UNIONS

FIRST DIVISION

EDEN GLADYS ABARIA,

ROMULO ALFORQUE, ELENA

ALLA, EVELYN APOSTOL,

AMELIA ARAGON, BEATRIZ

ALBASTRO, GLORIA

ARDULLES, GLENDA

BANTILAN, VIRGILIE

BORINAGA, ROLDAN

CALDERON, ILDEBRANDO

CUTA, ROMEO EMPUERTO,

LANNIE FERNANDEZ, LUCINELL

GABAYERON,

JESUSA GERONA, JOSE

GONZAGA, TEOFILO

HINAMPAS, JOSEFINA

IBUNA, MARLYN LABRA,

MARIA CARMENCITA LAO,

ERA CANEN, RODNEY REX

LERIAS, ERNIE MANLIGAS,

JOHANNE DEL MAR, RUBY

ORIMACO, CONSTANCIO

PAGADOR, MARVELOUS

PANAL, NOLAN PANAL,

LILLAN PETALLAR, GERNA

PATIGDAS, MELODIA

PAULIN, SHIRLEY ROSE

REYES, JOSEFINA REYES,

OSCAR DE LOS SANTOS,

SOLOMON DE LOS SANTOS,

RAMON TAGNIPIS,

BERNADETTE TIBAY, RONALD

TUMULAK, LEONCIO

VALLINAS, EDELBERTO

VILLA and the

NAGKAHIUSANG MAMUMUO

G.R. No.

154113

SA METRO CEBU COMMUNITY

HOSPITAL,

Petitioners,

- versus -

NATIONAL LABOR RELATIONS

COMMISSION, METRO CEBU

COMMUNITY HOSPITAL, INC.,

ITS BOARD OF TRUSTEES,

REV. GREGORIO IYOY,

SHIELA BUOT, REV. LORENZO

GENOTIVA, RUBEN CARABAN,

RUBEN ESTOYE, LILIA SAURO,

REV. ELIZER BERTOLDO,

RIZALINA VILLAGANTE, DRA.

LUCIA FLORENDO,

CONCEPCION VILLEGAS,

REV. OLIVER CANEN, DRA.

CYD RAGAS, REV. MIKE

CAMBA, AVEDNIGO

VALIENTE, RIZALINO

TAGANAS, CIRIACO

PONGASI, ISIAS WAGAS, REV.

ESTER GELOAGAN, REV. LEON

MANIWAN, CRESENTE BAOAS,

WINEFREDA BARLOSO, REV.

RUEL MARIGA AND THE

UNITED CHURCH OF CHRIST IN

THE PHILIPPINES, REV.

HILARIO GOMEZ, REV. ELMER

BOLOCON, THE NATIONAL

FEDERATION OF LABOR AND

ARMAND ALFORQUE,

Respondent

s.

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PERLA NAVA, DANIELA

YOSORES, AGUSTIN

ALFORNON, AILEEN

CATACUTAN, ROLANDO

G.R. No.

187778

REDILOSA, CORNELIO

MARIBOJO, VIRGENCITA

CASAS, CRISANTA

GENEGABOAS, EMILIO LAO,

RICO GASCON, ALBINA

BAÑEZ, PEDRO

CABATINGAN, PROC

OMIO SALUPAN, ELIZABETH

RAMON, DIOSCORO

GABUNADA, ROY

MALAZARTE, FELICIANITA

MALAZARTE, NORBERTA

CACA, MILAGROS

CASTILLO, EDNA ALBO,

BERNABE LUMAPGUID, CELIA

SABAS, SILVERIO LAO, DARIO

LABRADOR, ERNESTO CANEN,

JR., ELSA BUCAO, HANNAH

BONGCARAS, NEMA

BELOCURA, PEPITO

LLAGAS,GUILLERMA

REMOCALDO,

ROGELIO DABATOS, ROBERTO

JAYMA,

RAYMUNDO DELATADO,

MERLYN NODADO, NOEL

HORTELANO, HERMELO DELA

TORRE, LOURDES OLARTE,

DANILO ZAMORA, LUZ CAB

ASE, CATALINA ALSADO,

RUTH BANZON AND THE

NAGKAHIUSANG

MAMUMUO SA METRO C

EBU COMMUNITY HOSPITAL,

Petitioners,

- versus -

NATIONAL

LABOR RELATIONS

COMMISSION (FOURTH

DIVISION), METRO CEBU

COMMUNITY HOSPITAL, INC.,

BOARD OF TRUSTEES, REV.

GREGORIO IYOY, SHIELA

BUOT, REV. LORENZO

GENOTIVA, RUBEN CABABAN,

ROSENDO ESTOYE, LILIA

SAURO, REV.

ELIZER BERTOLDO,

RIZALINA VILLAGANTE, DRA.

LUCIA

FLORENDO, CONCEPCION

VILLEGAS, REV. OLIVER

CANEN, DRA. CYD RAAGAS,

REV. MIKE CAMBA,

AVIDNIGO VALIENTE,

RIZALINO

TAGANAS, CIRIACO

PONGASI, ISIAS

WAGAS, REV. ESTER

GELOAGAN, REV. LEON

MANIWAN, CRESENTE BAOAS,

WINIFREDA BARLOSO, REV.

RUEL MARIGA, THE

UNITED CHURCH

OF CHRIST IN THE PHILIPPINE

S, REV. HILARIO GOMEZ,

REV. ELMER BOLOCON, THE

NATIONAL FEDERATION OF

LABOR AND ARMANDO

ALFORQUE,

Respondent

s.

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METRO CEBU COMMUNITY

HOSPITAL, presently known

as Visayas Community

Medical Center (VCMC),

Petitioner,

- versus -

PERLA NAVA, DANIELA

YOSORES, AGUSTIN

ALFORNON, AILEEN

G.R. No.

187861

CATACUTAN, ROLANDO

REDILOSA, CORNELIO

MARIBOJO, VIRGENCITA

CASAS, CRISANTA

GENEGABOAS, EMILIO LAO,

RICO GASCON, ALBINA

BANEZ, PEDRO CABATINGAN,

PROCOMIO SALUPAN,

ELIZABETH RAMON,

DIOSCORO GABUNADA, ROY

MALAZARTE, FELICIANITA

MALAZARTE, NORBERTA

CACA,

MILAGROS CASTILLO, EDNA

ALBO, BERNABE LUMABGUID,

CELIA SABAS,

SILVERIO

LAO, DARIOLABRADOR,

ERNESTO CANEN,

JR., ELSA BUCAO,

HANNAH BONGCARAS,

NEMA

BELOCURA, PEPITO LLAGAS,

GUILLERMA REMOCALDO,

ROGELIO

DABATOS, ROBERTO

JAYMA, RAYMUNDO

DELATADO, NOEL

HORTELANO, HERMELO DE

LA TORRE, LOURDES

OLARTE, DANILOZAMORA,

LUZ CABASE, CATALINA

ALSADO AND RUTH BANZON,

Respondent

s.

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VISAYAS COMMUNITY

MEDICAL CENTER (VCMC)

formerly known as METRO

CEBU COMMUNITY HOSPITAL

G.R. No.

196156

(MCCH),

Petitioner,

- versus -

ERMA YBALLE, NELIA ANGEL,

ELEUTERIA CORTEZ and

EVELYN ONG,

Respondent

s.

Present:

CORONA, C.J

.,

Chairpers

on,

LEONARDO-

DE CASTRO,

BERSAMIN,

DEL CASTILLO,

and

VILLARAMA,

JR., JJ.

Promulgated:

December 7,

2011

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DECISION

VILLARAMA, JR., J.:

The consolidated petitions before us involve

the legality of mass termination of hospital

employees who participated in strike and picketing

activities.

The factual antecedents:

Metro Cebu Community Hospital, Inc.

(MCCHI), presently known as the Visayas

Community Medical Center (VCMC), is a non-stock,

non-profit corporation organized under the laws of

the Republic of the Philippines. It operates the

Metro Cebu Community Hospital (MCCH), a tertiary

medical institution located at Osmeña

Boulevard, Cebu City. MCCH is owned by the

United Church of Christ in the Philippines (UCCP)

and Rev. Gregorio P. Iyoy is the Hospital

Administrator.

The National Federation of Labor (NFL) is the

exclusive bargaining representative of the rank-

and-file employees of MCCHI. Under the 1987 and

1991 Collective Bargaining Agreements (CBAs), the

signatories were Ciriaco B. Pongasi, Sr. for MCCHI,

and Atty. Armando M. Alforque (NFL Legal Counsel)

and Paterno A. Lumapguid as President of NFL-

MCCH Chapter. In the CBA effective from January

1994 until December 31, 1995, the signatories were

Sheila E. Buot as Board of Trustees Chairman, Rev.

Iyoy as MCCH Administrator and Atty. Fernando Yu

as Legal Counsel of NFL, while Perla Nava, President

of Nagkahiusang Mamumuo sa MCCH (NAMA-

MCCH-NFL) signed the Proof of Posting.[1]

On December 6, 1995, Nava wrote Rev. Iyoy

expressing the union’s desire to renew the CBA,

attaching to her letter a statement of proposals

signed/endorsed by 153 union members. Nava

subsequently requested that the following

employees be allowed to avail of one-day union

leave with pay on December 19, 1995: Celia Sabas,

Jesusa Gerona, Albina Bañez, Eddie Villa, Roy

Malazarte, Ernesto Canen, Jr., Guillerma

Remocaldo, Catalina Alsado, Evelyn Ong, Melodia

Paulin, Sofia Bautista, Hannah Bongcaras, Ester

Villarin, Iluminada Wenceslao and Perla Nava.

However, MCCHI returned the CBA proposal for

Nava to secure first the endorsement of the legal

counsel of NFL as the official bargaining

representative of MCCHI employees.[2]

Meanwhile, Atty. Alforque informed MCCHI

that the proposed CBA submitted by Nava was

never referred to NFL and that NFL has not

authorized any other legal counsel or any person

for collective bargaining negotiations. By January

1996, the collection of union fees (check-off) was

temporarily suspended by MCCHI in view of the

existing conflict between the federation and its

local affiliate. Thereafter, MCCHI attempted to take

over the room being used as union office but was

prevented to do so by Nava and her group who

protested these actions and insisted that

management directly negotiate with them for a

new CBA. MCCHI referred the matter to Atty.

Alforque, NFL’s Regional Director, and advised

Nava that their group is not recognized by NFL.[3]

In his letter dated February 24,

1996 addressed to Nava, Ernesto Canen, Jr., Jesusa

Gerona, Hannah Bongcaras, Emma Remocaldo,

Catalina Alsado and Albina Bañez, Atty. Alforque

suspended their union membership for serious

violation of the Constitution and By-Laws. Said

letter states:

During the last General Membership Meeting of the

union on February 20, 1996, you openly declared

that you recognized the officers of the KMU not

those of the NFL, that you submit to the

stuctures [sic] and authority of the KMU not of the

NFL, and that you are loyal only to the KMU not to

the NFL.

Also, in the same meeting, you admitted having

sent a proposal for a renewed collective

bargaining agreement to the management without

any consultation with the NFL. In fact, in your letter

dated February 21, 1996 addressed to Rev.

Gregorio Iyoy, the Administrator of the hospital, you

categorically stated as follows: “We do not need

any endorsement from NFL, more particularly from

Atty. Armando Alforque to negotiate our CBA with

MCCH.” You did not only ignore the authority of

the undersigned as Regional Director but you

maliciously prevented and bluntly refused my

request to join the union negotiating panel in the

CBA negotiations.

Your above flagrant actuations, made in the

presence of the union membership, constitute the

following offenses:

1. Willful violation of the Constitution and By-Laws of

the Federation and the orders and decisions of duly

constituted authorities of the same (Section 4 (b),

Article III), namely:

a) Defying the decision of the organization

disaffiliating from the KMU; and

b) Section 9 (b), Article IX which pertains to the

powers and responsibilities of the Regional Director,

particularly, to negotiate and sign collective

bargaining agreement together with the local

negotiating panel subject to prior ratification by the

general membership;

2. Joining or assisting another labor organization or

helping in the formation of a new labor

organization that seeks or tends to defeat the

purpose of the Federation (Section 4 (d), Article III)

in relation to the National Executive Board’s

Resolution No. 8, September 26-27, 1994, to wit:

“Pursuant to the NEB Resolution disaffiliating from

the KMU dated September 11, 1993, the NEB in

session hereby declare that KMU is deemed an

organization that seeks to defeat the objective of

establishing independent and democratic unions

and seeks to replace the Federation as exclusive

representative of its members.

Committing acts that tend to alienate the loyalty of

the members to the Federation, subvert its duly

constituted authorities, and divide the organization

in any level with the objective of establishing a pro-

KMU faction or independent union loyal to the KMU

shall be subject to disciplinary action, suspension or

expulsion from union membership, office or position

in accordance with paragraph[s] d and f of Section

4, Article III, and paragraph h, Section 6, Article VI,

paragraph d, Section 9, Article IX.”

You are, therefore, directed to submit written

explanation on the above charges within five (5)

days from receipt hereof. Failure on your part shall

be considered a waiver of your right to be heard

and the Federation will act accordingly.

Considering the gravity of the charges against you,

the critical nature of the undertaking to renew the

collective bargaining agreement, and the serious

threat you posed to the organization, you are

hereby placed under temporary suspension from

your office and membership in the union

immediately upon receipt hereof pending

investigation and final disposition of your case in

accordance with the union’s constitution and by-

laws.

For your guidance and compliance.[4]

On February 26, 1996, upon the request of

Atty. Alforque, MCCHI granted one-day union

leave with pay for 12 union members.[5] The next

day, several union members led by Nava and her

group launched a series of mass actions such as

wearing black and red armbands/headbands,

marching around the hospital premises and putting

up placards, posters and streamers. Atty. Alforque

immediately disowned the concerted activities

being carried out by union members which are not

sanctioned by NFL. MCCHI directed the union

officers led by Nava to submit within 48 hours a

written explanation why they should not be

terminated for having engaged in illegal concerted

activities amounting to strike, and placed them

under immediate preventive

suspension. Responding to this directive, Nava and

her group denied there was a temporary stoppage

of work, explaining that employees wore their

armbands only as a sign of protest and reiterating

their demand for MCCHI to comply with its duty to

bargain collectively. Rev. Iyoy, having been

informed that Nava and her group have also been

suspended by NFL, directed said officers to appear

before his office for investigation in connection with

the illegal strike wherein they reportedly uttered

slanderous and scurrilous words against the officers

of the hospital, threatening other workers and

forcing them to join the strike. Said union officers,

however, invoked the grievance procedure

provided in the CBA to settle the dispute between

management and the union.[6]

On March 13 and 19, 1996, the Department of

Labor and Employment (DOLE) Regional Office No.

7 issued certifications stating that there is nothing in

their records which shows that NAMA-MCCH-NFL

is a registered labor organization, and that said

union submitted only a copy of its Charter

Certificate on January 31, 1995.[7] MCCHI then sent

individual notices to all union members asking them

to submit within 72 hours a written explanation why

they should not be terminated for having supported

the illegal concerted activities of NAMA-MCCH-NFL

which has no legal personality as per DOLE records.

In their collective response/statement dated March

18, 1996, it was explained that the picketing

employees wore armbands to protest MCCHI’s

refusal to bargain; it was also contended that

MCCHI cannot question the legal personality of the

union which had actively assisted in CBA

negotiations and implementation.[8]

On March 13, 1996, NAMA-MCCH-NFL filed a

Notice of Strike but the same was deemed not filed

for want of legal personality on the part of the

filer. The National Conciliation and Mediation

Board (NCMB) Region 7 office likewise denied their

motion for reconsideration on March 25,

1996. Despite such rebuff, Nava and her group still

conducted a strike vote on April 2, 1996 during

which an overwhelming majority of union members

approved the strike.[9]

Meanwhile, the scheduled investigations did

not push through because the striking union

members insisted on attending the same only as a

group. MCCHI again sent notices informing them

that their refusal to submit to investigation is

deemed a waiver of their right to explain their side

and management shall proceed to impose proper

disciplinary action under the

circumstances. OnMarch 30, 1996, MCCHI sent

termination letters to union leaders and other

members who participated in the strike and

picketing activities. On April 8, 1996, it also issued a

cease-and-desist order to the rest of the striking

employees stressing that the wildcat concerted

activities spearheaded by the Nava group is illegal

without a valid Notice of Strike and warning them

that non-compliance will compel management to

impose disciplinary actions against them. For their

continued picketing activities despite the said

warning, more than 100 striking employees were

dismissed effective April 12 and 19, 1996.

Unfazed, the striking union members held

more mass actions. The means of ingress to and

egress from the hospital were blocked so that

vehicles carrying patients and employees were

barred from entering the premises. Placards were

placed at the hospital’s entrance gate stating:

“Please proceed to another hospital” and “we are

on protest.” Employees and patients reported acts

of intimidation and harassment perpetrated by

union leaders and members. With the intensified

atmosphere of violence and animosity within the

hospital premises as a result of continued protest

activities by union members, MCCHI suffered heavy

losses due to low patient admission rates. The

hospital’s suppliers also refused to make further

deliveries on credit.

With the volatile situation adversely affecting

hospital operations and the condition of confined

patients, MCCHI filed a petition for injunction in the

NLRC (Cebu City) on July 9, 1996(Injunction Case

No. V-0006-96). A temporary restraining order (TRO)

was issued on July 16, 1996. MCCHI presented 12

witnesses (hospital employees and patients),

including a security guard who was stabbed by an

identified sympathizer while in the company of

Nava’s group. MCCHI’s petition was granted and

a permanent injunction was issued on September

18, 1996 enjoining the Nava group from committing

illegal acts mentioned in Art. 264 of the Labor

Code.[10]

On August 27, 1996, the City Government of

Cebu ordered the demolition of the structures and

obstructions put up by the picketing employees of

MCCHI along the sidewalk, having determined the

same as a public nuisance or nuisance per se.[11]

Thereafter, several complaints for illegal

dismissal and unfair labor practice were filed by the

terminated employees against MCCHI, Rev. Iyoy,

UCCP and members of the Board of Trustees of

MCCHI.

On August 4, 1999, Executive Labor Arbiter Reynoso

A. Belarmino rendered his decision[12] dismissing the

complaints for unfair labor practice in NLRC Case

Nos. RAB-VII-02-0309-98, RAB-VII-02-0394-98 and

RAB-VII-03-0596-98 filed by Nava and 90 other

complainants. Executive Labor Arbiter Belarmino

found no basis for the charge of unfair labor

practice and declared the strike and picketing

activities illegal having been conducted by NAMA-

MCCH-NFL which is not a legitimate labor

organization. The termination of union leaders

Nava, Alsado, Bañez, Bongcaras,

Canen, Gerona and Remocaldo were upheld as

valid but MCCHI was directed to grant separation

pay equivalent to one-half month for every year of

service, in the total amount ofP3,085,897.40 for the

84 complainants.[13]

Complainants appealed to the

Commission. On March 14, 2001, the NLRC’s Fourth

Division rendered its Decision,[14] the dispositive

portion of which reads:

WHEREFORE, premises considered, the decision of

the Executive Labor Arbiter dismissing the complaint

for unfair labor practice and illegal dismissal is

AFFIRMED with MODIFICATIONS declaring the

dismissal of all the complainants in RAB Case No.

07-02-0394-98 and RAB Case No. 07-03-0596-98 valid

and legal. Necessarily, the award of separation

pay and attorney’s fees are hereby Deleted.

Resolution on RAB Case No. 07-02-0309-98 is hereby

Deferred upon Joint Motion of the parties.

SO ORDERED.[15]

In its Resolution dated July 2, 2001, the NLRC

denied complainants’ motion for

reconsideration.[16]

Complainants elevated the case to the Court

of Appeals (CA) (Cebu Station) via a petition for

certiorari, docketed as CA-G.R. SP No. 66540.[17]

In its Resolution dated November 14, 2001, the

CA’s Eighth Division dismissed the petition on the

ground that out of 88 petitioners only 47 have

signed the certification against forum

shopping.[18] Petitioners moved to reconsider the

said dismissal arguing that the 47 signatories more

than constitute the principal parties as the petition

involves a matter of common concern to all the

petitioning employees.[19] By

Resolution[20] dated May 28, 2002, the CA reinstated

the case only insofar as the 47 petitioners who

signed the petition are concerned.

Petitioners challenged the validity of

the November 14, 2001 and May 28,

2002 resolutions before this Court in a petition for

review on certiorari, docketed as G.R. No. 154113.

Meanwhile, the NLRC’s Fourth Division

(Cebu City) rendered its Decision[21] dated March

12, 2003 in RAB Case Nos. 07-02-0309-98 (NLRC

Case No. V-001042-99) pertaining to complainants

Erma Yballe, Evelyn Ong, Nelia Angel and Eleuteria

Cortez as follows:

WHEREFORE, premises considered, the

decision of the Executive Labor Arbiter dismissing

the complaint for unfair labor practice and illegal

dismissal is AFFIRMED with MODIFICATIONS declaring

all complainants to have been validly

dismissed. Necessarily, the award of separation

pay and attorney’s fees are hereby Deleted.

SO ORDERED.[22]

The NLRC likewise denied the motion for

reconsideration filed by complainants Yballe, et al.

in its Resolution dated April 13, 2004.[23]

On October 17, 2008, the CA rendered its

Decision[24] in CA-G.R. SP No. 66540, the dispositive

portion of which states:

WHEREFORE, premises considered, judgment is

hereby rendered AFFIRMING the Decision of the

National Labor Relations Commission (NLRC) –

Fourth Division dated March 14, 2001 in NLRC Case

No. V-001042-99, WITH MODIFICATIONS to the effect

that (1) the petitioners, except the union officers,

shall be awarded separation pay equivalent to

one-half (1/2) month pay for every year of service,

and (2) petitioner Cecilia Sabas shall be awarded

overtime pay amounting to sixty-three (63) hours.

SO ORDERED.[25]

Petitioners filed a motion for reconsideration

while private respondents filed a motion for partial

reconsideration questioning the award of

separation pay. The former also invoked the

decision of this Court in Bascon v. Court of

Appeals,[26] while the latter argued for the

application of the ruling in decision rendered by the

CA (Cebu City) in Miculob v. NLRC, et al. (CA-G.R.

SP No. 84538),[27] both involving similar complaints

filed by dismissed employees of MCCHI.

By Resolution[28] dated April 17, 2009, the CA

denied both motions:

WHEREFORE, the petitioners’ Motion for

Reconsideration and the private respondent[s’]

Motion for Partial Reconsideration of the October

17, 2008 Decision are both DENIED for lack of merit.

The Motions for Substitution of Counsel and

Compromise Agreements submitted by petitioners

Bernardito Lawas, Avelina Bangalao, Dailenda

Hinampas and Daylinda Tigo are hereby

approved. Consequently, said petitioners are

ordered dropped from the list of petitioners and the

case is deemed dismissed as to them.

SO ORDERED.[29]

Complainants Yballe, et al. also challenged

before the CA the March 12, 2003 Decision

and April 13, 2004 Resolution of the NLRC in a

petition for certiorari, docketed as CA-G.R. SP No.

84998 (Cebu City). By Decision[30] dated November

7, 2008, the CA granted their petition, as follows:

WHEREFORE, the challenged Decision of

public respondent dated March 12, 2003 and its

Resolution dated April 13, 2004 are hereby

REVERSED AND SET ASIDE. Private

respondent Metro Cebu CommunityHospital is

ordered to reinstate petitioners Erma Yballe,

Eleuteria Cortes, Nelia Angel and Evelyn Ong

without loss of seniority rights and other privileges; to

pay them their full backwages inclusive of their

allowances and other benefits computed from the

time of their dismissal up to the time of their actual

reinstatement.

No pronouncement as to costs.

SO ORDERED.[31]

Private respondents (MCCHI, et al.) moved to

reconsider the above decision but the CA denied

their motion on February 22, 2011.[32]

Both petitioners and private respondents in

CA-G.R. SP No. 66540 appealed to this Court.

Private respondent MCCHI in CA-G.R. SP No. 84998,

under its new name Visayas Community Medical

Center (VCMC), filed a petition for certiorari in this

Court.

In G.R. No. 187778, petitioners Nava, et al.

prayed that the CA decision be set aside and a

new judgment be entered by this Court (1)

declaring private respondents guilty of unfair labor

practice and union busting; (2) directing private

respondents to cease and desist from further

committing unfair labor practices against the

petitioners; (3) imposing upon MCCH the proposed

CBA or, in the alternative, directing the hospital and

its officers to bargain with the local union; (4)

declaring private respondents guilty of unlawfully

suspending and illegally dismissing the individual

petitioners-employees; (5) directing private

respondents to reinstate petitioners-employees to

their former positions, or their equivalent, without

loss of seniority rights with full backwages and

benefits until reinstatement; and (6) ordering private

respondents to pay the petitioners moral damages,

exemplary damages, legal interests, and attorney’s

fees.[33]

On the other hand, petitioner MCCHI in G.R.

No. 187861 prayed for the modification of the CA

decision by deleting the award of separation pay

and reinstating the March 14, 2001 decision of the

NLRC.[34]

In G.R. No. 196156, MCCHI/VCMC prayed for

the annulment of the November 7, 2008 Decision

and February 22, 2011 Resolution of the CA, for this

Court to declare the dismissal of respondents

Yballe, et al. as valid and legal and to reinstate the

March 12, 2003 Decision and April 13, 2004

Resolution of the NLRC.

G.R. No. 187861 was consolidated with G.R.

Nos. 154113 and 187778 as they involve similar

factual circumstances and identical or related

issues. G.R. No. 196156 was later also consolidated

with the aforesaid cases.

The issues are: (1) whether the CA erred in

dismissing the petition for certiorari (CA-G.R. SP

No. 66540) with respect to the petitioners in G.R.

No. 154113 for their failure to sign the certification

against forum shopping; (2) whether MCCHI is guilty

of unfair labor practice; (3) whether petitioning

employees were illegally dismissed; and (4) if their

termination was illegal, whether petitioning

employees are entitled to separation pay,

backwages, damages and attorney’s fees.

Dropping of petitioners who did not sign the

certification against forum shopping improper

The Court has laid down the rule in Altres v.

Empleo[35] as culled from “jurisprudential

pronouncements”, that the certification against

forum shopping must be signed by all the plaintiffs

or petitioners in a case; otherwise, those who did

not sign will be dropped as parties to the case.

Under reasonable or justifiable circumstances,

however, as when all the plaintiffs or petitioners

share a common interest and invoke a common

cause of action or defense, the signature of only

one of them in the certification against forum

shopping substantially complies with the Rule.

In the case at bar, the signatures of 47 out of

88 petitioning employees in the certification against

forum shopping constitute substantial compliance

with the rule. There is no question that they shared a

common interest and invoked a common cause of

action when they filed suit before the Labor Arbiter

and NLRC questioning the validity of their

termination and charging MCCHI with unfair labor

practice. Thus, when they appealed their case to

the CA, they pursued the same as a collective

body, raising only one argument in support of their

cause of action, i.e., the illegal dismissal allegedly

committed by MCCHI when union members

resorted to strike and mass actions due to MCCHI’s

refusal to bargain with officers of the local chapter.

There is sufficient basis, therefore, for the 47

signatories to the petition, to speak for and in

behalf of their co-petitioners and to file the Petition

for Certiorari in the appellate court.[36] Clearly, the

CA erred in dropping as parties-petitioners those

who did not sign the certification against forum

shopping.

However, instead of remanding the case to

the CA for it to resolve the petition with respect to

the herein petitioners in G.R. No. 154113, and as

prayed for, the Court shall consider them parties-

petitioners in CA-G.R. SP No. 66540,which case has

already been decided and now subject of appeal

in G.R. No. 187778.

MCCHI not guilty of unfair labor practice

Art. 248 (g) of the Labor Code, as amended,

makes it an unfair labor practice for an employer

“[t]o violate the duty to bargain collectively” as

prescribed by the Code. The applicable provision

in this case is Art. 253 which provides:

ART. 253. Duty to bargain collectively when there

exists a collective bargaining agreement. – When

there is a collective bargaining agreement, the

duty to bargain collectively shall also mean that

neither party shall terminate nor modify such

agreement during its lifetime. However, either party

can serve a written notice to terminate or modify

the agreement at least sixty (60) days prior to its

expiration date. It shall be the duty of both parties

to keep the status quo and to continue in full force

and effect the terms and conditions of the existing

agreement during the 60-day period and/or until a

new agreement is reached by the parties.

NAMA-MCCH-NFL charged MCCHI with

refusal to bargain collectively when the latter

refused to meet and convene for purposes of

collective bargaining, or at least give a counter-

proposal to the proposed CBA the union had

submitted and which was ratified by a majority of

the union membership. MCCHI, on its part,

deferred any negotiations until the local union’s

dispute with the national union federation (NFL) is

resolved considering that the latter is the exclusive

bargaining agent which represented the rank-and-

file hospital employees in CBA negotiations since

1987.

We rule for MCCHI.

Records of the NCMB and DOLE Region 7

confirmed that NAMA-MCCH-NFL had not

registered as a labor organization, having

submitted only its charter certificate as an affiliate

or local chapter of NFL.[37] Not being a legitimate

labor organization, NAMA-MCCH-NFL is not entitled

to those rights granted to a legitimate labor

organization under Art. 242, specifically:

(a) To act as the representative of its members for

the purpose of collective bargaining;

(b) To be certified as the exclusive representative

of all the employees in an appropriate collective

bargaining unit for purposes of collective

bargaining;

x x x x

Aside from the registration requirement, it is

only the labor organization designated or selected

by the majority of the employees in an appropriate

collective bargaining unit which is the exclusive

representative of the employees in such unit for the

purpose of collective bargaining, as provided in Art.

255.[38] NAMA-MCCH-NFL is not the labor

organization certified or designated by the majority

of the rank-and-file hospital employees to represent

them in the CBA negotiations but the NFL, as

evidenced by CBAs concluded in 1987, 1991 and

1994. While it is true that a local union has the right

to disaffiliate from the national federation, NAMA-

MCCH-NFL has not done so as there was no any

effort on its part to comply with the legal requisites

for a valid disaffiliation during the “freedom

period”[39] or the last 60 days of the last year of the

CBA, through a majority vote in a secret balloting in

accordance with Art. 241 (d).[40] Nava and her

group simply demanded that MCCHI directly

negotiate with the local union which has not even

registered as one.

To prove majority support of the employees,

NAMA-MCCH-NFL presented the CBA proposal

allegedly signed by 153 union members. However,

the petition signed by said members showed that

the signatories endorsed the proposed terms and

conditions without stating that they were likewise

voting for or designating the NAMA-MCCH-NFL as

their exclusive bargaining representative. In any

case, NAMA-MCCH-NFL at the time of submission of

said proposals was not a duly registered labor

organization, hence it cannot legally represent

MCCHI’s rank-and-file employees for purposes of

collective bargaining. Hence, even assuming that

NAMA-MCCH-NFL had validly disaffiliated from its

mother union, NFL, it still did not possess the legal

personality to enter into CBA negotiations. A local

union which is not independently registered cannot,

upon disaffiliation from the federation, exercise the

rights and privileges granted by law to legitimate

labor organizations; thus, it cannot file a petition for

certification election.[41] Besides, the NFL as the

mother union has the right to investigate members

of its local chapter under the federation’s

Constitution and By-Laws, and if found guilty to

expel such members.[42] MCCHI therefore cannot

be faulted for deferring action on the CBA proposal

submitted by NAMA-MCCH-NFL in view of the union

leadership’s conflict with the national

federation. We have held that the issue of

disaffiliation is an intra-union dispute[43] which must

be resolved in a different forum in an action at the

instance of either or both the federation and the

local union or a rival labor organization, not the

employer.[44]

Not being a legitimate labor organization nor

the certified exclusive bargaining representative of

MCCHI’s rank-and-file employees, NAMA-MCCH-

NFL cannot demand from MCCHI the right to

bargain collectively in their behalf.[45] Hence,

MCCHI’s refusal to bargain then with NAMA-MCCH-

NFL cannot be considered an unfair labor practice

to justify the staging of the strike.[46]

Strike and picketing activities conducted by union

officers and members were illegal

Art. 263 (b) of the Labor Code, as amended,

provides:

ART. 263. Strikes, picketing and lockouts. – x x x

(b) Workers shall have the right to engage in

concerted activities for purposes of collective

bargaining or for their mutual benefit and

protection. The right of legitimate labor

organizations to strike and picket and of employers

to lockout, consistent with the national interest, shall

continue to be recognized and

respected. However, no labor union may strike and

no employer may declare a lockout on grounds

involving inter-union and intra-union disputes.

x x x x (Emphasis supplied.)

As borne by the records, NAMA-MCCH-NFL was not

a duly registered or an independently registered

union at the time it filed the notice of strike

on March 13, 1996 and when it conducted the

strike vote on April 2, 1996. It could not then legally

represent the union members. Consequently, the

mandatory notice of strike and the conduct of the

strike vote report were ineffective for having been

filed and conducted by NAMA-MCCH-NFL which

has no legal personality as a legitimate labor

organization, in violation of Art. 263 (c), (d) and (f)

of the Labor Code and Rule XXII, Book V of the

Omnibus Rules Implementing the Labor Code.[47]

Art. 263 of the Labor Code provides:

ART. 263. Strikes, picketing and lockouts. — (a) x x x

x x x x

(c) In cases of bargaining deadlocks, the duly

certified or recognized bargaining agent may file a

notice of strike or the employer may file a notice of

lockout with the Department at least 30 days

before the intended date thereof. In cases of unfair

labor practice, the period of notice shall be 15 days

and in the absence of a duly certified or

recognized bargaining agent, the notice of strike

may be filed by any legitimate labor organization in

behalf of its members. However, in case of dismissal

from employment of union officers duly elected in

accordance with the union constitution and by-

laws, which may constitute union busting, where

the existence of the union is threatened, the 15-day

cooling-off period shall not apply and the union

may take action immediately. (As amended by

Executive Order No. 111, December 24, 1986.)

(d) The notice must be in accordance with such

implementing rules and regulations as the

Department of Labor and Employment may

promulgate.

x x x x

(f) A decision to declare a strike must be approved

by a majority of the total union membership in the

bargaining unit concerned, obtained by secret

ballot in meetings or referenda called for that

purpose. A decision to declare a lockout must be

approved by a majority of the board of directors of

the corporation or association or of the partners in a

partnership, obtained by secret ballot in a meeting

called for that purpose. The decision shall be valid

for the duration of the dispute based on

substantially the same grounds considered when

the strike or lockout vote was taken. The

Department may, at its own initiative or upon the

request of any affected party, supervise the

conduct of the secret balloting. In every case, the

union or the employer shall furnish the Ministry the

voting at least seven days before the intended

strike or lockout, subject to the cooling-off period

herein provided. (As amended by Batas Pambansa

Bilang 130, August 21, 1981 and further amended

by Executive Order No. 111, December 24, 1986.)

(Emphasis supplied.)

Rule XXII, Book V of the Omnibus Rules

Implementing the Labor Code reads:

RULE XXII

CONCILIATION, STRIKES AND LOCKOUTS

x x x x

SEC. 6. Who may declare a strike or lockout. — Any

certified or duly recognized bargaining

representative may declare a strike in cases of

bargaining deadlocks and unfair labor

practices. The employer may declare a lockout in

the same cases. In the absence of a certified or

duly recognized bargaining representative, any

legitimate labor organization in the establishment

may declare a strike but only on grounds of unfair

labor practice. (Emphasis supplied.)

Furthermore, the strike was illegal due to the

commission of the following prohibited activities[48]:

(1) violence, coercion, intimidation and harassment

against non-participating employees; and (2)

blocking of free ingress to and egress from the

hospital, including preventing patients and their

vehicles from entering the hospital and other

employees from reporting to work, the putting up of

placards with a statement advising incoming

patients to proceed to another hospital because

MCCHI employees are on strike/protest. As shown

by photographs[49] submitted by MCCHI, as well as

the findings of the NCMB and Cebu City

Government, the hospital premises and sidewalk

within its vicinity were full of placards, streamers and

makeshift structures that obstructed its use by the

public who were likewise barraged by the noise

coming from strikers using megaphones.[50] On

the other hand, the affidavits[51] executed by

several hospital employees and patients narrated in

detail the incidents of harassment, intimidation,

violence and coercion, some of these witnesses

have positively identified the perpetrators. The

prolonged work stoppage and picketing activities

of the striking employees severely disrupted hospital

operations that MCCHI suffered heavy financial

losses.

The findings of the Executive Labor Arbiter and

NLRC, as sustained by the appellate court, clearly

established that the striking union members created

so much noise, disturbance and obstruction that

the local government authorities eventually

ordered their removal for being a public nuisance.

This was followed by an injunction from the NCMB

enjoining the union leaders from further blocking

the free ingress to and egress from the hospital, and

from committing threats, coercion and intimidation

against non-striking employees and

patients/vehicles desiring to enter for the purpose

of seeking medical treatment/confinement. By

then, the illegal strike had lasted for almost five

months.

Consequences of illegal strike to union officers and

members

Art. 264 (a) of the Labor Code, as amended,

provides for the consequences of an illegal strike to

the participating workers:

x x x Any union officer who knowingly

participates in illegal strike and any worker or union

officer who knowingly participates in the

commission of illegal acts during a strike may be

declared to have lost his employment

status: Provided, That mere participation of a

worker in a lawful strike shall not constitute sufficient

ground for termination of his employment, even if a

replacement had been hired by the employer

during such lawful strike.

