shall be
considered part of the Civil Service only if they have
original charters, as distinguished from those created under
general law.
PAGCOR belongs to the Civil Service because it was
created directly by PD 1869 on July 11, 1983. Consequently,
controversies concerning the relations of the employees with
the management of PAGCOR should come under the
jurisdiction of the Merit System Protection Board and the Civil
Service Commission, conformably to the Administrative Code
of 1987.
Applying this rule, we have upheld the jurisdiction of the Civil
Service authorities, as against that of the labor authorities, in
controversies involving the terms of employment, and other
related issues, of the Civil Service officials and employees.
We have held in a number of cases that labor arbiters exercise
original and exclusive jurisdiction over conflicts between
employees and their employers but not when the Labor Code
is not involved. It is obvious from the complaint that the
Erika Cristel Diaz | LABOR RELATIONS
plaintiffs have not alleged any unfair labor practice. Theirs is a
simple action for damages for tortious acts allegedly committed
by the defendants. Such being the case, the governing statute
is the Civil Code and not the Labor Code. It results that the
orders under review are based on a wrong premise.
A similar exception is applicable to the Civil Service authorities.
There are also instances when the Merit System Protection
Board and the Civil Service Commission have to yield
jurisdiction to the civil courts even if the conflict involves civil
servants.
Following the doctrine laid down in the above-mentioned
cases, which we here apply by analogy, the Civil Service
authorities will have jurisdiction over a case involving civil
servants only if it can be regarded as equivalent to a labor
dispute resoluble under the Labor Code. Conversely, the
regular courts will have jurisdiction if the case can be decided
under the general laws, as where the complaint is, say, for the
recovery of private debts, as in Molave; or for damages due to
the slanderous remarks of the employer, as in Medina; or for
malicious prosecution of the employees, as in Pepsi Cola.
The mere fact that the parties are members of the Civil Service
does not remove such controversies from the general
jurisdiction of the courts of justice and place them under the
special jurisdiction of the Board and the Commission.
Even as the labor authorities have original jurisdiction to
interpret and apply the Labor Code, so too have the Civil
Service authorities the original jurisdiction to resolve questions
coming under PD 1869. The civil courts are excluded from
either case because the general civil and criminal laws are not
involved. Obviously, the same rule applied to workers in the
private sector should also apply to civil servants, for what is
sauce for the goose is sauce for the gander.
Whether such loss of confidence had really been
established is a matter that we believe should be
determined in the first instance by the Civil Service
authorities. Absent such a determination, the question of
damages cannot be resolved as the two issues are
inseparable. The trial court cannot make an independent
finding that the private respondent is entitled to damages
unless it is first ascertained that he was arbitrarily separated.
This is a factual question best examined by the Civil Service
authorities. Moreover, even if it be assumed that the Regional
Trial Court of Angeles City has or may eventually exercise
jurisdiction over the question of damages, the Solicitor General
would still be correct in pointing out that the doctrine of
exhaustion of administrative remedies has not been observed.
There would be no cause of action before it at this time.
Our conclusion is that the trial court erred in denying the
motion to dismiss and that the respondent court also erred in
sustaining it. The issue raised by the private respondent, to wit,
the correct interpretation and application of PD 1869,
properly comes under the jurisdiction of the Merit System
Protection Board, subject to appeal to the Civil Service
Commission, and ultimately to review by this Court.
4. Philippine International Trading Corporation (PITC)
Philippine International Trading Corporation vs. COA
The PITC is a government-owned and controlled
corporation created under Presidential Decree (PD) No.
252 on July 21, 1973, primarily for the purpose of promoting
 and developing Philippine trade in pursuance of national
economic development.
According to the COA in its Decision No. 98-048 dated January
27, 1998, the exemption granted to the PITC has been
repealed and revoked by the repealing provisions of RA 6758,
particularly:
Section 16 thereof which provides:
Sec. 16. Repeal of Special Salary Laws and Regulations. -
All laws, decrees, executive orders, corporate charters, and
other issuances or parts thereof, that exempt agencies from
the coverage of the System, or that authorize and fix position
classifications, salaries, pay rates or allowances of specified
positions, or groups of officials, and employees or of agencies,
which are inconsistent with the System, including the proviso
under Section 2 and Section 16 of PD No. 985 are hereby
repealed.
PITC argues that RA 6758 which is a law of general application
cannot repeal provisions of the Revised Charter of PITC and its
amendatory laws expressly exempting PITC from OCPC
coverage being special laws.
In the case at bar, the repeal by Section 16 of RA 6758 of “all
corporate charters that exempt agencies from the coverage of
the System” was clear and expressed necessarily to achieve
the purposes for which the law was enacted, that is, the
standardization of salaries of all employees in government
owned and / or controlled corporations to achieve "equal
pay for substantially equal work.
Henceforth, PITC should now be considered as covered by
laws prescribing a compensation and position classification
system in the government including RA 6758. This is without
prejudice, however, as discussed above, to the non-diminution
of pay of incumbents as of July 1, 1989 as provided in Sections
12 and 17 of said law.
Examples of government corporations NOT covered
by Civil Service Laws:
1. Philippine National Oil Company-Energy Development
Corporation (PNOC-EDC);
2. Food Terminal Inc. (FTC); and
3. National Housing Corporation (NHC)
1. Philippine National Oil Company-Energy Development
Corporation (PNOC-EDC)
PNOC-Energy Development Corp. vs. NLRC
Rule under the 1973 Constitution
Petitioner PNOC-EDC argued that since Labor Arbiter Minoria
rendered the decision at the time when the 1973 Constitution
was in force, said decision is null and void because under the
1973 Constitution, government-owned and controlled
corporations were governed by the Civil Service Law.
Even assuming that PNOC-EDC has no original or special
charter and Section 2(i), Article IX-B of the 1987 Constitution
provides that:
The Civil Service embraces all branches, subdivision,
instrumentalities and agencies of the Government, including
government-owned or controlled corporations with original
charters.
Erika Cristel Diaz | LABOR RELATIONS
This issue has already been laid to rest in the case of PNOC-
EDC vs. Leogardo, involving the same petitioner and the same
issue, where this Court ruled that the doctrine that employees
of government-owned and controlled corporations, whether
created by special law or formed as subsidiaries under the
General Corporation law are governed by the Civil Service Law
and not by the Labor Code, has been supplanted by the
present Constitution.
1987 Constitution applies
Thus, under the present state of the law, the test in
determining whether a government-owned or controlled
corporation is subject to the Civil Service Law are the
manner of its creation, such that government corporations
created by special charter are subject to its provisions while
those incorporated under the General Corporation Law are not
within its coverage.
Specifically, the PNOC-EDC having been incorporated
under the General Corporation Law was held to be a
government owned or controlled corporation whose employees
are subject to the provisions of the Labor Code.
The fact that the case arose at the time when the 1973
Constitution was still in effect, does not deprive the NLRC of
jurisdiction on the premise that it is the 1987 Constitution
that governs because it is the Constitution in place at the
time of the decision. In the case at bar, the decision of the
NLRC was promulgated on July 3, 1987. Accordingly, this case
falls squarely under the rulings of the aforementioned cases.
2. Food Terminal Inc. (FTC)
Lumanta vs. NLRC & Food Terminal, Inc.
On 20 March 1987, petitioner Luz Lumanta, joined by 54 other
retrenched employees, filed a complaint for unpaid 'd
retrenchment or separation pay against private respondent
Food Terminal, Inc. ("FTI") with the Department of Labor and
Employment. The complaint was later amended to include
charges of underpayment of wages and non-payment of
emergency cost of living allowances (ECOLA).
Private respondent FTI moved to dismiss the complaint on the
ground of lack of jurisdiction. It argued that being a
government-owned and controlled corporation, its employees
are governed by the Civil Service Law not by the Labor Code,
and that claims arising from employment fall within the
jurisdiction of the Civil Service Commission and not the
Department of Labor and Employment.
The only question raised in the present Petition is whether or
not a labor law claim against a government-owned and
controlled corporation, such as private respondent FTI, falls
within the jurisdiction of the Department of Labor and
Employment.
Comparison between the provisions under the 1973 and
1987 Constitution:
1973 Constitution, Article II-B, Section 1(1) of which
provided:
The civil service embraces every branch, agency, subdivision,
and instrumentality of the Government, including every
government-owned or controlled corporation.
 The 1987 Constitution which took effect on February 2,
1987, has on this point a notably different provision which
reads:
The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original
charter. (Article IX-B, Section 2 [1]).
Meaning of “with original charter”
The intent and meaning of the new phrase "with original
charter, in effect held that government-owned and controlled
corporations with original charter refer to corporations
chartered by special law as distinguished from corporations
organized under our general incorporation statute-the
Corporation Code.
It is the 1987 Constitution, and not the case law embodied
in Juco, which applies in the case at bar, under the principle
that jurisdiction is determined as of the time of the filing of the
complaint. At the time the complaint against private
respondent FTI was filed (i.e., 20 March 1987), and at the time
the decisions of the respondent Labor Arbiter and National
Labor Relations Commission were rendered (i.e., 31 August
1987 and 18 March 1988, respectively), the 1987 Constitution
had already come into effect.
Letter of Instruction No. 1013, dated 19 April 1980, included
Food Terminal, Inc. in the category of government-owned
or controlled corporations. Since then, FTI served as the
marketing arm of the National Grains Authority (now known as
the National Food Authority).
The pleadings show that FTI was previously a privately
owned enterprise, created and organized under the
general incorporation law, with the corporate name Greater
Manila Food Terminal Market, Inc. The record does not
indicate the precise amount of the capital stock of FM that is
owned by the government; the petitioners' claim, and this has
not been disputed, that FTl is not hundred percent (100%)
government-owned and that it has some private
shareholders.
We conclude that because respondent FTI is government-
owned and controlled corporation without original charter,
it is the Department of Labor and Employment, and not the
Civil Service Commission, which has jurisdiction over the
dispute arising from employment of the petitioners with private
respondent FTI, and that consequently, the terms and
conditions of such employment are governed by the Labor
Code and not by the Civil Service Rules and Regulations.
Public respondent National Labor Relations Commission acted
without or in excess of its jurisdiction in dismissing petitioners
complaint.
3. National Housing Corporation (NHC)
TUCP vs. National Housing Corporation
Respondent National Housing Corporation (hereinafter referred
to as NHC) is a corporation organized in 1959 in accordance
with Executive Order No. 399, otherwise known as the Uniform
Charter of Government Corporations, dated January 1, 1951.
Its shares of stock are and have been one hundred percent
Erika Cristel Diaz | LABOR RELATIONS
(100%) owned by the Government from its incorporation under
Act 459, the former corporation law.
The government entities that own its shares of stock are the
Government Service Insurance System, the Social Security
System, the Development Bank of the Philippines, the National
Investment and Development Corporation and the People's
Homesite and Housing Corporation. 1 Petitioner Trade Unions
of the Philippines and Allied Services (TUPAS, for brevity) is a
legitimate labor organization with a chapter in NHC.
In retrospect, it will be recalled that in a former case of illegal
dismissal involving the same respondent corporation, We had
ruled that the employees of NHC and of other government
owned or controlled corporations were governed by civil
service laws, rules and regulations pursuant to the 1973
Constitution which provided that "the civil service embraces
every branch, agency, subdivision and instrumentality of the
government, including government-owned or controlled
corporations."
It was therein stressed that to allow subsidiary corporations to
be excluded from the civil service laws would be to permit the
circumvention or emasculation of the above-quoted
constitutional provision. As perceptively analyzed therein, it
would be possible for a regular ministry of government to
create a host of subsidiary corporations under the Corporation
Code funded by a willing legislature.
A government-owned corporation could create several
subsidiary corporations. These subsidiary corporation rations
would enjoy the best of two worlds. Their officials and
employees would be privileged individuals, free from the strict
accountability required by the Civil Service Decree and the
regulations of the Commission on Audit. Their incomes would
not be subject to the competitive restraints of the open market
nor to the terms and conditions of civil service employment.
The rule, however, was modified in the 1987 Constitution, the
corresponding provision whereof declares that the civil service
embraces all branches, subdivisions, instrumentalities and
agencies of the government, including government-owned or
controlled corporations with original charters.
Consequently, the civil service now covers only
government owned or controlled corporations with
original or legislative charters, that is those created by an
act of Congress or by special law, and not those
incorporated under and pursuant to a general legislation.
The situations sought to be avoided by the 1973 Constitution
and expressed by this Court in the National Housing
Corporation case ... appear relegated to relative insignificance
by the 1987 Constitutional provision that the Civil Service
embraces government-owned controlled corporations with
original charters and therefore, by clear implication, the Civil
Service does not include government-owned or controlled
corporations which are organized as subsidiaries of
government-owned or controlled corporations under the
general corporation law.
The workers or employees of NHC undoubtedly have the right
to form unions or employees' organizations. The right to
unionize or to form organizations is now explicitly recognized
and granted to employees in both the governmental and the
private sectors.
There is, therefore, no impediment to the holding of a
certification election among the workers of NHC for it is clear
 that they are covered by the Labor Code, the NHC being a SSS VS. COA
government-owned and/or controlled corporation without
an original charter.
On 18 February 1997 the Department of Budget and
Management (DBM) declared as illegal the contract signing
Statutory implementation of the last cited section of the
bonus which the CNA authorized to be distributed among the
Constitution is found in Article 244 of the Labor Code, as
personnel of the SSS.4 On 1 July 1997 the SSS Corporate
amended by Executive Order No. 111, thus:
Auditor disallowed fund releases for the signing bonus since it
was "an allowance in the form of additional compensation
Right of employees in the public service — Employees of
prohibited by the Constitution.
the government corporations established under the
Corporation Code shall have the right to organize and to
Indeed we find no merit in the claim that the employees and
bargain collectively with their respective employers. All other
officers of SSS are entitled to the signing bonus provided for in
employees in the civil service shall have the right to form
the CNA. In the first place, the process of collective
associations for purposes not contrary to law.
negotiations in the public sector does not encompass
terms and conditions of employment requiring the
For, whether the employees of NHC are covered by the Labor
appropriation of public funds:
Code or by the civil service laws, a certification election may be
conducted.
Sec. 13. Terms and conditions of employment or
improvements thereof, except those that are fixed by law,
For employees in corporations and entities covered by the
may be the subject of negotiations between duly recognized
Labor Code, the determination of the exclusive bargaining
employees’ organizations and appropriate government
representative is particularly governed by Articles 255 to 259 of
authorities.
said Code. Article 256 provides for the procedure when there is
a representation issue in organized establishments, while
Sec. 3. Those that require appropriation of funds, such as
Article 257 covers unorganized establishments. These Labor
the following, are not negotiable:
Code provisions are fleshed out by Rules V to VII, Book V of
(a) Increase in salary emoluments and other allowances not
the Omnibus Implementing Rules.
presently provided for by law;
(b) Facilities requiring capital outlays;
With respect to other civil servants, that is, employees of all
(c) Car plan;
branches, subdivisions, instrumentalities and agencies of the
(d) Provident fund;
government including government-owned or controlled
(e) Special hospitalization, medical and dental services;
corporations with original charters and who are, therefore,
(f) Rice/sugar/other subsidies;
covered by the civil service laws, the guidelines for the
(g) Travel expenses;
exercise of their right to organize is provided for under
(h) Increase in retirement benefits.
Executive Order No. 180. Chapter IV thereof, consisting of
Sections 9 to 12, regulates the determination of the "sole and
Sec. 4. Matters that involve the exercise of management
exclusive employees representative";
prerogatives, such as the following, are likewise not
subject to negotiation:
Under Section 12, where there are two or more duly registered
(a) Appointment;
employees' organizations in the appropriate organization unit,
(b) Promotion;
the Bureau of Labor Relations shall, upon petition order the
(c) Assignment/Detail;
conduct of certification election and shall certify the winner as
(d) Reclassification/ upgrading of position;
the exclusive representative of the rank-and-file employees in
(e) Revision of compensation structure;
said organizational unit.
(f) Penalties imposed as a result of disciplinary actions;
(g) Selection of personnel to attend seminar, trainings, study
Distinction between Right to Self-Organization and grants;
Right of Association (h) Distribution of work load;
(i) External communication linkages.
Right to self- Right to On this issue, we have to explain the relevant amendments to
organization association the SSS charter in relation to the passage of RA 6758 (1989)
ER-EE YES NO entitled “An Act Prescribing a Revised Compensation and
relationship Position Classification in the Government and for other
Collective YES. Must be the NO. Lawful Purposes.”
bargaining purpose in whole purpose need not
or in part include CB We have no doubt that RA 6758 modified, if not repealed, Sec.
Separate YES NO 3, par. (c), of RA 1161 as amended, at least insofar as it
personality concerned the authority of SSC to fix the compensation of SSS
Abridgment by YES NO employees and officers. This means that whatever salaries and
state other financial and non-financial inducements that the SSC
Legal basis Labor Code Constitution (Bill was minded to fix for them, the compensation must comply
of Rights) with the terms of RA 6758.
Who can Private sector Both private and
exercise employees public sector Consequently, only the remuneration which was being offered
employees as of 1 July 1989, and which was then being enjoyed by
incumbent SSS employees and officers, could be availed of
exclusively by the same employees and officers separate from

Erika Cristel Diaz | LABOR RELATIONS

 and independent of the prescribed standardized salary rates.
Unfortunately, however, the signing bonus in question did not
qualify under Secs. 12 and 17 of RA 6758.
It was non-existent as of 1 July 1989 as it accrued only in 1996
when the CNA was entered into by and between SSC and
ACCESS. The signing bonus therefore could not have been
included in the salutary provisions of the statute nor would it be
legal to disburse to the intended recipients.
Jurisdiction of the Commission on Audit (COA)
Oriondo et. al vs. COA
Corregidor Foundation Inc. is a GOCC without original
charter under the audit jurisdiction of the COA
A corporation, whether with or without an original charter,
is under the audit jurisdiction of the Commission on Audit
so long as the government owns or has controlling
interest in it.
It is immaterial whether a corporation is private or public for
purposes of exercising the audit jurisdiction of the Commission
on Audit. So long as the government owns or controls the
corporation, as in this case, the Commission on Audit may
audit the corporation's accounts.
The constitutional criterion on the exercise of the Commission
on Audit's audit jurisdiction depends on the government's
ownership or control of a corporation. The nature of the
corporation, whether it is private, quasi-public, or public is
immaterial.
The Constitution vests in the Commission on Audit, audit
jurisdiction over government-owned and controlled
corporations with original charters, as well government-
owned or controlled corporations without original
charters.
Government-owned or controlled corporations with
original charters are subject to the Commission's pre-
audit, while government-owned or controlled corporations
without original charters are subject to the Commission's
post-audit.
Government-owned or controlled corporations without
original charters refer to corporations created under the
Corporation Code but are owned or controlled by the
government. The nature or purpose of the corporation is not
material in determining the Commission's audit jurisdiction.
Neither is the manner of creation of a corporation, whether
under a general or special law.
Just because the employees of Corregidor Foundation, Inc.
are not under the jurisdiction of the Civil Service
Commission does not mean that Corregidor Foundation,
Inc. is not government-owned or controlled. Article IX-B,
Section 2(1) of the Constitution is clear that the jurisdiction of
the Civil Service Commission is over government-owned or
controlled corporations with original charters, not over those
without original charters like Corregidor Foundation, Inc.
Erika Cristel Diaz | LABOR RELATIONS
Lastly, while it is true that just like any other corporation
organized under the Corporation Code, Corregidor Foundation,
Inc. may determine voluntarily and solely the successors of its
members in accordance with its own by-laws, this does not
change the public character of its functions and the control the
government has over it.
As discussed, the promotion and development of tourism is a
public function and, as provided in its Articles of Incorporation,
the members of Corregidor Foundation, Inc. must be
government officials who shall hold their membership by
reason of their office. In sum, Corregidor Foundation, Inc. is
a government-owned or controlled corporation. Thus, it is
under the audit jurisdiction of the Commission on Audit.
Others who can exercise the Right to Self-
Organization
Aliens
ART. 284. [269] Prohibition Against Aliens; Exceptions.
All aliens, natural or juridical, as well as foreign
organizations are strictly prohibited from engaging directly or
indirectly in all forms of trade union activities without
prejudice to normal contacts between Philippine labor
unions and recognized international labor centers: Provided,
however, That aliens working in the country with valid
permits issued by the Department of Labor and
Employment, may exercise the right to self-organization
and join or assist labor organizations of their own
choosing for purposes of collective bargaining: Provided,
further, That said aliens are nationals of a country which
grants the same or similar rights to Filipino workers.
Requisites for an alien employee to exercise his right to
self-organize:
(1) He should have a valid working permit issued by the
DOLE; and
(2) He is a national of a country which grants the same or
similar rights to Filipino workers or which has ratified either
ILO Convention No. 874 or ILO Convention No. 98, as
certified by the Philippine Department of Foreign Affairs
(DFA).
Employees of a cooperative
Employees of a cooperative are entitled to exercise their right
to self-organization except those members of the cooperatives.
Such members are considered owners, and owners cannot
bargain with himself or his co-owners.
Cooperative Rural Bank of Davao City vs. Calleja et. al
Definition of cooperative
Under Section 2 of P.D. No. 175, a cooperative is defined to
mean organizations composed primarily of small producers
and of consumers who voluntarily join together to form
business enterprises which they themselves own, control, and
patronize."

