ulp-cert. elect cases

G.R. No. 91086 May 8, 1990

VIRGILIO S. CARIÑO petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, HARRISON INDUSTRIAL CORPORATION and HARRISON INDUSTRIAL WORKERS' UNION, respondents.

Federico C. Leynes for petitioner.

Banzuela, Flores, Miralles, Rañeses Sy, Taquio & Associates for respondent Union.

Armando V. Ampil for respondent Harrison.

R E S O L U T I O N

FELICIANO, J.:

Petitioner asks the Court to declare null and void a Decision dated 26 May 1989 of the National Labor Relations Commission (NLRC) in NLRC Case No. NCR-00-09-03225-87 and to reinstate the Decision of the Labor Arbiter which the NLRC had modified.

Petitioner Cariño was the former President of private respondent Harrison Industrial Workers' Union ("Union"). Because he was widely believed to have grossly mismanaged Union affairs, the other officers of the Union formed an investigating committee and several times invited petitioner Cariño to answer the complaints and charges against him. These charges were, principally:

1. Conspiring with the company during the negotiation of the CBA, resulting in, among other things, Article 22 entitled "Retirement" which provided for retirement pay of one (1) day's basic salary for every year of service.

2. Paying attorney's fees to Atty. Federico Leynes, Union counsel, out of Union funds without obtaining corresponding receipts therefor.

3. Unilaterally increasing the membership dues by an additional P17.00 per member in order to pay increased attorney's fees.

4. Concealing the CBA, failure to present and to explain the provisions of the same prior to ratification by the union membership.

5. Refusal to turn over the custody and management of Union funds to the Union treasurer.

Petitioner Cariño, however, failed to respond to the calls or invitations made by the investigating committee. Finally, the investigation committee caged a general membership meeting on 11 June 1987. At this general membership meeting, the charges against petitioner were presented and discussed and the Union decided to file a petition for special election of its officers.

On 16 June 1987, a petition for special election of officers was filed by the Union with the Bureau of Labor Relations, Department of Labor and Employment. Several hearings were field at the BLR always with due notice to petitioner Cariño petitioner, however, failed to appear even once.

On 5 August 1987, a general Union membership meeting was held for the impeachment of Cariño. The general membership found Cariño guilty of the above-mentioned charges and decided to expel him from the Union and to recommend his termination from employment. Atty. Federico Leynes also ceased to be counsel for the Union.

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The Union accordingly informed private respondent Harrison Industrial Corporation ("Company") of the expulsion of petitioner Cariño from the Union and demanded application of the Union Security Clause of the then existing Collective Bargaining Agreement (CBA) on 15 September 1987. Petitioner Cariño received a letter of termination from the Company, effective the next day.

Petitioner Cariño, now represented by Atty. Leynes, the former lawyer of the Union, filed a complaint for illegal dismissal with the Labor Arbiter.

In a Decision dated 7 October, 1988, the Labor Arbiter held that there was no just cause for the dismissal of petitioner Cariño, none of the causes for suspension or dismissal of Union members enumerated in the Union's Constitution and By-Laws being applicable to petitioner's situation. The Labor Arbiter also held that the manner of petitioner's dismissal had been in disregard of the requirements of notice and hearing laid down in the Labor Code. The Labor Arbiter ordered petitioner's reinstatement with full backwages and payment of attorney's fees, the monetary liability to be borne solidarily by the Company and the Union.

The Company and the Union went on appeal before the public respondent National Labor Relations Commission (NLRC). The NLRC, in a Decision promulgated on 26 May 1989, reversed the Labor Arbiter's award. The NLRC noted that petitioner Cariño had merely denied the serious charges of mismanagement preferred against him, as set out in the affidavit of Dante Maroya, the incumbent President of the Union, which affidavit had been adopted by the Union as its position paper in the proceedings before the Labor Arbiter. The NLRC held Cariño's silence as "tantamount to [an] admission of guilt" and as constituting the ultimate cause for his dismissal. However, the NLRC agreed with the Labor Arbiter's finding that the manner of petitioner Cariño's dismissal was inconsistent with the requirements of due process. The NLRC accordingly found the Company and the Union solidarily liable, "by way of penalty and financial assistance", to petitioner Cariño for payment of separation pay, at the rate of one-half (1/2) month's salary for each year of service.

In the instant Petition for Certiorari, petitioner Cariño basically seeks reinstatement of the Decision of the Labor Arbiter.

1. Petitioner Cariño contended that the NLRC had erred in taking cognizance of the Union's admittedly late appeal. We agree, however, with the Solicitor General that it is a settled principle of remedial law that reversal of a judgment obtained by a party appealing from it also benefits a co-party who had not appealed, or who had appealed out of time, where the rights and liabilities of both parties under the modified decision are so interwoven and inter-dependent as to be substantively inseparable. 1

In the instant case, the NLRC could take cognizance of the late appeal of the Union, considering that the lawfulness of petitioner Cariño's dismissal by the Company could be determined only after ascertaining, among other things, the validity of the Union's act of expelling Cariño from its membership. In other words, the Company having seasonably appealed the Labor Arbiter's Decision and the Company's and the Union's liability being closely intertwined the NLRC could properly take account of the Union's appeal even though not seasonably filed.

2. The NLRC in effect held that there had been just cause for petitioner Cariño's dismissal. The Court considers that the NLRC was correct in so holding, considering the following documentary provisions:

a) Article II, Sections 4 and 5 of the Collective Bargaining Agreement between the Company and the Union provided as follows:

Sec. 4. Any employee or worker obliged to join the UNION and/or maintain membership therein under the foregoing sections who fails to do so and/or maintain such membership shall be dismiss without pay upon formal request of the UNION.

Sec. 5. Any UNION member may be suspended and/or expelled by the UNION for:

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a) Non-payment of dues or special assessment to the UNION.

b) Organizing or joining another UNION or affiliating with a labor federation.

c) Commission of a crime as defined by the Revised Penal Code against any UNION officer in relation to activities for and in behalf of the UNION.

d) Participation in an unfair labor practice or any derogatory act against the UNION or any of its officers or members; and

e) Involvement in any violation of this Agreement or the UNION's Constitution and By-Laws.

The UNION assumes full and complete responsibility for all dismiss of any worker/employee effected by the UNION and conceded in turn, by the COMPANY pursuant to the provisions hereof.

The UNION shall defend and hold the COMPANY free and harmless against any and all claims the dismissed worker/employee might bring and/or obtain from the Company for such dismissal. 2 (Emphasis supplied)

b) The Constitution of the Union contains the following provisions:

(i) Article X Section 5 reads:

ARTICLE X-FEES, DUES SPECIAL ASSESSMENTS, FINES AND OTHER PAYMENTS

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Sec. 5. Special assessments or other extraordinary fees such as for payment of attorney's fees shall be made only upon a resolution duly ratified by the general membership by secret balloting.

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(Emphasis supplied.)

(ii) Article XV entitled "Discipline" provides in Section I thereof that:

Sec. 1. Any individual union members and/or union officer may be disciplined or expelled from the UNION by the Executive Board if the latter should find the former guilty of charges, based on the following grounds preferred officially against him:

a) Non-payment of dues and other assessments for two (2) months;

b) Culpable violation of the Constitution and By Laws;

c) Deliberate refusal to implement policies, rules and regulations decisions and/or support the programs or projects of the UNION as laid down by its governing organs or its officers; and

d) Any act inimical to the interest of the UNION and/or its officers, such as but not limited to rumor mongering which tends to discredit the name and integrity of the UNION and/or its officers and creating or causing to create dissension among the UNION members thereof. 4 (Emphasis supplied.)

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Article XVI entitled "Impeachment and Recall" specified, in Section 1 thereof, the grounds for impeachment or recall of the President and other Union officers, in the following terms:

a) Committing or causing the commission directly or indirectly of acts against the interest and welfare of the UNION;

b) Malicious attack against the UNION, its officers or against a fellow UNION officer or member;

c) Failure to comply with the obligation to turn over and return to the UNION Treasurer within three (3) days are [sic] unexpected sum or sum of money received an authorized UNION purpose;

d) Gross misconduct unbecoming of a UNION officer;

e) Misappropriation of UNION funds and property. This is without prejudice to the filing of an appropriate criminal or civil action against the responsible officer or officers by any interested party

f) Willful violation of any provisions on this Constitution or rules, regulations, measures, resolution and decisions of the UNION. 5 (Emphasis supplied.)

It appears to the Court that the particular charges raised against petitioner Cariño, set out earlier, reasonably fall within the underscored provisions of the foregoing documents. The NLRC impliedly recognized this when it described the charges of mismanagement against Carino as serious.

The Labor Arbiter, however, also held that petitioner Cariño had been deprived of procedural due process on the union level in view of alleged failure to comply with the required procedure, governing impeachment and recall proceedings set out in Article XVI, Section 2, of the Constitution of the Union. Article XVI, Section 2 reads as follows:

a) Impeachment or recall proceedings shall be initiated by a formal petition or resolution signed by at least thirty (30%) percent of all bona fide members of the UNION and addressed to the Chairman of the Executive board.

b) The Board Chairman shall then convene a general membership fee to consider the impeachment or recall of an officer or a group of officers, whether elective or appointive

c) UNION officers against whom impeachment or recall charges have been filed shall be given ample opportunity to defend themselves before any impeachment or recall vote is finally taken.

d) A majority of all members of the UNION shall be required to impeach or recall UNION officers.

e) The UNION officers impeached shall ipso facto be considered resigned or ousted from office and shall no longer be elected nor appointed to any position in the UNION.

f) The decision of the general membership on the impeachment or recall charge shall be final and executory. 6

The NLRC, for its part, noted that while the prescribed procedural steps had not all been followed or complied with, still,

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Be that as it may, the general membership of the Union had spoken and decided to expel complainant as Union President and member and ultimately, requested the company to terminate his services per CBA prescription. It is worthy to note that the charges aired by Mr. Dante Maroya are serious enough for complainant to specifically respond and explain his side at the arbitral proceedings below. While it appears that due process was lacking at the plant level, this was cured by the arbitration process conducted by the Labor Arbiter. Despite the ample opportunity to explain his side, complainant failed to do so and instead, relied completely on alleged denial of due process. Complainant's silence in this respect is tantamount to [an] admission of guilt. 7 (Emphasis supplied.)

It is true that the impeachment of Cariño had not been initiated by a formal petition or resolution signed by at least thirty percent (30%) of an the bona fide members of the Union. A general meeting had, however, been called to take up the charges against petitioner Carino who had been given multiple opportunities to defend himself before the investigating committee of the Union officers and before the general Union members as well as before the Bureau of Labor Relations. Petitioner Cariño, however, chose to disregard all calls for him to appear and defend himself. At the general membership meeting, therefore, petitioner Cariño was impeached and ordered recalled byunanimous vote of the membership. Under these circumstances, failure to comply literally with step (a) of Article XVI Section 2 of the Union's Constitution must be regarded as non-material: the prescribed impeachment and recall proceeding had been more than substantially complied with.

4. Turning now to the involvement of the Company in the dismissal of petitioner Cariño we note that the Company upon being formally advised in writing of the expulsion of petitioner Carino from the Union, in turn simply issued a termination letter to Cariño, the termination being made effective the very next day. We believe that the Company should have given petitioner Carino an opportunity to explain his side of the controversy with the Union. Notwithstanding the Unions Security Clause in the CBA, the Company should have reasonably satisfied itself by its own inquiry that the Union had not been merely acting arbitrarily and capriciously in impeaching and expelling petitioner Cariño. From what was already discussed above, it is quite clear that had the Company taken the trouble to investigate the acts and proceedings of the Union, it could have very easily determined that the Union had not acted arbitrarily in impeaching and expelling from its ranks petitioner Cariño. The Company offered the excuse that the Union had threatened to go on strike if its request had not been forthwith granted. Assuming that such a threat had in fact been made, if a strike was in fact subsequently called because the Company had insisted on conducting its own inquiry, the Court considers that such would have been prima facie an illegal strike. The Company also pleaded that for it to inquire into the lawfulness of the acts of the Union in this regard would constitute interference by the Company in the administration of Union affairs. We do not believe so.

In Liberty Cotton Mills Worker's Union, et al. v. Liberty Cotton Mills, et al. 8 the Court held respondent company to have acted in bad faith in dismissing the petitioner workers without giving them an opportunity to present their side in their controversy with their own union.

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It is OUR considered view that respondent company is equally liable for the payment of backwages for having acted in bad faith in effecting the dismissal of the individual petitioners. Bad faith on the part of respondent company may be gleaned from the fact that the petitioner workers were dismissed hastily and summarily. At best, it was guilty of a tortious act, for which it must assume solidary liability, since it apparently chose to summarily dismiss the workers at the union's instance secure in the union's contractual undertaking that the union would hold it "free from any liability" arising from such dismissal.

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While respondent company, under the Maintenance of Membership prevision of the Collective Bargaining Agreement, is bound to dismiss any employee expelled by PAFLU for disloyalty, upon its written request, this undertaking should not be done hastily and

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summarily. The company acted in bad faith in dismissing petitioner workers without giving them the benefit of a hearing. It did not even bother to inquire from the workers concerned and from PAFLU itself about the cause of the expulsion of the petitioner workers. Instead, the company immediately dismissed the workers on May 29, 1964 — in a span of only one day — stating that it had no alternative but to comply with its obligation under the Security Agreement in the Collective Bargaining Agreement thereby disregarding the right of the workers to due process, self-organization and security of tenure.

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The power to dismiss is a normal prerogative of the employer. However, this is not without limitations.The employer is bound to exercise caution in terminating the services of his employee especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement,as in the instant case. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should therefore respect and protect the rights of their employees, which include the right to labor. . . .

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In Manila Cordage Company v. Court of industrial Relations, et al., 10 the Court stressed the requirement of good faith on the part of the company in dismissing the complainant and in effect held that precipitate action in dismissing the complainant is indication of lack of good faith.

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The contention of the petitioners that they acted in good faith in dismissing the complainants and, therefore, should not be held liable to pay their back wages has no merit. The dismissal of the complainants by the petitioners was precipitate and done with undue haste. Considering that the so-called "maintainance of membership" clause did not clearly give the petitioners the right to dismiss the complainants if said complainants did not maintain their membership in the Manco Labor Union, the petitioners should have raised the issue before the Court of industrial Relations in a petition for permission to dismiss the complainants.

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5. We conclude that the Company had failed to accord to petitioner Cariño the latter's right to procedural due process. The right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the Company or his own Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a CBA. An employee is entitled to be protected not only from a company which disregards his rights but also from his own Union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job.

The Court does not believe, however, that the grant of separation pay to petitioner Cariño was an appropriate response (there having been just cause for the dismissal) to the failure of the Company to accord him his full measure of due process. Since petitioner Cariño had clearly disdained answering the charges preferred against him within the Union, there was no reason to suppose that if the Company had held formal proceedings before dismissing him, he would have appeared in a Company investigation and pleaded his defenses, if he had any, against the charges against him. There was no indication that the Company had in fact conspired with the Union to bring about the expulsion and dismissal of petitioner

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Cariño indeed, the Union membership believed it was Cariño who had conspired with the company in the course of negotiating the CBA. Considering all the circumstances of this case, and considering especially the nature of the charges brought against petitioner Cariño before his own Union, the Court believes that a penalty of P5,000 payable to petitioner Carino should be quite adequate, the penalty to be borne by the Company and the Union solidarily The Court also considers that because the charges raised against petitioner and unanswered by him have marked overtones of dishonesty, this is not a case where "financial (humanitarian) assistance" to the dismissed employee is warranted. 12

WHEREFORE, the Court DISMISSED the Petition for certiorari for lack of merit but MODIFIED the Decision of the public respondent National Labor Relations Commission dated 26 May 1989 by eliminating the grant of separation pay and in lieu thereof imposing a penalty of P5,000.00 payable to the petitioner to be borne solidarily by the Company and the Union. No pronouncement as to costs.

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G.R. No. 113907 February 28, 2000

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), ITS PRESIDENT BEDA MAGDALENA VILLANUEVA, MARIO DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO, ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG, NENITA BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN, DOMINGO ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN, LIGAYA MANALO, PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO LOMO, PRECILA EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO, CELEDONA MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER, JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG, CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE, LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO, SIMPLICIA SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO, ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH BARCIBAL, CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO CABRERA, CONCEPSION ARRIOLA, PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES, EDITHA IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS, LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES, ISABELITA AURIN, MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA AURIN, EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVIMINDA ABINES, FLORENCIA ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO, CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO, EDITHA ANTA ZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT, MARIETA ARAGON, REBECCA ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA, EMMA ATIENZA, EMMA ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA BANGCORE, HERMINIA BARIL, PETRONA BARRIOS, MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO, ERNESTO BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR, LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO, BERNANDITA BASILIDES, HELEN BATO, HELEN BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN, THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA BINUYAG, LINA BINUYA, BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO, REVELINA CORANES, MARITESS CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ, MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES, MEDITA CORTADO, AMALIA CASAJEROS,

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LUCINA CASTILIO, EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO, MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA CASTRODES, VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA CONSTANTINO, SALVACION CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ, ROSA CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA CALANZA, BARBARA CALATA, IMELDA CALDERON, CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO, CARMENCITA CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T. CAPIRAL, FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA CASTISIMO, JOY MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R. CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C. CORROS, AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGIE DOMONDON, CELSA DOROPAW, VIOLETA DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ, MERCY DE LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS, JULIETA DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON, HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL, LYDIA ESCOBIN, VICENTE E. ELOIDA. ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO, JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS, ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA FAUSTINO, DOLORES FACUNDO, CRETITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA FRANCISCO, MA. JESUSA FRANCISCO, NENITA FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA, PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA, VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA, DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA GONZAGA, MARY GRANCE GOZON, CARMEN GONZALES, MERLITA GREGORIO, HERMINIA GONZALES, CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA, CRESTITA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ, HERRADURA, SUSANA HIPOLITO, NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA, JULIO JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER, IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ, TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG, LORNA LARGA, CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON, MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE LEON, FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANIE MANING, LUCENA MABANGLO, CLARITA MEJIA, IRENE MENDOZA, LILIA MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA MUYCO, NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA MALLARI, LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY, CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA, PERLITA MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRIAM NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA, CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS,

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NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA PINAT, EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT, FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA, MERCEIDTA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN, FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI PARISALES, JOSEPHINE PATRICIO, CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ, MAURA PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA PACERAN, CLARITA POLICARPIO, MAXIMO POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO, JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON, FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA REYES NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA RODIL, BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ, LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES, TERESITA REYES, ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO, MELECIA ROSALES, ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO, HELEN SIBAL, ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA SARMIENTO, MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA. VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR, EMMA SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES SAN JOSE, EGLECERIA OSANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN SENDING, ELENA SONGALIA, FELICITAS SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA TORRE, MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA TINGTING, ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA VILLARITO, ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS, FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA VELASCO, AUREA VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA VALENCI, MYRNA VASQUEZ, EVELNYN VEJERAMO, TEODORA VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU, ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO, CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO, ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO, GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA, SOFIA AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA, CONCEPCION ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO, JOSEPHINE ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE, HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT, LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS, NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE BARTOLOME, SHIRLEY BELMONTE, MERONA BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG, BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA

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BINUYA, BIBIANA BAARDE, ELSA BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO, APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA BASIJAN, RENITA BADAMA, ELENA BALADAD, CRESENCIA BAJO, BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN, MARIA CAMERINO,VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN, NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO, MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA GONG, TEOFILA CARACOL, TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES, MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS, IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA, ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO, CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG, JULIETA DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA, TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA, MERLITA ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO, SUSANA FERNANDO, EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO, CHARITA GOREMBALEM, NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ, JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA INSORIO, ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL, ROWENA JARABJO, ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA LATOGA, EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON, CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION MACAREZA, AMALIA MADO, TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA, NELCITA MANGANTANG, TERESITA NELLA, GENEROZA MERCADO, CRISTETA MOJANA, BERNARDA MONGADO, LYDIA MIRANDA, ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO, ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO, JUANA MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO, TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA MANALO, LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG, MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE, VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS, MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO, LIBRADA OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA, PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR, ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA, REBECCA PIAPES, EDITHA PILAR, MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON, MA. NITA PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO, MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS, ROSITA RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA, ROSITA REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO, JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS SISON, GLORIA TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA TABULAO, MACARIA TORRES, LUTGARDA TUSI, ESTELLA TORREJOS,

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VICTORIA TAN, MERLITA DELA VEGA, WEVINA ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN, EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE, MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA CAPISTRANO, BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO, ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE, LUCITA DONATO NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION GAMBOA, JOSEPHINE IGNACIO, SUSAN IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA LUMBIS, LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY MENDOZA, IRENEA MEDINA, NARCISA MABEZA, ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA MENDOZA, FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES PACHECO, LILIA PADILLA, MARISSA PEREZ, FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO, JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO, MERCEDITA SAMANIEGO, BLANDINA SIMBULAN, JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA, FLORENTINA HERNAEZ, BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA POASADAS, ESTRELLA ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES, NOEMI PENISALES, CLARITA POLICARPIO, BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA REGALIS, SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID, FILMA MELAYA, ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA, MA. FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR, LUISA SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE PINEDA, and MARIA JESUS FRANCISCO, petitioners, vs.HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO IBANEZ, AND RODRIGO AGUILING, respondents.

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul the decision of the National Labor Relations Commission in an unfair labor practice case instituted by a local union against its employer company and the officers of its national federation.

The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B) (MSMG), hereinafter referred to as the "local union", is an affiliate of the private respondent, United Lumber and General Workers of the Philippines (ULGWP), referred to as the "federation". The collective bargaining agreement between MSMG and M. Greenfield, Inc., names the parties as follows:

This agreement made and entered into by and between:

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M. GREENFIELD, INC. (B) a corporation duly organized in accordance with the laws of the Republic of the Philippines with office address at Km. 14, Merville Road, Parañaque, Metro Manila, represented in this act by its General manager, Mr. Carlos T. Javelosa, hereinafter referred to as the Company;

-and-

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B) (MSMG)/UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor organization with address at Suite 404, Trinity Building, T. M. Kalaw Street, Manila, represented in this act by a Negotiating Committee headed by its National President, Mr. Godofredo Paceno, Sr., referred to in this Agreement as the UNION.1

The CBA includes, among others, the following pertinent provisions:

Art. II-Union Security

Sec. 1. Coverage and Scope. All employees who are covered by this Agreement and presently members of the UNION shall remain members of the UNION for the duration of this Agreement as a condition precedent to continued employment with the COMPANY.

x x x x x x x x x

Sec. 4. Dismissal. Any such employee mentioned in Section 2 hereof, who fails to maintain his membership in the UNION for non-payment of UNION dues, for resignation and for violation of UNION's Constitution and By-Laws and any new employee as defined in Section 2 of this Article shall upon written notice of such failure to join or to maintain membership in the UNION and upon written recommendation to the COMPANY by the UNION, be dismissed from the employment by the COMPANY; provided, however, that the UNION shall hold the COMPANY free and blameless from any and all liabilities that may arise should the dismissed employee question, in any manner, his dismissal; provided, further that the matter of the employee's dismissal under this Article may be submitted as a grievance under Article XIII and, provided, finally, that no such written recommendation shall be made upon the COMPANY nor shall COMPANY be compelled to act upon any such recommendation within the period of sixty (60) days prior to the expiry date of this Agreement conformably to law.

Art. IX

Sec. 4. Program Fund — The Company shall provide the amount of P10,000.00 a month for a continuing labor education program which shall be remitted to the Federation . . .2

On September 12, 1986, a local union election was held under the auspices of the ULGWP wherein the herein petitioner, Beda Magdalena Villanueva, and the other union officers were proclaimed as winners. Minutes of the said election were duly filed with the Bureau of Labor Relations on September 29, 1986.

On March 21, 1987, a Petition for Impeachment was filed with the national federation ULGWP by the defeated candidates in the aforementioned election.

On June 16, 1987, the federation conducted an audit of the local union funds. The investigation did not yield any unfavorable result and the local union officers were cleared of the charges of anomaly in the custody, handling and disposition of the union funds. 1âwphi1.nêt

The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the DOLE NCR on November 5, 1987, docketed as NCR-OD-M-11-780-87. However, the same was dismissed

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on March 2, 1988, by Med-Arbiter Renato Parungo for failure to substantiate the charges and to present evidence in support of the allegations.

On April 17, 1988, the local union held a general membership meeting at the Caruncho Complex in Pasig. Several union members failed to attend the meeting, prompting the Executive Board to create a committee tasked to investigate the non-attendance of several union members in the said assembly, pursuant to Sections 4 and 5, Article V of the Constitution and By-Laws of the union, which read:

Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng unyon ng sinumang kasapi o pinuno ay maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw na nagkulang.

Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing na pagliban at maparusahan itong alinsunod sa Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na mahuli and dating sa takdang oras ng di lalampas sa isang oras ay magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na pagliban.3

On June 27, 1988, the local union wrote respondent company a letter requesting it to deduct the union fines from the wages/salaries of those union members who failed to attend the general membership meeting. A portion of the said letter stated:

x x x x x x x x x

In connection with Section 4 Article II of our existing Collective Bargaining Agreement, please deduct the amount of P50.00 from each of the union members named in said annexes on the payroll of July 2-8, 1988 as fine for their failure to attend said general membership meeting.4

In a Memorandum dated July 3, 1988, the Secretary General of the national federation, Godofredo Paceño, Jr. disapproved the resolution of the local union imposing the P50.00 fine. The union officers protested such action by the Federation in a Reply dated July 4, 1988.

On July 11, 1988, the Federation wrote respondent company a letter advising the latter not to deduct the fifty-peso fine from the salaries of the union members requesting that:

. . . any and all future representations by MSMG affecting a number of members be first cleared from the federation before corresponding action by the Company.5

The following day, respondent company sent a reply to petitioner union's request in a letter, stating that it cannot deduct fines from the employees' salary without going against certain laws. The company suggested that the union refer the matter to the proper government office for resolution in order to avoid placing the company in the middle of the issue.

The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union culminating in the latter's declaration of general autonomy from the former through Resolution No. 10 passed by the local executive board and ratified by the general membership on July 16, 1988.

In retaliation, the national federation asked respondent company to stop the remittance of the local union's share in the education funds effective August 1988. This was objected to by the local union which demanded that the education fund be remitted to it in full.

The company was thus constrained to file a Complaint for Interpleader with a Petition for Declaratory Relief with the Med-Arbitration Branch of the Department of Labor and Employment, docketed as Case No. OD-M-8-435-88. This was resolved on October 28, 1988, by Med-Arbiter Anastacio Bactin in an Order, disposing thus:

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WHEREFORE, premises considered, it is hereby ordered:

1. That the United Lumber and General Workers of the Philippines (ULGWP) through its local union officers shall administer the collective bargaining agreement (CBA).

2. That petitioner company shall remit the P10,000.00 monthly labor education program fund to the ULGWP subject to the condition that it shall use the said amount for its intended purpose.

3. That the Treasurer of the MSMG shall be authorized to collect from the 356 union members the amount of P50.00 as penalty for their failure to attend the general membership assembly on April 17, 1988.

However, if the MSMG Officers could present the individual written authorizations of the 356 union members, then the company is obliged to deduct from the salaries of the 356 union members the P50.00 fine.6

On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989, which modified in part the earlier disposition, to wit:

WHEREFORE, premises considered, the appealed portion is hereby modified to the extent that the company should remit the amount of five thousand pesos (P5,000.00) of the P10,000.00 monthly labor education program fund to ULGWP and the other P5,000.00 to MSMG, both unions to use the same for its intended purpose.7

Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield, Grosby, Triumph International, General Milling, and Vander Hons chapters) filed a Petition for Audit and Examination of the federation and education funds of ULGWP which was granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order which directed the audit and examination of the books of account of ULGWP.

On September 30, 1988, the officials of ULGWP called a Special National Executive Board Meeting at Nasipit, Agusan del Norte where a Resolution was passed placing the MSMG under trusteeship and appointing respondent Cesar Clarete as administrator.

On October 27, 1988, the said administrator wrote the respondent company informing the latter of its designation of a certain Alfredo Kalingking as local union president and "disauthorizing" the incumbent union officers from representing the employees. This action by the national federation was protested by the petitioners in a letter to respondent company dated November 11, 1988.

On November 13, 1988, the petitioner union officers received identical letters from the administrator requiring them to explain within 72 hours why they should not be removed from their office and expelled from union membership.

On November 26, 1988, petitioners replied:

(a) Questioning the validity of the alleged National Executive Board Resolution placing their union under trusteeship;

(b) Justifying the action of their union in declaring a general autonomy from ULGWP due to the latter's inability to give proper educational, organizational and legal services to its affiliates and the pendency of the audit of the federation funds;

(c) Advising that their union did not commit any act of disloyalty as it has remained an affiliate of ULGWP;

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(d) Giving ULGWP a period of five (5) days to cease and desist from further committing acts of coercion, intimidation and harassment.8

However, as early as November 21, 1988, the officers were expelled from the ULGWP. The termination letter read:

Effective today, November 21, 1988, you are hereby expelled from UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (ULGWP) for committing acts of disloyalty and/or acts inimical to the interest and violative to the Constitution and by-laws of your federation.

You failed and/or refused to offer an explanation inspite of the time granted to you.

Since you are no longer a member of good standing, ULGWP is constrained to recommend for your termination from your employment, and provided in Article II Section 4, known as UNION SECURITY, in the Collective Bargaining agreement.9

On the same day, the federation advised respondent company of the expulsion of the 30 union officers and demanded their separation from employment pursuant to the Union Security Clause in their collective bargaining agreement. This demand was reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to respondent company.

Thereafter, the Federation filed a Notice of Strike with the National Conciliation and Mediation Board to compel the company to effect the immediate termination of the expelled union officers.

On March 7, 1989, under the pressure of a threatened strike, respondent company terminated the 30 union officers from employment, serving them identical copies of the termination letter reproduced below:

We received a demand letter dated 21 November 1988 from the United Lumber and General Workers of the Philippines (ULGWP) demanding for your dismissal from employment pursuant to the provisions of Article II, Section 4 of the existing Collective Bargaining Agreement (CBA). In the said demand letter, ULGWP informed us that as of November 21, 1988, you were expelled from the said federation "for committing acts of disloyalty and/or acts inimical to the interest of ULGWP and violative to its Constitution and By-laws particularly Article V, Section 6, 9, and 12, Article XIII, Section 8.

In subsequent letters dated 21 February and 4 March 1989, the ULGWP reiterated its demand for your dismissal, pointing out that notwithstanding your expulsion from the federation, you have continued in your employment with the company in violation of Sec. 1 and 4 of Article II of our CBA, and of existing provisions of law.

In view thereof, we are left with no alternative but to comply with the provisions of the Union Security Clause of our CBA. Accordingly, we hereby serve notice upon you that we are dismissing you from your employment with M. Greenfield, Inc., pursuant to Sections 1 and 4, Article II of the CBA effective immediately.10

On that same day, the expelled union officers assigned in the first shift were physically or bodily brought out of the company premises by the company's security guards. Likewise, those assigned to the second shift were not allowed to report for work. This provoked some of the members of the local union to demonstrate their protest for the dismissal of the said union officers. Some union members left their work posts and walked out of the company premises.

On the other hand, the Federation, having achieved its objective, withdrew the Notice of Strike filed with the NCMB.

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On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila, docketed as Case No. NCMB-NCR-NS-03-216-89, alleging the following grounds for the strike:

(a) Discrimination

(b) Interference in union activities

(c) Mass dismissal of union officers and shop stewards

(d) Threats, coercion and intimidation

(e) Union busting

The following day, March 9, 1989, a strike vote referendum was conducted and out of 2, 103 union members who cast their votes, 2,086 members voted to declare a strike.

On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition, docketed as Case No. NCMB-NCR-NS-03-216-89, with the Office of the Secretary of the Department of Labor and Employment praying for the suspension of the effects of their termination from employment. However, the petition was dismissed by then Secretary Franklin Drilon on April 11, 1989, the pertinent portion of which stated as follows:

At this point in time, it is clear that the dispute at M. Greenfield is purely an intra-union matter. No mass lay-off is evident as the terminations have been limited to those allegedly leading the secessionist group leaving MSMG-ULGWP to form a union under the KMU. . . .

x x x x x x x x x

WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of our extraordinary authority under Article 277 (b) of the Labor Code, as amended, the instant Petition is hereby DISMISSED for lack of merit.

SO ORDERED.11

On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension by respondent company. This prompted the union members to again stage a walk-out and resulted in the official declaration of strike at around 3:30 in the afternoon of March 14, 1989. The strike was attended with violence, force and intimidation on both sides resulting to physical injuries to several employees, both striking and non-striking, and damage to company properties.

The employees who participated in the strike and allegedly figured in the violent incident were placed under preventive suspension by respondent company. The company also sent return-to-work notices to the home addresses of the striking employees thrice successively, on March 27, April 8 and April 31, 1989, respectively. However, respondent company admitted that only 261 employees were eventually accepted back to work. Those who did not respond to the return-to-work notice were sent termination letters dated May 17, 1989, reproduced below:

M. Greenfield Inc., (B)

Km. 14, Merville Rd., Parañaque, M.M.

May 17, 1989

x x x x x x x x x

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On March 14, 1989, without justifiable cause and without due notice, you left your work assignment at the prejudice of the Company's operations. On March 27, April 11, and April 21, 1989, we sent you notices to report to the Company. Inspite of your receipt of said notices, we have not heard from you up to this date.

Accordingly, for your failure to report, it is construed that you have effectively abandoned your employment and the Company is, therefore, constrained to dismiss you for said cause.

Very truly yours,

M. GREENFIELD, INC., (B)

By:

WENZEL STEPHEN LIGOTAsst. HRD Manager12

On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch, National Capital Region, DOLE, Manila, docketed as Case No. NCR-00-09-04199-89, charging private respondents of unfair labor practice which consists of union busting, illegal dismissal, illegal suspension, interference in union activities, discrimination, threats, intimidation, coercion, violence, and oppression.

After the filing of the complaint, the lease contracts on the respondent company's office and factory at Merville Subdivision, Parañaque expired and were not renewed. Upon demand of the owners of the premises, the company was compelled to vacate its office and factory.

Thereafter, the company transferred its administration and account/client servicing department at AFP-RSBS Industrial Park in Taguig, Metro Manila. For failure to find a suitable place in Metro Manila for relocation of its factory and manufacturing operations, the company was constrained to move the said departments to Tacloban, Leyte. Hence, on April 16, 1990, respondent company accordingly notified its employees of a temporary shutdown in operations. Employees who were interested in relocating to Tacloban were advised to enlist on or before April 23, 1990.

The complaint for unfair labor practice was assigned to Labor Arbiter Manuel Asuncion but was thereafter reassigned to Labor Arbiter Cresencio Ramos when respondents moved to inhibit him from acting on the case.

On December 15, 1992, finding the termination to be valid in compliance with the union security clause of the collective bargaining agreement, Labor Arbiter Cresencio Ramos dismissed the complaint.

Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo Putong retired from the service, leaving only two commissioners, Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in the First Division. When Commissioner Veloso inhibited himself from the case, Commissioner Joaquin Tanodra of the Third Division was temporarily designated to sit in the First Division for the proper disposition of the case.

The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion for reconsideration on January 28, 1994, petitioners elevated the case to this Court, attributing grave abuse of discretion to public respondent NLRC in:

I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY RESPONDENT COMPANY AS VALID;

II. HOLDING THAT THE STRIKE STAGED BY THE PETITIONERS AS ILLEGAL;

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III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED TO HAVE ABANDONED THEIR WORK AND HENCE, VALIDLY DISMISSED BY RESPONDENT COMPANY; AND

IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF UNFAIR LABOR PRACTICE.

Notwithstanding the several issues raised by the petitioners and respondents in the voluminous pleadings presented before the NLRC and this Court, they revolve around and proceed from the issue of whether or not respondent company was justified in dismissing petitioner employees merely upon the labor federation's demand for the enforcement of the union security clause embodied in their collective bargaining agreement.

Before delving into the main issue, the procedural flaw pointed out by the petitioners should first be resolved.

Petitioners contend that the decision rendered by the First Division of the NLRC is not valid because Commissioner Tanodra, who is from the Third Division, did not have any lawful authority to sit, much less write theponencia, on a case pending before the First Division. It is claimed that a commissioner from one division of the NLRC cannot be assigned or temporarily designated to another division because each division is assigned a particular territorial jurisdiction. Thus, the decision rendered did not have any legal effect at all for being irregularly issued.

Petitioners' argument is misplaced. Article 213 of the Labor Code in enumerating the powers of the Chairman of the National Labor Relations Commission provides that:

The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a judgment or resolution. Whenever the required membership in a division is not complete and the concurrence of two (2) commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary.