The above provision makes a distinction

between workers and union officers who

participate in an illegal strike: an ordinary striking

worker cannot be terminated for mere participation

in an illegal strike. There must be proof that he or

she committed illegal acts during a strike. A union

officer, on the other hand, may be terminated from

work when he knowingly participates in an illegal

strike, and like other workers, when he commits an

illegal act during a strike.[52]

Considering their persistence in holding picketing

activities despite the declaration by the NCMB that

their union was not duly registered as a legitimate

labor organization and the letter from NFL’s legal

counsel informing that their acts constitute

disloyalty to the national federation, and their filing

of the notice of strike and conducting a strike vote

notwithstanding that their union has no legal

personality to negotiate with MCCHI for collective

bargaining purposes, there is no question that

NAMA-MCCH-NFL officers knowingly participated in

the illegal strike. The CA therefore did not err in

ruling that the termination of union officers Perla

Nava, Catalina Alsado, Albina Bañez, Hannah

Bongcaras, Ernesto Canen, Jesusa Gerona and

Guillerma Remocaldo was valid and justified.

With respect to the dismissed union members,

although MCCHI submitted photographs taken at

the picket line, it did not individually name those

striking employees and specify the illegal act

committed by each of them. As to the affidavits

executed by non-striking employees, they identified

mostly union officers as the persons who blocked

the hospital entrance, harassed hospital employees

and patients whose vehicles were prevented from

entering the premises. Only some of these witnesses

actually named a few union members who

committed similar acts of harassment and

coercion. Consequently, we find no error

committed by the CA in CA-G.R. SP No. 66540

when it modified the decision of the NLRC and

ruled that the dismissal of union members who

merely participated in the illegal strike was

illegal. On the other hand, in CA-G.R. SP No.

84998, the CA did not err in ruling that the dismissal

of Yballe, et al. was illegal; however, it also ordered

their reinstatement with full back wages.

Dismissed union members not entitled to

backwages but should be awarded separation pay

in lieu of reinstatement

Since there is no clear proof that union

members actually participated in the commission of

illegal acts during the strike, they are not deemed

to have lost their employment status as a

consequence of a declaration of illegality of the

strike.

Petitioners in G.R. Nos. 154113 and 187778

assail the CA in not ordering their reinstatement with

back wages. Invoking stare decisis, they cited the

case of Bascon v. Court of Appeals[53]decided by

this Court in 2004 and which involved two former

hospital employees who likewise sued MCCHI after

the latter terminated their employment due to their

participation in the same illegal strike led by NAMA-

MCCH-NFL. In said case we ruled that petitioners

Cole and Bascon were illegally dismissed because

MCCHI failed to prove that they committed illegal

acts during the strike. We thus ordered the

reinstatement of petitioners Bascon and Cole

without loss of seniority rights and other privileges

and payment of their back wages inclusive of

allowances, and other benefits computed from the

time they were dismissed up to the time of their

actual reinstatement. Bascon was also the basis of

the award of back wages in CA-G.R. SP No. 84998.

Stare decisis et non quieta movere. Stand by

the decision and disturb not what is settled. Under

the doctrine of stare decisis, once a court has laid

down a principle of law as applicable to a certain

state of facts, it will adhere to that principle and

apply it to all future cases where the facts are

substantially the same,[54] even though the parties

may be different. It proceeds from the first principle

of justice that, absent any powerful countervailing

considerations, like cases ought to be decided

alike. Thus, where the same questions relating to

the same event have been put forward by parties

similarly situated as in a previous case litigated and

decided by a competent court, the rule of stare

decisis is a bar to any attempt to relitigate the same

issue.[55]

The doctrine though is not cast in stone for

upon a showing that circumstances attendant in a

particular case override the great benefits derived

by our judicial system from the doctrine ofstare

decisis, the Court is justified in setting it aside.[56] For

the Court, as the highest court of the land, may be

guided but is not controlled by precedent. Thus, the

Court, especially with a new membership, is not

obliged to follow blindly a particular decision that it

determines, after re-examination, to call for a

rectification.[57]

Although the Bascon case involved the very same

illegal strike in MCCHI which led to the termination

of herein petitioners, its clearly erroneous

application of the law insofar only as the award of

back wages warrants setting aside the

doctrine. Indeed, the doctrine of stare

decisis notwithstanding, the Court has abandoned

or overruled precedents whenever it realized that

the Court erred in the prior decisions. “Afterall, more

important than anything else is that this Court

should be right.”[58]

In G & S Transport Corporation v. Infante,[59] the

Court explained the rationale for its recent rulings

deleting back wages awarded to the dismissed

workers if the strike was found to be illegal.

Considering that they did not render work for the

employer during the strike, they are entitled only to

reinstatement.

With respect to backwages, the principle of a “fair

day’s wage for a fair day’s labor” remains as the

basic factor in determining the award thereof. If

there is no work performed by the employee there

can be no wage or pay unless, of course, the

laborer was able, willing and ready to work but was

illegally locked out, suspended or dismissed or

otherwise illegally prevented from working. While it

was found that respondents expressed their

intention to report back to work, the latter

exception cannot apply in this case. In Philippine

Marine Officers’ Guild v. Compañia Maritima, as

affirmed in Philippine Diamond Hotel and Resort v.

Manila Diamond Hotel Employees Union, the Court

stressed that for this exception to apply, it is

required that the strike be legal, a situation that

does not obtain in the case at bar.

Under the circumstances, respondents’

reinstatement without backwages suffices for the

appropriate relief. If reinstatement is no longer

possible, given the lapse of considerable time from

the occurrence of the strike, the award of

separation pay of one (1) month salary for each

year of service, in lieu of reinstatement, is in

order.[60] (Emphasis supplied.)

The CA decision in CA-G.R. SP No. 66540 ordering

the payment of separation pay in lieu of

reinstatement without back wages is thus in order,

to conform to the policy of a fair day’s wage for a

fair day’s labor. The amount of separation pay is

increased to one month pay for every year of

service, consistent with jurisprudence. Accordingly,

the decision in CA-G.R. SP No. 84998 is modified by

deleting the award of back wages and granting

separation pay in lieu of reinstatement.

It is to be noted that as early as April 8, 1996, union

members who took part in the concerted activities

have been warned by management that NAMA-

MCCH-NFL is not a legitimate labor organization

and its notice of strike was denied by the NCMB,

and directed to desist from further participating in

such illegal activities. Despite such warning, they

continued with their picketing activities and held

more mass actions after management sent them

termination notices. The prolonged work stoppage

seriously disrupted hospital operations, which could

have eventually brought MCCHI into bankruptcy

had the City Government of Cebu not issued a

demolition order and the NLRC Region 7 not

formally enjoined the prohibited picketing activities.

Also, the illegal dismissal complaints subsequently

filed by the terminated employees did not

obliterate the fact that they did not suffer loss of

earnings by reason of the employer’s unjustified

acts, there being no unfair labor practice

committed by MCCHI. Hence, fairness and justice

dictate that back wages be denied the said

employees who participated in the illegal

concerted activities to the great detriment of the

employer.

Separation pay is made an alternative relief in lieu

of reinstatement in certain circumstances, like: (a)

when reinstatement can no longer be effected in

view of the passage of a long period of time or

because of the realities of the situation; (b)

reinstatement is inimical to the employer’s interest;

(c) reinstatement is no longer feasible; (d)

reinstatement does not serve the best interests of

the parties involved; (e) the employer is prejudiced

by the workers’ continued employment; (f) facts

that make execution unjust or inequitable have

supervened; or (g) strained relations between the

employer and employee.[61]

Considering that 15 years had lapsed from the

onset of this labor dispute, and in view of strained

relations that ensued, in addition to the reality of

replacements already hired by the hospital which

had apparently recovered from its huge losses, and

with many of the petitioners either employed

elsewhere, already old and sickly, or otherwise

incapacitated, separation pay without back wages

is the appropriate relief. We note that during the

pendency of the cases in this Court, some of the

petitioners have entered into compromise

agreements with MCCHI, all of which were duly

approved by this Court. Thus, excluded from the

herein monetary awards are the following

petitioners whose compromise agreements have

been approved by this Court and judgment having

been entered therein: Gloria Arguilles, Romulo

Alforque, Gerna Patigdas-Barte, Daylinda Tigo

Merlyn Nodado, Ramon Tagnipis, Bernabe

Lumapguid, Romeo Empuerto, Marylen Labra,

Milagros Castillo Bernadette Pontillas-Tibay,

Constancio Pagador, Nolan Alvin Panal, Edilberto

Villa, Roy Malazarte, Felecianita Malazarte and

Noel Hortelano.

Attorney’s fees

The dismissed employees having been

compelled to litigate in order to seek redress and

protect their rights, they are entitled to reasonable

attorney’s fees pursuant to Art. 2208 (2) of theCivil

Code. In view of the attendant circumstances of

this case, we hold that attorney’s fees in the

amount of P50,000.00 is reasonable and

justified. However, the respondents in G.R. No.

196156 are not entitled to the same relief since they

did not appeal from the CA decision which did not

include the award of attorney’s fees.

WHEREFORE, the petition for review on certiorari in

G.R. No. 187861 is DENIED while the petitions in G.R.

Nos. 154113, 187778 and 196156 are PARTLY

GRANTED. The Decision dated October 17, 2008 of

the Court of Appeals in CA-G.R. SP No. 66540 is

hereby AFFIRMED with MODIFICATIONS in that

MCCHI is ordered to pay the petitioners in G.R. Nos.

154113 and 187778, except the petitioners who are

union officers, separation pay equivalent to one

month pay for every year of service, and

reasonable attorney’s fees in the amount

of P50,000.00. The Decision dated November 7,

2008 is likewise AFFIRMED with MODIFICATIONS in

that MCCHI is ordered to pay the private

respondents in G.R. No. 196156 separation pay

equivalent to one month pay for every year of

service, and that the award of back wages

is DELETED.

The case is hereby remanded to the Executive

Labor Arbiter for the recomputation of separation

pay due to each of the petitioners union members

in G.R. Nos. 154113, 187778 and 196156 except

those who have executed compromise

agreements approved by this Court.

No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 169717 March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER

CHEMICAL SOLIDARITY OF UNIONS IN THE

PHILIPPINES FOR EMPOWERMENT AND REFORMS

(SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union

President,Petitioner,

vs.

CHARTER CHEMICAL and COATING

CORPORATION, Respondent.

D E C I S I O N

DEL CASTILLO, J.:

The right to file a petition for certification election is

accorded to a labor organization provided that it

complies with the requirements of law for proper

registration. The inclusion of supervisory employees

in a labor organization seeking to represent the

bargaining unit of rank-and-file employees does not

divest it of its status as a legitimate labor

organization. We apply these principles to this case.

This Petition for Review on Certiorari seeks to reverse

and set aside the Court of Appeal’s March 15, 2005

Decision1 in CA-G.R. SP No. 58203, which annulled

and set aside the January 13, 2000 Decision2 of the

Department of Labor and Employment (DOLE) in

OS-A-6-53-99 (NCR-OD-M-9902-019) and the

September 16, 2005 Resolution3 denying petitioner

union’s motion for reconsideration.

Factual Antecedents

On February 19, 1999, Samahang Manggagawa sa

Charter Chemical Solidarity of Unions in the

Philippines for Empowerment and Reforms

(petitioner union) filed a petition for certification

election among the regular rank-and-file

employees of Charter Chemical and Coating

Corporation (respondent company) with the

Mediation Arbitration Unit of the DOLE, National

Capital Region.

On April 14, 1999, respondent company filed an

Answer with Motion to Dismiss4 on the ground that

petitioner union is not a legitimate labor

organization because of (1) failure to comply with

the documentation requirements set by law, and

(2) the inclusion of supervisory employees within

petitioner union.5

Med-Arbiter’s Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin

issued a Decision6 dismissing the petition for

certification election. The Med-Arbiter ruled that

petitioner union is not a legitimate labor

organization because the Charter Certificate,

"Sama-samang Pahayag ng Pagsapi at

Authorization," and "Listahan ng mga Dumalo sa

Pangkalahatang Pulong at mga Sumang-ayon at

Nagratipika sa Saligang Batas" were not executed

under oath and certified by the union secretary

and attested to by the union president as required

by Section 235 of the Labor Code7 in relation to

Section 1, Rule VI of Department Order (D.O.) No. 9,

series of 1997. The union registration was, thus,

fatally defective.

The Med-Arbiter further held that the list of

membership of petitioner union consisted of 12

batchman, mill operator and leadman who

performed supervisory functions. Under Article 245

of the Labor Code, said supervisory employees are

prohibited from joining petitioner union which seeks

to represent the rank-and-file employees of

respondent company.

As a result, not being a legitimate labor

organization, petitioner union has no right to file a

petition for certification election for the purpose of

collective bargaining.

Department of Labor and Employment’s Ruling

On July 16, 1999, the DOLE initially issued a

Decision8 in favor of respondent company

dismissing petitioner union’s appeal on the ground

that the latter’s petition for certification election

was filed out of time. Although the DOLE ruled,

contrary to the findings of the Med-Arbiter, that the

charter certificate need not be verified and that

there was no independent evidence presented to

establish respondent company’s claim that some

members of petitioner union were holding

supervisory positions, the DOLE sustained the

dismissal of the petition for certification after it took

judicial notice that another union, i.e., Pinag-isang

Lakas Manggagawa sa Charter Chemical and

Coating Corporation, previously filed a petition for

certification election on January 16, 1998. The

Decision granting the said petition became final

and executory on September 16, 1998 and was

remanded for immediate implementation. Under

Section 7, Rule XI of D.O. No. 9, series of 1997, a

motion for intervention involving a certification

election in an unorganized establishment should be

filed prior to the finality of the decision calling for a

certification election. Considering that petitioner

union filed its petition only on February 14, 1999, the

same was filed out of time.

On motion for reconsideration, however, the DOLE

reversed its earlier ruling. In its January 13, 2000

Decision, the DOLE found that a review of the

records indicates that no certification election was

previously conducted in respondent company. On

the contrary, the prior certification election filed by

Pinag-isang Lakas Manggagawa sa Charter

Chemical and Coating Corporation was, likewise,

denied by the Med-Arbiter and, on appeal, was

dismissed by the DOLE for being filed out of time.

Hence, there was no obstacle to the grant of

petitioner union’s petition for certification

election, viz:

WHEREFORE, the motion for reconsideration is

hereby GRANTED and the decision of this Office

dated 16 July 1999 is MODIFIED to allow the

certification election among the regular rank-and-

file employees of Charter Chemical and Coating

Corporation with the following choices:

1. Samahang Manggagawa sa Charter Chemical-

Solidarity of Unions in the Philippines for

Empowerment and Reform (SMCC-SUPER); and

2. No Union.

Let the records of this case be remanded to the

Regional Office of origin for the immediate conduct

of a certification election, subject to the usual pre-

election conference.

SO DECIDED.9

Court of Appeal’s Ruling

On March 15, 2005, the CA promulgated the

assailed Decision, viz:

WHEREFORE, the petition is hereby GRANTED. The

assailed Decision and Resolution dated January 13,

2000 and February 17, 2000 are hereby

[ANNULLED] and SET ASIDE.

SO ORDERED.10

In nullifying the decision of the DOLE, the appellate

court gave credence to the findings of the Med-

Arbiter that petitioner union failed to comply with

the documentation requirements under the Labor

Code. It, likewise, upheld the Med-Arbiter’s finding

that petitioner union consisted of both rank-and-file

and supervisory employees. Moreover, the CA held

that the issues as to the legitimacy of petitioner

union may be attacked collaterally in a petition for

certification election and the infirmity in the

membership of petitioner union cannot be

remedied through the exclusion-inclusion

proceedings in a pre-election conference pursuant

to the ruling in Toyota Motor Philippines v. Toyota

Motor Philippines Corporation Labor Union.11 Thus,

considering that petitioner union is not a legitimate

labor organization, it has no legal right to file a

petition for certification election.

Issues

I

Whether x x x the Honorable Court of Appeals

committed grave abuse of discretion tantamount

to lack of jurisdiction in granting the respondent

[company’s] petition for certiorari (CA G.R. No. SP

No. 58203) in spite of the fact that the issues subject

of the respondent company[’s] petition was

already settled with finality and barred from being

re-litigated.

II

Whether x x x the Honorable Court of Appeals

committed grave abuse of discretion tantamount

to lack of jurisdiction in holding that the alleged

mixture of rank-and-file and supervisory

employee[s] of petitioner [union’s] membership is

[a] ground for the cancellation of petitioner

[union’s] legal personality and dismissal of [the]

petition for certification election.

III

Whether x x x the Honorable Court of Appeals

committed grave abuse of discretion tantamount

to lack of jurisdiction in holding that the alleged

failure to certify under oath the local charter

certificate issued by its mother federation and list of

the union membership attending the organizational

meeting [is a ground] for the cancellation of

petitioner [union’s] legal personality as a labor

organization and for the dismissal of the petition for

certification election.12

Petitioner Union’s Arguments

Petitioner union claims that the litigation of the issue

as to its legal personality to file the subject petition

for certification election is barred by the July 16,

1999 Decision of the DOLE. In this decision, the DOLE

ruled that petitioner union complied with all the

documentation requirements and that there was

no independent evidence presented to prove an

illegal mixture of supervisory and rank-and-file

employees in petitioner union. After the

promulgation of this Decision, respondent company

did not move for reconsideration, thus, this issue

must be deemed settled.

Petitioner union further argues that the lack of

verification of its charter certificate and the alleged

illegal composition of its membership are not

grounds for the dismissal of a petition for

certification election under Section 11, Rule XI of

D.O. No. 9, series of 1997, as amended, nor are they

grounds for the cancellation of a union’s

registration under Section 3, Rule VIII of said

issuance. It contends that what is required to be

certified under oath by the local union’s secretary

or treasurer and attested to by the local union’s

president are limited to the union’s constitution and

by-laws, statement of the set of officers, and the

books of accounts.

Finally, the legal personality of petitioner union

cannot be collaterally attacked but may be

questioned only in an independent petition for

cancellation pursuant to Section 5, Rule V, Book IV

of the Rules to Implement the Labor Code and the

doctrine enunciated in Tagaytay Highlands

International Golf Club Incoprorated v. Tagaytay

Highlands Empoyees Union-PTGWO.13

Respondent Company’s Arguments

Respondent company asserts that it cannot be

precluded from challenging the July 16, 1999

Decision of the DOLE. The said decision did not

attain finality because the DOLE subsequently

reversed its earlier ruling and, from this decision,

respondent company timely filed its motion for

reconsideration.

On the issue of lack of verification of the charter

certificate, respondent company notes that Article

235 of the Labor Code and Section 1, Rule VI of the

Implementing Rules of Book V, as amended by D.O.

No. 9, series of 1997, expressly requires that the

charter certificate be certified under oath.

It also contends that petitioner union is not a

legitimate labor organization because its

composition is a mixture of supervisory and rank-

and-file employees in violation of Article 245 of the

Labor Code. Respondent company maintains that

the ruling in Toyota Motor Philippines vs. Toyota

Motor Philippines Labor Union14 continues to be

good case law. Thus, the illegal composition of

petitioner union nullifies its legal personality to file

the subject petition for certification election and its

legal personality may be collaterally attacked in

the proceedings for a petition for certification

election as was done here.

Our Ruling

The petition is meritorious.

The issue as to the legal personality of petitioner

union is not barred by the July 16, 1999 Decision of

the DOLE.

A review of the records indicates that the issue as to

petitioner union’s legal personality has been timely

and consistently raised by respondent company

before the Med-Arbiter, DOLE, CA and now this

Court. In its July 16, 1999 Decision, the DOLE found

that petitioner union complied with the

documentation requirements of the Labor Code

and that the evidence was insufficient to establish

that there was an illegal mixture of supervisory and

rank-and-file employees in its membership.

Nonetheless, the petition for certification election

was dismissed on the ground that another union

had previously filed a petition for certification

election seeking to represent the same bargaining

unit in respondent company.

Upon motion for reconsideration by petitioner union

on January 13, 2000, the DOLE reversed its previous

ruling. It upheld the right of petitioner union to file

the subject petition for certification election

because its previous decision was based on a

mistaken appreciation of facts.15 From this adverse

decision, respondent company timely moved for

reconsideration by reiterating its previous

arguments before the Med-Arbiter that petitioner

union has no legal personality to file the subject

petition for certification election.

The July 16, 1999 Decision of the DOLE, therefore,

never attained finality because the parties timely

moved for reconsideration. The issue then as to the

legal personality of petitioner union to file the

certification election was properly raised before the

DOLE, the appellate court and now this Court.

The charter certificate need not be certified under

oath by the local union’s secretary or treasurer and

attested to by its president.

Preliminarily, we must note that Congress enacted

Republic Act (R.A.) No. 948116 which took effect on

June 14, 2007.17 This law introduced substantial

amendments to the Labor Code. However, since

the operative facts in this case occurred in 1999, we

shall decide the issues under the pertinent legal

provisions then in force (i.e., R.A. No.

6715,18 amending Book V of the Labor Code, and

the rules and regulations19 implementing R.A. No.

6715, as amended by D.O. No. 9,20

series of 1997) pursuant to our ruling in Republic v.

Kawashima Textile Mfg., Philippines, Inc.21

In the main, the CA ruled that petitioner union

failed to comply with the requisite documents for

registration under Article 235 of the Labor Code

and its implementing rules. It agreed with the Med-

Arbiter that the Charter Certificate, Sama-samang

Pahayag ng Pagsapi at Authorization, and Listahan

ng mga Dumalo sa Pangkalahatang Pulong at

mga Sumang-ayon at Nagratipika sa Saligang

Batas were not executed under oath. Thus,

petitioner union cannot be accorded the status of

a legitimate labor organization.

We disagree.

The then prevailing Section 1, Rule VI of the

Implementing Rules of Book V, as amended by D.O.

No. 9, series of 1997, provides:

Section 1. Chartering and creation of a local

chapter — A duly registered federation or national

union may directly create a local/chapter by

submitting to the Regional Office or to the Bureau

two (2) copies of the following:

(a) A charter certificate issued by the federation or

national union indicating the creation or

establishment of the local/chapter;

(b) The names of the local/chapter’s officers, their

addresses, and the principal office of the

local/chapter; and

(c) The local/chapter’s constitution and by-laws

provided that where the local/chapter’s

constitution and by-laws [are] the same as [those]

of the federation or national union, this fact shall be

indicated accordingly.

All the foregoing supporting requirements shall be

certified under oath by the Secretary or the

Treasurer of the local/chapter and attested to by its

President.

As readily seen, the Sama-samang Pahayag ng

Pagsapi at Authorization and Listahan ng mga

Dumalo sa Pangkalahatang Pulong at mga

Sumang-ayon at Nagratipika sa Saligang Batas are

not among the documents that need to be

submitted to the Regional Office or Bureau of Labor

Relations in order to register a labor organization. As

to the charter certificate, the above-quoted rule

indicates that it should be executed under oath.

Petitioner union concedes and the records confirm

that its charter certificate was not executed under

oath. However, in San Miguel Corporation

(Mandaue Packaging Products Plants) v. Mandaue

Packing Products Plants-San Miguel Corporation

Monthlies Rank-and-File Union-FFW (MPPP-SMPP-

SMAMRFU-FFW),22 which was decided under the

auspices of D.O. No. 9, Series of 1997, we ruled –

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon.

Laguesma, 331 Phil. 356 (1996), the Court ruled that

it wasnot necessary for the charter certificate to be

certified and attested by the local/chapter

officers. Id. While this ruling was based on the

interpretation of the previous Implementing Rules

provisions which were supplanted by the 1997

amendments, we believe that the same doctrine

obtains in this case. Considering that the charter

certificate is prepared and issued by the national

union and not the local/chapter, it does not make

sense to have the local/chapter’s officers x x

x certify or attest to a document which they had no

hand in the preparation of.23 (Emphasis supplied)

In accordance with this ruling, petitioner union’s

charter certificate need not be executed under

oath. Consequently, it validly acquired the status of

a legitimate labor organization upon submission of

(1) its charter certificate,24 (2) the names of its

officers, their addresses, and its principal

office,25 and (3) its constitution and by-laws26— the

last two requirements having been executed under

oath by the proper union officials as borne out by

the records.

The mixture of rank-and-file and supervisory

employees in petitioner union does not nullify its

legal personality as a legitimate labor organization.

The CA found that petitioner union has for its

membership both rank-and-file and supervisory

employees. However, petitioner union sought to

represent the bargaining unit consisting of rank-

and-file employees. Under Article 24527 of the Labor

Code, supervisory employees are not eligible for

membership in a labor organization of rank-and-file

employees. Thus, the appellate court ruled that

petitioner union cannot be considered a legitimate

labor organization pursuant to Toyota Motor

Philippines v. Toyota Motor Philippines Corporation

Labor Union28(hereinafter Toyota).

Preliminarily, we note that petitioner union questions

the factual findings of the Med-Arbiter, as upheld

by the appellate court, that 12 of its members,

consisting of batchman, mill operator and

leadman, are supervisory employees. However,

petitioner union failed to present any rebuttal

evidence in the proceedings below after

respondent company submitted in evidence the

job descriptions29 of the aforesaid employees. The

job descriptions indicate that the aforesaid

employees exercise recommendatory managerial

actions which are not merely routinary but require

the use of independent judgment, hence, falling

within the definition of supervisory employees under

Article 212(m)30 of the Labor Code. For this reason,

we are constrained to agree with the Med-Arbiter,

as upheld by the appellate court, that petitioner

union consisted of both rank-and-file and

supervisory employees.

Nonetheless, the inclusion of the aforesaid

supervisory employees in petitioner union does not

divest it of its status as a legitimate labor

organization. The appellate court’s reliance

on Toyota is misplaced in view of this Court’s

subsequent ruling in Republic v. Kawashima Textile

Mfg., Philippines, Inc.31 (hereinafter Kawashima).

InKawashima, we explained at length how and why

the Toyota doctrine no longer holds sway under the

altered state of the law and rules applicable to this

case, viz:

R.A. No. 6715 omitted specifying the exact effect

any violation of the prohibition [on the co-mingling

of supervisory and rank-and-file employees] would

bring about on the legitimacy of a labor

organization.

It was the Rules and Regulations Implementing R.A.

No. 6715 (1989 Amended Omnibus Rules) which

supplied the deficiency by introducing the following

amendment to Rule II (Registration of Unions):

"Sec. 1. Who may join unions. - x x x Supervisory

employees and security guards shall not be eligible

for membership in a labor organization of the rank-

and-file employees but may join, assist or form

separate labor organizations of their own; Provided,

that those supervisory employees who are included

in an existing rank-and-file bargaining unit, upon the

effectivity of Republic Act No. 6715, shall remain in

that unit x x x. (Emphasis supplied) and Rule V

(Representation Cases and Internal-Union Conflicts)

of the Omnibus Rules, viz:

"Sec. 1. Where to file. - A petition for certification

election may be filed with the Regional Office

which has jurisdiction over the principal office of the

employer. The petition shall be in writing and under

oath.

Sec. 2. Who may file. - Any legitimate labor

organization or the employer, when requested to

bargain collectively, may file the petition.

The petition, when filed by a legitimate labor

organization, shall contain, among others:

x x x x

(c) description of the bargaining unit which shall be

the employer unit unless circumstances otherwise

require; and provided further, that the appropriate

bargaining unit of the rank-and-file employees shall

not include supervisory employees and/or security

guards. (Emphasis supplied)

By that provision, any questioned mingling will

prevent an otherwise legitimate and duly registered

labor organization from exercising its right to file a

petition for certification election.

Thus, when the issue of the effect of mingling was

brought to the fore in Toyota, the Court, citing

Article 245 of the Labor Code, as amended by R.A.

No. 6715, held:

"Clearly, based on this provision, a labor

organization composed of both rank-and-file and

supervisory employees is no labor organization at

all. It cannot, for any guise or purpose, be a

legitimate labor organization. Not being one, an

organization which carries a mixture of rank-and-

file and supervisory employees cannot possess any

of the rights of a legitimate labor organization,

including the right to file a petition for certification

election for the purpose of collective bargaining. It

becomes necessary, therefore, anterior to the

granting of an order allowing a certification

election, to inquire into the composition of any

labor organization whenever the status of the labor

organization is challenged on the basis of Article

245 of the Labor Code.

x x x x

In the case at bar, as respondent union's

membership list contains the names of at least

twenty-seven (27) supervisory employees in Level

Five positions, the union could not, prior to purging

itself of its supervisory employee members, attain

the status of a legitimate labor organization. Not

being one, it cannot possess the requisite

personality to file a petition for certification

election." (Emphasis supplied)

In Dunlop, in which the labor organization that filed

a petition for certification election was one for

supervisory employees, but in which the

membership included rank-and-file employees, the

Court reiterated that such labor organization had

no legal right to file a certification election to

represent a bargaining unit composed of

supervisors for as long as it counted rank-and-file

employees among its members.

It should be emphasized that the petitions for

certification election involved

in Toyota and Dunlop were filed on November 26,

1992 and September 15, 1995, respectively; hence,

the 1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended

Omnibus Rules was further amended by

Department Order No. 9, series of 1997 (1997

Amended Omnibus Rules). Specifically, the

requirement under Sec. 2(c) of the 1989 Amended

Omnibus Rules – that the petition for certification

election indicate that the bargaining unit of rank-

and-file employees has not been mingled with

supervisory employees – was removed. Instead,

what the 1997 Amended Omnibus Rules requires is

a plain description of the bargaining unit, thus:

Rule XI

Certification Elections

x x x x

Sec. 4. Forms and contents of petition. - The petition

shall be in writing and under oath and shall contain,

among others, the following: x x x (c) The

description of the bargaining unit.

In Pagpalain Haulers, Inc. v. Trajano, the Court had

occasion to uphold the validity of the 1997

Amended Omnibus Rules, although the specific

provision involved therein was only Sec. 1, Rule VI,

to wit:

"Section. 1. Chartering and creation of a

local/chapter.- A duly registered federation or

national union may directly create a local/chapter

by submitting to the Regional Office or to the

Bureau two (2) copies of the following: a) a charter

certificate issued by the federation or national

union indicating the creation or establishment of

the local/chapter; (b) the names of the

local/chapter's officers, their addresses, and the

principal office of the local/chapter; and (c) the

local/ chapter's constitution and by-laws; provided

that where the local/chapter's constitution and by-

laws is the same as that of the federation or

national union, this fact shall be indicated

accordingly.

All the foregoing supporting requirements shall be

certified under oath by the Secretary or the

Treasurer of the local/chapter and attested to by its

President."

which does not require that, for its creation and

registration, a local or chapter submit a list of its

members.

Then came Tagaytay Highlands Int'l. Golf Club, Inc.

v. Tagaytay Highlands Employees Union-PGTWO in

which the core issue was whether mingling affects

the legitimacy of a labor organization and its right

to file a petition for certification election. This time,

given the altered legal milieu, the Court

abandoned the view in Toyota and Dunlopand

reverted to its pronouncement in Lopez that while

there is a prohibition against the mingling of

supervisory and rank-and-file employees in one

labor organization, the Labor Code does not

provide for the effects thereof. Thus, the Court held

that after a labor organization has been registered,

it may exercise all the rights and privileges of a

legitimate labor organization. Any mingling

between supervisory and rank-and-file employees

in its membership cannot affect its legitimacy for

that is not among the grounds for cancellation of its

registration, unless such mingling was brought

about by misrepresentation, false statement or

fraud under Article 239 of the Labor Code.

In San Miguel Corp. (Mandaue Packaging Products

Plants) v. Mandaue Packing Products Plants-San

Miguel Packaging Products-San Miguel Corp.

Monthlies Rank-and-File Union-FFW, the Court

explained that since the 1997 Amended Omnibus

Rules does not require a local or chapter to provide

a list of its members, it would be improper for the

DOLE to deny recognition to said local or chapter

on account of any question pertaining to its

individual members.

More to the point is Air Philippines Corporation v.

Bureau of Labor Relations, which involved a petition

for cancellation of union registration filed by the

employer in 1999 against a rank-and-file labor

organization on the ground of mixed membership:

the Court therein reiterated its ruling in Tagaytay

Highlands that the inclusion in a union of

disqualified employees is not among the grounds

for cancellation, unless such inclusion is due to

misrepresentation, false statement or fraud under

the circumstances enumerated in Sections (a) and

(c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No.

9481, the 1997 Amended Omnibus Rules, as

interpreted by the Court in Tagaytay Highlands, San

Miguel and Air Philippines, had already set the tone

for it. Toyota and Dunlop no longer hold sway in the

present altered state of the law and the

rules.32 [Underline supplied]

The applicable law and rules in the instant case are

the same as those in Kawashima because the

present petition for certification election was filed in

1999 when D.O. No. 9, series of 1997, was still in

effect. Hence, Kawashimaapplies with equal force

here. As a result, petitioner union was not divested

of its status as a legitimate labor organization even

if some of its members were supervisory employees;

it had the right to file the subject petition for

certification election.

The legal personality of petitioner union cannot be

collaterally attacked by respondent company in

the certification election proceedings.

Petitioner union correctly argues that its legal

personality cannot be collaterally attacked in the

certification election proceedings. As we explained

in Kawashima:

Except when it is requested to bargain collectively,

an employer is a mere bystander to any petition for

certification election; such proceeding is non-

adversarial and merely investigative, for the

purpose thereof is to determine which organization

will represent the employees in their collective

bargaining with the employer. The choice of their

representative is the exclusive concern of the

employees; the employer cannot have any

partisan interest therein; it cannot interfere with,

much less oppose, the process by filing a motion to

dismiss or an appeal from it; not even a mere

allegation that some employees participating in a

petition for certification election are actually

managerial employees will lend an employer legal

personality to block the certification election. The

employer's only right in the proceeding is to be

notified or informed thereof.

The amendments to the Labor Code and its

implementing rules have buttressed that policy

even more.33

WHEREFORE, the petition is GRANTED. The March 15,

2005 Decision and September 16, 2005 Resolution of

the Court of Appeals in CA-G.R. SP No. 58203

are REVERSED and SET ASIDE. The January 13, 2000

Decision of the Department of Labor and

Employment in OS-A-6-53-99 (NCR-OD-M-9902-019)

is REINSTATED.

No pronouncement as to costs.

SO ORDERED.

FIRST DIVISION

[G.R. No. 111836. February 1, 1996]

PAMBANSANG KAPATIRAN NG MGA ANAK PAWIS

SA FORMEY PLASTIC NATIONAL WORKERS

BROTHERHOOD, petitioner, vs. SECRETARY OF LABOR,

SECRETARYBIENVENIDO LAGUESMA, FORMEY

PLASTIC, INC., KALIPUNAN NG MANGGAGAWANG

PILIPINO (KAMAPI) and MED-ARBITER RASIDALI C.

ABDULLAH,respondents.

D E C I S I O N

BELLOSILLO, J.:

The rank and file workers of Formey Plastic, Inc.

(FORMEY), formed a local union known

as Pambansang Kapatiran ng mga Anak Pawis sa

Formey Plastic (KAPATIRAN) under the auspices of

the National Workers Brotherhood (NWB). They

ratified their Constitution and By-Laws on 4 April

1993.

On 22 April 1993 KAPATIRAN filed a Petition for

Certification Election[1] with the Department of

Labor and Employment Med-Arbiter Division

alleging that there was no existing and effective

Collective Bargaining Agreement (CBA) between

FORMEY and any union; neither was there any

recognized union within the company.

FORMEY moved to dismiss the

petition[2] while Kalipunan ng Manggagawang

Pilipino (KAMAPI) intervened and likewise moved to

dismiss[3] on the ground that there was already a

duly registered CBA covering the period 1 January

1992 to 31 December 1996 hence the “contract bar

rule”[4] would apply. KAPATIRAN opposed both

motions to dismiss[5] with an Addendum[6] thereto

claiming that the CBA executed between FORMEY

and KAMAPI was fraudulently registered with the

Department of Labor and Employment and that it

was defective since what was certified as

bargaining agent was KAMAPI which, as a

federation, only served as mere agent of the local

union hence without any legal personality to sign in

behalf of the latter.

Med-Arbiter Rasidali C. Abdullah found that a valid

and existing CBA between FORMEY and KAMAPI

effectively barred the filing of the petition for

certification election.[7]

KAPATIRAN appealed[8] imputing grave abuse of

discretion to the Med-Arbiter in applying the

“contract bar rule” and in not adopting the case

of Progressive Development Corporation v.

Secretary, Department of Labor and

Employment,[9] as authority to disregard the CBA

between FORMEY and KAMAPI. The Secretary of

Labor acting through Undersecretary Bienvenido E.

Laguesma upheld the decision of the Med-

Arbiter.[10] The Motion for Reconsideration having

been denied[11] KAPATIRAN now files this Petition for

Certiorari[12] charging the Secretary of Labor with

grave abuse of discretion in applying the “contract

bar rule” literally and in ruling that the Progressive

Development Corporation[13] case could not be

invoked.

Pending resolution of the petition KAMAPI filed

an Urgent Motion to Dismiss[14] the instant petition

contending that it had become moot and

academic due to the cancellation of

NWB’s[15] certificate of registration and its delisting

from the roll of labor federations.[16] KAPATIRAN

opposed the motion[17] claiming that the

cancellation and delisting were not yet final and

executory considering that it had filed a motion for

reconsideration[18] with the Bureau of Labor

Relations.

The rule is that findings of facts of quasi-judicial

agencies will not be disturbed unless there is a

showing of grave abuse of discretion. We find none

in the case at bench. We therefore affirm that

there is a validly executed collective bargaining

agreement between FORMEY and KAMAPI.

Art. 253-A of the Labor Code provides that “(n)o

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 (60) day period immediately before the

date of expiry of such five-year term of the

collective bargaining agreement.” Sec. 3, Rule V,

Book V of theOmnibus Rules Implementing the

Labor Code provides that “x x x (i)f 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 subject agreement was made effective 1

January 1992 and is yet to expire on 31 December

1996. The petition for certification election having

been filed on 22 April 1993 it is therefore clear that

said petition must fail since it was filed before the

so-called 60-day freedom period. KAPATIRAN insists

that the CBA was a fake it having been

surreptitiously registered with the Department of

Labor and Employment.