Its creation and growth were declared as a policy of the State
as a means of increasing the income and purchasing power of
the low-income sector of the population in order to attain a
more equitable distribution of income and wealth.
A cooperative, therefore, is by its nature different from an
ordinary business concern, being run either by persons,
partnerships, or corporations. Its owners and/or members
are the ones who run and operate the business while the
others are its employees.
As above stated, irrespective of the number of shares owned
by each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. Their share capital
earn limited interests. They enjoy special privileges as —
exemption from income tax and sales taxes, preferential right
to supply their products to State agencies and even exemption
from the minimum wages laws.
An employee therefore of such a cooperative who is a
member and co-owner thereof cannot invoke the right to
collective bargaining for certainly an owner cannot bargain
with himself or his co-owners. Employees of cooperatives who
are themselves members of the cooperative have no right to
form or join labor organizations for purposes of collective
bargaining for being themselves co-owners of the cooperative.
However, in so far as it involves cooperatives with
employees who are not members or co-owners thereof,
certainly such employees are entitled to exercise the
rights of all workers to organization, collective bargaining,
negotiations and others as are enshrined in the Constitution
and existing laws of the country.
Central Negros Electric Cooperative vs. Secretary
Employees who withdraw their membership from the
cooperative may join a labor union
The argument of CENECO that the withdrawal was merely to
subvert the ruling of this Court in the BATANGAS case is
without merit. The case referred to merely declared that
employees who are at the same time members of the
cooperative cannot join labor unions for purposes of collective
bargaining. However, nowhere in said case is it stated that
member-employees are prohibited from withdrawing their
membership in the cooperative in order to join a labor union.
The alleged board resolutions relied upon by petitioner in
denying the withdrawal of the members concerned were never
presented nor their contents disclosed either before the med-
arbiter or the Secretary of Labor if only to prove the
ratiocination for said denial.
Furthermore, CENECO never averred non-compliance with the
terms and conditions for withdrawal, if any. It appears that the
Articles of Incorporation of CENECO do not provide any
ground for withdrawal from membership which accordingly
gives rise to the presumption that the same may be done at
any time and for whatever reason. In addition, membership in
the cooperative is on a voluntary basis.
Hence, withdrawal therefrom cannot be restricted
unnecessarily. The right to join an organization necessarily
includes the equivalent right not to join the same.
Erika Cristel Diaz | LABOR RELATIONS
The right of the employees to self-organization is a
compelling reason why their withdrawal from the
cooperative must be allowed. As pointed out by CURE, the
resignation of the member-employees is an expression of
their preference for union membership over that of
membership in the cooperative.
The avowed policy of the State to afford fall protection to labor
and to promote the primacy of free collective bargaining
mandates that the employees' right to form and join unions for
purposes of collective bargaining be accorded the highest
consideration.
Membership in an electric cooperative which merely vests in
the member a right to vote during the annual meeting becomes
too trivial and insubstantial vis-a-vis the primordial and more
important constitutional right of an employee to join a union of
his choice.
Negros Oriental Electric Cooperative (NORECO) vs.
Secretary
The petitioner is indeed correct in stating that employees of a
cooperative who are members-consumers or members-
owners, are not qualified to form, join or assist labor
organizations for purposes of collective bargaining, because of
the principle that an owner cannot bargain with himself.
However, the petitioner failed to mention that the Supreme
Court has also declared that in so far as it involves
cooperatives with employees who are not members or co-
owners thereof, certainly such employees are entitled to
exercise the rights of all workers to organization, collective
bargaining, negotiations and others as are enshrined in the
Constitution and existing laws of the country.
The public respondent found that petitioner failed to show any
proof that any member of the private respondent was also a
member or co-owner of the petitioner-cooperative. Hence the
members of the private respondent could validly form a labor
organization.
Petitioner failed to show any proof that any member of the
private respondent was also a member or co-owner of the
petitioner cooperative. Finally, the instant petition ambiguously
states that "NORECO1 is an electric cooperative and all the
employees of the subject union are members of the
cooperative", but submitted a certified list of employees who
are members-co-owners of the petitioner electric cooperative.
Impliedly, there are rank-and-file employees of the petitioner
who are not themselves members-co-owners, or who are the
ones qualified to form or join a labor organization.
Republic vs. Asiapro Cooperative
Employee-employer relationship can exist between the
cooperative and the owner-member
The situation in Cooperative Rural Bank of Davao City, Inc. v.
Ferrer-Calleja is very much different from the present case.
The declaration made by the Court in the aforesaid case was
made in the context of whether an employee who is also an
owner-member of a cooperative can exercise the right to
 bargain collectively with the employer who is the cooperative
wherein he is an owner-member.
Obviously, an owner-member cannot bargain collectively with
the cooperative of which he is also the owner because an
owner cannot bargain with himself.
In the instant case, there is no issue regarding an owner-
member’s right to bargain collectively with the cooperative. The
question involved here is whether an employer-employee
relationship can exist between the cooperative and an
owner-member.
In fact, a closer look at Cooperative Rural Bank of Davao City,
Inc. will show that it actually recognized that an owner-member
of a cooperative can be its own employee. It bears stressing,
too, that a cooperative acquires juridical personality upon its
registration with the Cooperative Development Authority.
It has its Board of Directors, which directs and supervises its
business; meaning, its Board of Directors is the one in charge
in the conduct and management of its affairs. With that, a
cooperative can be likened to a corporation with a personality
separate and distinct from its owners-members. Consequently,
an owner-member of a cooperative can be an employee of the
latter and an employer-employee relationship can exist
between them.
Minors
The Child and Youth Welfare Code
P.D 603 as amended by P.D 1179
Article 111. Right to Self-Organization. - Working
children shall have the same freedoms as adults to join
the collective bargaining union of their own choosing in
accordance with existing law.
Neither management nor any collective bargaining union
shall threaten or coerce working children to join, continue or
withdraw as members of such union.
Employees of Contractors/Sub-contractors
Sec. 8(d) D.O No. 18-02, Series of 2002
Section 8. Rights of Contractual Employees. Consistent
with Section 7 of these Rules, the contractual employee
shall be entitled to all the rights and privileges due a regular
employee as provided for in the Labor Code, as amended,
to include the following:
(a) Safe and healthful working conditions;
(b) Labor standards such as service incentive leave, rest
days, overtime pay, holiday pay, 13th month pay and
separation pay;
(c) Social security and welfare benefits;
(d) Self-organization, collective bargaining and
peaceful concerted action; and
(e) Security of tenure.
GR: An employee of a legitimate job contractor is entitled to all
the rights and privileges due a regular employee as provided in
the Labor Code, such as the right to self-organization,
collective bargaining and peaceful concerted activities,
including the right to strike. But this right cannot be exercised
Erika Cristel Diaz | LABOR RELATIONS
and invoked against the principal but only against the
independent contractor which employed them.
XPN: When there is labor-only contracting
In which case, there is no indirect employer and the seconded
employees exercise the right to self-organization vis-a-vis the
“indirect” employer who becomes the only employer.
Homeworkers
Sec. 3, D.O No. 5 (1992)
Homeworkers have the right to form, join or assist
organizations of their own choosing in accordance with law.
The registration of homeworkers’ organizations or
associations following the requirements prescribed by law
will vest legal personality thereto.
Single-employee workplace
The lone employee can simply affiliate with a Labor federation
which, in turn, will represent him in a collective bargaining with
the employer. The Labor Code does not require a minimum
number of employees for the exercise of the right to self-
organization. If it did, then it would be discriminatory to
employees in workplaces that do not meet the required number
for union formation.
Kasambahay
Rule IV, Sec. 1(j) of the IRR of R.A 10361 or the Domestic
Workers Act or Batas Kasambahay is ultra-vires:
SECTION 1. Rights and Privileges of Kasambahay. – The
rights and privileges of the Kasambahay, are as follows:
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly
rest periods, service incentive leave, and 13th month
pay;
(c) Freedom from employers’ interference in the disposal
of wages;
(d) Coverage under the SSS, PhilHealth and Pag-IBIG
laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance;
(g) Right to privacy;
(h) Access to outside communication;
(i) Access to education and training;
(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract
as required in Section 7, Rule II;
(l) Right to certificate of employment as required in
Section 5, Rule VII;
(m) Right to terminate the employment as provided in
Section 2, Rule VII; and (n) Right to exercise their own
religious beliefs and cultural practices.
- The above stated provision of the IRR is ultra vires as the
right is not expressly conferred by R.A 10361.
- The provision is not only conceptually ridiculous but the
exercise of such right by domestic workers is not
amendable to implementation under any circumstance.
- In the context of the labor provisions of the Constitution
and as implemented by Article 252 [243] of the Labor
Code, the right to self-organization is granted only to all
persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable,
 medical or educational institutions whether operating for
profit or not.
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 (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal

Unions
Definition
Union refers to any labor organization in the private sector
organized for collective bargaining and for other legitimate
purposes. (Rules Implementing Book V of the Labor Code,
Sec. 1[ccc])
Note: Definition should be “or” instead of “and”.
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

Classification of Unions (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."
Basic classification of unions as to purpose
Art. 253(243) of the Labor Code

1. Labor organization
Takata Philippines Corp. vs. BLR
All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, The 20% minimum requirement under Art. 240[234]
medical, or educational institutions, whether operating for pertains to employees membership in the union and not
profit or not, shall have the right to self-organization and to the list of workers who participate in the organizational
form, join, or assist labor organizations of their own choosing meeting
for purposes of collective bargaining. [1st par]
It does not appear in Article 234 (b) of the Labor Code that the
2. Worker’s organization attendees in the organizational meeting must comprise 20% of
Ambulant, intermittent and itinerant workers, self- employed the employees in the bargaining unit. In fact, even the
people, rural workers and those without any definite employers Implementing Rules and Regulations of the Labor Code does
may form labor organizations for their mutual aid and not so provide.
protection. [2nd par]
It is only under Article 234 (c) that requires the names of all its
Distinction 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
Labor Worker’s employees’ membership in the union and not to the list of
organization association workers who participated in the organizational meeting.
Existence of ER- YES NO
EE relationship Indeed, Article 234 (b) and (c) provide for separate
Purpose Collective Mutual aid and requirements, which must be submitted for the union's
bargaining in protection registration, and which respondent did submit. Here, the total
whole or in part number of employees in the bargaining unit was 396, and 20%
Formation Art. 240 & Art. Book V, Rule IV of which was about 79.
241 Labor Code and Rule III, Sec.
2 (c) and (d) Respondent submitted a document entitled "Pangalan ng Mga
Petition for YES NO Kasapi ng Unyon" showing the names of 119 employees as
certification union members, thus respondent sufficiently complied even
election beyond the 20% minimum membership requirement.

Respondent also submitted the attendance sheet of the

Classification of labor organization as to how organizational meeting which contained the names and
formed signatures of the 68 union members who attended the meeting.
1. Independent union
Considering that there are 119 union members which are more
than 20% of all the employees of the bargaining unit, and since
Art. 240[234] Requirements of Registration. - A the law does not provide for the required number of members