It must be remembered that during the pendency of the case in the First Division of the NLRC, one of the three commissioners, Commissioner Romeo Putong, retired, leaving Chairman Bartolome Carale and Commissioner Vicente Veloso III. Subsequently, Commissioner Veloso inhibited himself from the case because the counsel for the petitioners was his former classmate in law school. The First Division was thus left with only one commissioner. Since the law requires the concurrence of two commissioners to arrive at a judgment or resolution, the Commission was constrained to temporarily designate a commissioner from another division to complete the First Division. There is nothing irregular at all in such a temporary designation for the law empowers the Chairman to make temporary assignments whenever the required concurrence is not met. The law does not say that a commissioner from the first division cannot be temporarily assigned to the second or third division to fill the gap or vice versa. The territorial divisions do not confer exclusive jurisdiction to each division and are merely designed for administrative efficiency.

Going into the merits of the case, the court finds that the Complaint for unfair labor practice filed by the petitioners against respondent company which charges union busting, illegal dismissal, illegal suspension, interference in union activities, discrimination, threats, intimidation, coercion, violence, and oppression actually proceeds from one main issue which is the termination of several employees by respondent company upon the demand of the labor federation pursuant to the union security clause embodied in their collective bargaining agreement.

Petitioners contend that their dismissal from work was effected in an arbitrary, hasty, capricious and illegal manner because it was undertaken by the respondent company without any prior administrative investigation; that, had respondent company conducted prior independent investigation it would have found that their expulsion from the union was unlawful similarly for lack of prior administrative investigation; that the federation cannot recommend the dismissal of the union officers because it was not a principal party to the collective bargaining agreement between the company and the union; that public respondents acted with

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grave abuse of discretion when they declared petitioners' dismissals as valid and the union strike as illegal and in not declaring that respondents were guilty of unfair labor practice.

Private respondents, on the other hand, maintain that the thirty dismissed employees who were former officers of the federation have no cause of action against the company, the termination of their employment having been made upon the demand of the federation pursuant to the union security clause of the CBA; the expelled officers of the local union were accorded due process of law prior to their expulsion from their federation; that the strike conducted by the petitioners was illegal for noncompliance with the requirements; that the employees who participated in the illegal strike and in the commission of violence thereof were validly terminated from work; that petitioners were deemed to have abandoned their employment when they did not respond to the three return to work notices sent to them; that petitioner labor union has no legal personality to file and prosecute the case for and on behalf of the individual employees as the right to do so is personal to the latter; and that, the officers of respondent company cannot be liable because as mere corporate officers, they acted within the scope of their authority.

Public respondent, through the Labor Arbiter, ruled that the dismissed union officers were validly and legally terminated because the dismissal was effected in compliance with the union security clause of the CBA which is the law between the parties. And this was affirmed by the Commission on appeal. Moreover, the Labor Arbiter declared that notwithstanding the lack of a prior administrative investigation by respondent company, under the union security clause provision in the CBA, the company cannot look into the legality or illegality of the recommendation to dismiss by the union nd the obligation to dismiss is ministerial on the part of the company.13

This ruling of the NLRC is erroneous. Although this Court has ruled that union security clauses embodied in the collective bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts14 cannot override one's right to due process.

In the case of Cariño vs. National Labor Relations Commission,15 this Court pronounced that while the company, under a maintenance of membership provision of the collective bargaining agreement, is bound to dismiss any employee expelled by the union for disloyalty upon its written request, this undertaking should not be done hastily and summarily. The company acts in bad faith in dismissing a worker without giving him the benefit of a hearing.

The power to dismiss is a normal prerogative of the employer. However, this is not without limitation. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement, . . . Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should respect and protect the rights of their employees, which include the right to labor.

In the case under scrutiny, petitioner union officers were expelled by the federation for allegedly committing acts of disloyalty and/or inimical to the interest of ULGWP and in violation of its Constitution and By-laws. Upon demand of the federation, the company terminated the petitioners without conducting a separate and independent investigation. Respondent company did not inquire into the cause of the expulsion and whether or not the federation had sufficient grounds to effect the same. Relying merely upon the federation's allegations, respondent company terminated petitioners from employment when a separate inquiry could have revealed if the federation had acted arbitrarily and capriciously in expelling the union officers. Respondent company's allegation that petitioners were accorded due process is belied by the termination letters received by the petitioners which state that the dismissal shall be immediately effective.

As held in the aforecited case of Cariño, "the right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union is not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from

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his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and mere dismissal from his job.

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees' right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process.16 Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company.

In its decision, public respondent also declared that if complainants (herein petitioners) have any recourse in law, their right of action is against the federation and not against the company or its officers, relying on the findings of the Labor Secretary that the issue of expulsion of petitioner union officers by the federation is a purely intra-union matter.

Again, such a contention is untenable. While it is true that the issue of expulsion of the local union officers is originally between the local union and the federation, hence, intra-union in character, the issue was later on converted into a termination dispute when the company dismissed the petitioners from work without the benefit of a separate notice and hearing. As a matter of fact, the records reveal that the termination was effective on the same day that the termination notice was served on the petitioners.

In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.17, the Court held the company liable for the payment of backwages for having acted in bad faith in effecting the dismissal of the employees.

. . . Bad faith on the part of the respondent company may be gleaned from the fact that the petitioner workers were dismissed hastily and summarily. At best, it was guilty of a tortious act, for which it must assume solidary liability, since it apparently chose to summarily dismiss the workers at the union's instance secure in the union's contractual undertaking that the union would hold it "free from any liability" arising from such dismissal.

Thus, notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the company free from any liability resulting from such a dismissal, the company may still be held liable if it was remiss in its duty to accord the would-be dismissed employees their right to be heard on the matter.

Anent petitioners contention that the federation was not a principal party to the collective bargaining agreement between the company and the union, suffice it to say that the matter was already ruled upon in the Interpleader case filed by respondent company. Med-Arbiter Anastacio Bactin thus ruled:

After a careful examination of the facts and evidences presented by the parties, this Officer hereby renders its decision as follows:

1.) It appears on record that in Collective Bargaining Agreement (CBA) which took effect on July 1, 1986, the contracting parties are M. Greenfield, Inc. (B) and Malayang Samahan ng Mga Manggagawa sa M. Greenfield, Inc. (B) (MSMG)/United Lumber and General Workers of the Philippines (ULGWP). However, MSMG was not yet registered labor organization at the time of the signing of the CBA. Hence, the union referred to in the CBA is the ULGWP.18

Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:

It is undisputed that ULGWP is the certified sole and exclusive collective bargaining agent of all the regular rank-and-file workers of the company, M. Greenfield, Inc. (pages 31-32 of the records).

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It has been established also that the company and ULGWP signed a 3-year collective bargaining agreement effective July 1, 1986 up to June 30, 1989.19

Although the issue of whether or not the federation had reasonable grounds to expel the petitioner union officers is properly within the original and exclusive jurisdiction of the Bureau of Labor Relations, being an intra-union conflict, this Court deems it justifiable that such issue be nonetheless ruled upon, as the Labor Arbiter did, for to remand the same to the Bureau of Labor Relations would be to intolerably delay the case.

The Labor Arbiter found that petitioner union officers were justifiably expelled from the federation for committing acts of disloyalty when it "undertook to disaffiliate from the federation by charging ULGWP with failure to provide any legal, educational or organizational support to the local. . . . and declared autonomy, wherein they prohibit the federation from interfering in any internal and external affairs of the local union."20

It is well-settled that findings of facts of the NLRC are entitled to great respect and are generally binding on this Court, but it is equally well-settled that the Court will not uphold erroneous conclusions of the NLRC as when the Court finds insufficient or insubstantial evidence on record to support those factual findings. The same holds true when it is perceived that far too much is concluded, inferred or deduced from the bare or incomplete facts appearing of record.21

In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration of autonomy by the local union was part of its "plan to take over the respondent federation." This is purely conjecture and speculation on the part of public respondent, totally unsupported by the evidence.

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 to which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association.22

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 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.23

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.24

The evidence on hand does not show that there is such a provision in ULGWP's constitution. Respondents' reliance upon Article V, Section 6, of the federation's constitution is not right because said section, in fact, bolsters the petitioner union's claim of its right to declare autonomy:

Sec. 6. The autonomy of a local union affiliated with ULGWP shall be respected insofar as it pertains to its internal affairs, except as provided elsewhere in this Constitution.

There is no disloyalty to speak of, neither is there any violation of the federation's constitution because there is nothing in the said constitution which specifically prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any valid dismissal because Article II, Section 4 of the union security clause in the CBA limits the dismissal to only three (3) grounds, to wit: failure to maintain membership in the union (1) for non-payment of union dues, (2) for resignation; and (3) for violation of the union's Constitution and By-Laws.

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To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on February 26, 1989, the petitioners declared as vacant all the responsible positions of ULGWP, filled these vacancies through an election and filed a petition for the registration of UWP as a national federation. It should be pointed out, however, that these occurred after the federation had already expelled the union officers. The expulsion was effective November 21, 1988. Therefore, the act of establishing a different federation, entirely separate from the federation which expelled them, is but a normal retaliatory reaction to their expulsion.

With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held that the strike was illegal for the following reasons: (1) it was based on an intra-union dispute which cannot properly be the subject of a strike, the right to strike being limited to cases of bargaining deadlocks and unfair labor practice (2) it was made in violation of the "no strike, no lock-out" clause in the CBA, and (3) it was attended with violence, force and intimidation upon the persons of the company officials, other employees reporting for work and third persons having legitimate business with the company, resulting to serious physical injuries to several employees and damage to company property.

On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict between the federation and the local union, it bears reiterating that when respondent company dismissed the union officers, the issue was transformed into a termination dispute and brought respondent company into the picture. Petitioners believed in good faith that in dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in that it violated the petitioner's right to self-organization. The strike was staged to protest respondent company's act of dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to be untrue, the presumption of legality of the strike prevails.25

Another reason why the Labor Arbiter declared the strike illegal is due to the existence of a no strike no lockout provision in the CBA. Again, such a ruling is erroneous. A no strike, no lock out provision can only be invoked when the strike is economic in nature, i.e. to force wage or other concessions from the employer which he is not required by law to grant.26 Such a provision cannot be used to assail the legality of a strike which is grounded on unfair labor practice, as was the honest belief of herein petitioners. Again, whether or not there was indeed unfair labor practice does not affect the strike.

On the allegation of violence committed in the course of the strike, it must be remembered that the Labor Arbiter and the Commission found that "the parties are agreed that there were violent incidents . . . resulting to injuries to both sides, the union and management."27 The evidence on record show that the violence cannot be attributed to the striking employees alone for the company itself employed hired men to pacify the strikers. With violence committed on both sides, the management and the employees, such violence cannot be a ground for declaring the strike as illegal.

With respect to the dismissal of individual petitioners, the Labor Arbiter declared that their refusal to heed respondent's recall to work notice is a clear indication that they were no longer interested in continuing their employment and is deemed abandonment. It is admitted that three return to work notices were sent by respondent company to the striking employees on March 27, April 11, and April 21, 1989 and that 261 employees who responded to the notice were admitted back to work.

However, jurisprudence holds that for abandonment of work to exist, it is essential (1) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts.28 Deliberate and unjustified refusal on the part of the employee to go back to his work post amd resume his employment must be established. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore.29 And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer.

In the present case, respondents failed to prove that there was a clear intention on the part of the striking employees to sever their employer-employee relationship. Although admittedly the company sent three return to work notices to them, it has not been substantially proven that these notices were actually sent and received by the employees. As a matter of fact, some employees deny that they ever received such notices.

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Others alleged that they were refused entry to the company premises by the security guards and were advised to secure a clearance from ULGWP and to sign a waiver. Some employees who responded to the notice were allegedly told to wait for further notice from respondent company as there was lack of work.

Furthermore, this Court has ruled that an employee who took steps to protest his lay-off cannot be said to have abandoned his work.30 The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment. In the case under consideration, the petitioners did, in fact, file a complaint when they were refused reinstatement by respondent company.

Anent public respondent's finding that there was no unfair labor practice on the part of respondent company and federation officers, the Court sustains the same. As earlier discussed, union security clauses in collective bargaining agreements, if freely and voluntarily entered into, are valid and binding. Corollary, dismissals pursuant to union security clauses are valid and legal subject only to the requirement of due process, that is, notice and hearing prior to dismissal. Thus, the dismissal of an employee by the company pursuant to a labor union's demand in accordance with a union security agreement does not constitute unfair labor practice.31

However, the dismissal was invalidated in this case because of respondent company's failure to accord petitioners with due process, that is, notice and hearing prior to their termination. Also, said dismissal was invalidated because the reason relied upon by respondent Federation was not valid. Nonetheless, the dismissal still does not constitute unfair labor practice.

Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot be held personally liable for damages on account of the employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents.

It has come to the attention of this Court that the 30-day prior notice requirement for the dismissal of employees has been repeatedly violated and the sanction imposed for such violation enunciated in Wenphil Corporation vs.NLRC32 has become an ineffective deterrent. Thus, the Court recently promulgated a decision to reinforce and make more effective the requirement of notice and hearing, a procedure that must be observed before termination of employment can be legally effected.

In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040, January 27, 2000), the Court ruled that an employee who is dismissed, whether or not for just or authorized cause but without prior notice of his termination, is entitled to full backwages from the time he was terminated until the decision in his case becomes final, when the dismissal was for cause; and in case the dismissal was without just or valid cause, the backwages shall be computed from the time of his dismissal until his actual reinstatement. In the case at bar, where the requirement of notice and hearing was not complied with, the aforecited doctrine laid down in the Serrano case applies.

WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to immediately reinstate the petitioners to their respective positions. Should reinstatement be not feasible, respondent company shall pay separation pay of one month salary for every year of service. Since petitioners were terminated without the requisite written notice at least 30 days prior to their termination, following the recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann Department Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from the time the herein petitioner employees and union officers were dismissed until their actual reinstatement. Should reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated until the finality of this decision. Costs against the respondent company. 1âwphi1.nêt

SO ORDERED.

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G.R. No. 170287 February 14, 2008

ALABANG COUNTRY CLUB, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, ALABANG COUNTRY CLUB INDEPENDENT EMPLOYEES UNION, CHRISTOPHER PIZARRO, MICHAEL BRAZA, and NOLASCO CASTUERAS, respondents.

D E C I S I O N

VELASCO, JR., J.:

Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation with principal office at Country Club Drive, Ayala Alabang, Muntinlupa City. Respondent Alabang Country Club Independent Employees Union (Union) is the exclusive bargaining agent of the Club's rank-and-file employees. In April 1996, respondents Christopher Pizarro, Michael Braza, and Nolasco Castueras were elected Union President, Vice-President, and Treasurer, respectively.

On June 21, 1999, the Club and the Union entered into a Collective Bargaining Agreement (CBA), which provided for a Union shop and maintenance of membership shop.

The pertinent parts of the CBA included in Article II on Union Security read, as follows:

ARTICLE II

UNION SECURITY

SECTION 1. CONDITION OF EMPLOYMENT. All regular rank-and-file employees, who are members or subsequently become members of the UNION shall maintain their membership in good standing as a condition for their continued employment by the CLUB during the lifetime of this Agreement or any extension thereof.

SECTION 2. [COMPULSORY] UNION MEMBERSHIP FOR NEW REGULAR RANK-AND-FILE EMPLOYEES

a) New regular rank-and-file employees of the Club shall join the UNION within five (5) days from the date of their appointment as regular employees as a condition for their continued employment during the lifetime of this Agreement, otherwise, their failure to do so shall be a ground for dismissal from the CLUB upon demand by the UNION.

b) The Club agrees to furnish the UNION the names of all new probationary and regular employees covered by this Agreement not later than three (3) days from the date of regular appointment showing the positions and dates of hiring.

x x x x

SECTION 4. TERMINATION UPON UNION DEMAND. Upon written demand of the UNION and after observing due process, the Club shall dismiss a regular rank-and-file employee on any of the following grounds:

(a) Failure to join the UNION within five (5) days from the time of regularization;

(b) Resignation from the UNION, except within the period allowed by law;

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(c) Conviction of a crime involving moral turpitude;

(d) Non-payment of UNION dues, fees, and assessments;

(e) Joining another UNION except within the period allowed by law;

(f) Malversation of union funds;

(g) Actively campaigning to discourage membership in the UNION; and

(h) Inflicting harm or injury to any member or officer of the UNION.

It is understood that the UNION shall hold the CLUB free and harmless [sic] from any liability or damage whatsoever which may be imposed upon it by any competent judicial or quasi-judicial authority as a result of such dismissal and the UNION shall reimburse the CLUB for any and all liability or damage it may be adjudged.1 (Emphasis supplied.)

Subsequently, in July 2001, an election was held and a new set of officers was elected. Soon thereafter, the new officers conducted an audit of the Union funds. They discovered some irregularly recorded entries, unaccounted expenses and disbursements, and uncollected loans from the Union funds. The Union notified respondents Pizarro, Braza, and Castueras of the audit results and asked them to explain the discrepancies in writing.2

Thereafter, on October 6, 2001, in a meeting called by the Union, respondents Pizarro, Braza, and Castueras explained their side. Braza denied any wrongdoing and instead asked that the investigation be addressed to Castueras, who was the Union Treasurer at that time. With regard to his unpaid loans, Braza claimed he had been paying through monthly salary deductions and said the Union could continue to deduct from his salary until full payment of his loans, provided he would be reimbursed should the result of the initial audit be proven wrong by a licensed auditor. With regard to the Union expenses which were without receipts, Braza explained that these were legitimate expenses for which receipts were not issued, e.g. transportation fares, food purchases from small eateries, and food and transportation allowances given to Union members with pending complaints with the Department of Labor and Employment, the National Labor Relations Commission (NLRC), and the fiscal's office. He explained that though there were no receipts for these expenses, these were supported by vouchers and itemized as expenses. Regarding his unpaid and unliquidated cash advances amounting to almost PhP 20,000, Braza explained that these were not actual cash advances but payments to a certain Ricardo Ricafrente who had loaned PhP 200,000 to the Union.3

Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan and cash advances. He claimed his salaries were regularly deducted to pay his loan and he did not know why these remained unpaid in the records. Nonetheless, he likewise agreed to continuous salary deductions until all his accountabilities were paid.4

Castueras also denied any wrongdoing and claimed that the irregular entries in the records were unintentional and were due to inadvertence because of his voluminous work load. He offered that his unpaid personal loan of PhP 27,500 also be deducted from his salary until the loans were fully paid. Without admitting any fault on his part, Castueras suggested that his salary be deducted until the unaccounted difference between the loans and the amount collected amounting to a total of PhP 22,000 is paid.5

Despite their explanations, respondents Pizarro, Braza, and Castueras were expelled from the Union, and, on October 16, 2001, were furnished individual letters of expulsion for malversation of Union funds.6 Attached to the letters were copies of the Panawagan ng mga Opisyales ng Unyon signed by 37 out of 63 Union members and officers, and a Board of Directors' Resolution7 expelling them from the Union.

In a letter dated October 18, 2001, the Union, invoking the Security Clause of the CBA, demanded that the Club dismiss respondents Pizarro, Braza, and Castueras in view of their expulsion from the Union.8 The

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Club required the three respondents to show cause in writing within 48 hours from notice why they should not be dismissed. Pizarro and Castueras submitted their respective written explanations on October 20, 2001, while Braza submitted his explanation the following day.

During the last week of October 2001, the Club's general manager called respondents Pizarro, Braza, and Castueras for an informal conference inquiring about the charges against them. Said respondents gave their explanation and asserted that the Union funds allegedly malversed by them were even over the total amount collected during their tenure as Union officers-PhP 120,000 for Braza, PhP 57,000 for Castueras, and PhP 10,840 for Pizarro, as against the total collection from April 1996 to December 2001 of only PhP 102,000. They claimed the charges are baseless. The general manager announced he would conduct a formal investigation.

Nonetheless, after weighing the verbal and written explanations of the three respondents, the Club concluded that said respondents failed to refute the validity of their expulsion from the Union. Thus, it was constrained to terminate the employment of said respondents. On December 26, 2001, said respondents received their notices of termination from the Club.9

Respondents Pizarro, Braza, and Castueras challenged their dismissal from the Club in an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-00130-02 filed with the NLRC, National Capital Region Arbitration Branch. In his January 27, 2003 Decision,10 the Labor Arbiter ruled in favor of the Club, and found that there was justifiable cause in terminating said respondents. He dismissed the complaint for lack of merit.

On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an Appeal docketed as NLRC NCR CA No. 034601-03 with the NLRC.

On February 26, 2004, the NLRC rendered a Decision11 granting the appeal, the fallo of which reads:

WHEREFORE, finding merit in the Appeal, judgment is hereby rendered declaring the dismissal of the complainants illegal. x x x Alabang Country Club, Inc. and Alabang Country Club Independent Union are hereby ordered to reinstate complainants Christopher Pizarro, Nolasco Castueras and Michael Braza to their former positions without loss of seniority rights and other privileges with full backwages from the time they were dismissed up to their actual reinstatement.

SO ORDERED.

The NLRC ruled that there was no justifiable cause for the termination of respondents Pizarro, Braza, and Castueras. The commissioners relied heavily on Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Sec. 2 provides:

SEC. 2. Actions arising from Article 241 of the Code. - Any action arising from the administration or accounting of union funds shall be filed and disposed of as an intra-union dispute in accordance with Rule XIV of this Book.

In case of violation, the Regional or Bureau Director shall order the responsible officer to render an accounting of funds before the general membership and may, where circumstances warrant, mete the appropriate penalty to the erring officer/s, including suspension or expulsion from the union.12

According to the NLRC, said respondents' expulsion from the Union was illegal since the DOLE had not yet made any definitive ruling on their liability regarding the administration of the Union's funds.

The Club then filed a motion for reconsideration which the NLRC denied in its June 20, 2004 Resolution.13

Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition for Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of Appeals (CA).






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The CA Upheld the NLRC Rulingthat the Three Respondents were Deprived Due Process

On July 5, 2005, the appellate court rendered a Decision,14 denying the petition and upholding the Decision of the NLRC. The CA's Decision focused mainly on the Club's perceived failure to afford due process to the three respondents. It found that said respondents were not given the opportunity to be heard in a separate hearing as required by Sec. 2(b), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, as follows:

SEC. 2. Standards of due process; requirements of notice.-In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Code:

x x x x

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.

The CA also said the dismissal of the three respondents was contrary to the doctrine laid down in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos (Malayang Samahan), where this Court ruled that even on the assumption that the union had valid grounds to expel the local union officers, due process requires that the union officers be accorded a separate hearing by the employer company.15

In a Resolution16 dated October 20, 2005, the CA denied the Club's motion for reconsideration.

The Club now comes before this Court with these issues for our resolution, summarized as follows:

1. Whether there was just cause to dismiss private respondents, and whether they were afforded due process in accordance with the standards provided for by the Labor Code and its Implementing Rules.

2. Whether or not the CA erred in not finding that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that respondents Pizarro, Braza, and Castueras were illegally expelled from the Union.

3. Whether the case of Agabon vs. NLRC17 should be applied to this case.

4. Whether that in the absence of bad faith and malice on the part of the Club, the Union is solely liable for the termination from employment of said respondents.

The main issue is whether the three respondents were illegally dismissed and whether they were afforded due process.

The Club avers that the dismissal of the three respondents was in accordance with the Union security provisions in their CBA. The Club also claims that the three respondents were afforded due process, since the Club conducted an investigation separate and independent from that conducted by the Union.

Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the Club failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII, Book V of the implementing rules of the Code.

First, we resolve the legality of the three respondents' dismissal from the Club.





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Valid Grounds for Termination

Under the Labor Code, an employee may be validly terminated on the following grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3) termination due to disease under Art. 284; and (4) termination by the employee or resignation under Art. 285.

Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. Here, Art. II of the CBA on Union security contains the provisions on the Union shop and maintenance of membership shop. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated.18 Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction.19 This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment, the authorized bargaining representative gains more numbers and strengthens its position as against other unions which may want to claim majority representation.

In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the union's decision to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the CBA's union security provision.

The language of Art. II of the CBA that the Union members must maintain their membership in good standing as a condition sine qua non for their continued employment with the Club is unequivocal. It is also clear that upon demand by the Union and after due process, the Club shall terminate the employment of a regular rank-and-file employee who may be found liable for a number of offenses, one of which is malversation of Union funds.20

Below is the letter sent to respondents Pizarro, Braza, and Castueras, informing them of their termination:

On October 18, 2001, the Club received a letter from the Board of Directors of the Alabang Country Club Independent Employees' Union ("Union") demanding your dismissal from service by reason of your alleged commission of act of dishonesty, specifically malversation of union funds. In support thereof, the Club was furnished copies of the following documents:

1. A letter under the subject "Result of Audit" dated September 14, 2001 (receipt of which was duly acknowledged from your end), which required you to explain in writing the charges against you (copy attached);

2. The Union's Board of Directors' Resolution dated October 2, 2001, which explained that the Union afforded you an opportunity to explain your side to the charges;

3. Minutes of the meeting of the Union's Board of Directors wherein an administrative investigation of the case was conducted last October 6, 2001; and

4. The Union's Board of Directors' Resolution dated October 15, 2001 which resolved your expulsion from the Union for acts of dishonesty and malversation of union funds, which was duly approved by the general membership.

After a careful evaluation of the evidence on hand vis-à-vis a thorough assessment of your defenses presented in your letter-explanation dated October 6, 2001 of which you also expressed that you




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waived your right to be present during the administrative investigation conducted by the Union's Board of Directors on October 6, 2001, Management has reached the conclusion that there are overwhelming reasons to consider that you have violated Section 4(f) of the CBA, particularly on the grounds of malversation of union funds. The Club has determined that you were sufficiently afforded due process under the circumstances.

Inasmuch as the Club is duty-bound to comply with its obligation under Section 4(f) of the CBA, it is unfortunate that Management is left with no other recourse but to consider your termination from service effective upon your receipt thereof. We wish to thank you for your services during your employment with the Company. It would be more prudent that we just move on independently if only to maintain industrial peace in the workplace.

Be guided accordingly.21

Gleaned from the above, the three respondents were expelled from and by the Union after due investigation for acts of dishonesty and malversation of Union funds. In accordance with the CBA, the Union properly requested the Club, through the October 18, 2001 letter22 signed by Mario Orense, the Union President, and addressed to Cynthia Figueroa, the Club's HRD Manager, to enforce the Union security provision in their CBA and terminate said respondents. Then, in compliance with the Union's request, the Club reviewed the documents submitted by the Union, requested said respondents to submit written explanations, and thereafter afforded them reasonable opportunity to present their side. After it had determined that there was sufficient evidence that said respondents malversed Union funds, the Club dismissed them from their employment conformably with Sec. 4(f) of the CBA.

Considering the foregoing circumstances, we are constrained to rule that there is sufficient cause for the three respondents' termination from employment.

Were respondents Pizarro, Braza, and Castueras accorded due process before their employments were terminated?

We rule that the Club substantially complied with the due process requirements before it dismissed the three respondents.

The three respondents aver that the Club violated their rights to due process as enunciated in Malayang Samahan,23 when it failed to conduct an independent and separate hearing before they were dismissed from service.

The CA, in dismissing the Club's petition and affirming the Decision of the NLRC, also relied on the same case. We explained in Malayang Samahan:

x x x Although this Court has ruled that union security clauses embodied in the collective bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental requirements of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one's right to due process.24

In the above case, we pronounced that while the company, under a maintenance of membership provision of the CBA, is bound to dismiss any employee expelled by the union for disloyalty upon its written request, this undertaking should not be done hastily and summarily. The company acts in bad faith in dismissing a worker without giving him the benefit of a hearing.25 We cautioned in the same case that the power to dismiss is a normal prerogative of the employer; however, this power has a limitation. The employer is bound to exercise caution in terminating the services of the employees especially so when it is made upon the request of a labor union pursuant to the CBA. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing employees because the dismissal affects not only their positions






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but also their means of livelihood. Employers should respect and protect the rights of their employees, which include the right to labor.26

The CA and the three respondents err in relying on Malayang Samahan, as its ruling has no application to this case. In Malayang Samahan, the union members were expelled from the union and were immediately dismissed from the company without any semblance of due process. Both the union and the company did not conduct administrative hearings to give the employees a chance to explain themselves. In the present case, the Club has substantially complied with due process. The three respondents were notified that their dismissal was being requested by the Union, and their explanations were heard. Then, the Club, through its President, conferred with said respondents during the last week of October 2001. The three respondents were dismissed only after the Club reviewed and considered the documents submitted by the Union vis-à-vis the written explanations submitted by said respondents. Under these circumstances, we find that the Club had afforded the three respondents a reasonable opportunity to be heard and defend themselves.

On the applicability of Agabon, the Club points out that the CA ruled that the three respondents were illegally dismissed primarily because they were not afforded due process. We are not unaware of the doctrine enunciated in Agabon that when there is just cause for the dismissal of an employee, the lack of statutory due process should not nullify the dismissal, or render it illegal or ineffectual, and the employer should indemnify the employee for the violation of his statutory rights.27 However, we find that we could not apply Agabon to this case as we have found that the three respondents were validly dismissed and were actually afforded due process.

Finally, the issue that since there was no bad faith on the part of the Club, the Union is solely liable for the termination from employment of the three respondents, has been mooted by our finding that their dismissal is valid.

WHEREFORE, premises considered, the Decision dated July 5, 2005 of the CA and the Decision dated February 26, 2004 of the NLRC are hereby REVERSED and SET ASIDE. The Decision dated January 27, 2003 of the Labor Arbiter in NLRC-NCR Case No. 30-01-00130-02 is hereby REINSTATED.

No costs.

SO ORDERED.



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G.R. No. 114974 June 16, 2004

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE), petitioner, vs.The Honorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND EMPLOYMENT; and the STANDARD CHARTERED BANK, respondents.

D E C I S I O N

CALLEJO, SR., J.:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the Standard Chartered Bank Employees Union, seeking the nullification of the October 29, 1993 Order1 of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions dated December 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing business in the Philippines. The exclusive bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union (the Union, for brevity).

In August of 1990, the Bank and the Union signed a five-year collective bargaining agreement (CBA) with a provision to renegotiate the terms thereof on the third year. Prior to the expiration of the three-year period2 but within the sixty-day freedom period, the Union initiated the negotiations. On February 18, 1993, the Union, through its President, Eddie L. Divinagracia, sent a letter3 containing its proposals4 covering political provisions5 and thirty-four (34) economic provisions.6 Included therein was a list of the names of the members of the Union’s negotiating panel.7

In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H. Harris, took note of the Union’s proposals. The Bank attached its counter-proposal to the non-economic provisions proposed by the Union.8 The Bank posited that it would be in a better position to present its counter-proposals on the economic items after the Union had presented its justifications for the economic proposals.9 The Bank, likewise, listed the members of its negotiating panel.10 The parties agreed to set meetings to settle their differences on the proposed CBA.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to the Bank’s Human Resource Manager and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team. The Bank acceded.11 Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank Employees (NUBE), the federation to which the Union was affiliated, be excluded from the Union’s negotiating panel.12 However, Umali was retained as a member thereof.

On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno suggested that the negotiation be kept a "family affair." The proposed non-economic provisions of the CBA were discussed first.13Even during the final reading of the non-economic provisions on May 4, 1993, there were still provisions on which the Union and the Bank could not agree. Temporarily, the notation "DEFERRED" was placed therein. Towards the end of the meeting, the Union manifested that the same should be changed to "DEADLOCKED" to indicate that such items remained unresolved. Both parties agreed to place the notation "DEFERRED/DEADLOCKED."14

On May 18, 1993, the negotiation for economic provisions commenced. A presentation of the basis of the Union’s economic proposals was made. The next meeting, the Bank made a similar presentation. Towards the end of the Bank’s presentation, Umali requested the Bank to validate the Union’s "guestimates," especially the figures for the rank and file staff.15 In the succeeding meetings, Umali chided the Bank for the

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insufficiency of its counter-proposal on the provisions on salary increase, group hospitalization, death assistance and dental benefits. He reminded the Bank, how the Union got what it wanted in 1987, and stated that if need be, the Union would go through the same route to get what it wanted.16

Upon the Bank’s insistence, the parties agreed to tackle the economic package item by item. Upon the Union’s suggestion, the Bank indicated which provisions it would accept, reject, retain and agree to discuss.17 The Bank suggested that the Union prioritize its economic proposals, considering that many of such economic provisions remained unresolved. The Union, however, demanded that the Bank make a revised itemized proposal.

In the succeeding meetings, the Union made the following proposals:

Wage Increase:

1st Year – Reduced from 45% to 40%

2nd Year - Retain at 20%

Total = 60%

Group Hospitalization Insurance:

Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually

Death Assistance:

For the employee – Reduced from P50,000.00 to P45,000.00

For Immediate Family Member – Reduced from P30,000.00 to P25,000.00

Dental and all others – No change from the original demand.18

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not make the necessary revisions on its counter-proposal, it would be best to seek a third party assistance.19 After the break, the Bank presented its revised counter-proposal20 as follows:

Wage Increase : 1st Year – from P1,000 to P1,050.00

2nd Year – P800.00 – no change

Group Hospitalization Insurance

From: P35,000.00 per illness

To : P35,000.00 per illness per year

Death Assistance – For employee

From: P20,000.00

To : P25,000.00

Dental Retainer – Original offer remains the same21

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The Union, for its part, made the following counter-proposal:

Wage Increase: 1st Year - 40%

2nd Year - 19.5%

Group Hospitalization Insurance

From: P60,000.00 per year

To : P50,000.00 per year

Dental:

Temporary Filling/ – P150.00

Tooth Extraction

Permanent Filling – 200.00

Prophylaxis – 250.00

Root Canal – From P2,000 per tooth

To: 1,800.00 per tooth

Death Assistance:

For Employees: From P45,000.00 to P40,000.00

For Immediate Family Member: From P25,000.00 to P20,000.00.22

The Union’s original proposals, aside from the above-quoted, remained the same.

Another set of counter-offer followed:

Management Union

Wage Increase

1st Year – P1,050.00 40%

2nd Year - 850.00 19.0%23

Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identify what it wanted to be included in the total economic package. Umali replied that it was impossible to do so because the Bank’s counter-proposal was unacceptable. He furthered asserted that it would have been easier to bargain if the atmosphere was the same as before, where both panels trusted each other. Diokno requested the Union panel to refrain from involving personalities and to instead focus on the negotiations.24 He suggested that in order to break the impasse, the Union should prioritize the items it wanted to iron out. Divinagracia stated that the Bank should make the first move and make a list of items it wanted to be included in the economic package. Except for the provisions on signing bonus and uniforms, the Union and the Bank failed to agree on the remaining economic provisions of the CBA. The Union declared a

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deadlock25 and filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06-380-93.26

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the Arbitration Branch of the National Labor Relations Commission (NLRC) in Manila, docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28, 1993. The Bank alleged that the Union violated its duty to bargain, as it did not bargain in good faith. It contended that the Union demanded "sky high economic demands," indicative of blue-sky bargaining.27 Further, the Union violated its no strike- no lockout clause by filing a notice of strike before the NCMB. Considering that the filing of notice of strike was an illegal act, the Union officers should be dismissed. Finally, the Bank alleged that as a consequence of the illegal act, the Bank suffered nominal and actual damages and was forced to litigate and hire the services of the lawyer.28

On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor, pursuant to Article 263(g) of the Labor Code, issued an Order assuming jurisdiction over the labor dispute at the Bank. The complaint for ULP filed by the Bank before the NLRC was consolidated with the complaint over which the SOLE assumed jurisdiction. After the parties submitted their respective position papers, the SOLE issued an Order on October 29, 1993, the dispositive portion of which is herein quoted:

WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank Employees Union – NUBE are hereby ordered to execute a collective bargaining agreement incorporating the dispositions contained herein. The CBA shall be retroactive to 01 April 1993 and shall remain effective for two years thereafter, or until such time as a new CBA has superseded it. All provisions in the expired CBA not expressly modified or not passed upon herein are deemed retained while all new provisions which are being demanded by either party are deemed denied, but without prejudice to such agreements as the parties may have arrived at in the meantime.