The resolution of this issue hinges on the

determination of factual matters which certainly is

not within the ambit of the present petition for

certiorari. Besides, the contention is without any

legal basis at all; it is purely speculative and bereft

of any documentary support. Petitioner itself even

admitted the existence of an agreement but

argued that its provisions were not being

implemented nor adhered to at all. Suffice it to

mention that the filing of the petition for

certification election is not the panacea to this

allegedly anomalous situation. Violations of

collective bargaining agreements constitute unfair

labor practice as provided for under Art. 248, par.

(i), of the Labor Code. In consonance thereto, Art.

261 equips petitioner with the proper and

appropriate recourse

-Art. 261. The Voluntary Arbitrator or panel of

Voluntary Arbitrators shall have original and

exclusive jurisdiction to hear and decide all

unresolved grievances arising from the

interpretation or implementation of the Collective

Bargaining Agreement x x x Accordingly, violations

of a Collective Bargaining Agreement, except

those which are gross in character, shall no longer

be treated as unfair labor practice and shall be

resolved under the Collective Bargaining

Agreement. For purposes of this article, gross

violations of Collective Bargaining Agreement shall

mean flagrant and/or malicious refusal to comply

with the economic provision of such agreement.

The CBA entered into between FORMEY and

KAMAPI stipulates among others –

Article IX - GRIEVANCE PROCEDURE

Sec. 1. Any complaint, grievance, difficulty,

disagreement or dispute arising out of any section

taken (sic) by the Company and/or by the Union

concerning the interpretation of the terms and

conditions of the agreement and/or which may

arise regarding (sic) the terms and conditions of

employment shall be settled in the manner

provided for under this Article.

Sec. 2. The Company and the Union agree to

create and establish a Grievance Committee

composed of two (2) representatives from the

Company and two (2) from the Union to receive

complaint, grievance or dispute from the workers

and/or from the Company with the view to settle it

amicably.

Sec. 3. In case a complaint or grievance has been

filed by either the Union or the Company, the

grievance committee shall discuss the same and

have (sic) to settle it. If after the meeting of the

grievance committee no satisfactory settlement is

reached the matter shall be referred to the top

officers of the Union and the Company for the

settlement of the said grievance or dispute.

Sec. 4. Within five (5) days from the time the top

officers of the Union and the Company

has (sic) failed to reach an amicable settlement of

the grievance or dispute, the same shall be

submitted for voluntary arbitration. The arbitrator or

arbitrators shall be chosen by lottery and the union

and the Company shall avail (sic) the list of

arbitrators of the Honorable Bureau of Labor

Relations.

Sec. 5. The mutually agreed or chosen arbitrator

shall proceed to try and hear the case and

for (sic) the reception of evidence and to call

witnesses to testify and after the submission of the

case by both parties an award or order shall be

issued in accordance with the rules and guidelines

promulgated by the Honorable Department of

Labor and Employment based on the pertinent

laws and established jurisprudence. The expenses

of the arbitration proceedings shall be

borned (sic) equally by the Company and

the Union.[19]

By filing the petition for certification election it is

clear that KAPATIRAN did not avail of the

abovementioned grievance procedure.

It is further argued that the CBA has no binding

force since it was entered into by KAMAPI as a

federation and not by the local union. Perusal of

the agreement proves the contention flawed. The

signatories for KAMAPI consisted of its national

president and of the duly elected officers of the

local union. Thus the fact that KAMAPI was

particularly mentioned as the bargaining party

without specifying the local union cannot strip it of

its authority to participate in the bargaining

process. The local union maintains its separate

personality despite affiliation with a larger national

federation.[20]

The doctrine laid down in Progressive Development

Corporation[21] is a mere clarification of the

principle enunciated in Liberty Cotton Mills Workers

Union v. Liberty Cotton Mills, Inc.[22] Both cases have

provided that “the mother union acting for and in

behalf of its affiliate ha(s) the status of an agent

while the local union remained the basic unit of the

association free to serve the common interest of all

its members subject only to the restraints imposed

by the Constitution and By-Laws of the association.”

Nonetheless, the facts and principles laid down in

both cases do not jibe squarely with the case at

bench. The controversy in Progressive

Development Corporation[23] centered on the

requirements before a local or chapter of a

federation may file a petition for certification

election and be certified as the sole and exclusive

bargaining agent, while in Liberty Cotton Mills

Workers[24] the issue involved was the disaffiliation of

the local union from the federation The question of

whether there was a valid and existing CBA, which

is the question being resolved in the case at bench,

was never raised in the two cited cases since it was

already an accepted fact that the CBA was validly

executed and existing.

Anent the Urgent Motion to Dismiss[25] filed by

KAMAPI on the ground that the instant petition had

become moot and academic due to the

cancellation by the Bureau of Labor Relations of

NWB’s certificate of registration and its consequent

delisting from the roll of labor federations, suffice it

to state that at this juncture we cannot properly rule

on the issue considering that KAMAPI has not

proven that the decision of the Bureau of

Labor Relations has become final and executory

taking into account KAPATIRAN’s filing of a motion

for reconsideration with the Bureau. This

notwithstanding, Sec. 9, Rule II, Book V of

the Omnibus Rules Implementing the Labor

Cose requires that an appeal be filed with the

Bureau, or in case of cancellation by the Bureau,

with the Secretary of Labor and Employment whose

decision shall become final and no longer subject

of appeal.

WHEREFORE, the petition is DENIED. The decision of

the Secretary of Labor and Employment dated 15

August 1993 sustaining the order of the Med-Arbiter

dated 31 May 1993 is AFFIRMED.

SO ORDERED.

Padilla, (Chairman), Vitug,

Kapunan, and Hermosisima, Jr., JJ., concur.

Republic of the Philippines

Supreme Court

Manila

SECOND DIVISION

INSULAR HOTEL EMPLOYEES UNION-NFL,

Petitioner,

- versus -

WATERFRONT INSULAR HOTEL DAVAO,

Respondent.

G.R. Nos. 174040-41

Present:

CARPIO, J., Chairperson,

VELASCO, JR., *

PERALTA,

BERSAMIN, ** and

ABAD, JJ.

Promulgated:

September 22, 2010

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

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

D E C I S I O N

PERALTA, J.:

Before this Court is a petition for review

on certiorari,[1] under Rule 45 of the Rules of Court,

seeking to set aside the Decision[2] dated October

11, 2005, and the Resolution[3] dated July 13, 2006 of

the Court of Appeals (CA) in consolidated labor

cases docketed as CA-G.R. SP No. 83831 and CA-

G.R. SP No. 83657. Said Decision reversed the

Decision[4] dated the April 5, 2004 of the Accredited

Voluntary Arbitrator Rosalina L. Montejo (AVA

Montejo).

The facts of the case, as culled from the

records, are as follows:

On November 6, 2000, respondent Waterfront

Insular Hotel Davao (respondent) sent the

Department of Labor and Employment (DOLE),

Region XI, Davao City, a Notice of Suspension of

Operations[5] notifying the same that it will suspend

its operations for a period of six months due to

severe and serious business losses. In said notice,

respondent assured the DOLE that if the company

could not resume its operations within the six-month

period, the company would pay the affected

employees all the benefits legally due to them.

During the period of the suspension, Domy R.

Rojas (Rojas), the President of Davao Insular Hotel

Free Employees Union (DIHFEU-NFL), the recognized

labor organization in Waterfront Davao, sent

respondent a number of letters asking

management to reconsider its decision.

In a letter[6] dated November 8, 2000, Rojas

intimated that the members of the Union were

determined to keep their jobs and that they

believed they too had to help respondent, thus:

x x x x

Sir, we are determined to keep our jobs and

push the Hotel up from sinking. We believe that we

have to help in this (sic) critical times. Initially, we

intend to suspend the re-negotiations of our CBA.

We could talk further on possible adjustments on

economic benefits, the details of which we are

hoping to discuss with you or any of your emissaries.

x x x[7]

In another letter[8] dated November 10, 2000,

Rojas reiterated the Union's desire to help

respondent, to wit:

We would like to thank you for giving us the

opportunity to meet [with] your representatives in

order for us to air our sentiments and extend our

helping hands for a possible reconsideration of the

company's decision.

The talks have enabled us to initially come up with

a suggestion of solving the high cost on payroll.

We propose that 25 years and above be paid their

due retirement benefits and put their length of

service to zero without loss of status of employment

with a minimum hiring rate.

Thru this scheme, the company would be able to

save a substantial amount and reduce greatly the

payroll costs without affecting the finance of the

families of the employees because they will still

have a job from where they could get their income.

Moreover, we are also open to a possible reduction

of some economic benefits as our gesture of

sincere desire to help.

We are looking forward to a more fruitful round of

talks in order to save the hotel.[9]

In another letter[10] dated November 20, 2000,

Rojas sent respondent more proposals as a form of

the Union's gesture of their intention to help the

company, thus:

1) Suspension of [the] CBA for ten years, No

strike no lock-out shall be enforced.

2) Pay all the employees their benefits due,

and put the length of service to zero with a

minimum hiring rate. Payment of benefits may be

on a staggered basis or as available.

3) Night premium and holiday pays shall be

according to law. Overtime hours rendered shall be

offsetted as practiced.

4) Reduce the sick leaves and vacation

leaves to 15 days/15days.

5) Emergency leave and birthday off are

hereby waived.

6) Duty meal allowance is fixed at P30.00

only. No more midnight snacks and double meal

allowance. The cook drinks be stopped as

practiced.

7) We will shoulder 50% of the group health

insurance and family medical allowance be

reduced to 1,500.00 instead of 3,000.00.

8) The practice of bringing home our

uniforms for laundry be continued.

9) Fixed manning shall be implemented, the

rest of manpower requirements maybe sourced

thru WAP and casual hiring. Manpower for fixed

manning shall be 145 rank-and-file union members.

10) Union will cooperate fully on strict

implementation of house rules in order to attain

desired productivity and discipline. The union will

not tolerate problem members.

11) The union in its desire to be of utmost

service would adopt multi-tasking for the hotel to

be more competitive.

It is understood that with the suspension of the CBA

renegotiations, the same existing CBA shall be

adopted and that all provisions therein shall remain

enforced except for those mentioned in this

proposal.

These proposals shall automatically supersede the

affected provisions of the CBA.[11]

In a handwritten letter[12] dated November 25,

2000, Rojas once again appealed to respondent for

it to consider their proposals and to re-open the

hotel. In said letter, Rojas stated that manpower

for fixed manning shall be one hundred (100) rank-

and-file Union members instead of the one hundred

forty-five (145) originally proposed.

Finally, sometime in January 2001, DIHFEU-NFL,

through Rojas, submitted to respondent a

Manifesto[13] concretizing their earlier proposals.

After series of negotiations, respondent and

DIHFEU-NFL, represented by its President, Rojas, and

Vice-Presidents, Exequiel J. Varela Jr. and Avelino

C. Bation, Jr., signed a Memorandum of

Agreement[14] (MOA) wherein respondent agreed

to re-open the hotel subject to certain concessions

offered by DIHFEU-NFL in its Manifesto.

Accordingly, respondent downsized its

manpower structure to 100 rank-and-file employees

as set forth in the terms of the MOA. Moreover, as

agreed upon in the MOA, a new pay scale was

also prepared by respondent.

The retained employees individually signed a

“Reconfirmation of Employment”[15] which

embodied the new terms and conditions of their

continued employment. Each employee was

assisted by Rojas who also signed the document.

On June 15, 2001, respondent resumed its

business operations.

On August 22, 2002, Darius Joves (Joves) and

Debbie Planas, claiming to be local officers of the

National Federation of Labor (NFL), filed a Notice of

Mediation[16] before the National Conciliation and

Mediation Board (NCMB), Region XI, Davao City. In

said Notice, it was stated that the Union involved

was “DARIUS JOVES/DEBBIE PLANAS ET. AL, National

Federation of Labor.” The issue raised in said Notice

was the “Diminution of wages and other benefits

through unlawful Memorandum of Agreement.”

On August 29, 2002, the NCMB called Joves

and respondent to a conference to explore the

possibility of settling the conflict. In the said

conference, respondent and petitioner Insular Hotel

Employees Union-NFL (IHEU-NFL), represented by

Joves, signed a Submission Agreement[17] wherein

they chose AVA Alfredo C. Olvida (AVA Olvida) to

act as voluntary arbitrator. Submitted for the

resolution of AVA Olvida was the determination of

whether or not there was a diminution of wages

and other benefits through an unlawful MOA. In

support of his authority to file the complaint, Joves,

assisted by Atty. Danilo Cullo (Cullo), presented

several Special Powers of Attorney (SPA) which

were, however, undated and unnotarized.

On September 2, 2002, respondent filed with

the NCMB a Manifestation with Motion for a Second

Preliminary Conference,[18] raising the following

grounds:

1) The persons who filed the instant complaint

in the name of the Insular Hotel Employees Union-

NFL have no authority to represent the Union;

2) The individuals who executed the special

powers of attorney in favor of the person who filed

the instant complaint have no standing to cause

the filing of the instant complaint; and

3) The existence of an intra-union dispute

renders the filing of the instant case premature.[19]

On September 16, 2002, a second preliminary

conference was conducted in the NCMB, where

Cullo denied any existence of an intra-union

dispute among the members of the union. Cullo,

however, confirmed that the case was filed not by

the IHEU-NFL but by the NFL. When asked to present

his authority from NFL, Cullo admitted that the case

was, in fact, filed by individual employees named in

the SPAs. The hearing officer directed both parties

to elevate the aforementioned issues to AVA

Olvida.[20]

The case was docketed as Case No. AC-220-

RB-11-09-022-02 and referred to AVA

Olvida. Respondent again raised its objections,

specifically arguing that the persons who signed the

complaint were not the authorized representatives

of the Union indicated in the Submission Agreement

nor were they parties to the MOA. AVA Olvida

directed respondent to file a formal motion to

withdraw its submission to voluntary arbitration.

On October 16, 2002, respondent filed its

Motion to Withdraw.[21] Cullo then filed an

Opposition[22] where the same was captioned:

NATIONAL FEDERATION OF LABOR

And 79 Individual Employees, Union

Members,

Complaina

nts,

-versus-

Waterfront Insular Hotel Davao,

Responden

t.

In said Opposition, Cullo reiterated that the

complainants were not representing IHEU-NFL, to

wit:

x x x x

2. Respondent must have been lost when it

said that the individuals who executed the

SPA have no standing to represent the union

nor to assail the validity of Memorandum of

Agreement (MOA). What is correct is that

the individual complainants are not

representing the union but filing the

complaint through their appointed

attorneys-in-fact to assert their individual

rights as workers who are entitled to the

benefits granted by law and stipulated in

the collective bargaining agreement.[23]

On November 11, 2002, AVA Olvida issued a

Resolution[24] denying respondent's Motion to

Withdraw. On December 16, 2002, respondent

filed a Motion for Reconsideration[25] where it

stressed that the Submission Agreement was void

because the Union did not consent

thereto. Respondent pointed out that the Union

had not issued any resolution duly authorizing the

individual employees or NFL to file the notice of

mediation with the NCMB.

Cullo filed a Comment/Opposition[26] to

respondent's Motion for Reconsideration. Again,

Cullo admitted that the case was not initiated by

the IHEU-NFL, to wit:

The case was initiated by complainants by

filling up Revised Form No. 1 of the NCMB duly

furnishing respondent, copy of which is hereto

attached as Annex “A” for reference and

consideration of the Honorable Voluntary Arbitrator.

There is no mention there of Insular Hotel Employees

Union, but only National Federation of Labor (NFL).

The one appearing at the Submission Agreement

was only a matter of filling up the blanks particularly

on the question there of Union; which was filled up

with Insular Hotel Employees Union-NFL. There is

nothing there that indicates that it is a complainant

as the case is initiated by the individual workers and

National Federation of Labor, not by the local

union. The local union was not included as party-

complainant considering that it was a party to the

assailed MOA.[27]

On March 18, 2003, AVA Olvida issued a

Resolution[28] denying respondent's Motion for

Reconsideration. He, however, ruled that

respondent was correct when it raised its objection

to NFL as proper party-complainant, thus:

Anent to the real complainant in this instant

voluntary arbitration case, the respondent is correct

when it raised objection to the National Federation

of Labor (NFL) and as proper party-complainants.

The proper party-complainant is INSULAR

HOTEL EMPLOYEES UNION-NFL, the recognized and

incumbent bargaining agent of the rank-and-file

employees of the respondent hotel. In the

submission agreement of the parties dated August

29, 2002, the party complainant written is INSULAR

HOTEL EMPLOYEES UNION-NFL and not the

NATIONAL FEDERATION OF LABOR and 79 other

members.

However, since the NFL is the mother

federation of the local union, and signatory to the

existing CBA, it can represent the union, the officers,

the members or union and officers or members, as

the case may be, in all stages of proceedings in

courts or administrative bodies provided that the

issue of the case will involve labor-management

relationship like in the case at bar.

The dispositive portion of the March 18, 2003

Resolution of AVA Olvida reads:

WHEREFORE, premises considered, the motion

for reconsideration filed by respondent is DENIED.

The resolution dated November 11, 2002 is modified

in so far as the party-complainant is concerned;

thus, instead of “National Federation of Labor and

79 individual employees, union members,” shall be

“Insular Hotel Employees Union-NFL et. al., as stated

in the joint submission agreement dated August 29,

2002. Respondent is directed to comply with the

decision of this Arbitrator dated November 11, 2002,

No further motion of the same nature shall

be entertained.[29]

On May 9, 2003, respondent filed its Position

Paper Ad Cautelam,[30] where it declared, among

others, that the same was without prejudice to its

earlier objections against the jurisdiction of the

NCMB and AVA Olvida and the standing of the

persons who filed the notice of mediation.

Cullo, now using the caption “Insular Hotel

Employees Union-NFL, Complainant,” filed a

Comment[31] dated June 5, 2003. On June 23, 2003,

respondent filed its Reply.[32]

Later, respondent filed a Motion for

Inhibition[33] alleging AVA Olvida's bias and

prejudice towards the cause of the employees. In

an Order[34] dated July 25, 2003, AVA Olvida

voluntarily inhibited himself out of “delicadeza” and

ordered the remand of the case to the NCMB.

On August 12, 2003, the NCMB issued a Notice

requiring the parties to appear before the

conciliator for the selection of a new voluntary

arbitrator.

In a letter[35] dated August 19, 2003 addressed

to the NCMB, respondent reiterated its position that

the individual union members have no standing to

file the notice of mediation before the NCMB.

Respondent stressed that the complaint should

have been filed by the Union.

On September 12, 2003, the NCMB sent both

parties a Notice[36] asking them to appear before it

for the selection of the new voluntary arbitrator.

Respondent, however, maintained its stand that the

NCMB had no jurisdiction over the case.

Consequently, at the instance of Cullo, the NCMB

approved ex parte the selection of AVA Montejo as

the new voluntary arbitrator.

On April 5, 2004, AVA Montejo rendered a

Decision[37] ruling in favor of Cullo, the dispositive

portion of which reads:

WHEREOF, in view of the all the foregoing,

judgment is hereby rendered:

1. Declaring the Memorandum of

Agreement in question as invalid as it is contrary to

law and public policy;

2. Declaring that there is a diminution of the

wages and other benefits of the Union members

and officers under the said invalid MOA.

3. Ordering respondent management to

immediately reinstate the workers wage rates and

other benefits that they were receiving and

enjoying before the signing of the invalid MOA;

4. Ordering the management respondent to

pay attorney’s fees in an amount equivalent to ten

percent (10%) of whatever total amount that the

workers union may receive representing individual

wage differentials.

As to the other claims of the Union regarding

diminution of other benefits, this accredited

voluntary arbitrator is of the opinion that she has no

authority to entertain, particularly as to the

computation thereof.

SO ORDERED.[38]

Both parties appealed the Decision of AVA

Montejo to the CA. Cullo only assailed the Decision

in so far as it did not categorically order respondent

to pay the covered workers their differentials in

wages reckoned from the effectivity of the MOA up

to the actual reinstatement of the reduced wages

and benefits. Cullos' petition was docketed as CA-

G.R. SP No. 83831. Respondent, for its part,

questioned among others the jurisdiction of the

NCMB. Respondent maintained that the MOA it

had entered into with the officers of the Union was

valid. Respondent's petition was docketed as CA-

G.R. SP No. 83657. Both cases were consolidated by

the CA.

On October 11, 2005, the CA rendered a

Decision[39] ruling in favor of respondent, the

dispositive portion of which reads:

WHEREFORE, premises considered, the

petition for review in CA-G.R. SP No. 83657 is hereby

GRANTED, while the petition in CA-G.R. SP No. 83831

is DENIED. Consequently, the assailed Decision

dated April 5, 2004 rendered by AVA Rosalina L.

Montejo is hereby REVERSED and a new one

entered declaring the Memorandum of Agreement

dated May 8, 2001 VALID and ENFORCEABLE.

Parties are DIRECTED to comply with the terms and

conditions thereof.

SO ORDERED.[40]

Aggrieved, Cullo filed a Motion for

Reconsideration, which was, however, denied by

the CA in a Resolution[41] dated July 13, 2006.

Hence, herein petition, with Cullo raising the

following issues for this Court's resolution, to wit:

I.

WITH DUE RESPECT, THE HONORABLE COURT OF

APPEALS COMMITTED SERIOUS ERRORS IN FINDING

THAT THE ACCREDITED VOLUNTARY ARBITRATOR HAS

NO JURISDICTION OVER THE CASE SIMPLY BECAUSE

THE NOTICE OF MEDIATION DOES NOT MENTION THE

NAME OF THE LOCAL UNION BUT ONLY THE AFFILIATE

FEDERATION THEREBY DISREGARDING THE

SUBMISSION AGREEMENT DULY SIGNED BY THE

PARTIES AND THEIR LEGAL COUNSELS THAT

MENTIONS THE NAME OF THE LOCAL UNION.

II.

WITH DUE RESPECT, THE HONORABLE COURT

OF APPEALS COMMITTED SERIOUS ERROR BY

DISREGARDING THE PROVISIONS OF THE CBA SIMPLY

BECAUSE IT BELIEVED THE UNPROVEN ALLEGATIONS

OF RESPONDENT HOTEL THAT IT WAS SUFFERING

FROM FINANCIAL CRISIS.

III.

THE HONORABLE COURT OF APPEALS MUST

HAVE SERIOUSLY ERRED IN CONCLUDING THAT

ARTICLE 100 OF THE LABOR CODE APPLIES ONLY TO

BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE

LABOR CODE WHICH, IN EFFECT, ALLOWS THE

DIMINUTION OF THE BENEFITS ENJOYED BY

EMPLOYEES FROM ITS ADOPTION HENCEFORTH.[42]

The petition is not meritorious.

Anent the first error raised, Cullo argues that

the CA erred when it overlooked the fact that

before the case was submitted to voluntary

arbitration, the parties signed a Submission

Agreement which mentioned the name of the local

union and not only NFL. Cullo, thus, contends that

the CA committed error when it ruled that the

voluntary arbitrator had no jurisdiction over the

case simply because the Notice of Mediation did

not state the name of the local union thereby

disregarding the Submission Agreement which

states the names of local union as Insular Hotel

Employees Union-NFL.[43]

In its Memorandum,[44] respondent maintains

its position that the NCMB and Voluntary Arbitrators

had no jurisdiction over the complaint. Respondent,

however, now also contends thatIHEU-NFL is a non-

entity since it is DIHFEU-NFL which is considered by

the DOLE as the only registered union in Waterfront

Davao.[45] Respondent argues that the Submission

Agreement does not name the local union DIHFEU-

NFL and that it had timely withdrawn its consent to

arbitrate by filing a motion to withdraw.

A review of the development of the case

shows that there has been much confusion as to

the identity of the party which filed the case

against respondent. In the Notice of

Mediation[46] filed before the NCMB, it stated that

the union involved was “DARIUS JOVES/DEBBIE

PLANAS ET. AL., National Federation of Labor.” In

the Submission Agreement,[47] however, it stated

that the union involved was “INSULAR HOTEL

EMPLOYEES UNION-NFL.”

Furthermore, a perusal of the records would

reveal that after signing the Submission Agreement,

respondent persistently questioned the authority

and standing of the individual employees to file the

complaint. Cullo then clarified in subsequent

documents captioned as “National Federation of

Labor and 79 Individual Employees, Union

Members, Complainants” that the individual

complainants are not representing the union, but

filing the complaint through their appointed

attorneys-in-fact.[48] AVA Olvida, however, in a

Resolution dated March 18, 2003, agreed with

respondent that the proper party-complainant

should be INSULAR HOTEL EMPLOYEES UNION-NFL, to

wit:

x x x In the submission agreement of the parties

dated August 29, 2002, the party complainant

written is INSULAR HOTEL EMPLOYEES UNION-NFL and

not the NATIONAL FEDERATION OF LABOR and 79

other members.[49]

The dispositive portion of the Resolution dated

March 18, 2003 of AVA Olvida reads:

WHEREFORE, premises considered, the motion

for reconsideration filed by respondent is DENIED.

The resolution dated November 11, 2002, is

modified in so far as the party complainant is

concerned, thus, instead of “National Federation of

Labor and 79 individual employees, union

members,” shall be “Insular Hotel Employees Union-

NFL et. al., as stated in the joint submission

agreement dated August 29, 2002. Respondent is

directed to comply with the decision of this

Arbitrator dated November 11, 2002.[50]

After the March 18, 2003 Resolution of AVA

Olvida, Cullo adopted “Insular Hotel Employees

Union-NFL et. al., Complainant” as the caption in all

his subsequent pleadings. Respondent, however,

was still adamant that neither Cullo nor the

individual employees had authority to file the case

in behalf of the Union.

While it is undisputed that a submission

agreement was signed by respondent and “IHEU-

NFL,” then represented by Joves and Cullo, this

Court finds that there are two circumstances which

affect its validity: first, the Notice of Mediation was

filed by a party who had no authority to do

so; second, that respondent had persistently voiced

out its objection questioning the authority of Joves,

Cullo and the individual members of the Union to

file the complaint before the NCMB.

Procedurally, the first step to submit a case for

mediation is to file a notice of preventive mediation

with the NCMB. It is only after this step that a

submission agreement may be entered into by the

parties concerned.

Section 3, Rule IV of the NCMB Manual of

Procedure provides who may file a notice of

preventive mediation, to wit:

Who may file a notice or declare a strike

or lockout or request preventive mediation. -

Any certified or duly recognized

bargaining representative may file a notice or

declare a strike or request for preventive mediation

in cases of bargaining deadlocks and unfair labor

practices. The employer may file a notice or

declare a lockout or request for preventive

mediation in the same cases. In the absence of a

certified or duly recognized bargaining

representative, any legitimate labor organization in

the establishment may file a notice, request

preventive mediation or declare a strike, but only

on grounds of unfair labor practice.

From the foregoing, it is clear that only a

certified or duly recognized bargaining agent may

file a notice or request for preventive mediation. It

is curious that even Cullo himself admitted, in a

number of pleadings, that the case was filed not by

the Union but by individual members

thereof. Clearly, therefore, the NCMB had no

jurisdiction to entertain the notice filed before it.

Even though respondent signed a Submission

Agreement, it had, however, immediately

manifested its desire to withdraw from the

proceedings after it became apparent that the

Union had no part in the complaint. As a matter of

fact, only four days had lapsed after the signing of

the Submission Agreement when respondent called

the attention of AVA Olvida in a “Manifestation with

Motion for a Second Preliminary

Conference”[51] that the persons who filed the

instant complaint in the name of Insular Hotel

Employees Union-NFL had no authority to represent

the Union. Respondent cannot be estopped in

raising the jurisdictional issue, because it is

basic that the issue of jurisdiction may be raised at

any stage of the proceedings, even on appeal,

and is not lost by waiver or by estoppel.

In Figueroa v. People,[52] this Court explained

that estoppel is the exception rather than the rule,

to wit:

Applying the said doctrine to the instant

case, the petitioner is in no way estopped by

laches in assailing the jurisdiction of the RTC,

considering that he raised the lack thereof in his

appeal before the appellate court. At that time, no

considerable period had yet elapsed for laches to

attach. True, delay alone, though unreasonable,

will not sustain the defense of “estoppel by

laches” unless it further appears that the party,

knowing his rights, has not sought to enforce them

until the condition of the party pleading laches has

in good faith become so changed that he cannot

be restored to his former state, if the rights be then

enforced, due to loss of evidence, change of title,

intervention of equities, and other causes. In

applying the principle of estoppel by laches in the

exceptional case of Sibonghanoy, the Court therein

considered the patent and revolting inequity and

unfairness of having the judgment creditors go up

their Calvary once more after more or less 15

years.The same, however, does not obtain in the

instant case.

We note at this point that estoppel, being in

the nature of a forfeiture, is not favored by law. It is

to be applied rarely—only from necessity, and only

in extraordinary circumstances. The doctrine must

be applied with great care and the equity must be

strong in its favor.When misapplied, the doctrine of

estoppel may be a most effective weapon for the

accomplishment of injustice. x x x (Italics

supplied.)[53]

The question to be resolved then is, do

the individual members of the Union have the

requisite standing to question the MOA before the

NCMB? On this note, Tabigue v. International Copra

Export Corporation (INTERCO)[54] is instructive:

Respecting petitioners’ thesis that

unsettled grievances should be referred to

voluntary arbitration as called for in the CBA, the

same does not lie.The pertinent portion of the CBA

reads:

In case of any dispute arising from the

interpretation or implementation of this Agreement

or any matter affecting the relations of Labor and

Management, the UNION and the COMPANY

agree to exhaust all possibilities of conciliation

through the grievance machinery. The committee

shall resolve all problems submitted to it within

fifteen (15) days after the problems ha[ve] been

discussed by the members. If the dispute or

grievance cannot be settled by the Committee, or

if the committee failed to act on the matter within

the period of fifteen (15) days herein stipulated,

the UNION and the COMPANY agree to submit the

issue to Voluntary Arbitration. Selection of the

arbitrator shall be made within seven (7) days from

the date of notification by the aggrieved party. The

Arbitrator shall be selected by lottery from four (4)

qualified individuals nominated by in equal

numbers by both parties taken from the list of

Arbitrators prepared by the National Conciliation

and Mediation Board (NCMB). If the Company and

the Union representatives within ten (10) days fail to

agree on the Arbitrator, the NCMB shall name the

Arbitrator. The decision of the Arbitrator shall be

final and binding upon the parties. However, the

Arbitrator shall not have the authority to change

any provisions of the Agreement.The cost of

arbitration shall be borne equally by the parties.

Petitioners have not, however, been

duly authorized to represent the union. Apropos is

this Court’s pronouncement in Atlas Farms, Inc. v.

National Labor Relations Commission, viz:

x x x Pursuant to Article 260 of the Labor

Code, the parties to a CBA shall name or designate

their respective representatives to the grievance

machinery and if the grievance is unsettled in that

level, it shall automatically be referred to the

voluntary arbitrators designated in advance by

parties to a CBA. Consequently, only disputes

involving the union and the company shall be

referred to the grievance machinery or voluntary

arbitrators. (Emphasis and underscoring

supplied.)[55]

If the individual members of the Union have no

authority to file the case, does the federation to

which the local union is affiliated have the standing

to do so? On this note, Coastal Subic Bay Terminal,

Inc. v. Department of Labor and Employment[56] is

enlightening, thus:

x x x A local union does not owe its

existence to the federation with which it is affiliated.

It is a separate and distinct voluntary association

owing its creation to the will of its members. Mere

affiliation does not divest the local union of its own

personality, neither does it give the mother

federation the license to act independently of the

local union. It only gives rise to a contract of

agency, where the former acts in representation of

the latter. Hence, local unions are considered

principals while the federation is deemed to be

merely their agent. x x x[57]

Based on the foregoing, this Court agrees with

approval with the disquisition of the CA when it

ruled that NFL had no authority to file the complaint

in behalf of the individual employees, to wit:

Anent the first issue, We hold that the

voluntary arbitrator had no jurisdiction over the

case. Waterfront contents that the Notice of

Mediation does not mention the name of the Union

but merely referred to the National Federation of

Labor (NFL) with which the Union is affiliated. In the

subsequent pleadings, NFL's legal counsel even

confirmed that the case was not filed by the union

but by NFL and the individual employees named in

the SPAs which were not even dated nor notarized.

Even granting that petitioner Union

was affiliated with NFL, still the relationship between

that of the local union and the labor federation or

national union with which the former was affiliated

is generally understood to be that of agency,

where the local is the principal and the federation

the agency. Being merely an agent of the local

union, NFL should have presented its authority to file

the Notice of Mediation. While We commend NFL's

zealousness in protecting the rights of lowly workers,

We cannot, however, allow it to go beyond what it

is empowered to do.

As provided under the NCMB Manual

of Procedures, only a certified or duly recognized

bargaining representative and an employer may

file a notice of mediation, declare a strike or

lockout or request preventive mediation. The

Collective Bargaining Agreement (CBA), on the

other, recognizes that DIHFEU-NFL is the exclusive

bargaining representative of all permanent

employees. The inclusion of the word “NFL” after

the name of the local union merely stresses that the

local union is NFL's affiliate. It does not, however,

mean that the local union cannot stand on its own.

The local union owes its creation and continued

existence to the will of its members and not to the

federation to which it belongs. The spring cannot

rise higher than its source, so to speak.[58]

In its Memorandum, respondent contends that

IHEU-NFL is a non-entity and that DIHFEU-NFL is the

only recognized bargaining unit in their

establishment. While the resolution of the said

argument is already moot and academic given the

discussion above, this Court shall address the same

nevertheless.

While the November 16, 2006

Certification[59] of the DOLE clearly states

that “IHEU-NFL” is not a registered labor

organization, this Court finds that respondent is

estopped from questioning the same as it did not

raise the said issue in the proceedings before the

NCMB and the Voluntary Arbitrators. A perusal of

the records reveals that the main theory posed by

respondent was whether or not the individual

employees had the authority to file the complaint

notwithstanding the apparent non-participation of

the union. Respondent never put in issue the fact

that DIHFEU-NFL was not the same as IHEU-NFL.

Consequently, it is already too late in the day to

assert the same.

Anent the second issue raised by Cullo, the

same is again without merit.

Cullo contends that respondent was not really

suffering from serious losses as found by the CA.

Cullo anchors his position on the denial by the

Wage Board of respondent's petition for exemption

from Wage Order No. RTWPB-X1-08 on the ground

that it is a distressed establishment.[60] In said denial,

the Board ruled:

A careful analysis of applicant's audited

financial statements showed that during the period

ending December 31, 1999, it registered retained

earnings amounting to P8,661,260.00. Applicant's

interim financial statements for the quarter ending

June 30, 2000 cannot be considered, as the same

was not audited. Accordingly, this Board finds that

applicant is not qualified for exemption as a

distressed establishment pursuant to the aforecited

criteria.[61]

In its Decision, the CA held that upholding the

validity of the MOA would mean the continuance

of the hotel's operation and financial viability, to

wit:

x x x We cannot close Our eyes to the impending

financial distress that an employer may suffer should

the terms of employment under the said CBA

continue.

If indeed We are to tilt the balance of justice

to labor, then We would be inclined to favor for the

nonce petitioner Waterfront. To uphold the validity

of the MOA would mean the continuance of the

hotel's operation and financial viability. Otherwise,

the eventual permanent closure of the hotel would

only result to prejudice of the employees, as a

consequence thereof, will necessarily lose their

jobs.[62]

In its petition before the CA, respondent

submitted its audited financial statements[63] which

show that for the years 1998, 1999, until September

30, 2000, its total operating losses amounted

to P48,409,385.00. Based on the foregoing, the CA

was not without basis when it declared that

respondent was suffering from impending financial

distress. While the Wage Board denied

respondent's petition for exemption, this Court notes

that the denial was partly due to the fact that the

June 2000 financial statements then submitted by

respondent were not audited. Cullo did not

question nor discredit the accuracy and

authenticity of respondent's audited financial

statements. This Court, therefore, has no reason to

question the veracity of the contents

thereof. Moreover, it bears to point out that

respondent's audited financial statements covering

the years 2001 to 2005 show that it still continues to

suffer losses.[64]

Finally, anent the last issue raised by Cullo, the

same is without merit.

Cullo argues that the CA must have erred in

concluding that Article 100 of the Labor Code

applies only to benefits already enjoyed at the time

of the promulgation of the Labor Code.

Article 100 of the Labor Code provides:

PROHIBITION AGAINST ELIMINATION OR

DIMINUTION OF BENEFITS- Nothing in this Book shall

be construed to eliminate or in any way diminish

supplements, or other employee benefits being

enjoyed at the time of the promulgation of this

Code.

On this note, Apex Mining Company, Inc. v.

NLRC[65] is instructive, to wit:

Clearly, the prohibition against elimination or

diminution of benefits set out in Article 100 of the

Labor Code is specifically concerned with benefits

already enjoyed at the time of the promulgation of

the Labor Code. Article 100 does not, in other

words, purport to apply to situations arising after the

promulgation date of the Labor Code x x x.[66]

Even assuming arguendo that Article 100

applies to the case at bar, this Court agrees with

respondent that the same does not prohibit a union

from offering and agreeing to reduce wages and

benefits of the employees. In Rivera v. Espiritu,[67] this

Court ruled that the right to free collective

bargaining, after all, includes the right to suspend it,

thus:

A CBA is “a contract executed upon

request of either the employer or the exclusive

bargaining representative incorporating the

agreement reached after negotiations 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.” The primary purpose of a CBA is

the stabilization of labor-management relations in

order to create a climate of a sound and stable

industrial peace. In construing a CBA, the courts

must be practical and realistic and give due

consideration to the context in which it is

negotiated and the purpose which it is intended to

serve.

The assailed PAL-PALEA agreement

was the result of voluntary collective bargaining

negotiations undertaken in the light of the severe

financial situation faced by the employer, with the

peculiar and unique intention of not merely

promoting industrial peace at PAL, but preventing

the latter’s closure. We find no conflict between

said agreement and Article 253-A of the Labor

Code. Article 253-A has a two-fold purpose. One is

to promote industrial stability and predictability.