Erika Cristel Diaz | LABOR RELATIONS

 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.
2. Chartered local
Art. 241 [234-A]. Chartering and Creation of a Local
Chapter. - A duly registered federation or national union
may directly create a local chapter by issuing a charter
certificate indicating the establishment of the local chapter.
The chapter shall acquire legal personality only for
purposes of filing a petition for certification election
from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and
privileges of a legitimate labor organization only upon
the submission of the following documents in addition to
its charter certificate:
(a) The names of the chapter's officers, their addresses, and
the principal office of the chapter; and
(b) The chapter's constitution and by-laws: Provided, That
where the chapter's constitution and by-laws are the same
as that of the federation or the national union, this fact shall
be indicated accordingly.
The additional supporting requirements shall be certified
under oath by the secretary or treasurer of the chapter and
attested by its president.
Abaria vs. NLRC
Records of the NCMB and DOLE Region 7 confirmed that
NAMA-MCCH-NFL had not registered as a labor organization,
having submitted only its charter certificate as an affiliate or
local chapter of NFL.
Not being a legitimate labor organization, NAMA-MCCH-NFL is
not entitled to those rights granted to a legitimate labor
organization under Art. 242, specifically:
(a) To act as the representative of its members for the
purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the
employees in an appropriate collective bargaining unit for
purposes of collective bargaining;
Aside from the registration requirement, it is only the labor
organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit which is
Erika Cristel Diaz | LABOR RELATIONS
the exclusive representative of the employees in such unit for
the purpose of collective bargaining, as provided in Art. 255.
NAMA-MCCH-NFL is not the labor organization certified or
designated by the majority of the rank-and-file hospital
employees to represent them in the CBA negotiations but the
NFL, as evidenced by CBAs concluded in 1987, 1991 and
1994.
While it is true that a local union has the right to disaffiliate from
the national federation, NAMA-MCCH-NFL has not done so as
there was no any effort on its part to comply with the legal
requisites for a valid disaffiliation during the "freedom period" or
the last 60 days of the last year of the CBA, through a majority
vote in a secret balloting in accordance with Art. 241 (d).
Nava and her group simply demanded that MCCHI directly
negotiate with the local union which has not even registered as
one.
To prove majority support of the employees, NAMA-MCCH-
NFL presented the CBA proposal allegedly signed by 153
union members. However, the petition signed by said members
showed that the signatories endorsed the proposed terms and
conditions without stating that they were likewise voting for or
designating the NAMA-MCCH-NFL as their exclusive
bargaining representative.
In any case, NAMA-MCCH-NFL at the time of submission of
said proposals was not a duly registered labor organization,
hence it cannot legally represent MCCHI’s rank-and-file
employees for purposes of collective bargaining.
Hence, even assuming that NAMA-MCCH-NFL had validly
disaffiliated from its mother union, NFL, it still did not
possess the legal personality to enter into CBA
negotiations.
A local union which is not independently registered
cannot, upon disaffiliation from the federation, exercise
the rights and privileges granted by law to legitimate labor
organizations; thus, it cannot file a petition for certification
election.
Besides, the NFL as the mother union has the right to
investigate members of its local chapter under the federation’s
Constitution and By-Laws, and if found guilty to expel such
members.
MCCHI therefore cannot be faulted for deferring action on the
CBA proposal submitted by NAMA-MCCH-NFL in view of the
union leadership’s conflict with the national federation. We
have held that the issue of disaffiliation is an intra-union
dispute which must be resolved in a different forum in an action
at the instance of either or both the federation and the local
union or a rival labor organization, not the employer.
Not being a legitimate labor organization nor the certified
exclusive bargaining representative of MCCHI’s rank-and-file
employees, NAMA-MCCH-NFL cannot demand from MCCHI
the right to bargain collectively in their behalf. Hence, MCCHI’s
refusal to bargain then with NAMA-MCCH-NFL cannot be
considered an unfair labor practice to justify the staging of the
strike.
Samahang Manggawa sa Charter Chemical Solidarity of
 Unions in the Philippines for Empowerment and
Reforms (SMCC-SUPER) vs. Charter Chemical and
Coating Corporation
The charter certificate need not be certified under oath by
the local union's secretary or treasurer and attested to by
its president.
The then prevailing Section 1, Rule VI of the Implementing
Rules of Book V, as amended by D.O. No. 9, series of 1997,
provides:
Section 1. Chartering and creation of a local chapter -- A
duly registered federation or national union may directly create
a local/chapter by submitting to the Regional Office or to the
Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national
union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapter's officers, their addresses,
and the principal office of the local/chapter; and
(c) The local/chapter's constitution and by-laws provided that
where the local/chapter's constitution and by-laws [are] the
same as [those] of the federation or national union, this fact
shall be indicated accordingly.
All the foregoing supporting requirements shall be
certified under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President.
As readily seen, the Sama-samang Pahayag ng Pagsapi at
Authorization and Listahan ng mga Dumalo sa Pangkalahatang
Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas
are not among the documents that need to be submitted to the
Regional Office or Bureau of Labor Relations in order to
register a labor organization. As to the charter certificate, the
above-quoted rule indicates that it should be executed under
oath.
The Court ruled that it was not necessary for the charter
certificate to be certified and attested by the local/chapter
officers. While this ruling was based on the interpretation of the
previous Implementing Rules provisions which were
supplanted by the 1997 amendments, we believe that the
same doctrine obtains in this case.
Considering that the charter certificate is prepared and
issued by the national union and not the local/chapter, it
does not make sense to have the local/chapter's officers
certify or attest to a document which they had no hand in
the preparation of.
In accordance with this ruling, petitioner union's charter
certificate need not be executed under oath. Consequently, it
validly acquired the status of a legitimate labor organization
upon submission of (1) its charter certificate, (2) the names of
its officers, their addresses, and its principal office, and (3) its
constitution and by-laws the last two requirements having been
executed under oath by the proper union officials as borne out
by the records.
Affiliate
Rules Implementing Book V of the Labor Code
Erika Cristel Diaz | LABOR RELATIONS
Sec. 1(b). Affiliate refers to an independent union
affiliated with a federation, national union or a chartered
local which was subsequently granted independent
registration but did not disaffiliate from its federation,
reported to the Regional Office and the Bureau in
accordance with Rule III, Sections 6 and 7 of these Rules.
Pambansang Kapatiran ng mga Anak Pawis sa Formey
Plastic National Workers Brotherhood vs. Laguesma
It is further argued that the CBA has no binding force since it
was entered into by KAMAPI as a federation and not by the
local union. Perusal of the agreement proves the contention
flawed. The signatories for KAMAPI consisted of its national
president and of the duly elected officers of the local union.
Thus the fact that KAMAPI was particularly mentioned as
the bargaining party without specifying the local union
cannot strip it of its authority to participate in the
bargaining process. The local union maintains its separate
personality despite affiliation with a larger national
federation.
The doctrine laid down in Progressive Development
Corporation is a mere clarification of the principle enunciated in
Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.
Both cases have provided that the mother union acting for
and in behalf of its affiliate has the status of an agent while
the local union remained the basic unit of the association
free to serve the common interest of all its members
subject only to the restraints imposed by the Constitution and
By-Laws of the association.
Nonetheless, the facts and principles laid down in both cases
do not jibe squarely with the case at bench. The controversy in
Progressive Development Corporation centered on the
requirements before a local or chapter of a federation may file
a petition for certification election and be certified as the sole
and exclusive bargaining agent, while in Liberty Cotton Mills
Workers the issue involved was the disaffiliation of the local
union from the federation. The question of whether there was a
valid and existing CBA, which is the question being resolved in
the case at bench, was never raised in the two cited cases
since it was already an accepted fact that the CBA was validly
executed and existing.
Insular Hotel Employees Union-NFL vs. Waterfront
Insular Hotel Davao
Pursuant to Article 260 of the Labor Code, the parties to a
CBA shall name or designate their respective representatives
to the grievance machinery and if the grievance is unsettled in
that level, it shall automatically be referred to the voluntary
arbitrators designated in advance by parties to a CBA.
Consequently, only disputes involving the union and the
company shall be referred to the grievance machinery or
voluntary arbitrators.
If the individual members of the Union have no authority
to file the case, does the federation to which the local
union is affiliated have the standing to do so? On this note,
 Coastal Subic Bay Terminal, Inc. v. Department of Labor and
Employment is enlightening, thus:
A local union does not owe its existence to the federation
with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its
members.
Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the
license to act independently of the local union. It only gives
rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their
agent.
Based on the foregoing, this Court agrees with approval with
the disquisition of the CA when it ruled that NFL had no
authority to file the complaint in behalf of the individual
employees, to wit:
Anent the first issue, We hold that the voluntary arbitrator had
no jurisdiction over the case. Waterfront contents that the
Notice of Mediation does not mention the name of the
Union but merely referred to the National Federation of
Labor (NFL) with which the Union is affiliated.
In the subsequent pleadings, NFL's legal counsel even
confirmed that the case was not filed by the union but by
NFL and the individual employees named in the SPAs which
were not even dated nor notarized.
Even granting that petitioner Union was affiliated with NFL, still
the relationship between that of the local union and the
labor federation or national union with which the former
was affiliated is generally understood to be that of agency,
where the local is the principal and the federation the
agency.
Being merely an agent of the local union, NFL should have
presented its authority to file the Notice of Mediation.
While We commend NFL's zealousness in protecting the rights
of lowly workers, We cannot, however, allow it to go beyond
what it is empowered to do.
National Union of Bank Employees (NUBE) vs.
Philnabank Empoloyees Association (PEMA)
The right of the local union to exercise the right to
disaffiliate from its mother union is well settled in this
jurisdiction.
A local union has the right to disaffiliate from its mother union
or declare its autonomy. A local union, being a separate and
voluntary association, is free to serve the interests of all its
members including the freedom to disaffiliate or declare its
autonomy from the federation which it belongs when
circumstances warrant, in accordance with the constitutional
guarantee of freedom of association.
The purpose of affiliation by a local union with a mother
union or a federation is to increase by collective action the
bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association,
free to serve their own and the common interest of all, subject
to the restraints imposed by the Constitution and By-Laws of
Erika Cristel Diaz | LABOR RELATIONS
the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement
which brought it into existence.
Thus, a local union which has affiliated itself with a
federation is free to sever such affiliation anytime and
such disaffiliation cannot be considered disloyalty. In the
absence of specific provisions in the federation's constitution
prohibiting disaffiliation or the declaration of autonomy of a
local union, a local may dissociate with its parent union.
The right of a local union to disaffiliate from its mother
federation is not a novel thesis unillumined by case law. The
right of local unions to separate from their mother
federation on the ground that as separate and voluntary
associations, local unions do not owe their creation and
existence to the national federation to which they are
affiliated but, instead, to the will of their members.
The sole essence of affiliation is to increase, by collective
action, the common bargaining power of local unions for
the effective enhancement and protection of their
interests. Admittedly, there are times when without succor and
support local unions may find it hard, unaided by other support
groups, to secure justice for themselves.
Yet the local unions remain the basic units of association,
free to serve their own interests subject to the restraints
imposed by the constitution and by-laws of the national
federation, and free also to renounce the affiliation upon the
terms laid down in the agreement which brought such affiliation
into existence.
Under the rules implementing the Labor Code, a chartered
local union acquires legal personality through the charter
certificate issued by a duly registered federation or
national union, and reported to the Regional Office in
accordance with the rules implementing the Labor Code.
Hence, local unions are considered principals while the
federation is deemed to be merely their agent. As such
principals, the unions are entitled to exercise the rights
and privileges of a legitimate labor organization, including
the right to seek certification as the sole and exclusive
bargaining agent in the appropriate employer unit.
A local union may disaffiliate at any time from its mother
federation, absent any showing that the same is prohibited
under its constitution or rule. Such, however, does not
result in it losing its legal personality altogether.
A local labor union is a separate and distinct unit primarily
designed to secure and maintain an equality of bargaining
power between the employer and their employee-
members.
A local union does not owe its existence to the federation with
which it is affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its members.
These and many more have consistently reiterated the earlier
view that the right of the local members to withdraw from
the federation and to form a new local union depends
upon the provisions of the union's constitution, by-laws
and charter and, in the absence of enforceable provisions
in the federation's constitution preventing disaffiliation of
a local union, a local may sever its relationship with its
parent.
 In the case at bar, there is nothing shown in the records nor is
it claimed by NUBE that PEMA was expressly forbidden to
disaffiliate from the federation nor were there any conditions
imposed for a valid breakaway. This being so, PEMA is not
precluded to disaffiliate from NUBE after acquiring the
status of an independent labor organization duly
registered before the DOLE.
Also, there is no merit on NUBE’s contention that PEMA’s
disaffiliation is invalid for non-observance of the procedure that
union members should make such determination through
secret ballot and after due deliberation, conformably with
Article 241 (d) of the Labor Code, as amended.
Conspicuously, other than citing the opinion of a recognized
labor law authority, NUBE failed to quote a specific
provision of the law or rule mandating that a local union
disaffiliation from a federation must comply with Article
241 (d) in order to be valid and effective.
Granting, for argument’s sake, that Article 241 (d) is
applicable, still, We uphold PEMA’s disaffiliation from
NUBE.
First, non-compliance with the procedure on disaffiliation,
being premised on purely technical grounds cannot rise
above the employees’s fundamental right to self-
organization and to form and join labor organizations of
their own choosing for the purpose of collective
bargaining.
Second, the Article nonetheless provides that when the
nature of the organization renders such secret ballot
impractical, the union officers may make the decision in
behalf of the general membership.
In this case, NUBE did not even dare to contest PEMA’s
representation that PNB employees, from where [PEMA]
[derives] its membership, are scattered from Aparri to Jolo,
manning more than 300 branches in various towns and cities of
the country, hence, to gather the general membership of the
union in a general membership to vote through secret balloting
is virtually impossible.
It is understandable, therefore, why PEMA’s board of directors
merely opted to submit for ratification of the majority their
resolution to disaffiliate from NUBE.
Third, and most importantly, NUBE did not dispute the
existence of the persons or their due execution of the
document showing their unequivocal support for the
disaffiliation of PEMA from NUBE.
No evidence was presented that the union members’
ratification was obtained by mistake or through fraud, force or
intimidation. Surely, this is not a case where one or two
members of the local union decided to disaffiliate from the
mother federation, but one where more than a majority of the
local union members decided to disaffiliate.
Consequently, by PEMA's valid disaffiliation from NUBE,
the vinculum that previously bound the two entities was
completely severed. As NUBE was divested of any and all
power to act in representation of PEMA, any act performed by
the former that affects the interests and affairs of the latter,
including the supposed expulsion of Serrana et al., is rendered
without force and effect.
Erika Cristel Diaz | LABOR RELATIONS
Also, in effect, NUBE loses it right to collect all union dues
held in its trust by PNB. The moment that PEMA separated
from and left NUBE and exists as an independent labor
organization with a certificate of registration, the former is
no longer obliged to pay dues and assessments to the
latter; naturally, there would be no longer any reason or
occasion for PNB to continue making deductions.
NUBE in this case is entitled to receive the dues from
respondent companies as long as petitioner union is affiliated
with it and respondent companies are authorized by their
employees (members of petitioner union) to deduct union dues.
Without said affiliation, the employer has no link to the mother
union.
The obligation of an employee to pay union dues is
coterminous with his affiliation or membership. The
employees' check-off authorization, even if declared
irrevocable, is good only as long as they remain members of
the union concerned.
A contract between an employer and the parent organization
as bargaining agent for the employees is terminated bv the
disaffiliation of the local of which the employees are members.
On the other hand, it was entirely reasonable for PNB to enter
into a CBA with PEMA as represented by Serrana et al. Since
PEMA had validly separated itself from NUBE, there would be
no restrictions which could validly hinder it from collectively
bargaining with PNB.
Classification as to components
1. Federation
2. National union
Rules Implementing Book V of the Labor Code
Sec. 1(ll). National Union or Federation refers to a group
of legitimate labor unions in a private establishment
organized for collective bargaining or for dealing with
employers concerning terms and conditions of employment
for their member unions or for participating in the
formulation of social and employment policies, standards
and programs, registered with the Bureau in accordance
with Rule III, Section 2-B of these Rules.
ART. 244. [237] Additional Requirements for
Federations or National Unions. – Subject to Article 238
[245] if the applicant for registration is a federation or a
national union, it shall, in addition to the requirements of
the preceding Articles, submit the following:
(a) Proof of the affiliation of at least ten (10) locals or
chapters, each of which must be a duly recognized
collective bargaining agent in the establishment or industry
in which it operates, supporting the registration of such
applicant federation or national union; and
(b) The names and addresses of the companies where
the locals or chapters operate and the list of all the
members in each company involved.
 San Miguel Corporation Employees Union-PTGWO vs. Trade union center is not allowed to directly create a local
San Miguel Packaging Products Employees Union- or chapter through chartering
PDMP After an exhaustive study of the governing labor law provisions,
both statutory and regulatory, we find no legal justification to
support the conclusion that a trade union center is allowed to
Petitioner filed with the DOLE-NCR a petition seeking the
directly create a local or chapter through chartering.
cancellation of respondent's registration and its dropping from
the rolls of legitimate labor organizations. In its petition,
Culling from its definition as provided by Department Order No.
petitioner accused respondent of committing fraud and
9, a trade union center is any group of registered national
falsification, and non-compliance with registration requirements
unions or federations organized for the mutual aid and
in obtaining its certificate of registration.
protection of its members; for assisting such members in
collective bargaining; or for participating in the formulation of
It raised allegations that respondent violated Articles 239(a),
social and employment policies, standards, and programs, and
(b) and (c) and 234(c) of the Labor Code. Moreover, petitioner
is duly registered with the DOLE in accordance with Rule III,
claimed that PDMP is not a legitimate labor organization, but a
Section 2 of the Implementing Rules.
trade union center, hence, it cannot directly create a local or
chapter.
The same rule provides that the application for
registration of an industry or trade union center shall be
Anent the foregoing, as has been held in a long line of cases,
supported by the following:
the legal personality of a legitimate labor organization, such as
PDMP, cannot be subject to a collateral attack. The law is very
(a) The list of its member organizations and their respective
clear on this matter. Article 212(h) of the Labor Code, as
presidents and, in the case of an industry union, the industry
amended, defines a legitimate labor organization as any
where the union seeks to operate;
labor organization duly registered with the DOLE, and
includes any branch or local thereof.
(b) The resolution of membership of each member
organization, approved by the Board of Directors of such
On the other hand, a trade union center is any group of
union;
registered national unions or federations organized for the
mutual aid and protection of its members; for assisting such
(c) The name and principal address of the applicant, the
members in collective bargaining; or for participating in the
names of its officers and their addresses, the minutes of its
formulation of social and employment policies, standards, and
organizational meeting/s, and the list of member organizations
programs, and is duly registered with the DOLE in accordance
and their representatives who attended such meeting/s; and
with Rule III, Section 2 of the Implementing Rules.
(d) A copy of its constitution and by-laws and minutes of its
The Implementing Rules stipulate that a labor organization
ratification by a majority of the presidents of the member
shall be deemed registered and vested with legal
organizations, provided that where the ratification was done
personality on the date of issuance of its certificate of
simultaneously with the organizational meeting, it shall be
registration.
sufficient that the fact of ratification be included in the minutes
of the organizational meeting.
Once a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack. It may be
Evidently, while a "national union" or "federation" is a labor
questioned only in an independent petition for cancellation in
organization with at least ten locals or chapters or affiliates,
accordance with Section 5 of Rule V, Book V of the
each of which must be a duly certified or recognized collective
Implementing Rules.
bargaining agent; a trade union center, on the other hand, is
composed of a group of registered national unions or
PDMP was registered as a trade union center and issued
federations.
Registration Certificate No. FED-11558-LC by the BLR on 14
February 1991. Until the certificate of registration of PDMP
Department Order No. 9 mentions two labor organizations
is cancelled, its legal personality as a legitimate labor
either of which is allowed to directly create a local or
organization subsists.
chapter through chartering – a duly registered federation
or a national union.
Once a union acquires legitimate status as a labor
organization, it continues to be recognized as such until
its certificate of registration is cancelled or revoked in an
Department Order No. 9 defines a "chartered local" as a
independent action for cancellation. It bears to emphasize
labor organization in the private sector operating at the
that what is being directly challenged is the personality of
enterprise level that acquired legal personality through a
respondent as a legitimate labor organization and not that of
charter certificate, issued by a duly registered federation or
PDMP. This being a collateral attack, this Court is without
national union and reported to the Regional Office in
jurisdiction to entertain questions indirectly impugning the
accordance with Rule III, Section 2-E of these Rules.
legitimacy of PDMP.
Republic Act No. 9481 or "An Act Strengthening the Workers'
Corollarily, PDMP is granted all the rights and privileges
Constitutional Right to Self-Organization, Amending for the
appurtenant to a legitimate labor organization, and continues to
Purpose Presidential Decree No. 442, As Amended, Otherwise
be recognized as such until its certificate of registration is
Known as the Labor Code of the Philippines" lapsed into law
successfully impugned and thereafter cancelled or revoked in
on 25 May 2007 and became effective on 14 June 2007. This
an independent action for cancellation.
law further amends the Labor Code provisions on Labor
Relations.