The Bank’s charge for unfair labor practice which it originally filed with the NLRC as NLRC-NCR Case No. 00-06-04191-93 but which is deemed consolidated herein, is dismissed for lack of merit. On the other hand, the Union’s charge for unfair labor practice is similarly dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No. 00-06-04191-93 is pending for his guidance and appropriate action.29

The SOLE gave the following economic awards:

1. Wage Increase:

a) To be incorporated to present salary rates:

Fourth year : 7% of basic monthly salary

Fifth year : 5% of basic monthly salary based on the 4th year adjusted salary

b) Additional fixed amount:

Fourth year : P600.00 per month

Fifth year : P400.00 per month

2. Group Insurance

a) Hospitalization : P45,000.00

b) Life : P130,000.00

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c) Accident : P130,000.00

3. Medicine Allowance

Fourth year : P5,500.00

Fifth year : P6,000.00

4. Dental Benefits

Provision of dental retainer as proposed by the Bank, but without diminishing existing benefits

5. Optical Allowance

Fourth year: P2,000.00

Fifth year : P2,500.00

6. Death Assistance

a) Employee : P30,000.00

b) Immediate Family Member : P5,000.00

7. Emergency Leave – Five (5) days for each contingency

8. Loans

a) Car Loan : P200,000.00

b) Housing Loan : It cannot be denied that the costs attendant to having one’s own home have tremendously gone up. The need, therefore, to improve on this benefit cannot be overemphasized. Thus, the management is urged to increase the existing and allowable housing loan that the Bank extends to its employees to an amount that will give meaning and substance to this CBA benefit.30

The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that both parties failed to substantiate their claims. Citing National Labor Union v. Insular-Yebana Tobacco Corporation,31 the SOLE stated that ULP charges would prosper only if shown to have directly prejudiced the public interest.

Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed a motion for reconsideration. On December 16, 1993, the SOLE issued a Resolution denying the motions. The Union filed a second motion for reconsideration, which was, likewise, denied on February 10, 1994.

On March 22, 1994, the Bank and the Union signed the CBA.32 Immediately thereafter, the wage increase was effected and the signing bonuses based on the increased wage were distributed to the employees covered by the CBA.

The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules of Procedure alleging as follows:

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A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE UNION’S CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR EVIDENCE OF RECORD AND ADMISSIONS PROVING THE UNFAIR LABOR PRACTICES CHARGED.33

B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON OTHER UNFAIR LABOR PRACTICES CHARGED.34

C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THE CHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OF INJURY TO THE PUBLIC INTEREST WAS PRESENTED.35

The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it found that the Bank did not commit unfair labor practice when it interfered with the Union’s choice of negotiator. It argued that, Diokno’s suggestion that the negotiation be limited as a "family affair" was tantamount to suggesting that Federation President Jose Umali, Jr. be excluded from the Union’s negotiating panel. It further argued that contrary to the ruling of the public respondent, damage or injury to the public interest need not be present in order for unfair labor practice to prosper.

The Union, likewise, pointed out that the public respondent failed to rule on the ULP charges arising from the Bank’s surface bargaining. The Union contended that the Bank merely went through the motions of collective bargaining without the intent to reach an agreement, and made bad faith proposals when it announced that the parties should begin from a clean slate. It argued that the Bank opened the political provisions "up for grabs," which had the effect of diminishing or obliterating the gains that the Union had made.

The Union also accused the Bank of refusing to disclose material and necessary data, even after a request was made by the Union to validate its "guestimates."

In its Comment, the Bank prayed that the petition be dismissed as the Union was estopped, considering that it signed the Collective Bargaining Agreement (CBA) on April 22, 1994. It asserted that contrary to the Union’s allegations, it was the Union that committed ULP when negotiator Jose Umali, Jr. hurled invectives at the Bank’s head negotiator, Cielito Diokno, and demanded that she be excluded from the Bank’s negotiating team. Moreover, the Union engaged in blue-sky bargaining and isolated the no strike-no lockout clause of the existing CBA.

The Office of the Solicitor General, in representation of the public respondent, prayed that the petition be dismissed. It asserted that the Union failed to prove its ULP charges and that the public respondent did not commit any grave abuse of discretion in issuing the assailed order and resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was able to substantiate its claim of unfair labor practice against the Bank arising from the latter’s alleged "interference" with its choice of negotiator; surface bargaining; making bad faith non-economic proposals; and refusal to furnish the Union with copies of the relevant data; (b) whether or not the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction when she issued the assailed order and resolutions; and, (c) whether or not the petitioner is estopped from filing the instant action.

The Court’s Ruling

The petition is bereft of merit.

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"Interference" under Article

248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in the selection of the Union’s negotiating panel, when Cielito Diokno, the Bank’s Human Resource Manager, suggested to the Union’s President Eddie L. Divinagracia that Jose P. Umali, Jr., President of the NUBE, be excluded from the Union’s negotiating panel. In support of its claim, Divinagracia executed an affidavit, stating that prior to the commencement of the negotiation, Diokno approached him and suggested the exclusion of Umali from the Union’s negotiating panel, and that during the first meeting, Diokno stated that the negotiation be kept a "family affair."

Citing the cases of U.S. Postal Service36 and Harley Davidson Motor Co., Inc., AMF,37 the Union claims that interference in the choice of the Union’s bargaining panel is tantamount to ULP.

In the aforecited cases, the alleged ULP was based on the employer’s violation of Section 8(a)(1) and (5) of the National Labor Relations Act (NLRA),38 which pertain to the interference, restraint or coercion of the employer in the employees’ exercise of their rights to self-organization and to bargain collectively through representatives of their own choosing; and the refusal of the employer to bargain collectively with the employees’ representatives. In both cases, the National Labor Relations Board held that upon the employer’s refusal to engage in negotiations with the Union for collective-bargaining contract when the Union includes a person who is not an employee, or one who is a member or an official of other labororganizations, such employer is engaged in unfair labor practice under Section 8(a)(1) and (5) of the NLRA.

The Union further cited the case of Insular Life Assurance Co., Ltd. Employees Association – NATU vs. Insular Life Assurance Co. Ltd.,39 wherein this Court said that the test of whether an employer has interfered with and coerced employees in the exercise of their right to self-organization within the meaning of subsection (a)(1) is whether the employer has engaged in conduct which it may reasonably be said, tends to interfere with the free exercise of employees’ rights under Section 3 of the Act.40 Further, it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective bargaining.41

Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OF ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the Philippines is a signatory, "workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to job organizations of their own choosing without previous authorization."42

Workers’ and employers’ organizations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom to organize their administration and activities and to formulate their programs.43Article 2 of ILO Convention No. 98 pertaining to the Right to Organize and Collective Bargaining, provides:

Article 2

1. Workers’ and employers’ organizations shall enjoy adequate protection against any acts or interference by each other or each other’s agents or members in their establishment, functioning or administration.

2. In particular, acts which are designed to promote the establishment of workers’ organizations under the domination of employers or employers’ organizations or to support workers’ organizations by financial or other means, with the object of placing such organizations under the control of employers or employers’ organizations within the meaning of this Article.

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The aforcited ILO Conventions are incorporated in our Labor Code, particularly in Article 243 thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION. – All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes 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.

and Articles 248 and 249 respecting ULP of employers and labor organizations.

The said ILO Conventions were ratified on December 29, 1953. However, even as early as the 1935 Constitution,44 the State had already expressly bestowed protection to labor as part of the general provisions. The 1973 Constitution,45 on the other hand, declared it as a policy of the state to afford protection to labor, specifying that the workers’ rights to self-organization, collective bargaining, security of tenure, and just and humane conditions of work would be assured. For its part, the 1987 Constitution, aside from making it a policy to "protect the rights of workers and promote their welfare,"46 devotes an entire section, emphasizing its mandate to afford protection to labor, and highlights "the principle of shared responsibility" between workers and employers to promote industrial peace.47

Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer interferes, restrains or coerces employees in the exercise of their right to self-organization or the right to form association. The right to self-organization necessarily includes the right to collective bargaining.

Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act to yield adverse effects on the free exercise to right to self-organization or on the right to collective bargaining of the employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is committed.

In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.48 In the case at bar, the Union bases its claim of interference on the alleged suggestions of Diokno to exclude Umali from the Union’s negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted such act to yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the employees, especially considering that such was undertaken previous to the commencement of the negotiation and simultaneously with Divinagracia’s suggestion that the bank lawyers be excluded from its negotiating panel.

The records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the Union’s negotiating panel, the negotiations pushed through. The complaint was made only on August 16, 1993 after a deadlock was declared by the Union on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences over the economic provisions became heated and the parties had become frustrated. It happened after the parties started to involve personalities. As the public respondent noted, passions may rise, and as a result, suggestions given under less adversarial situations may be colored with unintended meanings.49 Such is what appears to have happened in this case.

The Duty to Bargain

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Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the normal relations and innocent communications, which are all part of the friendly relations between the Union and Bank.

The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went through the motions of bargaining without any intent of reaching an agreement, as evident in the Bank’s counter-proposals. It explained that of the 34 economic provisions it made, the Bank only made 6 economic counterproposals. Further, as borne by the minutes of the meetings, the Bank, after indicating the economic provisions it had rejected, accepted, retained or were open for discussion, refused to make a list of items it agreed to include in the economic package.

Surface bargaining is defined as "going through the motions of negotiating" without any legal intent to reach an agreement.50 The resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in question, and usually such intent can only be inferred from the totality of the challenged party’s conduct both at and away from the bargaining table.51 It involves the question of whether an employer’s conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining.52

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had any intention of violating its duty to bargain with the Union. Records show that after the Union sent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-proposals on February 24, 1993. Thereafter, meetings were set for the settlement of their differences. The minutes of the meetings show that both the Bank and the Union exchanged economic and non-economic proposals and counter-proposals.

The Union has not been able to show that the Bank had done acts, both at and away from the bargaining table, which tend to show that it did not want to reach an agreement with the Union or to settle the differences between it and the Union. Admittedly, the parties were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to bargain "does not compel either party to agree to a proposal or require the making of a concession."53 Hence, the parties’ failure to agree did not amount to ULP under Article 248(g) for violation of the duty to bargain.

We can hardly dispute this finding, for it finds support in the evidence. The inference that respondents did not refuse to bargain collectively with the complaining union because they accepted some of the demands while they refused the others even leaving open other demands for future discussion is correct, especially so when those demands were discussed at a meeting called by respondents themselves precisely in view of the letter sent by the union on April 29, 1960…54

In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made bad-faith provisions has no leg to stand on. The records show that the Bank’s counterproposals on the non-economic provisions or political provisions did not put "up for grabs" the entire work of the Union and its predecessors. As can be gleaned from the Bank’s counterproposal, there were many provisions which it proposed to be retained. The revisions on the other provisions were made after the parties had come to an agreement. Far from buttressing the Union’s claim that the Bank made bad-faith proposals on the non-economic provisions, all these, on the contrary, disprove such allegations.

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,55 in the case at bar, Umali, in a 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:

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Article 242. Rights of Legitimate Labor Organization…

(c) To be furnished by the employer, upon written request, with the 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 representatives 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 negotiation;

The Union, did not, as the Labor Code requires, send a written request for the issuance of a copy of the data about the Bank’s rank and file employees. Moreover, as alleged by the Union, the fact that the Bank made use of the aforesaid guestimates, amounts to a validation of the data it had used in its presentation.

No Grave Abuse of Discretion

On the Part of the Public Respondent

The special civil action for certiorari may be availed of when the tribunal, board, or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law for the purpose of annulling the proceeding.56 Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility which must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Mere abuse of discretion is not enough.57

While it is true that a showing of prejudice to public interest is not a requisite for ULP charges to prosper, it cannot be said that the public respondent acted in capricious and whimsical exercise of judgment, equivalent to lack of jurisdiction or excess thereof. Neither was it shown that the public respondent exercised its power in an arbitrary and despotic manner by reason of passion or personal hostility.

Estoppel not Applicable

In the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when it signed the new CBA.

Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular manner, is barred from adopting an inconsistent position, attitude or course of conduct that thereby causes loss or injury to another.58

In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the Union waived its ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was included in the order of the SOLE, while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for reconsideration respecting its ULP charges against the Bank before the SOLE.

The Union Did Not Engage

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In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable proposals.59 The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when it issued the questioned order and resolutions. While the approval of the CBA and the release of the signing bonus did not estop the Union from pursuing its claims of ULP against the Bank, we find the latter did not engage in ULP. We, likewise, hold that the Union is not guilty of ULP.

IN LIGHT OF THE FOREGOING, the October 29, 1993 Order and December 16, 1993 and February 10, 1994 Resolutions of then Secretary of Labor Nieves R. Confesor are AFFIRMED. The Petition is hereby DISMISSED.

SO ORDERED.

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G.R. No. 146728 February 11, 2004

GENERAL MILLING CORPORATION, petitioner, vsHON. COURT OF APPEALS, GENERAL MILLING CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT, respondents.

D E C I S I O N

QUISUMBING, J.:

Before us is a petition for certiorari assailing the decision1 dated July 19, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, which earlier reversed the decision2 dated January 30, 1998 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-0112-94.

The antecedent facts are as follows:

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC) employed 190 workers. They were all members of private respondent General Milling Corporation Independent Labor Union (union, for brevity), a duly certified bargaining agent.

On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA) which included the issue of representation effective for a term of three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would expire on November 30, 1991.

On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counter-proposal be submitted within ten (10) days.

As early as October 1991, however, GMC had received collective and individual letters from workers who stated that they had withdrawn from their union membership, on grounds of religious affiliation and personal differences. Believing that the union no longer had standing to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the union’s officers, Rito Mangubat and Victor Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no longer existed, but that management was nonetheless always willing to dialogue with them on matters of common concern and was open to suggestions on how the company may improve its operations.

In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or resignation from the union and submitted a manifesto, signed by its members, stating that they had not withdrawn from the union.

On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union protested and requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC, however, advised the union to "refer to our letter dated December 16, 1991."3

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. The complaint alleged unfair labor practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference with the right to self-organization; and (3) discrimination. The labor arbiter dismissed the case with the recommendation that a petition for certification election be held to determine if the union still enjoyed the support of the workers. lawphi1.nêt

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The union appealed to the NLRC.

On January 30, 1998, the NLRC set aside the labor arbiter’s decision. Citing Article 253-A of the Labor Code, as amended by Rep. Act No. 6715,4 which fixed the terms of a collective bargaining agreement, the NLRC ordered GMC to abide by the CBA draft that the union proposed for a period of two (2) years beginning December 1, 1991, the date when the original CBA ended, to November 30, 1993. The NLRC also ordered GMC to pay the attorney’s fees.5

In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration of a CBA, insofar as the representation aspect is concerned, is five (5) years which, in the case of GMC-Independent Labor Union was from December 1, 1988 to November 30, 1993. All other provisions of the CBA are to be renegotiated not later than three (3) years after its execution. Thus, the NLRC held that respondent union remained as the exclusive bargaining agent with the right to renegotiate the economic provisions of the CBA. Consequently, it was unfair labor practice for GMC not to enter into negotiation with the union.

The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of its members from February to June 1993 confirmed the pressure exerted by GMC on its employees to resign from the union. Thus, the NLRC also found GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization.

With respect to the union’s claim of discrimination, the NLRC found the claim unsupported by substantial evidence.

On GMC’s motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution dated October 6, 1998. It found GMC’s doubts as to the status of the union justified and the allegation of coercion exerted by GMC on the union’s members to resign unfounded. Hence, the union filed a petition for certioraribefore the Court of Appeals. For failure of the union to attach the required copies of pleadings and other documents and material portions of the record to support the allegations in its petition, the CA dismissed the petition on February 9, 1999. The same petition was subsequently filed by the union, this time with the necessary documents. In its resolution dated April 26, 1999, the appellate court treated the refiled petition as a motion for reconsideration and gave the petition due course.

On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:

WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October 6, 1998 is hereby SET ASIDE, and its decision of January 30, 1998 is, except with respect to the award of attorney’s fees which is hereby deleted, REINSTATED.6

A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October 26, 2000, the CA denied it for lack of merit.

Hence, the instant petition for certiorari alleging that:

I

THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NO DECISION SHALL BE RENDERED BY ANY COURT WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS BASED.

II

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.

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III

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING THAT THE NLRC HAS NO JURISDICTION TO DETERMINE THE TERMS AND CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT.7

Thus, in the instant case, the principal issue for our determination is whether or not the Court of Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for violating the duty to bargain collectively and/or interfering with the right of its employees to self-organization, and (2) imposing upon GMC the draft CBA proposed by the union for two years to begin from the expiration of the original CBA. lawphi1.nêt

On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:

ART. 253-A. Terms of a collective bargaining agreement. – Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution....

The law mandates that the representation provision of a CBA should last for five years. The relation between labor and management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of the workers, because it was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1, 1988. The union’s proposal was also submitted within the prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA, the company committed an unfair labor practice under Article 248 of the Labor Code, which provides that:

ART. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the following unfair labor practice:

. . .

(g) To violate the duty to bargain collectively as prescribed by this Code;

. . .

Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargain collectively," thus:

ART. 252. Meaning of duty to bargain collectively. – The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement....

We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turn$ on the facts of the individual case.8 There is no per se test of good faith in bargaining.9Good faith or bad faith is an inference to be drawn from the facts.10 The effect of an employer’s or a union’s actions individually is not the test of good-faith bargaining, but the impact of all such occasions or actions, considered as a whole.11

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Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this obligation when it presented proposals for a new CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty under Article 252. What it did was to devise a flimsy excuse, by questioning the existence of the union and the status of its membership to prevent any negotiation.

It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest of the state in ensuring lasting industrial peace. Thus:

ART. 250. Procedure in collective bargaining. – The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice. (Underscoring supplied.)

GMC’s failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.

We hold that GMC’s refusal to make a counter-proposal to the union’s proposal for CBA negotiation is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.12

Failing to comply with the mandatory obligation to submit a reply to the union’s proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.

Did GMC interfere with the employees’ right to self-organization? The CA found that the letters between February to June 1993 by 13 union members signifying their resignation from the union clearly indicated that GMC exerted pressure on its employees. The records show that GMC presented these letters to prove that the union no longer enjoyed the support of the workers. The fact that the resignations of the union members occurred during the pendency of the case before the labor arbiter shows GMC’s desperate attempts to cast doubt on the legitimate status of the union. We agree with the CA’s conclusion that the ill-timed letters of resignation from the union members indicate that GMC had interfered with the right of its employees to self-organization. Thus, we hold that the appellate court did not commit grave abuse of discretion in finding GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization.

Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years commencing from the expiration of the original CBA?

The Code provides:

ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – .... It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period [prior to its expiration date] and/or until a new agreement is reached by the parties. (Underscoring supplied.)

The provision mandates the parties to keep the status quo while they are still in the process of working out their respective proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue to govern the relationship between the parties, until a new one is agreed upon. The rule necessarily presupposes that all other things are equal. That is, that neither party is guilty of bad faith.

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However, when one of the parties abuses this grace period by purposely delaying the bargaining process, a departure from the general rule is warranted.

In Kiok Loy vs. NLRC,13 we found that petitioner therein, Sweden Ice Cream Plant, refused to submit any counter proposal to the CBA proposed by its employees’ certified bargaining agent. We ruled that the former had thereby lost its right to bargain the terms and conditions of the CBA. Thus, we did not hesitate to impose on the erring company the CBA proposed by its employees’ union - lock, stock and barrel. Our findings in Kiok Loy are similar to the facts in the present case, to wit:

… petitioner Company’s approach and attitude – stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its objection thereto.14

Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment,15 petitioner therein, Divine Word University of Tacloban, refused to perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the university of the CBA proposed by the Divine Word University Employees Union. We said further:

That being the said case, the petitioner may not validly assert that its consent should be a primordial consideration in the bargaining process. By its acts, no less than its action which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an employer.16

Applying the principle in the foregoing cases to the instant case, it would be unfair to the union and its members if the terms and conditions contained in the old CBA would continue to be imposed on GMC’s employees for the remaining two (2) years of the CBA’s duration. We are not inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was GMC which violated the duty to bargain collectively, based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union.

We carefully note, however, that as strictly distinguished from the facts of this case, there was no pre-existing CBA between the parties in Kiok Loy and Divine Word University of Tacloban. Nonetheless, we deem it proper to apply in this case the rationale of the doctrine in the said two cases. To rule otherwise would be to allow GMC to have its cake and eat it too.

Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be allowed to resort with impunity to schemes feigning negotiations by going through empty gestures.17 Thus, by imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests of equity and fair play were properly served and both parties regained equal footing, which was lost when GMC thwarted the negotiations for new economic terms of the CBA.

The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draft CBA proposed by the union should not be disturbed since they are supported by substantial evidence. On this score, we see no cogent reason to rule otherwise. Hence, we hold that the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it imposed on GMC, after it had committed unfair labor practice, the draft CBA proposed by the union for the remaining two (2) years of the duration of the original CBA. Fairness, equity, and social justice are best served in this case by sustaining the appellate court’s decision on this issue.

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WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and the resolution dated October 26, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.

SO ORDERED.

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G.R. No. 149440 January 28, 2003

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners, vs.NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents.

PANGANIBAN, J.:

Although the employers have shown that respondents performed work that was seasonal in nature, they failed to prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these workers have served them for several years already. Hence, they are regular — not seasonal — employees.

The Case

Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the February 20, 2001 Decision of the Court of Appeals 1 (CA) in CA-GR SP No. 51033. The dispositive part of the Decision reads:

"WHEREFORE, premises considered, the instant special civil action for certiorari is hereby DENIED." 2

On the other hand, the National Labor Relations Commission (NLRC) Decision, 3 upheld by the CA, disposed in this wise:

"WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered declaring complainants to have been illegally dismissed. Respondents are hereby ORDERED to reinstate complainants except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their previous position and to pay full backwages from September 1991 until reinstated. Respondents being guilty of unfair labor practice are further ordered to pay complainant union the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages." 4

The Facts

The facts are summarized in the NLRC Decision as follows:

"Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or were choosy in the kind of jobs they wanted to perform, the records is replete with complainants' persistence and dogged determination in going back to work.

"Indeed, it would appear that respondents did not look with favor workers' having organized themselves into a union. Thus, when complainant union was certified as the collective bargaining representative in the certification elections, respondents under the pretext that the result was on appeal, refused to sit down with the union for the purpose of entering into a collective bargaining agreement. Moreover, the workers including complainants herein were not given work for more than one month. In protest, complainants staged a strike which was however settled upon the signing of a Memorandum of Agreement which stipulated among others that:

'a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to conclude the same within thirty (30) days.

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'b) The management will give priority to the women workers who are members of the union in case work relative . . . or amount[ing] to gahit and [dipol] arises.

'c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.

'd) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to the actual strike will be given priority. However, in case the said workforce would not be enough, the management can hire additional workers to supplement them.

'e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to work in the hacienda; and

'f) The union will immediately lift the picket upon signing of this agreement.'

"However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its commitment to sit down and bargain collectively. Instead, respondent employed all means including the use of private armed guards to prevent the organizers from entering the premises.

"Moreover, starting September 1991, respondents did not any more give work assignments to the complainants forcing the union to stage a strike on January 2, 1992. But due to the conciliation efforts by the DOLE, another Memorandum of Agreement was signed by the complainants and respondents which provides:

'Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of the union officials and members;

'Whereas parties to the present dispute agree to settle the case amicably once and for all;

'Now therefore, in the interest of both labor and management, parties herein agree as follows:

'1. That the list of the names of affected union members hereto attached and made part of this agreement shall be referred to the Hacienda payroll of 1990 and determine whether or not this concerned Union members are hacienda workers;

'2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the subjects of a Memorandum of Agreement entered into by and between the parties last January 4, 1990;

'3. That herein parties can use other employment references in support of their respective claims whether or not any or all of the listed 36 union members are employees or hacienda workers or not as the case may be;

'4. That in case conflict or disagreement arises in the determination of the status of the particular hacienda workers subject of this agreement herein parties further agree to submit the same to voluntary arbitration;

'5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be composed of three representatives each and is given five working days starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers. (Union representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.)"

"Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as follows:

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'The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who received their 13th month pay. The following are deemed not considered employees:

1. Luisa Rombo

2. Ramona Rombo

3. Bobong Abrega

4. Boboy Silva

'The name Orencio Rombo shall be verified in the 1990 payroll.

'The following employees shall be reinstated immediately upon availability of work:

1. Jose Dagle 7. Alejandro Tejares

2. Rico Dagle 8. Gaudioso Rombo

3. Ricardo Dagle 9. Martin Alas-as Jr.

4. Jesus Silva 10. Cresensio Abrega

5. Fernando Silva 11. Ariston Eruela Sr.

6. Ernesto Tejares 12. Ariston Eruela Jr.'

"When respondents again reneged on its commitment; complainants filed the present complaint.

"But for all their persistence, the risk they had to undergo in conducting a strike in the face of overwhelming odds, complainants in an ironic twist of fate now find themselves being accused of 'refusing to work and being choosy in the kind of work they have to perform'." 5 (Citations omitted)

Ruling of the Court of Appeals

The CA affirmed that while the work of respondents was seasonal in nature, they were considered to be merely on leave during the off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed security of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal.

The appellate court found neither "rhyme nor reason in petitioner's argument that it was the workers themselves who refused to or were choosy in their work." As found by the NLRC, the record of this case is "replete with complainants' persistence and dogged determination in going back to work." 6

The CA likewise concurred with the NLRC's finding that petitioners were guilty of unfair labor practice.

Hence this Petition. 7

Issues

Petitioners raise the following issues for the Court's consideration:

"A. Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were regular employees, contrary to the clear provisions of Article 280 of the Labor Code, which categorically state that seasonal employees are not covered by the definition of regular employees under paragraph 1, nor covered under paragraph 2 which refers exclusively to casual employees who have served for at least one year.

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"B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, . . . and relying instead on rulings which are not directly applicable to the case at bench, viz, Philippine Tobacco, Bacolod-Murcia, and Gaco, . . .

"C Whether or not the Court of Appeals committed grave abuse of discretion in upholding the NLRC's conclusion that private respondents were illegally dismissed, that petitioner[s were] guilty of unfair labor practice, and that the union be awarded moral and exemplary damages." 8

Consistent with the discussion in petitioners' Memorandum, we shall take up Items A and B as the first issue and Item C as the second.

The Court's Ruling

The Petition has no merit.

First Issue:

Regular Employment

At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on certiorari of CA decisions. 9 Questions of fact are not entertained. 10 The Court is not a trier of facts and, in labor cases, this doctrine applies with greater force. 11 Factual questions are for labor tribunals to resolve. 12 In the present case, these have already been threshed out by the NLRC. Its findings were affirmed by the appellate court.

Contrary to petitioners' contention, the CA did not err when it held that respondents were regular employees.

Article 280 of the Labor Code, as amended, states:

"Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

"An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exist." (Italics supplied)

For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. The evidence proves the existence of the first, but not of the second, condition. The fact that respondents — with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva — repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently, petitioners employed respondents for more than one season. Therefore, the general rule of regular employment is applicable.

In Abasolo v. National Labor Relations Commission, 13 the Court issued this clarification:

"[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC, in which this Court held:

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"The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual trade or business of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists.

xxx xxx xxx

". . . [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the . . . season does not detract from considering them in regular employment since in a litany of cases this Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely considered on leave until re-employed." 14

The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the case at bar. In the earlier case, the workers were required to perform phases of agricultural work for a definite period of time, after which their services would be available to any other farm owner. They were not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof. On the other hand, herein respondents, having performed the same tasks for petitioners every season for several years, are considered the latter's regular employees for their respective tasks. Petitioners' eventual refusal to use their services — even if they were ready, able and willing to perform their usual duties whenever these were available — and hiring of other workers to perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.

The Court finds no reason to disturb the CA's dismissal of what petitioners claim was their valid exercise of a management prerogative. The sudden changes in work assignments reeked of bad faith. These changes were implemented immediately after respondents had organized themselves into a union and started demanding collective bargaining. Those who were union members were effectively deprived of their jobs. Petitioners' move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.

"Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and authorized cause." 16 In the case at bar, petitioners failed to prove any such cause for the dismissal of respondents who, as discussed above, are regular employees.

Second Issue:

Unfair Labor Practice

The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:

"Indeed, from respondents' refusal to bargain, to their acts of economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot but conclude that respondents did not want a union in their hacienda—a clear interference in the right of the workers to self-organization." 17

We uphold the CA's affirmation of the above findings. Indeed, factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality. Their findings are binding on the Supreme Court. 18 Verily, their

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conclusions are accorded great weight upon appeal, especially when supported by substantial evidence. 19 Consequently, the Court is not duty-bound to delve into the accuracy of their factual findings, in the absence of a clear showing that these were arbitrary and bereft of any rational basis." 20

The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary damages."21

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.

SO ORDERED.

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G.R. No. 112661 May 30, 2001

SIMEON DE LEON, EFREN ABAD, JAIME ABAD, JESSIE ABAY-ABAY, ROLANDO ABIOLA, ALICIO ABISO, CELEDONIO ABSALON, JEREMIAS ADO, VICENTE ADO, VICENTE AGGABAO, EFRAIN AGUIRRE, ALEXANDER ALATA, ERNESTO ALCALDE, LORENZO ALCOY, ALMARIO ALICIO, CESAR AMADOR, JOSE AMANTE, ESTELITO AMBROSIO, VICENTE ANAPI, ARNEL ANCHETA, ROGELIO ANCHETA, WILFREDO ANONUEVO, DOMINGO ANTIGRO, MARGARITO ANTIGRO, ROGELIO ANZANO, ANTONIO APOSTOL, ORLANDO AQUINO, JUAN ARCALAS, BONIFACIO ARIOLA, EDGAR ARIOLA, BONIFACIO ARMASA, FERNANDO BACCAY, MARIO BACUD, RUPERTO BACUDAN, NILO BALAG, ARGEL BALTAZAR, DEMETRIO BARAYOGA, FELIX BARNEDO, FLORENTINO BARTE, SARRI BASIRUL, MARCELO BATANES, RECTO BAYONA, VICTORIO BERMUNDO, ISMAEL BERNAL, LERIO BERSABE, FIDEL BOSE, MARIANO BOTACION, DANILO BRAZIL, REYNALDO BRUNIO, MARIO BUENAVENTURA, ARSENIO BULATAO, FRANCISCO BULATAO, CARLOS CAJARA, ROSENDO CAMACHO, RUBEN CAMACHO, NESTOR CAPILOS, DOMINGO CASTRO, MAXIMIANO DE CASTO, EDINO CASTUERA, ZALDY CERDON, ANTONIO DERUJANO, VICTOR CIPRIANO, JUANITO CORPUZ, ALFREDO CRUZ, FERNANDO DELA CRUZ, MARIO CUSTOPAY, ROSAURO CUSTODIO, FRANKLIN CUSTODIO, ALFREDO DAPROZA, RENATO DAVAG, NOEL DEMINGOY, GENE DIESTRO, ESTEBAN DIONSON, RAMON DIZA, JEREMIAS DOROMAL, MANUEL EDATO, FERNANDO EDORA, CONRADO ENRIQUEZ, NICOMEDEZ ENRIQUEZ, ROLITO ESPIEL, LAURO ESPANOL, NONITO ESPLANA, ELPIDIO ESPANOL, DIOLITO ESTOPEREZ, ODILON EUSTE, HENRY FACTOR, VIRGILIO FAVORITO, ARISTOTLE FERNANDEZ, RODOFLO FORMALEJO, JUNE FULAY, RUIS FUTOL, JESUS GABA, RODRIGO GABAT, ROSALIA GABAT, CLEMENTE GASPAR, RODRIGO GAVIOLA, ELLEN GODELOSON, SALVADOR GUELA, EDUARDO GUZMAN, BALTAZAR DE GUZMAN, ZOSIMO DE GUZMAN, REYANLDO HAGUIRING, CARLOS GINDAP, BERNARDINO GIPIT, WILFREDO HERNANDEZ, IMMANUEL IBRING, PEPITO IMPERIO, MAGTANGGOL INSORIO, RODELYN JACUNTO, MARIO JARAPAN, MAXIMO JIMENEZ, ALEJANDRO JUDLOMAN, JUAN LAOAGAN, DANTE LARIOSA, ELINO LASAGA, JOSEPH LEGASPINA, ZOSIMO LEPALAM, BENJAMIN LIBAN, EFREN LIGUE, CLETO LINGA, ROMEO LLAGAS, LUCIO LLARENA, ALFREDO LOPEZ, FELIX LOPEZ, SANTOS LOPEZ, RUBEN LORENZO, NILO LUGANA, CANCIO MAATUBANG, ANTONIO MACASIO, ROBERTO MACATUNGGAL, VIRGILIO MACALINAO, RAMON MACOY, JOSE MAGALONA, ALEJO MANAGUELOD, DOMINGO MANALO, EMILIANO MANALO, SULPICIO MANTALABA, EDITO MANUEL, ROMULO MANUEL, FELINO MARANA, CARLITO MARGAJA, ROMARES MARIANO, CERMELO MARTINEZ, MODESTO MASULIT, ALMA MATUSALEM, FLAVIANO MEDEL, DOLCIANO MEDINA, DOLOROSA MEDINA, NORLINDO MEJARITO, PEDRITO MENDOZA, GUARDITO MERANO, ALBERTO DE MESA, CHARLIE MINANO, JOSE MONTEROSO, ROSENDO MORALES, CESAR NARDA, DOMINADOR NAGAL, EDEMIO NARISMA, DINISIO NAVASCA, REGINO NEPICON, JR., JESSIE CRIS NILO, JERWYN ORARIO, EUGENIO ORBEGOZO, IRENEO ORGANISTA, CATALINO OJENDRAS, WILLIAM OLIVARES, JUANITO ORIO, WILLIAM ORTIZO, ROQUE PAL-PALLATOC, ROGELIO PAEL, LORENZO PAMINTUAN, VIRGILIO PANTALEON, ANTONIO PAPA, EMMANUEL PASCUAL, FRANCISCO PECUNDO, RUFINO PELICER, LEONARDO PEPITO, PABLITO PERALTA, EDILBERTO PEREZ, LOLITO PEREZ, PELAGIO PEREZ, JR., FERNANDO PINEDA, CARMEN PIO, ALEJANDRO QUIAMCO, VIRGILIO QUILALANG, JEREMEAS QUINES, ZENAIDA RAQUINE, DOMINGO RANOLA, SABINO RANULO, EDDIE RAZONABE, ALBERTO REBAULA, BENIGNO REGIS, PERFECTO REBOYO, VITALIANO REYES, ZOSIMO REYES, EDWIN ROBERTS, ROBERT ROJO, GODOFREDO ROLIO, ANATALIA ROSANTO, DOMINADOR ROSANTO, RAMON ROSANTO, SR., RODRIGO ROSANTO, JULIO RUBIO, DANTE RUZOL, VENUS RUZOL, ROMULO SABINO, CIPRIANO SACUILLES, SR., PRIMO SALAZAR, GASPAR SAMUYA, ANTONIO SANCHEZ, CLAUDIO SANCHEZ, YOLANDA SAN LUIS, ROBERTO SANTOS, BENITO SEGUDIENTE, EDGAR SIBAL, GREGORIO SIBAL, VALENTINO SIBAL, SONNY SINGH, ROMEO SOMERA, EDGAR TABAQUE, BENITO TACATA, MATILDE TACATA, ANDRESITO TALAM, ANTOLIN TALISIC, PABLO TAMAYO, JULIE TAMIEZA, ROGELIO TAYO, CELSO TE, ENRIQUE TRIPULCA, ARMANDO TUIBEO, NICANOR TUMAMAO, EDUARDO TUMBALE, RAMON TURIRIT, LONGENIO UMACAM, TOLENTINO UNDAUNDO, DIOLITO VALENCIA, ERNESTO VARGAS, BILLY VASQUEZ, TOMAS VELINA, MARCOS DE VERA, IRENEO VILELA, NICANDRO VILLAFRANCA, DANNY VILLANUEVA, LOLITA VITALICO, ALIPIO YGOT, AGOSTO YROMA, FELIX ZAMBALES, and GUILLERMO ZIPANGAN, petitioners,

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vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC), and FORTUNE TOBACCO CORPORATION and/or MAGNUM INTEGRATED SERVICES, INC. (formerly FORTUNE INTEGRATED SERVICES, INC.), respondents.

PUNO, J.:

This case stemmed from a complaint for illegal dismissal, unfair labor practice and refund of cash bond filed by petitioners against respondents before the Arbitration Branch of the National Labor Relations Commission (NLRC). The petition at bar seeks the annulment of the resolution of the NLRC dated July 5, 1993 reversing the decision of the Labor Arbiter finding respondents liable for the charges, and its resolution dated August 10, 1993 denying petitioners' motion for reconsideration.

The undisputed facts are as follows:

On August 23, 1980, Fortune Tobacco Corporation (FTC) and Fortune Integrated Services, Inc. (FISI) entered into a contract for security services where the latter undertook to provide security guards for the protection and security of the former. The petitioners were among those engaged as security guards pursuant to the contract.