Inasmuch as the agreement sought to promote

industrial peace at PAL during its rehabilitation, said

agreement satisfies the first purpose of Article 253-A.

The other is to assign specific timetables wherein

negotiations become a matter of right and

requirement. Nothing in Article 253-A, prohibits the

parties from waiving or suspending the mandatory

timetables and agreeing on the remedies to

enforce the same.

In the instant case, it was PALEA, as

the exclusive bargaining agent of PAL’s ground

employees, that voluntarily entered into the CBA

with PAL. It was also PALEA that voluntarily opted for

the 10-year suspension of the CBA. Either case was

the union’s exercise of its right to collective

bargaining. The right to free collective bargaining,

after all, includes the right to suspend it.[68]

Lastly, this Court is not unmindful of the fact

that DIHFEU-NFL's Constitution and By-Laws

specifically provides that “the results of the

collective bargaining negotiations shall be subject

to ratification and approval by majority vote of the

Union members at a meeting convened, or by

plebiscite held for such special

purpose.”[69] Accordingly, it is undisputed that the

MOA was not subject to ratification by the general

membership of the Union. The question to be

resolved then is, does the non-ratification of the

MOA in accordance with the Union's constitution

prove fatal to the validity thereof?

It must be remembered that after the MOA

was signed, the members of the Union individually

signed contracts denominated as “Reconfirmation

of Employment.”[70] Cullo did not dispute the fact

that of the 87 members of the Union, who signed

and accepted the “Reconfirmation of

Employment,” 71 are the respondent employees in

the case at bar. Moreover, it bears to stress that all

the employees were assisted by Rojas, DIHFEU-NFL's

president, who even co-signed each contract.

Stipulated in each Reconfirmation of Employment

were the new salary and benefits scheme. In

addition, it bears to stress that specific provisions of

the new contract also made reference to the

MOA. Thus, the individual members of the union

cannot feign knowledge of the execution of the

MOA. Each contract was freely entered into and

there is no indication that the same was attended

by fraud, misrepresentation or duress. To this Court's

mind, the signing of the individual “Reconfirmation

of Employment” should, therefore, be deemed an

implied ratification by the Union members of the

MOA.

In Planters Products, Inc. v. NLRC,[71] this Court

refrained from declaring a CBA invalid

notwithstanding that the same was not ratified in

view of the fact that the employees had enjoyed

benefits under it, thus:

Under Article 231 of the Labor Code and Sec.

1, Rule IX, Book V of the Implementing Rules, the

parties to a collective [bargaining] agreement are

required to furnish copies of the appropriate

Regional Office with accompanying proof of

ratification by the majority of all the workers in a

bargaining unit. This was not done in the case at

bar. But we do not declare the 1984-1987 CBA

invalid or void considering that the employees have

enjoyed benefits from it. They cannot receive

benefits under provisions favorable to them and

later insist that the CBA is void simply because other

provisions turn out not to the liking of certain

employees. x x x. Moreover, the two CBAs prior to

the 1984-1987 CBA were not also formally ratified,

yet the employees are basing their present claims

on these CBAs. It is iniquitous to receive benefits

from a CBA and later on disclaim its validity.[72]

Applied to the case at bar, while the terms of

the MOA undoubtedly reduced the salaries and

certain benefits previously enjoyed by the members

of the Union, it cannot escape this Court's attention

that it was the execution of the MOA which paved

the way for the re-opening of the hotel,

notwithstanding its financial distress. More

importantly, the execution of the MOA allowed

respondents to keep their jobs. It would certainly

be iniquitous for the members of the Union to sign

new contracts prompting the re-opening of the

hotel only to later on renege on their agreement on

the fact of the non-ratification of the MOA.

In addition, it bears to point out that Rojas did

not act unilaterally when he negotiated with

respondent's management. The Constitution and

By-Laws of DIHFEU-NFL clearly provide that the

president is authorized to represent the union on all

occasions and in all matters in which representation

of the union may be agreed or

required.[73] Furthermore, Rojas was properly

authorized under a Board of Directors

Resolution[74] to negotiate with respondent, the

pertinent portions of which read:

SECRETARY's CERTIFICATE

I, MA. SOCORRO LISETTE B. IBARRA, x x

x, do hereby certify that, at a meeting of the Board

of Directors of the DIHFEU-NFL, on 28 Feb. 2001 with

a quorum duly constituted, the following resolutions

were unanimously approved:

RESOLVED, as it is hereby resolved that

the Manifesto dated 25 Feb. 2001 be approved

ratified and adopted;

RESOLVED, FURTHER, that Mr. Domy R.

Rojas, the president of the DIHFEU-NFL, be hereby

authorized to negotiate with Waterfront Insular Hotel

Davao and to work for the latter's acceptance of

the proposals contained in DIHFEU-NFL Manifesto;

and

RESOLVED, FINALLY, that Mr. Domy R.

Rojas is hereby authorized to sign any and all

documents to implement, and carry into effect, his

foregoing authority.[75]

Withal, while the scales of justice usually tilt in

favor of labor, the peculiar circumstances herein

prevent this Court from applying the same in the

instant petition. Even if our laws endeavor to give

life to the constitutional policy on social justice and

on the protection of labor, it does not mean that

every labor dispute will be decided in favor of the

workers. The law also recognizes that management

has rights which are also entitled to respect and

enforcement in the interest of fair play.[76]

WHEREFORE, premises considered, the petition

is DENIED. The Decision dated October 11, 2005,

and the Resolution dated July 13, 2006 of the Court

of Appeals in consolidated labor cases docketed

as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657,

are AFFIRMED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 171153 September 12, 2007

SAN MIGUEL CORPORATION EMPLOYEES UNION–

PHILIPPINE TRANSPORT AND GENERAL WORKERS

ORGANIZATION (SMCEU–PTGWO), petitioner,

vs.

SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES

UNION–PAMBANSANG DIWA NG

MANGGAGAWANG PILIPINO (SMPPEU–

PDMP), respondent1.

D E C I S I O N

CHICO-NAZARIO, J.:

In this Petition for Review on Certiorari under Rule 45

of the Revised Rules of Court, petitioner SAN

MIGUEL CORPORATION EMPLOYEES UNION-

PHILIPPINE TRANSPORT AND GENERAL WORKERS

ORGANIZATION (SMCEU-PTGWO) prays that this

Court reverse and set aside the (a) Decision2 dated

9 March 2005 of the Court of Appeals in CA-G.R. SP

No. 66200, affirming the Decision3 dated 19

February 2001 of the Bureau of Labor Relations (BLR)

of the Department of Labor and Employment

(DOLE) which upheld the Certificate of Registration

of respondent SAN MIGUEL PACKAGING PRODUCTS

EMPLOYEES UNION–PAMBANSANG DIWA NG

MANGGAGAWANG PILIPINO (SMPPEU–PDMP); and

(b) the Resolution4 dated 16 January 2006 of the

Court of Appeals in the same case, denying

petitioner's Motion for Reconsideration of the

aforementioned Decision.

The following are the antecedent facts:

Petitioner is the incumbent bargaining agent for the

bargaining unit comprised of the regular monthly-

paid rank and file employees of the three divisions

of San Miguel Corporation (SMC), namely, the San

Miguel Corporate Staff Unit (SMCSU), San Miguel

Brewing Philippines (SMBP), and the San Miguel

Packaging Products (SMPP), in all offices and plants

of SMC, including the Metal Closure and

Lithography Plant in Laguna. It had been the

certified bargaining agent for 20 years – from 1987

to 1997.

Respondent is registered as a chapter of

Pambansang Diwa ng Manggagawang Pilipino

(PDMP). PDMP issued Charter Certificate No. 112 to

respondent on 15 June 1999.5 In compliance with

registration requirements, respondent submitted the

requisite documents to the BLR for the purpose of

acquiring legal personality.6 Upon submission of its

charter certificate and other documents,

respondent was issued Certificate of Creation of

Local or Chapter PDMP-01 by the BLR on 6 July

1999.7 Thereafter, respondent filed with the Med-

Arbiter of the DOLE Regional Officer in the National

Capital Region (DOLE-NCR), three separate

petitions for certification election to represent SMPP,

SMCSU, and SMBP.8 All three petitions were

dismissed, on the ground that the separate petitions

fragmented a single bargaining unit.9

On 17 August 1999, petitioner filed with the DOLE-

NCR a petition seeking the cancellation of

respondent's registration and its dropping from the

rolls of legitimate labor organizations. In its petition,

petitioner accused respondent of committing fraud

and falsification, and non-compliance with

registration requirements in obtaining its certificate

of registration. It raised allegations that respondent

violated Articles 239(a), (b) and (c)10 and 234(c)11of

the Labor Code. Moreover, petitioner claimed that

PDMP is not a legitimate labor organization, but a

trade union center, hence, it cannot directly create

a local or chapter. The petition was docketed as

Case No. NCR-OD-9908-007-IRD.12

On 14 July 2000, DOLE-NCR Regional Director

Maximo B. Lim issued an Order dismissing the

allegations of fraud and misrepresentation, and

irregularity in the submission of documents by

respondent. Regional Director Lim further ruled that

respondent is allowed to directly create a local or

chapter. However, he found that respondent did

not comply with the 20% membership requirement

and, thus, ordered the cancellation of its certificate

of registration and removal from the rolls of

legitimate labor organizations.13 Respondent

appealed to the BLR. In a Decision dated 19

February 2001, it declared:

As a chartered local union, appellant is not

required to submit the number of employees and

names of all its members comprising at least 20% of

the employees in the bargaining unit where it seeks

to operate. Thus, the revocation of its registration

based on non-compliance with the 20%

membership requirement does not have any basis

in the rules.

Further, although PDMP is considered as a trade

union center, it is a holder of Registration Certificate

No. FED-11558-LC issued by the BLR on 14 February

1991, which bestowed upon it the status of a

legitimate labor organization with all the rights and

privileges to act as representative of its members for

purposes of collective bargaining agreement. On

this basis, PDMP can charter or create a local, in

accordance with the provisions of Department

Order No. 9.

WHEREFORE, the appeal is hereby GRANTED.

Accordingly, the decision of the Regional Director

dated July 14, 2000, canceling the registration of

appellant San Miguel Packaging Products

Employees Union-Pambansang Diwa ng

Manggagawang Pilipino (SMPPEU-PDMP) is

REVERSED and SET ASIDE. Appellant shall hereby

remain in the roster of legitimate labor

organizations.14

While the BLR agreed with the findings of the DOLE

Regional Director dismissing the allegations of fraud

and misrepresentation, and in upholding that PDMP

can directly create a local or a chapter, it reversed

the Regional Director's ruling that the 20%

membership is a requirement for respondent to

attain legal personality as a labor organization.

Petitioner thereafter filed a Motion for

Reconsideration with the BLR. In a Resolution

rendered on 19 June 2001 in BLR-A-C-64-05-9-00

(NCR-OD-9908-007-IRD), the BLR denied the Motion

for Reconsideration and affirmed its Decision dated

19 February 2001.15

Invoking the power of the appellate court to review

decisions of quasi-judicial agencies, petitioner filed

with the Court of Appeals a Petition

for Certiorari under Rule 65 of the 1997 Rules of Civil

Procedure docketed as CA-G.R. SP No. 66200. The

Court of Appeals, in a Decision dated 9 March

2005, dismissed the petition and affirmed the

Decision of the BLR, ruling as follows:

In Department Order No. 9, a registered federation

or national union may directly create a local by

submitting to the BLR copies of the charter

certificate, the local's constitution and by-laws, the

principal office address of the local, and the names

of its officers and their addresses. Upon complying

with the documentary requirements, the local shall

be issued a certificate and included in the roster of

legitimate labor organizations. The [herein

respondent] is an affiliate of a registered federation

PDMP, having been issued a charter certificate.

Under the rules we have reviewed, there is no need

for SMPPEU to show a membership of 20% of the

employees of the bargaining unit in order to be

recognized as a legitimate labor union.

x x x x

In view of the foregoing, the assailed decision and

resolution of the BLR are AFFIRMED, and the petition

is DISMISSED.16

Subsequently, in a Resolution dated 16 January

2006, the Court of Appeals denied petitioner's

Motion for Reconsideration of the aforementioned

Decision.

Hence, this Petition for Certiorari under Rule 45 of

the Revised Rules of Court where petitioner raises

the sole issue of:

WHETHER OR NOT THE HONORABLE COURT OF

APPEALS COMMITTED REVERSIBLE ERROR IN RULING

THAT PRIVATE RESPONDENT IS NOT REQUIRED TO

SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF

ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE

EMPLOYEES IN THE BARGAINING UNIT WHERE IT SEEKS

TO OPERATE.

The present petition questions the legal personality

of respondent as a legitimate labor organization.

Petitioner posits that respondent is required to

submit a list of members comprising at least 20% of

the employees in the bargaining unit before it may

acquire legitimacy, citing Article 234(c) of the Labor

Code which stipulates that any applicant labor

organization, association or group of unions or

workers shall acquire legal personality and shall be

entitled to the rights and privileges granted by law

to legitimate labor organizations upon issuance of

the certificate of registration based on the following

requirements:

a. Fifty pesos (P50.00) registration fee;

b. The names of its officers, their addresses, the

principal address of the labor organization, the

minutes of the organizational meetings and the list

of the workers who participated in such meetings;

c. The names of all its members comprising at least

twenty percent (20%) of all the employees in the

bargaining unit where it seeks to operate;

d. If the applicant union has been in existence for

one or more years, copies of its annual financial

reports; and

e. Four (4) copies of the constitution and by-laws of

the applicant union, minutes of its adoption or

ratification and the list of the members who

participated in it.17

Petitioner also insists that the 20% requirement for

registration of respondent must be based not on

the number of employees of a single division, but in

all three divisions of the company in all the offices

and plants of SMC since they are all part of one

bargaining unit. Petitioner refers to Section 1, Article

1 of the Collective Bargaining Agreement

(CBA),18 quoted hereunder:

ARTICLE 1

SCOPE

Section 1. Appropriate Bargaining Unit. The

appropriate bargaining unit covered by this

Agreement consists of all regular rank and file

employees paid on the basis of fixed salary per

month and employed by the COMPANY in its

Corporate Staff Units (CSU), San Miguel Brewing

Products (SMBP) and San Miguel Packaging

Products (SMPP) and in different operations existing

in the City of Manila and suburbs, including Metal

Closure and Lithography Plant located at

Canlubang, Laguna subject to the provisions of

Article XV of this Agreement provided however,

that if during the term of this Agreement, a plant

within the territory covered by this Agreement is

transferred outside but within a radius of fifty (50)

kilometers from the Rizal Monument, Rizal Park,

Metro Manila, the employees in the transferred

plant shall remain in the bargaining unit covered by

this Agreement. (Emphasis supplied.)

Petitioner thus maintains that respondent, in any

case, failed to meet this 20% membership

requirement since it based its membership on the

number of employees of a single division only,

namely, the SMPP.

There is merit in petitioner's contentions.

A legitimate labor organization19 is defined as "any

labor organization duly registered with the

Department of Labor and Employment, and

includes any branch or local thereof."20 The

mandate of the Labor Code is to ensure strict

compliance with the requirements on registration

because a legitimate labor organization is entitled

to specific rights under the Labor Code,21 and are

involved in activities directly affecting matters of

public interest. Registration requirements are

intended to afford a measure of protection to

unsuspecting employees who may be lured into

joining unscrupulous or fly-by-night unions whose

sole purpose is to control union funds or use the

labor organization for illegitimate ends.22 Legitimate

labor organizations have exclusive rights under the

law which cannot be exercised by non-legitimate

unions, one of which is the right to be certified as

the exclusive representative23 of all the employees

in an appropriate collective bargaining unit for

purposes of collective bargaining.24 The acquisition

of rights by any union or labor organization,

particularly the right to file a petition for certification

election, first and foremost, depends on whether or

not the labor organization has attained the status of

a legitimate labor organization.25

A perusal of the records reveals that respondent is

registered with the BLR as a "local" or "chapter" of

PDMP and was issued Charter Certificate No. 112

on 15 June 1999. Hence, respondent was directly

chartered by PDMP.

The procedure for registration of a local or chapter

of a labor organization is provided in Book V of the

Implementing Rules of the Labor Code, as

amended by Department Order No. 9 which took

effect on 21 June 1997, and again by Department

Order No. 40 dated 17 February 2003. The

Implementing Rules as amended by D.O. No. 9

should govern the resolution of the petition at bar

since respondent's petition for certification election

was filed with the BLR in 1999; and that of petitioner

on 17 August 1999.26

The applicable Implementing Rules enunciates a

two-fold procedure for the creation of a chapter or

a local. The first involves the affiliation of an

independent union with a federation or national

union or industry union. The second, finding

application in the instant petition, involves the

direct creation of a local or a chapter through the

process of chartering.27

A duly registered federation or national union may

directly create a local or chapter by submitting to

the DOLE Regional Office or to the BLR two copies

of the following:

(a) A charter certificate issued by the federation or

national union indicating the creation or

establishment of the local/chapter;

(b) The names of the local/chapter's officers, their

addresses, and the principal office of the

local/chapter; and

(c) The local/chapter's constitution and by-laws;

Provided, That where the local/chapter's

constitution and by-laws is the same as that of the

federation or national union, this fact shall be

indicated accordingly.

All the foregoing supporting requirements shall be

certified under oath by the Secretary or the

Treasurer of the local/chapter and attested to by its

President.28

The Implementing Rules stipulate that a local or

chapter may be directly created by

a federation or national union. A duly constituted

local or chapter created in accordance with the

foregoing shall acquire legal personality from the

date of filing of the complete documents with the

BLR.29 The issuance of the certificate of registration

by the BLR or the DOLE Regional Office is not the

operative act that vests legal personality upon a

local or a chapter under Department Order No. 9.

Such legal personality is acquired from the filing of

the complete documentary requirements

enumerated in Section 1, Rule VI.30

Petitioner insists that Section 3 of the Implementing

Rules, as amended by Department Order No. 9,

violated Article 234 of the Labor Code when it

provided for less stringent requirements for the

creation of a chapter or local. This Court disagrees.

Article 234 of the Labor Code provides that

an independent labor organization acquires

legitimacy only upon its registration with the BLR:

Any applicant labor organization, association or

group of unions or workers shall acquire legal

personality and shall be entitled to the rights and

privileges granted by law to legitimate labor

organizations upon issuance of the certificate of

registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

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

principal address of the labor organization, the

minutes of the organizational meetings and the list

of the workers who participated in such meetings;

(c) The names of all its members comprising at least

twenty percent (20%) of all the employees in the

bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for

one or more years, copies of its annual financial

reports; and

(e) Four (4) copies of the constitution and by-laws of

the applicant union, minutes of its adoption or

ratification, and the list of the members who

participated in it. (Italics supplied.)

It is emphasized that the foregoing pertains to the

registration of an independent labor organization,

association or group of unions or workers.

However, the creation of a branch, local or

chapter is treated differently. This Court, in the

landmark case ofProgressive Development

Corporation v. Secretary, Department of Labor and

Employment,31 declared that when an unregistered

union becomes a branch, local or chapter, some of

the aforementioned requirements for registration

are no longer necessary or compulsory. Whereas an

applicant for registration of an independent union is

mandated to submit, among other things, the

number of employees and names of all its members

comprising at least 20% of the employees in the

bargaining unit where it seeks to operate, as

provided under Article 234 of the Labor Code and

Section 2 of Rule III, Book V of the Implementing

Rules, the same is no longer required of a branch,

local or chapter.32 The intent of the law in imposing

less requirements in the case of a branch or local of

a registered federation or national union is to

encourage the affiliation of a local union with a

federation or national union in order to increase the

local union's bargaining powers respecting terms

and conditions of labor.33

Subsequently, in Pagpalain Haulers, Inc. v.

Trajano34 where the validity of Department Order

No. 9 was directly put in issue, this Court was

unequivocal in finding that there is no inconsistency

between the Labor Code and Department Order

No. 9.

As to petitioner's claims that respondent obtained

its Certificate of Registration through fraud and

misrepresentation, this Court finds that the

imputations are not impressed with merit. In the

instant case, proof to declare that respondent

committed fraud and misrepresentation remains

wanting. This Court had, indeed, on several

occasions, pronounced that registration based on

false and fraudulent statements and documents

confer no legitimacy upon a labor organization

irregularly recognized, which, at best, holds on to a

mere scrap of paper. Under such circumstances,

the labor organization, not being a legitimate labor

organization, acquires no rights.35

This Court emphasizes, however, that a direct

challenge to the legitimacy of a labor organization

based on fraud and misrepresentation in securing

its certificate of registration is a serious allegation

which deserves careful scrutiny. Allegations thereof

should be compounded with supporting

circumstances and evidence. The records of the

case are devoid of such evidence. Furthermore, this

Court is not a trier of facts, and this doctrine applies

with greater force in labor cases. Findings of fact of

administrative agencies and quasi-judicial bodies,

such as the BLR, which have acquired expertise

because their jurisdiction is confined to specific

matters, are generally accorded not only great

respect but even finality.36

Still, petitioner postulates that respondent was not

validly and legitimately created, for PDMP cannot

create a local or chapter as it is not a legitimate

labor organization, it being a trade union center.

Petitioner's argument creates a predicament as it

hinges on the legitimacy of PDMP as a labor

organization. Firstly, this line of reasoning attempts

to predicate that a trade union center is not a

legitimate labor organization. In the process, the

legitimacy of PDMP is being impugned, albeit

indirectly. Secondly, the same contention premises

that a trade union center cannot directly create a

local or chapter through the process of chartering.

Anent the foregoing, as has been held in a long line

of cases, the legal personality of a legitimate labor

organization, such as PDMP, cannot be subject to a

collateral attack. The law is very clear on this

matter. Article 212 (h) of the Labor Code, as

amended, defines a legitimate labor

organization37 as "any labor organization duly

registered with the DOLE, and includes any branch

or local thereof."38 On the other hand, a trade union

center is any group of registered national unions or

federations organized for the mutual aid and

protection of its members; for assisting such

members in collective bargaining; or for

participating in the formulation of social and

employment policies, standards, and programs,

and is duly registered with the DOLE in accordance

with Rule III, Section 2 of the Implementing Rules.39

The Implementing Rules stipulate that a labor

organization shall be deemed registered and

vested with legal personality on the date of

issuance of its certificate of registration. Once a

certificate of registration is issued to a union, its

legal personality cannot be subject to collateral

attack.40 It may be questioned only in an

independent petition for cancellation in

accordance with Section 5 of Rule V, Book V of the

Implementing Rules. The aforementioned provision

is enunciated in the following:

Sec. 5. Effect of registration. The labor organization

or workers' association shall be deemed registered

and vested with legal personality on the date of

issuance of its certificate of registration. Such legal

personality cannot thereafter be subject to

collateral attack, but may be questioned only in an

independent petition for cancellation in

accordance with these Rules.

PDMP was registered as a trade union center and

issued Registration Certificate No. FED-11558-LC by

the BLR on 14 February 1991. Until the certificate of

registration of PDMP is cancelled, its legal

personality as a legitimate labor organization

subsists. Once a union acquires legitimate status as

a labor organization, it continues to be recognized

as such until its certificate of registration is

cancelled or revoked in an independent action for

cancellation.41 It bears to emphasize that what is

being directly challenged is the personality of

respondent as a legitimate labor organization and

not that of PDMP. This being a collateral attack, this

Court is without jurisdiction to entertain questions

indirectly impugning the legitimacy of PDMP.

Corollarily, PDMP is granted all the rights and

privileges appurtenant to a legitimate labor

organization,42 and continues to be recognized as

such until its certificate of registration is successfully

impugned and thereafter cancelled or revoked in

an independent action for cancellation.

We now proceed to the contention that PDMP

cannot directly create a local or a chapter, it being

a trade union center.

This Court reverses the finding of the appellate

court and BLR on this ground, and rules that PDMP

cannot directly create a local or chapter.

After an exhaustive study of the governing labor

law provisions, both statutory and regulatory,43 we

find no legal justification to support the conclusion

that a trade union center is allowed to directly

create a local or chapter through

chartering. Apropos, we take this occasion to

reiterate the first and fundamental duty of this

Court, which is to apply the law. The solemn power

and duty of the Court to interpret and apply the

law does not include the power to correct by

reading into the law what is not written therein.44

Presidential Decree No. 442, better known as the

Labor Code, was enacted in 1972. Being a

legislation on social justice,45 the provisions of the

Labor Code and the Implementing Rules have

been subject to several amendments, and they

continue to evolve, considering that labor plays a

major role as a socio-economic force. The Labor

Code was first amended by Republic Act No. 6715,

and recently, by Republic Act No. 9481.

Incidentally, the term trade union center was never

mentioned under Presidential Decree No. 442, even

as it was amended by Republic Act No. 6715. The

term trade union center was first adopted in the

Implementing Rules, under Department Order No.

9.

Culling from its definition as provided by

Department Order No. 9, a trade union center is

any group of registered national unions or

federations organized for the mutual aid and

protection of its members; for assisting such

members in collective bargaining; or for

participating in the formulation of social and

employment policies, standards, and programs,

and is duly registered with the DOLE in accordance

with Rule III, Section 2 of the Implementing

Rules.46 The same rule provides that the application

for registration of an industry or trade union center

shall be supported by the following:

(a) The list of its member organizations and their

respective presidents and, in the case of an industry

union, the industry where the union seeks to

operate;

(b) The resolution of membership of each member

organization, approved by the Board of Directors of

such union;

(c) The name and principal address of the

applicant, the names of its officers and their

addresses, the minutes of its organizational

meeting/s, and the list of member organizations

and their representatives who attended such

meeting/s; and

(d) A copy of its constitution and by-laws and

minutes of its ratification by a majority of the

presidents of the member organizations, provided

that where the ratification was done simultaneously

with the organizational meeting, it shall be sufficient

that the fact of ratification be included in the

minutes of the organizational meeting.47

Evidently, while a "national union" or "federation" is a

labor organization with at least ten locals or

chapters or affiliates, each of which must be a duly

certified or recognized collective bargaining

agent;48 a trade union center, on the other hand, is

composed of a group of registered national unions

or federations.49

The Implementing Rules, as amended by

Department Order No. 9, provide that "a duly

registered federation or national union" may

directly create a local or chapter. The provision

reads:

Section 1. Chartering and creation of a

local/chapter. – A duly registered federation or

national union may directly create a local/chapter

by submitting to the Regional Office or to the

Bureau two (2) copies of the following:

(a) A charter certificate issued by the federation or

national union indicating the creation or

establishment of the local/chapter;

(b) The names of the local/chapter's officers, their

addresses, and the principal office of the

local/chapter; and

(c) The local/chapter's constitution and by-laws;

provided that where the local/chapter's

constitution and by-laws is the same as that of the

federation or national union, this fact shall be

indicated accordingly.

All the foregoing supporting requirements shall be

certified under oath by the Secretary or the

Treasurer of the local/chapter and attested to by its

President.50

Department Order No. 9 mentions two labor

organizations either of which is allowed to directly

create a local or chapter through chartering – a

duly registered federation or a national union.

Department Order No. 9 defines a "chartered local"

as a labor organization in the private sector

operating at the enterprise level that acquired

legal personality through a charter certificate,

issued by a duly registered federation or national

union and reported to the Regional Office in

accordance with Rule III, Section 2-E of these

Rules.51

Republic Act No. 9481 or "An Act Strengthening the

Workers' Constitutional Right to Self-Organization,

Amending for the Purpose Presidential Decree No.

442, As Amended, Otherwise Known as the Labor

Code of the Philippines" lapsed52 into law on 25

May 2007 and became effective on 14 June

2007.53 This law further amends the Labor Code

provisions on Labor Relations.

Pertinent amendments read as follows:

SECTION 1. Article 234 of Presidential Decree No.

442, as amended, otherwise known as the Labor

Code of the Philippines, is hereby further amended

to read as follows:

ART. 234. Requirements of Registration. — A

federation, national union or industry or trade union

center or an independent union shall acquire legal

personality and shall be entitled to the rights and

privileges granted by law to legitimate labor

organizations upon issuance of the certificate of

registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

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

principal address of the labor organization, the

minutes of the organizational meetings and the list

of the workers who participated in such meetings;

(c) In case the applicant is an independent union,

the names of all its members comprising at least

twenty percent (20%) of all the employees in the

bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for

one or more years, copies of its annual financial

reports; and

(e) Four copies of the constitution and by-laws of

the applicant union, minutes of its adoption or

ratification, and the list of the members who

participated in it.

SECTION 2. A new provision is hereby inserted into

the Labor Code as Article 234-A to read as follows:

ART. 234-A. Chartering and Creation of a Local

Chapter. — A duly registered federation or national

union may directly create a local chapter by issuing

a charter certificate indicating the establishment of

the local chapter. The chapter shall acquire legal

personality only for purposes of filing a petition for

certification election from the date it was issued a

charter certificate.

The chapter shall be entitled to all other rights and

privileges of a legitimate labor organization only

upon the submission of the following documents in

addition to its charter certificate:

(a) The names of the chapter's officers, their

addresses, and the principal office of the chapter;

and

(b) The chapter's constitution and by-laws:

Provided, That where the chapter's constitution and

by-laws are the same as that of the federation or

the national union, this fact shall be indicated

accordingly.

The additional supporting requirements shall be

certified under oath by the secretary or treasurer of

the chapter and attested by its president.

(Emphasis ours.)

Article 234 now includes the term trade union

center, but interestingly, the provision indicating the

procedure for chartering or creating a local or

chapter, namely Article 234-A, still makes no

mention of a "trade union center."

Also worth emphasizing is that even in the most

recent amendment of the implementing

rules,54 there was no mention of a trade union

center as being among the labor organizations

allowed to charter.

This Court deems it proper to apply the Latin

maxim expressio unius est exclusio alterius. Under

this maxim of statutory interpretation, the expression

of one thing is the exclusion of another. When

certain persons or things are specified in a law,

contract, or will, an intention to exclude all others

from its operation may be inferred. If a statute

specifies one exception to a general rule or

assumes to specify the effects of a certain provision,

other exceptions or effects are excluded.55 Where

the terms are expressly limited to certain matters, it

may not, by interpretation or construction, be

extended to other matters.56 Such is the case here.

If its intent were otherwise, the law could have so

easily and conveniently included "trade union

centers" in identifying the labor organizations

allowed to charter a chapter or local. Anything that

is not included in the enumeration is excluded

therefrom, and a meaning that does not appear

nor is intended or reflected in the very language of

the statute cannot be placed therein.57 The rule is

restrictive in the sense that it proceeds from the

premise that the legislating body would not have

made specific enumerations in a statute if it had

the intention not to restrict its meaning and confine

its terms to those expressly mentioned.58 Expressium

facit cessare tacitum.59 What is expressed puts an

end to what is implied. Casus omissus pro omisso

habendus est. A person, object or thing omitted

must have been omitted intentionally.

Therefore, since under the pertinent status and

applicable implementing rules, the power granted

to labor organizations to directly create a chapter

or local through chartering is given to a federation

or national union, then a trade union center is

without authority to charter directly.

The ruling of this Court in the instant case is not a

departure from the policy of the law to foster the

free and voluntary organization of a strong and

united labor movement,60 and thus assure the rights

of workers to self-organization.61 The mandate of

the Labor Code in ensuring strict compliance with

the procedural requirements for registration is not

without reason. It has been observed that the

formation of a local or chapter becomes a handy

tool for the circumvention of union registration

requirements. Absent the institution of safeguards, it

becomes a convenient device for a small group of

employees to foist a not-so-desirable federation or

union on unsuspecting co-workers and pare the

need for wholehearted voluntariness, which is basic

to free unionism.62 As a legitimate labor

organization is entitled to specific rights under the

Labor Code and involved in activities directly

affecting public interest, it is necessary that the law

afford utmost protection to the parties

affected.63 However, as this Court has enunciated

in Progressive Development Corporation v.

Secretary of Department of Labor and

Employment, it is not this Court's function to

augment the requirements prescribed by law. Our

only recourse, as previously discussed, is to exact

strict compliance with what the law provides as

requisites for local or chapter formation.64

In sum, although PDMP as a trade union center is a

legitimate labor organization, it has no power to

directly create a local or chapter. Thus, SMPPEU-

PDMP cannot be created under the more lenient

requirements for chartering, but must have

complied with the more stringent rules for creation

and registration of an independent union, including

the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The

Decision dated 09 March 2005 of the Court of

Appeals in CA-GR SP No. 66200 is REVERSED and SET

ASIDE. The Certificate of Registration of San Miguel

Packaging Products Employees Union–

Pambansang Diwa ng Manggagawang Pilipino

is ORDERED CANCELLED, and SMPPEU-

PDMP DROPPED from the rolls of legitimate labor

organizations.

Costs against petitioner.

SO ORDERED.

Ynares-Santiago, Chairperson, Austria_Martinez,

Nachura, Reyes, JJ., concur.

Footnotes

FIRST DIVISION

MARICALUM MINING

CORPORATION,

Petitioner,

- versus -

HON. ARTURO D. BRION in

his official capacity as

Acting Secretary of Labor

and Employment and the

NATIONAL MINES AND

ALLIED

WORKERSUNION (NAMAWU

Local 103),

Respondents

.

G.R. No. 157696-

97

Present:

PANGANIBAN, C.J

.

Chairperson,

YNARES-

SANTIAGO,

AUSTRIA-

MARTINEZ,

CALLEJO, SR., and

CHICO-

NAZARIO, JJ.

Promulgated:

February 9, 2006

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

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

D E C I S I O N

CHICO-NAZARIO, J.:

This petition for review on certiorari under Rule

45 of the Rules of Court seeks to set aside the

Decision[1] dated 24 January 2002 of the Court of

Appeals in CA-G.R. SP No. 65351 and No. 65458

entitled, “Carlos G. Nerja, Jr., et al. v. Hon. Arturo

D. Brion, et al.” and “Maricalum Mining Corporation

v. Hon. Arturo D. Brion, et al.,” respectively, and the

Resolution dated 18 March 2003 denying

petitioner’s motion for reconsideration.

Petitioner Maricalum Mining Corporation

(MMC) is a domestic corporation engaged in

mining business and operation, while private

respondent National Mines and Allied Workers

Union Local 103 (NAMAWU) is the exclusive

bargaining agent of the rank and file employees of

petitioner.

On 29 January 1996, NAMAWU submitted its

Collective Bargaining Agreement (CBA) proposals

to petitioner. Due to petitioner’s inaction to the

proposals submitted by NAMAWU, the latter filed on

19 March 1996, its first Notice of Strike with the

National Conciliation and Mediation Board

(NCMB), Bacolod City, for refusal to bargain and

Unfair Labor Practice.

Eventually, petitioner presented its counter-

proposals and started the CBA negotiations. While

the negotiations were going on, petitioner dismissed

some workers effective 06 May 1996.

On 23 August 1996, NAMAWU filed a second

Notice of Strike for Unfair Labor Practice against

petitioner.

On 05 September 1996, while

the NCMB Bacolod City was conducting

conciliation meetings, petitioner issued Notices of

Temporary Lay-off to its selected rank and file

employees effective 07 October 1996.

After the NCMB failed to conciliate the labor

dispute between NAMAWU and petitioner, then

Department of Labor and Employment (DOLE)

Secretary Leonardo Quisumbing,[2] on 03 October

1996, assumed jurisdiction over the case docketed

as OS-AJ-10-96-014 (NCMB-RB6-08-06-96).

Meanwhile, Pedro M. Abuana, Jr., an

adversely affected employee of petitioner during

the retrenchment effected on 07 October 1996,

filed, in his own behalf, an illegal dismissal case

against the petitioner before the Regional

Arbitration Branch No. VI, National Labor Relations

Commission (NLRC) docketed as RAB Case No. 06-

12-10636-96 (Abuana case). The Labor Arbiter ruled

that the dismissal of Abuana was legal and

valid.[3] On appeal, the NLRC affirmed the ruling of

the Labor Arbiter, which decision became final

and executory.[4]

In an order dated 30 July 1997

(Quisumbing order),

Secretary Quisumbing resolved the labor dispute in

favor of NAMAWU: (1) directing the reinstatement

with backwages of the workers laid-off in May and

October 1996; (2) finding petitioner guilty of illegal

dismissal and unfair labor practice; (3) directing the

parties to enter into a collective bargaining

agreement incorporating all the terms and

conditions of the previous bargaining agreement;

and (4) providing for across-the-board increase of

all rank-and-file workers. The dispositive portion

reads:

WHEREFORE, judgment is hereby rendered:

1. Declaring that lay-offs implemented on May 7,

1996 and October 7, 1996 as illegal:

2. Ordering that all workers, whether union

members or not, who were laid-off on May 7, 1996

and October 7, 1996 be immediately reinstated

without gap in service, loss of seniority, and that

their full backwages and benefits from the time of

termination until actual reinstatement be paid;

3. Declaring the Company to have violated the

Labor Code provisions on Unfair Labor Practice for

negotiating in bad faith and later refusing to

negotiate; and

4. Ordering the parties to enter into a new

collective bargaining agreement incorporating all

the terms and conditions of the previous collective

bargaining agreement between the Company and

the NFL, except the name of the exclusive

bargaining agent, and providing for an annual

across-the-board increase in the daily wage of all

rank and file workers in the amount of P60.00 per

day from February, 1995 until January, 1998 and

another P50.00 increase annually effective February

1, 1998 until January 31, 2000.

Petitioner filed a motion for reconsideration

which was granted by succeeding DOLE

Secretary Cresenciano Trajano in an order dated 17

April 1998 (Trajano order). The Trajano order

modified the Quisumbing order as follows: (1)

setting aside the finding of illegal dismissal and

unfair labor practice and remanding these issues to

the arbitration level of the NLRC for a hearing on

the merits; and (2) deleting the award

of backwages for the workers to be reinstated. The

pertinent portions of the Trajano order state:

This Office finds that there are no new

matters/evidence in the Motion for Reconsideration

which would warrant a reversal of Our decision on

wage issue.