Erika Cristel Diaz | LABOR RELATIONS

 Article 234 now includes the term trade union center, but
interestingly, the provision indicating the procedure for
chartering or creating a local or chapter, namely Article
234-A, still makes no mention of a trade union center.
Also worth emphasizing is that even in the most recent
amendment of the implementing rules, there was no mention of
a trade union center as being among the labor organizations
allowed to charter. If its intent were otherwise, the law could
have so easily and conveniently included "trade union centers"
in identifying the labor organizations allowed to charter a
chapter or local.
Therefore, since under the pertinent status and applicable
implementing rules, the power granted to labor
organizations to directly create a chapter or local through
chartering is given to a federation or national union, then a
trade union center is without authority to charter directly.
In sum, although PDMP as a trade union center is a
legitimate labor organization, it has no power to directly
create a local or chapter. Thus, SMPPEU-PDMP cannot be
created under the more lenient requirements for chartering, but
must have complied with the more stringent rules for creation
and registration of an independent union, including the 20%
membership requirement.
Classification as to capacity to represent
1. Bargaining – Private sector
Legitimate labor organization
Art. 219 [212](h). Legitimate labor organization means
any labor organization duly registered with the
Department of Labor and Employment, and includes any
branch or local thereof.
Rules Implementing Book V of the Labor Code
Sec. 1(ff). Legitimate Labor Organization refers to any
labor organization in the private sector registered or
reported with the Department in accordance with Rules III
and IV of these Rules.
Rules Implementing Book V of the Labor Code
Sec. 1(dd). Labor Organization refers to any union or
association of employees in the private sector which
exists in whole or in part for the purpose of collective
bargaining, mutual aid, interest, cooperation,
protection, or other lawful purposes.
Exclusive bargaining representative
Article 251[242]. Rights of legitimate labor
organizations. - A legitimate labor organization shall
have the right:
(b) To be certified as the exclusive representative of all
the employees in an appropriate collective bargaining
unit for purposes of collective bargaining;
Rules Implementing Book V of the Labor Code
Erika Cristel Diaz | LABOR RELATIONS
Sec. 1.(u). Exclusive Bargaining Representative refers to
a legitimate labor union duly recognized or certified as
the sole and exclusive bargaining representative or
agent of all the employees in a bargaining unit.
Bargaining representative
Art. 219[212] (j). Bargaining representative means a
legitimate labor organization or any officer or agent of
such organization whether or not employed by the
employer.
Collective bargaining agent
Art. 244 [237]. Additional requirements for Federations
or National Unions:
(a). Proof of the affiliation of at least ten (10) locals or
chapters, each of which must be a duly recognized
collective bargaining agent in the establishment or
industry in which it operates, supporting the registration of
such applicant federation or national union.
Note: The Labor Code has a variation of terminologies. Add to
this the use of “Exclusive Bargaining Agent” in decided cases:
Maricalum Corporation vs. Brion
Article 256 of the Labor Code partly provides:
REPRESENTATION ISSUE IN ORGANIZED
ESTABLISHMENTS. - In organized establishments, when a
verified petition questioning the majority status of the
incumbent bargaining agent is filed before the Department of
Labor and Employment within the sixty-day period before the
expiration of the collective bargaining agreement, the Med-
Arbiter shall automatically order an election by secret ballot
when the verified petition is supported by the written consent of
at least twenty-five (25%) percent of all the employees in the
appropriate bargaining unit.
At the expiration of the freedom period, the employer shall
continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification
election is filed.
According to the foregoing provision, for a union to become
an exclusive bargaining representative of a particular
establishment, it must emerge as winner in a certification
election.
In the case at bar, there was no certification election held
challenging the majority status of NAMAWU as the exclusive
bargaining representative of petitioner's employees. NAMAWU,
therefore, remains the exclusive bargaining representative of
petitioner's employees and possesses legal standing to
represent them.
2. Negotiation – Public sector
Employees Organization
E.O 180 – PROVIDING GUIDELINES FOR THE EXERCISE
OF THE RIGHT TO ORGANIZE OF GOVERNMENT
 EMPLOYEES, CREATING A PUBLIC SECTOR LABOR-
MANAGEMENT COUNCIL, AND FOR OTHER PURPOSES
III. Registration of Employees' Organization
Sec. 7. Government employees' organizations shall
register with the Civil Service Commission and the
Department of Labor and Employment.
The application shall be filed with the Bureau of Labor
Relations of the Department which shall process the same
in accordance with the provisions of the Labor Code of the
Philippines, as amended. Applications may also be filed with
the Regional Offices of the Department of Labor and
Employment which shall immediately transmit the said
applications to the Bureau of Labor Relations within three
(3) days from receipt thereof.
Legitimate Employees Organization
Sec. 8. Upon approval of the application, a registration
certificate be issued to the organization recognizing it as a
legitimate employees' organization with the right to
represent its members and undertake activities to further
and defend its interest.
The corresponding certificates of registration shall be
jointly approved by the Chairman of the Civil Service
Commission and Secretary of Labor and Employment.
IV. Sole and Exclusive Employees' Representatives
Sole and Exclusive Representative
Sec. 10. The duly registered employees' organization
having the support of the majority of the employees in
the appropriate organizational unit shall be designated as
the sole and exclusive representative of the employees.
Effect of Registration
Rule IV, Sec. 8 in relation to Rule XIV:
Pagpalain Haulers, Inc. vs. Trajano
On July 10, 1997, Pagpalain filed a motion to dismiss the
petition, alleging that ILO-PHILS was not a legitimate labor
organization due to its failure to comply with the requirements
for registration under the Labor Code. Specifically, it claimed
that the books of account submitted by ILO-PHILS were not
verified under oath by its treasurer and attested to by its
president, a required by Rule II, Book V of the Omnibus Rules
Implementing the Labor Code.
As can be gleaned from the Article 234, the Labor Code does
not require the submission of books of account in order
for a labor organization to be registered as a legitimate
labor organization.
Erika Cristel Diaz | LABOR RELATIONS
The requirement that books of account be submitted as a
requisite for a registration can be found only in Book V of the
Omnibus Rules Implementing the Labor Code, prior to its
amendment by Department Order No. 9, Series of 1997.
Specifically, the old Section 3(e), Rule II, of Book V provided
that the local or chapter of a labor federation or national union
shall have and maintain a constitution and by-laws, set of
officers and books of accounts. For reporting purposes, the
procedure governing the reporting of independently registered
unions, federations or national unions shall be observed.
Since the Department Order No. 9 has done away with the
submission of books of account as a requisite for registration,
Pagpalains only recourse now is to have said order declared
null and void.
Department Order No. 9 only dispenses with books of account
as a requirement for registration of a local or chapter of a
national union or federation. As provided by Article 241 (h) and
(j), a labor organization must still maintain books of account,
but it need not submit the same as a requirement for
registration. Given the foregoing disquisition, we find no cogent
reason to declare Department Order No. 9 null and void, as
well as to reverse the assailed resolution of the Secretary of
Labor.
Samahan ng mga Manggagawa Ng Samma
(Sammalikha) vs. Samma Corporation
LIKHA was granted legal personality as a federation under its
certificate of registration. Subsequently, petitioner as its local
chapter was issued its charter certificate. With certificates of
registration issued in their favor, they are clothed with
legal personality as legitimate labor organizations:
Section 5. Effect of registration. - The labor organization
or workers' association shall be deemed registered and
vested with legal personality on the date of issuance of its
certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but may be
questioned only in an independent petition for cancellation in
accordance with these Rules.
Section 3. Acquisition of legal personality by local
chapter.- A local/chapter constituted in accordance with
Section 1 of this Rule shall acquire legal personality from
the date of filing of the complete documents enumerated
therein. Upon compliance with all the documentary
requirements, the Regional Office or Bureau of Labor
Relations shall issue in favor of the local/chapter a certificate
indicating that it is included in the roster of legitimate labor
organizations.
Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of
registration.
Unless petitioner's union registration is cancelled in
independent proceedings, it shall continue to have all the rights
of a legitimate labor organization, including the right to petition
for certification election.
Furthermore, the grounds for dismissal of a petition for
certification election based on the lack of legal personality
 of a labor organization are the following: (a) petitioner is not
listed by the Regional Office or the Bureau of Labor Relations
in its registry of legitimate labor organizations or (b) its legal
personality has been revoked or cancelled with finality in
accordance with the rules.
As mentioned, respondent filed a petition for cancellation of the
registration of petitioner on December 14, 2002. In a resolution
dated April 14, 2003, petitioner's charter certificate was
revoked by the DOLE. But on May 6, 2003, petitioner moved
for the reconsideration of this resolution.
Neither of the parties alleged that this resolution revoking
petitioner's charter certificate had attained finality. However, in
this petition, petitioner prayed that its charter certificate be
reinstated in the roster of active legitimate labor organizations.
This cannot be granted here. To repeat, the proceedings on a
petition for cancellation of registration are independent of
those of a petition for certification election. This case
originated from the latter. If it is shown that petitioner's legal
personality had already been revoked or cancelled with
finality in accordance with the rules, then it is no longer a
legitimate labor organization with the right to petition for a
certification election.
Proper remedy against Secretary of Labor for
refusal to register a labor organization
The proper remedy in case of refusal to register a labor
organization which complies with all the requirements is not
certiorari but Mandamus, since approval of application for
registration is not a judicial function.
Brillo vs. Buklatan
The third cause of action is for certiorari against the
Secretary of Labor for having granted licenses to new
unions, namely, the Leyte Stevedoring and Terminal Dock
Workers Union and the Visayan Workers Union, the
registration of which is alleged to be detrimental to Leyte
United Workers.
It is alleged that the new labor unions were organized by old
members of the Leyte United Workers, with the aid of the
employers, and the result may be the death of the Leyte United
Workers. It is maintained that the action of the Secretary of
Labor in approving the application of the said new labor
unions constitutes an excess of jurisdiction and grave
abuse of discretion.
The petition for certiorari does not lie because the
Secretary of Labor did not exercise judicial function.
Furthermore, there is no allegation that the new labor unions
have the purpose of undermining or destroying the constituted
Government or of violating any law or laws of the Philippines,
and therefore, they cannot be denied registration and
permission to operate under section 2, of Commonwealth Act
No. 213.
The fourth claim alleged in the complaint is a petition for
declaratory relief involving practically the same questions
raised in the third cause of action.
Philippine Land-Sea-Air Labor Union [PLASLU] vs. CIR
Erika Cristel Diaz | LABOR RELATIONS
It will be noted, however, that these employees whose votes
were challenged were hired on temporary or casual basis and
had work of a different nature from those of the laborers
permitted to vote in the certification election.
In the determination of the proper constituency of a collective
bargaining unit, certain factors must be considered, among
them, the employment status of the employees to be affected,
that is to say, the positions and categories of work to which
they belong, and the unity of the employees' interest.
And this is so because the basic test of a bargaining unit's
acceptability is whether it will best assure to all employees is
whether it will be assure to all employees the exercise of their
collective bargaining rights.
It appearing that the 242 stevedores and piece workers, whose
votes have been challenged, were employed on casual or day
to day basis and have no reasonable basis for continued or
renewed employment for any appreciable substantial time —
not to mention the nature of work they perform — they cannot
be considered to have such mutuality of interest as to justify
their inclusion in a bargaining unit composed of permanent or
regular employees.
Effect of incorporation under the Corporation Code
It is inconsequential as it does not make it a legitimate labor
organization. It has the effect only of giving it judicial
personality before the regular courts of justice. It does not
confer the rights and privileges accorded by law to legitimate
labor organizations.
Cebu Seamen’s Association Inc. vs. Calleja
The determinative issue in this case is who is entitled to
the collection and custody of the union dues? Cebu
Seamen's Association headed by Gabayoyo or Seamen's
Association of the Philippines headed by Nacua.
On October 23, 1950, a group of deck officers organized the
Cebu Seamen's Association, Inc., (CSAI), a non-stock
corporation and registered it with the Securities and Exchange
Commission (SEC).
The same group registered the organization with the Bureau of
Labor Relations (BLR) as Seamen's Association of the
Philippines (SAPI). It is the registration of the organization
with the BLR are not with the SEC which made it a
legitimate labor organization with rights and privileges
granted under the Labor Code.
Also, before the controversy, private respondent Dominica
Nacua was elected president of the labor union, SAPI. It had
an existing CBA with Aboitiz Shipping Corporation. Before the
end of the term of private respondent Nacua, some members
of the union which included Domingo Machacon and petitioner
Manuel Gabayoyo showed signs of discontentment with the
leadership of Nacua.
This break-away group revived the moribund corporation and
issued an undated resolution expelling Nacua from association.
Sometime in February, 1987, it held its own election of officers
supervised by the Securities and Exchange Commission.
The expulsion of Nacua from the corporation, of which she
denied being a member, has however, not affected her
 membership with the labor union. In fact, in the elections of
officers for 1987-1989, she was re-elected as the president of
the labor union.
In this connections, We cannot agree with the contention of
Gabayoyo that Nacua was already expelled from the union.
Whatever acts their group had done in the corporation do
not bind the labor union. Moreover, Gabayoyo cannot claim
leadership of the labor group by virtue of his having been
elected as a president of the dormant corporation CSAI.
Under the principles of administrative law in force in this
jurisdiction, decisions of administrative officers shall not be
disturbed by courts, except when the former acted without or in
excess of their jurisdiction or with grave abuse of discretion.
Public respondent Bureau of Labor Relations correctly ruled on
the basis of the evidence presented by the parties that SAPI,
the legitimate labor union, registered with its office, is not
the same association as CSAI, the corporation, insofar as
their rights under the Labor Code are concerned. Hence,
the former and not the latter association is entitled to the
release and custody of union fees with Aboitiz Shipping and
other shipping companies with whom it had an existing CBA.
It is undisputed from the records that the election of the so-
called set of officers headed by Manuel Gabayoyo was
conducted under the supervision of the SEC, presumably in
accordance with its constitution and by-laws as well as the
articles of incorporation of respondent CSAI, and the
Corporation Code.
That had been so precisely on the honest belief of the
participants therein that they were acting in their capacity as
members of the said corporation. That being the case, the
aforementioned set of officers is of the respondent corporation
and not of the complainant union. It follows, then, that any
proceedings, and actions taken by said set of officers
cannot, in any manner, affect the union and its members.
On the other hand, we rule and so hold that the other set of
officers headed by Dominica C. Nacua is the lawful set of
officers of SAPI and therefore, is entitled to the release and
custody of the union dues as well as the agency fees, if any,
there be.
A record check with the Labor Organizations (LOD), this
Bureau, shows that SAPI has submitted to it for file the list of
this new set of officers, in compliance with the second
paragraph of Article 242 (c) of the Labor Code. This list
sufficiently sustains the view that said officers were lawfully
elected, in the absence of clear and convincing proof to the
contrary.
There is NO collective bargaining in the public
sector:
Alliance of Government Workers vs. Minister of Labor &
Employment
The general rule in the past and up to the present is that the
terms and conditions of employment in the Government,
including any political subdivision or instrumentality thereof are
governed by law.
Erika Cristel Diaz | LABOR RELATIONS
Since the terms and conditions of government
employment are fixed by law, government workers cannot
use the same weapons employed by workers in the private
sector to secure concessions from their employers.
The principle behind labor unionism in private industry is that
industrial peace cannot be secured through compulsion by law.
Relations between private employers and their employees rest
on an essentially voluntary basis.
Subject to the minimum requirements of wage laws and other
labor and welfare legislation, the terms and conditions of
employment in the unionized private sector are settled through
the process of collective bargaining.
In government employment, however, it is the legislature
and, where properly given delegated power, the
administrative heads of government which fix the terms
and conditions of employment. And this is effected through
statutes or administrative circulars, rules, and regulations, not
through collective bargaining agreements.
Cancellation of registration
ART. 245[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.
Grounds for cancellation of registration
ART. 247 [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.
Fraud or misrepresentation deemed sufficient for
the cancellation of registration: grave and
compelling enough to vitiate consent of the majority
of the members
S.S Ventures International, Inc. vs. Ventures Labor
Union
The right to form, join, or assist a union is specifically
protected by Art. XIII, Section 314 of the Constitution and such
right, according to Art. III, Sec. 8 of the Constitution and Art.
 246 of the Labor Code, shall not be abridged. Once registered
with the DOLE, a union is considered a legitimate labor
organization endowed with the right and privileges granted by
law to such organization.
While a certificate of registration confers a union with
legitimacy with the concomitant right to participate in or ask for
certification election in a bargaining unit, the registration may
be canceled or the union may be decertified as the bargaining
unit, in which case the union is divested of the status of a
legitimate labor organization.
Among the grounds for cancellation is the commission of any
of the acts enumerated in Art. 239(a)16 of the Labor Code,
such as fraud and misrepresentation in connection with the
adoption or ratification of the union's constitution and like
documents.
The Court, has in previous cases, said that to decertify a union,
it is not enough to show that the union includes ineligible
employees in its membership. It must also be shown that
there was misrepresentation, false statement, or fraud in
connection with the application for registration and the
supporting documents, such as the adoption or ratification of
the constitution and by-laws or amendments thereto and the
minutes of ratification of the constitution or by-laws, among
other documents.
Essentially, Ventures faults both the BLR and the CA in finding
that there was no fraud or misrepresentation on the part of the
Union sufficient to justify cancellation of its registration. In this
regard, Ventures makes much of, first, the separate hand-
written statements of 82 employees who, in gist, alleged that
they were unwilling or harassed signatories to the attendance
sheet of the organizational meeting.
These mostly undated written statements submitted by
Ventures on March 20, 2001, or seven months after it filed its
petition for cancellation of registration, partake of the nature of
withdrawal of union membership executed after the Union's
filing of a petition for certification election on March 21, 2000.
The employees' withdrawal from a labor union made
before the filing of the petition for certification election is
presumed voluntary, while withdrawal after the filing of
such petition is considered to be involuntary and does not
affect the same.
Now then, if a withdrawal from union membership done after a
petition for certification election has been filed does not vitiate
such petition, is it not but logical to assume that such
withdrawal cannot work to nullify the registration of the union?
Upon this light, the Court is inclined to agree with the CA that
the BLR did not abuse its discretion nor gravely err when it
concluded that the affidavits of retraction of the 82
members had no evidentiary weight.
After a labor organization has filed the necessary registration
documents, it becomes mandatory for the BLR to check if the
requirements under Art. 234 of the Labor Code have been
sedulously complied with.
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.
Erika Cristel Diaz | LABOR RELATIONS
Prescinding from these considerations, the issuance to the
Union of Certificate of Registration necessarily implies that its
application for registration and the supporting documents
thereof are prima facie free from any vitiating irregularities.
Second, Ventures draws attention to the inclusion of 82
individuals to the list of participants in the January 9, 2000
organizational meeting. Ventures submits that the 82, being no
longer connected with the company, should not have been
counted as attendees in the meeting and the ratification
proceedings immediately afterwards.
The assailed inclusion of the said 82 individuals to the meeting
and proceedings adverted to is not really fatal to the Union's
cause for, as determined by the BLR, the allegations of
falsification of signatures or misrepresentation with respect to
these individuals are without basis.
The Court need not delve into the question of whether these 82
dismissed individuals were still Union members qualified to
vote and affix their signature on its application for registration
and supporting documents. The procedure for acquiring or
losing union membership and the determination of who are
qualified or disqualified to be members are matters internal to
the union and flow from its right to self-organization.
To our mind, the relevancy of the 82 individuals' active
participation in the Union's organizational meeting and the
signing ceremonies thereafter comes in only for purposes of
determining whether or not the Union, even without the 82,
would still meet what Art. 234(c) of the Labor Code requires to
be submitted.
Whatever misgivings the petitioner may have with regard to the
82 dismissed employees is better addressed in the inclusion-
exclusion proceedings during a pre-election conference. The
issue surrounding the involvement of the 82 employees is a
matter of membership or voter eligibility. It is not a ground to
cancel union registration
The bare fact that three signatures twice appeared on the
list of those who participated in the organizational meeting
would not, to our mind, provide a valid reason to cancel
Certificate of Registration. As the Union tenably explained
without rebuttal from Ventures, the double entries are no
more than "normal human error," effected without malice.
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 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.
Effect of filling a petition for certificate of
registration
ART. 246[238-A]. Effect of a Petition for Cancellation of
Registration. - A petition for cancellation of union
registration shall not suspend the proceedings for
certification election nor shall it prevent the filing of a
petition for certification election.
In case of cancellation, nothing herein shall restrict the right
of the union to seek just and equitable remedies in the

appropriate courts.
Itugon-Suyoc Mines vs. Sangilo-Itogon Workers
Petitioner's brief challenges Sañgilo's capacity to sue. Sañgilo,
so petitioner says, ceased to be a legitimate labor union on
March 31, 1960 when the Department of Labor cancelled the
former's registration permit for failure to comply with statutory
requirements. Contrariwise Sañgilo avers that at the time the
complaint below was filed it was a legitimate labor
organization, and continues to be so.
There is no order final in character cancelling Sañgilo's
registration permit and dropping its name from the roster
of legitimate labor unions. Sangilo's status does not appear
in the record to have changed. Therefore, Sañgilo still enjoys
all the rights accorded by law to a legitimate labor union. One
of those rights is the right to sue.
Even assuming that Sañgilo later lost its registration
permit in the course of the present proceedings, still
Sañgilo may continue as a party without need of
substitution of parties, subject however to the understanding
that whatever decision may be rendered therein will only be
binding upon those members of the union who have not
signified their desire to withdraw from the case before its trial
and decision on the merits.
Really, we perceive of no reason why the judgment in favor of
the fifteen individual respondent laborers should be overturned
simply because the union of which they were members ceased
to be a legitimate labor union.
It cannot be disputed that CIR's prosecutor brought this case
not merely for Sañgilo; it was also on behalf of the 107
employees enumerated therein. This accounts for the fact that
CIR's judgment for reinstatement and backpay was rendered in
favor of the fifteen respondent laborers.
Cebu Portland vs. CIR
One of the most important questions raised in this appeal is the
supposed lack of jurisdiction on the part of the Court of
Industrial Relations to consider the incidental case of
respondent Valencia, for the reason that when his claim was
presented before the court on November 16, 1950 the
Philippine Land-Air-Sea Labor Union, to which he belonged,
had no longer any personality before the said court, because
its permit to continue as a labor organization had already
expired and the same was not renewed by the Secretary of
Labor.
In the first place, it must be remembered that the registration
required by Commonwealth Act No. 103 is not a
prerequisite to the right of a labor organization to appear
and litigate a case before the Court of Industrial Relations.
In the second place, once the Court of Industrial Relations has
acquired jurisdiction over a case under the law of its creation, it
retains that jurisdiction until the case is completely decided,
including all the incidents related thereto.
Erika Cristel Diaz | LABOR RELATIONS
Standard Cigarettes vs. CIR
On March 9, 1955, the respondent company moved to suspend
the hearings on the petition for certification election pending
final termination of the complaint for unfair labor practice. And
the court, expressing the opinion that the charges in the unfair
labor practice case went into the root of the freedom of workers
to vote in a certification election, ordered the suspension of the
proceedings for certification election pending resolution of the
unfair labor practice case.
It is the Standard Cigarette Manufacturing Co., Inc., which had
asked for the suspension of the proceedings on the certification
election pending final determination of the unfair labor practice
complaint. In the usual course of things, the complainant union
would have been the one interested in the deferment of the
certification election, since the unfair practices of the employer
could result in the substantial reduction of its membership and
its failure to get elected as the employees’ bargaining
representative.
But the complainant union did not ask for the suspension;
instead, it had strongly opposed the same in the court below
and has even come to this Court on certiorari against such
suspension. If the complainant union itself believes that it
would not suffer prejudice in the election because of the
employer’s alleged unfair labor practices, or is willing to
take the risks in said election, then we see no further
reason for the respondent court to suspend the holding of
the election by the employees of their collective
bargaining agent.
The move of the company to suspend the certification
election proceedings, pending resolution of the unfair
labor practice complaint against it, can be taken only as a
maneuver to further delay such election and thereby favor
the intervenor-union, with whom it had already concluded
a collective bargaining agreement.
As a matter of fact, the records show that it was the intervenor-
union who had argued more strongly, first, against the petition
for certification election, and then for its suspension. And when
this petition for certiorari was filed before this Court, it was
again the intervenor-union who answered and argued against
the petition while the company (against whom the unfair labor
practice case was filed and at whose instance the certification
election proceedings were suspended), did not even bother to
answer in these proceedings, showing a lack of interest
whether this petition is sustained by us or not.
Tablante vs. Noriel
Case prior to amendment of Article 247[239] the Labor
Code:
Petitioner is quite insistent that private respondent labor union
having engaged in an illegal strike, its registration permit must
be cancelled. It based its contention on the relevant section of
Presidential Decree No. 823.
Petitioner, nonetheless, would seek to import a semblance of
plausibility to its claim by the assertion that the Labor Code
itself provides, in another section, that cancellation of
registration follows from "any activity prohibited by law."