On February 1, 1991, the incorporators and stockholders of FISI sold out lock, stock and barrel to a group of new stockholders by executing for the purpose a "Deed of Sale of Shares of Stock". On the same date, the Articles of Incorporation of FISI was amended changing its corporate name to Magnum Integrated Services, Inc. (MISI). A new by-laws was likewise adopted and approved by the Securities and Exchange Commission on June 4, 1993.

On October 15, 1991, FTC terminated the contract for security services which resulted in the displacement of some five hundred eighty two (582) security guards assigned by FISI/MISI to FTC, including the petitioners in this case. FTC engaged the services of two (2) other security agencies, Asian Security Agency and Ligalig Security Services, whose security guards were posted on October 15, 1991 to replace FISI's security guards.

Sometime in October 1991, the Fortune Tobacco Labor Union, an affiliate of the National Federation of Labor Unions (NAFLU), and claiming to be the bargaining agent of the security guards, sent a Notice of Strike to FISI/MISI. On November 14, 1991, the members of the union which include petitioners picketed the premises of FTC. The Regional Trial Court of Pasig, however, issued a writ of injunction to enjoin the picket.1âwphi1.nêt

On November 29, 1991, Simeon de Leon, together with sixteen (16) other complainants instituted the instant case before the Arbitration Branch of the NLRC. The complaint was later amended to allow the inclusion of other complainants.1âwphi1.nêt

The parties submitted the following issues for resolution:

(1) Whether petitioners were illegally dismissed;

(2) Whether respondents are guilty of unfair labor practice; and

(3) Whether petitioners are entitled to the refund of their cash bond deposited with respondent FISI.

Petitioners alleged that they were regular employees of FTC which was also using the corporate names Fortune Integrated Services, Inc. and Magnum Integrated Services, Inc. They were assigned to work as security guards at the company's main factory plant, its tobacco redrying plant and warehouse. They averred that they performed their duties under the control and supervision of FTC's security supervisors. Their services, however, were severed in October 1991 without valid cause and without due process.

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Petitioners claimed that their dismissal was part of respondents' design to bust their newly-organized union which sought to enforce their rights under the Labor Standards law.1

Respondent FTC, on the other hand, maintained that there was no employer-employee relationship between FTC and petitioners. It said that at the time of the termination of their services, petitioners were the employees of MISI which was a separate and distinct corporation from FTC. Hence, petitioners had no cause of action against FTC.2

Respondent FISI, meanwhile, denied the charge of illegal dismissal and unfair labor practice. It argued that petitioners were not dismissed from service but were merely placed on floating status pending re-assignment to other posts. It alleged that the temporary displacement of petitioners was not due to its fault but was the result of the pretermination by FTC of the contract for security services.3

The Labor Arbiter found respondents liable for the charges. Rejecting FTC's argument that there was no employer-employee relationship between FTC and petitioners, he ruled that FISI and FTC should be considered as a single employer. He observed that the two corporations have common stockholders and they share the same business address. In addition, FISI had no client other than FTC and other corporations belonging to the group of companies owned by Lucio Tan. The Labor Arbiter thus found respondents guilty of union busting and illegal dismissal. He observed that not long after the stockholders of FISI sold all their stocks to a new set of stockholders, FTC terminated the contract of security services and engaged the services of two other security agencies. FTC did not give any reason for the termination of the contract. The Labor Arbiter gave credence to petitioners' theory that respondents' precipitate termination of their employment was intended to bust their union. Consequently, the Labor Arbiter ordered respondents to pay petitioners their backwages and separation pay, to refund their cash bond deposit, and to pay attorney's fees.4

On appeal, the NLRC reversed and set aside the decision of the Labor Arbiter. First, it held that the Labor Arbiter erred in applying the "single employer" principle and concluding that there was an employer-employee relationship between FTC and FISI on one hand, and petitioners on the other hand. It found that at the time of the termination of the contract of security services on October 15, 1991, FISI which, at that time, had been renamed Magnum Integrated Services, Inc. had a different set of stockholders and officers from that of FTC. They also had separate offices. The NLRC held that the principle of "single employer" and the doctrine of piercing the corporate veil could not apply under the circumstances. It further ruled that the proximate cause for the displacement of petitioners was the termination of the contract for security services by FTC on October 15, 1991. FISI could not be faulted for the severance of petitioners' assignment at the premises of FTC. Consequently, the NLRC held that the charge of illegal dismissal had no basis. As regards the charge of unfair labor practice, the NLRC found that petitioners who had the burden of proof failed to adduce any evidence to support their charge of unfair labor practice against respondents. Hence, it ordered the dismissal of petitioners' complaint.5

The petitioners filed a motion for reconsideration of the resolution of the NLRC but the same was denied.6 Hence, this petition.

We gave due course to the petition on May 15, 1995. Thus, the ruling in St. Martin Funeral Home vs. NLRC7remanding all petitions for certiorari from the decision of the NLRC to the Court of Appeals does not apply to the case at bar.

The petition is impressed with merit.

An examination of the facts of this case reveals that there is sufficient ground to conclude that respondents were guilty of interfering with the right of petitioners to self-organization which constitutes unfair labor practice under Article 248 of the Labor Code.8 Petitioners have been employed with FISI since the 1980s and have since been posted at the premises of FTC -- its main factory plant, its tobacco redrying plant and warehouse. It appears from the records that FISI, while having its own corporate identity, was a mere instrumentality of FTC, tasked to provide protection and security in the company premises. The records

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show that the two corporations had identical stockholders and the same business address. FISI also had no other clients except FTC and other companies belonging to the Lucio Tan group of companies. Moreover, the early payslips of petitioners show that their salaries were initially paid by FTC.9 To enforce their rightful benefits under the laws on Labor Standards, petitioners formed a union which was later certified as bargaining agent of all the security guards. On February 1, 1991, the stockholders of FISI sold all their participations in the corporation to a new set of stockholders which renamed the corporation Magnum Integrated Services, Inc. On October 15, 1991, FTC, without any reason, preterminated its contract of security services with MISI and contracted two other agencies to provide security services for its premises. This resulted in the displacement of petitioners. As MISI had no other clients, it failed to give new assignments to petitioners. Petitioners have remained unemployed since then. All these facts indicate a concerted effort on the part of respondents to remove petitioners from the company and thus abate the growth of the union and block its actions to enforce their demands in accordance with the Labor Standards laws. The Court held inInsular Life Assurance Co., Ltd., Employees Association-NATU vs. Insular Life Assurance Co., Ltd.:10

"The test of whether an employer has interfered with and coerced employees within the meaning of section (a) (1) is whether the employer has engaged in conduct which it may reasonably be said tends to interfere with the free exercise of employees' rights under section 3 of the Act, and it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective bargaining."11

We are not persuaded by the argument of respondent FTC denying the presence of an employer-employee relationship. We find that the Labor Arbiter correctly applied the doctrine of piercing the corporate veil to hold all respondents liable for unfair labor practice and illegal termination of petitioners' employment. It is a fundamental principle in corporation law that a corporation is an entity separate and distinct from its stockholders and from other corporations to which it is connected. However, when the concept of separate legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as an association of persons, or in case of two corporations, merge them into one. The separate juridical personality of a corporation may also be disregarded when such corporation is a mere alter ego or business conduit of another person.12 In the case at bar, it was shown that FISI was a mere adjunct of FTC. FISI, by virtue of a contract for security services, provided FTC with security guards to safeguard its premises. However, records show that FISI and FTC have the same owners and business address, and FISI provided security services only to FTC and other companies belonging to the Lucio Tan group of companies. The purported sale of the shares of the former stockholders to a new set of stockholders who changed the name of the corporation to Magnum Integrated Services, Inc. appears to be part of a scheme to terminate the services of FISI's security guards posted at the premises of FTC and bust their newly-organized union which was then beginning to become active in demanding the company's compliance with Labor Standards laws. Under these circumstances, the Court cannot allow FTC to use its separate corporate personality to shield itself from liability for illegal acts committed against its employees.

Thus, we find that the termination of petitioners' services was without basis and therefore illegal. Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was witheld from him up to the time of his actual reinstatement. However, if reinstatement is no longer possible, the employer has the alternative of paying the employee his separation pay in lieu of reinstatement.13

IN VIEW WHEREOF, the petition is GRANTED. The assailed resolutions of the NLRC are SET ASIDE. Respondents are hereby ordered to pay petitioners their full backwages, and to reinstate them to their former position without loss of seniority rights and privileges, or to award them separation pay in case reinstatement is no longer feasible. 1âwphi1.nêt

SO ORDERED.

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FIRST DIVISION

[G.R. No. 141471. September 18, 2000]

COLEGIO DE SAN JUAN DE LETRAN, petitioner, vs. ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS,respondents.

D E C I S I O N

KAPUNAN, J.:

This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals, promulgated on 9 August 1999, dismissing the petition filed by Colegio de San Juan de Letran (hereinafter, "petitioner") and affirming the Order of the Secretary of Labor, dated December 2, 1996, finding the petitioner guilty of unfair labor practice on two (2) counts.

The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows:

"On December 1992, Salvador Abtria, then President of respondent union, Association of Employees and Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitionerColegio de San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same year, the union elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly elected President (Secretary of Labor and Employment's Order dated December 2, 1996, p. 12).

Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union members, who eventually rejected the said CBA (Ibid, p. 2).

Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission (NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC (Ibid, p. 2).

On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty. Federico Leynes as the union's legal counsel; and (2) refusal to bargain (Ibid, p. 1).

On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA starting 1994-1999. On February 7, 1996, the union

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submitted its proposals to petitioner, which notified the union six days later or on February 13, 1996 that the same had been submitted to its Board of Trustees. In the meantime, Ambas was informed through a letter dated February 15, 1996 from her superior that her work schedule was being changed from Monday to Friday to Tuesday to Saturday. Ambas protested and requested management to submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3).

Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996, the union received petitioner's letter dismissing Ambas for alleged insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal. (Ibid, p. 2-3).

On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner stopped the negotiations after it purportedly received information that a new group of employees had filed a petition for certification election (Ibid, p. 3).

On June 18, 1996, the union finally struck. On July 2, 1996, public respondent the Secretary of Labor and Employment assumed jurisdiction and ordered all striking employees including the union president to return to work and for petitioner to accept them back under the same terms and conditions before the actual strike. Petitioner readmitted the striking members except Ambas. The parties then submitted their pleadings including their position papers which were filed on July 17, 1996 ( Ibid, pp. 2-3).

On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor practice on two counts and directing the reinstatement of private respondent Ambas with backwages. Petitioner filed a motion for reconsideration which was denied in an Order dated May 29, 1997 (Petition, pp. 8-9)."[1]

Having been denied its motion for reconsideration, petitioner sought a review of the order of the Secretary of Labor and Employment before the Court of Appeals. The appellate court dismissed the petition and affirmed the findings of the Secretary of Labor and Employment. The dispositive portion of the decision of the Court of Appeals sets forth:

WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit in fact and in law.

With cost to petitioner.

SO ORDERED.[2]

Hence, petitioner comes to this Court for redress.

Petitioner ascribes the following errors to the Court of Appeals:

I

http://sc.judiciary.gov.ph/jurisprudence/2000/sept2000/141471.htm#_edn2


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THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO BARGAIN (UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE BARGAINING NEGOTIATIONS WITH RESPONDENT AEFL, DESPITE THE FACT THAT THE SUSPENSION OF THE NEGOTIATIONS WAS BROUGHT ABOUT BY THE FILING OF A PETITION FOR CERTIFICATION ELECTION BY A RIVAL UNION WHO CLAIMED TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE BARGAINING UNIT.

II

THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR PRACTICE FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER DISMISSAL WAS CAUSED BY HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER REFUSAL TO FOLLOW THE PRESCRIBED WORK SCHEDULE.[3]

The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another legitimate labor organization? (2) whether the termination of the union president amounts to an interference of the employees' right to self-organization?

The petition is without merit.

After a thorough review of the records of the case, this Court finds that petitioner has not shown any compelling reason sufficient to overturn the ruling of the Court of Appeals affirming the findings of the Secretary of Labor and Employment. It is axiomatic that the findings of fact of the Court of Appeals are conclusive and binding on the Supreme Court and will not be reviewed or disturbed on appeal. In this case, the petitioner failed to show any extraordinary circumstance justifying a departure from this established doctrine.

As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain collectively," as follows:

Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession.


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Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation.

Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the proposals presented by the latter. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could only offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to file its reply. This is a clear violation of Article 250 of the Labor Code governing the procedure in collective bargaining, to wit:

Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice. [4]

x x x

As we have held in the case of Kiok Loy vs. NLRC,[5] the company's refusal to make counter-proposal to the union's proposed CBA is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.[6] In the case at bar, petitioner's actuation show a lack of sincere desire to negotiate rendering it guilty of unfair labor practice.

Moreover, the series of events that transpired after the filing of the first notice of strike in January 1996 show petitioner's resort to delaying tactics to ensure that negotiation would not push through. Thus, on February 15, 1996, or barely a few days after the union proposals for the new CBA were submitted, the union president was informed by her superior that her work schedule was being changed from Mondays to Fridays to Tuesdays to Saturdays. A request from the union president that the issue be submitted to a grievance machinerywas subsequently denied. Thereafter, the petitioner and the union met on March 27, 1996 to discuss the ground rules for negotiation. However, just two days later, or on March 29, 1996, petitioner dismissed the union president for alleged insubordination. In its final attempt to thwart the bargaining process, petitioner suspended the negotiation on the ground that it allegedly received information that a new group of employees called the Association of Concerned Employees of Colegio (ACEC) had filed a petition for certification election. Clearly, petitioner tried to evade its duty to bargain collectively.

Petitioner, however, argues that since it has already submitted the union's proposals to the Board of Trustees and that a series of conferences had already been undertaken to discuss the ground rules for negotiation such should already be considered as acts indicative of its intention to bargain. As pointed out earlier, the evidence on record belie the assertions of petitioner.




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Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the petition for certification election the issue on majority representation of the employees has arose. According to petitioner, the authority of the union to negotiate on behalf of the employees was challenged when a rival union filed a petition for certification election. Citing the case of Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises,[7] petitioner asserts that in view of the pendency of the petition for certification election, it had no duty to bargain collectively with the union.

We disagree. In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. The petition must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification election must be filed during the sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: " .… If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule is based on Article 232,[8] in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any representation issue may be filed afterthe lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed.[9] Hence, the contract bar rule still applies.[10] The purpose is to ensure stability in the relationship of the workers and the company by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.[11]

In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for certification election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid and existing collective bargaining agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the petition for certification election did not constitute a bar to the ongoing negotiation. Reliance, therefore, by petitioner of the ruling in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises [12] is misplaced since that case involved a legitimate representation issue which is not present in the case at bar.

Significantly, the same petition for certification election was dismissed by the Secretary of Labor on October 25, 1996. The dismissal was upheld by this Court in a Resolution, dated April 21, 1997.[13]

In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith with respondent union.

Concerning the issue on the validity of the termination of the union president, we hold that the dismissal was effected in violation of the employees' right to self-organization.

To justify the dismissal, petitioner asserts that the union president was terminated for cause, allegedly for insubordination for her failure to comply with the new working schedule assigned to her, and pursuant to its managerial prerogative to discipline and/or dismiss its employees. While we recognize the right of the employer to terminate the services of an employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of equity and fair play. [14] The employer's right to terminate the services of an employee for just or authorized cause must be









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exercised in good faith.[15] More importantly, it must not amount to interfering with, restraining or coercing employees in the exercise of their right to self-organization because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor Code.

The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union president and when she started negotiating for a new CBA. Thus, it was when she was the union president and during the period of tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination. [16] We quote with approval the following findings of the Secretary of Labor on this matter, to wit:

"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid ground to teminate her employment. The disputed management action was directly connected with Ms. Ambas' determination to change the complexion of the CBA. As a matter of fact, Ms. Ambas' unflinching position in faithfully and truthfully carrying out her duties and responsibilities to her Union and its members in getting a fair share of the fruits of their collective endeavors was the proximate cause for her dismissal, the charge of insubordination being merely a ploy to give a color of legality to the contemplated management action to dismiss her. Thus, the dismissal of Ms. Ambas was heavily tainted with and evidently done in bad faith. Manifestly, it was designed to interfere with the members' right to self-organization.

Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her from the premises of the College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance within the scope of the Grievance Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."[17]

In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the findings of the Secretary of Labor and Employment. The right to self-organization of employees must not be interfered with by the employer on the pretext of exercising management prerogative of disciplining its employees. In this case, the totality of conduct of the employer shows an evident attempt to restrain the employees from fully exercising their rights under the law. This cannot be done under the Labor Code.

WHEREFORE, premises considered, the petition is DENIED for lack of merit.




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SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, and Pardo, JJ., concur.Ynares-Santiago, J., on leave.

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FIRST DIVISION

CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA JR., VIRGILIO AGERO, and LEONARDO VISORRO, JR., Petitioners,

- versus - HON. COURT OF APPEALS, CAPASCO UNION OF SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE TAMONDONG III, Respondents.

G.R. No. 164561 Present: PANGANIBAN, C.J. Chairperson,YNARES-SANTIAGO,AUSTRIA-MARTINEZ,CALLEJO, SR., andCHICO-NAZARIO, JJ. Promulgated: August 30, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

D E C I S I O N CHICO-NAZARIO, J.:

This is a special civil action for Certiorari under Rule 65 of the Rules of Court seeking to annul and set aside, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, (1) the Decision[1] of the Court of Appeals in CA-G.R. SP No. 57179 dated 28 October 2003 which annulled the Decision[2] of the National Labor Relations Commission (NLRC) in NLRC Case No. 017822-99 dated 25 August 1999, thereby, reinstating the Decision[3] of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998; and (2) the Resolution[4] of the same court, dated 3 June 2004, which denied the petitioners’ Motion for Reconsideration. Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO), a domestic corporation engaged in the business of manufacturing steel products; Benjamin Chua, Jr. (now deceased), the former CAPASCO President; Virgilio Agerro, CAPASCO’s Vice-

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President; and Leonardo Visorro, Jr., CAPASCO’s Administrative-Personnel Manager. Herein private respondents are Enrique Tamondong III, the Personnel Superintendent of CAPASCO who was previously assigned at the petitioners’ Cainta Plant, and CAPASCO Union of Supervisory Employees (CUSE), a duly registered union of CAPASCO. The facts of the case are as follows: Four former employees of CAPASCO originally filed this labor case before the NLRC, namely: Fidel Lacambra, Armando Dayson, Reynaldo Vacalares, andEnrique Tamondong III. However, in the course of the proceedings, Fidel Lacambra[5] and Armando Dayson[6] executed a Release and Quitclaim, thus, waiving and abandoning any and all claims that they may have against petitioner CAPASCO. On 3 November 1999, Reynaldo Vacalares also signed a Quitclaim/Release/Waiver.[7] Hence, this Petition shall focus solely on issues affecting private respondent Tamondong. Petitioner CAPASCO, hired private respondent Tamondong as Assistant to the Personnel Manager for its Cainta Plant on 16 February 1990. Thereafter, he was promoted to the position of Personnel/Administrative Officer, and later to that of Personnel Superintendent. Sometime in June 1996, the supervisory personnel of CAPASCO launched a move to organize a union among their ranks, later known as private respondent CUSE. Private respondent Tamondong actively involved himself in the formation of the union and was even elected as one of its officers after its creation. Consequently, petitioner CAPASCO sent a memo[8] dated 3 February 1997, to private respondent Tamondong requiring him to explain and to discontinue from his union activities, with a warning that a continuance thereof shall adversely affect his employment in the company. Private respondent Tamondong ignored said warning and made a reply letter[9] on 5 February 1997, invoking his right as a supervisory employee to join and organize a labor union. In view of that, on 6 February 1997, petitioner CAPASCO through a memo[10] terminated the employment of private respondent Tamondong on the ground of loss of trust and confidence, citing his union activities as acts constituting serious disloyalty to the company. Private respondent Tamondong challenged his dismissal for being illegal and as an act involving unfair labor practice by filing a Complaint for Illegal Dismissal and Unfair Labor Practice before the NLRC, Regional Arbitration Branch IV. According to him, there was no just cause for his dismissal and it was anchored solely on his involvement

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and active participation in the organization of the union of supervisory personnel in CAPASCO. Though private respondent Tamondong admitted his active role in the formation of a union composed of supervisory personnel in the company, he claimed that such was not a valid ground to terminate his employment because it was a legitimate exercise of his constitutionally guaranteed right to self-organization. In contrast, petitioner CAPASCO contended that by virtue of private respondent Tamondong’s position as Personnel Superintendent and the functions actually performed by him in the company, he was considered as a managerial employee, thus, under the law he was prohibited from joining a union as well as from being elected as one of its officers. Accordingly, petitioners maintained their argument that the dismissal of private respondent Tamondong was perfectly valid based on loss of trust and confidence because of the latter’s active participation in the affairs of the union. On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos rendered a Decision in favor of private respondent Tamondong, decreeing as follows:

WHEREFORE, premises considered, judgment is hereby rendered finding [petitioner CAPASCO] guilty of unfair labor practice and illegal dismissal. Concomitantly, [petitioner CAPASCO] is hereby ordered:

1. To cease and desist from further committing acts of unfair labor practice, as charged;

2. To reinstate [private respondent Tamondong] to his former position

without loss of seniority rights and other privileges and his full backwages inclusive of allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement, and herein partially computed as follows:

a) P167,076.00 - backwages from February 7, 1997 to August 7,

1998;b) P18,564.00 - 13th month pay for 1997 and 1998;c) P4,284.00 - Holiday pay for 12 days;d) P 3,570.00 - Service Incentive Leave for 1997 and 1998. P 193,494.00 - Total partial backwages and benefits.[11]

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Aggrieved, petitioners appealed the afore-quoted Decision to the NLRC. On 25 August 1999, the NLRC rendered its Decision modifying the Decision of the Acting Executive Labor Arbiter Pedro C. Ramos, thus:

WHEREFORE, premises all considered, the decision appealed from is hereby MODIFIED:

a) Dismissing the Complaint for Illegal Dismissal filed by [private respondent Tamondong] for utter lack of merit;

b) Dismissing the Complaint for Unfair Labor Practice for lack

of factual basis;

c) Deleting the awards to [private respondent Tamondong] of backwages, moral and exemplary damages, and attorney’s fees;

d) Affirming the awards to [private respondent Tamondong],

representing 13th month pay for 1997 and 1998, holiday pay for 12 days, and service incentive leave for 1997 totaling P26,418.00; and

e) Ordering the payment of backwages to [private

respondent Tamondong] reckoned from 16 September 1998 up to the date of this Decision.[12]

Petitioners filed a Motion for Clarification and Partial Reconsideration, while, private respondent Tamondong filed a Motion for Reconsideration of the said NLRC Decision, but the NLRC affirmed its original Decision in its Resolution[13] dated 25 November 1999. Dissatisfied with the above-mentioned Decision of the NLRC, private respondents Tamondong and CUSE filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals, alleging grave abuse of discretion on the part of the NLRC. Then, the Court of Appeals in its Decision dated 28 October 2003, granted the said Petition. The dispositive of which states that:

WHEREFORE, premises considered, the instant Petition for Certiorari is GRANTED and the herein assailed Decision dated August 25, 1999 of the NLRC, Third Division is ANNULLED and SET ASIDE. Accordingly, the Decision dated August 7, 1998 of NLRC, RAB IV

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Acting Executive Labor Arbiter Pedro C. Ramos, insofar as [private respondentTamondong] is concerned is hereby REINSTATED.[14]

Consequently, petitioners filed a Motion for Reconsideration of the aforesaid Decision of the Court of Appeals. Nonetheless, the Court of Appeals denied the said Motion for Reconsideration for want of convincing and compelling reason to warrant a reversal of its judgment. Hence, this present Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure. In the Memorandum[15] filed by petitioners, they aver that private respondent Tamondong as Personnel Superintendent of CAPASCO was performing functions of a managerial employee because he was the one laying down major management policies on personnel relations such as: issuing memos on company rules and regulations, imposing disciplinary sanctions such as warnings and suspensions, and executing the same with full power and discretion. They claim that no further approval or review is necessary for private respondent Tamondong to execute these functions, and the notations “NOTED BY” of petitioner Agerro, the Vice-President of petitioner CAPASCO, on the aforesaid memos are nothing but mere notice that petitioner Agerro was aware of such company actions performed by private respondent Tamondong. Additionally, private respondent Tamondong was not only a managerial employee but also a confidential employee having knowledge of confidential information involving company policies on personnel relations. Hence, the Court of Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it held that private respondent Tamondong was not a managerial employee but a mere supervisory employee, therefore, making him eligible to participate in the union activities of private respondent CUSE. Petitioners further argue that they are not guilty of illegal dismissal and unfair labor practice because private respondent Tamondong was validly dismissed and the reason for preventing him to join a labor union was the nature of his position and functions as Personnel Superintendent, which position was incompatible and in conflict with his union activities. Consequently, it was grave abuse of discretion on the part of the Court of Appeals to rule that petitioner CAPASCO was guilty of illegal dismissal and unfair labor practice. Lastly, petitioners maintain that the Court of Appeals gravely abused its discretion when it reinstated the Decision of Executive Labor Arbiter Pedro C. Ramos holding

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CAPASCO liable for backwages, 13th month pay, service incentive leave, moral damages, exemplary damages, and attorney’s fees. On the other hand, private respondents, assert that the assailed Decision being a final disposition of the Court of Appeals is appealable to this Court by a Petition for Review on Certiorari under Rule 45 of the Rules of Court and not under Rule 65 thereof. They also claim that petitioners new ground that private respondent Tamondong was a confidential employee of CAPASCO, thus, prohibited from participating in union activities, is not a valid ground to be raised in this Petition forCertiorari seeking the reversal of the assailed Decision and Resolution of the Court of Appeals. Now, given the foregoing arguments raise by both parties, the threshold issue that must first be resolved is whether or not the Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure is the proper remedy for the petitioners, to warrant the reversal of the Decision and Resolution of the Court of Appeals dated 28 October 2003 and 3 June 2004, respectively. The petition must fail. The special civil action for Certiorari is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.[16] The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial function; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.[17] Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal, board or officer is not authorized, and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting. [18] Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means lack of power to exercise authority.[19] Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or,

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in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.[20] In the case before this Court, petitioners fail to meet the third requisite for the proper invocation of Petition for Certiorari under Rule 65, to wit: that there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. They simply alleged that the Court of Appeals gravely abuse its discretion which amount to lack or excess of jurisdiction in rendering the assailed Decision and Resolution. They did not bother to explain why an appeal cannot possibly cure the errors committed by the appellate court. It must be noted that the questioned Decision of the Court of Appeals was already a disposition on the merits; this Court has no remaining issues to resolve, hence, the proper remedy available to the petitioners is to file Petition for Review under Rule 45 not under Rule 65. Additionally, the general rule is that a writ of certiorari will not issue where the remedy of appeal is available to the aggrieved party. The remedies of appeal in the ordinary course of law and that of certiorari under Rule 65 of the Revised Rules of Court are mutually exclusive and not alternative or cumulative.[21] Time and again this Court reminded members of the bench and bar that the special civil action of Certiorari cannot be used as a substitute for a lost appeal[22] where the latter remedy is available. Such a remedy will not be a cure for failure to timely file a Petition for Review on Certiorari under Rule 45. Nor can it be availed of as a substitute for the lost remedy of an ordinary appeal, especially if such loss or lapse was occasioned by one’s own negligence or error in the choice of remedies.[23] In the case at bar, petitioners received on 9 June 2004 the Resolution of the Court of Appeals dated 3 June 2004 denying their Motion for Reconsideration. Upon receipt of the said Resolution, they had 15 days or until 24 June 2004 within which to file an appeal by way of Petition for Review under Rule 45, but instead of doing so, they just allowed the 15 day period to lapse, and then on the 61st day from receipt of the Resolution denying their Motion for Reconsideration, they filed this Petition for Certiorari under Rule 65 alleging grave abuse of discretion on the part of the appellate court. Admittedly, this Court, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, has the discretion to treat a Petition for Certiorari as a Petition for Review on Certiorari under Rule 45, especially if filed within the reglementary period for filing a Petition for Review.[24] However, in the present case, this Court finds no

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compelling reason to justify a liberal application of the rules, as this Court did in the case of Delsan Transport Lines, Inc. v. Court of Appeals.[25] In the said case, this Court treated the Petition forCertiorari filed by the petitioner therein as having been filed under Rule 45 because said Petition was filed within the 15-day reglementary period for filing a Petition for Review on Certiorari. Petitioner’s counsel therein received the Court of Appeals Resolution denying their Motion for Reconsideration on 26 October 1993 and filed the Petition for Certiorari on 8 November 1993, which was within the 15-day reglementary period for filing a Petition for Review on Certiorari. It cannot therefore be claimed that the Petition was used, as a substitute for appeal after that remedy has been lost through the fault of the petitioner.[26] Conversely, such was not the situation in the present case. Hence, this Court finds no reason to justify a liberal application of the rules. Accordingly, where the issue or question involves or affects the wisdom or legal soundness of the decision, and not the jurisdiction of the court to render said decision, the same is beyond the province of a petition for certiorari.[27] It is obvious in this case that the arguments raised by the petitioners delved into the wisdom or legal soundness of the Decision of the Court of Appeals, therefore, the proper remedy is a Petition for Review on Certiorari under Rule 45. Consequently, it is incumbent upon this Court to dismiss this Petition. In any event, granting arguendo, that the present petition is proper, still it is dismissible. The Court of Appeals cannot be said to have acted with grave abuse of discretion amounting to lack or excess of jurisdiction in annulling the Decision of the NLRC because the findings of the Court of Appeals that private respondentTamondong was indeed a supervisory employee and not a managerial employee, thus, eligible to join or participate in the union activities of private respondent CUSE, were supported by evidence on record. In the Decision of the Court of Appeals dated 28 October 2003, it made reference to the Memorandum[28] dated 12 September 1996, which required private respondent Tamondong to observe fixed daily working hours from 8:00 am to 12:00 noon and from 1:00 pm to 5:00 pm. This imposition upon private respondent Tamondong, according to the Court of Appeals, is very uncharacteristic of a managerial employee. To support such a conclusion, the Court of Appeals cited the case of Engineering Equipment, Inc. v. NLRC[29] where this Court held that one of the essential characteristics[30] of an employee holding a managerial rank is that he is not subjected to the rigid observance of regular office hours or maximum hours of work.

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Moreover, the Court of Appeals also held that upon careful examination of the documents submitted before it, it found out that:

[Private respondent] Tamondong may have possessed enormous powers and was performing important functions that goes with the position of Personnel Superintendent, nevertheless, there was no clear showing that he is at liberty, by using his own discretion and disposition, to lay down and execute major business and operational policies for and in behalf of CAPASCO. [Petitioner] CAPASCO miserably failed to establish that [private respondent] Tamondong was authorized to act in the interest of the company using his independent judgment. x x x. Withal, [private respondent] Tamondong may have been exercising certain important powers, such as control and supervision over erring rank-and-file employees, however, x x x he does not possess the power to hire, transfer, terminate, or discipline erring employees of the company. At the most, the record merely showed that [private respondent] Tamondong informed and warned rank-and-file employees with respect to their violations of CAPASCO’s rules and regulations. x x x. [Also, the functions performed by private respondent such as] issuance of warning[31] to employees with irregular attendance and unauthorized leave of absences and requiring employees to explain regarding charges of abandonment of work, are normally performed by a mere supervisor, and not by a manager.[32]

Accordingly, Article 212(m) of the Labor Code, as amended, differentiates supervisory employees from managerial employees, to wit: 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; whereas, managerial employees are those who are vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. Thus, from the foregoing provision of the Labor Code, it can be clearly inferred that private respondent Tamondong was just a supervisory employee. Private respondent Tamondong did not perform any of the functions of a managerial employee as stated in the definition given to it by the Code. Hence, the Labor Code[33] provisions regarding disqualification of a managerial employee from joining, assisting or forming any labor organization does not apply to herein private respondent Tamondong. Being a supervisory employee of CAPASCO, he cannot be prohibited from joining or participating in the union activities of private respondent CUSE, and in making such a conclusion, the Court of Appeals did not act whimsically, capriciously or in a despotic manner, rather, it was guided by the evidence submitted before it. Thus, given the

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foregoing findings of the Court of Appeals that private respondent is a supervisory employee, it is indeed an unfair labor practice[34] on the part of petitioner CAPASCO to dismiss him on account of his union activities, thereby curtailing his constitutionally guaranteed right to self-organization.[35] With regard to the allegation that private respondent Tamondong was not only a managerial employee but also a confidential employee, the same cannot be validly raised in this Petition for Certiorari. It is settled that an issue which was not raised in the trial court cannot be raised for the first time on appeal. This principle applies to a special civil action for certiorari under Rule 65.[36] In addition, petitioners failed to adduced evidence which will prove that, indeed, private respondent was also a confidential employee. WHEREFORE, premises considered, the instant Petition is DISMISSED. The Decision and Resolution of the Court of Appeals dated 28 October 2003 and3 June 2004, respectively, in CA-G.R. SP No. 57179, which annulled the Decision of the NLRC in NLRC Case No. 017822-99 dated 25 August 1999, thereby, reinstating the Decision of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August 1998, is hereby AFFIRMED. With costs against petitioners. SO ORDERED.

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DE LA SALLE UNIVERSITY andDR. CARMELITA I. QUEBENGCO, Petitioners, - versus - DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA-NAFTEU), Respondent.

G.R. No. 177283 Present:

QUISUMBING, CARPIO MORALES, TINGA, VELASCO, JR., BRION, JJ. Promulgated: April 7, 2009

SECOND DIVISION x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CARPIO MORALES, J.

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On challenge by the De La Salle University and its Executive Vice President Dr. Carmelita I. Quebengco (petitioners) via the present petition for review on certiorari is the Court of Appeals First Division Decision of September 16, 2005[1] in CA-G.R. No. SP No. 81220 which SET ASIDE the National Labor Relations Commission (NLRC) Second Division Orders of June 26, 2003 and September 30, 2003 affirming the dismissal of the complaint for Unfair Labor Practices (ULP) filed by De La Salle University Employees Association (respondent), and DIRECTED the NLRC Second Division to transmit the records of the said complaint to the NLRC Third Division. The antecedent facts of the case are as follows: In 2001, a splinter group of respondent led by one Belen Aliazas (Aliazas group) filed a petition for conduct of elections with the Department of Labor and Employment (DOLE), alleging that the then incumbent officers of respondent had failed to call for a regular election since 1985. Disputing the Aliazas group’s allegation, respondent claimed that an election was conducted in 1987 but by virtue of the enactment of Republic Act 6715, [2]which amended the Labor Code, the term of office of its officers was extended to five years or until 1992 during which a general assembly was held affirming their hold-over tenure until the termination of collective bargaining negotiations; and that a collective bargaining agreement (CBA) was executed only on March 30, 2000. Acting on the petition for the conduct of election filed by the Aliazas group, the DOLE-NCR held, by Decision of March 19, 2001, that the holdover authority of respondent’s incumbent set of officers had been extinguished by virtue of the execution of the CBA. It accordingly ordered the conduct of elections to be placed under the control and supervision of its Labor Relations Division[3] and subject to pre-election conferences. The conditions for the conduct of election imposed by the DOLE-NCR notwithstanding, respondent called for a regular election on July 9, 2001, without prior notice to the DOLE and without the conduct of pre-election conference, prompting the Aliazas group to file an Urgent Motion for Intervention with the Bureau of Labor Relations (BLR) of the DOLE. The BLR granted the Aliaza’s group’s motion for

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intervention three days before the intended date of election or on July 6, 2001 and thus disposed as follows:

WHEREFORE, without necessarily resolving the merits of the appeal and considering the urgency of the issues raised by appellees and the limited time involved, the motion is hereby GRANTED. Consequently, appellants and or the members of the DLSUEA-COMELEC headed by Mr. Dominador Almodovar or any of their authorized representatives are hereby directed to cease and desist from holding the general election of DLSUEA officers on 9 July 2001, until further ordered by this Office. SO ORDERED.[4] (Emphasis and underscoring supplied) The Aliazas group thereupon, via letter of August 7, 2001 to Brother Rolando

Dizon, FSC, President of petitioner DLSU, requested the University “to please put on escrow all union dues/agency fees and whatever money considerations deducted from salaries of concerned co-academic personnel until such time that an election of union officials has been scheduled and subsequent elections has been held.” [5] (Underscoring in the original; emphasis supplied)

Responding to the Aliazas group’s request, petitioners, citing the abovementioned

DOLE and BLR Orders, advised respondent by letter of August 16, 2001 as follows: x x x By virtue of the 19 March 2001 Decision and the 06 July 2001 Order of the Department of Labor and Employment (DOLE), the hold-over authority of your incumbent set of officers has been considered extinguished and an election of new union officers, to be conducted and supervised by the DOLE has been directed to be held. Until the result of this election comes out and a declaration by the DOLE of the validly elected officers is made, a void in the Union leadership exists.