We however find it necessary, in the interest

of justice and fairness, to reconsider Our finding of

Unfair Labor Practice which could ultimately subject

the Company and its officers to criminal

prosecution.

x x x x

This being the case, it is a matter of necessity

that a full-blown hearing be conducted on the issue

of unfair labor practice. Indeed, Art. 247 of the

Labor Code, as amended, mandates that a

hearing should be conducted in the resolution of

an unfair labor practice.

Pending resolution of the issue of unfair labor

practice and illegal termination, the Company is

directed to physically reinstate all workers, whether

union members or not who were laid-off on May 7,

1996 andOctober 7, 1996.

WHEREFORE, except as above modified, Our

Order dated 30 July 1997 is hereby AFFIRMED.

The Executive Labor Arbiter, Regional

Arbitration Branch No. VI, National Labor Relations

Commission, is hereby deputized as Hearing Officer

and is directed to conduct hearing/s and receive

evidence as expeditiously as possible on the issues

of unfair labor practice and terminations effected

by the Company on May 7, 1996 and October 7,

1996, and to submit his Report and

Recommendation to this Office within ten (10) days

from termination of the hearing.

Meanwhile, as earlier mentioned, on 30 April

1998, the Labor Arbiter handling RAB Case No. 06-

12-10636-96 which was filed by Abuana ruled that

the retrenchment effected by MMC on07 May

1996 and 07 October 1996 were valid and legal.[5]

Dissatisfied by

the Quisumbing and Trajano orders, petitioner MMC

filed a petition for certiorari before this Court

docketed as G.R. No. 133519 entitled,

“Maricalum Mining Corporation v.

Hon. Cresenciano B. Trajano, et al.” In a resolution

dated 06 July 1998 (Resolution), this Court dismissed

the petition on the ground that the then Secretary

of DOLE Quisumbing did not commit grave abuse

of discretion in issuing his order dated 30 July 1997.

Petitioner moved for a reconsideration of the

Resolution.

On 11 September 1998, NAMAWU filed a

Motion for Partial Execution with the DOLE which

was not acted upon due to the pendency of

petitioner’s motion for reconsideration.

During the pendency of petitioner’s motion

for reconsideration, the decision in St. Martin’s

Funeral Homes v. National Labor Relations

Commission[6] was promulgated. Following the

ruling in said case, petitioner’s motion for

reconsideration of our resolution dated 06 July

1998 was remanded to the Court of Appeals for

proper disposition.

On 14 June 1999, the appellate court denied

petitioner’s motion for reconsideration.

Still undaunted, petitioner brought the case

anew to this Court via petition for review

on certiorari, docketed as G.R. No. 138996 entitled,

“Maricalum Mining Corporation v.

HonCresenciano B. Trajano, in his capacity as the

Secretary of the DOLE and NAMAWU Local

103,” which was, however, denied with finality in a

resolution dated 26 January 2000.

On 10 February 2000, NAMAWU filed an Ex-

Parte Manifestation and Second Motion for

Execution with the Secretary of DOLE. The motion

also sought assistance from the Bureau of Working

Conditions (BWC) in the computation of the

awards/benefits due NAMAWU’s members under

the Quisumbing order.

On 25 July 2000, the BWC submitted to the

DOLE its findings and observation, coming up with a

computation in the aggregate amount of One

Hundred Fifty-Nine Million, Fifty-Four Thousand Nine

Hundred Seventy-One and 30/100 (P159,054,971.30)

Pesos for loss of time, benefits, rice subsidy, health

insurance bonus and backwages of union

members who were illegally dismissed.

Petitioner filed a comment to the BWC

findings on 08 September 2000, stating that the

BWC computation was erroneous for the following

reasons: (1) there is no legal basis for the

computation of backwages because

the Trajano order deleted the award

of backwages made in the Quisumbing order; (2)

the entitlement to backwages of the employees

retrenched in May and October 1996 would be

dependent on the resolution of the cases for illegal

dismissal and unfair labor practice; and (3) the

wage increase awarded by the Secretary cannot

be availed of by the other employees who were

not retrenched in May and October 1996.

On 18 November 2000, 149 employees of

petitioner who claimed were part of the 215

members of NAMAWU filed a Motion for

Intervention With Prior Leave before the Office of

the Secretary of DOLE.[7]

In an order[8] dated 09 May 2001, DOLE Acting

Secretary Arturo

D. Brion granted NAMAWU’s motion for execution,

approved BWC’s computation of the benefits due

to the laid-off employees and denied the motion

for intervention, thus:

WHEREFORE, premises considered, judgment is

hereby rendered:

1. Ordering respondent MMC to immediately

reinstate all workers whether union member or not,

who were laid-off on May 7, 1997 and October 7,

1996 without gap in service, loss of seniority, and

that their fullbackwages and benefits from the time

of termination until actual reinstatement be paid;

2. Approving the computation of BWC consisting

of 23 pages based on the Order of July 30,

1997 submitted on this office on July 25,

2000 through Director Danilo S. Lorredo and made

integral part thereof;

3. Denying intervenor’s motion for intervention;

and

4. Ordering the Bureau of Working Condition to

compute the remaining amount of the award due

to complainants as per order of the Secretary of

Labor dated July 30, 1997 starting October 1,

1999 until January 31, 2000.

Let a partial writ of execution be issued

directing the Sheriff, Regional Office No. VI,

Department of Labor and

Employment, Bacolod City to proceed to the

premises of Mariculum Mining Corporation to

execute the Order dated July 30, 1997 affirmed by

the Court of Appeals and the Supreme Court in the

resolutions dated June 14, 1999 and July 6, 1998,

respectively, and collect the aggregate amount of

P159,054,971.30 whose breakdown is specified in

the partial writ of execution.

Petitioner filed a motion for

reconsideration. On 11 May 2001, then DOLE

Acting Secretary Brion issued a Partial Writ of

Execution,[9] directing to proceed to the MMC

premises for the execution of the same. In an order

dated o6 June 2001, Acting Secretary Brion denied

petitioner’s motion for reconsideration.

With the denial of petitioner’s motion, Carlos

G. Nerja, Jr. and Eugenio D. Caras, who claimed to

represent the 342 employees of petitioner at that

time and who allegedly stand to be adversely

affected by the enforcement of the Partial Writ of

Execution, filed a petition for certiorari before the

Court of Appeals docketed as CA-G.R. SP No.

65351.

Petitioner also filed a petition

for certiorari before the Court of Appeals which was

docketed as CA-G.R. SP No. 65458.

NAMAWU filed a motion for consolidation of

the two petitions which was granted by the

appellate court in its order dated 12 November

2001.

The Court of Appeals dispose of the two

petitions by dismissing them in a Decision dated 24

January 2002.

Motions for reconsiderations were filed, which

the Court of Appeals denied in an order dated 18

March 2003.

Carlos G. Nerja, Jr. and Eugenio D. Caras filed

a petition for review before this Court which was

dismissed on 09 June 2003.

On 11 April 2003, petitioner filed the instant

petition for review on certiorari.

In its Memorandum, petitioner raises the

following issues:

I

WHETHER THE COURT OF APPEALS ERRED IN NOT

RULING THAT THE TRAJANO ORDER MODIFIED THE

QUISUMBING ORDER AND THUS,

PUBLIC RESPONDENT GRAVELY ABUSED HIS

DISCRETION IN ORDERING AND ISSUING A WRIT OF

EXECUTION BASED ON THE QUISUMBING ORDER.

II

WHETHER THE COURT OF APPEALS ERRED IN NOT

RULING THAT PUBLIC RESPONDENT ACTED

WHIMSICALLY AND CAPRICIOUSLY IN APPROVING

THE COMPUTATION OF THE BUREAU OF WORKING

CONDITIONS (BWC) WITHOUT GIVING ANY

CONSIDERATION TO THE SUPERVENING EVENTS THAT

RENDER THE ENFORCEMENT OF THE BWC

COMPUTATION UNREASONABLE AND UNJUST.

III

WHETHER THE COURT OF APPEALS ERRED IN NOT

RULING THAT NAMAWU HAD NO LEGAL STANDING

TO SEEK THE IMPLEMENTATION OF THE ASSAILED

ORDERS GIVEN THAT MAJORITY OF ITS TOTAL

MEMBERSHIP HAS CHOSEN TO DISAFFILIATE.

The petition has no merit.

On the first issue, petitioner contends that the

Court of Appeals erred in affirming the assailed

orders issued by DOLE Acting Secretary Brion finding

that it was the Quisumbing order that this Court

upheld in G.R. No. 133519 and that the said order

should be the basis for the enforcement of the writ

of execution.

Petitioner stresses that the Trajano order

superseded and modified the Quisumbing order,

hence, the basis for the issuance and enforcement

of the writ of execution must be the former

order. To support its stance, petitioner argues

that when it filed the petition in G.R. No. 133519, it

merely questioned the Trajano order inasmuch as

the said order affirmed the Quisumbingorder

directing the reinstatement of the laid-off workers

and the award of wage increase. Petitioner points

out that since the only issues raised by it in G.R. No.

133519 were the reinstatement and award of wage

increase, it follows that the other issues such as

unfair labor practice and the award

of backwages are excluded. Thus, the effect of the

dismissal of the petition in G.R. No. 133519 was the

reinstatement of the Trajano order.

Petitioner also asserts that even assuming that

the Resolution affirmed the Quisumbing order in its

entirety without a similar pronouncement that

the Trajano order was a nullity, would only mean

that there were two valid and subsisting

orders. Since the Trajano order is the later

issuance, ergo, it supersedes and modifies

the Quisumbing order.

Petitioner further claims that NAMAWU

admitted the validity, finality and enforceability of

the Trajano order in its Motion for Partial Execution

dated 11 September 1998.

In the petition filed by petitioner in G.R. No.

133519, the following averments appear:[10]

Now, not only was the assumption improperly

made, but worse, its implementation was also

gravely abused by the then Secretary of Labor. It

may be well to note that in the first assailed Order

dated 30 July 1997, the Petitioner was found guilty

of unfair labor practice and illegal dismissal, a

finding that was arrived at by

then Secretary Quisumbing without observing the

measure of due process demanded by the gravity

of the charges made against MMC x x x.

For all its efforts, the Petitioner should have, at the

very least, been spared of these whimsical and

arbitrary impositions of the Public Respondent

and his predecessor in office (referring to

Secretary Quisumbing) x x x.

The foregoing portion of the petition amply

suggests that petitioner was assailing

the Quisumbing order, not only on the issues of

reinstatement and the award of wage increase,

but also on the matter of unfair labor practice,

illegal dismissal and the award of backwages as

well. Assuming arguendo that indeed the issues on

unfair labor practice and award

of backwages were not raised by petitioner, there is

nothing to prevent this Court from reviewing matters

not specifically raised or assigned as error by the

parties, if their consideration is necessary in arriving

at a just resolution of the controversy, as in the

instant case. Thus we held:

x x x It is axiomatic that an appeal, once accepted

by this Court, throws the entire case open to review,

and that this Court has the authority to review

matters not specifically raised or assigned as error

by the parties, if their consideration is necessary in

arriving at a just resolution of the case.[11]

In upholding the Quisumbing order over

the Trajano order, we resolved:[12]

Indeed, the timing of the retrenchment of

workers tends to confirm the finding of the

Secretary of Labor that the cessation of operations

on October 7, 1996 was an illegal lock-out. It is

noteworthy that Petitioner claimed business losses

to justify the retrenchment of workers at the time

when the parties were negotiating a new CBA.

Considering that he found Petitioner to be

guilty of unfair labor practice in bargaining in bad

faith, the reinstatement of the dismissed workers

and the grant of wage increase were proper.

It must be noted that the Trajano order

omitted the findings of unfair labor practice and

illegal dismissal and the award of backwages which

were embodied in the Quisumbing order. Since we

upheld entirely the findings in

the Quisumbing order, i.e., illegal dismissal, unfair

labor practice, award of backwages, reinstatement

and wage increase in our Resolution, as a result

the Trajanoorder is necessarily vacated.

Furthermore, the dispositive portion could not

have been clearer as it categorically declares that

the Secretary of Labor, i.e., Leonardo Quisumbing,

did not commit grave abuse in his order dated 30

July 1997, thus:

WHEREFORE, the petition for certiorari is

DISMISSED for lack of showing that the Secretary of

Labor and Employment committed grave abuse of

discretion in his order of July 30, 1997.

The order that we sustained in the

foregoing fallo is the Quisumbing order which is

dated 30 July 1997, and definitely not

the Trajano order which is dated 17 April 1998. Even

if we did not explicitly annul the Trajano order,

nevertheless the tenor of the

Resolution’s dispositive portion indubitably decreed

that we sustained the order dated 30 July 1997 or

the Quisumbing order. Indeed, it is

the dispositive part of the judgment that actually

settles and declares the rights and obligations of

the parties, finally, definitively, authoritatively,

notwithstanding the existence of inconsistent

statements in the body that may tend to

confuse.[13] It is the dispositive part that controls, for

purposes of execution.[14] Hence, there is no doubt

that it was the Quisumbing order, not

the Trajano order, that we upheld in our Resolution

and which should be the basis of the writ of

execution.

As to petitioner’s contention that NAMAWU

allegedly admitted in its Motion for Partial Execution

dated 11 September 1998 the validity and finality

the Trajano order, the same is unsubstantiated. It

does not appear from the said motion that

NAMAWU made such categorical admission.

Besides, even if there was such an admission,

the same does not bind this Court. It is not the

interpretation of NAMAWU that makes

the Trajano order or the Quisumbing order

controlling, rather, it is the Court’s declaration that

settles such issue.

Anent the second issue, petitioner questions

the BWC computation. It accentuates that the

same is flawed as it included the award

of backwages which was already deleted in

the Trajanoorder.

Petitioner also insists that the Abuana case –

where the dismissal of Abuana was declared valid,

and therefore the award of backwages was

deleted by the labor arbiter and later affirmed by

the NLRC - should have a bearing in the instant

case considering that the circumstances

surrounding the dismissal of Abuana are the same

circumstances that resulted in the retrenchments

ofNAMAWU’s members in May and October

1996. As Abuana was not

awarded backwages, NAMAWU’s members should

not have been awarded backwages as well.

Petitioner likewise avers that the employees

who were not retrenched in May and October 1996

should not be awarded the wage increase

because of subsequent and supervening events

such as the fact that these employees had entered

into separate agreements with petitioner for the

adoption of a new progressive wage system and

that they executed quitclaims releasing petitioner

from any liabilities.

According to petitioner, another reason why

the wage increase cannot be availed of by the

employees not retrenched in May and October

1996, is because the NAMAWU and petitioner have

yet to enter into a collective bargaining as required

by the Quisumbing order. It is petitioner’s

interpretation of the said order that prior to the

implementation of the wage increase, a CBA must

first be constituted.

On the other hand, the Court of Appeals

opined that the Quisumbing order, and not

the Trajano order, is controlling and should be the

basis of the issuance of the writ of execution.

As to the Abuana case, the appellate court

ruled that the same cannot prevail over

the Quisumbing order, the latter having been

affirmed both by the Court of Appeals and this

Court. The Court of Appeals added that the

decision in Abuana cannot bind the parties in the

instant case since they are not involved in the

said Abuana case.

Addressing the matter on the execution of

quitclaims, the Court of Appeals discredited the

same on the grounds that the copies of the same

were not presented, and that granting that they

were indeed executed, the same cannot bar the

execution of the Quisumbing order in the absence

of any showing that the entire amount due the

employees was fully satisfied with the execution of

the quitclaims.

It ruled that the wage increase embodied in

the BWC computation does not refer to the agreed

wage increase that can only be implemented after

a CBA is reached by the parties, rather, it refers to

the across-the-board increase granted in

the Quisumbing order as a result of a finding of

unfair labor practice on the part of petitioner due

to its failure to observe its duty to bargain. Thus, the

wage increase as computed by the BWC, is legally

in order even in the absence of a new CBA.

We agree with the Court of Appeals.

Petitioner’s assertion that there is no basis for

the computation of backwages, because

the backwages awarded in the Quisumbing order

was deleted in the Trajano order flounders in view

of our declaration that the Quisumbing order sets

aside the Trajano order.

The Court of Appeals is correct in saying that

the pronouncement in the Abuana case is not

binding on the parties in this case. We further state

that the Abuana case does not affect NAMAWU no

matter the similarity in situation is on the ground that

NAMAWU was not impleaded as a party in

the Abuana case. It is a basic postulate in this

jurisdiction that “no man shall be affected [in] any

proceeding to which he is a stranger, and strangers

to a case are not bound by any judgment

rendered by the court.”[15] Due process requires

that a court decision can only bind a party therein

and not against one who did not have his day in

court.

As to petitioner’s argument on the new

progressive wage, suffice it to state that the same

issue had already been passed upon

in Maricalum Mining Corporation

v. Trajano[16] where we affirmed the finding of the

Court of Appeals, viz:[17]

The alleged acceptance of the workers of the

new wage structure is likewise unreliable. If the

alternative is dismissal, who would not sign an

“acceptance” of such new wage

structure? Besides, as pointed out by the private

respondent, even granting that the workers freely

agreed to such wage structures, the company

could not have validly negotiated with them

without violating the Labor Code, considering that

the private respondent was still then the exclusive

bargaining agent of the rank-and-file employees.

Petitioner’s contention that the workers whose

services were terminated subsequent in May and

October 1996 executed quitclaims does not merit

our attention because petitioner failed to prove

such execution.

Quitclaims are commonly frowned upon as

contrary to public policy and ineffective to bar

claims for the full measure of the workers’ legal

rights especially if the following are present: (a)

there is clear proof that the waiver was wangled

from an unsuspecting or gullible person; or (b) the

terms of the settlement are unconscionable, and

on their face invalid, such quitclaims must be struck

down as invalid or illegal.[18] In the instant case, the

execution of the alleged quitclaims appears to be

suspect because of the illegal dismissal of the

workers and the unfair labor practice committed by

petitioner. For fear of getting nothing from

petitioner, it may be readily concluded that

employees were compelled to sign the

quitclaims. Also, petitioner failed to present

evidence to show that payments to the workers

were made.

Equally unavailing is petitioner’s assertion that

the wage increase or adjustment adopted under

the BWC computation is premature since no CBA

had been entered into.

As accurately explained by the appellate

court:[19]

Neither can We subscribe to petitioner’s

contention that the wage adjustment or increase

adopted in the BWC computation cannot be

implemented in the absence of a new CBA. It is

undisputed that the increase adverted to in the

BWC computation does not refer to the agreed

wage increase that could only be implemented

based on a new CBA. Rather, it refers to the across-

the-board increase granted in

the Quisumbing order as a consequence of a

finding of unfair labor practice on the part of MMC

due to its failure to observe its duty to bargain.

Anent the third issue, petitioner argues that

NAMAWU had no legal standing to seek the

implementation of the assailed orders of DOLE

Acting Secretary Brion because of the disaffiliation

of the majority of its members which

deprived NAMAWU’s authority to represent its

members.

Article 256 of the Labor Code partly provides:

REPRESENTATION ISSUE IN ORGANIZED

ESTABLISHMENTS. – In organized establishments,

when a verified petition questioning the majority

status of the incumbent bargaining agent is filed

before the Department of Labor and Employment

within the sixty-day period before the expiration of

the collective bargaining agreement, the Med-

Arbiter shall automatically order an election by

secret ballot when the verified petition is supported

by the written consent of at least twenty-five (25%)

percent of all the employees in the appropriate

bargaining unit.

x x x x

At the expiration of the freedom period, the

employer shall continue to recognize the majority

status of the incumbent bargaining agent where no

petition for certification election is filed.

According to the foregoing provision, for a

union to become an exclusive bargaining

representative of a particular establishment, it must

emerge as winner in a certification election. In the

case at bar, there was no certification election held

challenging the majority status of NAMAWU as the

exclusive bargaining representative of petitioner’s

employees. NAMAWU, therefore, remains the

exclusive bargaining representative of petitioner’s

employees and possesses legal standing to

represent them.

One final point. NAMAWU accuses petitioner

of forum shopping. NAMAWU alleges that the

instant petition is filed for the purpose of preventing

the execution of the Quisumbing order as affirmed

by this Court on 06 July 1998 in G.R. No. 133519 and

on 26 January 2000 in G.R. No. 138996.

Petitioner counters that it did not commit

forum shopping because the relief prayed for in the

previous case was the reversal of the Trajano order

while the relief prayed for in this petition is the

reversal of the orders enforcing and executing the

terms of the Quisumbing order.

Forum shopping exists when a party

repetitively avails of several judicial remedies in

different courts, simultaneously or successively, all

substantially founded on the same transactions and

the same essential facts and circumstances, and all

raising substantially the same issues either pending

in, or already resolved adversely, by some other

court.[20] It has been characterized as an act of

malpractice that is prohibited and condemned as

trifling with the courts and abusing their

processes. The test in determining whether a party

violates the rule against forum shopping is where a

final judgment in one case will amount

to res judicata in the action under consideration or

where the elements of litis pendentia are

present. In turn, the elements of res judicata as

enumerated inSy Kao v. Court of Appeals[21] are as

follows: (a) identity of parties; (b) identity of rights

asserted and reliefs being founded on the same

facts; and (c) identity in the two preceding

particulars should be such that any judgment which

may be rendered on the other action will,

regardless of which party is successful, amount

to res judicata in the action under consideration.

In this case, the parties are the same,

petitioner and NAMAWU. The reliefs prayed for are

substantially identical which is ultimately the

nullification of

the Quisumbing order. Likewise, resjudicata[22] exists

because a ruling of this Court on the issues raised by

petitioner would amount to revisiting and re-

ventilating the essentially same issue, i.e., whether

or not the Quisumbingorder is controlling, which

were already passed upon and definitely resolved

by this Court in Maricalum Mining Corporation

v. Trajano.[23] Even on this ground alone, for

being violative of the rule against forum shopping,

the instant petition for review should be denied.[24]

WHEREFORE, the petition is DENIED. The

assailed Decision of the Court of Appeals dated 24

January 2002 and its Resolution dated 18 March

2003 are hereby AFFIRMED. With costs.

SO ORDERED.

THIRD DIVISION

[G.R. No. 133215. July 15, 1999]

PAGPALAIN HAULERS, INC., petitioner, vs. The

HONORABLE CRESENCIANO B. TRAJANO, in his

official capacity as Secretary of Labor and

Employment, the HONORABLE RENATO D.

PARUNGO, in his official capacity as the Med-

Arbiter in DOLE Case No. NCR-OD-M-9705-006, and

the INTEGRATED LABOR ORGANIZATION (ILO-PHILS)

PAGPALAIN WORKERS UNION-ILO-

PHILS. respondents.

D E C I S I O N

ROMERO, J.:

On May 14, 1997, respondent Integrated Labor

Organization-Pagpalain Haulers Worker’s Union

(hereafter referred to as ILO-PHILS), in a bid to

represent the rank-and-file drivers and helpers of

petitioner Pagpalain Haulers, Inc. (hereafter

referred to as Pagpalain), filed a petition for

certification election with the Department of Labor

and Employment. ILO-PHILS attached to the

petition copies of its charter certificate, its

constitution and by-laws, its books of account, and

a list of its officers and their addresses.

On July 10, 1997, Pagpalain filed a motion to dismiss

the petition, alleging that ILO-PHILS was not a

legitimate labor organization due to its failure to

comply with the requirements for registration under

the Labor Code. Specifically, it claimed that the

books of account submitted by ILO-PHILS were not

verified under oath by its treasurer and attested to

by its president, a required by Rule II, Book V of the

Omnibus Rules Implementing the Labor Code.

In a reply dated August 4, 1997, ILO-PHILS dismissed

Pagpalain’s claims, saying that Department Order

No. 9, Series of 1997 had dispensed with the

requirement that a local or chapter of a national

union submit books of account in order to be

registered with the Department of Labor and

Employment.

Finding in favor of ILO-PHILS, the Med-Arbiter, on

August 27, 1997, ordered the holding of certification

elections among the rank-and-file of Pagpalain

Haulers. Pagpalain promptly appealed the

decision to the Secretary of Labor and

Employment. It claimed that the Med-Arbiter had

gravely abused his discretion in allowing

Department Order No. 9 to take precedence over

a ruling of the Supreme Court. Pagpalain

cited Protection Technology v. Secretary,

Department of Labor and

Employment[1] and Progressive Development

Corporation v. Secretary of Labor[2] in support of its

contention.

Declaring Protection and Progressive to be

inapplicable to the case before him, the Secretary,

on February 27, 1998, issued a resolution dismissing

Pagpalain’s appeal. In his own words, “[I]n these

aforementioned cases, the Supreme Court

premised its ruling on the previous rules

implementing the Labor Code, particularly Book V,

that provides the requirements for the registration of

a local or chapter of a federation or national

union. With the issuance of Department Order No.

09 amending the rules implementing Book V of the

Code, the requirement on books of account no

longer exists.”[3]

Aggrieved by said resolution, Pagpalain now

comes to this Court for relief claiming that the

Secretary of Labor acted without jurisdiction in

issuing the questioned resolution. In support of its

proposition, it claims that:

1. DEPARTMENT ORDER NO. 9, SERIES OF 1997,

ISSUED BY PUBLIC RESPONDENT SECRETARY OF

LABOR IS NULL AND VOID FOR BEING CONTRARY TO

PUBLIC POLICY LAID DOWN BY THE SUPREME COURT

INPROTECTION TECHNOLOGY, INC. V. SECRETARY

OF LABOR (G.R. NO. 117211, 1 MARCH 1995)

AND PROGRESSIVE DEVELOPMENT CORP. V.

SECRETARY OF LABOR (G.R. NO. 96425, 4 FEBRUARY

1992);

2. DEPARTMENT ORDER NO. 9, SERIES OF 1997, OF

PUBLIC RESPONDENT SECRETARY OF LABOR

CANNOT ALTER THE REQUIREMENTS OF ARTICLES

241(H) AND (J) OF THE LABOR CODE OF THE

PHILIPPINES, NOR CAN IT PREVAIL OVER THE RULINGS

OF THE SUPREME COURT, WHICH FORM PART OF THE

LAW OF THE LAND.

Pagpalain’s contentions are without merit.

Under Article 234 of the Labor Code, the

requirements for registration of a labor organization

is as follows:

Art. 234. Requirements of registration.– Any

applicant labor organization, association or group

of unions or workers shall acquire legal personality

and shall be entitled to the rights and privileges

granted by law to legitimate labor organizations

upon issuance of the certificate of registration

based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

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

principal address of the labor organization, the

minutes of the organizational meetings and the list

of the workers who participated in such meetings;

(c) The names of all its members comprising at

least twenty percent (20%) of all the employees in

the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for

one or more years, copies of its annual financial

reports; and

(e) Four (4) copies of the constitution and by-laws

of the applicant union, minutes of its adoption or

ratification, and the list of the members who

participated in it.

As can be gleaned from the above, the Labor

Code does not require the submission of books of

account in order for a labor organization to be

registered as a legitimate labor organization. The

requirement that books of account be submitted as

a requisite for a registration can be found only in

Book V of the Omnibus Rules Implementing the

Labor Code, prior to its amendment by Department

Order No. 9, Series of 1997. Specifically, the old

Section 3(e), Rule II, of Book V provided that ‘[t]he

local or chapter of a labor federation or national

union shall have and maintain a constitution and

by-laws, set of officers and books of accounts. For

reporting purposes, the procedure governing the

reporting of independently registered unions,

federations or national unions shall be observed.”

In Progressive Development Corporation, cited by

Pagpalain, this Court held that the above-

mentioned “‘procedure governing the reporting of

independently registered unions’ refers to the

certification and attestation requirements

contained in Article 235, paragraph 2.” Article 235,

paragraph 2 provides that “[a]ll requisite

documents and papers shall be certified under

oath by the secretary or the treasurer of the

organization, as the case may be, and attested to

by its president;” hence, in the above-mentioned

case, we ruled that in applications for registration

by a local or chapter of a federation or national

union, the constitution and by-laws, set of officers

and books of account submitted by said local or

chapter must be certified under oath by the

secretary or treasurer and attested to by its

president.

Three years later, in Protection Technology v.

Secretary of Labor, we amplified our ruling

in Progressive, saying that the non-submission of

books of account certified by and attested to by

the appropriate officer is a ground for an employer

to legitimately oppose a petition for certification

election filed by a local or chapter of a national

union.

By virtue of Department Order No. 9, Series of 1997,

however, the documents needed to be submitted

by a local or chapter have been reduced to the

following:

(a) A charter certificate issued by the federation or

national union indicating the creation or

establishment of the local/chapter;

(b) The names of the local/chapter’s officers, their

addresses, and the principal office of the

local/chapter;

(c) The local/chapter’s constitution and by-laws;

provided that where the local/chapter’s

constitution and by-laws is the same as that of the

federation or national union, this fact shall be

indicated accordingly.

All the foregoing supporting requirements shall be

certified under oath by the Secretary or Treasurer of

the local/chapter and attested by its President.[4]

Since the Department Order No. 9 has done away

with the submission of books of account as a

requisite for registration, Pagpalain’s only recourse

now is to have said order declared null and void. It

premises its case on the principles laid down

in Progressive and Protection Technology. First,

Pagpalain maintains that Department Order No. 9 is

illegal, allegedly because it contravenes the

above-mentioned rulings of this Court. Citing

Article 8 of the Civil Code, which provides that

“[j]udicial decisions applying or interpreting the laws

or the Constitution shall form a part of the legal

system of the Philippines,” Pagpalain declares the

two cases part of the law of the land which, under

the third paragraph of Article 7 of the Civil

Code,[5] may not be supplanted by mere

regulation.

Second, it claims that dispensing with books of

account contravenes public policy,

citing Protection Technology, as follows:

It is immaterial that the Union, having been

organized for less than a year before the

application for registration with the BLR, would have

had no real opportunity to levy and collect dues

and fees from its members which need to be

recorded in the books of account. Such

accounting books can and must be submitted to

the BLR, even if they contain no detailed or

extensive entries as yet. The point to be stressed is

that the applicant local or chapter must

demonstrate to the BLR that it is entitled to

registered status because it has in place a system

for accounting for members’ contributions to its

fund even before it actually receives dues and fees

from its members. The controlling intention is to

minimize the risk of fraud and diversion in the course

of the subsequent formation and growth of the

Union fund. [Underscoring petitioner’s]

To buttress its argument, Pagpalain also

cites Progressive, thus:

The employer naturally needs assurance that the

union it is dealing with is a bona fide organization,

one which has not submitted false statements or

misrepresentations to the Bureau. The inclusion of

the certification and attestation requirements will in

a marked degree allay these apprehensions of

management. Not only is the issuance of any false

statement and misrepresentation a ground for

cancellation of registration (See Article 239(a), (c)

and (d)); it is also a ground for a criminal charge of

perjury.

The certification and attestation requirements are

preventive measures against the commission of

fraud. They likewise afford a measure of protection

to unsuspecting employees who may be lured into

joining unscrupulous or fly-by-night unions whose

sole purpose is to control union funds or to use the

union for dubious ends. [Underscoring petitioner’s]

Finally, Pagpalain cites as indicative of public

policy, the following sections of Article 241 of the

Labor Code:

The following are the rights and conditions of

membership in a labor organization:

xxx xxx

xxx

(h) Every payment of fees, dues, or other

contributions by a member shall be evidenced by a

receipt signed by the officer or agent making the

collection and entered into the record of the

organization to be kept and maintained for that

purpose;

xxx xxx

xxx

(j) Every income or revenue of the organization shall

be evidenced by a record showing its source, and

every expenditure of its funds shall be evidenced

by a receipt from the person to whom the payment

is made, which shall state the date, place and

purpose of such payment. Such record or receipt

shall form part of the financial records of the

organization. [Underscoring petitioner’s]

Under Article 8 of the Civil Code, “[j]udicial

decisions applying or interpreting the laws or the

Constitution shall form a part of the legal system of

the Philippines.” This does not mean, however, that

courts can create law. The courts exist for

interpreting the law, not for enacting it. To allow

otherwise would be violative of the principle of

separation of powers, inasmuch as the sole function

of our courts is to apply or interpret the laws,

particularly where gaps or lacunae exist or where

ambiguities becloud issues, but it will not arrogate

unto itself the task of legislating.

Consequently, Progressive and Protection Technolo

gy are not to be deemed as laws on the registration

of unions. They merely interpret and apply the

implementing rules of the Labor Code as to

registration of unions. It is this interpretation that

forms part of the legal system of the Philippines, for

the interpretation placed upon the written law by a

competent court has the force of

law.[6] Progressive and Protection Technology,

however, applied and interpreted the then existing

Book V of the Omnibus Rules Implementing the

Labor Code. Since Book V of the Omnibus Rules, as

amended by Department Order No. 9, no longer

requires a local or chapter to submit books of

accounts as a prerequisite for registration, the

doctrines enunciated in the above-mentioned

cases, with respect to books of account, are

already passe and therefore, no longer

applicable. Hence, Pagpalain cannot insist that

ILO-PHILS comply with the requirements prescribed

in said rulings, for the current implementing rules

have deleted the same.

Neither can Pagpalain contend that Department

Order No. 9 is an invalid exercise of rule-making

power by the Secretary of Labor. For an

administrative order to be valid, it must (i) be issued

on the authority of law and (ii) it must not be

contrary to the law and Constitution.[7]

Department Order No. 9 has been issued on

authority of law. Under the law, the Secretary is

authorized to promulgate rules and regulations to

implement the Labor Code. Specifically, Article 5

of the Labor Code provides that “[t]he Department

of Labor and other government agencies charged

with the administration and enforcement of this

Code or any of its parts shall promulgate the

necessary implementing rules and

regulations.” Consonant with this article, the

Secretary of Labor and Employment promulgated

the Omnibus Rules Implementing the Labor

Code. By virtue of this self-same authority, the

Secretary amended the above-mentioned omnibus

rules by issuing Department Order No. 9, Series of

1997.

Moreover, Pagpalain has failed to show that

Department Order No. 9 is contrary to the law or

the Constitution. At the risk of being repetitious, the

Labor Code does not require a local or chapter to

submit books of account in order for it to be

registered as a legitimate labor organization. There

is, thus, no inconsistency between the Labor Code

and Department Order No. 9. Neither has

Pagpalain shown that said order contravenes any

provision of the Constitution.

Pagpalain cannot also allege that Department

Order No. 9 is violative of public policy. As

adverted to earlier, the sole function of our courts is

to apply or interpret the laws.[8] It does not

formulate public policy, which is the province of the

legislative and executive branches of

government. It cannot, thus, be said that the

principles laid down by the court

in Progressive and Protection Technology constitute

public policy on the matter. They do, however,

constitute the Court’s interpretation of public

policy, as formulated by the executive department

through its promulgation of rules implementing the

Labor Code. However, this public policy has itself

been changed by the executive department,

through the amendments introduced in Book V of

the Omnibus Rules by Department Order No. 9. It is

not for us to question this change in policy, it being

a well-established principle beyond question that it

is not within the province of the courts to pass

judgment upon the policy of legislative or executive

action.[9] Notwithstanding the expanded judicial

power under Section 1, Article VIII of the

Constitution, an inquiry on the above-stated policy

would delve into matters of wisdom not within the

powers of this Court.

Furthermore, the controlling intention in requiring

the submission of books of account is the protection

of labor through the minimization of the risk of fraud

and diversion in the handling of union funds. As

correctly pointed out by the Solicitor General, this

intention can still be realized through other

provisions of the Labor Code. Article 241 of the

Labor Code, for instance:

Art. 241. Rights and conditions of membership in a

labor organization– The following are the rights and

conditions of membership in a labor organization:

xxx xxx

xxx

(b) The members shall be entitled to full and

detailed reports from their officers and

representatives of all financial transactions as

provided for in the constitution and by-laws of the

organization;

xxx xxx

xxx

(g) No officer, agent or member of a labor

organization shall collect any fees, dues, or other

contributions in its behalf or make any disbursement

of its funds unless he is duly authorized pursuant to

its constitution and by-laws;

(h) Every payment of fees, dues, or other

contributions by a member shall be evidenced by a

receipt signed by the officer or agent making the

collection and entered into the record of the

organization to be kept and maintained for the that

purpose;

(i) The funds of the organization shall not be

applied for any purpose or object other than those

expressly provided by its constitution or by-laws or

those expressly authorized by written resolution

adopted by the majority of the members at a

general meeting duly called for the purpose;

(j) Every income or revenue of the organization

shall be evidenced by a record showing its source,

and every expenditure of its funds shall be

evidenced by a receipt from the person to whom

the payment is made, which shall state the date,

place and purpose of such payment. Such record

or receipt shall form part of the financial records of

the organization.

xxx xxx

xxx

(l) The treasurer of any labor organization and

every officer thereof who is responsible for the

account of such organization or for the collection,

management, disbursement, custody or control of

the fund, moneys and other properties of the

organization, shall render to the organization and to

its members a true and correct account of all the

moneys received and paid by him since he

assumed office or since the last day on which he

rendered such account, and of all bonds, securities

and other properties of the organization entrusted

to his custody or under his control. The rendering of

such account shall be made:

(1) At least once a year within 30 days after the

close of its fiscal year;

(2) At such other times as may be required by a

resolution of the majority of the members of the

organization;

(3) Upon vacating his office.

The account shall be duly audited and verified by

affidavit and a copy thereof shall be furnished the

Secretary of Labor.

(m) The books of account and other records of the

financial activities of any labor organization shall be

open to inspection by any officer or member

thereof during office hours;

xxx xxx

xxx

Furthermore, Article 274 of the Labor Code

empowers the Secretary of Labor or his duly

authorized representative to inquire into the

financial activities of legitimate labor organizations

upon the filing of a complaint under oath duly

supported by the written consent of 20% of the total

membership of the labor organization concerned,

as well as to examine their books of accounts and

other records to determine compliance or non-

compliance with the law. All of these provisions are

designed to safeguard the funds of a labor

organization that they may not be squandered or

frittered away by its officers or by third persons to

the detriment of its members.