The argument is false and misleading according to the
Comment of the Solicitor-General. Thus, by this amendatory
law, it is evident that no cause of action exists which will
warrant the cancellation of Association of Democratic Labor
Organization's permit and registration.
Of course, petitioner tried to evade said issue by relying on
Article 240 (e) and Article 242 (p) of the Labor Code of the
Philippines, as amended. Let us examine its legal contention
on this matter.
For expediency, we quote in entirety the aforesaid Article relied
upon by the petitioner for cancellation of the registration and
permit of the union:
Article 239. Ground for cancellation of union registration. The
following shall constitute grounds for cancellation of union
registration:
(e) Acting as a labor contractor or engaging in the "cabo"
system, or otherwise engaging in any activity prohibited by law.
Suppletory to the above provision is Section 6 (c) of Rule II,
Book V of the Rules and Regulations implementing the Labor
Code of the Philippines, as amended, which reads as follows:
Section 6. Denial of Registration of local unions-The Regional
Office may deny the application for registration on any of the
following grounds:
(c) Engaging in the "cabo " system or other illegal practices.
It is a fact that Association of Democratic Labor Organization is
not a labor contractor or is it engaged in the 'cabo' system or is
it otherwise engaged in any activity of such nature which is
prohibited by law.
The above-quoted article should not be interpreted or
construed to include an illegal strike engaged into by any
union. This is so because the phrase or otherwise engaging
in any activity prohibited by law' should be construed to
mean such activity engaged into by a union that partakes
of the nature of a labor contractor or 'cabo' system.
The law does not intend to include in the said phrase
illegally declared strike simply because strike per se is
legal. Also, if the law intends to include illegally declared strike,
the same could have been expressly placed therein as had
been previously done in Presidential Decree No. 823.
St. Luke’s Medical Center vs. Torres
We do not see merit in petitioner’s theory that the awards were
granted prematurely. In its effort to persuade this Court along
this point, petitioner denies having negotiated with private
respondent SLMCEA-AFW. Petitioner collectively refers to all
the talks conducted with private respondent as mere informal
negotiations due to the representation issue involving AFW.
Petitioner thus argues that in the absence of any formal
negotiations, no collective bargaining could have taken place.
Public respondent, petitioner avers, should have required the
parties instead to negotiate rather than prematurely issuing his
order.
We cannot agree with this line of reasoning. It is immaterial
whether the representation issue within AFW has been
resolved with finality or not. Said squabble could not
Erika Cristel Diaz | LABOR RELATIONS
possibly serve as a bar to any collective bargaining since AFW
is not the real party-in-interest to the talks; rather, the
negotiations were confined to petitioner and the local
union SLMCEA which is affiliated to AFW.
Only the collective bargaining agent, the local union SLMCEA
in this case, possesses legal standing to negotiate with
petitioner. A duly registered local union affiliated with a national
union or federation does not lose its legal personality or
independence.
The locals are separate and distinct units primarily designed to
secure and maintain an equality of bargaining power between
the employer and their employee-members in the economic
struggle for the fruits of the joint productive effort of labor and
capital; and the association of the locals into the national union
(as PAFLU) was in furtherance of the same end.
These associations are consensual entities capable of entering
into such legal relations with their members. The essential
purpose was the affiliation of the local unions into a common
enterprise to increase by collective action the common
bargaining power in respect of the terms and conditions of
labor.
Yet the locals remained the basic units of association, free to
serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the
Association, and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which
brought it into existence.
Appending "AFW" to the local union’s name does not mean
that the federation absorbed the latter. No such merger can be
construed. Rather, what is conveyed is the idea of affiliation,
with the local union and the larger national federation retaining
their separate personalities.
Rights of legitimate labor organization
- Not every legitimate labor organization possesses the
rights mentioned in Article 251 [242] of the Labor Code.
- Article 251(a) must be read in relation to Article 267[255]
of the Labor Code.
ART. 251[242]. Rights of legitimate labor organizations.
A legitimate labor organization shall have the right:
(a) To act as the representative of its members for the
purpose of collective bargaining;
(b) To be certified as the exclusive representative of all
the employees in an appropriate collective bargaining
unit for purposes of collective bargaining;
(c) To be furnished by the employer, upon written
request, with his annual audited financial statements,
including the balance sheet and the profit and loss
statement, within thirty (30) calendar days from the date of
receipt of the request, after the union has been duly
recognized by the employer or certified as the sole and
exclusive bargaining representative of the employees in
the bargaining unit, or within sixty (60) calendar days
before the expiration of the existing collective bargaining
agreement, or during the collective bargaining negotiation.
(d) To own property, real or personal, for the use and
benefit of the labor organization and its members;

(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit
the organization and its members, including cooperative,
housing welfare and other projects not contrary to law.
Notwithstanding any provision of a general or special law to
the contrary, the income, and the properties of legitimate
labor organizations, including grants, endowments,
gifts, donations and contributions they may receive from
fraternal and similar organizations, local or foreign, which
are actually, directly and exclusively used for their lawful
purposes, shall be free from taxes, duties and other
assessments.
The exemptions provided herein may be withdrawn only by
a special law expressly repealing this provision.
ART. [267]255. Exclusive bargaining representation and
workers’ participation in policy and decision-making.—
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 labor-
management 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.
(a) and (b): To act as the representative of its
members for the purpose of collective bargaining
Philippine Diamond Hotel and Resort, Inc. vs. Manila
Diamond Hotel Employees Union
As Article 255 of the Labor Code declares, only the labor
organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit is
the exclusive representative of the employees in such unit
for the purpose of collective bargaining.
The union (hereafter referred to as respondent) is admittedly
not the exclusive representative of the majority of the
Erika Cristel Diaz | LABOR RELATIONS
employees of petitioner, hence, it could not demand from
petitioner the right to bargain collectively in their behalf.
Respondent insists, however, that it could validly bargain in
behalf of "its members, relying on Article 242 of the Labor
Code. Respondent’s reliance on said article, a general
provision on the rights of legitimate labor organizations, is
misplaced, for not every legitimate labor organization
possesses the rights mentioned therein. Article 242 (a)
must be read in relation to above-quoted Article 255.
On respondent’s contention that it was bargaining in behalf
only of its members, the appellate court, affirming the NLRC’s
observation that the same would only fragment the employees
of petitioner, held that what [respondent] will be achieving is to
divide the employees, more particularly, the rank-and-file
employees of petitioner.
The other workers who are not members are at a serious
disadvantage, because if the same shall be allowed,
employees who are non-union members will be economically
impaired and will not be able to negotiate their terms and
conditions of work, thus defeating the very essence and reason
of collective bargaining, which is an effective safeguard against
the evil schemes of employers in terms and conditions of
work."
It bears noting that the goal of the DOLE is geered towards a
single employer wide unit which is more to the broader and
greater benefit of the employees working force. The philosophy
is to avoid fragmentation of the bargaining unit so as to
strengthen the employees’ bargaining power with the
management.
To veer away from such goal would be contrary, inimical and
repugnant to the objectives of a strong and dynamic unionism.
Petitioner’s refusal to bargain then with respondent cannot be
considered a ULP to justify the staging of the strike.
Furusawa Rubber Phil., Inc. vs. Secretary
The main contention of petitioner is that FEU-IND is not a
legitimate labor organization so that, under the law, it could not
file a petition for certification election. The basis of this
argument is the failure of the petitioning union to submit an
original copy of its certificate of registration.
We cannot sustain petitioner. We agree with respondent
Secretary of Labor and Employment that FEU-IND is a
legitimate labor organization. As such, it enjoys all the rights
and privileges recognized by law. 2 The fact that FEU-IND has
been issued Certificate of Registration by DOLE is sufficient
proof of its legitimacy.
The presentation of the xerox copy of the certificate of
registration to support its claim of being a duly registered
labor organization instead of the submission of the
original certificate is not a fatal defect and does not in any
way affect its legitimate status as a labor organization
conferred by its registration with DOLE. The issuance of the
certificate of registration evidently shows that FEU-IND has
complied with the requirements of Art. 234 of the Labor Code.
The requirements for registration being mandatory, they are
complied with before any labor organization, association or
group of unions or workers acquires legal personality and be
 entitled to the rights and privileges granted by law to legitimate
labor organizations.
One of the rights of a legitimate labor organization is to
represent its members in collective bargaining
agreements; also, to be certified as the exclusive
representative of all employees in an appropriate unit for
purposes of collective bargaining. Hence the petition of
FEU-IND, as a legitimate labor organization, for
certification election may rightfully be granted.
Caltex Refinery Employees Association vs. Brilantes
The matter of retirement benefits deserves a second look
considering that the concerned employees were already
previously granted the option to choose between the old and
the new plan at the time the latter was initiated and they
choose to be covered under the Old Plan.
To accede to the Unions demand to cover them under the new
plan entails a different arrangement under a new scheme and
likewise requires the approval of a Board of Trustees. It is,
therefore, understood that the new Retirement Plan does not
apply to the more or less 40 employees being sought by the
Union to be covered under the New Plan.
We hold that public respondent did not commit grave abuse of
discretion in respecting the free and voluntary decision of
the employees in regard to the Provident Plan and the
irrevocable one-time option provided for in the New
Retirement Plan.
Although the union has every right to represent its
members in the negotiation regarding the terms and
conditions of their employment, it cannot negate their
wishes on matters which are purely personal and
individual to them.
In this case, the forty employees freely opted to be covered by
the Old Plan; their decision should be respected. The company
gave them every opportunity to choose, and they voluntarily
exercised their choice. The union cannot pretend to know
better; it cannot impose its will on them.
(c) To request for audited financial statements
4 instances:
(1) After it has been voluntarily recognized by the employer as
the sole and exclusive bargaining representative of the
employees in the bargaining unit; or
(2) After it has been certified as the sole and exclusive
bargaining representative by the DOLE; or
(3) Within the 60-day freedom period prior to the expiration of
the CBA; or
(4) During and in the course of the collective bargaining
negotiations.
Standard Chartered Bank Employees union NUBE vs.
Confessor
We, likewise, find that the Union failed to substantiate its claim
that the Bank refused to furnish the information it needed.
While the refusal to furnish requested information is in
itself an unfair labor practice, and also supports the
inference of surface bargaining, in the case at bar, Umali, in a
Erika Cristel Diaz | LABOR RELATIONS
meeting dated May 18, 1993, requested the Bank to validate
its guestimates on the data of the rank and file. However,
Umali failed to put his request in writing as provided for in
Article 242(c) of the Labor Code.
The Union, did not, as the Labor Code requires, send a written
request for the issuance of a copy of the data about the Banks
rank and file employees. Thus, the employer cannot be held for
unfair labor practice.
(d) and (e): To own property and be sued in its
registered name
Note: These are inherent rights of a juridical person.
Lakas ng Manggagawang Makabayan vs. Marcelo
Enterprises
Concerted activities executed and carried into effect at the
instigation and motivation of a labor organization not a
bargaining agent constitute a violation of employer’s
basis right to bargain
The clear facts of the case indisputably show that a legitimate
representation issue confronted the respondent Marcelo
Companies. In the face of these facts and in conformity with
the existing jurisprudence, We hold that there existed no duty
to bargain collectively with the complainant LAKAS on the part
of said companies.
And proceeding from this basis, it follows that all acts instigated
by complainant LAKAS such as the filing of the Notice of Strike
on June 13, 1967 (although later withdrawn) and the two
strikes of September 4, 1967 and November 7, 1967 were
calculated, designed and intended to compel the respondent
Marcelo Companies to recognize or bargain with it
notwithstanding that it was an uncertified union, or in the case
of respondent Marcelo Tire and Rubber Corporation, to bargain
with it despite the fact that the MUEWA of Paulino Lazaro was
already certified as the sole bargaining agent in said
respondent company.
These concerted activities executed and carried into effect at
the instigation and motivation of LAKAS are all illegal and
violative of the employer’s basic right to bargain collectively
only with the representative supported by the majority of its
employees in each of the bargaining units.
This Court is not unaware of the present predicament of the
employees involved but much as we sympathize with those
who have been misled and so lost their jobs through hasty, ill-
advised and precipitate moves, We rule that the facts neither
substantiate nor support the finding that the respondent
Marcelo Companies are guilty of unfair labor practice.
Worker’s right to self-organization subject to employer’s
freedom to enforce rules and orders necessary to the
proper conduct of his business
It was never the state policy nor our judicial pronouncement
that the employees’ rights to self-organization and to engage in
concerted activities for mutual aid and protection, are absolute
or be upheld under all circumstances.
The protection of workers’ right to self-organization in no way
interfere with employer’s freedom to enforce such rules and
orders as are necessary to proper conduct of his businesses,
 so long as employer’s supervision is not for the purpose of
intimidating or coercing his employees with respect to their
self-organization and representation.
It is the functions of the court to see that the rights of self-
organization and collective bargaining guaranteed by the Act
are amply secured to the employee, but in its effort to prevent
the prescribed unfair labor practice, the court must be mindful
of the welfare of the honest employer.
A union has no right or personality to sue for and on
behalf of non-members thereof
Firstly, LAKAS cannot bring any action for and in behalf of the
employees who were members of MUEWA because, as
intimated earlier in this Decision, the said local union was
never an affiliate of LAKAS.
What appears clearly from the records is that it was Augusto
Carreon and his follow who joined LAKAS, but then Augusto
Carreon was not the recognized presidents of MUEWA and
neither he nor his followers can claims any legitimate
representation of MUEWA.
Apparently, it is this split faction of MUEWA. headed by,
Augusto Carreon who, is being sought to be represented by
LAKAS. However, it cannot do so because the members
constituting this split faction of MUEWA were still members of
MUEWA which was on its own right a duly registered labor
unions.
Hence any suit to be brought for and in behalf of them can be
made only by MUEWA, and not LAKAS. It appearing then that
Augusto Carreon and his cohorts did not disaffiliate from
MUEWA nor signed any individual affiliation with LAKAS,
LAKAS bears no legal interest in representing MUEWA or any
of its members.
A labor union would go beyond the limits of its legitimate
purposes if it is given the unrestrained liberty to prosecute any
case even for employees who are not members of any union at
all. A suit brought by another in representation of a real party in
interest is defective.
Under the uncontroverted facts obtaining herein, the
aforestated ruling is applicable, the only difference being that,
here, a labor federation seeks to represent members of a
registered local union never affiliated with it and members of
registered local unions which, in the course of the proceedings
before the industrial court, disaffiliated from it.
This is not to say that the complaining employees were without
any venue for redress. Under the aforestated considerations,
the respondent court should have directed the amendment of
the complaint by dropping LAKAS as the complainant and
allow the suit to be further prosecuted in the individual names
of those who had grievances. A class suit under Rule 3,
Section 12 of the Rule of Court is authorized and should suffice
for the purpose.
Pampanga Sugar Development Co. Inc. vs. CIR
The act of management in securing quitclaims individually
with the workers without the intervention of the union has
been held to be evidently done in bad faith
Erika Cristel Diaz | LABOR RELATIONS
This Court finds the quitclaims not valid. Firstly, said quitclaims
were secured on December 27, 1972 by petitioner after it lost
its case in the lower court when the latter profmulgated its
decision on the case on December 4, 1972. Obviously in its
desire to deny what is due the sugar workers concerned
and frustrate the decision of the lower court awarding
benefits to them, it used its moral ascendancy as
employer over said workers to secure said quitclaims.
This Court rejects the allegation of petitioner to the effect that
the 53 agreements gave substance to the policy of the
Industrial Peace Act of encouraging the parties to make all
reasonable efforts to settle their differences by mutual
agreement.
Petitioner's contention and the case cited in support thereof
apply only where there is good faith on the part of the party
litigants. In the case at bar, petitioner acted with evident bad
faith and malice. Petitioner secured the 53 quitclaim
agreements individually with the 53 sugar workers without
the intervention of respondent's lawyer who was
representing them before the lower court.
This subterfuge is tantamount to a sabotage of the interest
of respondent association. Needless to say, the means
employed by petitioner in dealing with the workers
individually, instead of collectively through the union and
its counsel, violates good morals as they undermine the
unity of respondent union and fuels industrial disputes,
contrary to the declared policy in the Industrial Peace Act.
This Court likewise rejects petitioner's allegation that the 53
quitclaim agreements were in the nature of a compromise.
Petitioner's allegations and citations apply only to compromises
between the party-litigants done in good faith. In the case at
bar, there was no compromise between the petitioner and the
respondent Sugar Workers Association.
In respect of the 53 quitclaims, these are not compromise
agreements between the petitioner and respondent union.
They are separate documents of renunciation of individual
rights. Compromise involves the mutual renunciation of rights
by both parties on a parity basis. The quitclaims, however, bind
the workers to renounce their rights while the petitioner not
only does not renounce anything but also acquires exemption
from any legal liability in connection therewith.
Marquez vs. Secretary
Money claims cannot be the object of settlement or
compromise without consent of each laborer concerned
On October 29, 1986, Minerva Peran signed an agreement
with petitioner reducing their claims from a total amount of
P625,000 to only P80,000 to be paid in several installments.
Peran signed as president of the SAMAHAN which had
allegedly disaffiliated from respondent KAMPIL-KATIPUNAN.
However, Peran failed to show any evidence that SAMAHAN
had indeed disaffiliated from KAMPIL-KATIPUNAN. More
importantly, the employees denied giving Peran the authority to
enter into the amicable settlement and to move for the
dismissal of the complaint.
Money claims due to laborers cannot be the object of
settlement or compromise effected by the union, union officers
 or counsel without the specific individual consent of each
laborer concerned because the aggrieved parties are the
individual complainants themselves. Their representative can
only assist but not decide for them.
In the light of the categorical denial by the employees that
Peran was authorized to enter into an amicable settlement as
regards their claims, the Court holds that public respondent
Secretary of Labor ruled correctly in upholding the Regional
Director’s rejection of the agreement.
General Rubber and Footwear Corp. vs. Drilon
Union members who did not ratify a waiver of accrued
wage differentials are not bound by the ratification made
by a majority of the union members
There is no dispute that private respondents had not ratified
the Return-to-Work Agreement. It follows, and we so hold, that
private respondents cannot be held bound by the Return-to-
Work Agreement.
The waiver of money claims, which in this case were
accrued money claims, by workers and employees must
be regarded as a personal right, that is, a right that must
be personally exercised. For a waiver thereof to be legally
effective, the individual consent or ratification of the
workers or employees involved must be shown.
Neither the officers nor the majority of the union had any
authority to waive the accrued rights pertaining to the
dissenting minority members, even under a collective
bargaining agreement which provided for a "union shop."
The members of the union need the protective shield of this
doctrine not only vis-a-vis their employer but also, at times, vis-
a-vis the management of their own union, and at other times
even against their own imprudence or impecuniousness.
It is undisputed that the 100 members did not sign and ratify
the Return-to-Work Agreement and therefore they cannot be
bound by the waiver of benefits therein. Accordingly, the
benefits under Wage Order No. 6 due them by virtue of the
final and executory Order of the National Wages Council dated
March 4, 1985 subsists in their favor and can be subject for
execution.
XPN: When the union was already a party to the
suit
Acedrea vs. ICTSI
A labor union is one such party authorized to represent its
members under Article 242(a) of the Labor Code which
provides that a union may act as the representative of its
members for the purpose of collective bargaining. This
authority includes the power to represent its members for the
purpose of enforcing the provisions of the CBA.
That APCWU acted in a representative capacity "for and in
behalf of its Union members and other employees similarly
situated," the title of the case filed by it at the Labor Arbiter’s
Office so expressly states.
Erika Cristel Diaz | LABOR RELATIONS
While a party acting in a representative capacity, such as a
union, may be permitted to intervene in a case, ordinarily,
a person whose interests are already represented will not
be permitted to do the same except when there is a
suggestion of fraud or collusion or that the representative
will not act in good faith for the protection of all interests
represented by him.
Petitioners-appellants cite the dismissal of the case filed by
ICTSI, first by the Labor Arbiter, and later by the Court of
Appeals. 3The dismissal of the case does not, however, by
itself show the existence of fraud or collusion or a lack of good
faith on the part of APCWU. There must be clear and
convincing evidence of fraud or collusion or lack of good
faith independently of the dismissal. This, petitioners-
appellants failed to proffer.
Petitioners-appellants likewise express their fear that APCWU
would not prosecute the case diligently because of its
"sweetheart relationship" with ICTSI. There is nothing on
record, however, to support this alleged relationship which
allegation surfaces as a mere afterthought because it was
never raised early on.
To reiterate, for a member of a class to be permitted to
intervene in a representative action, fraud or collusion or lack
of good faith on the part of the representative must be proven.
It must be based on facts borne on record. Mere assertions, as
what petitioners-appellants proffer, do not suffice.
(f) To undertake all other activities designed to
benefit the organization and its members, including
cooperative, housing welfare and other projects not
contrary to law.
Right to tax exemption of its income, property,
gifts, duties and assessments [last par]
Notwithstanding any provision of a general or special law to the
contrary, the income, and the properties of legitimate labor
organizations, including grants, endowments, gifts,
donations and contributions they may receive from fraternal
and similar organizations, local or foreign, which are actually,
directly and exclusively used for their lawful purposes, shall be
free from taxes, duties and other assessments.
Rights and Conditions of Membership
Art. 250[241]. Rights and Conditions of Membership in a
Labor Organization. – The following are the rights and
conditions of membership in a labor organization:
(a) No arbitrary or excessive initiation fees shall be
required of the members of a legitimate labor organization
nor shall arbitrary, excessive or oppressive fine and
forfeiture be imposed;
(b) The members shall be entitled to full and detailed
reports from their officers and representatives of all
financial transactions as provided for in the constitution and
by-laws of the organization;