In the light of these circumstances, the University has no other alternative but to temporarily do the following: 1. Establish a savings account for the Union where all collected union dues

and agency fees will be deposited and held in trust; and2. Discontinue normal relations with any group within the Union including the

incumbent set of officers. We are informing you of this decision of the University not only for your guidance but also for the apparent reason that the University does not want

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itself to be unnecessarily involved in your intra-union dispute. This is the only way that the University can maintain neutrality on this matter of grave concern. (Emphasis and underscoring supplied)

Petitioners’ above-quoted move drew respondent to file a complaint against petitioners for Unfair Labor Practice (ULP complaint), claiming that petitioners unduly interfered with its internal affairs and discriminated against its members. The ULP complaint was docketed as NLRC-NCR Case No. S-30-08-03757-01. During the pendency of its ULP complaint or on March 7, 2002, respondent filed its First Notice of Strike with the Office of the Secretary of Labor (OSL), charging petitioners for 1) gross violation of the CBA and 2) bargaining in bad faith which was certified for compulsory arbitration to the NLRC (certified case). The certified case, docketed as NLRC-NCR CC000222-02, was raffled to the NLRC Third Division. In the meantime, Labor Arbiter Felipe Pati, by Decision of July 12, 2002, dismissed respondent’s ULP complaint. Respondent appealed to the NLRC. The appeal was docketed as NLRC-NCR CA No. 033173-02 and lodged at the NLRC Second Division.

While the dismissal of its ULP complaint was pending appeal before the NLRC Second Division, respondent, on behalf of some of its members, filed four other cases against petitioners which were lodged at the NLRC Second Division.

Respondent thereafter filed in the certified case which was lodged at the

NLRC Third Division a motion to have its four other cases and its ULP complaint thenpending appeal before the NLRC Second Division to have these cases “subsumed” in the certified case. The NLRC Third Division granted respondent’s motion byOrder of April 30, 2003. Petitioners moved to reconsider this Order but it was denied, prompting petitioners to elevate the matter via certiorari to the Court of Appeals. This petition, docketed as CA G.R. No. SP-79798, was raffled to the appellate court’s Tenth Division.

The NLRC Second Division, in the meantime, affirmed by Decision of June 26, 2003, the dismissal by the Arbiter of respondent’s ULP complaint. Respondent thus elevated the case to the Court of Appeals via certiorari, docketed as CA-G.R. No. 81220. This was raffled to the appellate court’s First Division.

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By Decision of June 17, 2004, the Court of Appeals Tenth Division, to which petitioners’ certiorari petition in CA-G.R. No. SP-79798 challenging the April 30, 2003 NLRC Third Division Order “subsuming” respondent’s complaints including the ULP Complaint under the certified case, REVERSED the said Order of the NLRC Third Division [6] with respect to the “subsuming” of respondent’s ULP complaint under the certified case, the ULP complaint having been, at the time the NLRC Third Division Order was issued, “already disposed of” (dismissed) by the Arbiter and was in fact pending appeal before the NLRC Second Division. Thus theTenth Division of the appellate court held:

Anent ULP case with docket No. NLRC-NCR Case No. S-30-08-03757-01 raffled to Labor Arbiter Pati for resolution, private respondent gravely erred in including it among the cases to be consolidated with NLRC NCR CC No. 000222-02. The case is obviously no longer under arbitration . The records show that when complainant-appellee (respondent Union) filed its motion to consolidate the cases on January 28, 2003 and the resolution of the said motion by the Third Division of the NLRC on April 30, 2003 granting the desired consolidation, NLRC-NCR Case No. S-30-08-03757-01 had already been disposed of by Labor Arbiter Pati and was, in fact, already on appeal before the Second Division of the NLRC, docketed therein as NLRC-NCR CA No. 033173-02. According to the Union itself, on June 26, 2003, the NLRC affirmed the decision of Labor Arbiter Pati and on September 30, 2003, it denied the Union’s motion for reconsideration. x x x (Citation omitted) The NLRC had thus already exhausted its jurisdiction over NLRC-NCR CA No. 033173-02. Consequently, the same case is now removed from the ambit of compulsory arbitration and may only be subject of judicial review via the special civil action of certiorari in this Court. But we are not informed if such a judicial action has been taken.[7] (Emphasis and underscoring supplied) The Court of Appeals First Division subsequently resolving respondent’s petition

for certiorari in CA-G.R. No. 81220 (which assailed the affirmance by the NLRC Second Division of the Arbiter’s dismissal of its ULP complaint), upon the sole issue of “whether the NLRC [Second Division] committed grave abuse of discretion . . . in ignoring the order of the [NLRC] 3rd Division declaring subsumed or absorbed [herein respondent’s ULP complaint] in the certified case,” answered the same in the affirmative via the herein challenged September 16, 2005 Decision. It thus SET ASIDE the NLRC Second Division Order affirming the dismissal of respondent’s ULP complaint and accordingly ordered said NLRC Second Division to transmit the entire

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records of the ULP complaint to the NLRC Third Divisionto which said ULP complaint had priorly been ordered consolidated by the latter Division with the certified case.

WHEREFORE, premises considered, the petition is granted. Accordingly, the Order dated June 26, 2003 of National Labor Relations Commission (NLRC) as well as the Order dated September 30, 2003 are hereby SET ASIDE. The 2 nd Division of the NLRC is hereby directed to transmit the entire records of the case to the 3 rd Division [of the NLRC] for its resolution.

SO ORDERED.[8] (Underscoring supplied)

Hence, petitioner’s petition for review on certiorari at bar. Petitioners contend that the First Division of the Court of Appeals disregarded the

ruling of the appellate court’s Tenth Division setting aside the NLRC ThirdDivision Order “subsuming” respondent’s ULP complaint, which was lodged at the NLRC Second Division, under the certified case pending with said NLRC ThirdDivision. They fault the First Division of the appellate court for

I

. . . RULING THAT THE SECOND DIVISION OF THE NLRC COMMITTED SERIOUS ERROR OR GRAVE ABUSE OF DISCRETION WHEN IT AFFIRMED THE RULING OF LABOR ARBITER FELIPE P. PATI DATED 12 JULY 2002 (THROUGH ITS RESOLUTION AND ORDER DATED 26 JUNE 2003 AND 30 SEPTEMBER 2003, RESPECTIVELY) CONSIDERING THAT: A. WHEN THE NLRC’S SECOND DIVISION RENDERED ITS 26 JUNE

2003 RESOLUTION, WHICH DISMISSED THE APPEAL FILED BY THE UNION AND AFFIRMED THE 12 JULY 2002 DECISION OF LABOR ARBITER FELIPE P. PATI IN NLRC NCR CASE NO. 30-08-0357-01 (NLRC NCR CA NO. 033173-02), THE CONSOLIDATION ORDER OF THE NLRC THIRD DIVISION IN NCMB-NCR-NS NO. 03-093-02 (NLRC NCR CC NO. 000222-02) WHICH WAS ISSUED ON 30 APRIL 2003 HAD NOT YET ATTAINED FINALITY.

B. . . . [NOT] TAK[ING] COGNIZANCE OF THE DECISION

RENDERED BY THE TENTH DIVISION OF THE SAME COURT DATED 17 JUNE 2004, ANNULLING AND SETTING ASIDE THE 30

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APRIL 2003 AND 28 JULY 2003 RESOLUTIONS OF THE THIRD DIVISION, WHICH ORDERED THE CONSOLIDATION OF ALL CASES FILED BY THE UNION AGAINST THE UNIVERSITY.[9]

In any event, petitioners contend that

II

THE SECOND DIVISION OF THE NLRC DID NOT GRAVELY ABUSE ITS DISCRETION WHEN IT HELD THAT THE PETITIONERS WERE NOT GUILTY OF UNFAIR LABOR PRACTICE, CONSIDERING THAT THE TEMPORARY MEASURES IMPLEMENTED BY THE UNIVERSITY WERE UNDERTAKEN IN GOOD FAITH AND ONLY TO MAINTAIN ITS NEUTRALITY AMID THE INTRA-UNION DISPUTE.”[10] (Underscoring supplied)

The petition is partly meritorious.

The June 17, 2004 Decision of the appellate court’s Tenth Division SETTING

ASIDE the order of consolidation issued by the NLRC Third Division became final and executory on July 11, 2004. The herein challenged appellate court’s First Division Decision REVERSING the NLRC Second Division Order which affirmed the dismissal of respondent’s ULP complaint and directing that the records of said complaint be transmitted to the NLRC Third Division was promulgated onSeptember 16, 2005.

It is thus clear that the appellate court’s Tenth Division Decision declaring that the NLRC Third Division’s order “subsuming” respondent’s ULP complaint (then pending appeal before the NLRC Second Division) under the certified case pending before it (NLRC Third division) had become final and executory on July 11, 2004. Therefore, with respect to the herein challenged Decision of the appellate court’s First Division ordering the NLRC Second Division to transmit the records of respondent’s ULP complaint to the NLRC Third Division, the same can no longer be effected, the appellate court’s Tenth Division ruling having, it bears repeating, become final. To still transmit to the NLRC Third Division respondent’s ULP complaint on appeal which has already been resolved by the NLRC Second Division would lead to absurd consequences.

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On the other matter raised by petitioners – that their acts of withholding union and agency dues and suspension of normal relations with respondent’s incumbent set of officers pending the intra-union dispute did not constitute interference, the Court finds for respondent.

Pending the final resolution of the intra-union dispute, respondent’s officers remained duly authorized to conduct union affairs. The clarification letter of May 16, 2003 issued by BLR Director Hans Leo J. Cacdac enlightens:

We take this opportunity to clarify that there is no void in the DLSUEA leadership. The 19 March 2001 Decision of DOLE-NCR Regional Director should not be construed as an automatic termination of the incumbent officers’ tenure of office. As duly-elected officers of the DLSUEA, their leadership is not deemed terminated by the expiration of their terms of office, for they shall continue their functions and enjoy the rights and privileges pertaining to their respective positions in a hold-over capacity, until their successors shall have been elected and qualified.[11] (Emphasis and underscoring supplied) It bears noting that at the time petitioners’ questioned moves were adopted, a valid

and existing CBA had been entered between the parties. It thus behooved petitioners to observe the terms and conditions thereof bearing on union dues and representation. It is axiomatic in labor relations that a CBA entered into by a legitimate labor organization and an employer becomes the law between the parties, compliance with which is mandated by express policy of the law.[12]

Respecting the issue of damages, respondent, in its Position Paper before the Labor

Arbiter, prayed for the award of exemplary damages, nominal damages, and attorney’s fees.

Exemplary or corrective damages are imposed by way of example or correction for

the public good in addition to the moral, temperate, liquidated or compensatory damages. While the amount of exemplary damages need not be proved, respondent must show proof of entitlement to moral, temperate or compensatory damages before the Court may consider awarding exemplary damages. No such damages were prayed for, however, hence, the Court finds no basis to grant the prayer for exemplary damages.

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Nonetheless, the grant of nominal damages and attorney’s fees to respondent under

Article 2221[13] and Article 2208 (8)[14] of the Civil Code, respectively, is in order.

WHEREFORE, the petition, insofar as the challenged Court of Appeals First Division Decision ordering the transmittal by the NLRC Second Division of the records of respondent’s ULP complaint to the NLRC Third Division is concerned, has become moot.

In so far as the petition involves the merits of the NLRC Second Division Decision is concerned, the same is REVERSED and a NEW one is entered finding petitioners liable for Unfair Labor Practice, and ordering them to pay respondent nominal damages in the amount of P250,000 and attorney’s fees in the amount ofP50,000.

SO ORDERED.

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SECOND DIVISION S.S. VENTURES INTERNATIONAL, G.R. No. 161690INC., Petitioner, Present: QUISUMBING, J., Chairperson, - versus - YNARES-SANTIAGO,* CARPIO MORALES, TINGA, and VELASCO, JR., JJ. S.S. VENTURES LABOR UNION (SSVLU) and DIR. HANS LEO Promulgated:CACDAC, in His capacity asDirector of the Bureau of Labor July 23, 2008Relations (BLR), Respondents. x-----------------------------------------------------------------------------------------x

D E C I S I O N

VELASCO, JR., J.: Petitioner S.S. Ventures International, Inc. (Ventures), a PEZA-registered export firm with principal place of business at Phase I-PEZA-Bataan Export Zone, Mariveles, Bataan, is in the business of manufacturing sports shoes. Respondent S.S. Ventures Labor Union (Union), on the other hand, is a labor organization registered with the Department of Labor and Employment (DOLE) under Certificate of Registration No. RO300-00-02-UR-0003. On March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in behalf of the rank-and-file employees of Ventures. Five hundred forty two (542) signatures, 82 of which belong to______________________ * Additional member as per Special Order No. 509 dated July 1, 2008.

terminated Ventures employees, appeared on the basic documents supporting the petition. On August 21, 2000, Ventures filed a Petition[1] to cancel the Union’s certificate of registration invoking the grounds set forth in Article 239(a) of the Labor Code.

http://sc.judiciary.gov.ph/jurisprudence/2008/july2008/161690.htm#_ftn1

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[2] Docketed as Case No. RO300-0008-CP-002 of the same DOLE regional office, the petition alleged the following:

(1) The Union deliberately and maliciously included the names of more or less 82 former employees no longer connected with Ventures in its list of members who attended the organizational meeting and in the adoption/ratification of its constitution and by-laws held on January 9, 2000 in Mariveles, Bataan; and the Union forged the signatures of these 82 former employees to make it appear they took part in the organizational meeting and adoption and ratification of the constitution;

(2) The Union maliciously twice entered the signatures of three persons namely:

Mara Santos, Raymond Balangbang, and Karen Agunos; (3) No organizational meeting and ratification actually took place; and (4) The Union’s application for registration was not supported by at least 20% of

the rank-and-file employees of Ventures, or 418 of the total 2,197-employee complement. Since more or less 82 of the 500[3] signatures were forged or invalid, then the remaining valid signatures would only be 418, which is very much short of the 439 minimum (2197 total employees x 20% = 439.4) required by the Labor Code.[4]

In its Answer with Motion to Dismiss,[5] the Union denied committing the imputed acts of fraud or forgery and alleged that: (1) the organizational meeting actually took place on January 9, 2000 at the Shoe City basketball court in Mariveles; (2) the 82 employees adverted to in Ventures’ petition were qualified Union members for, although they have been ordered dismissed, the one-year prescriptive period to question their dismissal had not yet lapsed; (3) it had complied with the 20%-member registration requirement since it had 542 members; and (4) the “double” signatures were inadvertent human error.

In its supplemental reply memorandum[6] filed on March 20, 2001, with

attachments, Ventures cited other instances of fraud and misrepresentation, claiming that the “affidavits” executed by 82 alleged Union members show that they were deceived into signing paper minutes or were harassed to signing their attendance in the organizational meeting. Ventures added that some employees signed the “affidavits” denying having attended such meeting.






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In a Decision dated April 6, 2001, Regional Director Ana C. Dione of DOLE-Region III found for Ventures, the dispositive portion of which reads:

Viewed in the light of all the foregoing, this office hereby grants the

petition. WHEREFORE, this office resolved to CANCEL Certificate of Registration No. [RO300-00-02-UR-0003] dated 28 February 2000 of respondent S.S. Ventures Labor Union-Independent.

So Ordered.[7]

Aggrieved, the Union interposed a motion for reconsideration, a recourse which appeared to have been forwarded to the Bureau of Labor Relations (BLR). Although it would later find this motion to have been belatedly filed, the BLR, over the objection of Ventures which filed a Motion to Expunge, gave it due course and treated it as an appeal. Despite Ventures’ motion to expunge the appeal,[8] the BLR Director rendered on October 11, 2002 a decision[9] in BLR-A-C-60-6-11-01, granting the Union’s appeal and reversing the decision of Dione. The fallo of the BLR’s decision reads:

WHEREFORE, the appeal is hereby GRANTED. The Decision of Director Ana C. Dione dated 6 April 2001 is hereby REVERSED and SET ASIDE. S.S. Ventures Labor Union-Independent shall remain in the roster of legitimate labor organizations.

SO ORDERED.[10]

Ventures sought reconsideration of the above decision but was denied by the BLR.

Ventures then went to the Court of Appeals (CA) on a petition for certiorari under Rule 65, the recourse docketed as CA-G.R. SP No. 74749. On October 20, 2003, the CA rendered a Decision,[11] dismissing Ventures’ petition. Ventures’ motion for reconsideration met a similar fate.[12]

Hence, this petition for review under Rule 45, petitioner Ventures raising the

following grounds:







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I.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN DISREGARDING THE SUBSTANTIAL AND OVERWHELMING EVIDENCE ADDUCED BY THE PETITIONER SHOWING THAT RESPONDENT UNION PERPETRATED FRAUD, FORGERY, MISREPRESENTATION AND MISSTATEMENTS IN CONNECTION WITH THE ADOPTION AND RATIFICATION OF ITS CONSTITUTION AND BY-LAWS, AND IN THE PREPARATION OF THE LIST OF MEMBERS WHO TOOK PART IN THE ALLEGED ORGANIZATIONAL MEETING BY HOLDING THAT:

A.

THE 87 AFFIDAVITS OF ALLEGED UNION MEMBERS HAVE NO EVIDENTIARY WEIGHT.

B.

THE INCLUSION OF THE 82 EMPLOYEES IN THE LIST OF ATTENDEES TO THE JANUARY 9, 2000 MEETING IS AN INTERNAL MATTER WITHIN THE AMBIT OF THE WORKER’S RIGHT TO SELF-ORGANIZATION AND OUTSIDE THE SPHERE OF INFLUENCE (OF) THIS OFFICE (PUBLIC RESPONDENT IN THIS CASE) AND THE PETITIONER.

II.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN IGNORING AND DISREGARDING THE BLATANT PROCEDURAL LAPSES OF THE RESPONDENT UNION IN THE FILING OF ITS MOTION FOR RECONSIDERATION AND APPEAL.

A.

BY GIVING DUE COURSE TO THE MOTION FOR RECONSIDERATION FILED BY THE RESPONDENT UNION DESPITE THE FACT THAT IT WAS FILED BEYOND THE REGLEMENTARY PERIOD.

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B.

BY ADMITTING THE APPEAL FILED BY ATTY. ERNESTO R. ARELLANO AND HOLDING THAT THE SAME DOES NOT CONSTITUTE FORUM SHOPPING UNDER SUPREME COURT CIRCULAR NO. 28-91.

III.

PUBLIC RESPONDENT ACTED RECKLESSLY AND IMPRUDENTLY, GRAVELY ABUSED ITS DISCRETION AND EXCEEDED ITS JURISDICTION IN INVOKING THE CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION AND ILO CONVENTION NO. 87 TO JUSTIFY THE MASSIVE FRAUD, MISREPRESENTATION, MISSTATEMENTS AND FORGERY COMMITTED BY THE RESPONDENT UNION.[13]

The petition lacks merit. The right to form, join, or assist a union is specifically protected by Art. XIII,

Section 3[14] 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.[15] 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.[17]

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






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statements of 82 employees who, in gist, alleged that they were unwilling or harassed signatories to the attendance sheet of the organizational meeting.

We are not persuaded. As aptly noted by both the BLR and CA, 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. We have in precedent cases[18] said that 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.

It cannot be over-emphasized that the registration or the recognition of a labor

union after it has submitted the corresponding papers is not ministerial on the part of the BLR. Far from it. After a labor organization has filed the necessary registration documents, it becomes mandatory for the BLR to check if the requirements under Art. 234[19] of the Labor Code have been sedulously complied with.[20] If the union’s application is infected by falsification and like serious irregularities, especially those appearing on the face of the application and its attachments, a union should be denied recognition as a legitimate labor organization. Prescinding from these considerations, the issuance to the Union of Certificate of Registration No. RO300-00-02-UR-0003 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




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individuals are without basis.[21] 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. Suffice it to say that, as aptly observed by the CA, 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, to wit:

Art. 234. Requirements of Registration.—Any applicant labor organization x x x 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: x x x x (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate.

The BLR, based on its official records, answered the poser in the affirmative.

Wrote the BLR:

It is imperative to look into the records of respondent union with this Bureau pursuant to our role as a central registry of union and CBA records under Article 231 of the Labor Code and Rule XVII of the rules implementing Book V of the Labor Code, as amended x x x.

In its union records on file with this Bureau, respondent union submitted

the names of [542] members x x x. This number easily complied with the 20% requirement, be it 1,928 or 2,202 employees in the establishment. Even subtracting the 82 employees from 542 leaves 460 union members, still within 440 or 20% of the maximum total of 2,202 rank-and-file employees.

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 x x x. 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. (Emphasis added.)


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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 No. RO300-00-02-UR-0003. As the Union tenably explained without rebuttal from Ventures, the double entries are no more than “normal human error,” effected without malice. Even the labor arbiter who found for Ventures sided with the Union in its explanation on the absence of malice.[22]

The cancellation of a union’s registration doubtless has an impairing dimension on

the right of labor to self-organization. Accordingly, we can accord concurrence to the following apt observation of the BLR: “[F]or 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.”[23] In its Comment, the Union points out that for almost seven (7) years following the filing of its petition, no certification election has yet been conducted among the rank-and-file employees. If this be the case, the delay has gone far enough and can no longer be allowed to continue. The CA is right when it said that Ventures should not interfere in the certification election by actively and persistently opposing the certification election of the Union. A certification election is exclusively the concern of employees and the employer lacks the legal personality to challenge it.[24] In fact, jurisprudence frowns on the employer’s interference in a certification election for such interference unduly creates the impression that it intends to establish a company union.[25]

Ventures’ allegations on forum shopping and the procedural lapse supposedly committed by the BLR in allowing a belatedly filed motion for reconsideration need not detain us long. Suffice it to state that this Court has consistently ruled that the application of technical rules of procedure in labor cases may be relaxed to serve the demands of substantial justice.[26] So it must be in this case. WHEREFORE, the petition is DENIED. The Decision and Resolution dated October 20, 2003 and January 19, 2004, respectively, of the CA areAFFIRMED. S.S. Ventures Labor Union shall remain in the roster of legitimate labor organizations, unless it has in the meantime lost its legitimacy for causes set forth in the Labor Code. Costs against petitioner.






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SO ORDERED.

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FIRST DIVISION

G.R. No. L-33987 September 4, 1975

LIBERTY COTTON MILLS WORKERS UNION, RAFAEL NEPOMUCENO, MARIANO CASTILLO, NELLY ACEVEDO, RIZALINO CASTILLO and RAFAEL COMBALICER, petitioners, vs.LIBERTY COTTON MILLS, INC., PHILIPPINE ASSOCIATION OF FREE LABOR UNION (PAFLU) and the COURT OF INDUSTRIAL RELATIONS, respondents.

Carlos E. Santiago for petitioners.

Paredes, Poblador, Nazareno, Azada, Tomacuz & Paredes for respondent Liberty Cotton Mills, Inc. Ernesto D. Llaguno for respondent Union.

Jose K. Manguiat, Jr. for respondent Court.

ESGUERRA, J.:

Petition for Certiorari to review the decision dated March 30, 1971 of the Court of Industrial Relations in Case No. 4216, dismissing petitioners' complaint for unfair labor practice.

The factual background of this case is as follows:

The Liberty Cotton Mills Workers Union, hereinafter referred to as the Union, adopted its Constitution and By-laws on January 1, 1959. 1 Among other things, the said Constitution provided:

ARTICLE I — NAME AND DOMICILE.

Section 1. The name of this organization shall be Liberty Cotton Mills Workers Union-PAFLU.

Section 2. This Union shall have its office at l233 Tecson, Tindalo, Tondo, Manila.

xxx xxx xxx

ARTICLE X — UNION AFFILIATION

Section 1. The Liberty Cotton Mills Workers Union-Paflu shall be affiliated with the Philippine Association of Free Labor Unions, otherwise known as PAFLU, and shall remain an affiliate as long as ten or more of its members evidence their desire to continue the said local union's affiliation, in accordance with the Paflu Constitution, Article XI-Paragraph 11:15 thereof;

ARTICLE XIII — CHARGES, TRIALS, AND IMPEACHMENT OF OFFICERSAND MEMBERS: APPEALS.

Section 1. Any member or officer of the Liberty Cotton Mills Workers Union-Paflu may be charged, tried or impeached if an officer, in accordance with this and the PAFLU CONSTITUTION.

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On October 1, 1959, a Collective Bargaining Agreement 2 was entered into by and between the Company and the Union represented by PAFLU. Said Agreement contained these clear and unequivocal provisions:

This Agreement, made and entered into this 1st day of October, 1959, in the City of Manila, by and between

The LIBERTY COTTON MILLS INC., a corporation duly organized and existing under the laws of the Philippines, with principal office at 549 San Francisco Street, Karuhatan, Polo, Bulacan, hereinafter referred to as the COMPANY, represented in this Act by its President, Mr. RAFAEL GOSINGCO:

AND

THE PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, a legitimate labor organization existing and operating under the laws of the Philippines, with postal address at 1233 Tecson, Tindalo, Tondo, Manila, hereinafter referred to as the UNION, represented in this Act by its National Treasurer and duly authorized representative, Mr. CATALINO G. LUZANO, herein acting for and in behalf of its affiliate the LIBERTY COTTON MILLS WORKERS UNION-PAFLU, and the employees of the Company in the appropriate bargaining unit hereinafter defined:

WITNESSETH:

I. UNION RECOGNITION

The COMPANY recognizes the UNION as the sole bargaining agent for all of its employees, other than supervisors ... consonant with the certification of the said UNION by the Court of Industrial Relations in Case No. 627-MC, entitled" In re Petition for Certification Election, Liberty Cotton Mills, Inc., petitioner."

III. UNION SECURITY

All employees who, at the time of the signing of this Agreement are members of the UNION, or who, at any time during the effectivity of this Agreement, may join the UNION, shall as a condition for continued employment, remain members of the UNION while this agreement remains in force; any employee, who, at any time during the life of this agreement shall resign from the UNION or be expelled, therefrom in accordance with its Constitution and By-Laws for non-payment of union dues or other duly approved union assessments or for disloyalty to the UNION shall be dismissed from employment by the COMPANY upon request in writing by the UNION which shall hold the COMPANY free from any liability arising from or caused by such dismissal.

XI. TERM

This Agreement shall be effective from October 1, 1959 to September 30, 1961, during which time it shall be binding upon the parties hereto and all the employees of COMPANY comprised within the appropriate bargaining unit defined above, and may not be modified by court action, by concerted activities or by any other means. ... Should, either party fail to give written notice to the other of its desire to amend or discontinue this Agreement at

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least thirty (30) days from the expiry date set forth above, this Agreement shall be continued in force for one (1) year, and thereafter for yearly terms unless written notice is given at least thirty (30) days from the expiration of the contract.

The above Collective Bargaining Agreement was amended on February 28, 1964, thus: 3

Article III. UNION SECURITY

Additional Clause

The Company agrees to encourage casual workers and non-union members to join the Union which is the sole and exclusive agent for all the employees covered by this Agreement.

Article XI. DURATION

The Duration of this Agreement shall be for two (2) years, that is from November 2, 1963 up to November, 1965.

The Agreements aforementioned bore the signatures of representatives of both the Company and the PAFLU, and the incumbent President of the local union.

On March 13, 1964, while the Collective Bargaining Agreement was in full force, Marciano Castillo and Rafael Nepomuceno, President and Vice-President, respectively, of the local union, wrote PAFLU, its mother federation, complaining about the legal counsel assigned by the PAFLU to assist them in a ULP case (Case No. 4001) they filed against the Company. In said letter, the local union expressed its dissatisfaction and loss of confidence in the PAFLU lawyers, claiming that PAFLU never lifted a finger regarding this particular complaint.

On May 17, 1964, thirty two (32) out of the 36 members of the local union disaffiliated themselves from respondent PAFLU pursuant to their local union's Constitution and By-Laws, specifically Article X thereof, supra (p. 12 Record). A copy of the signed resolution of disaffiliation was furnished the Company as well as the Bureau of Labor Relations. The following day, the local union wrote the Company and required the turn-over of the checked-off dues directly to its Treasurer.

On May 27, 1964, PAFLU, thru its National Secretary wrote the Company this letter:

This is to inform your good office that sometime last May 25, 1964, our federation was in receipt of a letter signed by 32 persons and informing us of their desire to disaffiliate the local union from the mother federation — PAFLU. The members and officers who made the letter have no right to do the same under our existing contract and under the PAFLUs Constitution and By-Laws.

We wish to make it clear with the management that the contractural union in our contract which was signed a few months ago is the Philippine Association of Free Labor Union (PAFLU). The actuation made by the supposed union members is inconsistent with the present contract we have and under the provisions of "Maintenance of Union Membership" they can an be dismissed. Under the PAFLUs Constitution that is null and void. And in view of the disloyalty shown by those members, the mother federation will take over the administration of the Union in dealing with the management especially.

We inform your goodself that the mother federation is not honoring the said letter and we request you do the same under the circumstances.

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Hence, all the communications pertaining to union business and other relative matters be coursed to the mother federation for prompt action.

And on May 29,1964, PAFLU wrote the Company again, this time quoting en toto Article III of the Collective Bargaining Agreement on "Union Security" and requesting the termination of the employment of Rafael Nepomuceno, Marciano Castillo, Nelly Acevedo, Enrique Managan, Rizalino Castillo and Rafael Combalicer, all petitioners herein. PAFLU at the same time expelled the aforementioned workers from their' union membership in the mother federation for allegedly "instigating union disaffiliation.".

On May 30,1964, the Company terminated the employment of the members expelled by the PAFLU (Exhs. "D", "D-1" to "D-3" pp. 14-17 Record). On the last day of May, 1964, counsel for the ousted workers wrote the Company requesting their reinstatement. This was denied by the Company; hence the complaint for unfair labor practice filed with the Court of Industrial Relations.

After due hearing, the Court rendered its decision dismissing the complaint, but with a strong' recommendation for the reinstatement of complainant workers in respondent Company. The workers (petitioners herein) being unsatisfied with the decision, appealed to this Court and raised the following questions:

1. Under the Collective Bargaining Agreement, who between the PAFLU and the local union is the sole bargaining agent of the workers of the Company?

2. Was the disaffiliation of the local union from the PAFLU valid and justified under the Constitution and By-laws of the Union?

3. Was the disaffiliation of the Union from the PAFLU an act of disloyalty of the petitioners (workers) which could be a valid ground for their expulsion from their own union and their dismissal from the Company?

4. Does the PAFLU as the mother federation of the union possess the power to expel the officers and members of the union under the Constitution and By-Laws? And assuming it has such powers, were the petitioner workers validly expelled from the Union in accordance with the Constitution and By-Laws?

5. May the workers be summarily dismissed by the Company under the Collective Bargaining Agreement even without valid proof of their valid expulsion from their own union?

6. Did not the dismissal of only the five (5) petitioner workers constitute discrimination, considering that the disaffiliation was signed by more than the majority of the union members?

All these questions boil down to the single issue of whether or not the dismissal of the complaining employees, petitioners herein, was justified or not. The resolution of this question hinges on a precise and careful analysis of the Collective Bargaining Agreements. (Exhs. "H' and "I") In these contracts it appears that PAFLU has been recognized as the sole bargaining agent for all the employees of the Company other than its supervisors and security guards. Moreover it likewise appears that "PAFLU, represented in this Act by its National Treasurer, and duly authorized representative, ... (was) acting for and in behalf of its affiliate, the Liberty Cotton Mills Workers Union and the employees of the Company, etc.' In other words, the PAFLU, acting for and in behalf of its affiliate, had 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 including the freedom to disaffiliate when the circumstances warrant. This is clearly provided in its Constitution and By-Laws, specifically Article X on Union Affiliation, supra. At this point, relevant is the ruling in an American case: 4

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

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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 also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence. (Emphasis supplied)

This brings Us to the question of disaffiliation which was the root cause of the dismissal. It is claimed by PAFLU that the local union could not have validly disaffiliated from it as the Union Security Clause so provided. We have meticulously read the provision of the supposed union security clause and We cannot agree with both the stand of PAFLU and the respondent court. For while it is correct to say that a union security clause did exist, this clause was limited by the provision in the Unions' Constitution and By-Laws, which states:

That the Liberty Cotton Mills Workers Union-PAFLU shall be affiliated with the PAFLU, and shall remain an affiliate as long as ten (10) or more of its members evidence their desire to continue the said local unions affiliation.

Record shows that only four (4) out of its members remained for 32 out of the 36 members of the Union signed the resolution of disaffiliation on May 17, 1964, triggered by the alleged negligence of PAFLU in attending to the needs of its local union, particularly its failure to assign a conscientious lawyer to the local to attend to the ULP case they filed against the Company. The disaffiliation was, therefore, valid under the local's Constitution and By-Laws which, taken together with the Collective Bargaining Agreement, is controlling. The Court of Industrial Relations likewise held in its decision that the act of disaffiliation did not have any effect as the workers retracted from such act. As stated by the respondent court —

... it is believed that the effect of their retraction obliterates their participation in the resolution. Hence, under Article X of the said Constitution and By-Laws, complainant union remained affiliated with respondent union at the time termination of the services of complainant workers was requested and when they were dismissed by the Company on May 30, 1964.

Although the fact of retraction is true, We find that the respondent court failed to notice the fact that not all signatories to the resolution of disaffiliation dated May 17, 1964, took part in the retraction. Only a number of employees, 16 to be exact, retracted. Also, and this is a significant factor, the retraction is dated June 3, 1964, or four days after the petitioners herein had been dismissed. There is no use in saying that the retraction obliterated the act of disaffiliation when they were already out of the service when it was done. The disaffiliation, coming as it did from the greater majority of its members, is more than enough to show the collective desire of the members of the Liberty Cotton Mills Workers Union to sever their relations from the mother federation. The right of disaffiliation is inherent in the compact and such act should not have been branded as an act of disloyalty, especially considering the cause which impelled the union to take such a step.

Lastly, we will take up the process by which the workers were dismissed. We find that it was hastily and summarily done. The PAFLU received the resolution to disaffiliate on or about May 25, 1964, after which it wrote the Company about its stand, first on the 27th of May followed by its letter of the 29th requesting for the termination of petitioners herein for 'disloyalty in having instigated disaffiliation'. The Company the acting on the request of the mother federation sent notices of termination to the officers of the local union immediately on the day following, or on May 30, 1964, heavily relying on the Collective Bargaining Agreement, viz:

... for disloyalty to the union shall be dismissed from employment by the Company upon request in writing by the Union, which shall hold the COMPANY free from any liability arising from or caused by such dismissal.

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While the above quoted provision may have been the basis for the Company's actuation, as in fact it was alleged by the Company in its Brief, We are of the opinion that such stipulation does not bind the courts much less released the Company from liability should a finding for unfair labor practice be positive. In the case at bar, however, considering that the dispute revolved around the mother federation and its local, with the company dismissing the workers at the instance of the mother federation, We believe that the Company's liability should be limited to the immediate reinstatement of the workers.

Considering, however, that their dismissal was effected without previous hearing, and at the instance of PAFLU, this mother federation should be, as it is hereby, held liable to the petitioners for the payment of their back wages. Following the precedent of Mercury Drug Co. vs. CIR, 5 of fixing an amount of net backwages and doing away with the protracted process of determining the complainants-workers' earnings elsewhere during the period of their illegal dismissal, the Court fixes the amount of backwages to be paid under this decision to the complainants-workers at three (3) years backwages without deduction or qualification.

WHEREFORE, the decision appealed from is reversed and set aside and the company is hereby ordered to immediately reinstate complainant workers, within thirty (30) days from notice of this decision and failure to so reinstate the workers without valid and just cause shall make respondent company liable to the workers for the payment of their wages from and after the expiration of such thirty-day period. The mother federation respondent PAFLU is sentenced to pay complainants-workers the equivalent of three (3) years backwages without deduction or qualification.

In view of the length of time that this dispute has been pending, this decision shall be immediately executory upon promulgation and notice to the parties. Without pronouncement as to costs.

Castro (Chairman), Teehankee, Makasiar, Muñoz Palma and Martin, JJ., concur.

Footnotes

1 Constitution and By-Laws p. 23 Record.

2 Collective Bargaining Agreement p. 29 Record.

3 Amendment to Collective Bargaining Agreement p. 34 Record.

4 Harker et al. vs. Mckissock et al. 81A 2d 480, 482.

5 56 SCRA 694 (Apr. 30, 1974) as applied in NASSCO vs. CIR, 57 SCRA 642, Almira vs. B.F. Goodrich Phil. Inc., 58 SCRA 120, Phil. Rock Products Inc. vs. PAFLU, 58 SCRA 730, Feati University FAculty Club vs. Feati University, 58 scra 395 and Davao Free Workers Front vs. 60 SCRA 408.