Lastly, Department Order No. 9 only dispenses with

books of account as a requirement for

registration of a local or chapter of a national union

or federation. As provided by Article 241 (h) and (j),

a labor organization must still maintain books of

account, but it need not submit the same as a

requirement for registration. Given the foregoing

disquisition, we find no cogent reason to declare

Department Order No. 9 null and void, as well as to

reverse the assailed resolution of the Secretary of

Labor.

WHEREFORE, premises considered, the instant

petition is hereby DISMISSED for lack of merit and

the resolution of the Secretary of Labor dated

February 27, 1998 AFFIRMED. Costs against

petitioner.

SO ORDERED.

Vitug, Panganiban, Purisima, and Gonzaga_Reyes,

JJ., concur.

IRST DIVISION

SAMAHAN NG MGA G.R. No.

167141

MANGGAGAWA SA

SAMMA–LAKAS SA Present:

INDUSTRIYA NG

KAPATIRANG HALIGI YNARES-

SANTIAGO, J.,*

NG ALYANSA (SAMMA–

CARPIO, Acting Chairperson,**

LIKHA), CORONA,

Petitioner, LEONARDO-

DE CASTRO and

BRION, JJ.***

- v e r s u s -

SAMMA CORPORATION,

Respondent. Promulgate

d:

March 13, 2009

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

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

D E C I S I O N

This is a petition for review on certiorari[1] of

the August 31, 2004 decision[2] and February 15,

2005 resolution[3] of the Court of Appeals (CA) in

CA-G.R. SP No. 77156.

Petitioner Samahan ng mga Manggagawa sa

Samma– Lakas sa Industriya ng Kapatirang Haligi ng

Alyansa (SAMMA-LIKHA) filed a petition for

certification election on July 24, 2001 in the

Department of Labor and Employment (DOLE),

Regional Office IV.[4] It claimed that: (1) it was a

local chapter of the LIKHA Federation, a legitimate

labor organization registered with the DOLE; (2) it

sought to represent all the rank-and-file employees

of respondent Samma Corporation; (3) there was

no other legitimate labor organization representing

these rank-and-file employees; (4) respondent was

not a party to any collective bargaining agreement

and (5) no certification or consent election had

been conducted within the employer unit for the

last 12 months prior to the filing of the petition.

Respondent moved for the dismissal of the petition

arguing that (1) LIKHA Federation failed to establish

its legal personality; (2) petitioner failed to prove its

existence as a local chapter; (3) it failed to attach

the certificate of non-forum shopping and (4) it had

a prohibited mixture of supervisory and rank-and-file

employees.[5]

In an order dated November 12, 2002, med-arbiter

Arturo V. Cosuco ordered the dismissal of the

petition on the following grounds: (1) lack of legal

personality for failure to attach the certificate of

registration purporting to show its legal personality;

(2) prohibited mixture of rank-and-file and

supervisory employees and (3) failure to submit a

certificate of non-forum shopping.[6]

Petitioner moved for reconsideration on

November 29, 2001. The Regional Director of DOLE

Regional Office IV forwarded the case to the

Secretary of Labor. Meanwhile, on December 14,

2002, respondent filed a petition for cancellation of

petitioner’s union registration in the DOLE Regional

Office IV.[7]

On January 17, 2003, Acting Secretary Manuel

G. Imson, treating the motion for reconsideration as

an appeal, rendered a decision reversing the order

of the med-arbiter. He ruled that the legal

personality of a union cannot be collaterally

attacked but may only be questioned in an

independent petition for cancellation of

registration. Thus, he directed the holding of a

certification election among the rank-and-file

employees of respondent, subject to the usual pre-

election conference and inclusion-exclusion

proceedings.[8]

On January 23, 2003 or six days after the

issuance of said decision, respondent filed its

comment on the motion for reconsideration of

petitioner, asserting that the order of the med-

arbiter could only be reviewed by way of appeal

and not by a motion for reconsideration pursuant to

Department Order (D.O.) No. 9, series of 1997.[9]

On February 6, 2003, respondent filed its motion for

reconsideration of the January 17, 2003 decision. In

a resolution dated April 3, 2003, Secretary Patricia

A. Sto. Tomas denied the motion.[10]

Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr.,

Officer-in-Charge/Regional Director of DOLE

Regional Office IV, issued a resolution revoking the

charter certificate of petitioner as local chapter of

LIKHA Federation on the ground of prohibited

mixture of supervisory and rank-and-file employees

and non-compliance with the attestation clause

under paragraph 2 of Article 235 of the Labor

Code.[11] On May 6, 2003, petitioner moved for the

reconsideration of this resolution.[12]

Respondent filed a petition for certiorari[13] in the CA

assailing the January 17, 2003 decision and April 3,

2003 resolution of the Secretary of Labor. In a

decision dated August 31, 2004, the CA reversed

the same.[14] It denied reconsideration in a

resolution dated February 15, 2005. It held that

Administrative Circular No. 04-94 which required the

filing of a certificate of non-forum shopping applied

to petitions for certification election. It also ruled

that the Secretary of Labor erred in granting the

appeal despite the lack of proof of service on

respondent. Lastly, it found that petitioner had no

legal standing to file the petition for certification

election because its members were a mixture of

supervisory and rank-and-file employees.[15]

Hence, this petition.

The issues for our resolution are the following:

(1) whether a certificate for non-forum shopping is

required in a petition for certification election; (2)

whether petitioner’s motion for reconsideration

which was treated as an appeal by the Secretary

of Labor should not have been given due course

for failure to attach proof of service on respondent

and (3) whether petitioner had the legal personality

to file the petition for certification election.

REQUIREMENT OF CERTIFICATE

OF NON-FORUM SHOPPING

IS NOT REQUIRED IN A PETITION

FOR CERTIFICATION ELECTION

In ruling against petitioner, the CA declared that

under Administrative Circular No. 04-94,[16] a

certificate of non-forum shopping was required in a

petition for certification election. The circular

states:

The complaint and other initiatory pleadings

referred to and subject of this Circular are the

original civil complaint, counterclaim, cross-claim,

third (fourth, etc.) party complaint, or complaint-in-

intervention, petition, or application wherein a party

asserts his claim for relief. (Emphasis supplied)

According to the CA, a petition for certification

election asserts a claim, i.e., the conduct of a

certification election. As a result, it is covered by

the circular.[17]

We disagree.

The requirement for a certificate of non-forum

shopping refers to complaints, counter-claims,

cross-claims, petitions or applications where

contending parties litigate their respective positions

regarding the claim for relief of the complainant,

claimant, petitioner or applicant. A certification

proceeding, even though initiated by a “petition,”

is not a litigation but an investigation of a non-

adversarial and fact-finding character.[18]

Such proceedings are not predicated upon an

allegation of misconduct requiring relief, but, rather,

are merely of an inquisitorial nature. The Board's

functions are not judicial in nature, but are merely

of an investigative character. The object of the

proceedings is not the decision of any alleged

commission of wrongs nor asserted deprivation of

rights but is merely the determination of proper

bargaining units and the ascertainment of the will

and choice of the employees in respect of the

selection of a bargaining representative. The

determination of the proceedings does not entail

the entry of remedial orders to redress rights, but

culminates solely in an official designation of

bargaining units and an affirmation of the

employees' expressed choice of bargaining

agent.[19] (Emphasis supplied)

In Pena v. Aparicio,[20] we ruled against the

necessity of attaching a certification against forum

shopping to a disbarment complaint. We looked

into the rationale of the requirement and

concluded that the evil sought to be avoided is not

present in disbarment proceedings.

… [The] rationale for the requirement of a

certification against forum shopping is to apprise

the Court of the pendency of another action or

claim involving the same issues in another court,

tribunal or quasi-judicial agency, and thereby

precisely avoid the forum shopping situation. Filing

multiple petitions or complaints constitutes abuse of

court processes, which tends to degrade the

administration of justice, wreaks havoc upon orderly

judicial procedure, and adds to the congestion of

the heavily burdened dockets of the

courts. Furthermore, the rule proscribing forum

shopping seeks to promote candor and

transparency among lawyers and their clients in the

pursuit of their cases before the courts to promote

the orderly administration of justice, prevent undue

inconvenience upon the other party, and save the

precious time of the courts. It also aims to prevent

the embarrassing situation of two or more courts or

agencies rendering conflicting resolutions or

decisions upon the same issue.

It is in this light that we take a further look at

the necessity of attaching a certification against

forum shopping to a disbarment complaint. It would

seem that the scenario sought to be avoided, i.e.,

the filing of multiple suits and the possibility of

conflicting decisions, rarely happens in disbarment

complaints considering that said proceedings are

either "taken by the Supreme Court motu proprio, or

by the Integrated Bar of the Philippines (IBP) upon

the verified complaint of any person." Thus, if the

complainant in a disbarment case fails to attach a

certification against forum shopping, the pendency

of another disciplinary action against the same

respondent may still be ascertained with

ease.[21] (Emphasis supplied)

The same situation holds true for a petition for

certification election. Under the omnibus rules

implementing the Labor Code as amended by D.O.

No. 9,[22] it is supposed to be filed in the Regional

Office which has jurisdiction over the principal

office of the employer or where the bargaining unit

is principally situated.[23] The rules further provide

that where two or more petitions involving the same

bargaining unit are filed in one Regional Office, the

same shall be automatically

consolidated.[24] Hence, the filing of multiple suits

and the possibility of conflicting decisions will rarely

happen in this proceeding and, if it does, will be

easy to discover.

Notably, under the Labor Code and the rules

pertaining to the form of the petition for

certification election, there is no requirement for a

certificate of non-forum shopping either in D.O. No.

9, series of 1997 or in D.O. No. 40-03, series of 2003

which replaced the former.[25]

Considering the nature of a petition for

certification election and the rules governing it, we

therefore hold that the requirement for a certificate

of non-forum shopping is inapplicable to such a

petition.

TREATMENT OF MOTION FOR

RECONSIDERATION AS AN APPEAL

The CA ruled that petitioner’s motion for

reconsideration, which was treated as an appeal

by the Secretary of Labor, should not have been

given due course for lack of proof of service in

accordance with the implementing rules as

amended by D.O. No. 9:

Section 12. Appeal; finality of decision. – The

decision of the Med-Arbiter may be appealed to

the Secretary for any violation of these

Rules. Interloculory orders issued by the Med-Arbiter

prior to the grant or denial of the petition, including

order granting motions for intervention issued after

an order calling for a certification election, shall not

be appealable. However, any issue arising

therefrom may be raised in the appeal on the

decision granting or denying the petition.

The appeal shall be under oath and shall

consist of a memorandum of appeal specifically

stating the grounds relied upon by the appellant

with the supporting arguments and evidence. The

appeal shall be deemed not filed unless

accompanied by proof of service thereof to

appellee.[26] (Emphasis supplied)

In accepting the appeal, the Secretary of

Labor stated:

[Petitioner’s] motion for reconsideration of

the Med-Arbiter’s Order dated November 12, 2002

was verified under oath by [petitioner’s] president

Gil Dispabiladeras before Notary Public Wilfredo A.

Ruiz on 29 November 2002, and recorded in the

Notarial Register under Document No. 186, Page

No. 38, Book V, series of 2002. On page 7 of the

said motion also appears the notation “copy of

respondent to be delivered personally with the

name and signature of one Rosita Simon,

11/29/02.” The motion contained the grounds and

arguments relied upon by [petitioner] for the

reversal of the assailed Order. Hence, the motion

for reconsideration has complied with the formal

requisites of an appeal.

The signature of Rosita Simon appearing on

the last page of the motion can be considered

as compliance with the required proof of service

upon respondent. Rosita Simon’s employment

status was a matter that should have been raised

earlier by [respondent]. But [respondent] did not

question the same and slept on its right to oppose

or comment on [petitioner’s] motion for

reconsideration. It cannot claim that it was

unaware of the filing of the appeal by [petitioner],

because a copy of the indorsement of the entire

records of the petition to the Office of the Secretary

“in view of the memorandum of appeal filed by Mr.

Jesus B. Villamor” was served upon the employer

and legal counsels Atty. Ismael De Guzman and

Atty. Anatolio Sabillo at the Samma Corporation

Office, Main Avenue, PEZA, Rosario, Cavite on

December 5, 2002.[27] (Emphasis supplied)

The motion for reconsideration was properly

treated as an appeal because it substantially

complied with the formal requisites of the

latter. The lack of proof of service was not fatal as

respondent had actually received a copy of the

motion. Consequently, it had the opportunity to

oppose the same. Under these circumstances, we

find that the demands of substantial justice and

due process were satisfied.

We stress that rules of procedure are

interpreted liberally to secure a just, speedy and

inexpensive disposition of every action. They should

not be applied if their application serves no useful

purpose or hinders the just and speedy disposition

of cases. Specifically, technical rules and

objections should not hamper the holding of a

certification election wherein employees are to

select their bargaining representative. A contrary

rule will defeat the declared policy of the State

to promote the free and responsible exercise of the

right to self-organization through the establishment

of a simplified mechanism for the speedy

registration of labor organizations and workers’

associations,determination of representation status,

and resolution of intra and inter-union

disputes.[28] xxx (Emphasis supplied)

LEGAL PERSONALITY OF PETITIONER

Petitioner argues that the erroneous inclusion

of one supervisory employee in the union of rank-

and-file employees was not a ground to impugn its

legitimacy as a legitimate labor organization which

had the right to file a petition for certification

election.

We agree.

LIKHA was granted legal personality as a federation

under certificate of registration no. 92-1015-032-

11638-FED-LC. Subsequently, petitioner as its local

chapter was issued its charter certificate no. 2-

01.[29] With certificates of registration issued in their

favor, they are clothed with legal personality as

legitimate labor organizations:

Section 5. Effect of registration. – The labor

organization or workers’ association shall be

deemed registered and vested with legal

personality on the date of issuance of its certificate

of registration. Such legal personality cannot

thereafter be subject to collateral attack, but may

be questioned only in an independent petition for

cancellation in accordance with these Rules.[30]

- 0 -

Section 3. Acquisition of legal personality by local

chapter. - A local/chapter constituted in

accordance with Section 1 of this Rule shall acquire

legal personality from the date of filing of the

complete documents enumerated therein. Upon

compliance with all the documentary

requirements, the Regional Office or Bureau of

Labor Relations shall issue in favor of the

local/chapter a certificate indicating that it is

included in the roster of legitimate labor

organizations.[31]

Such legal personality cannot thereafter be subject

to collateral attack, but may be questioned only in

an independent petition for cancellation of

certificate of registration.[32] Unless petitioner’s union

registration is cancelled in independent

proceedings, it shall continue to have all the rights

of a legitimate labor organization, including the

right to petition for certification election.

Furthermore, the grounds for dismissal of a petition

for certification election based on the lack of legal

personality of a labor organization are the

following: (a) petitioner is not listed by the Regional

Office or the Bureau of Labor Relations in its registry

of legitimate labor organizations or (b) its legal

personality has been revoked or cancelled with

finality in accordance with the rules.[33]

As mentioned, respondent filed a petition for

cancellation of the registration of petitioner on

December 14, 2002. In a resolution dated April 14,

2003, petitioner’s charter certificate was revoked by

the DOLE. But on May 6, 2003, petitioner moved for

the reconsideration of this resolution. Neither of the

parties alleged that this resolution revoking

petitioner’s charter certificate had attained

finality. However, in this petition, petitioner prayed

that its charter certificate be “reinstated in the

roster of active legitimate labor

[organizations].”[34] This cannot be granted here. To

repeat, the proceedings on a petition for

cancellation of registration are independent of

those of a petition for certification election. This

case originated from the latter. If it is shown that

petitioner’s legal personality had already been

revoked or cancelled with finality in accordance

with the rules, then it is no longer a legitimate labor

organization with the right to petition for a

certification election.

A FINAL NOTE

Respondent, as employer, had been the one

opposing the holding of a certification election

among its rank-and-file employees. This should not

be the case. We have already declared that, in

certification elections, the employer is a bystander;

it has no right or material interest to assail the

certification election.[35]

[This] Court notes that it is petitioner, the employer,

which has offered the most tenacious resistance to

the holding of a certification election among its

monthly-paid rank-and-file employees. This must not

be so, for the choice of a collective bargaining

agent is the sole concern of the employees. The

only exception to this rule is where the employer

has to file the petition for certification election

pursuant to Article 258 of the Labor Code because

it was requested to bargain collectively, which

exception finds no application in the case before

us. Its role in a certification election has aptly been

described in Trade Unions of the Philippines and

Allied Services (TUPAS) v. Trajano, as that of a mere

bystander. It has no legal standing in a certification

election as it cannot oppose the petition or appeal

the Med-Arbiter's orders related thereto. . .[36]

WHEREFORE, the petition is hereby GRANTED. Let

the records of the case be remanded to the office

of origin, the Regional Office IV of the Department

of Labor and Employment, for determination of the

status of petitioner’s legal personality. If petitioner is

still a legitimate labor organization, then said office

shall conduct a certification election subject to the

usual pre-election conference.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 83190 August 4, 1992

CEBU SEAMEN'S ASSOCIATION, INC., petitioner,

vs.

HON. PURA FERRER-CALLEJA, SEAMEN'S

ASSOCIATION OF THE PHILS./DOMINICA C.

NACUA, respondent.

Paterno P. Natinga for petitioner.

Romero S. Occena for Seamen's Association of the

Philippines.

MEDIALDEA, J.:

This petition seeks the reversal of the resolution of

the Bureau of Labor Relations 1 which affirmed the

decision of the Med-Arbiter holding that the set of

officers of Seamen's Association of the Philippines

headed by Dominica C. Nacua, as president, was

the lawful set of officers entitled to the release and

custody of the union dues as well as agency fees of

said association. The dispositive portion of the

resolution reads:

WHEREFORE, premises considered, the Order of the

Med-Arbiter dated 13 July 1987 is hereby affirmed

and the appeal therefrom DISMISSED for lack of

merit. (p. 39, Rollo)

The facts surrounding the controversy in this case,

as stated in the questioned resolution, is as follows:

The records show that sometime on 23 October

1950, a group of deck officers and marine

engineers on board vessels plying Cebu and other

ports of the Philippines organized themselves into

an association and registered the same as a non-

stock corporation known as Cebu Seamen's

Association, Inc. (CSAI), with the Securities and

Exchange Commission (SEC). Later, on 23 June

1969, the same group registered its association with

this Bureau as a labor union known as the Seamen's

Association of the Philippines, Incorporated (SAPI).

SAPI has an existing collective bargaining

agreement (CBA) with the Aboitiz Shipping

Corporation which will expire on 31 December

1988. In consonance with the CBA said company

has been remitting checked-off union dues to said

union until February, 1987 when a group composed

of members of said union, introducing itself to be its

new set of officers, went to the company and

claimed that they are entitled to the remittance

and custody of such union dues. This group,

headed by Manuel Gabayoyo claims that they

were elected as such on January 20, 1987 under

the supervision of the SEC.

On 26 May 1987, another group headed by

Dominica C. Nacua, claiming as the duly elected

set of officers of the union in an election held on 20

December 1986, filed a complaint, for and in behalf

of the union, against the Cebu Seamen's

Association, Inc. (CSAI) as represented by Manuel

Gabayoyo for the security of the aforementioned

CBA, seeking such relief, among others, as an order

restraining the respondent from acting on behalf of

the union and directing the Aboitiz Shipping Corp.

to remit the checked-off union dues for the months

of March and April 1987.

On 10 June 1987, respondent CSAI filed its

Answer/Position Paper alleging that the

complainant union and CSAI are one and the same

union; that Dominica C. Nacua and Atty. Prospero

Paradilla who represented the union had been

expelled as members/officers as of November 1984

for lawful causes; and, that its set of officers headed

by Manuel Gabayoyo has the lawful right to the

remittance and custody of the corporate funds

(otherwise known as union does) in question

pursuant to the resolution of the SEC dated 22 April

1987.

To bolster further its posture, on the following day,

11 June 1987, the respondent also filed a Motion to

Dismiss the Complaint on the grounds, among

others, that the SEC, not the Med-Arbiter, has

jurisdiction over the dispute as provided under P.D.

No. 902-A; that there can neither be a complainant

no respondent in the instant case as the parties

involved are one and the same labor union, and

that Mrs. Dominica C. Nacua and Atty. Prospero

Paradilla have no personality to represent the union

as they had already been expelled as

members/officers thereof in two resolutions of the

Board of Directors dated November 1984 and

January 17, 1987.

On 19 June 1987, the Med-Arbiter issued an Order

denying said motion but directing the Aboitiz

Shipping Corporation to remit the already checked-

off union dues to the complainant union through its

officers end to continue remitting any checked-off

union dues until further notice. The Med-Arbiter also

set further hearing of the complaint on July 1, 1987.

On 19 June 1987, the respondent filed a motion for

reconsideration of said order of 19 June 1987,

reiterating its previous position. Thereafter, the Med-

Arbiter issued the assailed Order. . . . (pp. 34 -

35, Rollo)

From the decision of the Med-Arbiter, Cebu

Seamen's Association headed by Capt. Gabayoyo

filed an appeal with the Bureau of Labor Relations

(BLR).

The BLR, as already stated, affirmed the decision of

the Med-Arbiter in a resolution dated February 19,

1988. The Gabayoyo group appealed to the Office

of the Secretary, Department of Labor, which

appeal was considered as a motion for

reconsideration of the BLR's decision. The said

appeal/motion for consideration was denied for

lack of merit on April 11, 1988 (p. 42, Rollo) by the

BLR.

Hence, this petition.

There are three issues presented for resolution in this

petition, to wit:

1 WHETHER OR NOT THE MED-ARBITER OF REGION VII

HAS JURISDICTION OVER THE CASE AT BAR.

2. WHETHER OR NOT THE COMPLAINANT-APPELLEE

THE SEAMEN'S ASSOCIATION OF THE PHILIPPINES WAS

REGISTERED AS A LABOR FEDERATION WITH THE

BUREAU OF LABOR RELATIONS.

3 WHETHER OR NOT DOMINICA C. NACUA AND

PROSPERO PARADIL(L)A HAVE (THE) PERSONALITY

TO REPRESENT THE HEREIN COMPLAINANT-APPELLEE,

CONSIDERING THAT BOTH OF THEM HAVE BEEN

EXPELLED FROM THE ASSOCIATION "SEAMEN'S

ASSOCIATION OF THE PHILIPPINES, INC." (FORMERLY

THE CEBU SEAMEN'S ASSOCIATION, INC.).

There is no doubt that the controversy between the

aforesaid two sets of officers is an intra-union

dispute. Both sets of officers claim to be entitled to

the release of the union dues collected by the

company with whom it had an existing CBA. The

controversy involves claims of different

members/officers to certain rights granted under

the labor code.

Article 226 of the Labor Code vests upon the

Bureau of Labor Relations and Labor Relations

Division the original and exclusive authority and

jurisdiction to act on all inter-union and intra-union

disputes. Therefore, the Med-Arbiter originally, and

the Director on appeal, correctly assumed

jurisdiction over the controversy.

The determinative issue in this case is who is entitled

to the collection and custody of the union dues?

Cebu Seamen's Association headed by Gabayoyo

or Seamen's Association of the Philippines headed

by Nacua.

As stated in the findings of fact in the questioned

resolution of Director Pura Ferrer-Calleja, on

October 23, 1950, a group of deck officers

organized the Cebu Seamen's Association, Inc.,

(CSAI), a non-stock corporation and registered it

with the Securities and Exchange Commission

(SEC). The same group registered the organization

with the Bureau of Labor Relations (BLR) as

Seamen's Association of the Philippines (SAPI). It is

the registration of the organization with the BLR are

not with the SEC which made it a legitimate labor

organization with rights and privileges granted

under the Labor Code.

We gathered from the records that CSAI, the

corporation was already inoperational before the

controversy in this case arose. In fact, on August 24,

1984 the SEC ordered the CSAI to show cause why

its certificate of registration should not be revoked

for continuous inoperation (p. 343, Rollo). There is

nothing in the records which would show that CSAI

answered said show-cause order.

Also, before the controversy, private respondent

Dominica Nacua was elected president of the

labor union, SAPI. It had an existing CBA with Aboitiz

Shipping Corporation. Before the end of the term of

private respondent Nacua, some members of the

union which included Domingo Machacon and

petitioner Manuel Gabayoyo showed signs of

discontentment with the leadership of Nacua. This

break-away group revived the moribund

corporation and issued an undated resolution

expelling Nacua from association (pp. 58-59, Rollo).

Sometime in February, 1987, it held its own election

of officers supervised by the Securities and

Exchange Commission. It also filed a case of estafa

against Nacua sometime in May, 1986 (p. 52, Rollo).

The expulsion of Nacua from the corporation, of

which she denied being a member, has however,

not affected her membership with the labor union.

In fact, in the elections of officers for 1987-1989, she

was re-elected as the president of the labor union.

In this connections, We cannot agree with the

contention of Gabayoyo that Nacua was already

expelled from the union. Whatever acts their group

had done in the corporation do not bind the labor

union. Moreover, Gabayoyo cannot claim

leadership of the labor group by virtue of his having

been elected as a president of the dormant

corporation CSAI.

Under the principles of administrative law in force in

this jurisdiction, decisions of administrative officers

shall not be disturbed by courts, except when the

former acted without or in excess of their jurisdiction

or with grave abuse of discretion.

Public respondent Bureau of Labor Relations

correctly ruled on the basis of the evidence

presented by the parties that SAPI, the legitimate

labor union, registered with its office, is not the

same association as CSAI, the corporation, insofar

as their rights under the Labor Code are

concerned. Hence, the former and not the latter

association is entitled to the release and custody of

union fees with Aboitiz Shipping and other shipping

companies with whom it had an existing CBA. As

correctly held by public respondent:

It is undisputed from the records that the election of

the so-called set of officers headed by Manuel

Gabayoyo was conducted under the supervision of

the SEC, presumably in accordance with its

constitution and by-laws as well as the articles of

incorporation of respondent CSAI, and the

Corporation Code. That had been so precisely on

the honest belief of the participants therein that

they were acting in their capacity as members of

the said corporation. That being the case, the

aforementioned set of officers is of the respondent

corporation and not of the complainant union. It

follows, then, that any proceedings, and actions

taken by said set of officers can not, in any manner,

affect the union and its members.

On the other hand, we rule and so hold that the

other set of officers headed by Dominica C. Nacua

is the lawful set of officers of SAPI and therefore, is

entitled to the release and custody of the union

dues as well as the agency fees, if any, there be. A

record check with the Labor Organizations (LOD),

this Bureau, shows that SAPI has submitted to it for

file the list of this new set of officers, in compliance

with the second paragraph of Article 242 (c) of the

Labor Code. This list sufficiently sustains the view

that said officers were lawfully elected, in the

absence of clear and convincing proof to the

contrary. (pp. 9-10, Rollo)

ACCORDINGLY, the petition is DISMISSED. The

questioned resolution of the Bureau of Labor

Relations is AFFIRMED.

SO ORDERED.

Cruz, Griño-Aquino and Bellosillo, JJ., concur.

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

S.S. VENTURES INTERNATIONAL, G.R. No. 161690

INC.,

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 as

Director of the Bureau of Labor July 23, 2008

Relations (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.[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.

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:

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.

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 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 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.)

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

are AFFIRMED. 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.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associat

e Justice

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-24189 August 30, 1968

ITOGON-SUYOC MINES, INC., petitioner,

vs.

SANGILO-ITOGON WORKERS' UNION in behalf of

BARTOLOME MAYO, BERNARDO AQUINO, ET

AL.,respondents.

Reyes and Cabato for petitioner.

Benjamin C. Rillera for respondents.

SANCHEZ, J.:

Petitioner's appeal seeks reversal of the judgment of

the Court of Industrial Relations (CIR) directing

reinstatement of the fifteen individual respondents

"to their former positions or substantially equivalent

employment in the company, with full back wages

from the time of their dismissal to their actual

reinstatement, without loss of seniority and other

privileges."

The controversy arose because prior to May 28,

1958, Itogon-Suyoc Mines, Inc., through its general

superintendent Claude Fertig, had been dismissing

from its employ members of respondent Sañgilo-

Itogon Workers' Union (Sañgilo, for short). Fifty-four

members of Sañgilo were already fired when

Department of Labor conciliators conferred with

petitioner's representative to explore the possibility

of their reinstatement. Petitioner refused

reinstatement, alleged that dismissal of the 54 was

for cause.

On May 28, 1958, sensing that its members were

being eased out of employment one by one,

Sañgilo called a strike, accompanied by picketing

carried out at or near petitioner's mine premises in

Itogon. Work was paralyzed. On the fourth or fifth

day of the strike, company policemen drove the

strikers out of petitioner's premises. The strike lasted

until about June 2, 1958.

On that day, June 2, 1958, petitioner filed an

injunction suit against some strikers in the Court of

First Instance of Baguio (Civil Case No. 774). Nothing

clear appears of record as to the present status of

this suit.

On the same day, too, petitioner's officials

conferred with the officers of the other labor union

in the company, the Itogon Labor Union. They

hammered out an agreement whereby all strikers

were given fifteen (15) days from said date to return

to work. Thru a public address system, strikers were

then urged to go back to their jobs. Notices

addressed to the strikers which read — "All of you

are required to report immediately to your

respective work otherwise you will be considered

AWOL [absent without leave] and will be dropped

from the rolls"1 were posted on the Itogon Labor

Union bulletin board, the Itogon store, and at 1300

checkpoint — the main entrance to the company's

mining premises. These notices did rot contain the

fifteen (15) days' grace period aforesaid.

On November 18, 1958, a CIR prosecutor in behalf

of Sañgilo charged petitioner and Claude Fertig, its

general superintendent, with unfair labor practice

for the dismissal of two company employees A.

Manaois and Jose Baldo on June 9, 1957 and

March 5, 1958, respectively, allegedly because of

their affiliation with Sañgilo and for having testified

against petitioner in Certification Case No. 3-MC-

Pang.2 The complaint prayed for reinstatement and

back wages. Petitioner asserted just cause in

defense.

On October 5, 1960, CIR adjudged that the

dismissal of A. Manaois was just and legal, but that

petitioner was guilty of unfair labor practice in

dismissing Jose Baldo. CIR thus ordered Baldo's

reinstatement with back wages. The CIR judgment

for Jose Baldo was elevated by petitioner to this

Court.3 On December 24, 1964, we affirmed.

Meanwhile, on March 3, 1961, CIR's prosecutor —

on Sañgilo's charge filed with CIR on July 12, 1960,

— lodged an unfair labor practice complaint

against herein petitioner, its general superintendent

Claude Fertig, and the Itogon Labor

Union.4 Averment was there made of the arbitrary

dismissal of 107 of Sañgilo's members because of

membership and/or affiliation with said union and

for having testified or about to testify in Certification

Case G.R. No. 3-MC-Pang.; that Sañgilo's president,

Bartolome Mayo, was dismissed also because of his

refusal to dissolve the union; and that said

company and its general superintendent Claude

Fertig "had given aid and support to ... Itogon Labor

Union, another labor organization" existing in said

company "by allowing the officers and members

thereof, to hold meetings inside the mine premises

and the theatre building owned" by the company

and also allowing them to use the company's light

facilities — privileges which were denied Sañgilo.

The prayer was for judgment declaring respondents

therein guilty of unfair labor practice; enjoining

them from further committing unfair labor practice

acts; ordering the dissolution of Itogon Labor Union,

"it being a company dominated union"; and

directing reinstatement of the dismissed 107

employees mentioned in the complaint, with full

back wages from the time of dismissal up to actual

reinstatement.

The mining company and Claude Fertig in their

answer aver that the May 27, 1958 strike was illegal;

that thereafter "many of respondent company's

workers left for their respective home towns,

abandoning their jobs, and never reported for work

until the present; that some of the persons listed in

the complaint are still working; and some of them

left respondent company's employ even earlier

than May 27, 1958 voluntarily or were discharged

for cause." The company's principal defense is that

the action for reinstatement with back wages is

barred by laches.

Itogon Labor Union's defense is that the concessions

it enjoyed were in pursuance of a collective

bargaining contract between said union and the

company.

Of the 107 dismissed employees, 10 manifested in

writing that they had never been members of

Sañgilo, were actually working with the company

and not interested at all in the prosecution of the

suit.5 One of the named dismissed employees,

Graciano Mejia, died on October 26, 1957.6 Of the

remaining individual complainants, only 15

appeared and testified in court. They were

amongst the strikers.

Came the CIR decision of May 20, 1964. Associate

Judge Jose S. Bautista there observed that "the

picketing was conducted peacefully, as the strikers

did not commit acts of violence or cause injuries to

persons or damage to property" and that "the union

members staged the strike for the reason that their

fellow members were being eased out of

employment little by little by respondent company."

.

On the charge that the Itogon Labor Union was

company dominated, CIR declared that "the

privilege of respondent union in holding meetings

inside the company's mine premises and theater

building, and in using the company's light facilities,

is one of the concessions obtained by said union in

accordance with the collective bargaining

agreement entered into by the respondent

Company and the Itogon Labor Union." .

CIR's judgment thus directed "respondent Itogon-

Suyoc Mines, Inc. to reinstate (1) Bartolome Mayo,

(2) Bernardo Aquino, (3) Florentino Ceralde, (4)

Marcelo Datuin, (5) Antonio Deogracias, (6)

Domingo Deray, (7) Pedro Espiritu, (8) Mariano Idos,

(9) Antonio Laop, (10) Gregorio Laureta, (11)

Chayon Pogay, (12) Roman Quinto, (13) Jose

Santos, (14) Simplicio Tambaoan, and (15) Tomas

Valerio, to their former positions or substantially

equivalent employment in the company, with full

backwages from the time of their dismissal to their

actual reinstatement, without loss of seniority and

other privileges. The complaint with respect to the

remaining members of complainant Sañgilo-Itogon

Workers' Union and with respect to the company

domination charge against respondent Itogon

Labor Union is hereby DISMISSED."

Its motion to reconsider having been denied by

CIR en banc, petitioner appealed to this Court.

1. Petitioner's brief 7 challenges Sañgilo's capacity

to sue. Sañgilo, so petitioner says, ceased to be a

legitimate labor union on March 31, 1960 when the

Department of Labor cancelled the former's

registration permit for failure to comply with

statutory requirements. Contrariwise Sañgilo avers

that at the time the complaint below was filed it

was a legitimate labor organization, and continues

to be so. 1äwphï1.ñët

Judicial inquiry was made by CIR on this issue.

A subpoena duces tecum was issued to the

registrar of labor organizations of the Department of

Labor requiring him or his duly authorized

representative "[t]o bring with [him] the following:

(1) the list of membership of the Sañgilo-Itogon

Workers' Union; (2) the revocation, if any, of the

registration permit of the Sañgilo-Itogon Workers'

Union dated March 22, 1960; and (3) the

cancellation proceedings of the Sañgilo-Itogon

Workers' Union which took place sometime in

1960."8

Atty. Narciso Fabella, the duly authorized

representative, answered the subpoena. With the

record of the cancellation proceedings of Sañgilo

with him, he testified before the CIR hearing officer

that on March 31, 1960, Sañgilo's registration permit

[No. 2141-IP issued on May 21, 1957] was cancelled

by the Department of Labor under Cancellation

Proceedings 1722;9 that his office then received a

motion for reconsideration of said cancellation; that

on April 27, 1960, an order was issued advising

Sañgilo to comply with the requirement it failed to

satisfy and which was the cause of the cancellation

of Sañgilo's permit; that on March 9, 1962, Sañgilo

filed a manifestation and motion to lift resolution

with the request that it be given fifteen days within

which to present evidence of compliance; that on

March 23, 1962, an order was issued directing the

union to submit, within fifteen days from notice, a

copy of its financial report for the period from May

12, 1957 to May 11, 1958, sworn to by its treasurer,

Ernesto Aragon, pursuant to Sangilo's constitution

and by-laws and Section 17(k) of Republic Act 875;

and that no financial report had been submitted to

the Department of Labor.

And then, the witness testified as follows:

ATTY. RILLERA [Counsel for Sañgilo]:

Q Now, Mr. Fabella, per your records, do you have

the final order cancelling the permit of the

complainant union, or is the proceeding still going

on?

WITNESS

A As far as the record is concerned, it seems that

the proceeding is still going on because there is no

other order pertaining [to] the non-submittal of the

union of the financial report required within fifteen

(15) days.10

So it is, that there is no order final in character

cancelling Sañgilo's registration permit and

dropping its name from the roster of legitimate

labor unions. Sangilo's status does not appear in the

record to have changed. Therefore, Sañgilo still

enjoys all the rights accorded by law to a legitimate

labor union. One of those rights is the right to

sue.1äwphï1.ñët

Even assuming that Sañgilo later lost its registration

permit in the course of the present proceedings, still

Sañgilo may continue as a party without need of

substitution of parties, "subject however to the

understanding that whatever decision may be

rendered therein will only be binding upon those

members of the union who have not signified their

desire to withdraw from the case before its trial and

decision on the merits." 11

Really, we perceive of no reason why the judgment

in favor of the fifteen individual respondent laborers

should be overturned simply because the union of

which they were members ceased to be a

legitimate labor union. It cannot be disputed that

CIR's prosecutor brought this case not merely for

Sañgilo; it was also on behalf of the 107

employees enumerated therein. This accounts for

the fact that CIR's judgment for reinstatement and

backpay was rendered in favor of the fifteen

respondent laborers. To accept petitioner's

argument as valid is to shunt aside substance to

give way to form. Error, if any, was harmless. It does

not affect the substantial rights of the parties in

interest. It is no ground for reversal. 12 At this stage

this Court may even strike out Sañgilo-Itogon

Workers' Union and leave the fifteen individual

respondents alone. 13

2. Next to be considered is petitioner's claim that

respondents were guilty of splitting their cause of

action.