(c) The members shall directly elect their officers in the
local union, as well as their national officers in the
national union or federation to which they or their local
union is affiliated, by secret ballot at intervals of five (5)
years.
No qualification requirement for candidacy to any
position shall be imposed other than membership in good
standing in subject labor organization.
The secretary or any other responsible union officer shall
furnish the Secretary of Labor and Employment with a list of
the newly-elected officers, together with the appointive
officers or agents who are entrusted with the handling of
funds within thirty (30) calendar days after the election of
officers or from the occurrence of any change in the list of
officers of the labor organization;
(d) 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;
(e) No labor organization shall knowingly admit as
members or continue in membership any individual who
belongs to a subversive organization or who is engaged
directly or indirectly in any subversive activity;
(f) No person who has been convicted of a crime
involving moral turpitude shall be eligible for election
as a union officer or for appointment to any position in the
union;
(g) No officer, agent or member of a labor organization
shall collect any fees, dues, or other contributions in its
behalf or make any disbursement of its money or funds
unless he is duly authorized pursuant to its constitution
and by-laws;
(h) Every payment of fees, dues or other contributions
by a member shall be evidenced by a receipt signed by
the officer or agent making the collection and entered into
the record of the organization to be kept and maintained for
the purpose;
(i) The funds of the organization shall not be applied for
any purpose or object other than those expressly
provided by its constitution and by-laws or those
expressly authorized by written resolution adopted by
the majority of the members at a general meeting duly
called for the purpose;
(j) Every income or revenue of the organization shall be
evidenced by a record showing its source, and every
expenditure of its funds shall be evidenced by a receipt from
the person to whom the payment is made, which shall state
the date, place and purpose of such payment. Such record
or receipt shall form part of the financial records of the
organization.
Any action involving the funds of the organization shall
prescribe after three (3) years from the date of submission
Erika Cristel Diaz | LABOR RELATIONS
of the annual financial report to the Department of Labor
and Employment or from the date the same should have
been submitted as required by law, whichever comes
earlier:
Provided, That this provision shall apply only to a
legitimate labor organization which has submitted the
financial report requirements under this Code: Provided,
further, That failure of any labor organization to comply
with the periodic financial reports required by law and
such rules and regulations promulgated thereunder six (6)
months after the effectivity of this Act shall
automatically result in the cancellation of union
registration of such labor organization;
(k) The officers of any labor organization shall not be
paid any compensation other than the salaries and
expenses due to their positions as specifically provided for
in its constitution and by-laws, or in a written resolution
duly authorized by a majority of all the members at a
general membership meeting duly called for the purpose.
The minutes of the meeting and the list of participants and
ballots cast shall be subject to inspection by the Secretary of
Labor or his duly authorized representatives. Any
irregularities in the approval of the resolutions shall be
a ground for impeachment or expulsion from the
organization;
(l) The treasurer of any labor organization and every
officer thereof who is responsible for the account of such
organization or for the collection, management,
disbursement, custody or control of the funds, moneys
and other properties of the organization, shall render to
the organization and to its members a true and correct
account of all moneys received and paid by him since he
assumed office or since the last day on which he rendered
such account, and of all bonds, securities and other
properties of the organization entrusted to his custody or
under his control.
The rendering of such account shall be made:
(1) At least once a year within thirty (30) days after the
close of its fiscal year;
(2) At such other times as may be required by a resolution
of the majority of the members of the organization; and
(3) Upon vacating his office.
The account shall be duly audited and verified by affidavit
and a copy thereof shall be furnished the Secretary of
Labor.
(m) The books of accounts and other records of the
financial activities of any labor organization shall be
open to inspection by any officer or member thereof during
office hours;
(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 in 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 assessment or fees. The record
shall be attested to by the president.
(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; and
(p) It shall be the duty of any labor organization and its
officers to inform its members on the provisions of its
constitution and by-laws, collective bargaining
agreement, the prevailing labor relations system and all
their rights and obligations under existing labor laws.
For this purpose, registered labor organizations may
assess reasonable dues to finance labor relations
seminars and other labor education activities.
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union
registration or expulsion of officers from office,
whichever is appropriate.
At least thirty percent (30%) of the members of a union or
any member or members specially concerned may
report such violation to the Bureau. The Bureau shall
have the power to hear and decide any reported violation to
mete the appropriate penalty.
Criminal and civil liabilities arising from violations of
above rights and conditions of membership shall continue to
be under the jurisdiction of ordinary courts.
Constitution and By-Laws interpretation
Johnson (FFW) vs. Director
We find unmeritorious the contention of the petitioners that the
questioned decision and order are contrary to law for being
tantamount to compelling the union to disburse it funds without
the authority of the general membership and to collect from its
members without the benefit of individual payroll authorization.
Section 5, Article XIII of the petitioner-union's constitution and
by-laws earlier aforequoted is self-executory. The financial aid
extended to any suspended or terminated union member is
realized from the contributions declared to be compulsory
under the said provision in the amount of seventy-five centavos
due weekly from each union member.
The nature of the said contributions being compulsory and the
fact that the purpose as stated is for financial aid clearly
indicate that individual payroll authorizations of the union
members are not necessary. The petitioner-union's
constitution and by-laws govern the relationship between
and among its members. As in the interpretation of
contracts, if the terms are clear and leave no doubt as to
the intention of the parties, the literal meaning of the
stipulations shall control.
Erika Cristel Diaz | LABOR RELATIONS
We likewise find untenable the argument of the petitioners that
the public respondent, in granting financial aid to the private
respondent, in effect, substituted the decision of the petitioner-
union to do otherwise and that in so doing, the public
respondent gravely abused its discretion amounting to lack of
jurisdiction.
The union constitution is a covenant between the union
and its members and among the members. There is
nothing in their constitution which leaves the legal
interpretation of its terms unilaterally to the union or its
officers or even the general membership.
The union constitution and by-laws clearly show that any
member who is suspended or terminated from employment
without reasonable cause is entitled to financial assistance
from the union and its members. The problem, however, is
that the constitution does not indicate which body has the
power to determine whether a suspension or dismissal is
for reasonable cause or not.
To our mind, the constitution's silence on this matter is a
clear recognition of the labor arbiter's exclusive
jurisdiction over dismissal cases. After all, the union's
constitution and by-laws is valid only insofar as it is not
inconsistent with existing laws.
Right to vote
Tancinco employees vs. Calleja
Submission of the employees names with the BLR as
qualified members of the union is not a condition sine qua
non to enable said members to vote in the election of
union's officers. It finds no support in fact and in law. Per
public respondent's findings, the April 24, 1986 list consists of
158 union members only wherein 51 of the 56 challenged
voters' names do not appear.
Adopting however a rough estimate of a total number of union
members who cast their votes of some 333 and excluding
therefrom the 56 challenged votes, if the list is to be the
basis as to who the union members are then public
respondent should have also disqualified some 175 of the
333 voters.
It is true that under article 242(c) of the Labor Code, as
amended, only members of the union can participate in the
election of union officers. The question however of
eligibility to vote may be determined through the use of
the applicable payroll period and employee's status during
the applicable payroll period. The payroll of the month next
preceding the labor dispute in case of regular employees 15
and the payroll period at or near the peak of operations in case
of employees in seasonal industries.
In the case before us, considering that none of the parties
insisted on the use of the payroll period-list as voting list
and considering further that the 51 remaining employees
were correctly ruled to be qualified for membership, their
act of joining the election by casting their votes on May 26,
1986 after the May 10, 1986 agreement is a clear
manifestation of their intention to join the union.
They must therefore be considered ipso facto members
thereof. Said employees having exercised their right to
 unionism by joining ITM-MEA their decision is paramount.
Their names could not have been included in the list of
employee submitted on April 24, 1986 to the Bureau of Labor
for the agreement to join the union was entered into only on
May 10, 1986. Indeed the election was supervised by the
Department of Labor where said 56 members were allowed to
vote. Private respondents never challenged their right to vote
then.
It is however the position of private respondents that since a
collective bargaining agreement (CBA) has been concluded
between the local union and ITM management the
determination of the legal question raised herein may not serve
the purpose which the union envisions and may destroy the
cordial relations existing between the management and the
union.
We do not agree. Existence of a CBA and cordial
relationship developed between the union and the
management should not be a justification to frustrate the
decision of the union members as to who should properly
represent them in the bargaining unit.
Neither may the inclusion and counting of the 56
segregated votes serve to disturb the existing relationship
with management as feared by herein private respondents.
Respondents themselves pointed out that petitioners joined the
negotiating panel in the recently concluded CBA.
This fact alone is conclusive against herein petitioners and
hence will estop them later if ever, from questioning the CBA
which petitioners concurred with. Furthermore, the inclusion
and counting of the 56 segregated votes would not necessarily
mean success in favor of herein petitioners as feared by
private respondents herein.
Exhaustion of remedies
Villaor vs. Trajano
Public respondent further opined that the COMELEC should
have been allowed to discharge its functions without prejudice
to the right of petitioners to apply for relief from the Board of
Directors.
He averred that under the union constitution, the Board has
the power to remove or discipline, by three-fourths’ votes,
any union officer including the president himself or the
members of the COMELEC, and accordingly concluded that
only after the remedy failed could the petitioners be
allowed to bring their case to the Med-Arbiter. In short, the
petitioners should first exhaust administrative remedies before
bringing their case to the Med-Arbiter.
Article 226 of the Labor Code and supplemented by Policy
Instruction No. 6 relating to the distribution of jurisdiction over
labor cases, it is safe to conclude that the freedom of the
unions from interference from the government
presupposes that there is no inter-union or intra-union
conflict.
In the instant case, there is no question that there is an intra-
union conflict. Accordingly, there is no question that the Med-
Arbiter rightly exercised jurisdiction over the case.
Impeachment
Erika Cristel Diaz | LABOR RELATIONS
Litton Mills employees vs. Calleja
The controversy stems from respondent Umali's act of
affiliating the petitioner-union with GATCORD, which caused
the union officers to impeach Umali for disloyalty to the union.
The impeachment is anchored on a provision in the petitioner
union's Constitution and By-Laws.
As to the impeachment of a union officer, Section 2, Article XV
of the petitioner-union's Constitution and By-Laws provides the
procedures to be followed, to wit: (1) Impeachment should be
initiated by petition signed by at least 30% of all bona fide
members of the union, and addressed to the Chairman of the
Executive Board; (b) A general membership meeting shall be
convened by the Board Chairman to consider the impeachment
of an officer; (c) Before any impeachment vote is finally taken,
the union officer against whom impeachment charges have
been filed shall be given ample opportunity to defend himself ,
and (d) A majority of all the members of the union shall be
required to impeach or recall union officers.
It clearly appears that the above cited procedure was not
followed by the petitioners when they impeached Umali.
To be sure, there was difficulty on the part of the petitioners in
complying with the required procedure for impeachment,
considering that the petition to impeach had to be addressed to
the Chairman of the Executive Board of the Union, and that the
majority membership which would decide on the impeachment
had to be convened only upon call of the Chairman of the
Executive Board who, in the case at bar, happened to be
respondent Umali himself.
Nevertheless, despite the practical difficulties in complying
with the said procedure, petitioners should have shown
substantial compliance with said impeachment procedure,
by giving Umali ample opportunity to defend himself, as
contrasted to an outright impeachment, right after he
failed to appear before the first and only investigation
scheduled on 27 August 1986 in the Litton Canteen.
The above conclusions notwithstanding, the Court believes that
the union-members themselves know what is best for
them, i.e., whether they still want respondent Umali as their
Union President, and whether they wish to affiliate their union
with GATCORD. And, the best and most appropriate means
of ascertaining the will of the union members is through a
certification election.
Consistent with the foregoing observations, it appears from
from the record that a group of employees headed by
petitioner Rogelio Abong broke away from the petitioner-
union and formed a new union, called Litton Mills Workers
Union, and that in a certification election that followed, said
Litton Mills Workers Union, headed by petitioner Abong, was
chosen as the collective bargaining agent.
Because of this supervening event, it now appears clear
that the majority of the heretofore members of petitioner-
union LMEAK do not wish respondent Umali to continue
as their president; neither do they wish their union to be
affiliated with the GATCORD federation. Consequently, the
issues in this petition have become moot and academic.
The Manifestation of the petitioners after informing the Court of
the election of the Litton Mills Workers union headed by
petitioner Abong, as the collective bargaining representative in
LMI, reiterates the prayer that respondent Umali be considered
and declared as impeached.