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SECOND DIVISION

[G.R. No. 127374. January 31, 2002]

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO DAKILA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and SERAFIN AYROSO, respondents.

[G.R. No. 127431. January 31, 2002]

PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO CABANIAS, PEPITO RODILLAS, SHARON CASTILLO, DANILO CARBONEL, MANUEL EDA, ROLANDO FELIX, JOCELYN FRONDA, RICARDO LUMBA, JOSEPH MARISOL, NERISA MORTEL, TEOFILO QUIRONG, LEONARDO REYES, MANUEL CADIENTE and HERMINIA RIOSA, petitioners, vs. PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, respondents.

D E C I S I O N

BELLOSILLO, J.:

This is a petition for certiorari[1] seeking to set aside the 31 July 1996 Decision[2] of the National Labor Relations Commission affirming the 30 June 1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders, Inc., Mariles C. Romulo [3] and Francisco Dakila as well as the elected officers of the Philippine Skylanders Employees and Workers Association-PAFLU[4] guilty of unfair labor practice and ordering them to pay private respondent Philippine Association of Free Labor Union (PAFLU) September[5] P150,000.00 as damages. Petitioners likewise seek the reversal of the 31 October 1996 Resolution of the NLRC denying their Motion for Reconsideration.

In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election conducted among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor.

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Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of duty toward its members. Attached to the notice was a copy of the resolution adopted and signed by the officers and members of PSEA authorizing their local union to disaffiliate from its mother federation.

PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine Skylanders Employees Association - National Congress of Workers (PSEA-NCW), and to maintain continuity within the organization, allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers in the newly-forged PSEA-NCW.

On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with the Department of Labor and Employment.

Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited financial statement. Ayroso explained that with the dismissal of PSEA-WATU’s election protest the time was ripe for the parties to enter into a collective bargaining agreement.

On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW.

Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a complaint for unfair labor practice against PSI, its president Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged that aside from PSI’s refusal to bargain collectively with its workers, the company through its president and personnel manager, was also liable for interfering with its employees' union activities.[6]

Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair labor practice against Francisco Dakila. Through Ayroso PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby confirming his illicit participation in union activities. Ayroso added that the members of the local union had unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to their interests.[7] The two (2) complaints were thereafter consolidated.

On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party respondents. PAFLU averred that the local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice since they brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.[8]

PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the dismissal of the complaint on the ground that the issue of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its officers who were being sued in their capacities as former officers of PSEA-PAFLU and asserted that since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no personality to file the instant complaint. In support of this assertion, PSEA-NCW submitted in evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing Ayroso or PAFLU from instituting any action in their behalf.[9]





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In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice. The Decision explained that despite PSEA-PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file employees, the company knowingly sanctioned and confederated with Dakila in actively assisting a rival union. This, according to the Labor Arbiter, was a classic case of interference for which PSI could be held responsible. As PSEA-NCW's personality was not accorded recognition, its collective bargaining agreement with PSI was struck down for being invalid. Ayroso's legal personality to file the complaint was sustained on the ratiocination that under the Labor Code no petition questioning the majority status of the incumbent bargaining agent shall be entertained outside of the sixty (60)-day period immediately before the expiry date of such five (5)-year term of the collective bargaining agreement that the parties may enter into. Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU P150,000.00 in damages.[10]

PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA could not validly separate from PAFLU, join another national federation and subsequently enter into a collective bargaining agreement with its employer-company.[11]

Petitioners separately moved for reconsideration but both motions were denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW together with their respective officers pleading for a reversal of the NLRC's Decision which they claimed to have been rendered in excess of jurisdiction. In due time, both petitions were consolidated.

In these petitions, petitioner PSEA together with its officers argued that by virtue of their disaffiliation PAFLU as a mere agent had no authority to represent them before any proceedings. They further asserted that being an independent labor union PSEA may freely serve the interest of all its members and readily disaffiliate from its mother federation when circumstances so warrant. This right, they averred, was consistent with the constitutional guarantee of freedom of association.[12]

For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain collectively with PSEA-NCW was actuated, to a large extent, by PAFLU's behavior. Having heard no objections or protestations from PAFLU relative to PSEA's disaffiliation, they reckoned that PSEA's subsequent association with NSW was done bona fide.[13]

The Solicitor General filed a Manifestation in Lieu of Comment recommending that both petitions be granted. In his Manifestation, the Solicitor General argued against the Labor Arbiter's assumption of jurisdiction citing the following as reasons: first, there was no employer-employee relationship between complainant Ayroso and PSI over which the Labor Arbiter could rightfully assert his jurisdiction; second, since the case involved a dispute between PAFLU as mother federation and PSEA as local union, the controversy fell within the jurisdiction of the Bureau of Labor Relations; and lastly, the relationship of principal-agent between PAFLU and PSEA had been severed by the local union through the lawful exercise of its right of disaffiliation.[14]

Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's disaffiliation. To be more precise, may PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and file employees?






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At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter.[15] Nonetheless, with due recognition of this fact, we deem it proper to settle the controversy at this instance since to remand the case to the BLR would only mean intolerable delay for the parties.

The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.[16] we upheld 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.

Such dictum has been punctiliously followed since then.[17]

Upon an application of the aforecited principle to the issue at hand, the impropriety of the questioned Decisions becomes clearly apparent. There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. As such, the pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local union, or an equivalent of 92.5% of the total union membership supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is not a case where one (1) or two (2) members of the local union decided to disaffiliate from the mother federation, but it is a case where almost all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from subsequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the petitions. It stands unchallenged that PAFLU instituted the complaint for unfair labor practice against the wishes of workers whose interests it was supposedly protecting. The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. The complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA and their respective officers, having been filed by a party which has no legal personality to institute the complaint, should have been dismissed at the first instance for failure to state a cause of action.




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Policy considerations dictate that in weighing the claims of a local union as against those of a national federation, those of the former must be preferred. Parenthetically though, the desires of the mother federation to protect its locals are not altogether to be shunned. It will however be to err greatly against the Constitution if the desires of the federation would be favored over those of its members. That, at any rate, is the policy of the law. For if it were otherwise, instead of protection, there would be disregard and neglect of the lowly workingmen.

WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers Association-NCW, together with their respective officers, are GRANTED. The Decision of the National Labor Relations Commission of 31 July 1996 affirming the Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine Skylanders and Workers Association-NCW, Philippine Skylanders, Inc. and their respective officers, guilty of unfair labor practice and ordering them to pay damages to private respondent Philippine Association of Free Labor Unions (PAFLU) September (now UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying reconsideration is REVERSED and SET ASIDE. No costs.

SO ORDERED.

Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

[1] This petition for certiorari was instituted with the Supreme Court on 23 December 1996. Hence, it does not come within our ruling in St. Martin Funeral Home v. National Labor Relations Commission and Bienvenido Aricayos (G.R. No. 130866, 16 September 1998, 295 SCRA 494) where we decreed that appeals from decisions of the National Labor Relations Commission should be initially presented to the Court of Appeals.

[2] Decision penned by Commissioner Rogelio I. Rayala, concurred in by Commissioners Raul T. Aquino and Victoriano R. Calaylay, Second Division National Labor Relations Commission; Rollo, G.R. No. 127374, pp. 45-57.

[3] Spelled also as "Marites C. Romulo" and "Matules C. Romulo" in the records.

[4] Private respondent PAFLU refuses to acknowledge PSEA’s disaffiliation and continuously refers to petitioner local union as PSEA-PAFLU while the local union insists on its new affiliation -- PSEA-NCW. Hence, PSEA, PSEA-PAFLU and PSEA-NCW refer to one and the same organization.

[5] Now known as "Unified PAFLU."

[6] Original Records, pp. 4-16.

[7] Id., pp. 22-27.

[8] Id., pp. 101-123.

[9] Id., pp. 47-51.

[10] Decision penned by Labor Arbiter Emerson C. Tumanon; id., pp. 198-208.

[11] See Note 1.

[12] Id., pp. 13-44.

[13] Rollo, G.R. No. 127431, pp. 12-44.

[14] Id., pp. 206- 239.

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[15] Sec.1, Book V, Rules and Regulations Implementing the Labor Code: (2) “An inter-union dispute refers to any conflict between and among union members x x x including cases arising from chartering or affiliation of labor organizations.”

[16] No. L-33987, 4 September 1975, 66 SCRA 512.

[17] Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, 28 February 2000, 326 SCRA 428; Tropical Hut Employees Union-CGW v. Tropical Hut Food Market, Inc., G.R. Nos. 43495-99, 20 January 1990, 181 SCRA 173; Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824, 19 June 1985, 137 SCRA 42; Adamson & Adamson Inc., v. CIR, No. L-35120, 31 January 1984, 127 SCRA 268; Villar v. Inciong, 206 Phil. 366, (1983); PINCO Employees and Workers Organization v. PINCOCO, 198 Phil. 166 (1982).




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SECOND DIVISION

G.R. No. 100485 September 21, 1994

SAN MIGUEL CORPORATION, petitioner, vs.THE HONORABLE BIENVENIDO E. LAGUESMA and NORTH LUZON MAGNOLIA SALES LABOR UNION-INDEPENDENT, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

E.N.A. Cruz & Associates for private respondent.

PUNO, J.:

Petitioner San Miguel Corporation (SMC) prays that the Resolution dated March 19, 1991 and the Order dated April 12, 1991 of public respondent Undersecretary Bienvenido E. Laguesma declaring respondent union as the sole and exclusive bargaining agent of all the Magnolia sales personnel in northern Luzon be set aside for having been issued in excess of jurisdiction and/or with grave abuse of discretion.

On June 4, 1990, the North Luzon Magnolia Sales Labor Union (respondent union for brevity) filed with the Department of Labor a petition for certification election among all the regular sales personnel of Magnolia Dairy Products in the North Luzon Sales Area. 1

Petitioner opposed the petition and questioned the appropriateness of the bargaining unit sought to be represented by respondent union. It claimed that its bargaining history in its sales offices, plants and warehouses is to have a separate bargaining unit for each sales office.

The petition was heard on November 9, 1990 with petitionerbeing represented by Atty. Alvin C. Batalla of the Siguion Reyna law office. Atty. Batalla withdrew petitioner's opposition to a certification election and agreed to consider all the sales offices in northern Luzon as one bargaining unit. At the pre-election conference, the parties agreed inter alia, on the date, time and place of the consent election. Respondent union won the election held on November 24, 1990. In an Order dated December 3, 1990, 2 Mediator-Arbiter Benalfre J. Galang certified respondent union as the sole and exclusive bargaining agent for all the regular sales personnel in all the sales offices of Magnolia Dairy Products in the North Luzon Sales Area.

Petitioner appealed to the Secretary of Labor. It claimed thatAtty. Batalla was only authorized to agree to the holding of certification elections subject to the following conditions: (1) there would only be one general election; (2) in this general election, the individual sales offices shall still comprise separate bargaining units. 3

In a Resolution dated March 19, 1991, 4 public respondent, by authority of the Secretary of Labor, denied SMC's appeal and affirmed the Order of the Med- Arbiter.

Hence this petition for certiorari.

Petitioner claims that:

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THE HONORABLE UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION WHEN HE IGNORED AND TOTALLY DISREGARDED PETITIONER'S VALID AND JUSTIFIABLE GROUNDS WHY THE ERROR MADE IN GOOD FAITH BY PETITIONER'S COUNSEL BE CORRECTED, AND INSTEAD RULED:

A

THAT PRIVATE RESPONDENT IS "THE SOLE AND EXCLUSIVE BARGAINING AGENT FOR ALL THE REGULAR SALES OFFICES OF MAGNOLIA DAIRY PRODUCTS, NORTH LUZON SALES AREA", COMPLETELY IGNORING THE ESTABLISHED BARGAINING HISTORY OF PETITIONER SMC.

B

THAT PETITIONER IS ESTOPPED FROM QUESTIONING THE "AGREEMENT" ENTERED INTO AT THE HEARING ON9 NOVEMBER 1990, IN CONTRAVENTION OF THE ESTABLISHED FACTS OF THE CASE AND THE APPLICABLE LAW ON THE MATTER.

We find no merit in the petition.

The issues for resolution are: (1) whether or not respondent union represents an appropriate bargaining unit, and (2) whether or not petitioner is bound by its lawyer's act of agreeing to consider the sales personnel in the north Luzon sales area as one bargaining unit.

Petitioner claims that in issuing the impugned Orders, public respondent disregarded its collective bargaining history which is to have a separate bargaining unit for each sales office. It insists that its prior collective bargaining history is the most persuasive criterion in determining the appropriateness of the collective bargaining unit.

There is no merit in the contention.

A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 5

The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine); 6 (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. 7

Contrary to petitioner's assertion, this Court has categorically ruled that the existence of a prior collective bargaining historyis neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. 8

Indeed, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they perform.

In the case at bench, respondent union sought to represent the sales personnel in the various Magnolia sales offices in northern Luzon. There is similarity of employment status for only the regular sales personnel in the north Luzon area are covered. They have the same duties and responsibilities and substantially similar compensation and working conditions. The commonality of interest among he sales personnel in the north Luzon sales area cannot be gainsaid. In fact, in the certification election held on November 24, 1990,

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the employees concerned accepted respondent union as their exclusive bargaining agent. Clearly, they have expressed their desire to be one.

Petitioner cannot insist that each of the sales office of Magnolia should constitute only one bargaining unit. What greatly militates against this position is the meager number of sales personnel in each of the Magnolia sales office in northern Luzon. Even the bargaining unit sought to be represented by respondent union in the entire north Luzon sales area consists only of approximatelyfifty-five (55) employees. 9 Surely, it would not be for the best interest of these employees if they would further be fractionalized. The adage "there is strength in number" is the very rationale underlying the formation of a labor union.

Anent the second issue, petitioner claims that Atty. Batalla was merely a substitute lawyer for Atty. Christine Ona, who got stranded in Legaspi City. Atty. Batalla was allegedly unfamiliar with the collective bargaining history of its establishment. Petitioner claims it should not be bound by the mistake committed by its substitute lawyer.

We are not persuaded. As discussed earlier, the collective bargaining history of a company is not decisive of what should comprise the collective bargaining unit. Insofar as the alleged "mistake" of the substitute lawyer is concerned, we find that this mistake was the direct result of the negligence of petitioner's lawyers. It will be noted that Atty. Ona was under the supervision of two (2) other lawyers, Attys. Jacinto de la Rosa, Jr. and George C. Nograles. There is nothing in the records to show that these two (2) counsels were likewise unavailable at that time. Instead of deferring the hearing, petitioner's counsels chose to proceed therewith. Indeed, prudence dictates that, in such case, the lawyers allegedly actively involved in SMC's labor case should have adequately and sufficiently briefed the substitute lawyer with respect to the matters involved in the case and the specific limits of his authority. Unfortunately, this was not done in this case. The negligence of its lawyers binds petitioner. As held by this Court in the case of Villa Rhecar Bus v. De la Cruz: 10

. . . As a general rule, a client is bound by the mistakes of his counsel. Only when the application of the general rule would result in serious injustice should an exception thereto be called for.

In the case at bench, petitioner insists that each of the sales offices in northern Luzon should be considered as a separate bargaining unit for negotiations would be more expeditious. Petitioner obviously chooses to follow the path of least resistance. It is not, however, the convenience of the employer that constitutes the determinative factor in forming an appropriate bargaining unit. Equally, if not more important, is the interest of the employees. In choosing and crafting an appropriate bargaining unit, extreme care should be taken to prevent an employer from having any undue advantage over the employees' bargaining representative. Our workers are weak enough and it is not our social policy to further debilitate their bargaining representative.

In sum, we find that no arbitrariness or grave abuse of discretion can be attributed to public respondents certification of respondent union as the sole and exclusive bargaining agent of all the regular Magnolia sales personnel of the north Luzon sales area.

WHEREFORE, premises considered, the challenged Resolution and Order of public respondent are hereby AFFIRMED in toto, there being no showing of grave abuse of discretion or lack of jurisdiction.

SO ORDERED.

Narvasa, C.J., Regalado and Mendoza, JJ., concur.

Padilla, J., took no part.

#Footnotes

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1 The Magnolia North Luzon Sales Area covers San Fernando, Pampanga, Cabanatuan City, Olongapo City, Poro Point, La Union, Baguio City, Dagupan City, Laoag City and Ilagan, Isabela.

2 Annex "K", Petition, Rollo, pp. 94-97.

3 See Appeal, Annex "L", Petition, Rollo, pp. 98-103, at p. 101.

4 Annex "A", Petition, Rollo, pp. 30-36.

5 U.P. v. Ferre-Calleja, G.R. No. 96189, July 14, 1992, 211 SCRA 451; Belyca Corporation v. Ferrer-Calleja, G.R. No. L-77395, November 29, 1988, 168 SCRA 184; both cases citing Rothenberg in Labor Relations, at p. 482.

6 Mechanical Department Labor Union Sa Philippine National Railways v. Court of Industrial Relations, No. L-28223, August 30, 1968, 24 SCRA 925.

7 Rothenberg on Labor Relations, pp. 482-510.

8 Free Trade Unions v. Mainit Lumber Development Company Workers Union,G.R. No. 79526, December 21, 1990, 192 SCRA 598.

9 See Petition for Certification Election, Annex "C", Petition, Rollo, at p. 39.

10 No. L-78936, January 7, 1988, 157 SCRA 13.

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SECOND DIVISION

G.R. No. 110399 August 15, 1997

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President,petitioners, vs.HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.

ROMERO, J.:

This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner." The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election.

The antecedent facts are undisputed:

On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.

On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.

On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter's error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent company's Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit.

Upon petitioner-union's motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.

On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings.

On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated inPhilips Industrial Development, Inc. v. NLRC 2 case. Said Order reads in part:

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. . . Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining.

In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election.

WHEREFORE, the Motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election. 3

Hence this petition.

For resolution in this case are the following issues:

1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit.

On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union.

There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245 4 of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not.

Confidential employees are 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. 5 The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee — that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. 6

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." The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests. 7 "Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who in the normal performance of their duties may obtain advance information of the company's position with regard to contract negotiations, the disposition of grievances, or other labor relations matters." 8

There have been precedents in this regards, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, 9 the Court held that "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 interest. The Union can also become company-dominated with the presence of managerial employees in Union membership." The same rationale was applied to confidential employees in "Golden Farms, Inc. v. Ferrer-Calleja" 10 and in the more recent case of "Philips Industrial Development, Inc. v. NLRC" 11which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who

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exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them. 12

An important element of the "confidential employee rule" is the employee's need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employee's necessary access to confidential labor relations information. 13

It is the contention of respondent corporation that Supervisor employees 3 and 4 and the exempt employees come within the meaning of the term "confidential employees" primarily because they answered in the affirmative when asked "Do you handle confidential data or documents?" in the Position Questionnaires submitted by the Union. 14 In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to "labor relations." 15

Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee. 16 "If access to confidential labor relations information is to be a factor in the determination of an employee's confidential status, such information must relate to the employer's labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit representing employees of the union or association." 17 "Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information 18 or technical trade secrets, will not render an employee a confidential employee." 19

Herein listed are the functions of supervisors 3 and higher:

1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.

2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products.

3. To administer efficient system of evaluation of products in the outlets.

4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. 20

It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employer's internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board, 21 "an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employer's internal business operations and which is not related to the field of labor relations."

It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all" workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through representatives of their choosing. 22

In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business

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operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 23

In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out.

It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests.

This Court finds the contention of the petitioner meritorious.

An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of thelaw." 24

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. 25

It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective bargaining unit. 26 It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the mandate of the Constitution. 27

The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic rank and file employee of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baños, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative.

WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.

SO ORDERED.

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Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

Footnotes

1 (NCR-OD-M-90-10-01).

2 210 SCRA 339 (1992)

3 Rollo pp. 45-46.

4 Art. 245. — 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 organization of their own.

5 Westinghouse Electric Corp. v. NLRB (CA6) 398 F2d 669 (1968); Ladish Co., 178 NLRB 90, 1969.

6 B.F. Goodrich Co., 115 NLRB 722 (1956).

7 Westinghouse Electric Corporation v. NLRB, supra; citing Retail Clerks International Assn. v. NLRB., 125 US App. D.C. 63, 366 F2d 642, 645 n. 7 (1966).

8 In the Matter of The Hoover Company and United Electrical, Radio and Machine workers of America, 55 NLRB 1321 (1941); Philippine Phosphate Fertilizer Corporation v. Hon. Ruben Torres, et al., 231 SCRA 335 (1994); National Association of trade Unions, etc. v. Hon R. Torres, et al., 239 SCRA 546 (1994).

9 144 SCRA 682 (1986).

10 175 SCRA 471 (1989).

11 Supra.

12 Philips Industrial Development Inc., v. NLRC, supra.

13 NLRB v. Swift and Co. (CA1) 292 F2d 561: citing Pullman Standard Div., Pullman Inc., 214 NLRB 762, 1974-1975; Kieckhefer Container Co., 118 NLRB 950, 1957-1958.

14 Rollo, p. 86.

15 Rollo, p. 131.

16 Chrysler Corp., 173 NLRB 1046 (1968); Standard Oil Co., 127 NLRB 656 (1960).

17 Pacific Maritime Assn., 185 NLRB 780 (1970); Air Line Pilots Asso., 97 NLRB 929 (1951).

18 Westinghouse Electric Corp. v. NLRB, supra, citing NLRB v. Armour and Co. (CA10) 154 F2d 570, 169 ALR 421, cert den 329 US 732, 91 L Ed 633, 67 S Ct 92; NLRB v. Poultrymen's Service Corp. (CA3) 138 F2d 204; Pacific Far East Line Inc., 174 NLRB 1168 (1969), Dun and Bradstreet, Inc., 194 NLRB 9 (1972); Fairfax Family Fund Inc., 195 NLRB 306 (1972).

19 Lykiens Hosiery Mills, Inc. 82 NLRB 981 (1948); Janowski 83 NLRB 273 (1948).

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20 Rollo, p. 157.

21 Supra.

22 Ford Motor Co., 66 NLRB 1317, 1322 (1946); Goodrich Co., supra; Vulcanized Rubber and Plastics Co., Inc., 129 NLRB 1256 (1961).

23 National Association of Trade Unions v. Hon. Ruben Torres, et. al., supra.

24 University of the Philippines v. Calleja-Ferrer, 211 SCRA 464 (1992); citing Rothenberg on Labor Relations, p. 482.

25 Democratic Labor Association v. Cebu Stevedoring Co., Inc., et al., G.R. No. L-10321, February 28, 1958;citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162.

26 Supra; National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union-United Lumber and General Workers of the Philippines, 192 SCRA 589 (1990); Philippine Land-Air-Sea Labor Union v. Court of Industrial Relations, 110 Phil. 176.

27 Rollo, pp. 136-137.

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FIRST DIVISION

ST. JAMES SCHOOL OF QUEZON CITY, G.R. No. 151326 Petitioner,

Present: Davide, Jr., C.J., Chairman, Quisumbing, - versus - Ynares-Santiago, Carpio, and

Azcuna, JJ. SAMAHANG MANGGAGAWA SA Promulgated:ST. JAMES SCHOOL OF QUEZON CITY, Respondent. November 23, 2005

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the 5 September 2001 Decision

and 3 January 2002 Resolution of the Court of Appeals[2] in CA-G.R. SP No. 60197. The

Court of Appeals sustained the Decision of the Department of Labor and Employment

(“DOLE”) directing the opening of the challenged ballots cast during the certification

election.

The Antecedent Facts

http://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/151326.htm#_ftn2


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The Samahang Manggagawa sa St. James School of Quezon City (“Samahang

Manggagawa”) filed a petition for certification election to determine the collective

bargaining representative of the motor pool, construction and transportation employees of

St. James School of Quezon City (“St. James”). On 26 June 1999, the certification

election was held at the DOLE office in Intramuros, Manila. There were 149 eligible

voters and 84 voters cast their votes. St. James filed a certification election protest

challenging the 84 votes. St. James alleged that it had 179 rank and file employees, none

of whom voted in the certification election. St. James argued that those who voted were

not its regular employees but construction workers of an independent contractor,

Architect Conrado Bacoy (“Architect Bacoy”).

In an Order dated 6 January 2000,[3] Med-Arbiter Tomas F. Falconitin (“Med-

Arbiter Falconitin”) ruled that at the time of the certification election, the 84 voters were

no longer working at St. James. Med-Arbiter Falconitin supported his ruling using the

roster of rank and file employees submitted by St. James, which did not include the

names of the 84 voters. Med-Arbiter Falconitin also ruled that since the construction

projects have ceased, some of the workers were no longer entitled to vote in the

certification election. Finally, Med-Arbiter Falconitin ruled that even if the 84 workers

were to be included in the 179 rank and file employees of St. James, the total number of

voters would be 263. Thus, the 84 votes cast would not be sufficient to constitute a

majority of all eligible voters to have a valid certification election. The dispositive

portion of the Order reads: WHEREFORE, premises considered, the certification election protest is hereby

given due course.


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Accordingly, judgment is hereby rendered, declaring the certification election for the rank and file employees of respondent/protestant St. James School of Quezon City conducted on June 26, 1999, a failure; and null and void ab initio.

SO ORDERED.[4]

Samahang Manggagawa appealed to the Secretary of Labor. In its Decision [5] dated

5 May 2000, the DOLE[6] reversed the ruling of Med-Arbiter Falconitin. The DOLE

ruled that Samahang Manggagawa seeks to represent the non-academic personnel or the

rank and file employees from the motor pool, construction and transportation

departments, and not all the rank and file employees of St. James. According to the

DOLE, Med-Arbiter Falconitin erred in including all the rank and file employees of St.

James, whether teaching or non-teaching personnel, in the computation of the total

number of employees. The DOLE ruled that the list submitted by St. James contained

only the administrative, teaching and office personnel of the school. The dispositive

portion of the Decision reads: WHEREFORE, the appeal is hereby GRANTED and the order dated 06 January

2000 of the Med-Arbiter is REVERSED and SET ASIDE. In lieu thereof, an order is hereby issued directing the Election Officer, Lilibeth Cagara, DOLE-National Capital Region to open and canvass the 84 challenged ballots within ten (10) days from receipt hereof, subject to usual notice and representation by the parties and thereafter to issue the corresponding certification of the results.

SO DECIDED.[7]

St. James filed a motion for reconsideration. The DOLE[8] denied the motion in its

19 June 2000 Resolution.[9] St. James filed a special civil action before the Court of

Appeals.







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In a Decision[10] dated 5 September 2001, the Court of Appeals dismissed the

petition and ruled that the DOLE did not commit grave abuse of discretion in reversing

the ruling of Med-Arbiter Falconitin. In its 3 January 2002 Resolution,[11] the Court of

Appeals denied St. James’ motion for reconsideration.

Hence, the petition before this Court.

The Issues

St. James questions the validity of the formation of the labor union and the validity

of the certification election.[12]

The Ruling of the Court

The petition has no merit.

The Validity of the Formation of the Labor Union

St. James argues that majority of the members of Samahang Manggagawa are not

its employees but employees of Architect Bacoy, an independent contractor.

St. James may no longer question the validity of the formation of the labor union.

The records[13] show that prior to the holding of the certification election, St. James

filed a petition for cancellation of Samahang Manggagawa’s union registration. Among

the grounds cited in the petition was the lack of employer-employee relationship between





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St. James and Samahang Manggagawa’s members. The Med-Arbiter recommended the

cancellation of the union registration. DOLE Regional Director IV Romeo Young

(“Director Young”) adopted the Med-Arbiter’s recommendation and cancelled Samahang

Manggagawa’s union registration. Samahang Manggagawa filed an appeal before the

Bureau of Labor Relations (“BLR”). In its Decision[14] dated 22 January 1998, the

BLR[15] reversed Director Young’s Decision. In its Resolution[16] of 12 February 1998,

the BLR denied St. James’ motion for reconsideration. St. James filed a special civil

action before the Court of Appeals. The case was docketed as CA-G.R. SP No.

50918. In its 9 February 2001 Decision,[17] the Court of Appeals dismissed St. James’

petition and affirmed the BLR’s Decision. The Court of Appeals ruled that the

construction workers are actually St. James’ regular employees in its motor pool,

construction and transportation departments. The Court of Appeals also ruled that

Architect Bacoy is a labor-only contractor and thus an agent of St. James, which is the

real employer.

St. James filed a petition for certiorari before this Court. The case was docketed as

G.R. No. 149648. In a Resolution dated 10 October 2001, this Court denied the petition

for St. James’ error in the choice or mode of appeal.[18] The Court’s 10 October 2001

Resolution closed any issue on the validity of the formation of the labor union.

The Validity of the Certification Election

Section 13, Rule XII, Book V of the Omnibus Rules Implementing the Labor Code

(“Omnibus Rules”) provides:






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Section 13. Proclamation and certification of results by election officer; when proper. – Upon completion of the canvass there being a valid election, the election officer shall proclaim and certify as winner the union which obtained a majority of the valid votes cast under any of the following conditions:

a) No protest had been filed or, even if one was filed, the same was not perfected within the five-day period for perfection of the protest;

b) No challenge of eligibility issue was raised or even if one was raised, the

resolution of the same will not materially change the result.

For this purpose, the election officer shall immediately issue the corresponding certification, copy furnished all parties, which shall form part of the records of the case. The winning union shall have the rights, privileges and obligations of a duly certified collective bargaining representative from the time the certification is issued. The proclamation and certification so issued shall not be appealable.

According to St. James, the certification election was conducted without quorum.

St. James alleges that it has 179 rank and file employees in its Quezon City Campus.

When the certification election was held, none of these qualified rank and file employees

cast their votes because they were all on duty in the school premises. The 84 voters who

cast their votes are employees of Architect Bacoy. St. James also alleges that it has 570

rank and file employees in all its campuses. Even if the 84 voters are its employees, the

votes do not constitute a majority vote of its rank and file employees because the quorum

should be based on its 570 rank and file employees.

We cannot sustain the argument.

St. James has five campuses – the Philamlife and Scout Alcaraz, Quezon City

campuses which are pre-schools; the Parañaque City and Calamba, Laguna campuses

which offer elementary, secondary and college education; and the Tandang Sora, Quezon

City campus which offers elementary and secondary education.[19]


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The members of Samahang Manggagawa are employees in the Tandang Sora

campus. Under its constitution and by-laws, Samahang Manggagawa seeks to represent

the motor pool, construction and transportation employees of the Tandang Sora campus.

[20] Thus, the computation of the quorum should be based on the rank and file motor pool,

construction and transportation employees of the Tandang Sora campus and not on all the

employees in St. James’ five campuses.

Section 2, Rule XII, Book V of the Omnibus Rules provides:

Section 2. Qualification of voters; inclusion-exclusion proceedings. – All employees who are members of the appropriate bargaining unit sought to be represented by the petitioner at the time of the certification or consent election shall be qualified to vote. A dismissed employee whose dismissal is being contested in a pending case shall be allowed to vote in the election.

In case of disagreement over the voters’ list or over the eligibility of voters, all

contested voters shall be allowed to vote. However, their votes shall be segregated and sealed in individual envelopes in accordance with Section 9 of these Rules.

The motor pool, construction and transportation employees of the Tandang Sora

campus had 149 qualified voters at the time of the certification election. Hence, the 149

qualified voters should be used to determine the existence of a quorum. Since a majority

or 84 out of the 149 qualified voters cast their votes, a quorum existed in the certification

election.

St. James further alleges that the names of the 84 voters are not on the list of its

rank and file employees. On this score, we sustain the factual finding of the DOLE that

the list submitted by St. James consists of its administrative, teaching and office


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personnel. These administrative, teaching and office personnel are not members of

Samahang Manggagawa. They do not belong to the bargaining unit that Samahang

Manggagawa seeks to represent. Hence, the list submitted by St. James may not be used

as basis to determine the members of Samahang Manggagawa.

WHEREFORE, we DENY the petition. We AFFIRM the 5 September

2001 Decision and the 3 January 2002 Resolution of the Court of Appeals in CA-G.R. SP

No. 60197.

SO ORDERED.

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FIRST DIVISION

G.R. No. 128845 June 1, 2000

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs.HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International School-Manila; and INTERNATIONAL SCHOOL, INC., respondents.

KAPUNAN, J.:

Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is, of course, beside the point. The point is that employees should be given equal pay for work of equal value. That is a principle long honored in this jurisdiction. That is a principle that rests on fundamental notions of justice. That is the principle we uphold today.1âwphi1.nêt

Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents.1To enable the School to continue carrying out its educational program and improve its standard of instruction, Section 2(c) of the same decree authorizes the School to employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment, except laws that have been or will be enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire:

a. What is one's domicile?

b. Where is one's home economy?

c. To which country does one owe economic allegiance?

d. Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that individual to the Philippines?2

Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire; otherwise, he or she is deemed a foreign-hire.

The School grants foreign-hires certain benefits not accorded local-hires.1avvphi1 These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The School explains:

A foreign-hire would necessarily have to uproot himself from his home country, leave his family and friends, and take the risk of deviating from a promising career path — all for the purpose of pursuing his profession as an educator, but this time in a foreign land. The new foreign hire is faced with economic realities: decent abode for oneself and/or for one's family, effective means of transportation, allowance for the education of one's children, adequate insurance against illness and death, and of course the primary benefit of a basic salary/retirement compensation.

http://www.lawphil.net/judjuris/juri2000/jun2000/gr_128845_2000.html#fnt2


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Because of a limited tenure, the foreign hire is confronted again with the same economic reality after his term: that he will eventually and inevitably return to his home country where he will have to confront the uncertainty of obtaining suitable employment after along period in a foreign land.

The compensation scheme is simply the School's adaptive measure to remain competitive on an international level in terms of attracting competent professionals in the field of international education.3

When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members"4 of the School, contested the difference in salary rates between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadlock between the parties.

On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this Court.

Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination.

The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with nationalities other than Filipino, who have been hired locally and classified as local hires.5 The Acting Secretary of Labor found that these non-Filipino local-hires received the same benefits as the Filipino local-hires.

The compensation package given to local-hires has been shown to apply to all, regardless of race. Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino local hires.6

The Acting secretary upheld the point-of-hire classification for the distinction in salary rates:

The Principle "equal pay for equal work" does not find applications in the present case. The international character of the School requires the hiring of foreign personnel to deal with different nationalities and different cultures, among the student population.

We also take cognizance of the existence of a system of salaries and benefits accorded to foreign hired personnel which system is universally recognized. We agree that certain amenities have to be provided to these people in order to entice them to render their services in the Philippines and in the process remain competitive in the international market.

Furthermore, we took note of the fact that foreign hires have limited contract of employment unlike the local hires who enjoy security of tenure. To apply parity therefore, in wages and other benefits would also require parity in other terms and conditions of employment which include the employment which include the employment contract.

A perusal of the parties' 1992-1995 CBA points us to the conditions and provisions for salary and professional compensation wherein the parties agree as follows:

All members of the bargaining unit shall be compensated only in accordance with Appendix C hereof provided that the Superintendent of the School has the discretion to recruit and hire expatriate teachers from abroad, under terms and conditions that are consistent with accepted international practice.





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Appendix C of said CBA further provides:

The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary schedule. The 25% differential is reflective of the agreed value of system displacement and contracted status of the OSRS as differentiated from the tenured status of Locally Recruited Staff (LRS).

To our mind, these provisions demonstrate the parties' recognition of the difference in the status of two types of employees, hence, the difference in their salaries.

The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an established principle of constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants based on reasonable classification. A classification is reasonable if it is based on substantial distinctions and apply to all members of the same class. Verily, there is a substantial distinction between foreign hires and local hires, the former enjoying only a limited tenure, having no amenities of their own in the Philippines and have to be given a good compensation package in order to attract them to join the teaching faculty of the School.7

We cannot agree.

That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy against these evils. The Constitution8 in the Article on Social Justice and Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe honesty and good faith.

International law, which springs from general principles of law,9 likewise proscribes discrimination. General principles of law include principles of equity, 10 i.e., the general principles of fairness and justice, based on the test of what is reasonable. 11 The Universal Declaration of Human Rights, 12 the International Covenant on Economic, Social, and Cultural Rights, 13 the International Convention on the Elimination of All Forms of Racial Discrimination, 14 the Convention against Discrimination in Education, 15 the Convention (No. 111) Concerning Discrimination in Respect of Employment and Occupation 16 — all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws.

In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and discrimination by the employer are all the more reprehensible.

The Constitution 17 specifically provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the physical workplace — the factory, the office or the field — but include as well the manner by which employers treat their employees.

The Constitution 18 also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor Code 19 provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. 20

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, prohibits and penalizes 21 the payment of lesser compensation to a female employee as against a male employee for work of equal value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor organization.

Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides:
















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The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work, which ensure, in particular:

a. Remuneration which provides all workers, as a minimum, with:

(i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work;

x x x x x x x x x

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. 22 This rule applies to the School, its "international character" notwithstanding.

The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-hires.23 The Court finds this argument a little cavalier. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly.

The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities, which they perform under similar working conditions.

The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary rates without violating the principle of equal work for equal pay.

"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at regular intervals for the rendering of services." In Songco v. National Labor Relations Commission, 24 we said that:

"salary" means a recompense or consideration made to a person for his pains or industry in another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the fundamental idea of compensation for services rendered. (Emphasis supplied.)

While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances.

The Constitution enjoins the State to "protect the rights of workers and promote their welfare," 25 "to afford labor full protection." 26 The State, therefore, has the right and duty to regulate the relations between labor and capital. 27 These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, must yield to the common good. 28 Should such contracts contain stipulations that are contrary to public policy, courts will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this Court. 1avvphi1








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We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires.

A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 29 The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. 30 The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights. 31

It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of collective bargaining. The collective bargaining history in the School also shows that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold the practice of respondent School of according foreign-hires higher salaries than local-hires.

SO ORDERED.

Puno and Pardo, JJ., concur.Davide, Jr., C.J., on official leave.Ynares-Santiago, J., is on leave.




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SECOND DIVISION

[G.R. No. 79526 : December 21, 1990.]

192 SCRA 598

NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU), Petitioner, vs. MAINIT LUMBER DEVELOPMENT COMPANY WORKERS UNION-UNITED LUMBER AND GENERAL

WORKERS OF THE PHILIPPINES. (MALDECOWU-ULGWP), Respondents.

D E C I S I O N

PARAS, J.:

This is a petition for Certiorari to annul and set aside the resolution ** of the public respondent Bureau of Labor Relation dated January 29,1987 in BLR Case No. A-5-99-85 entitled: IN RE: Petition for Direct Certification or Certification Election, Mainit Lumber Development Company Workers Union-United Lumber and General Workers of the Philippines (MALDECOWU-ULGWP), petitioner-appellee vs. Mainit Lumber and Development Company, Inc. (MALDECO), respondent; National Association of Free Trade Unions (NAFTU), compulsory intervenor-appellant, affirming the Order of the Med-Arbiter date September 24, 1986 and denying petitioner's motion for reconsideration.

The facts are as follows:

On January 28, 1985, private respondent Mainit Lumber Development Company Workers Union-United Lumber and General Workers of the Philippines, MALDECOWU-ULGWP (ULGWP, for short), a legitimate labor organization duly registered with the Ministry of Labor and Employment under Registry No. 2944-IP, filed with Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for certification election to determine the sole and exclusive collective bargaining representative among the rank and file workers/employees of Mainit Lumber Development Company Inc. (MALDECO), a duly organized, registered and existing corporation engaged in the business of logging and saw-mill operations employing approximately 136 rank and file employees/workers (Rollo, p. 11; Petition; Annex "A"). The case was scheduled for hearing two (2) times. During the first scheduled hearing on February 20, 1985, the counsel for compulsory intervenor (now petitioner), National Association of Free Trade Union (NAFTU) requested for postponement on the ground that he was leaving for abroad. During the scheduled hearing of March 13, 1985, they, however, agreed to submit simultaneously their respective position papers within twenty (20) days (Rollo, p. 17; Petition; Annex "D").

Petitioner ULGWP, private respondent herein, in its petition and position paper alleged, among others: (1) that there was no certification election conducted within 12 months prior to the filing of the petition; (2) that the petition was filed within the 60 day freedom period, i.e. CBA expired on February 28, 1985; (3) that the petition is supported by the signatures of 101 rank and file employees out of a total of 201 employees of the employer or more than thirty percent (30%) than that required by law (Rollo, p. 13; Petition; Annex "B"). :-cralaw

On April 11, 1985, the Med-Arbiter granted the petition for certification election. On April 26, 1985, NAFTU appealed the decision of the Med-Arbiter on the ground that MALDECO was composed of two (2) bargaining units, the Sawmill Division and the Logging Division, but both the petition and decision treated these separate and distinct units only as one (Rollo, p. 20; Petition; Annex "E").

On April 28, 1986, the Bureau of Labor Relations affirmed the decision (Rollo, p. 26; Petition; Annex "J"). Thus, a certification election was held on separate dates at the employer's sawmill division and logging area respectively. In said election MALDECOWU-ULGWP garnered a total vote of 146 while NAFTU garnered a total of 2 votes (Rollo, p. 42; Petition; Annex "O").

On July 26, 1986, NAFTU filed an election protest alleging massive vote buying accompanied with grave and serious threat force and intimidation on the lives of 25 applicants as stated in a Joint Affidavit attached thereto (Rollo, p. 28; Petition; Annexes "K", "K-3").

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MALDECO filed its Manifestation on August 3, 1986, which corroborated petitioner's stand. Attached to the said Manifestation was a joint affidavit executed by thirty five (35) of its employees/workers (Rollo, p. 33; Petition; Annexes "L", "L-1").

On September 3, 1986, private respondent filed its position paper (Rollo, p. 36; Petition; Annex "I"). On September 8, 1986 petitioner filed its opposition to private respondent's position paper (Rollo, p. 39; Petition; Annex "N"). On September 24, 1986, the Med-Arbiter dismissed the election protest (Rollo, p. 42; Petition; Annex "O").

On October 10, 1986, petitioner NAFTU appealed the order of the Med-Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 46) which denied the appeal (Rollo, p. 48) and the two motions for reconsideration (Rollo, pp. 51, 55).

Hence, this petition.

The issues raised in this petition are:

I

WHETHER OR NOT IT WAS RIGHT FOR THE MED-ARBITER TO CHANGE THE EMPLOYER FROM TWO SEPARATE BARGAINING UNITS TO ONLY ONE.

II

WHETHER OR NOT THERE WAS MASSIVE VOTE BUYING AND SERIOUS THREAT TO LIFE TO JUSTIFY INVALIDATING THE RESULT OF THE ELECTION.

III

WHETHER OR NOT AN ELECTION PROTEST IN A CERTIFICATION ELECTION CAN BE GIVEN DUE COURSE EVEN IF NOT ENTERED IN THE MINUTES OF THE ELECTION.

In the case at bar, petitioner alleges that the employer MALDECO was composed of two bargaining units, the Sawmill Division in Butuan City and the Logging Division, in Zapanta Valley, Kitcharao, Agusan Norte, about 80 kilometers distant from each other and in fact, had then two separate CBA's, one for the Sawmill Division and another for the Logging Division, both the petition and decision referred only to one bargaining unit; that from 1979 to 1985, the Ministry of Labor and Employment recognized the existence of two (2) separate bargaining units at MALDECO, one for its Logging Division and another for its Sawmill Division.

Significantly, out of two hundred and one (201) employees of MALDECO, one hundred seventy five (175) consented and supported the petition for certification election, thereby confirming their desire for one bargaining representative (Rollo, p. 104). :- nad

Moreover, while the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. This is so because "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights." (Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al., 103 Phil. 1103 [1958]).

Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in the same way that the company needs them both. There may be difference as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of a separate bargaining unit.

Secondly, the issue had been raised earlier by petitioner. The respondent Bureau of Labor Relations had already ruled on the same in its decision dated April 28, 1986 affirming the Med-Arbiter's Order dated April 11, 1985 which granted the petition for Certification Election. NAFTU did not elevate the April 28, 1986 decision to this Court. On the contrary, it participated in the questioned election and later it did not raise the issue in its election protest (Rollo, p. 210). Hence, the principle of res judicata applies. It was settled as early as 1956 that "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within their jurisdiction

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as to the judgments of courts having general judicial powers . . ." (B.F. Goodrich Philippines, Inc. v. Workmen's Compensation Commission and Leandro M. Castro, 159 SCRA 355 [1988]).

With regard to the second and third issues raised by petitioner, the public respondent Bureau of Labor Relations in its order dated September 24, 1986 found the following, to wit:

"After a careful perusal of the records of this case and after considering, adducing and weighing all the pleadings, arguments, etc. and the circumstances attendant to the instant case, this Office is of the opinion that the grounds relied upon by the protestant NAFTU in its protest are bereft of any merit, hence, this Office finds no cogent reason to order the invalidation or annulment of the certification election under protest or the holding of a run-off election thereat between no union and the protestee, MALDECOWU-ULGWP. Indeed, the minutes of said certification elections conducted both at the sawmill and logging departments on August 15 and 21, 1986 respectively, of the respondent/employer showed that there was no protest on massive vote buying accompanied with grave and serious threats, force and intimidation raised by any of the parties who were ably represented in said elections. Paragraph 2, Section 9, Rule 6 of the Rules and Regulations implementing the Labor Code of the Philippines (now Section 3, Rule VI, Book 5 of the Omnibus Rules Implementing the Labor Code) provides that protests not so raised and contained in the minutes of the proceedings are deemed waived. Allegations of vote buying, grave and serious threats, force and intimidation are questions of fact which should be contained in the minutes of said proceedings. There is no clear and convincing proof presented by the protestant in support of its contention, hence, we have no other alternative than to uphold the election results."

In the case of Philippine Airlines Employees' Association (PALEA) v. Hon. Pura Ferrer-Calleja, et al., 162 SCRA 425 [1988]), this Court held that factual findings of the Bureau of Labor Relations which are supported by substantial evidence are binding on this Court and must be respected. : nad

PREMISES CONSIDERED, the resolution of public respondent Bureau of Labor Relations dated January 29, 1987 is hereby AFFIRMED.

SO ORDERED.

Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.

Endnotes

** Penned by Pura Ferrer-Calleja.

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SECOND DIVISION

G.R. No. 77395 November 29, 1988

BELYCA CORPORATION, petitioner, vs.DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO, MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY,respondents.

Soriano and Arana Law Offices for petitioner.

The Solicitor General for public respondent.

Francisco D. Alas for respondent Associated Labor Unions-TUCP.

PARAS, J.:

This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of the Bureau of Labor Relations dated November 24, 1986 and denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's motion for reconsideration.

The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows:

WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal therefrom denied.

Let, therefore, the pertinent records of the case be remanded to the office of origin for the immediate conduct of the certification election.

The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:

WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock Agro-Division) is hereby dismissed for lack of merit and the Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the records of this case be immediately forwarded to the Office of origin for the holding of the certification elections.

No further motion shall hereafter be entertained.

The antecedents of the case are as follows:

On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly registered with the Ministry of Labor and Employment under Registration Certificate No. 783-IP, filed with the Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for direct certification as the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-Division), a duly organized, registered and existing corporation engaged in the business of poultry raising, piggery and planting of agricultural crops such as corn, coffee and various vegetables, employing approximately 205 rank and file employees/workers, the collective bargaining unit sought in the petition, or in case of doubt of the union's majority representation, for the issuance of an order authorizing the immediate holding of a certification election (Rollo, p. 18). Although the

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case was scheduled for hearing at least three times, no amicable settlement was reached by the parties. During the scheduled hearing of July 31, 1986 they, however, agreed to submit simultaneously their respective position papers on or before August 11, 1986 (rollo. p. 62).

Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that there is no existing collective bargaining agreement between the respondent employer, petitioner herein, and any other existing legitimate labor unions; (2) that there had neither been a certification election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition nor a contending union requesting for certification as the. sole and exclusive bargaining representative in the proposed bargaining unit; (3) that more than a majority of respondent employer's rank-and-file employees/workers in the proposed bargaining unit or one hundred thirty-eight (138) as of the date of the filing of the petition, have signed membership with the ALU-TUCP and have expressed their written consent and authorization to the filing of the petition; (4) that in response to petitioner union's two letters to the proprietor/ General Manager of respondent employer, dated April 21, 1986 and May 8, 1 986, requesting for direct recognition as the sole and exclusive bargaining agent of the rank-and-file workers, respondent employer has locked out 119 of its rank-and-file employees in the said bargaining unit and had dismissed earlier the local union president, vice-president and three other active members of the local unions for which an unfair labor practice case was filed by petitioner union against respondent employer last July 2, 1986 before the NLRC in Cagayan de Oro City (Rollo, pp. 18; 263). <äre||anº•1àw>

Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of its business, very few of its employees are permanent, the overwhelming majority of which are seasonal and casual and regular employees; (2) that of the total 138 rank-and-file employees who authorized, signed and supported the filing of the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious insubordination and destruction of property and (f) 100 simply abandoned their work or stopped working; (3) that the 128 incumbent employees or workers of the livestock section were merely transferred from the agricultural section as replacement for those who have either been dismissed, retrenched or resigned; and (4) that the statutory requirement for holding a certification election has not been complied with by the union (Rollo, p. 26).

The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986 (Rollo, p. 62).

On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo, p. 80) and the motion for reconsideration (Rollo, p. 92). Thus, the instant petition received in this Court by mail on February 20, 1987 (Rollo, p. 3).

In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the petition and issued a temporary restraining order (,Rollo, p. 95).

Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on April 8, 1987 (Rollo, p. 218).

On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their respective memoranda within twenty (20) days from notice (Rollo, p. 225).

The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public respondents as its memorandum (Rollo, p. 226); memorandum for respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).

The issues raised in this petition are:

I

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WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT.

II

WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES IN THE PROPOSED BARGAINING UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH.

In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the rank-and-file workers of the livestock and agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in piggery, poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables (Rollo, p. 26). But petitioner contends that the bargaining unit must include all the workers in its integrated business concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented bargaining units (Rollo, p. 435). <äre||anº•1àw>

The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of the Code provides:

Art. 256. Exclusive bargaining representative.—The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employee shall have the right at any time to present grievances to their employer.

According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482).

This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective bargaining unit.

Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees".

Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court laid down the test of proper grouping, which is community and mutuality of interest.

Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107 Phil. 28 [1960]) where the employment status was not at issue but the nature of work of the employees concerned; the Court stressed the importance of the second factor otherwise known as the substantial-mutual-interest test and found no reason to disturb the finding of the lower Court that the employees in the administrative, sales and dispensary departments perform work which has nothing to do with production and maintenance, unlike those in the raw leaf, cigar, cigarette and packing and engineering

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and garage departments and therefore community of interest which justifies the format or existence as a separate appropriate collective bargaining unit.

Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was again challenged, the Court reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that among the factors to be considered are: employment status of the employees to be affected, that is the positions and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties.

In any event, whether importance is focused on the employment status or the mutuality of interest of the employees concerned "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights (Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra)

Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference between the work performed by musicians and that of other persons who participate in the production of a film which suffice to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132 [1961]).

Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of petitioner corporation perform work entirely different from those performed by employees in the supermarts and cinema. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including the categories of their positions and employment status. As stated by petitioner corporation in its position paper, due to the nature of the business in which its livestock-agro division is engaged very few of its employees in the division are permanent, the overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26). Definitely, they have very little in common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. Undeniably, the rank and file employees of the livestock-agro division fully constitute a bargaining unit that satisfies both requirements of classification according to employment status and of the substantial similarity of work and duties which will ultimately assure its members the exercise of their collective bargaining rights.

II

It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two hundred five (205) rank-and-file employees and workers. It has no existing duly certified collective bargaining agreement with any legitimate labor organization. There has not been any certification election conducted in the proposed bargaining unit within the last twelve (12) months prior to the filing of the petition for direct certification and/or certification election with the Ministry of Labor and Employment, and there is no contending union requesting for certification as the sole and exclusive bargaining representative in the proposed bargaining unit.

The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124 employees or workers which are more than a majority of the rank-and-file employees or workers in the proposed bargaining unit had signed membership with respondent ALU-TUCP and had expressed their written consent and authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on August 18, 1986 on a finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been met.

But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently withdrew their membership; five (5) were retrenched; twelve (12) were dismissed for illegally and unlawfully barricading the entrance to petitioner's farm; and one hundred (100) simply abandoned their work.

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Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July 28, 1986 showing that the employees were on strike, which was confirmed by the finding of the Bureau of Labor Relations to the effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the local union president, Warrencio Maputi; the Vice-president, Gilbert Redoblado and three other active members of the union Carmen Saguing, Roberto Romolo and Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal dismissal etc. was filed by the Union in their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p. 415). <äre||anº•1àw> The complaint was amended on August 20, 1986 for respondent Union to represent Warrencio Maputi and 137 others against petitioner corporation and Bello Casanova President and General Manager for unfair labor practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416).

Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice but to call a certification election (Atlas Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no existing collective bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company for the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case.

It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their written consent to the certification election or more than a majority of the rank and file employees and workers; much more than the required 30% and over and above the present requirement of 20% by Executive Order No. 111 issued on December 24, 1980 and applicable only to unorganized establishments under Art. 257, of the Labor Code, to which the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More than that, any doubt cast on the authenticity of signatures to the petition for holding a certification election cannot be a bar to its being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to the required 30% being met warrant holding of the certification election (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]). In fact, once the required percentage requirement has been reached, the employees' withdrawal from union membership taking place after the filing of the petition for certification election will not affect said petition. On the contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679 [1983]). Hence, the subsequent disaffiliation of the six (6) employees from the union will not be counted against or deducted from the previous number who had signed up for certification elections Vismico Industrial Workers Association (VIWA) v. Noriel 131 SCRA 569 [1984]). <äre||anº•1àw>Similarly, until a decision, final in character, has been issued declaring the strike illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied participation in the certification election notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by violence. Under the foregoing circumstances, it does not necessarily follow that the strikers in question are no longer entitled to participate in the certification election on the theory that they have automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to bargain collectively is nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this Court, the holding of a certification election is a statutory policy that should not be circumvented. (George and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82 [1986]).

Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter was requested to bargain collectively. But thereafter the role of the employer in the certification process ceases. The employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64 [1983]).

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There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that petitioner corporation from the outset has actively participated and consistently taken the position of adversary in the petition for direct certification as the sole and exclusive bargaining representative and/or certification election filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this Court. Considering that a petition for certification election is not a litigation but a mere investigation of a non-adversary character to determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra; Bulakena Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines, Inc. v. Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to give the employees true representation in their collective bargaining with an employer (Confederation of Citizens Labor Unions CCLU v. Noriel, 116 SCRA 694 [1982]), there appears to be no reason for the employer's objection to the formation of subject union, much less for the filing of the petition for a certification election.

PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining order issued by the Court on March 4, 1987 is LIFTED permanently.

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

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SECOND DIVISION

G.R. No. L-44493 & L-44494 December 3, 1980

DIATAGON LABOR FEDERATION LOCAL 110 OF THE ULGWP, petitioner, vs.HON. BLAS F. OPLE, Secretary of Labor, CARMELO C. NORIEL, Director of Labor Relations, MINDANAO ASSOCIATION OF TRADE UNIONS (MATU) LIANGA BAY LOGGING CO., INC. and GEORGIA PACIFIC INTERNATIONAL CORPORATION, respondents.

AQUINO, J.:

The issue in this case, which involves a 1975 certification election, is whether two companies should be regarded as a single collective bargaining unit. The factual background is as follows:

1. Lianga Bay Logging Co., Inc. is a domestic corporation which was organized in 1954. It has offices in Diatagon Lianga, Surigao del Sur and Filipinas Life Bldg., Ayala Avenue, Makati, Metro Manila. It is engaged in logging and manufacturing plywood (p. 195, Rollo).

2. Georgia Pacific International Corporation is a Delaware corporation licensed to do business in the Philippines on March 31, 1967. It has an office at Lianga. It employs around 400 workers (pp. 107, 114-123, 185-6, Rollo).

3. The Diatagon Labor Federation Local 110 of ULGWP (United Lumber and General Workers of the Philippines) had a collective bargaining agreement with the Lianga Bay logging Co., Inc. which was due to expire on March 31, 1975. On February 3, 1975, or before the expiration of that CBA, a rival union, the Mindanao Association of Trade Unions, filed with the Bureau of Labor Relations a petition for the holding of a certification election at Lianga Bay Logging Co., Inc., BLR Case No. 0399. The union assumed that Lianga Bay Logging Co., Inc. had approximately 900 employees (pp. 31-32, Rollo).

4. Before that petition could be acted upon, the Diatagon Labor Federation was able to negotiate on March 17, 1975 with Georgia Pacific International Corporation a CBA for a term of three years expiring on March 31, 1978 (p. 355, Rollo). That CBA was certified by the Bureau of Labor Relations on July 10, 1975 (p. 124, Rollo).

5. At this juncture, it should be stressed that the said CBA included 236 employees working at the veneer plant and electrical department of Georgia Pacific International Corporation in Lianga. Those 236 employees were formerly employees of Lianga Bay Logging Co., Inc. After July, 1974, they were transferred to Georgia Pacific International Corporation and became employees of the latter (p. 131, Rollo).

6. That transfer is not clearly brought out in the pleadings of the parties. The obscuration of that fact is one reason for the delay in the disposition of this case because if the consequences of that transfer are not taken into account, the case remains unclear and controversial. By reason of that transfer, the employees of Lianga Bay Logging Co., lnc. were reduced to 653 (p. 87, Rollo). Georgia Pacific International Corporation has around 400 employees. The Diatagon Labor Federation claims to have 328 members among the employees of Georgia Pacific International Corporation (pp. 114-123, Rollo).

7. Another fact that should be underscored is that, in spite of the transfer, the 236 employees continued to use in 1975 the pay envelopes and Identification cards of their former employer, Lianga Bay Logging Co., Inc. That confusing circumstance spawned the controversy in this case because the Mindanao Association of Trade Unions and the Director of Labor Relations used that circumstance to support their conclusion that the 236 employees should still be regarded as employees of Lianga Bay Logging Co., Inc. and not of

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Georgia Pacific International Corporation or that the two companies should be regarded as only one bargaining unit.

8. It is the contention of the Mindanao Association of Trade Unions that the said CBA was negotiated between Georgia Pacific International Corporation and the Diatagon Labor Federation in order to frustrate the petition for certification election at Lianga Bay Logging Co., Inc. which, as above stated, was filed by the Mindanao Association of Trade Unions on February 3,1975 (p. 248, Rollo).

9. Pursuant to the order of the Med-Arbiter dated May 14, 1975 in BLR Case No. 0399, a certification election was held in the premises of Lianga Bay Logging Co., Inc. at Diatagon on July 20, 1975. The Diatagon Labor Federation won the election with 290 votes as against 227 votes for the Mindanao Association of Trade Unions (p. 65, Rollo). The Mindanao Association of Trade Unions wanted the aforementioned 236 employees of Georgia Pacific International Corporation to take part in the election because they were using the pay envelopes and Identification cards of Lianga Bay Logging Co., Inc. but they were not allowed to vote because they were not included in the payrolls of Lianga Logging Co., Inc. (p. 72, Rollo).

10. The Mindanao Association of Trade Unions filed an election protest dated July 23, 1975 on the ground, inter alia, that around four hundred workers were disenfranchised because of the inaccuracy of the official voting lists (p. 74, Rollo) .

11. Because the Mindanao Association of Trade Unions was confronted by the undeniable fact that the said 236 employees were already included in the CBA entered into between Georgia Pacific international Corporation and Diatagon Labor Federation on March 17, 1975, the, Mindanao Association of Trade Unions resorted to the expedient of filing on August 1, 1975 with the Bureau of Labor Relations a petition for the decertification of the aforementioned CBA (BLR Case No. 0981; pp. 135-37, Rollo). That petition was dismissed by the Med-Arbiter in his order of February 4, 1976 on The ground that it was a reiteration of the election protest of the same union in BIR Case No. 0399 (p. 145, Rollo).

12. In the meantime, or on September 8, 1975, the Med-Arbiter dismissed the election protest of the Mindanao Association of Trade Unions and certified the Diatagon Labor Federation as the exclusive bargaining agent of the employees of Lianga Bay Logging Co., Inc. (p. 89, Rollo).

13. From that order, the Mindanao Association of Trade Unions appealed on September 15, 1975 to the Director of Labor Relations. Its appeal was based on the fact that the oft-mentioned 236 employees were not allowed to vote at the certification election since the Med-Arbiter regarded them as employees of Georgia Pacific International Corporation, having been included in its payrolls, although they still used the pay enveloped and Identification cards of Lianga Bay Logging Co., Inc. (pp. 91-101, Rollo).

14. The Mindanao Association of Trade Unions adopted another remedy in its unrelenting effort to attain its objective of becoming the collective bargaining agent of the workers of the two companies alleged to have a common management and represented by the said lawyers. It filed with the Bureau of Labor Relations on October 10, 1975 a petition for a certification election in Georgia Pacific International Corporation (its prior petition was for the decertification of the listing CBA). It alleged that there had not been any certification election in that corporation (BLR Case No. 2033; pp. 107-108, Rollo).

15. That petition was dismissed by the Med-Arbiter in his order of December 22, 1975 but, upon appeal, the Director of Labor Relations called the attention of the parties to his order in BLR Case No. 0399 (p. 166, Rollo). In that petition, the Mindanao Association of Trade Unions assumed that the 236 employees were employees of Georgia Pacific International Corporation.

16, About three weeks later, or on October 29, 1915, the Mindanao Association of Trade Unions scored a notable victory The Director of Labor Relations issued on that date in BLR Case No. 0399 an order reversing the order of the Med-Arbiter and sustaining the appeal of the Mindanao Association of Trade Unions. The Director held that the aforementioned 236 employees should be allowed to vote in the certification election

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at Lianga Bay Logging Co., Inc. because they used the company's pay envelopes and Identification cards. The Director ignored the fact that those 236 employees were included in the payrolls of Georgia Pacific International Corporation and were already covered by the existing CBA. The Director ordered the holding of a new certification election at Lianga Bay Logging Co., Inc. wherein the 236 employees would be allowed to vote (pp. 127-9, Rollo).

17. The Diatagon Labor Federation filed a motion for the reconsideration of that order (p. 130, Rollo). Lianga Bay Logging Co., Inc. filed a manifestation dated November 17, 1975 categorically alleging that the 236 workers were not its employees but employees of Georgia Pacific International Corporation (pp. 111-13, Rollo).

18. The Director denied the motion in his order of December 17, 1975, wherein it was intimated that the Bureau's Labor Organization Division would thresh out, at the pre-election conference whether the said 236 employees should be allowed to take part in the election (pp 146-7, Rollo)

19. The Diatagon labor federation appealed to the Secretary of Labor but he refused to rule on the appeal and, instead, referred it to the Director of Labor relations. The Director in his order of March 15, 1976 dismissed the appeal. He ruled that Lianga Bay Logging Co., Inc. and Georgia Pacific International Corporation have a common interest and that the 236 employees should be regarded as employees of Lianga Bay Logging Co., Inc. The Director held that the transfer of the 236 employees to Georgia Pacific International Corporation was designed to prejudice the Mindanao Association of Trade Unions and to favor Diatagon Labor Federation, and that such an eventuality should not be tolerated (pp. 153-157, Rollo).

20. Again, the Diatagon Labor Federation appealed to the Secretary of Labor from the Director's order of March 15, 1976 and again the Secretary referred the appeal to the Director who, treating the appeal as another motion for reconsideration, denied it in his resolution of April 29, 1976 in BLR Case No. 0399 (p. 164, Rollo).

21. The Diatagon Labor Federation moved for the clarification of the resolution of April 27, 1976 in BLR Case No. 2033 wherein the Director impliedly allowed one certification election for the employees of the two companies. It wanted to know whether there should be two bargaining units and whether the 236 employees should be allowed to vote twice. Georgia Pacific International Corporation filed its own motion for reconsideration (pp. 167-173, Rollo).

22. The Director in his order of May 29, 1976 in BLR Cases Nos. 0399 and 2033 (a consolidation of the two certification cases) ruled that the two companies should be treated as one bargaining unit because they have a common interest and that the 236 employees should be allowed to vote (pp. 174-6, Rollo).

23. From the order of May 29, 1976, the Diatagon Labor Federation appealed to the Secretary of Labor but the appeal was referred to the Director of Labor Relations to be regarded as a motion for reconsideration (p. 219, Rollo). As was to be expected, the Director denied the appeal or motion for reconsideration in his order of August 18, 1976. He held that there existed no distinction between the employees of the two companies and. consequently, they should belong to only one bargaining unit (p. 221, Rollo).

24. On September 9, 1976, the Diatagon Labor Federation filed this certiorari case wherein it prayed for the annulment of the aforementioned orders of the Director of Labor Relations. The two companies were impleaded as respondents. They adopted the stand of the petitioner. On September 16, 1976, this Court issued a restraining order to enjoin the holding of a new certification election.

25. But before Chat restraining order was issued, or on September 12, 1976, a Sunday, a certification election was held among the employees of the two companies. The Diatagon Labor Federation opposed the holding of the election. There were 944 eligible voters. The Mindanao Association of Trade Unions obtained 456 votes. The Diatagon Labor Federation obtained 63 votes. Only 555 voters took part in the election. It turned out that the election was transferred by the Director of Labor Relations to September 15,

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1976 (p. 224, Rollo). The protest of the Diatagon Labor Federation against that election was not acted upon by the Director of Labor Relations in view of the pendency of this case (p. 347, Rollo).

The issues are (a) whether the Director of Labor Relations gravely abused his discretion in treating the employees of the two companies as one bargaining unit and (b) whether the Secretary of Labor gravely abused his discretion in not entertaining the appeals of the petitioner from the orders of the Director of Labor Relations.

We hold that the director of Labor Relations acted with grave abuse of discretion in treating the two companies as a single bargaining unit. That ruling is arbitrary and untenable because the two companies are indubitably distinct entities with separate juridical personalities.

The fact that their businesses are related and that the 236 employees of Georgia Pacific International Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a justification for disregarding their separate personalities. Hence, the 236 employees, who are now attached to Georgia Pacific International Corporation, should not be allowed to vote in the certification election at the Lianga Bay Logging Co., Inc. They should vote at a separate certification election to determine the collective bargaining representative of the employees of Georgia Pacific International Corporation.

However, at this late hour, or after the lapse of more than five years, the result of the 1975 certification election should not be implemented. A new certification election should be held at Lianga Bay Logging Co., Inc. but the 236 employees should not be allowed to vote in that election.

With respect to the refusal of the Secretary of Labor (now Minister of Labor and Employment) to entertain appeals from the orders of the Director of Labor Relations, that norm of conduct is based on the rule laid down by the Secretary himself in Rule V (Certification Cases and Intra-Union Conflicts of Book Five [Labor Relations]) of the Rules and Regulations Implementing the Labor Code dated February 16, 1976, which Rule V provides:

SECTION 10. Decision of the Bureau is final and inappealable. — The Bureau shall have twenty (20) working days from receipt of the records of the case within which to decide the appeal (from the Med-Arbiter). The decision of the Bureau in all cases shall be final and inappealable. (sic)

That rule is in consonance with the policy of insuring speedy labor justice. It is noteworthy that pursuant to that policy Presidential Decree No. 1391, which took effect on May 29, 1978, eliminated appeals to the Secretary of Labor from the decisions of the National Labor Relations commission.

Rule III (Representation Issues, Interventions, Affiliations and Disaffiliations) of the Rules Implementing Presidential Decree No. 1391, which rules took effect on September 15, 1978, reaffirms the above-quoted section 10 of Rule Five in the following provisions which also recognize this Court's power to review the orders of the Director of Labor Relations:

SEC. 8. Decision of the Bureau Director. — Final and Inappeatable. — The Director of Labor Relations shall have twenty (20) working days from receipt of the records of the case within which to decide cases on appeal from the Med-Arbiters in the Regional Offices. The decision of the Director, as representative of the Minister of labor, shall in all cases be final and inappealable. (sic)

SEC. 9. Petition for certiorari Prohibition etc. to the Supreme Court. — The filing with the Supreme Court of a petition for certiorari or prohibition shall not stay the execution of the order of the Bureau unless otherwise ordered by the Supreme Court.

Moreover, under article 226 of the Labor Code, the Bureau of Labor Relations and the labor relations divisions in the regional offices of the Department of Labor have "original and exclusive authority to act, at

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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".

On the other hand, the petitioner and the two companies cite section 3, Rule XVIII of the Rules of Procedure of the Bureau of Labor Relations dated September 13, 1975 which provide that "decisions of the Bureau of Labor Relations may be appealed to the Secretary of Labor whose decisions shall be final and unappealable". Evidently, that rule was abrogated by the 1976 and 1978 implementing rules quoted above.

WHEREFORE, the orders of the Director of Labor Relations holding that the employees of Lianga Bay Logging Co., Inc. and Georgia Pacific International Corporation should be treated as one bargaining unit are reversed and set aside. A new certification election should be held at Lianga Bay Logging Co., Inc. The 236 employees of Georgia Pacific International Corporation should not be allowed to vote in that election. No costs.

SO ORDERED.

Barredo (Chairman), Concepcion, Jr., Abad Santos and De Castro, JJ., concur.

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SECOND DIVISION

[G.R. No. 109002. April 12, 2000]

DELA SALLE UNIVERSITY, petitioner, vs. DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and BUENAVENTURA MAGSALIN,respondents.

[G.R. No. 110072. April 12, 2000]

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS AND EMPLOYEES UNION (DLSUEA-NAFTEU),petitioner, vs. DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.

D E C I S I O N

BUENA, J.:

Filed with this Court are two petitions for certiorari,[1] the first petition with preliminary injunction and/or temporary restraining order,[2] assailing the decision of voluntary arbitrator Buenaventura Magsalin, dated January 19, 1993, as having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction. These two petitions have been consolidated inasmuch as the factual antecedents, parties involved and issues raised therein are interrelated.[3] Missc

The facts are not disputed and, as summarized by the voluntary arbitrator, are as follows. On December 1986, Dela Salle University (hereinafter referred to as UNIVERSITY) and Dela Salle University Employees Association - National Federation of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of regular non-academic rank and file employees,[4] (hereinafter referred to as UNION) entered into a collective bargaining agreement with a life span of three (3) years, that is, from December 23, 1986 to December 22, 1989.[5] During the freedom period, or 60 days before the expiration of the said collective bargaining agreement, the Union initiated negotiations with the University for a new collective bargaining agreement[6] which, however, turned out to be unsuccessful, hence, the Union filed a Notice of Strike with the National Conciliation and Mediation Board, National Capital Region.[7] After several conciliation-mediation meetings, five (5) out of the eleven (11) issues raised in the Notice of Strike were resolved by the parties. A partial collective bargaining agreement was thereafter executed by the parties.[8] On March 18, 1991, the parties entered into a Submission Agreement, identifying the remaining six (6) unresolved issues for arbitration, namely: "(1) scope of the bargaining unit, (2) union security clause, (3) security of tenure, (4) salary increases for the third and fourth years [this should properly read second and third years][9] of

http://sc.judiciary.gov.ph/jurisprudence/2000/apr2000/109002.htm#_ftn9









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the collective bargaining agreement, (5) indefinite union leave, reduction of the union president’s workload, special leave, and finally, (6) duration of the agreement."[10] The parties appointed Buenaventura Magsalin as voluntary arbitrator.[11] On January 19, 1993, the voluntary arbitrator rendered the assailed decision.[12] Spped

In the said decision, the voluntary arbitrator, on the first issue involving the scope of the bargaining unit, ruled that "…the Computer Operators assigned at the CSC [Computer Services Center], just like any other Computer Operators in other units, [should be] included as members of the bargaining unit,"[13] after finding that "[e]vidently, the Computer Operators are presently doing clerical and routinary work and had nothing to do with [the] setting of management policies for the University, as [may be] gleaned from the duties and responsibilities attached to the position and embodied in the CSC [Computer Services Center] brochure. They may have, as argued by the University, access to vital information regarding the University’s operations but they are not necessarily confidential."[14] Regarding the discipline officers, the voluntary arbitrator "…believes that this type of employees belong (sic) to the rank-and-file on the basis of the nature of their job."[15] With respect to the employees of the College of St. Benilde, the voluntary arbitrator found that the College of St. Benilde has a personality separate and distinct from the University and thus, held "…that the employees therein are outside the bargaining unit of the University’s rank-and-file employees."[16]

On the second issue regarding the propriety of the inclusion of a union shop clause in the collective bargaining agreement, in addition to the existing maintenance of membership clause, the voluntary arbitrator opined that a union shop clause "…is not a restriction on the employee’s right of (sic) freedom of association but rather a valid form of union security while the CBA is in force and in accordance with the Constitutional policy to promote unionism and collective bargaining and negotiations. The parties therefore should incorporate such union shop clause in their CBA."[17]

On the third issue with respect to the use of the "last-in-first-out" method in case of retrenchment and transfer to other schools or units, the voluntary arbitrator upheld the "…elementary right and prerogative of the management of the University to select and/or choose its employees, a right equally recognized by the Constitution and the law. The employer, in the exercise of this right, can adopt valid and equitable grounds as basis for lay-off or separation, like performance, qualifications, competence, etc. Similarly, the right to transfer or reassign an employee is an employer’s exclusive right and prerogative."[18]

Regarding the fourth issue concerning salary increases for the second and third years of the collective bargaining agreement, the voluntary arbitrator opined that the "…proposed budget of the University for SY 1992-93 could not sufficiently cope up










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with the demand for increases by the Union. xxx xxx. With the present financial condition of the University, it cannot now be required to grant another round of increases through collective bargaining without exhausting its coffers for other legitimate needs of the University as an institution,"[19]thus, he ruled that "…the University can no longer be required to grant a second round of increase for the school years under consideration and charge the same to the incremental proceeds."[20] Misspped

On the fifth issue as to the Union’s demand for a reduction of the workload of the union president, special leave benefits and indefinite union leave with pay, the voluntary arbitrator rejected the same, ruling that unionism "…is no valid reason for the reduction of the workload of its President,"[21] and that there is "…no sufficient justification to grant an indefinite leave."[22] Finding that the Union and the Faculty Association are not similarly situated, technically and professionally,[23] and that "[w]hile professional growth is highly encouraged on the part of the rank-and-file employees, this educational advancement would not serve in the same degree as demanded of the faculty members,"[24]the voluntary arbitrator denied the Union’s demand for special leave benefits.