Petitioner argues that the first unfair labor practice

suit (CIR Case 50-ULP- Pang.) heretofore mentioned

covers the second unfair labor practice suit - the

case at hand. And this, because "[a]ll acts of unfair

labor practice allegedly committed by the herein

petitioner [the company] prior to November 18,

1958 [when CIR Case 50-ULP-Pang. was filed]

against the members of respondent union [Sañgilo]

constituted one single cause of action." Petitioner

continues onto say that since CIR Case 50-ULP-

Pang, has been finally decided by this Court in a

decision promulgated on December 24, 1964, said

case is a bar to the present action.

We do not go along with petitioner.

The rule against splitting of a cause of action

applies only where the actions are between the

same parties. 14Here, the parties in the two cases

aforecited are different. The first case involves only

two (2) laborers, namely, Jose Baldo and A.

Manaois the second refers to the claim of other

laborers numbering 107 in all. These two cases, it is

true, were brought in the name of Sañgilo.

However, the real parties in interest in both cases

are the dismissed employees. Sañgilo merely

represented its members before CIR. 15 CIR found

that the members "are not situated under similar

circumstances", and that their alleged dismissal

"took pace on different dates". 16 Each one of these

employees has a cause of action arising from his

particular dismissal. And the cause of action of one

is separate and distinct from the others. 17 Although,

of course, they may be joined and brought in the

name of the union. Res judicata has not attached.

3. Petitioner's averment that it gave out notices for

a return to work would not be of help to its cause.

On this point, the court said: "The Court is aware of

the offer of the company to the strikers to return to

work, but it is even more cognizant of the fact that

passions and emotions among the striking

employees were running high at the heat of the

strike." 18 The validity of this reasoning we do not find

cause to dispute.

And then, evidence there is that the individual

respondents were driven out of and denied

admission into the company's mine premises

because they staged a strike. They were turned out

of the bunkhouses they rented in the premises as

living quarters. They were virtually locked out.

Evidence there is, too, that because of the strike the

laborers were not allowed to go back to their

jobs. 19

4. Petitioner seeks to nullify individual respondents'

right to reinstatement and backpay upon the

ground that they are guilty of laches. Really the

present case was started after the lapse of almost

two years and two months after the

strike. 1äwphï1.ñët

Laches has been defined as "such delay in

enforcing one's rights as works disadvantage to

another" and "in a general sense is the neglect, for

an unreasonable and unexplained length of time,

under circumstances permitting diligence, to do

what in law should have been done." 20 As we go

into the core of this problem, we are reminded that

for the doctrine of stale demand to apply, four

essential requisites must be present, viz: "(1)

conduct on the part of the defendant, or of one

under whom he claims, giving rise to the situation of

which complaint is made and for which the

complaint seeks a remedy; (2) delay in asserting the

complainant's rights, the complainant having had

knowledge or notice of the defendant's conduct

and having been afforded an opportunity to

institute a suit; (3) lack of knowledge or notice on

the part of the defendant that the complainant

would assert the right on which he bases his suit;

and (4) injury or prejudice to the defendant in the

event relief is accorded to the complainant, or the

suit is not held barred." 21

With these as guideposts, let us look at the facts.

It is true that CIR declared Sañgilo and its members

who did not come to court and testify guilty of

laches. 22 But as to the 15 individual respondents,

the question of laches was passed by — sub silentio.

Clearly implicit in this is that CIR is of the opinion that

laches is not a bar to reinstatement and recovery of

back wages for these 15 individual respondents

who actually testified in court. For CIR, despite a

categorical finding of laches on the part of the

union and some of its complaining members,

proceeded to order reinstatement and back

wages for the 15 respondents. By and large,

appreciation of laches rests mainly with the trial

court. Absent a clear abuse, we are not to disturb

its ruling thereon.

Indeed, these fifteen respondents showed sufficient

interest in their case. They went to court and

supported their cause by their own testimony. Delay

in the filing of suit should not hamper their suit. We

must not for a moment forget that these fifteen

laborers' belong to the lower economic stratum of

our society. They are not expected to possess the

intelligence or foresight of those who have been

favored by high formal education. 23 Individually,

they may not be in a position to file suit; they may

not have the means. Thrown out of job, driven off,

and refused entrance to, the company's premises,

each has to go his own way. They had to return —

as most of them did — to their families in the

lowlands, far from the mine site. And yet they were

not remiss in their duty to report the matter to their

president. But the president, respondent Bartolome

Mayo, was then in the Baguio General Hospital.

Mayo lost no time in reporting the laborers' plight to

the union counsel. The laborers had every right to

assume that their union was doing something for

them. They had done their part. They had to

depend on the action taken by their union leaders.

A labor union certainly would not be of much use if

it does not act for the welfare of its members.

As to respondent Mayo himself, evidence appears

on record that from the time of his dismissal, he had

personally and by telephone asked Superintendent

Fertig for his reinstatement. He was brushed off with

the reply: "Your union went on strike". 24 On one

occasion after the strike, when Mayo met Fertig in

Baguio, the former repeated his request for

reinstatement, but received the same answer: "You

are still on strike". 25

Laches, if any, we must say, is not solely to be laid

at the door of respondents. The company

contributed too in the delay of the filing of the

present suit. And this because, as testified to by the

union president in court, such delay in filing the

present ULP case was due to the fact that the

legality of their strike precisely was being litigated in

the Court of First Instance of Baguio in Injunction

Case 774 filed on June 2, 1958 by the very

company itself against some of the strikers.

Naturally, if the strike is there declared illegal, the

strikers including the herein fifteen respondents

would lose their right to reinstatement and

backpay. But as said suit became apparently

dormant, the union, on behalf of respondents,

decided to lodge their present complaint with the

CIR.

Thus it is, that the taint of laches cannot attach to

individual respondents. For the second element

required for the defense of laches to prosper is here

absent.

5. The judgment below directs petitioner to pay

individual respondents back wages from the time of

their dismissal to their actual reinstatement without

loss of seniority and privileges.

Since the dismissal of respondents in 1958, more

than ten years had elapsed. It would not seem out

of place to restate the guidelines to be observed in

the ascertainment of the total back wages

payable under the judgment below. These

are:.1äwphï1.ñët

First. To be deducted from the back wages

accruing to each of the laborers to be reinstated is

the total amount of earnings obtained by him from

other employment(s) from the date of dismissal to

the date of reinstatement. Should the laborer

decide that it is preferable not to return to work, the

deduction should be made up to the time

judgment becomes final. And these, for the reason

that employees should not be permitted to enrich

themselves at the expense of their

employer. 26 Besides, there is the "law's abhorrence

for double compensation." 27

Second. Likewise, in mitigation of the damages that

the dismissed respondents are entitled to, account

should be taken of whether in the exercise of due

diligence respondents might have obtained

income from suitable remunerative

employment. 28 We are prompted to give out this

last reminder because it is really unjust that a

discharged employee should, with folded arms,

remain inactive in the expectation that a windfall

would come to him. A contrary view would breed

idleness; it is conducive to lack of initiative on the

part of a laborer. Both bear the stamp of

undesirability.

For the reasons given, the judgment under review is

hereby affirmed.

Let the record of this case be returned to the Court

of Industrial Relations with instructions to forthwith

ascertain the amount of back wages due individual

respondents in accordance with the guidelines

herein set forth. Costs against petitioner. So

ordered. 1äwphï1.ñët

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,

Zaldivar, Castro, Angeles and Fernando, JJ.,

concur.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-29059 December 15, 1987

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.

CEBU PORTLAND CEMENT COMPANY and COURT OF

TAX APPEALS, respondents.

CRUZ, J.:

By virtue of a decision of the Court of Tax Appeals

rendered on June 21, 1961, as modified on appeal

by the Supreme Court on February 27, 1965, the

Commissioner of Internal Revenue was ordered to

refund to the Cebu Portland Cement Company the

amount of P 359,408.98, representing overpayments

of ad valorem taxes on cement produced and sold

by it after October 1957. 1

On March 28, 1968, following denial of motions for

reconsideration filed by both the petitioner and the

private respondent, the latter moved for a writ of

execution to enforce the said judgment . 2

The motion was opposed by the petitioner on the

ground that the private respondent had an

outstanding sales tax liability to which the judgment

debt had already been credited. In fact, it was

stressed, there was still a balance owing on the

sales taxes in the amount of P 4,789,279.85 plus 28%

surcharge. 3

On April 22, 1968, the Court of Tax

Appeals * granted the motion, holding that the

alleged sales tax liability of the private respondent

was still being questioned and therefore could not

be set-off against the refund. 4

In his petition to review the said resolution, the

Commissioner of Internal Revenue claims that the

refund should be charged against the tax

deficiency of the private respondent on the sales of

cement under Section 186 of the Tax Code. His

position is that cement is a manufactured and not

a mineral product and therefore not exempt from

sales taxes. He adds that enforcement of the said

tax deficiency was properly effected through his

power of distraint of personal property under

Sections 316 and 318 5 of the said Code and,

moreover, the collection of any national internal

revenue tax may not be enjoined under Section

305, 6 subject only to the exception prescribed in

Rep. Act No. 1125. 7 This is not applicable to the

instant case. The petitioner also denies that the

sales tax assessments have already prescribed

because the prescriptive period should be counted

from the filing of the sales tax returns, which had not

yet been done by the private respondent.

For its part, the private respondent disclaims liability

for the sales taxes, on the ground that cement is not

a manufactured product but a mineral

product. 8 As such, it was exempted from sales

taxes under Section 188 of the Tax Code after the

effectivity of Rep. Act No. 1299 on June 16, 1955, in

accordance with Cebu Portland Cement Co. v.

Collector of Internal Revenue, 9 decided in 1968.

Here Justice Eugenio Angeles declared that "before

the effectivity of Rep. Act No. 1299, amending

Section 246 of the National Internal Revenue Code,

cement was taxable as a manufactured product

under Section 186, in connection with Section

194(4) of the said Code," thereby implying that it

was not considered a manufactured product

afterwards. Also, the alleged sales tax deficiency

could not as yet be enforced against it because

the tax assessment was not yet final, the same

being still under protest and still to be definitely

resolved on the merits. Besides, the assessment had

already prescribed, not having been made within

the reglementary five-year period from the filing of

the tax returns. 10

Our ruling is that the sales tax was properly imposed

upon the private respondent for the reason that

cement has always been considered a

manufactured product and not a mineral product.

This matter was extensively discussed and

categorically resolved in Commissioner of Internal

Revenue v. Republic Cement

Corporation, 11 decided on August 10, 1983, where

Justice Efren L. Plana, after an exhaustive review of

the pertinent cases, declared for a unanimous

Court:

From all the foregoing cases, it is clear that

cement qua cement was never considered as a

mineral product within the meaning of Section 246

of the Tax Code, notwithstanding that at least 80%

of its components are minerals, for the simple

reason that cement is the product of

a manufacturingprocess and is no longer the

mineral product contemplated in the Tax Code

(i.e.; minerals subjected to simple treatments) for

the purpose of imposing the ad valorem tax.

What has apparently encouraged the herein

respondents to maintain their present posture is the

case of Cebu Portland Cement Co. v. Collector of

Internal Revenue, L-20563, Oct. 29, 1968 (28 SCRA

789) penned by Justice Eugenio Angeles. For some

portions of that decision give the impression that

Republic Act No. 1299, which amended Section

246, reclassified cement as a mineral product that

was not subject to sales tax. ...

xxx xxx xxx

After a careful study of the foregoing, we conclude

that reliance on the decision penned by Justice

Angeles is misplaced. The said decision is no

authority for the proposition that after the

enactment of Republic Act No. 1299 in 1955

(defining mineral product as things with at least 80%

mineral content), cement became a 'mineral

product," as distinguished from a "manufactured

product," and therefore ceased to be subject to

sales tax. It was not necessary for the Court to so

rule. It was enough for the Court to say in effect

that even assuming Republic Act No. 1299 had

reclassified cement was a mineral product, the

reclassification could not be given retrospective

application (so as to justify the refund of sales taxes

paid before Republic Act 1299 was adopted)

because laws operate prospectively only, unless

the legislative intent to the contrary is manifest,

which was not so in the case of Republic Act 1266.

[The situation would have been different if the

Court instead had ruled in favor of refund, in which

case it would have been absolutely necessary (1)

to make an unconditional ruling that Republic Act

1299 re-classified cement as a mineral product (not

subject to sales tax), and (2) to declare the law

retroactive, as a basis for granting refund of sales

tax paid before Republic Act 1299.]

In any event, we overrule the CEPOC decision of

October 29, 1968 (G.R. No. L-20563) insofar as its

pronouncements or any implication therefrom

conflict with the instant decision.

The above views were reiterated in the

resolution 12 denying reconsideration of the said

decision, thus:

The nature of cement as a "manufactured product"

(rather than a "mineral product") is well-settled. The

issue has repeatedly presented itself as a threshold

question for determining the basis for computing

the ad valorem mining tax to be paid by cement

Companies. No pronouncement was made in

these cases that as a "manufactured product"

cement is subject to sales tax because this was not

at issue.

The decision sought to be reconsidered here

referred to the legislative history of Republic Act No.

1299 which introduced a definition of the terms

"mineral" and "mineral products" in Sec. 246 of the

Tax Code. Given the legislative intent, the holding in

the CEPOC case (G.R. No. L-20563) that cement

was subject to sales tax prior to the effectivity • f

Republic Act No. 1299 cannot be construed to

mean that, after the law took effect, cement

ceased to be so subject to the tax. To erase any

and all misconceptions that may have been

spawned by reliance on the case of Cebu Portland

Cement Co. v. Collector of Internal Revenue, L-

20563, October 29, 1968 (28 SCRA 789) penned by

Justice Eugenio Angeles, the Court has expressly

overruled it insofar as it may conflict with the

decision of August 10, 1983, now subject of these

motions for reconsideration.

On the question of prescription, the private

respondent claims that the five-year reglementary

period for the assessment of its tax liability started

from the time it filed its gross sales returns on June

30, 1962. Hence, the assessment for sales taxes

made on January 16, 1968 and March 4, 1968, were

already out of time. We disagree. This contention

must fail for what CEPOC filed was not the sales

returns required in Section 183(n) but the ad

valorem tax returns required under Section 245 of

the Tax Code. As Justice Irene R. Cortes

emphasized in the aforestated resolution:

In order to avail itself of the benefits of the five-year

prescription period under Section 331 of the Tax

Code, the taxpayer should have filed the required

return for the tax involved, that is, a sales tax return.

(Butuan Sawmill, Inc. v. CTA, et al., G.R. No. L-21516,

April 29, 1966, 16 SCRA 277). Thus CEPOC should

have filed sales tax returns of its gross sales for the

subject periods. Both parties admit that returns were

made for the ad valorem mining tax. CEPOC

argues that said returns contain the information

necessary for the assessment of the sales tax. The

Commissioner does not consider such returns as

compliance with the requirement for the filing of tax

returns so as to start the running of the five-year

prescriptive period.

We agree with the Commissioner. It has been held

in Butuan Sawmill Inc. v. CTA, supra, that the filing of

an income tax return cannot be considered as

substantial compliance with the requirement of

filing sales tax returns, in the same way that an

income tax return cannot be considered as a return

for compensating tax for the purpose of computing

the period of prescription under Sec. 331. (Citing

Bisaya Land Transportation Co., Inc. v. Collector of

Internal Revenue, G.R. Nos. L-12100 and L-11812,

May 29, 1959). There being no sales tax returns filed

by CEPOC, the statute of stations in Sec. 331 did not

begin to run against the government. The

assessment made by the Commissioner in 1968 on

CEPOC's cement sales during the period from July

1, 1959 to December 31, 1960 is not barred by the

five-year prescriptive period. Absent a return or

when the return is false or fraudulent, the

applicable period is ten (10) days from the

discovery of the fraud, falsity or omission. The

question in this case is: When was CEPOC's omission

to file tha return deemed discovered by the

government, so as to start the running of said

period? 13

The argument that the assessment cannot as yet be

enforced because it is still being contested loses

sight of the urgency of the need to collect taxes as

"the lifeblood of the government." If the payment of

taxes could be postponed by simply questioning

their validity, the machinery of the state would grind

to a halt and all government functions would be

paralyzed. That is the reason why, save for the

exception already noted, the Tax Code provides:

Sec. 291. Injunction not available to restrain

collection of tax. — No court shall have authority to

grant an injunction to restrain the collection of any

national internal revenue tax, fee or charge

imposed by this Code.

It goes without saying that this injunction is available

not only when the assessment is already being

questioned in a court of justice but more so if, as in

the instant case, the challenge to the assessment is

still-and only-on the administrative level. There is all

the more reason to apply the rule here because it

appears that even after crediting of the refund

against the tax deficiency, a balance of more than

P 4 million is still due from the private respondent.

To require the petitioner to actually refund to the

private respondent the amount of the judgment

debt, which he will later have the right to distrain for

payment of its sales tax liability is in our view an Idle

ritual. We hold that the respondent Court of Tax

Appeals erred in ordering such a charade.

WHEREFORE, the petition is GRANTED. The resolution

dated April 22, 1968, in CTA Case No. 786 is SET

ASIDE, without any pronouncement as to costs.

SO ORDERED.

Teehankee, C.J., Narvasa, Paras and Gancayco,

JJ., concur.

TABLANTE-TUNGOL ENTERPRISES, Petitioner, v. HON.

CARMELO C. NORIEL, ELISEO E. PEÑAFLOR and

ASSOCIATION OF DEMOCRATIC LABOR

ORGANIZATION, Respondents.

SYNOPSIS

Petitioner, after two unsuccessful attempts to

prevent collective bargaining with respondent

union, filed this certiorari proceeding alleging that

public respondents should have cancelled the

registration and permit of respondent labor

organization as it had engaged in an illegal strike. It

based its contention on P.D. No. 823 and Article 239

of the New Labor Code that cancellation of

registration follows from "any activity prohibited by

law."cralaw virtua1aw library

The Solicitor General, in his Comment claimed that

the argument proferred was false and misleading

as the law should not be interpreted to include an

illegal strike engaged into by any union. The phrase

‘or otherwise engaging in any activity prohibited by

law’ should be construed to mean such activity

engaged into by a union that par takes of the

nature of a labor contractor or ‘cabo’ system and

respondent union is not engaged in any such

activity. Subsequently, petitioner and private

respondent filed a joint motion to dismiss alleging

that they have threshed-out their respective

disputes.

The Supreme Court dismissed the petition for being

moot and academic.

SYLLABUS

1. CONSTITUTIONAL LAW; PROTECTION TO LABOR;

LABOR UNIONS; ENGAGING IN ILLEGAL STRIKE NOT A

GROUND FOR DENIAL OR CANCELLATION OF UNION

REGISTRATION; NOSCITUR A SOCIIS AND EJUSDEM

GENERIS. — Article 239 of the Labor Code of the

Philippines, as amended, and Section 6 (c) of Rule

II, Book V, of the Rules and Regulations

implementing the Labor Code of the Philippines, as

amended mentions as among the grounds for

cancellation or denial of the application for union

registration. The following shall constitute grounds

for cancellation of union registration" x x x "Acting

as labor contractor or engaging in the "cabo"

system, or otherwise engaging in any activity

prohibited by law. This provision should not be

interpreted or construed to include all illegal strike

engaged into by any union. This is so because the

phrase ‘or otherwise engaging in any activity

prohibited by law’ should be construed to mean

such activity engaged into by a union that par

takes of the nature of a labor contractor or ‘cabo’

system. The law does not intend to include in the

said phrase illegally declared strike simply because

strike per se is legal. Also, if the law intends to

include illegally declared strike, the same could

have been expressly placed therein as had been

previously done in Presidential Decree No. 823.

2. CERTIORARI AND MANDAMUS; AMICABLE

SETTLEMENT OF THE ISSUES RAISED RENDERS THE

PETITION MOOT AND ACADEMIC. — Where both

parties have threshed-out their respective disputes

and have found ways and means to settle the

issues raised in the petition, the same is to be

dismissed on the ground that it is moot and

academic.

R E S O L U T I O N

FERNANDO, J.:

Petitioner Tablante-Tungol Enterprises, resolute in its

determination not to bargain collectively with

private respondent, Association of Democratic

Labor Organization, has once again filed

acertiorari proceeding against respondents Director

Carmelo C. Noriel, Bureau of Labor Relations, and

the Chief of its Med-Arbiter Section, Regional Office

No. 3, Eliseo Peñaflor. The first attempt, 1 embodied

in a certiorari and prohibition petition dated May 3,

1976, to set aside a resolution of respondent Noriel

ordering a certification election, was dismissed in a

minute resolution of May 12, 1976 2 for lack of merit.

The second petition for certiorari was filed on

December 8, 1976, 3 this time to nullify a

certification election held on May 26, 1976, wherein

private respondent 4 was unanimously chosen as

the collective bargaining representative. 5 For

obvious lack of merit, it was likewise dismissed in a

resolution of November 18, 1977. 6 In

this certiorari proceeding, it was alleged that public

respondents should have cancelled the registration

and permit of private respondent labor

organization as private respondent labor union had

engaged in an illegal strike. That was the novel issue

raised in this petition. Solicitor General Estelito P.

Mendoza, 7 in his exhaustive Comment, considered

as the answer, found no merit in such an allegation

and sustained the action of respondent public

officials.chanrobles virtual lawlibrary

Petitioner is quite insistent that private respondent

labor union having engaged in an illegal strike, its

registration permit must be cancelled. It based its

contention on the relevant section of Presidential

Decree No. 823. 8 It did admit that as amended by

Presidential Decree No. 849, there is no mention of

such a penalty. It now reads in full: "Violation of any

provision thereof shall be punished by a fine of

P1,000 to P10,000 and/or imprisonment of 1 year to

5 years. Any person violating any provision of

Presidential Decree No. 823 shall be dealt with

under General Order No. 2-A and General Order

No. 49." 9

Petitioner, nonetheless, would seek to import a

semblance of plausibility to its claim by the assertion

that the Labor Code itself provides, in another

section, that cancellation of registration follows

from "any activity prohibited by law." 10 The

argument is false and misleading according to the

Comment of the Solicitor General. Thus: "By this

amendatory law, it is evident that no cause of

action exists which will warrant the cancellation of

[Association of Democratic Labor Organization’s]

permit and registration. Of course, petitioner tried to

evade said issue by relying on Article 240 (e) and

Article 242 (p) of the Labor Code of the Philippines,

as amended. Let us examine its legal contention on

this matter. For expediency, we quote in entirety

the aforesaid Article relied upon by the petitioner

for cancellation of the registration and permit of the

union: ‘Article 239. Ground for cancellation of union

registration. The following shall constitute grounds

for cancellation of union registration: . . . (e) Acting

as a labor contractor or engaging in the "cabo"

system, or otherwise engaging in any activity

prohibited by law. Suppletory to the above

provision is Section 6 (c) of Rule II, Book V of the

Rules and Regulations implementing the Labor

Code of the Philippines, as amended, which reads

as follows: ‘Section 6. Denial of Registration of local

unions — The Regional Office may deny the

application for registration on any of the following

grounds: . . . (c) Engaging in the "cabo" system or

other illegal practices.’ It is a fact that [Association

of Democratic Labor Organization] is not a labor

contractor or is it engaged in the ‘cabo’ system or

is it otherwise engaged in any activity of such

nature which is prohibited by law. The above-

quoted article should not be interpreted or

construed to include an illegal strike engaged into

by any union. This is so because the phrase ‘or

otherwise engaging in any activity prohibited by

law’ should be construed to mean such activity

engaged into by a union that par takes of the

nature of a labor contractor or ‘cabo’ system. The

law does not intend to include in the said phrase

illegally declared strike simply because strike per se

is legal. Also, if the law intends to include illegally

declared strike, the same could have been

expressly placed therein as had been previously

done in Presidential Decree No. 823." 11 Clearly, an

awareness of the relevance of the maxims noscitur

a sociis and ejusdem generis ought to have

cautioned counsel for petitioner to shy away from

this approach.

The realization must have dawned on petitioner’s

counsel, Ramos L. Cura, whose abilities could have

been enlisted for a more worthwhile cause, that the

petition filed by him hardly has any prospect for

success. The Comment of Solicitor General

Mendoza was filed on July 12, 1978. Then came, less

than a month later, August 3, 1978 to be exact, a

joint motion to dismiss filed by petitioner and

private Respondent. It alleges: "1. That, or February

27, 1978, petitioners filed with this Honorable Court a

petition for certiorari and mandamus; 2. That, after

the filing of the aforesaid petition, the parties

through their respective representatives/counsel,

met for the purpose of amicable settlement of the

issues raised in the aforesaid petition, 3. That, both

parties have threshed-out their respective disputes

and have found ways and means which would

render the above-entitled case moot and

academic; 4. That, both parties are no longer

interested in the outcome/result of this case and

pray of this Honorable Court to dismiss it for being

moot and academic." 12 The prayer is for the

dismissal of the petition on the ground that it is moot

and academic.chanrobles law library

WHEREFORE, this petition for certiorari is dismissed for

being moot and academic.

Barredo, Antonio, Aquino and Santos, JJ., concur.

Concepcion Jr., J., took no part.

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 99395 June 29, 1993

ST. LUKE'S MEDICAL CENTER, INC., petitioner,

vs.

HON. RUBEN O. TORRES and ST. LUKE'S MEDICAL

CENTER ASSOCIATION-ALLIANCE OF FILIPINO

WORKERS ("SLMCEA-AFW"), respondents.

Sofronio A. Ona for petitioner.

Edgar R. Martir for respondent union.

MELO, J.:

In response to the mandate under Article 263(g) of

the Labor Code and amidst the labor controversy

between petitioner St. Luke's Medical Center and

private respondent St. Luke's Medical Center

Employees Association-Alliance of Filipino Workers

(SLMCEA-AFW), then Secretary of Labor Ruben D.

Torres, issued the Order of January 28, 1991

requiring the parties to execute and finalize their

1990-1993 collective bargaining agreement (CBA)

to retroact to the expiration of the anterior CBA. The

parties were also instructed to incorporate in the

new CBA the disposition on economic and non-

economic issues spelled out in said Order (p.

48, Rollo). Separate motions for re-evaluation from

the parties were to no avail; hence, the petition at

bar premised on the following ascriptions of error, to

wit:

I

PUBLIC RESPONDENT HON. SECRETARY OF LABOR

ACTED IN EXCESS OF JURISDICTION AND/OR

COMMITTED GRAVE ABUSE OF DISCRETION WHEN HE

VIOLATED PETITIONER'S RIGHT TO DUE PROCESS,

PUBLIC RESPONDENT COMPLETELY IGNORED THE

LATTER'S EVIDENCE AND ISSUED THE QUESTIONED

AWARDS ON THE BASIS OF ARBITRARY GUESSWORKS,

CONJECTURES AND INFERENCES.

II

PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION WHEN HE CURTAILED THE PARTIES' RIGHT

TO FREE COLLECTIVE BARGAINING, AND WHEN HE

GRANTED MONETARY AWARDS AND ADDITIONAL

BENEFITS TO THE EMPLOYEES GROSSLY

DISPROPORTIONATE TO THE OPERATING INCOME OF

PETITIONER.

III

PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION WHEN HE ADOPTED/CONSIDERED THE

ALLEGATIONS OF THE UNION THAT THE HOSPITAL

OFFERED SALARY AND MEAL ALLOWANCE

INCREASES IN THE AMOUNT OF P1,140,00 FOR THE

FIRST YEAR AND P700.00 ACROSS THE BOARD

MONTHLY SALARY INCREASES FOR THE SECOND

AND THIRD YEARS OF THE NEW CBA.

IV

FINALLY, PUBLIC RESPONDENT COMMITTED GRAVE

ABUSE OF DISCRETION WHEN HE GAVE HIS AWARD

RETROACTIVE EFFECT.

When the collective bargaining agreement for the

period August 1, 1987 to July 30, 1990 was forged

between petitioner and private respondent, the

incumbent national president of AFW, the

federation to which the local union SLMCEA is

affiliated, was Gregorio del Prado.

Before the expiration of the 1987-90 CBA, the AFW

was plagued by internal squabble splitting its

leadership between Del Prado and Purita Ramirez,

resulting in the filing by AFW and Del Prado of a

petition later docketed before the Department of

Labor as NCR-00-M-90-05-077, where a declaration

was sought on the legitimacy of Del Prado's faction

as bona fide officers of the federation. Pending

resolution of said case, herein private respondent

SLMCEA-AFW brought to the attention of

petitioner via a letter dated July 4, 1990 that the

1987-1990 was about to expire, and manifested in

the process that private respondent wanted to

renew the CBA. This development triggered round-

table talks on which occasions petitioner proposed,

among other items, a maximum across-the-board

monthly salary increase of P375.00 per employee,

to which proposal private respondent demanded a

P1,500.00 hike or 50% increase based on the latest

salary rate of each employee, whichever is higher.

In the meantime, relative to the interpleader case

(NCR-00-M-90-05-070) initiated by petitioner to settle

the question as to who between Del Prado and

Diwa was authorized to collect federation dues

assessed from hospital employees, the Med-Arbiter

recognized Del Prado's right (p. 423, Rollo). This

resolution of July 31, 1990 was elevated to the Labor

Secretary.

That talks that then ensued between petitioner and

private respondent were disturbed anew when the

other wing in the AFW headed by Purita Ramirez,

expressed its objections to the on-going

negotiations, and when a petition for certification

election was filed by the Association of Democratic

Labor Organization of petitioner. However, private

respondent emerged victorious after the elections

and was thus certified as the exclusive bargaining

entity of petitioner's rank and file employees.

Following the decision dated September 14, 1990 in

NCR-00-M-90-05-077 (pp. 444-445, Rollo) which

upheld the legitimacy of Del Prado's

status including the other officers, Bayani Diwa of

the Ramirez Wing

appealed; the two cases — NCR-00-M-90-05-070 for

interpleader and NCR-00-90-05-077 — were

consolidated.

On September 17, 1990, private respondent wrote

petitioner for the resumption of their negotiations

concerning the union's proposed CBA. Petitioner

reacted by writing a letter on September 20, 1990

expressing willingness to negotiate a new CBA for

the rank and file employees who are not occupying

confidential positions. Negotiations thus resumed.

However, a deadlock on issues, especially that

bearing on across-the-board monthly and meal

allowances followed and to pre-empt the

impending strike as voted upon by a majority of

private respondent's membership, petitioner lodged

the petition below. The Secretary of Labor

immediately assumed jurisdiction and the parties

submitted their respective pleadings.

On January 22, 1991, a resolution was issued in the

consolidated cases which eventually declared

Gregorio del Prado and his group as the legitimate

officials of the AFW and the acknowledged group

to represent AFW (pp. 320-321, Rollo).

On January 28, 1991, public respondent Secretary

of Labor issued the Order now under challenge.

Said Order contained a disposition on both the

economic and non-economic issues raised in the

petition. On the economic issues, he thus ruled:

First year — P1,140.00 broken down as follows:

P510.00 in compliance with the government

mandated daily salary increase of P17.00; and

P630.00 CBA across the board monthly salary

increase.

Second year — P700.00 across the board monthly

salary increase.

Third year — P700.00 across the board monthly

salary increase.

It is understood that the second and third year

salary increases shall not be chargeable to future

government mandated wage increases. (p.

47, Rollo.)

As earlier stated, both parties moved for

reconsideration of the above order, but both

motions were denied. Consequently, petitioner St.

Luke's filed the instant petition, a special civil action

on certiorari.

In assailing the Order of January 28, 1991, petitioner

St. Luke's focuses on public respondent's disposition

of the economic issues.

First, petitioner finds highly questionable the very

basis of public respondent's decision to award

P1,140.00 as salary and meal allowance increases

for the first year and P700.00 across-the-board

monthly salary increases for the succeeding second

and third years of the new CBA. According to

petitioner, private respondent SLMCEA-AFW misled

public respondent into believing that said amounts

were the last offer of petitioner St. Luke's

immediately prior to the deadlock. Petitioner

vehemently denies having made such offer,

claiming that its only offer consists of the following:

Non-Economic Issues:

St. Luke's submits that it is adopting the non-

economic issues proposed and agreed upon in its

Collective Bargaining Agreement with SLMCEA-

AFW for the period covering 1987, 1990. Copy of

the CBA is attached as Annex "F" hereof.

Economic Issue

St. Luke's respectfully offers to give an increase to all

its rank and file employees computed as follows:

First Year — P900 (P700.00 basic + P200.00 food

allowance) for an over all total food allowance of

P320.00.

Second Year — P400

Third Year — P400

plus the union will be allowed to operate and

manage one (1) canteen for free to augment their

funds. Although the profit shall be divided equally

between union and SLMC, the operation of the

canteen will generate for them a monthly income

of no less than P15,000.00, and likewise provide

cheap and subsidized food to Union members.

The wage increase as proposed shall be credited to

whatever increases in the minimum wage or to any

across the board increases that may be mandated

by the government or the DOLE. (pp. 20-21,Rollo.)

Petitioner charges that public respondent, in

making such award, erroneously relied on the

extrapolated figures provided by respondent

SLMCEA-AFW, which grossly inflated petitioner St.

Luke's net income. Petitioner contends that if the

disputed award are sustained, the wage increases

and benefits shall total approximately

P194,403,000.00 which it claims is excessive and

unreasonable, considering that said aggregate

amount is more than its projected income for the

next three years. To illustrate its point, petitioner

submits the following computation:

YR I

A. P1,40 added to basic pay

a) P1,140 x 1,500 (no. of employees) x 12 (months)

— P 20,520,000

b) 13th month pay: P1,140 x 1,500 — 1,710,000

c) Overtime pay, 20% of payroll — 4,104,000

d) Holiday pay, PM/Night pay — 1,026,000

e) Sick leave — 855,000

f) Funeral, Paternity, Maternity leaves, retirement

pay — 820,000

B. P230 added to meal allowance

a) P230 x 1,500 x 12 — 4,140,000

C. One day added to sick leave

a) (Ave. pay P3,000 = P1,140) divided by 30 x 1,500

— 222,000

D. Sick leave cash conversion base reduced from

60 to 45 days

a) (P3,300 = P1,140)/30 x 1,200 — 2,664,000

E. Retirement benefits adjustment — 500,000

—————

FIRST YEAR ADDITIONAL COST P 36,561,000

YR II

A. Yr I increase except sick leave cash conversion

from 60 to 45 — P33,897,000

B. P700 added to monthly basic pay

a) P700 x 1,500 x 12 — 2,600,000

b) 13th month pay: P700 x 1,500 — 1,050,000

c) Overtime, pay, 20% of P12.6 M — 2,520,000

d) Holiday pay, PM/Night pay — 630,000

e) Sick leave: 15 days x 700/30 x 1,500 — 525,000

f) Funeral, paternity, maternity leaves, retirement

pay — 504,000

————

SECOND YEAR ADDITIONAL COST P51,726,000

YR III

A. Yr I and Yr II increases — 88,287,000

B. P700 added to basic pay

a) P700 x 1,500 x 12 — 12,600,000

b) 13th month pay: P700 x 1,500 — 1,050,000

c) Overtime pay, 20% of P12.6 M — 2,520,000

d) Holiday pay, PM/Night pay — 630,000

e) Sick leave — 525,000

f) Funeral, paternity, maternity, leaves,

retirement pay — 504,000

————

THIRD YEAR ADDITIONAL COST — 106,116,000

TOTAL THREE-YEAR ADDITIONAL

BENEFIT/WAGES — 194,403,000

(pp. 14-16, Rollo).

On the basis of the foregoing, petitioner St. Luke's

concludes that it would be in a very poor position

to even produce the resources necessary to pay

the wage increases of its rank and file employees.

Petitioner also impugns public respondent's awards

on grounds of prematurity, emphasizing that the

awards in question even preceded collective

bargaining negotiations which have to take place

first between both litigants. It denies entering into a

round of negotiations with private respondent

SLMCEA-AFW on the theory that the meetings

referred to by the latter were merely informal ones,

without any binding effect on the parties because

AFW is torn between two factions vying for the right

to represent it. Thus, petitioner maintains that

nothing conclusive on the terms and conditions of

the proposed CBA could be arrived at when the

other party, private respondent SLMCEA-AFW is

confronted with an unresolved representation issue.

Petitioner argues further that since no formal

negotiations were conducted, it could not have

possibly made an offer of P1,140.00 as salary and

meal allowance increases for the first year and an

increase of P700.00 across-the-board monthly salary

for the second and third years of the new CBA. It

raises doubts on the veracity of the minutes

presented by private respondent SLMCEA-AFW to

prove that negotiations were held, particularly on

October 26, 1990, when petitioner allegedly made

said offer as its last ditch effort for a compromise

prior to the deadlock. According to petitioner,

these minutes, unsigned by petitioner, were merely

concocted by private respondent SLMCEA-AFW.

Finally, petitioner attacks the Order of January 28,

1991 for being violative of Article 253-A of the Labor

Code, particularly its provisions on retroactivity. Said

Article pertinently provides:

xxx xxx xxx

Any agreement on such other provisions of the

collective bargaining agreement entered into

within six (6) months from the date of expiry of the

term of such other provisions as fixed in the

collective bargaining agreement, shall retroact to

the day immediately following such date. If any

such agreement is entered into beyond six months,

the parties shall agree on the duration of

retroactivity thereof. In case of a deadlock in the

renegotiation of the collective bargaining

agreement, the parties may exercise their rights

under this Code.

Petitioner argues that in granting retroactive effect

to the enforceability of the CBA, public respondent

committed an act contrary to the above provision

of law, pointing out that the old CBA expired on

July 30, 1990 and the questioned order was issued

on January 28, 1991. Petitioner theorizes that

following Article 13 of the Civil Code which provides

that there are 30 days in one month, the

questioned Order of January 28, 1991 was issued

beyond the six-month period, graphically shown

thus:

July 30, 1990 Expiration

July 31 = 1 day

August 1-31, 1990 = 31 days

September 1-30, 1990 = 30 days

October 1-31, 1990 = 31 days

November 1-30, 1990 = 30 days

December 1-31, 1990 = 31 days

January 1-28, 1991 = 28 days

—————————

TOTAL = 182 days

(6 months and 2 days)

(p. 34, Rollo.)