This issue has, to the mind of the Court, likewise become
moot and academic for it is inconceivable that Umali will
be retained as president of the new collective bargaining
agent, the Litton Mills Workers Union, while Umali's
continued presidency of LMEAIC as a minority union if still
existing in LMI, has ceased to be of any moment in the
instant case.
Thirty-Percent Requirement of members to report
violations of the rights and conditions of
membership to the BLR
Verceles vs. BLR
30% requirement is not mandatory
On the matter concerning the 30% support requirement
needed to report violations of rights and conditions of
union membership, as found in the last paragraph of
Article 241 of the Labor Code, we likewise cannot sanction
the petitioners. the 30% requirement is not mandatory.
The respondent Director’s ruling, however, that the assent of
30% of the union membership, mentioned in Article 242 of the
Labor Code, was mandatory and essential to the filing of a
complaint for any violation of rights and conditions of
membership in a labor organization (such as the arbitrary and
oppressive increase of union dues here complained of), cannot
be affirmed and will be reversed.
The very article relied upon militates against the proposition. It
states that a report of a violation of rights and conditions of
membership in a labor organization may be made by at least
thirty percent (30%) of all the members of a union or any
member or members specially concerned.
The use of the permissive "may" in the provision at once
negates the notion that the assent of 30% of all the
members is mandatory. More decisive is the fact that the
provision expressly declares that the report may be made,
alternatively by any member or members specially
concerned.
And further confirmation that the assent of 30% of the union
members is not a factor in the acquisition of jurisdiction
by the Bureau of Labor Relations is furnished by Article 226
of the same Labor Code, which grants original and exclusive
jurisdiction to the Bureau, and the Labor Relations Division in
the Regional Offices of the Department of Labor, over all inter-
union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting labor
management relations, making no reference whatsoever to
any such 30%-support requirement.
Indeed, the officials mentioned are given the power to act
on all inter-union and intra-union conflicts (1) upon
request of either or both parties as well as (2) at their own
initiative.
Major policy matters
Halili vs. CIR
The alleged retainer's contract between Atty. Pineda and the
Union appears anomalous and even illegal as well as unethical
considering that the contract was executed only between
Atty. Pineda and the officers of the Union chosen by about
Erika Cristel Diaz | LABOR RELATIONS
125 members only. It was not a contract with the general
membership, Only 14% of the total membership of 897 was
represented.
This violates Article 242 (d) of the Labor Code which
provides:
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.
Special Assessments
ABS-CBN Supervisors vs. ABS-CBN et. al
Petitioners filed with the Bureau of Labor Relations, DOLE-
NCR, Quezon City, a Complaint against the Union Officers
and ABS-CBN Broadcasting corporation, praying that (1) the
special assessment of ten percent (10%) of the sum total of all
salary increases and signing bonuses granted by respondent
Company to the members of the Union be declared illegal for
failure to comply with the Labor Code, as amended, particularly
Article 241, paragraphs (g), (n), and (o); and in utter violation of
the Constitution and By-Laws of the ABS-CBN Supervisors
Employees Union; (2) respondent Company be ordered to
suspend further deductions from petitioners’ salaries for their
shares thereof.
Noticeably, Article 241 speaks of three (3) requisites that
must be complied with in order that the special
assessment for Union’s incidental expenses, attorney’s
fees and representation expenses, as stipulated in Article
XII of the CBA, be valid and upheld namely:
(1) authorization by a written resolution of the majority of
all the members at the general membership meeting duly
called for the purpose;
(2) secretary’s record of the minutes of the meeting; and
(3) individual written authorization for check-off duly signed
by the employee concerned.
After a thorough review of the records on hand, we find that
the three (3) requisites for the validity of the ten percent
(10%) special assessment for Union’s incidental expenses,
attorney’s fees and representation expenses were met.
It can be gleaned that on July 14, 1989, the ABS-CBN
Supervisors Employee Union held its general meeting,
whereat it was agreed that a ten percent 10% special
assessment from the total economic package due to every
member would be checked-off to cover expenses for
negotiation, other miscellaneous expenses and attorney’s fees.
On May 24, 1991, said Union held its General Membership
Meeting, wherein majority of the members agreed that in as
much as the Union had already paid Atty. P. Pascual the
amount of P500,000.00, the same must be shared by all the
members until this is fully liquidated.
Eighty-five (85) members of the same Union executed
individual written authorizations for check-off. Records do not
indicate that the aforesaid check-off authorizations were
executed by the eighty-five (85) Union members under the
influence of force or compulsion. T
 here is, then, the presumption that such check-off
authorizations were executed voluntarily by the signatories
thereto. Petitioner’s contention that the amount to be deducted
is uncertain is not persuasive because the check-off
authorization clearly stated that the sum to be deducted is
equivalent to ten percent (10%) of all and whatever benefits
may accrue under the CBA. In other words, although the
amount is not fixed, it is determinable.
Petitioners further contend that Article 241 (n) of the Labor
Code, as amended, on special assessments, contemplates a
general meeting after the conclusion of the collective
bargaining agreement.
Subject Article does not state that the general membership
meeting should be called after the conclusion of a
collective bargaining agreement. Even granting ex gratia
argumenti that the general meeting should be held after the
conclusion of the CBA, such requirement was complied with
since the May 24, 1991 General Membership Meeting was held
after the conclusion of the Collective Bargaining Agreement,
which was signed and concluded on December 7, 1989.
Considering that the three requisites aforesaid for the validity of
a special assessment were observed or met, we uphold the
validity of the ten percent (10%) special assessment authorized
in Article XII of the CBA.
Intra-union disputes
Duyag vs. Inciong
The Director held that resort to intra-union remedies is not
necessary and that the five complainants have the rights and
personality to institute the proceedings for the removal of the
respondents, to recover the amount illegally collected or
withheld from them and to question illegal disbursements and
expenditure of union funds.
However, the Director ruled that the power to remove the union
officers rests in the members and that the Bureau of Labor
Relations generally has nothing to do with the tenure of union
officers which "is a political question”.
Held: The Director of Labor Relations erred in holding that, as
a matter of policy, the tenure of union office being a "political
question is, generally, a matter outside his Bureau's jurisdiction
and should be pa upon by the union members themselves.
After hearing and even without submitting the matter to
the union members, the union officials may be removed by
the Director of Labor decisions as clearly provided him. The
Director should apply the law and not make policy
considerations prevail over its clear intent and meaning.
The labor officials should not hesitate to enforcement
strictly the law and regulations governing trade unions
even if that course of action would curtail the so-called
union autonomy and freedom from government
interference.
For the protection of union members and in order that the
affairs of the union may be administered honestly, labor
officials should be vigilant and watchful in monitoring and
checking the administration of union affairs.
Erika Cristel Diaz | LABOR RELATIONS
Laxity, permissiveness, neglect and apathy in supervising and
regulating the activities of union officials would result in
corruption and oppression. Internal safeguards within the union
can easily be ignored or swept aside by abusive, arrogant and
unscrupulous union officials to the prejudice of the members.
It is necessary and desirable that the Bureau of Labor
Relations and the Ministry of Labor should exercise close and
constant supervision over labor unions, particularly the
handling of their funds, so as to forestall abuses and venalities.
Hence, the Director acted correctly in ordering an examination
of the books and records of the union. The examination should
include a verification of the charge that the petty loans
extended by the union to its members were usurious and that
the fee for the issuance of cheeks is unwarranted since the
loans were made in cash.
Kapisanan vs. Hernandez
Case prior to amendment:
Judicial interference in internal affairs of a labor union is
sanctioned by Sec. 17 of Republic Act 875, otherwise known
as the Industrial Peace Act whi provides:
SEC. 17. Rights and conditions of membership in labor
organizations. — It is hereby declared to be the public policy
of the Philippines to encourage the following internal labor
organization procedures. A minimum of ten percent of the
members of a labor organization may report an alleged
violation of these procedures in their labor organization to
the court. If the Court finds, upon investigation, evidence to
substantiate the alleged violation and that effort to correct the
alleged violation through the procedures provided by the labor
organization’s constitution or by-laws have been exhausted the
court shall dispose of the complaint as in ‘unfair labor practice
cases.
For the court to intervene, two requirements must be
satisfied:
(1) at least 10% of the union membership must concur to report
the alleged violation; and
(2) the procedures provided by the Union’s constitution or by-
laws must first be exhausted.
It is true that under the statute redress must first be sought
within the organization itself in accordance with its constitution
and by-laws. However, it has been held that this requirement is
not absolute, but yields to exceptions under varying
circumstances. In the case at bar, noteworthy is the fact that
the complaint was filed against the union and its
incumbent officers, some of whom were members of the
board of directors.
The constitution and by-laws of the union provides that charges
for any violation thereof shall be filed before the said board. But
as explained by the lower court, if the complainants had done
so the board of directors would in effect be acting as
respondent, investigator and judge at the same time. To follow
the procedure indicated would be a farce under the
circumstances. Where exhaustion of remedies within the
union itself would practically amount to a denial of justice,
or would be illusory or vain, it will not be insisted upon,
particularly where property rights of the members are
involved, as a condition to the right to invoke the aid of a
court.
 LITEX Employees vs. CIR
The main ground of the Acting Chief Prosecutor in his motion
to dismiss is that petitioner Rances failed to comply with the
requirement of Section 17 of Republic Act No. 875, as
amended, which is the exhaustion of internal procedures as
provided by the union's constitution and by-laws to correct the
alleged violation, when he refused to submit for investigation to
the respondent officers of the union and to comment on the
union's recommendation of dismissal as required by the
respondent company.
Petitioner Rances maintains that his submitting to the
investigation called by the respondent union officers would
have resulted in farcical proceedings as the private
respondents would have acted as prosecutor, investigator, and
judge at the same time.
We find this claim of petitioner Rances meritorious. In
Kapisanan Ng Mga Manggagawa sa MRR v. Rafael
Hernandez, et al. this Court held:
It is true that under the statute redress must first be
sought within the organization itself in accordance
with its constitution and by-laws. However, it has been
held that this requirement is not absolute, but yields
exception under varying circumstances. In the case at
bar, noteworthy is the fact that the complaint was filed
against the union and its incumbent officers, some of
whom were members of the board of directors. The
constitution and by-laws of the union provide that
charges for any violation thereof shall be filed before
the said board.
But as explained by the lower court, if the
complainants had done so, the board of directors
would in effect be acting as respondent, investigator
and judge at the same time. To follow the procedure
indicated would be a farce under the circumstances.
Where exhaustion of remedies within the union itself
would practically amount to a denial of justice, or
would be illusory or vain, it will not be insisted upon,
particularly where property rights of the members are
involved, as a condition to the right to invoke the aid
of a court.
Kapisanan vs. Trajano
By and large, the holding of the referendum in question has
become moot and academic. This is in line with Our ruling in
Pascual vs. Provincial Board of Nueva Ecija:
The Court should never remove a public officer for acts
done prior to his present term of office. To do otherwise
would be to deprive the people of their right to elect their
officers. When the people have elected a man to office, it must
be assumed that they did this with knowledge of his life and
character, and that they disregarded or forgave his faults or
misconduct, if he had been guilty of any. It is not for the court,
by reason of such faults or misconduct to practically overrule
the will of the people.
Manalad vs. Trajano
The Director of the Bureau of Labor Relations issued an order
on July 10, 1985 to the effect that he was taking over the
management of the affairs of said union, ordering private
Erika Cristel Diaz | LABOR RELATIONS
respondents Babula and all other persons to cease acting as
officers of the union, and requiring them to turn over the union
funds to said director.
Subsequently, the Court's aforesaid resolution of July 3, 1985
was modified on July 17, 1985 by providing that the special
election scheduled on July 20, 1985 shall be held under the
personal supervision of respondent Director Trajano, with the
assistance of his staff, under the usual rules and applying
suppletorily the union's 1978 constitution and by-laws.
After a careful consideration of the facts of this case, We are of
the considered view that the expiration of the terms of office
of the union officers and the election of officers on
November 28, 1988 have rendered the issues raised by
petitioners in this case moot and academic. It is pointless
and unrealistic to insist on annulling an election of officers
whose terms had already expired.
We would have thereby a judgment on a matter which cannot
have any practical legal effect upon a controversy, even if
existing, and which, in the nature of things, cannot be
enforced. We must consequently abide by our consistent ruling
that where certain events or circumstances have taken place
during the pendency of the case which would render the case
moot and academic, the petition should be dismissed.
SMC Employees vs. Calleja
This is a special civil action of certiorari with a prayer for the
issuance of a writ of preliminary injunction to annul the orders
dated February 22, 1988 and June 23, 1988, of the Med-
Arbiter and the Bureau of Labor Relations (BLR), respectively,
for the holding of a certification election in the Calasiao Beer
Region of the San Miguel Corporation.
The Union filed a motion to dismiss alleging that the petition for
certification election was premature as it did not ask SMC to
bargain collectively with it. It cited Article 258 of the Labor
Code which provides:
ART. 258. When an employer may file petition. — When
requested to bargain collectively, an 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 cases shall be decided within twenty (20)
working 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.
Hence, this petition for certiorari alleging that the Director of the
BLR gravely abused her discretion in ordering the holding of a
certification election. Parenthetically, the certification election
was actually conducted on September 19, 1988 resulting in
"NO UNION" as the winner.
The petition has no merit. Ordinarily, in an unorganized
establishment like the SMC Calasiao Beer Region, it is the
union that files a petition for a certification election if there
is no certified bargaining agent for the workers in the
establishment.
If a union asks the employer to voluntarily recognize it as
the bargaining agent of the employees, as the petitioner
 did, it in effect asks the employer to certify it as the
bargaining representative of the employees — a
certification which the employer has no authority to give,
for it is the employees' prerogative (not the employer's) to
determine whether they want a union to represent them,
and, if so, which one it should be.
The petitioner's request for voluntary recognition as the
bargaining representative of the employees was in effect a
request to bargain collectively, or the first step in that direction,
hence, the employer's request for a certification election was in
accordance with Article 258 of the Labor Code, and the public
respondents did not abuse their discretion in granting the
request.
Cebu Seamen’s vs. Calleja
There is no doubt that the controversy between the
aforesaid two sets of officers is an intra-union dispute.
Both sets of officers claim to be entitled to the release of
the union dues collected by the company with whom it had
an existing CBA. The controversy involves claims of different
members/officers to certain rights granted under the labor
code.
Article 226 of the Labor Code vests upon the Bureau of
Labor Relations and Labor Relations Division the original
and exclusive authority and jurisdiction to act on all inter-
union and intra-union disputes. Therefore, the Med-Arbiter
originally, and the Director on appeal, correctly assumed
jurisdiction over the controversy.
ABS-CBN Supervisors vs. ABS-CBN et. al
Petitioners claim that the Decision of the Secretary of Labor
and Employment dated July 1, 1991, affirming in toto the Order
of Med-Arbiter Rasidali Abdullah dated January 31, 1991,
cannot be a subject of a motion for reconsideration because it
is final and unappealable pursuant to Section 8, Rule VIII, Book
V of the Omnibus Rule Implementing the Labor Code. It is
further argued that the only remedy of the respondent Union
Officers’ is to file a petition for certiorari with this Court.
Section 8, Rule VIII, Book V of the Omnibus Rules
Implementing the Labor Code, provides:
The Secretary shall have fifteen (15) calendar days within
which to decide the appeal from receipt of the records of the
case. The decision of the Secretary shall be final and
unappealable.
The aforecited provision cannot be construed to mean that
the Decision of the public respondent cannot be
reconsidered since the same is reviewable by writ of
certiorari under Rule 65 of the Rules of Court. As a rule, the
law requires a motion for reconsideration to enable the public
respondent to correct his mistakes, if any.
Hence, the only way by which a labor case may reach the
Supreme Court is through a petition for certiorari under
Rule 65 of the Rules of Court alleging lack or excess of
jurisdiction or grave abuse of discretion. Such petition may be
filed within a reasonable time from receipt of the
resolution denying the motion for reconsideration of the
NLRC decision.
Clearly, before a petition for certiorari under Rule 65 of the
Rules of Court may be availed of, the filing of a motion for
Erika Cristel Diaz | LABOR RELATIONS
reconsideration is a condition sine qua non to afford an
opportunity for the correction of the error or mistake
complained of.
So also, considering that a decision of the Secretary of Labor is
subject to judicial review only through a special civil action of
certiorari and, as a rule, cannot be resorted to without the
aggrieved party having exhausted administrative remedies
through a motion for reconsideration, the aggrieved party, must
be allowed to move for a reconsideration of the same so that
he can bring a special civil action for certiorari before the
Supreme Court.
Definition of terminologies
Bureau of Labor Relations (BLR)
The Bureau of Labor Relations and the Labor 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. 232[226], LC)
Civil Service Commission (CSC)
The Civil Service Commission is the central personnel agency
of the Philippine government. One of the three independent
constitutional commissions with adjudicative responsibility in
the national government structure, it is also tasked to render
final arbitration on disputes and personnel actions on Civil
Service matters.
Office of Personnel Relations
It is in the pursuit of this objective that the Commission
restored on March 3, 2003 under CSC Resolution No. 03-0328
the Office for Personnel Relations (OPR) which was abolished
in 1994.
It was renamed Personnel Relations Office (PRO) and given
the challenging task of promoting responsive management and
responsible public sector unionism as key partners to effective
governance.
The PRO handles all concerns on public sector unionism in
National Government Agencies (NGAs), Local Government
Units (LGUs), State Universities and Colleges (SUCs) and
Government-Owned or Controlled Corporations (GOCCs)
nationwide.
Composed of three (3) divisions - the Registration,
Accreditation and CNA Division, Conciliation and Education
Division and the Public Sector Labor Management Council
(PSLMC) Concerns Division, the PRO is committed to the
creation of harmonious working atmosphere between a
management and an employee’s organization which mutually
respect each other’s rights.
Department of Labor Regional Office
 The Department of Labor and Employment (DOLE) started as
a small bureau in 1908. It became a department on December
8, 1933 with the passage of Act 4121. The DOLE is the
national government agency mandated to formulate and
implement policies and programs, and serve as the policy-
advisory arm of the Executive Branch in the field of labor and
employment.
To carry out its mandate, the DOLE has 16 regional offices, 83
Field Offices with four (4) Satellite Offices, 38 overseas posts,
6 bureaus, 7 staff services and 11 agencies attached to it for
policy and program supervision and/or coordination.
Public Sector Labor Management Council
(PSLMC)
A Public Sector Labor Management Council, hereinafter
referred to as the Council, is hereby constituted to be
composed of the following:
1.) Chairman, Civil Service Commission Chairman;
2.) Secretary, Department of Labor and Employment Vice
Chairman;
3.) Secretary, Department of Finance Member;
4.) Secretary, Department of Justice Member;
5.) Secretary, Department of Budget and Management
Member
The Council shall implement and administer the provisions of
this Executive Order. For this purpose, the Council shall
promulgate the necessary rules and regulations to implement
this Executive Order. (E.O 180)
Employees Organization
Employees’ Organization refers to any organization, union or
association of employees in agencies of the national
government and their regional offices, attached agencies
and their regional offices, state universities and colleges,
government-owned and controlled corporations with
original charters, and local government units, which exists in
whole or in part for the purpose of collective negotiations or
for mutual aid, interest, cooperation and protection.
Registered Employees Organization
Registered Employees’ Organization refers to any
organization, union, or association of employees defined under
Section 1(t) hereof, which is registered with the DOLE and
the CSC in accordance with these Rules.
Accredited Employees Organization
Accredited Employees’ Organization refers to a registered
organization of rank-and-file employees as defined in these
Rules, which has been recognized and certified by the CSC
as the sole and exclusive collective negotiating agent.
Sole and Exclusive Employees’ Representative
The duly registered employees’ organization having the
support of the majority of the employees in the appropriate
organizational unit shall be designated as the sole and
exclusive representative of the employees.
Union
Erika Cristel Diaz | LABOR RELATIONS
Union refers to any labor organization in the private sector
organized for collective bargaining and for other legitimate
purposes.
Labor Organization
Labor Organization refers to any union or association of
employees in the private sector which exists in whole or in part
for the purpose of collective bargaining, mutual aid,
interest, cooperation, protection, or other lawful purposes.