On the last issue regarding the duration of the collective bargaining agreement, the voluntary arbitrator ruled that "…when the parties forged their CBA and signed it on 19 November 1990, where a provision on duration was explicitly included, the same became a binding agreement between them. Notwithstanding the Submission Agreement, thereby reopening this issue for resolution, this Voluntary Arbitrator is constrained to respect the original intention of the parties, the same being not contrary to law, morals or public policy."[25] As to the economic aspect of the collective bargaining agreement, the voluntary arbitrator opined that the "…economic provisions of the CBA shall be re-opened after the third year in compliance with the mandate of the Labor Code, as amended."[26]

Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained by the voluntary arbitrator "pursuant to existing rules and jurisprudence governing voluntary arbitration cases."[27] Josp-ped

On March 5, 1993, the University filed with the Second Division of this Court, a petition for certiorari with temporary restraining order and/or preliminary injunction assailing the decision of the voluntary arbitrator, as having been rendered "in excess of jurisdiction and/or with grave abuse of discretion."[28] Subsequently, on May 24, 1993, the Union also filed a petition for certiorari with the First Division.[29] Without giving due course to the petition pending before each division, the First and Second Divisions separately resolved to require the respondents in each petition, including the Solicitor General on behalf of the voluntary arbitrator, to file their respective Comments.[30] Upon motion by the Solicitor General dated July 29, 1993, both petitions were consolidated and transferred to the Second Division.[31]














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In his consolidated Comment[32] filed on September 9, 1993 on behalf of voluntary arbitrator Buenaventura C. Magsalin, the Solicitor General agreed with the voluntary arbitrator’s assailed decision on all points except that involving the employees of the College of St. Benilde. According to the Solicitor General, the employees of the College of St. Benilde should have been included in the bargaining unit of the rank-and-file employees of the University.[33] The Solicitor General came to this conclusion after finding "…sufficient evidence to justify the Union’s proposal to consider the University and the CSB [College of St. Benilde] as only one entity because the latter is but a mere integral part of the University," to wit:[34]

"1. One of the duties and responsibilities of the CSB’s Director of Academic Services is to coordinate with the University’s Director of Admissions regarding the admission of freshmen, shiftees and transferees (Annex "3" of the University’s Reply);

"2. Some of the duties and responsibilities of the CSB’s Administrative Officer are as follows:

‘A. xxx xxx xxx.

‘4. Recommends and implements personnel policies and guidelines (in accordance with the Staff Manual) as well as pertinent existing general policies of the university as a whole. xxx.

‘12. Conducts and establishes liaison with all the offices concerned at the Main Campus as well (sic) with other government agencies on all administrative-related matters. xxx Spp-edjo

‘B. xxx xxx xxx

‘7. Handles processing, canvassing and direct purchasing of all requisitions worth more than P10,000 or less. Coordinates and canvasses with the Main Campus all requisitions worth more than P10,000. xxx

‘C. xxx xxx xxx

‘7. Plans and coordinates with the Security and Safety Committee at the Main Campus the development of a security and safety program during times of emergency or occurrence of fire or other natural calamities. xxx (Annex "4" of the University’s Reply).’




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"3. The significant role which the University assumes in the admission of students at the CSB is revealed in the following provisions of the CSB’s Bulletin for Arts and Business Studies Department for the schoolyear 1992-1993, thus:

‘Considered in the process of admission for a (sic) high school graduate applicants are the following criteria: results of DLSU College Entrance Examination xxx.

‘Admission requirements for transferees are: xxx and an acceptable score in the DLSU admission test. xxx

‘Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with the DLSU policy on shifting. Considering that there sometimes exist exceptional cases where a very difficult but temporary situation renders a DLSU student falling under this category a last chance to be re-admitted provided he meets the cut-off scores required in the qualifying examination administered by the university. xxx

‘He may not be remiss in his study obligations nor incur any violation whatsoever, as such will be taken by the University to be an indication of his loss of initiative to pursue further studies at DLSU. In sch (sic) a case, he renders himself ineligible to continue studying at DLSU. DLSU thus reserves the right to the discontinuance of the studies of any enrolee whose presence is inimical to the objectives of the CSB/DLSU. xxx Mi-so

‘As a college within the university, the College of St. Benilde subscribes to the De La Salle Mission." (Annexes "C-1," "C-2," and "C-3" of the Union’s Consolidated Reply and Rejoinder)’

"4. The academic programs offered at the CSB are likewise presented in the University’s Undergraduate Prospectus for schoolyear 1992-1993 (Annex "D" of the Union’s Consolidated Reply and Rejoinder).

"5. The Leave Form Request (Annex "F" of the Union’s Position Paper) at the CSB requires prior permission from the University anent leaves of CSB employees, to wit:

‘AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE UNIVERSITY OR WHO

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OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE WITHOUT SECURING AUTHORITY FROM THE UNIVERSITY, OR WHO REFUSE TO BE RECALLED FROM AN APPROVED LEAVE SHALL BE CONSIDERED ABSENT WITHOUT LEAVE AND SHALL BE SUBJECT TO DISCIPLINARY ACTION.’

"6. The University officials themselves claimed during the 1990 University Athletic Association of the Philippines (UAAP) meet that the CSB athletes represented the University since the latter and the CSB comprise only one entity."

On February 9, 1994, this Court resolved to give due course to these consolidated petitions and to require the parties to submit their respective memoranda.[35]

In its memorandum filed on April 28, 1994,[36] pursuant to the above-stated Resolution,[37] the University raised the following issues for the consideration of the Court:[38] Ne-xold

I.

"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY ARBITRATOR WHEN HE INCLUDED, WITHIN THE BARGAINING UNIT COMPRISING THE UNIVERSITY’S RANK-AND-FILE EMPLOYEES, THE COMPUTER OPERATORS ASSIGNED AT THE UNIVERSITY’S COMPUTER SERVICES CENTER AND THE UNIVERSITY’S DISCIPLINE OFFICERS, AND WHEN HE EXCLUDED THE COLLEGE OF SAINT BENILDE EMPLOYEES FROM THE SAID BARGAINING UNIT.

II.

"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY ARBITRATOR WHEN HE UPHELD THE UNION’S DEMAND FOR THE INCLUSION OF A UNION SHOP CLAUSE IN THE PARTIES’ COLLECTIVE BARGAINING AGREEMENT.

III.

"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY ARBITRATOR WHEN HE DENIED THE UNION’S PROPOSAL FOR THE "LAST-IN-FIRST-OUT" METHOD OF LAY-OFF IN CASES OF RETRENCHMENT. Sc

IV.





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"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY ARBITRATOR WHEN HE RULED THAT THE UNIVERSITY CAN NO LONGER BE REQUIRED TO GRANT A SECOND ROUND OF WAGE INCREASES FOR THE SCHOOL YEARS 1991-92 AND 1992-93 AND CHARGE THE SAME TO THE INCREMENTAL PROCEEDS.

V.

"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY ARBITRATOR WHEN HE DENIED THE UNION’S PROPOSALS ON THE DELOADING OF THE UNION PRESIDENT, IMPROVED LEAVE BENEFITS AND INDEFINITE UNION LEAVE WITH PAY."

The Union, on the other hand, raised the following issues, in its memorandum,[39] filed pursuant to Supreme Court Resolution dated February 9, 1994,[40] to wit; that the voluntary arbitrator committed grave abuse of discretion in:

"(1)......FAILING AND/OR REFUSING TO PIERCE THE VEIL OF CORPORATE FICTION OF THE COLLEGE OF ST. BENILDE-DLSU DESPITE THE PRESENCE OF SUFFICIENT BASIS TO DO SO AND IN FINDING THAT THE EMPLOYEES THEREAT ARE OUTSIDE OF THE BARGAINING UNIT OF THE DLSU’S RANK-AND-FILE EMPLOYEES. HE ALSO ERRED IN HIS INTERPRETATION OF THE APPLICATION OF THE DOCTRINE; x-sc

"(2)......DENYING THE PETITIONER’S PROPOSAL FOR THE ‘LAST-IN FIRST-OUT’ METHOD OF LAY-OFF IN CASE OF RETRENCHMENT AND IN UPHOLDING THE ALLEGED MANAGEMENT PREROGATIVE TO SELECT AND CHOOSE ITS EMPLOYEES DISREGARDING THE BASIC TENETS OF SOCIAL JUSTICE AND EQUITY UPON WHICH THIS PROPOSAL WAS FOUNDED;

"(3)......FINDING THAT THE MULTISECTORAL COMMITTEE IN THE RESPONDENT UNIVERSITY IS THE LEGITIMATE GROUP WHICH DETERMINES AND SCRUTINIZES ANNUAL SALARY INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;

"(4)......HOLDING THAT THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS IS THE ONLY SOURCE OF SALARY INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;



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"(5)......FAILING/REFUSING/DISREGARDING TO CONSIDER THE RESPONDENT UNIVERSITY’S FINANCIAL STATEMENTS FACTUALLY TO DETERMINE THE FORMER’S CAPABILITY TO GRANT THE PROPOSED SALARY INCREASES OVER AND ABOVE THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS AND IN GIVING WEIGHT AND CONSIDERATION TO THE RESPONDENT UNIVERSITY’S PROPOSED BUDGET WHICH IS MERELY AN ESTIMATE.

"(6)......FAILING TO EQUATE THE POSITION AND RESPONSIBILITIES OF THE UNION PRESIDENT WITH THOSE OF THE PRESIDENT OF THE FACULTY ASSOCIATION WHICH IS NOT EVEN A LEGITIMATE LABOR ORGANIZATION AND IN SPECULATING THAT THE PRESIDENT OF THE FACULTY ASSOCIATION SUFFERS A CORRESPONDING REDUCTION IN SALARY ON THE ACCOUNT OF THE REDUCTION OF HIS WORKLOAD; IN FAILING TO APPRECIATE THE EQUAL RIGHTS OF THE MEMBERS OF THE UNION AND OF THE FACULTY FOR PROFESSIONAL ADVANCEMENT AS WELL AS THE DESIRABLE EFFECTS OF THE INSTITUTIONALIZATION OF THE SPECIAL LEAVE AND WORKLOAD REDUCTION BENEFITS." [41] xl-aw

The question which now confronts us is whether or not the voluntary arbitrator committed grave abuse of discretion in rendering the assailed decision, particularly, in resolving the following issues: (1) whether the computer operators assigned at the University’s Computer Services Center and the University’s discipline officers may be considered as confidential employees and should therefore be excluded from the bargaining unit which is composed of rank and file employees of the University, and whether the employees of the College of St. Benilde should also be included in the same bargaining unit; (2) whether a union shop clause should be included in the parties’ collective bargaining agreement, in addition to the existing maintenance of membership clause; (3) whether the denial of the Union’s proposed "last-in-first-out" method of laying-off employees, is proper; (4) whether the ruling that on the basis of the University’s proposed budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92 and 1992-93 and charge the same to the incremental proceeds, is correct; (5) whether the denial of the Union’s proposals on the deloading of the union president, improved leave benefits and indefinite union leave with pay, is proper; (6) whether the finding that the multi-sectoral committee in the University is the legitimate group which determines and scrutinizes the annual salary increases and fringe benefits of the employees of the University, is correct; and (7) whether the ruling that the 70% share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees, is proper.


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Now, before proceeding to the discussion and resolution of the issues raised in the pending petitions, certain preliminary matters call for disposition. As we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes,[42] the following are the well-settled rules in a petition for certiorari involving labor cases. "First, the factual findings of quasi-judicial agencies (such as the Department of Labor and Employment), when supported by substantial evidence, are binding on this Court and entitled to great respect, considering the expertise of these agencies in their respective fields. It is well-established that findings of these administrative agencies are generally accorded not only respect but even finality.[43] Man-ikx

"Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion.[44]

"Third, in Flores vs. National Labor Relations Commission,[45] we explained the role and function of Rule 65 as an extraordinary remedy:

"It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases — those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRC's evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality.

"No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench. Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record, which is certainly beyond the province of the extraordinary writ of certiorari. Such demand is impermissible for it would involve this Court in determining what evidence is entitled to belief and the weight to be assigned it. As we have reiterated countless times, judicial review by this Court in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction." (emphasis supplied).

With the foregoing rules in mind, we shall now proceed to discuss the merit of these consolidated petitions.

We affirm in part and modify in part. Scl-aw





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On the first issue involving the classification of the computer operators assigned at the University’s Computer Services Center and discipline officers, the University argues that they are confidential employees and that the Union has already recognized the confidential nature of their functions when the latter agreed in the parties’ 1986 collective bargaining agreement to exclude the said employees from the bargaining unit of rank-and-file employees. As far as the said computer operators are concerned, the University contends that "… the parties have already previously agreed to exclude all positions in the University’s Computer Services Center (CSC), which include the positions of computer operators, from the collective bargaining unit. xxx xxx."[46] The University further contends that "…the nature of the work done by these Computer Operators is enough justification for their exclusion from the coverage of the bargaining unit of the University’s rank-and-file employees. xxx xxx."[47] According to the University, the Computer Services Center, where these computer operators work, "…processes data that are needed by management for strategic planning and evaluation of systems. It also houses the University’s confidential records and information [e.g. student records, faculty records, faculty and staff payroll data, and budget allocation and expenditure related data] which are contained in computer files and computer-generated reports. xxx xxx. Moreover, the Computer Operators are in fact the repository of the University’s confidential information and data, including those involving and/or pertinent to labor relations. xxx xxx."[48]

As to the discipline officers, the University maintains that "…they are likewise excluded from the bargaining unit of the rank-and-file employees under the parties’ 1986 CBA. The Discipline Officers are clearly alter egos of management as they perform tasks which are inherent in management [e.g. enforce discipline, act as peace officers, secure peace and safety of the students inside the campus, conduct investigations on violations of University regulations, or of existing criminal laws, committed within the University or by University employees] xxx xxx."[49] The University also alleges that "the Discipline Officers are privy to highly confidential information ordinarily accessible only to management."[50] Manik-s

With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor General at this point, asserts that the veil of corporate fiction should be pierced, thus, according to the Union, the University and the College of St. Benilde should be considered as only one entity because the latter is but a mere integral part of the University.[51]

The University’s arguments on the first issue fail to impress us. The Court agrees with the Solicitor General that the express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the freedom period, the parties may not only renew the existing collective bargaining agreement but may







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also propose and discuss modifications or amendments thereto. With regard to the alleged confidential nature of the said employees’ functions, after a careful consideration of the pleadings filed before this Court, we rule that the said computer operators and discipline officers are not confidential employees. As carefully examined by the Solicitor General, the service record of a computer operator reveals that his duties are basically clerical and non-confidential in nature.[52] As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in the bargaining unit of rank-and-file employees.

The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be excluded from the bargaining unit of the rank-and-file employees of Dela Salle University, because the two educational institutions have their own separate juridical personality and no sufficient evidence was shown to justify the piercing of the veil of corporate fiction.[53] Man-ikan

On the second issue involving the inclusion of a union shop clause in addition to the existing maintenance of membership clause in the collective bargaining agreement, the University avers that "…it is in the spirit of the exercise of the constitutional right to self-organization that every individual should be able to freely choose whether to become a member of the Union or not. The right to join a labor organization should carry with it the corollary right not to join the same. This position of the University is but in due recognition of the individual’s free will and capability for judgment."[54] The University assails the Union’s demand for a union shop clause as "…definitely unjust and amounts to oppression. Moreover, such a demand is repugnant to democratic principles and the constitutionally guaranteed freedom of individuals to join or not to join an association as well as their right to security of tenure, particularly, on the part of present employees."[55]

The Union, on the other hand, counters that the Labor Code, as amended, recognizes the validity of a union shop agreement in Article 248 thereof which reads:

"ART. 248. Unfair labor practices of employers. –

xxx......xxx......xxx

(e) To discriminate in regard to hire or tenure of employment or any term or condition of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall prevent the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except of those employees who are already members of another union at the time of the signing of the collective bargaining agreement. xxx xxx." (emphasis supplied) Ol-dmiso





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We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the existing maintenance of membership clause in the collective bargaining agreement. As the Solicitor General asserted in his consolidated Comment, the University’s reliance on the case of Victoriano vs. Elizalde Rope Workers’ Union[56] is clearly misplaced. In that case, we ruled that "…the right to join a union includes the right to abstain from joining any union. xxx xxx. The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to 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 members 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. xxx xxx."[57]

On the third issue regarding the Union’s proposal for the use of the "last-in-first-out" method in case of lay-off, termination due to retrenchment and transfer of employees, the Union relies on social justice and equity to support its proposition, and submits that the University’s prerogative to select and/or choose the employees it will hire is limited, either by law or agreement, especially where the exercise of this prerogative might result in the loss of employment.[58] The Union further insists that its proposal is "…in keeping with the avowed State policy ‘(q) To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare’ (Art. 211, Labor Code, as amended)."[59]

On the other hand, the University asserts its management prerogative and counters that "[w]hile it is recognized that this right of employees and workers to ‘participate in policy and decision-making processes affecting their rights and benefits as may be provided by law’ has been enshrined in the Constitution (Article III, [should be Article XIII], Section 3, par. 2), said participation, however, does not automatically entitle the Union to dictate as to how an employer should choose the employees to be affected by a retrenchment program. The employer still retains the prerogative to determine the reasonable basis for selecting such employees."[60] Nc-m

We agree with the voluntary arbitrator that as an exercise of management prerogative, the University has the right to adopt valid and equitable grounds as basis for terminating or transferring employees. As we ruled in the case of Autobus Workers' Union (AWU) and Ricardo Escanlar vs. National Labor Relations Commission,[61] "[a] valid exercise of management prerogative is one which, among others, covers: work assignment, working methods, time, supervision of workers, transfer of employees, work supervision, and the discipline, dismissal and recall of workers. Except as provided for, or limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment." (emphasis supplied)







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On the fourth issue involving the voluntary arbitrator’s ruling that on the basis of the University’s proposed budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92 and 1992-93 and charge the same to the incremental proceeds, we find that the voluntary arbitrator committed grave abuse of discretion amounting to lack or excess of jurisdiction. As we ruled in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes,[62] "xxx xxx. [w]e believe that the standard proof of a company's financial standing is its financial statements duly audited by independent and credible external auditors."[63] Financial statements audited by independent external auditors constitute the normal method of proof of profit and loss performance of a company.[64] The financial capability of a company cannot be based on its proposed budget because a proposed budget does not reflect the true financial condition of a company, unlike audited financial statements, and more importantly, the use of a proposed budget as proof of a company’s financial condition would be susceptible to abuse by scheming employers who might be merely feigning dire financial condition in their business ventures in order to avoid granting salary increases and fringe benefits to their employees.

On the fifth issue involving the Union’s proposals on the deloading of the union president, improved leave benefits and indefinite union leave with pay, we agree with the voluntary arbitrator’s rejection of the said demands, there being no justifiable reason for the granting of the same. Nc-mmis

On the sixth issue regarding the finding that the multi-sectoral committee in the University is the legitimate group which determines and scrutinizes the annual salary increases and fringe benefits of the employees of the University, the Court finds that the voluntary arbitrator did not gravely abuse his discretion on this matter. From our reading of the assailed decision, it appears that during the parties’ negotiations for a new collective bargaining agreement, the Union demanded for a 25% and 40% salary increase for the second and third years, respectively, of the collective bargaining agreement.[65] The University’s counter-proposal was for a 10% increase for the third year.[66] After the meeting of the multi-sectoral committee on budget, which is composed of students, parents, faculty, administration and union, the University granted across-the-board salary increases of 11.3% and 19% for the second and third years, respectively.[67] While the voluntary arbitrator found that the said committee "…decided to grant the said increases based on the University’s viability which were exclusively sourced from the tuition fees. xxx xxx.," no finding was made as to the basis of the committee’s decision. Be that as it may, assuming for the sake of argument that the said committee is the group responsible for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the committee’s determination must still be based on duly audited financial statements following our ruling on the fourth issue.







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On the seventh and last issue involving the ruling that the 70% share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees, the Court deems that any determination of this alleged error is unnecessary and irrelevant, in view of our rulings on the fourth and preceding issues and there being no evidence presented before the voluntary arbitrator that the University held incremental tuition fee proceeds from which any wage increase or fringe benefit may be satisfied.

WHEREFORE, premises considered, the petitions in these consolidated cases, G.R. No. 109002 and G.R. No. 110072 are partially GRANTED. The assailed decision dated January 19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby AFFIRMED with the modification that the issue on salary increases for the second and third years of the collective bargaining agreement be REMANDED to the voluntary arbitrator for definite resolution within one month from the finality of this Decision, on the basis of the externally audited financial statements of the University already submitted by the Union before the voluntary arbitrator and forming part of the records. Scnc-m

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concur. 6/2/00 2:18 PM

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FIRST DIVISION

G.R. No. 75810 September 9, 1991

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner, vs.HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON GARMENTS MFG., CO., INC., respondents.

Esteban M. Mendoza for petitioner.

R E S O LU T I O N

NARVASA, J.:p

The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.

By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor Unions (NAFLU) was declared the exclusive bargaining representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON).

More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino KAMPIL Katipunan filed with the Bureau of Labor Relations a petition for certification election among the employees of VIRON. The petition allegedly counted with the support of more than thirty percent (30%) of the workers at VIRON.

NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a certification election be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the requirements of law and that since the certification of NAFLU as sole bargaining representative in 1981, no collective bargaining agreement had been executed between it and VIRON.

NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it was in process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had prompted it to file a notice of strike; and that these circumstances constituted a bar to the petition for election in accordance with Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1 reading as follows:

SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in accordance with Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification election may be held within one year from the date of issuance of declaration of a final certification election result. Neither may a representation question be entertained if, before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement.

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Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting aside the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election. This disposition is justified in the Resolution as follows:

... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its course since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that NAFLU slept on its right to bargain collectively with the employer. If a closer look was made on the history of labor management relations in the company, it could be readily seen that the delay in the negotiations for and conclusion of a collective agreement — the object of the one-year period — could be attributed first, on the exhaustion of all legal remedies in the representation question twice initiated in the company before the filing of the present petition and second, to management who had been resisting the representations of NAFLU in collective bargaining.

The one-year period therefore, should not be applied literally to the present dispute, especially considering that intervenor had to undergo a strike to bring management to the negotiation table. ...

KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action.

It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the date of issuance of declaration of a final certification election result' — in this case, from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON — can have no application to the case at bar. That one-year period-known as the "certification year" during which the certified union is required to negotiate with the employer, and certification election is prohibited 2 — has long since expired.

Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred because, before its filing, a bargaining deadlock between VIRON and NAFLU as the incumbent bargaining agent, had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout, in accordance with Section 3, Rule V, Book V of the Omnibus Rules above quoted.

Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargaining deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance and unfulfilled promises to bargain collectively; 3 but there is no proof that it had taken any action to legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it and VIRON.

The stark, incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the exclusive bargaining representative of all VIRON employees — to April 11, 1985 — when KAMPIL filed its petition for certification election or a period of more than four (4) years, no collective bargaining agreement was ever executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike notice.

The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for violation of terms and conditions of employment, which was settled by the parties' agreement, and to another strike staged on December 6, 1986 in connection with a claim of violation of said agreement, a dispute which has since been certified for compulsory arbitration by the Secretary of Labor & Employment. 4 Obviously, however, these activities took place after the initiation of the certification election case by KAMPIL, and it was grave abuse of discretion to have regarded them as precluding the holding of the certification election thus prayed for.

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WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the case at bar, and it was in the premises grave abuse of discretion to have ruled otherwise, the contested Resolution of the respondent Director of the Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE-04-004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent.

SO ORDERED.

Cruz, Griño-Aquino and Medialdea, JJ., concur.

Footnotes

1 As amended by Sec. 3, Rules Implementing Batas Pambansa Bilang 130.

2 EE Sec. 1, Rule 3, Rules and Regulations Implementing PD 1391.

3 omment filed by public respondent himself dated Sept. 14, 1987 (Rollo, pp. 60, 63) in view of the refusal of the Solicitor General to do so (Rollo, pp. 34-44).

4 Rollo, p. 63.

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FIRST DIVISION

G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE WORKERS, (CMC-ACE-UFSW), petitioners, vs.HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and Employment; CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS AND CAPITOL MEDICAL CENTER INCORPORATED AND DRA. THELMA CLEMENTE, President, respondents.

HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994 of public respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment in Case No. OS.-A-136-94 1 which dismissed the petition for certification election filed by petitioner for lack of merit and further directed private respondent hospital to negotiate a collective bargaining agreement with respondent union, Capitol Medical Center Employees Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's petition for certification election among the rank-and-file employees of the Capitol Medical Center. 2 Respondent CMC appealed the Order to the Office of the Secretary by questioning the legal status of respondent union's affiliation with the Alliance of Filipino Workers (AFW). To correct any supposed infirmity in its legal status, respondent union registered itself independently and withdrew the petition which had earlier been granted. Thereafter, it filed another petition for certification election.

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification election. 3Respondent CMC again appealed to the Office of the Secretary which affirmed 4 the Order of the Med-Arbiter granting the certification election.

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz issued an Order certifying respondent union as the sole and exclusive bargaining representative of the rank and file employees at CMC. 5

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of Labor which appeal was denied on February 26, 1993. 6 A subsequent motion for reconsideration filed by respondent CMC was likewise denied on March 23, 1993. 7

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of respondent union's certificate of registration in Case No. NCR-OD-M-92211-028. In the said case, Med-Arbiter Paterno Adap issued an Order dated February 4, 1993 which declared respondent union's certificate of registration as null and void. 8 However, this order was reversed on appeal by the Officer-in-Charge of the Bureau of Labor Relations in her Order issued on April 13, 1993. The said Order dismissed the motion for cancellation of the certificate of registration of respondent union and declared that it was not only a bona fide affiliate or local of a federation (AFW), but a duly registered union as well. Subsequently, this case reached this Court in Capitol Medical Center, Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated December 13, 1993, dismissing the petition of CMC for failure to sufficiently show that public respondent committed grave abuse of

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discretion. 9 The motion for reconsideration filed by CMC was likewise denied in our Resolution dated February 2, 1994. 10 Thereafter, on March 23, 1994, we issued an entry of judgment certifying that the Resolution dated December 13, 1993 has become final and executory. 11

Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of respondent CMC by Med-Arbiter Cruz, presented economic proposals for the negotiation of a collective bargaining agreement (CBA). However, respondent CMC contended that CBA negotiations should be suspended in view of the Order issued on February 4, 1993 by Med-Arbiter Adap declaring the registration of respondent union as null and void. In spite of the refusal of respondent CMC, respondent union still persisted in its demand for CBA negotiations, claiming that it has already been declared as the sole and exclusive bargaining agent of the rank-and-file employees of the hospital.

Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1, 1993. After complying with the other legal requirements, respondent union staged a strike on April 15, 1993. On April 16, 1993, the Secretary of Labor assumed jurisdiction over the case and issued an order certifying the same to the National Labor Relations Commission for compulsory arbitration where the said case is still pending. 12

It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the regular rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred thirty one (331) out of the four hundred (400) total rank-and-file employees of respondent CMC signed a petition to conduct a certification election; and 2) that the said employees are withdrawing their authorization for the said union to represent them as they have joined and formed the union Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). They also alleged that a certification election can now be conducted as more that 12 months have lapsed since the last certification election was held. Moreover, no certification election was conducted during the twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been concluded between respondent union and respondent CMC despite the lapse of twelve months from the time the said union was voted as the collective bargaining representative.

On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the certified bargaining agent of the rank-and-file employees of the Hospital, which was confirmed by the Secretary of Labor and Employment and by this Court. It also alleged that it was not remiss in asserting its right as the certified bargaining agent for it continuously demanded the negotiation of a CBA with the hospital despite the latter's avoidance to bargain collectively. Respondent union was even constrained to strike on April 15, 1993, where the Secretary of Labor intervened and certified the dispute for compulsory arbitration. Furthermore, it alleged that majority of the signatories who supported the petition were managerial and confidential employees and not members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to petitioner's allegations.

Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as more than twelve (12) months had lapsed since respondent union was certified as the exclusive bargaining agent and no CBA was as yet concluded. It also claimed that the other issues raised could only be resolved by conducting another certification election.

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper, immoral and in manifest disregard of the decisions rendered by the Secretary of Labor and by this Court. It claimed that CMC employed "legal obstructionism's" in order to let twelve months pass without a CBA having been concluded between them so as to pave the way for the entry of petitioner union.

On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election among the rank and fileemployees. 13 It ruled that the issue was the majority status of respondent union. Since no certification election was held within one year from the date of issuance of a final certification election result and there was no bargaining deadlock between respondent union and the employees that had been submitted to conciliation or had become the subject of a valid notice of strike or lock out, there is no bar to the holding of a certification election. 14

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Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the petition for certification election and in holding that this case falls under Section 3, Rule V Book V of the Rules Implementing the Labor Code. 15 It also prayed that the said provision must not be applied strictly in view of the facts in this case.

Petitioner union did not file any opposition to the appeal.

On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He ratiocinated that while the petition was indeed filed after the lapse of one year form the time of declaration of a final certification result, and that no bargaining deadlock had been submitted for conciliation or arbitration, respondent union was not remiss on its right to enter into a CBA for it was the CMC which refused to bargain collectively. 17

CMC and petitioner union separately filed motions for reconsideration of the said Order.

CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively with a union since the only issue involved is the determination of the bargaining agent of the employees.

Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification election would result in the denial of their substantial rights and interests. Moreover,it contended that public respondent's "indictment" that petitioner "capitalize (sic) on the ensuing delay which was caused by the Hospital, . . ." was unsupported by the facts and the records.

On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration hence this petition. 18

The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing the petition for certification election, and in directing the hospital to negotiate a collective bargaining agreement with the said respondent union.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against the holding of a certification election. It further claims that the denial of due process can be gleaned from the manner by which the assailed resolution was written, i.e., instead of the correct name of the mother federation UNIFIED, it was referred to as UNITED; and that the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO. Petitioner maintains that such errors indicate that the assailed resolution was prepared with "indecent haste."

We do not subscribe to petitioner's contention.

The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter the substance and merit of the assailed resolution.

Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of the questioned resolution. As correctly observed by the Solicitor General, petitioner is merely "nit-picking vainly trying to make a monumental issue out of a negligible error of the public respondent." 19

Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which was caused by the hospital and which resulted in the non-conclusion of a CBA within the certification year.'' 20 It further argues that the denial of its motion fro a fair hearing was clear case of denial of its right to due process.

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent union's appeal.

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It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules Implementing the Labor Code where a certification election should be conducted, viz: (1) that one year had lapsed since the issuance of a final certification result; and (2) that there is no bargaining deadlock to which the incumbent or certified bargaining agent is a party has been submitted to conciliation or arbitration, or had become the subject of a valid notice of strike or lockout, are present in this case. It further claims that since there is no evidence on record that there exists a CBA deadlock, the law allowing the conduct of a certification election after twelve months must be given effect in the interest of the right of the workers to freely choose their sole and exclusive bargaining agent.

While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final certification result, and that there is no collective bargaining deadlock, public respondent did not commit grave abuse of discretion when it ruled in respondent union's favor since the delay in the forging of the CBA could not be attributed to the fault of the latter.

A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of CMC, it invited the employer hospital to the bargaining table by submitting its economic proposal for a CBA. However, CMC refused to negotiate with respondent union and instead challenged the latter's legal personality through a petition for cancellation of the certificate of registration which eventually reached this Court. The decision affirming the legal status of respondent union should have left CMC with no other recourse but to bargain collectively; but still it did not. Respondent union was left with no other recourse but to file a notice of strike against CMC for unfair labor practice with the National Conciliation and Mediation Board. This eventually led to a strike on April 15, 1993.

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the subject petition for certification election on March 24, 1994, claiming that twelve months had lapsed since the last certification election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a petition for certification election, which had been submitted to conciliation or had become the subject of a valid notice of strike or lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had the occasion to define what a deadlock is, viz:\

A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There is a deadlock when there is a complete blocking or stoppage resulting from the action of equal and opposed forces . . . . The word is synonymous with the word impasse, which . . "presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties."

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor "reasonable effort at good faith bargaining," such can be attributed to CMC's fault as the bargaining proposals of respondent union were never answered by CMC. In fact, what happened in this case is worse than a bargaining deadlock for CMC employed all legal means to block the certification of respondent union as the bargaining agent of the rank-and-file; and use it as its leverage for its failure to bargain with respondent union. Thus, we can only conclude that CMC was unwilling to negotiate and reach an agreement with respondent union. CMC has not at any instance shown willingness to discuss the economic proposals given by respondent union. 22

As correctly ratiocinated by public respondent, to wit:

For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and which resulted in the non-conclusion of a CBA within the certification year, would be to negate and render a mockery of the proceedings undertaken before this Department and to put an unjustified premium on the failure of the respondent hospital to perform its duty to

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bargain collectively as mandated in Article 252 of the Labor Code, as amended, which states".

"Article 252. Meaning of duty to bargain collectively — the duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievance or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession."

The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear the brunt flowing from the respondent hospital's reluctance and thinly disguised refusal to bargain. 23

If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to conciliation or arbitration, with more reason should it not be conducted if, despite attempts to bring an employer to the negotiation table by the "no reasonable effort in good faith" on the employer certified bargaining agent, there was to bargain collectively.

In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by Chief Justice Andres R. Narvasa, the factual milieu of which is similar to this case, this Court allowed the holding of a certification election and ruled that the one year period known as the "certification year" has long since expired. We also ruled, that:

. . . prior to the filing of the petition for election in this case, there was no such "bargaining deadlock . . (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance, and unfulfilled promises to bargain collectively; but there is no proof that it had taken tiny action to legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it and VIRON. 24

Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case, NAFLU was counselled by this Court on the steps that it should have undertaken to protect its interest, but which it failed to do so.

This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there was proof that the certified bargaining agent, respondent union, had taken an action to legally coerce the employer to comply with its statutory duty to bargain collectively, i.e., charging the employer with unfair labor practice and conducting a strike in protest against the employer's refusal to bargain. 25 It is only just and equitable that the circumstances in this case should be considered as similar in nature to a "bargaining deadlock" when no certification election could be held. This is also to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be interpreted liberally so as to include a circumstance, e.g. where a CBA could not be concluded due to the failure of one party to willingly perform its duty to bargain collectively.

The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

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WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the instant petition is hereby DISMISSED.

SO ORDERED

Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.

Footnotes

1 NCR-00-M-9403-052.

2 Rollo, pp. 145-153.

3 Rollo, pp. 154-158.

4 Rollo, pp. 164-169.

5 Rollo, pp. 172-173.

6 Rollo, pp. 174-176.

7 Rollo, pp. 177-178.

8 Rollo, pp. 199-203.

9 Rollo, p. 281.

10 Rollo, p. 282.

11 Rollo, p. 283.

12 Rollo, pp. 209-210.

13 Rollo, pp. 26-31.

14 Ibid.

15 Rollo, pp. 71-77.

16 Rollo, pp. 33-41.

17 Ibid.

18 Rollo, pp. 43-44.

19 Rollo, p. 351.

20 Rollo, p. 14.

21 213 SCRA 759 (1992).

22 cf. Kiok Loy v. National Labor Relations Commission, 141 SCRA 179 (1987).

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23 Rollo, p. 40.

24 Emphasis supplied.

25 Kaisahan ng Manggagawang Pilipino v. Trajano, 201 SCRA 453 (1991).

ulp-cert. elect cases

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