Legitimate Labor Organization
Legitimate Labor Organization refers to any labor organization
in the private sector registered or reported with the
Department in accordance with Rules III and IV of these
Rules.
Exclusive Bargaining Agent/Representative
Exclusive Bargaining Representative refers to a legitimate
labor union duly recognized or certified as the sole and
exclusive bargaining representative or agent of all the
employees in a bargaining unit.
Affiliate
Affiliate refers to an independent union affiliated with a
federation, national union or a chartered local which was
subsequently granted independent registration but did not
disaffiliate from its federation, reported to the Regional
Office and the Bureau in accordance with Rule III, Sections 6
and 7 of these Rules.
Chartered Local/Chapter
Chartered Local refers to a labor organization in the private
sector operating at the enterprise level that acquired legal
personality through registration with the Regional Office in
accordance with Rule III, Section 2-E of these Rules.
Independent Union
Independent Union refers to a labor organization operating at
the enterprise level that acquired legal personality through
independent registration under Article 234 of the Labor Code
and Rule III, Section 2-A of these Rules.
National Union/Federation
National Union or Federation refers to a group of legitimate
labor unions in a private establishment organized for
collective bargaining or for dealing with employers
concerning terms and conditions of employment for their
member unions or for participating in the formulation of social
and employment policies, standards and programs, registered
with the Bureau in accordance with Rule III, Section 2-B of
these Rules.
Industry Union
Industry Union means any group of legitimate labor
organizations operating within an identified industry,
organized for collective bargaining or for dealing with
employers concerning terms and conditions of employment
within an industry, or for participating in the formulation of
social and employment policies, standards and programs in
such industry, which is duly registered with the Department in
accordance with Rule IIII, Section 2 of these Rules.
Trade Union Center
Trade Union Center means any group of registered national
unions or federations organized for the mutual aid and
 protection of its members, for assisting such members in
collective bargaining, or for participating in the formulation of
social and employment policies, standards and programs,
which is duly registered with the Department in accordance
with Rule III, Section 2 of these Rules.
Worker’s Association
Workers’ Association refers to an association of workers
organized for the mutual aid and protection of its members
or for any legitimate purpose other than collective
bargaining.
Legitimate Worker’s Association
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 Department in accordance with Rule III,
Sections 2-C and 2-D of these Rules.
Intra-Union Dispute
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.
Inter-Union Dispute
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.
Effects of union becoming a local/chapter of a
federation
 If a local is an independently registered union, it
does not lose its independent legal personality
since there is no such provision in the Labor
Code.
Adamson vs. CIR
The specific issue before us is whether or not a supervisor’s
union may affiliate with a federation with which unions of rank-
and-file employees of the same employer are also affiliated.
We find without merit the contentions of petitioner that if
affiliation will be allowed, only one union will in fact represent
both supervisors and rank-and-file employees of the petitioner;
that there would be an indirect affiliation of supervisors and
rank-and-file employees with one labor organization; that there
would be a merging of the two bargaining units; and that the
respondent union will lose its independence because it
becomes an alter ego of the federation.
There is nothing in the provisions of the Industrial Peace
Act which provides that a duly registered local union
affiliating with a national union or federation loses its legal
personality, or its independence. Notwithstanding affiliation,
the local union remained the basic unit free to serve the
common interest of all its members.
Erika Cristel Diaz | LABOR RELATIONS
In the case at bar, the Adamson and Adamson Supervisory
Union and the Adamson and Adamson, Inc., Salesmen
Association (FFW), have their own respective constitutions and
by-laws.
They are separately and independently registered of each
other. Both sent their separate proposals for collective
bargaining agreements with their employer. There could be no
employer influence on rank-in-file organizational activities nor
there could be any rank and file influence on the supervisory
functions of the supervisors because of the representation
sought to be proscribed.
 The local becomes subject to rules and
regulations of the Federation. The Federation
has a right to investigate and expel members of
the local on the basis of the Constitution and by-
laws of the Federation.
Villar vs. Inciong
The petitioners contended that PAFLU was without jurisdiction
to investigate their case since the charges, being intra-union
problems within the Amigo Employees Union-PAFLU, should
be conducted pursuant to the provisions of Article XI, Sections
2, 3, 4 and 5 of the local union's constitution and by-laws.
It is true that disaffiliation from a labor union is not open to legal
objection. It is implicit in the freedom of association ordained by
the Constitution. But this Court has laid down the ruling that a
closed shop is a valid form of union security, and such
provision in a collective bargaining agreement is not a
restriction of the right of freedom of association guaranteed by
the Constitution.
In the case at bar, it appears as an undisputed fact that on
February 15, 1977, the Company and the Amigo Employees
Union-PAFLU entered into a Collective Bargaining Agreement
with a union security clause provided for in Article XII thereof
which is a reiteration of the same clause in the old CBA.
The quoted stipulation for closed-shop is clear and unequivocal
and it leaves no room for doubt that the employer is bound,
under the collective bargaining agreement, to dismiss the
employees, herein petitioners, for non-union membership.
Petitioners became non-union members upon their expulsion
from the general membership of the Amigo Employees Union-
PAFLU on March 15, 1977 pursuant to the Decision of the
PAFLU national president.
We reject petitioners' theory that their expulsion was not valid
upon the grounds adverted to earlier in this Decision. That
PAFLU had the authority to investigate petitioners on the
charges filed by their co-employees in the local union and
after finding them guilty as charged, to expel them from
the roll of membership of the Amigo Employees Union-
PAFLU is clear under the constitution of the PAFLU to
which the local union was affiliated.
And pursuant to the security clause of the new CBA, reiterating
the same clause in the old CBA, PAFLU was justified in
applying said security clause.
 The contractual relation between the local &
federation from the CBA point of view is
principal and agent. The local is the principal.
 The federation is the agent. The real party in the
CBA is the local.
PICEWO vs. PICC
The question to be resolved is whether or not the petitioners'
act of disaffiliating themselves from the mother federation
constitutes an act of disloyalty to the union which would
warrant their expulsion and consequently their dismissal from
the company in pursuance to the union security clause
embodied in the CBA.
While We are not convinced with the petitioners' argument that
the only act that they have done was to change the name of
their union for they have registered the new union and affiliated
it with the Federation of Free Workers, We rule that individual
petitioners do not merit the dismissals meted by the company.
The locals are separate and distinct units primarily
designed to secure and maintain an equality of bargaining
power between the employer and their employee-members
in the economic struggle for the fruits of the joint productive
effort of labor and capital; and the association of the locals into
the national union was in furtherance of the same end.
These associations are consensual entities capable of entering
into such legal relations with their members. The essential
purpose was the affiliation of the local unions into a common
enterprise to increase by collective action the common
bargaining power in respect of the terms and conditions of
labor.
Yet the locals remained the basic units of association, free
to serve their own and the common interest of all, subject
to the restraints imposed by the Constitution and By-Laws
of the Association, and free also to renounce the affiliation
for mutual welfare upon the terms laid down in the
agreement which brought it into existence.
The right of the local members to withdraw from the
federation and to form a new local depends upon the
provisions of the union's constitution, by- laws and
charter. In the absence of enforceable provisions in the
federation's constitution preventing disaffiliation of a local
union, a local may sever its relationship with its parent.
There is nothing shown in the records nor is it claimed by
respondent federation that the local union was expressly
forbidden to disaffiliate from the federation. Except for the
union security clause, the federation claims no other ground in
expelling four of the fifty-one who signed the certification.
Fifty-one out of sixty employees is equivalent to eighty five
percent (85%) of the total working force. This is not a case
where one or two members of the old union decided to
organize another union in order to topple down the former, but
it is a case where majority of the union members decided to
reorganize the union and to disaffiliate from the mother
federation.
There is no merit to the contention of the respondent federation
that the act of disaffiliation is disloyalty to the union. The
federation and the union are two different entities and it was
the federation which actively initiated the dismissal of the
individual petitioners. A local union does not owe its existence
to the federation to which it is affiliated. It is a separate and
distinct voluntary association owing its creation and continued
Erika Cristel Diaz | LABOR RELATIONS
existence to the will of its members. The very essence of self-
organization is for the workers to form a group for the effective
enhancement and protection of their common interests.
Tropical Hut vs. Tropical Hut
The right of a local union to disaffiliate from its mother
federation is well-settled. A local union, being a separate and
voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when
circumstances warrant. This right is consistent with the
constitutional guarantee of freedom of association.
All employees enjoy the right to self-organization and to form
and join labor organizations of their own choosing for the
purpose of collective bargaining and to engage in concerted
activities for their mutual aid or protection.
This is a fundamental right of labor that derives its existence
from the Constitution. In interpreting the protection to labor and
social justice provisions of the Constitution and the labor laws
or rules or regulations, We have always adopted the liberal
approach which favors the exercise of labor rights.
The inclusion of the word NATU after the name of the local
union THEU in the registration with the Department of Labor is
merely to stress that the THEU is NATU's affiliate at the time of
the registration. It does not mean that the said local union
cannot stand on its own. Neither can it be interpreted to mean
that it cannot pursue its own interests independently of the
federation. A local union owes its creation and continued
existence to the will of its members and not to the
federation to which it belongs.
When the local union withdrew from the old federation to
join a new federation, it was merely exercising its primary
right to labor organization for the effective enhancement
and protection of common interests. In the absence of
enforceable provisions in the federation's constitution
preventing disaffiliation of a local union a local may sever
its relationship with its parent.
There is nothing in the constitution of the NATU or in the
constitution of the THEU-NATU that the THEU was expressly
forbidden to disaffiliate from the federation. The alleged non-
compliance of the local union with the provision in the NATU
Constitution requiring the service of three months’ notice of
intention to withdraw did not produce the effect of nullifying the
disaffiliation for the following grounds:
firstly, NATU was not even a legitimate labor organization, it
appearing that it was not registered at that time with the
Department of Labor, and therefore did not possess and
acquire, in the first place, the legal personality to enforce its
constitution and laws, much less the right and privilege under
the Labor Code to organize and affiliate chapters or locals
within its group, and secondly, the act of non-compliance with
the procedure on withdrawal is premised on purely technical
grounds which cannot rise above the fundamental right of self-
organization.
 A local, contrary to the constitution & by-laws
which allows disaffiliation only during sixty-day
freedom period, may disaffiliate from the
federation at any time, provided such act is
 approved by the majority of all in the bargaining
unit.
Associated Workers vs. NLRC
While it is true that AWUM as a local union, being an entity
separate and distinct from AWU, is free to serve the interest of
all its members and enjoys the freedom to disaffiliate, such
right to disaffiliate may be exercised, and is thus considered a
protected labor activity, only when warranted by
circumstances.
Generally, a labor union may disaffiliate from the mother
union to form a local or independent union only during the
60-day freedom period immediately preceding the
expiration of the CBA.
Even before the onset of the freedom period (and despite
the closed-shop provision in the CBA between the mother
union and management) disaffiliation may still be carried
out, but such disaffiliation must be effected by a majority
of the members in the bargaining unit.
This happens when there is a substantial shift in allegiance
on the part of the majority of the members of the union. In
such a case, however, the CBA continues to bind the
members of the new or disaffiliated and independent
union up to the CBA's expiration date.
The record does not show that individual respondents had
disaffiliated during the freedom period. The record does,
however, show that only 11 members of AWU had decided to
disaffiliate from AWU and form AWUM.
Respondent Metro had about 4,000 employees, and around
2,000 of these were members of AWU. It is evident that
individual respondents had failed to muster the necessary
majority in order to justify their disaffiliation. In fact, it was
only on December 5, 1985 that individual respondents
were finally able to register an independent union called
Metroport Workers Union [MWU].
Even then, in the absence of allegation by AWUM [MWU]
of the exact number of its members, the Court presumes
that only twenty percent [20%] of the employees of Metro
had joined MWU). Thus, in the referendum held on 7
January 1985 at the PTGWO compound (where
representatives of the Ministry of Labor and Employment
were present) to determine whether individual
respondents should be expelled from AWU, 1,229
members (out of 1,695 members present) voted for
expulsion of individual respondents.
In sum, the attempted disaffiliation of the eleven (11) private
respondents from the petitioner mother union and the effort to
organize either a new local of the mother union or an entirely
new and separate union, did not, under the circumstances of
this case, constitute protected activities of the eleven (11)
individual respondents.
Obligation to check-off federation dues terminates
with valid disaffiliation
Volkschel Labor Union vs. BLR
Erika Cristel Diaz | LABOR RELATIONS
Under Section 3, Article I, of the CBA, the obligation of the
respondent companies to deduct and remit dues to
ALUMETAL is conditioned on the individual check-off
authorization of petitioner's members.
In other words, ALUMETAL is entitled to receive the dues
from respondent companies as long as petitioner union is
affiliated with it and respondent companies are authorized
by their employees (members of petitioner union) to
deduct union dues.
Without said affiliation, the employer has no link to the
mother union. The obligation of an employee to pay union
dues is coterminous with his affiliation or membership.
The employees' check-off authorization, even if declared
irrevocable, is good only as long as they remain members of
the union concerned. A contract between an employer and the
parent organization as bargaining agent for the employees is
terminated by the disaffiliation of the local of which the
employees are members.
Respondent companies therefore were wrong in
continuing the check-off in favor of respondent federation
since they were duly notified of the disaffiliation and of
petitioner's members having already rescinded their
check-off authorization.
Suffice it to state that respondent federation is not entitled to
union dues payments from petitioner's members. A local union
which has validly withdrawn from its affiliation with the parent
association and which continues to represent the employees of
an employer is entitled to the check-off dues under a collective
bargaining contract.
Substitutionary doctrine
Benguet Consolidated vs. BCI Employees
Did the Collective Bargaining Contract executed between
BENGUET and BBWU on June 23, 1959 and effective until
December 23, 1963 automatically bind UNION-PAFLU
upon its certification, on August 18, 1962, as sole
bargaining representative of all BENGUET employees?
In support of an affirmative answer to the first question,
BENGUET first invokes the so-called "Doctrine of
Substitution" referred to in General Maritime Stevedores'
Union v. South Sea Shipping Lines:
We also hold that where the bargaining contract is to
run for more than two years, the principle of
substitution may well be adopted and enforced by the
CIR to the effect that after two years of the life of a
bargaining agreement, a certification election may be
allowed by the CIR; that if a bargaining agent other
than the union or organization that executed the
contract, is elected, said new agent would have to
respect said contract, but that it may bargain with
the management for the shortening of the life of
the contract if it considers it too long, or refuse to
renew the contract pursuant to an automatic
renewal clause.
The submission utterly fails to persuade Us. The above-
quoted pronouncement was obiter dictum. The only issue in
the General Maritime Stevedores' Union case was whether a
 collective bargaining agreement which had practically run for 5
years constituted a bar to certification proceedings.
We held it did not and accordingly directed the court a quo to
order certification elections. With that, nothing more was
necessary for the disposition of the case. Moreover, the
pronouncement adverted to was rather premature. The
possible certification of a union different from that which signed
the bargaining contract was a mere contingency then since the
elections were still to be held. Clearly, the Court was not called
upon to rule on possible effects of such proceedings on the
bargaining agreement.
But worse, BENGUET's reliance upon the Principle of
Substitution is totally misplaced. This principle, formulated
by the NLRB as its initial compromise solution to the
problem facing it when there occurs a shift in employees'
union allegiance after the execution of a bargaining
contract with their employer, merely states that even during
the effectivity of a collective bargaining agreement
executed between employer and employees thru their
agent, the employees can change said agent but the
contract continues to bind them up to its expiration date.
They may bargain however for the shortening of said
expiration date.
In formulating the "substitutionary" doctrine, the only
consideration involved was the employees' interest in the
existing bargaining agreement. The agent's interest never
entered the picture.
In fact, the justification for said doctrine was that the majority of
the employees, as an entity under the statute, is the true party
in interest to the contract, holding rights through the agency of
the union representative. Thus, any exclusive interest claimed
by the agent is defeasible at the will of the principal.
Stated otherwise, the "substitutionary" doctrine only
provides that the employees cannot revoke the validly
executed collective bargaining contract with their
employer by the simple expedient of changing their
bargaining agent. And it is in the light of this that the phrase
"said new agent would have to respect said contract" must be
understood.
It only means that the employees, thru their new bargaining
agent, cannot renege on their collective bargaining contract,
except of course to negotiate with management for the
shortening thereof.
The "substitutionary" doctrine, therefore, cannot be
invoked to support the contention that a newly certified
collective bargaining agent automatically assumes all the
personal undertakings — like the no-strike stipulation here —
in the collective bargaining agreement made by the deposed
union.
When BBWU bound itself and its officers not to strike, it
could not have validly bound also all the other rival unions
existing in the bargaining units in question. BBWU was the
agent of the employees, not of the other unions which possess
distinct personalities. To consider UNION contractually bound
to the no-strike stipulation would therefore violate the legal
maxim that res inter alios nec prodest nec nocet.
Of course, UNION, as the newly certified bargaining agent,
could always voluntarily assume all the personal undertakings
made by the displaced agent. But as the lower court found,
there was no showing at all that, prior to the strike, UNION
Erika Cristel Diaz | LABOR RELATIONS
formally adopted the existing CONTRACT as its own and
assumed all the liability ties imposed by the same upon BBWU.
 The local union and not the federation, is liable
for damages arising from illegal strike even if it
was the federation who filed the notice to strike.
Filipino Pipe Corp. vs. NLRC
Anent the responsibility for the damages allegedly sustained by
petitioner company on account of the illegal strike, the latter
theorized that the liability therefor should be borne by NLU-
TUCP and its national president, Atty. Eulogio Lerum, for
having directly participated in aiding and abetting the illegal
strike.
It is argued that FPWU-NLU is a mere agent of respondent
NLU-TUCP, because FPWU-NLU, which was formed by
respondent NLU-TUCP is not registered as a local unit or
chapter but directly affiliated with the latter and therefore, could
not have acted on its own. Otherwise stated, petitioner is of the
view that FPWU-NLU, a local union, cannot act as the principal
of respondent NLU-TUCP, a mother federation, because it is
not a legitimate labor organization.
Evidently, in the case under scrutiny, whether or not FPWU,
the local chapter, complied with the procedural requirements
that would make it a legitimate labor organization is immaterial.
It would not affect its status as the principal and basic unit of
the association. The requirement laid down in the Progressive
Development case, that the local union must be a legitimate
labor organization, pertains to the conditions before a union
may file a petition for certification election and to be certified as
sole and exclusive bargaining agent.
In the present case, there is no dispute that FPWU-NLU is the
sole and exclusive bargaining representative of the rank and
file employees of petitioner company. The union's status as a
legitimate labor organization is therefore of no moment in
the resolution of the controversy here. As the local union,
it is considered as the principal; the entity which staged
the illegal strike and the one responsible for the resulting
damages allegedly sustained by petitioner company.
Evidently, direct and primary responsibility for the
damages allegedly caused by the illegal strike sued upon
fall on the local union FPWU, being the principal, and not
on respondent NLU-TUCP, a mere agent of FPWU-NLU
which assisted the latter in filing the notice of strike.
Being just an agent, the notice of strike filed by Atty. Eulogio
Lerum, the national president of NLU-TUCP, is deemed to
have been filed by its principal, the FPWU-NLU. Having thus
dismissed the claim for damages against the principal, FPWU-
NLU, the action for damages against its agent, respondent
NLU-TUCP, and Atty. Lerum, has no more leg to stand on and
should also be dismissed.
-----------------------END OF FIRST EXAM COVERAGE----------------------
 Humility and
Perseverance ⚖️

Erika Cristel Diaz | LABOR RELATIONS