Traversing petitioner's arguments, private

respondent SLMCEA-AFW contends that the

formulation of the terms and conditions of the CBA

awards is well supported by the factual findings of

public respondent which established that petitioner

failed to refute private respondent's allegation that

during their last meeting on October 26, 1990,

petitioner stood pat on its offer of P1,140.00 as

salary and meal allowance increases for the first

year of the new CBA and P700.00 across-the-board

salary increases for the second and third years

thereof. Said awards, it said, are well within the

means of petitioner because its reported net

income of P15 million, P11 million, and 13 million for

1987, 1988, and 1989, respectively, have been

actually understated. Moreover, private respondent

claims that petitioner, in actual terms, does not

have to pay the alleged amount of P194,403,000.00

for wages and benefits in favor of its employees.

Such amount, according to private respondent, is

bloated and excessive. Private respondent in

substantiating such claim made the following

analysis:

First P1,140.00 total salary increase for the first year

(1990-1991) of the new CBA is divided into: P510.00

in compliance with the government mandated

daily salary increase of P17.00 and P630.00 CBA

across the board monthly salary increase, thus, the

whole P1,140.00 salary increase is payable only

beginning August 1, 1990 (reckoned from the CBA

July 30, 1990 expiry date) up to October 31, 1990

only following the November 1, 1990 effectivity of

WAGE ORDER NO. NCR-01 which granted the said

P17.00 daily wage increase or P510.00 monthly of

which herein petitioner promptly complied with and

paid to its employees and therefore deductible

from P1,140.00 total monthly salary increase (Annex

"A" — Petitioner and Annex "13" hereof);

Second, the remaining P630.00 CBA across the

board monthly salary increase takes effect on

November 1, 1990 up to January 7, 1991 only

following the January 8, 1991 effectivity of WAGE

ORDER NO. NCR-02 which mandated P12.00 daily

wage increase or P630.00 monthly, hence,

reducing the P630.00 CBA monthly salary increase

to P270.00 CBA monthly salary increase effective

January 8, 1991 and onwards till July 31, 1991

(Annexes "22" and "23" hereof);

Third, that out of an estimated workforce of 1,264

regular employees inclusive of about 209

supervisors, unit, junior area, division department

managers and top level executives, all occupying

permanent positions, and approximately 55 regular

but highly confidential employees, only 1,000 rank-

and-file regular/permanent employees (casuals,

contractuals, probies and security guards

excluded) are entitled to the CBA benefits for three

(3) years (1990-1993) (as private respondent

SLMCEA-AFW gathered and analyzed from the

petitioner's Personnel Strength Report hereto

attached as Annex "28" hereof) vis-a-vis the

generalized and inflated 1,500 employees as total

workforce purportedly entitled to CBA benefits per

its self-serving and incredible computation;

Fourth, the petitioner's computed 20% overtime pay

of the basic salary is unrealistic and overstated in

view of its extreme cost-cutting/ savings measures

on all expenditures, most specially, on overtime

work adopted since last year and a continuing

management priority project up to the present; and

Fifth, due to the above consideration, the total real

award of wages and fringe benefits is far less than

the true annual hefty operating net income of the

petitioner.

The net result is that the first year award of P1,140.00

monthly salary increase of which P510.00 monthly

salary increase is made in compliance with the

P510.00 monthly wage increase at P17.00 daily

wage increase effective November 1, 1990 under

Wage Order No. NCR-01 (Annex "13" hereof) or with

the intended P630.00 CBA monthly salary increase is

further reduced by P360.00 monthly wage increase

at P12.00 daily wage increase effective January 8,

1991 under Wage Order No.

NCR-02 (Annex "22" hereof), thereby leaving a

downgraded or watered down CBA monthly

increase of P270.00 only.

Comparatively speaking, the 13% monthly salary

increase of each employee average basic monthly

salary of P2,500.00 in 1987 or P325.00 monthly salary

increase granted by the petitioner under the first

old CBA (1987-1990) is better than the much diluted

P270.00 CBA monthly salary increase (in lieu of the

awarded P630.00 CBA monthly salary increase for

the first year of the new CBA under Order, dated

January 28, 1991, of public respondent). (Annexes

"A" and "G" — Petition). (pp. 390-391, Rollo.)

Private respondent concludes that petitioner's

version that it will have to pay P194,403,000.00 is not

true because this will be drastically reduced by 40%

to 60% in real terms due to a smaller number of

employees covered. It is further explained that the

government-decreed wage increases

abovementioned already form part of the

P1,140.00 wage and meal allowance increases, not

to mention the strict cost-cutting measures and

practices on overtime and expense items adopted

by petitioner since 1990.

With respect to public respondent's ruling that the

CBA awards should be given retroactive effect,

private respondent agrees with the Labor

Secretary's view that Article 253-A of the Labor

Code does not apply to arbitral awards such as

those involved in the instant case. According to

private respondent, Article 253-A of the Labor Code

is clear and plain on its face as referring only to

collective bargaining agreements entered into by

management and the certified exclusive

bargaining agent of all rank-and-file employees

therein within six (6) months from the expiry of the

old CBA.

These foregoing contentions and arguments of

private respondent have been similarly put forward

by the Office of the Solicitor General in its

Consolidated Comment filed on November 23,

1991. The Solicitor General share a the views of

private respondent SLMCEA-AFW.

We are now tasked to rule on the petition. Do

petitioner's evidence and arguments provide

adequate basis for the charge of alleged grave

abuse of discretion committed by public

respondent in his Order of January 28, 1991 as to

warrant its annulment by this Court? This is the sole

issue in the case at bar. Consequently, this Court

would apply the following yardstick in resolving the

aforestated issue: that public respondent, in the

exercise of his power to assume over subject labor

dispute, acted whimsically, capriciously, or in an

arbitrary, despotic manner by reason of passion or

personal hostility which was so patent and gross as

to amount to an evasion of positive duty or to a

virtual refusal to perform a duty enjoined or to act

at all in contemplation of law (San Sebastian

College vs. Court of Appeals, 197 SCRA 138 [1991]).

Subjected to and measure by this test, the

challenged Order, we believe, can withstand even

the most rigorous scrutiny.

Petitioner assails the Order of January 28, 1991 on

three grounds:

(a) unreasonable and baselessness; (b) prematurity;

and (c) violation of Article 253-A of the Labor Code.

We rule that the Order, particularly in its disposition

on the economic issues, was not arbitrarily imposed

by public respondent. A perusal of the Order shows

that public respondent took into consideration the

parties' respective contentions, a clear indication

that he was keenly aware of their contrary positions.

Both sides having been heard, they were allowed

to present their respective evidence. The due

process requirement was thus clearly observed.

Considering public respondent's expertise on the

subject and his observance of the cardinal

principles of due process, the assailed Order

deserves to be accorded great respect by this

Court.

Equally worth mentioning is the fact that in resolving

the economic issues, public respondent merely

adopted in toto petitioner's proposals.

Consequently, petitioner cannot now claim that the

awards are unreasonable and baseless. Neither

can it deny having made such proposals, as it

attempted to do in its Motion for Reconsideration of

the challenged Order before public respondent

and which it continues to pursue in the instant

petition. It is too late in the day for such pretense,

especially so because petitioner failed to

controvert private respondent's allegation

contained in its Comment to the petition before the

Labor Secretary that petitioner had offered as its

last proposal said salary and meal allowance

increases. As correctly pointed out by public

respondent, petitioner failed, when it had the

chance, to rebut the same in its Reply to said

Comment, considering that the resolution of the

labor dispute at that was still pending. Any

objection on this point is thus deemed waived.

We do not see merit in petitioner's theory that the

awards were granted prematurely. In its effort to

persuade this Court along this point, petitioner

denies having negotiated with private respondent

SLMCEA-AFW. Petitioner collectively refers to all the

talks conducted with private respondent as mere

informal negotiations due to the representation

issue involving AFW. Petitioner thus argues that in

the absence of any formal negotiations, no

collective bargaining could have taken place.

Public respondent, petitioner avers, should have

required the parties instead to negotiate rather

than prematurely issuing his order.

We cannot agree with this line of reasoning. It is

immaterial whether the representation issue within

AFW has been resolved with finality or not. Said

squabble could not possibly serve as a bar to any

collective bargaining since AFW is not the real

party-in-interest to the talks; rather, the negotiations

were confined to petitioner and the local union

SLMCEA which is affiliated to AFW. Only the

collective bargaining agent, the local union

SLMCEA in this case, possesses legal standing to

negotiate with petitioner. A duly registered local

union affiliated with a national union or federation

does not lose its legal personality or independence

(Adamson and Adamson, Inc. vs. The Court of

Industrial Relations and Adamson and Adamson

Supervising Union (FFW), 127 SCRA 268 [1984]).

InElisco-Elirol Labor Union (NAFLU) vs. Noriel (180

SCRA 681 [1977]), then Justice Teehankee re-

echoed the words of Justice Esguerra in Liberty

Cotton Mills Workers Union vs. Liberty Cotton Mills,

Inc. (66 SCRA 512 [1975]), thus:

(T)he locals are separate and distinct units primarily

designed to secure and maintain an equality of

bargaining power between the employer and their

employee-members in the economic struggle for

the fruits of the joint productive effort of labor and

capital; and the association of the locals into the

national union (as PAFLU) was in furtherance of the

same end. These associations are consensual

entities capable of entering into such legal relations

with their members. The essential purpose was the

affiliation of the local unions into a common

enterprise to increase by collective action the

common bargaining power in respect of the terms

and conditions of labor. Yet the locals remained

the basic units of association, free to serve their own

and the common interest of all, subject to the

restraints imposed by the Constitution and By-Laws

of the Association, and free also to renounce the

affiliation for mutual welfare upon the terms laid

down in the agreement which brought it into

existence. (at p. 688; emphasis in the original.)

Appending "AFW" to the local union's name does

not mean that the federation absorbed the latter.

No such merger can be construed. Rather, what is

conveyed is the idea of affiliation, with the local

union and the larger national federation retaining

their separate personalities.

Petitioner cannot pretend to be unaware of these

legal principles since they enjoy the benefit of legal

advice from their distinguished counsel. Thus, we

are constrained to agree with the position of the

Solicitor General that petitioner conveniently used

the representation issue within AFW to skirt entering

into bargaining negotiations with the private

respondent.

Too, petitioner is in error in contending that the

order was prematurely issued. It must be recalled

that immediately after the deadlock in the talks, it

was petitioner which filed a petition with the

Secretary of Labor for the latter to assume

jurisdiction over the labor dispute. In effect,

petitioner submitted itself to the public respondent's

authority and recognized the latter's power to settle

the labor dispute pursuant to article 263(g) of the

Labor Code granting him the power and authority

to decide the dispute. It cannot, therefore, be said

that public respondent's decision to grant the

awards is premature and pre-emptive of the

parties' right to collectively bargain, simply because

the Order of January 28, 1991 was unfavorable to

one or the other party, for as we held in Saulog

Transit, Inc. vs.Lazaro, (128 SCRA 591 [1984]):

It is a settled rule that a party cannot invoke the

jurisdiction of a court to secure affirmative relief

against his opponent and after failing to obtain

such relief, repudiate or question that same

jurisdiction. A party cannot invoke jurisdiction at

one time and reject it at another time in the same

controversy to suit its interests and convenience.

The Court frowns upon and does not tolerate the

undesirable practice of same litigants who submit

voluntarily a cause and then accepting the

judgment when favorable to them and attacking it

for lack of jurisdiction when adverse. (Tajonera v.

Lamaroxa, 110 SCRA 447, citing Tijam v.

Sibonghanoy, 23 SCRA 35). (at p. 601.)

Finally, the effectivity of the Order of January 28,

1991, must retroact to the date of the expiration of

the previous CBA, contrary to the position of

petitioner. Under the circumstances of the case,

Article 253-A cannot be property applied to herein

case. As correctly stated by public respondent in his

assailed Order of April 12, 1991 dismissing petitioner's

Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity

provisions awarded, we would stress that the

provision of law invoked by the Hospital, Article 253-

A of the Labor Code, speak of agreements by and

between the parties, and not arbitral awards . . . (p.

818, Rollo.)

Therefore, in the absence of a specific provision of

law prohibiting retroactivity of the effectivity of

arbitral awards issued by the Secretary of Labor

pursuant to Article 263 (g) of the Labor Code, such

as herein involved, public respondent is deemed

vested with plenary and discretionary powers to

determine the effectivity thereof.

WHEREFORE, the instant petition is hereby DISMISSED

for lack of merit.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 158075 June 30, 2006

PHILIPPINE DIAMOND HOTEL AND RESORT, INC.

(MANILA DIAMOND HOTEL), Petitioner,

vs.

MANILA DIAMOND HOTEL EMPLOYEES

UNION, Respondent.

D E C I S I O N

CARPIO MORALES, J.:

The Court of Appeals, by the assailed decision of

November 21, 2002,1 declared the strike staged by

respondent, Manila Diamond Hotel Employee’s

Union (the union), illegal and its officers to have lost

their employment status. It ordered, however,

among other things, the reinstatement and

payment of backwages to its members.

On November 11, 1996, the union, which was

registered on August 19, 1996 before the

Department of Labor and Employment

(DOLE),2 filed a Petition for Certification

Election3 before the DOLE-National Capital Region

(NCR) seeking certification as the exclusive

bargaining representative of its members.4

The DOLE-NCR denied the union’s petition as it

failed to comply with legal requirements,

specifically Section 2, Rule V, Book V of the Rules

and Regulations Implementing the Labor Code,

and was seen to fragment the employees of

petitioner.5

On June 2, 1997, Francis Mendoza (Mendoza), one

of the Hotel’s outlet cashiers, was discovered to

have failed to remit to the Hotel the amount

of P71,692.50 at the end of his May 31, 1997

duty.6 On being directed to explain such failure,

Mendoza claimed that after accomplishing his daily

cash remittance report, the union president Jose

Leonardo B. Kimpo (Kimpo) also an outlet cashier,

who signed the same and dropped his

remittances.7

Kimpo, who was thus directed to explain why no

administrative sanction should be imposed on him

for violating the standard procedure for remitting

cash collections, informed that he was not aware

of any such procedure.

Mendoza was subsequently suspended for one

week, it being "the responsibility of the cashier

to personally drop-off his remittances in the

presence of a witness."8 In the meantime or on July

14, 1997,9 he was re-assigned to the Hotel’s Cost

Control Department.10

Through its president Kimpo, the union later notified

petitioner of its intention to negotiate, by Notice to

Bargain,11a Collective Bargaining Agreement (CBA)

for its members.

Acting on the notice, the Hotel, through its Human

Resource Development Manager Mary Anne

Mangalindan, advised the union that since it was

not certified by the DOLE as the exclusive

bargaining agent, it could not be recognized as

such.12

The union clarified that it sought to bargain "for its

members only," and declared that "[the

Hotel’s] refusal tobargain [would prompt] the union

to engage in concerted activities to protect and

assert its rights under the Labor Code."13

By Notice14 to its members dated September 18,

1997, the union announced that its executive

officers as well as its directors decided to go on

strike in view of the management’s refusal to

bargain collectively, and thus called for the taking

of strike vote.

Petitioner thereupon issued a Final Reminder and

Warning15 to respondent against continuing

misinformation campaign and activities which

confused the Hotel employees and disturbed their

work performance.

The union went on to file a Notice of Strike16 on

September 29, 1997 with the National Conciliation

and Mediation Board (NCMB) due to unfair labor

practice (ULP) in that the Hotel refused to bargain

with it and the rank-and-file employees were being

harassed and prevented from joining it.17

Conciliation conferences were immediately

conducted by the NCMB on October 6, 13, and 20,

1997 during which the union insisted on the

adoption of a CBA for its members.18

In the meantime, or on or about November 7, 1997,

Kimpo filed before the Arbitration Branch a

complaint for ULP against petitioner.19

More conferences took place between petitioner

and the union before the NCMB.

In the conference held on November 20, 1997, the

union demanded the holding of a consent election

to which the Hotel interposed no objection,

provided the union followed the procedure under

the law. Petitioner then requested that the election

be held in January 1998.20

The parties agreed to meet again on December 1,

1997.21

In the early morning of November 29, 1997,

however, the union suddenly went on strike. The

following day, the National Union of Workers in the

Hotel, Restaurant and Allied Industries (NUWHRAIN)

joined the strike and openly extended its support to

the union.22 At about this time, Hotel supervisors

Vicente T. Agustin (Agustin) and Rowena Junio

(Rowena) failed to report for work and were, along

with another supervisor, Mary Grace U. de Leon

(Mary Grace), seen participating in and supporting

the strike.23

Petitioner thus filed on December 1, 1997 a petition

for injunction before the National Labor Relations

Commission (NLRC) to enjoin further commission of

illegal acts by the strikers.24

Mary Grace, who was directed to explain her

participation in the strike, alleged that she was

merely trying "to pacify the group."25 Petitioner,

finding her explanation "arrogant" and

unsatisfactory as her active participation in the

strike was confirmed by an eye witness, terminated

her services, by communication sent on December

9, 1997, drawing her to file a complaint for illegal

dismissal against petitioner.26 Agustin, who was also

terminated, filed a similar complaint against the

Hotel.27

An NLRC representative who conducted an ocular

inspection of the Hotel premises confirmed in his

Report that the strikers obstructed the free ingress to

and egress from the Hotel.28

By Order of December 8, 1998, the NLRC thus issued

a Temporary Restraining Order (TRO) directing the

strikers to immediately "cease and desist from

obstructing the free ingress and egress from the

Hotel premises."29

The service upon the strikers of the TRO

notwithstanding, they refused to dismantle the tent

they put up at the employee’s entrance to the

Hotel, prompting the Hotel’s security guards to, on

December 10, 1997, dismantle the same during

which the strikers as well as the guards were hit by

rocks coming from the direction of the construction

site at the nearby Land Bank Plaza, resulting to

physical injuries to some of them.30

Despite the efforts of the NCMB, which was joined

by the Department of Tourism, to conciliate the

parties, the same proved futile.

On January 14, 1998, Rowena, whose services were

terminated, also filed a complaint against petitioner

for illegal dismissal.

For its part, petitioner filed on January 28, 1998 a

petition to declare the strike illegal.

As then DOLE Secretary Cresenciano Trajano’s

attempts to conciliate the parties failed, he, acting

on the union’s Petition for Assumption of Jurisdiction,

issued on April 15, 1998 an order certifying the

dispute to the NLRC for compulsory arbitration, and

directing the striking officers and members to return

to work within 24 hours and the Hotel to accept

them back under the same terms and conditions

prevailing before the strike.31

On petitioner’s motion for reconsideration, then

DOLE Acting Secretary Jose Español, Jr., by Order of

April 30, 1998, modified the April 15, 1998 Order of

Secretary Trajano by directing the Hotel to

just reinstate the strikers toits payroll, and ordering

that all cases between the parties arising out of the

labor disputes which were pending before different

Labor Arbiters be consolidated with the case earlier

certified to the NLRC for compulsory arbitration.32 It

appears that the said order of the Acting Secretary

directing the reinstatement of the strikers to the

Hotel’s payroll was carried out.

By Resolution of November 19, 1999, the NLRC

declared that the strike was illegal and that the

union officers andmembers who were reinstated to

the Hotel’s payroll were deemed to have lost their

employment status. And it dismissed the complaints

filed by Mary Grace, Agustin, and Rowena as well

as the union’s complaint for ULP.33

On appeal by the union, the Court of Appeals

affirmed the NLRC Resolution dismissing the

complaints of Mary Grace, Agustin and Rowena

and of the union. It modified the NLRC Resolution,

however, by ordering thereinstatement with back

wages of union members. Thus it disposed:

WHEREFORE, in view of the foregoing, the petition is

granted only insofar as the dismissal of the union

members is concerned. Consequently, the ruling of

the public respondent NLRC to the effect that the

union members lost their employment status with

the Hotel is hereby reversed and set aside. Private

respondent Hotel is hereby ordered

to immediately reinstate the members with backwa

ges from the time they were terminated. The Court

finds no grave abuse of discretion on the part of the

NLRC, and therefore affirms the ruling of the NLRC

as follows:

(1) that the strike is illegal;

(2) that the union officers lost their employment

status when they formed the illegal strike; and

(3) That the dismissal of Ms. Mary Grace U. de Leon,

Vicente C. Agustin and Rowena Junio is valid.

SO ORDERED.34 (Underscoring supplied)

In so ruling, the appellate court noted that

petitioner failed to establish by convincing and

substantial evidence that the union members who

participated in the illegal strike committed illegal

acts, and although petitioner presented

photographs of the striking employees, the strikers

who allegedly committed illegal acts were not

named or identified.35

Hence, the present appeal by petitioner faulting

the appellate court:

I

IN ORDERING THE REINSTATEMENT AND THE

PAYMENT OF BACKWAGES OF THE INDIVIDUAL

RESPONDENTS WHOSE EMPLOYMENT STATUS WERE

PREVIOUSLY DECLARED TO HAVE BEEN LOST BY THE

NATIONAL LABOR RELATIONS COMMISSION, THE

COURT OF APPEALS HAS IN EFFECT DECIDED A

QUESTION OF SUBSTANCE NOT IN ACCORD WITH

LAW WHICH HAS NOT YET BEFORE BEEN DETERMINED

BY THIS HONORABLE COURT, [AND]

II

IN [THUS] DEVIAT[ING] FROM ESTABLISHED

DOCTRINES LONG SETTLED BY CONSISTENT

JURISPRUDENCE ENUNCIATED BY THIS HONORABLE

COURT.36 (Underscoring supplied)

Petitioner argues that:

IT WAS THE NLRC WHICH DECLARED THAT THE UNION

OFFICERS AND MEMBERS HAVE LOST THEIR

EMPLOYMENT AS A CONSEQUENCE OF THEIR STRIKE

WHICH IT ALSO DECLARED AND FOUND TO BE

ILLEGAL.

SUCH BEING THE CASE, IN THE EVENT THE NLRC’s

DECISION IS NOT UPHELD AS FAR AS THE

UNIONMEMBERS’ LOSING THEIR EMPLOYMENT IS

CONCERNED, PETITIONER SHOULD NOT BE HELD

LIABLE TO PAY THEIR BACKWAGES.

UNDER THE CIRCUMSTANCES, NEITHER CAN

PETITIONER BE VALIDLY DIRECTED TO REINSTATE

THEM.37(Emphasis and underscoring supplied)

Respondents, upon the other hand, pray for the

dismissal of the petition, they arguing that:

A. Respondent [union members] must be reinstated

and paid full backwages because their strike was

legal and done in good faith.

B. Even assuming arguendo, that the strike started

as an illegal strike, the union’s unconditional offer to

return to work, coupled with the hotel’s unfair labor

practices during the strike, transformed the strike

into a legal strike.

C. Even assuming arguendo, that the strike is illegal,

the reinstatement of the strikers and the payment of

full backwages is consistent with the ruling in

Telefunken Semiconductors Employees Union-FFW

v. Secretary, 283 SCRA 145 which states that the

individual liability of each of the union officers and

members determines whether or not strikers should

be reinstated.

D. Even assuming arguendo, that the strike is illegal,

Article 264 of the Labor Code directs

thereinstatement of and payment of full

backwages to the respondents.38 (Underscoring

supplied)

As did the NLRC and the Court of Appeals, this

Court finds the strike illegal.

Article 255 of the Labor Code provides:

ART. 255. EXCLUSIVE BARGAINING REPRESENTATION

AND WORKERS’ PARTICIPATION IN POLICY AND

DECISION-MAKING

The labor organization designated or selected by

the majority of the employees in

an appropriate collective bargaining unit shall be

the exclusive representative of the employees in

such unit for the purpose of collective bargaining.

However, an individual employee or group of

employees shall have the right at any time to

present grievances to their employer.

Any provision of law to the contrary

notwithstanding, workers shall have the right,

subject to such rules and regulations as the

Secretary of Labor and Employment may

promulgate, to participate in policy and decision-

making process of the establishment where they

are employed insofar as said processes will directly

affect their rights, benefits and welfare. For this

purpose, workers and employers may form labor-

management councils:Provided, That the

representatives of the workers in such labor

management councils shall be elected by at least

the majority of all employees in said establishment.

(Emphasis and underscoring supplied)

As the immediately quoted provision declares, only

the labor organization designated or selected by

the majority of the employees in an appropriate

collective bargaining unit is

the exclusive representative of the employees in

such unit for the purpose of collective bargaining.

The union (hereafter referred to as respondent) is

admittedly not the exclusive representative of the

majority of the employees of petitioner, hence, it

could not demand from petitioner the right to

bargain collectively in their behalf.

Respondent insists, however, that it could validly

bargain in behalf of "its members," relying on Article

242 of the Labor Code.39 Respondent’s reliance on

said article, a general provision on the rights of

legitimate labor organizations, is misplaced, for not

every legitimate labor organization possesses the

rights mentioned therein.40Article 242 (a) must be

read in relation to above-quoted Article 255.

On respondent’s contention that it was bargaining

in behalf only of its members, the appellate court,

affirming the NLRC’s observation that the same

would only "fragment the employees" of

petitioner,41 held that "what [respondent] will be

achieving is to divide the employees, more

particularly, the rank-and-file employees of

[petitioner] . . . the other workers who are not

members are at a serious disadvantage, because if

the same shall be allowed, employees who are

non-union members will be economically impaired

and will not be able to negotiate their terms and

conditions of work, thus defeating the very essence

and reason of collective bargaining, which is an

effective safeguard against the evil schemes of

employers in terms and conditions of work."42 This

Court finds the observation well-taken.

It bears noting that the goal of the DOLE is geered

towards "a single employer wide unit which is more

to the broader and greater benefit of the

employees working force."43 The philosophy is to

avoid fragmentation of the bargaining unit so as to

strengthen the employees’ bargaining power with

the management. To veer away from such goal

would be contrary, inimical and repugnant to the

objectives of a strong and dynamic unionism.44

Petitioner’s refusal to bargain then with respondent

can not be considered a ULP to justify the staging

of the strike.

The second ground alleged by respondent to justify

the staging of the strike – that petitioner prevented

or intimidated some workers from joining the union

before, during or after the strike – was correctly

discredited by the appellate court in this wise:

. . . a careful study of the allegations of petitioners in

their petition reveals that it

contained general allegations that the

Management of the Hotel committed unfair labor

practices by refusing to bargain with the union and

by alleged acts of union interference, coercion and

discrimination tantamount to union-busting. Since it

is the union who alleges that unfair labor practices

were committed by the Hotel, the burden of proof

is on the union to prove its allegations by substantial

evidence.

Moreover, while petitioner Union continues to

accuse the private respondent Hotel of violating

their constitutional right to organize by busting the

Union, this Court cannot overlook the events that

transpired prior to the strike that the Union staged

on November 29, 1997. It is beyond argument that

a conciliatory meeting was still scheduled to be

held on December 1, 1997 before the NCMB. In this

conciliatory meeting, petitioner Union could have

substantiated and presented additional evidences.

Thus, as held by the Supreme Court in the case of

Tiu vs. National Labor Relations Commission:

"The Court is not unmindful of this rule, but in the

case at bar the facts and the evidence did not

establish events [sic] least a rational basis why the

union would [wield] a strike based on alleged unfair

labor practices it did not even bother to

substantiate during the conciliation proceedings. It

is not enough that the union believed that the

employer committed acts of unfair labor practice

when the circumstances clearly negate even a

prima facie [showing to] warrant [such a] belief."

It is also evident from the records of the instant

petition, specifically from the Notice of Strike,

that their principal ground for the strike was the

"refusal of the Hotel Management to bargain

collectively with the Union for the benefit of the

latter’s members." In the instant case, it is not

disputed that the petitioner UNION is not a certified

bargaining unit to negotiate a collective

bargaining agreement (CBA) with private

respondent Hotel . . . 45 (Underscoring supplied)

On top of the foregoing observations, this Court

notes that respondent violated Article 264 which

proscribes the staging of a strike on the ground of

ULP during the pendency of cases involving the

same grounds for the strike.

Further, the photographs taken during the strike, as

well as the Ocular Inspection Report of the NLRC

representative, show that the strikers, with the use of

ropes and footed placards, blockaded the

driveway to the Hotel’s points of entrance and

exit,46 making it burdensome for guests and

prospective guests to enter the Hotel, thus violating

Article 264 (e) of the Labor Code which provides:

ART. 264 (e) No person engaged in picketing shall

commit any act of violence, coercion or

intimidation or obstruct the free ingress to or egress

from the employer’s premises for lawful purposes, or

obstruct public thoroughfares. (Emphasis supplied)

Furthermore, the photographs indicate that indeed

the strikers held noise barrage47 and threatened

guests with bodily harm.48

Finally, the police reports mention about the strikers’

exploding of firecrackers, causing the guests to

panic and transfer to other areas of the Hotel.49

It is doctrinal that the exercise of the right of private

sector employees to strike is not absolute. Thus

Section 3 of Article XIII of the Constitution, provides:

SECTION 3. x x x

It shall guarantee the rights of all workers to self-

organization, collective bargaining and

negotiations and peaceful concerted activities,

including the right to strike

in accordance with law. They shall be entitled to

security of tenure, humane conditions of work, and

a living wage. They shall also participate in policy

and decision-making processes affecting their rights

and benefits as may be provided by law. (Emphasis

and underscoring supplied)

Even if the purpose of a strike is valid, the strike may

still be held illegal where the means employed are

illegal. Thus, the employment of violence,

intimidation, restraint or coercion in carrying out

concerted activities which are injurious to the rights

to property renders a strike illegal. And so is

picketing or the obstruction to the free use of

property or the comfortable enjoyment of life or

property, when accompanied by intimidation,

threats, violence, and coercion as to constitute

nuisance.50

As the appellate court correctly held, the union

officers should be dismissed for staging and

participating in the illegal strike, following

paragraph 3, Article 264(a) of the Labor Code

which provides that ". . .[a]ny union officer

who knowingly participates in an illegal strike and

any worker or union officer who knowingly

participates in the commission of illegal acts during

strike may be declared to have lost his employment

status . . ."

An ordinary striking worker cannot, thus be

dismissed for mere participation in an illegal strike.

There must be proof that he committed illegal acts

during a strike, unlike a union officer who may be

dismissed by mere knowingly participating in an

illegal strike and/or committing an illegal act during

a strike.51

The appellate court found no convincing and

substantial proof, however, that the strikers-

members of respondent who participated in the

illegal strike committed illegal acts.

In the present case, private respondent Hotel failed

to established [sic] by convincing and substantial

evidence that these union members who

participated in the illegal strike committed illegal

acts. Consequently, they cannot be terminated

from service for their participation in an illegal strike.

Moreover, private respondent Hotel presented as

evidence photographs of the striking employees,

the question that comes to our mind is: why were

these strikers who allegedly participated in illegal

acts not identified or named? Instead the arbitral

tribunal found it worthy of credence to summarily

dismiss all the union members without them being

named or identified . . . 52

This Court finds otherwise. As reflected above, the

photographs show that some of the workers-strikers

who joined the strike indeed committed illegal acts

– blocking the free ingress to and egress from the

Hotel, holding noise barrage, threatening guests,

and the like. The strikers were, in a list53 attached to

petitioner’s Position Paper54filed with the NLRC,

named.

The list failed to specifically identify the ones who

actually committed illegal acts, however. Such

being the case, a remand of the case to the Labor

Arbiter, through the NLRC, is in order for the purpose

only of determining the respective liabilities of the

strikers listed by petitioner. Those proven to have

committed illegal acts during the course of the

strike are deemed to have lost their employment,

unless they have been readmitted by the Hotel,

whereas those not clearly shown to have

committed illegal acts should be reinstated.

Whether those ordered reinstated are entitled to

backwages is, however, another matter.

For the general rule is that backwages shall not be

awarded in an economic strike on the principle

that "a fair day’s wage" accrues only for a "fair

day’s labor."55 Even in cases of ULP strikes, award of

backwages rests on the court’s discretion and only

in exceptional instances.56

Thus, J.P. Heilbronn Co. v. National Labor

Union,57 instructs:

When in case of strikes, and according to the

C[ourt of] I[ndustrial] R[elations] even if the strike is

legal, strikers may not collect their wages during the

days they did not go to work, for the same reasons

if not more, laborers who voluntarily absent

themselves from work to attend the hearing of a

case in which they seek to prove and establish their

demands against the company, the legality and

propriety of which demands is not yet known,

should lose their pay during the period of such

absence from work. The age-old rule governing the

relation between labor and capital or

management and employee is that of a "fair day’s

wage for a fair day’s labor." If there is no work

performed by the employee there can be no wage

or pay, unless of course, the laborer was able,

willing and ready to work but was illegally locked

out, dismissed or suspended. It is hardly fair or just for

an employee or laborer to fight or litigate against

his employer on the employer’s time. (Emphasis and

underscoring supplied)

This Court must thus hearken to its policy that "when

employees voluntarily go on strike, even if in protest

against unfair labor practices," no backwages

during the strike is awarded.

In Cromwell Commercial Employees and Laborers

Union (PTUC) v. Court of Industrial Relations,58 this

Court made a distinction between two types of

employees involved in a ULP: those who are

discriminatorily dismissed for union activities, and

those who voluntarily go on strike even if it is in

protest of an ULP. Discriminatorily dismissed

employees were ordered entitled to backpay from

the date of the act of discrimination, that is, from

the day of their discharge, whereas employees who

struck as a voluntary act of protest against what

they considered a ULP of their employer were held

generally not entitled to backpay.59

Jurisprudential law, however, recognizes several

exceptions to the "no backwages rule," to wit: when

the employees were illegally locked to thus compel

them to stage a strike;60 when the employer is guilty

of the grossest form of ULP;61 when the employer

committed discrimination in the rehiring of strikers

refusing to readmit those against whom there were

pending criminal cases while admitting nonstrikers

who were also criminally charged in court;62 or

when the workers who staged a voluntary ULP strike

offered to return to work unconditionally but the

employer refused to reinstate them.63 Not any of

these or analogous instances is, however, present in

the instant case.

Respondent urges this Court to apply the

exceptional rule enunciated in Philippine Marine

Officers’ Guild v. Compañia Maritima64 and similar

cases where the employees unconditionally offered

to return to work, it arguing that there was such an

offer on its part to return to work but the Hotel

screened the returning strikers and refused to

readmit those whom it found to have perpetrated

prohibited acts during the strike.

It must be stressed, however, that for the exception

in Philippine Marine Officers’ Guild to apply, it is

required that the strike must be legal.65

Reinstatement without backwages of striking

members of respondent who did not commit illegal

acts would thus suffice under the circumstances of

the case. If reinstatement is no longer possible,

given the lapse of considerable time from the

occurrence of the strike, the award of separation

pay of one (1) month salary for each year of

service, in lieu of reinstatement, is in order.66

WHEREFORE, the Decision dated November 21,

2002 of the Court of Appeals is, in light of the

foregoing ratiocinations, AFFIRMED with

MODIFICATION in that only those members of the

union who did not commit illegal acts during the

course of the illegal strike should be reinstated but

without backwages. The case is, therefore,

REMANDED to the Labor Arbiter, through the NLRC,

which is hereby directed to, with dispatch, identify

said members and to thereafter order petitioner to

reinstate them, without backwages or, in the

alternative, if reinstatement is no longer feasible,

that they be given separation pay at the rate of

One (1) Month pay for every year of service.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-38258 November 19, 1982

LAKAS NG MANGGAGAWANG MAKABAYAN

(LAKAS), petitioner,

vs.

MARCELO ENTERPRISES and MARCELO TIRE & RUBBER

CORP., MARCELO RUBBER AND LATEX PRODUCTS,

MARCELO STEEL, CORPORATION, MARCELO

CHEMICAL & PIGMENT CORP., POLARIS MARKETING

CORPORATION and THE COURT OF INDUSTRIAL

RELATIONS, respondents,

G.R. No. L-38260 November 19, 1982

MARCELO TIRE & RUBBER CORPORATION, MARCELO

RUBBER & LATEX PRODUCTS, INC., MARCELO STEEL

CORPORATION, POLARIS MARKETING

CORPORATION, MARCELO CHEMICAL AND PIGMENT

CORP., MARCELO ENTERPRISES, under which name

or style they are also known, petitioners,

vs.

LAKAS NG MANGGAGAWANG MAKABAYAN

(LAKAS) AND THE HONORABLE COURT OF INDUSTRIAL

RELATIONS, respondents.

GUERRERO, J.:

Separate appeals by certiorari from the Decision of

the Court of Industrial Relations (Manila) dated July

20, 1973, as well as the Resolution of the court en

banc dated January 24, 1974 denying the

reconsideration thereof rendered in ULP Case No.

4951 entitled, "Lakas ng Manggagawang

Makabayan, Petitioner, versus Marcelo Enterprises

and Marcelo Tire and Rubber Corporation, Marcelo

Rubber and Latex Products, Marcelo Steel

Corporation, Polaris Marketing Corporation, and

Marcelo Chemical and Pigment Corporation,

Respondents. "

The antecedent facts as found by the respondent

Court of Industrial Relations embodied in the

appealed Decision are correct, supported as they

are by the evidence on record. Nevertheless, We

find it necessary to make a re-statement of the

facts that are integrated and inter-related, drawn

from the voluminuous records of these cases which

are herein jointly decided, since it would only be

from a statement of all the relevant facts of the

cases made in all fullness, collectively and

comprehensively, can the intricate issues posed in

these appeals be completely and judiciously

resolved.

It appears that prior to May 23, 1967, the date

which may be stated as the start of the labor

dispute between Lakas ng Manggagawang

Makabayan (hereinafter referred to as

complainant LAKAS) and the management of the

Marcelo Tire and Rubber Corporation, Marcelo

Rubber and Latex Products, Inc., Polaris Marketing

Corporation, Marcelo Chemical and Pigment

Corporation, and the Marcelo Steel Corporation

(Nail Plan) (hereinafter referred to as respondent

Marcelo Companies) the Marcelo Companies had

existing collective bargaining agreements (CBAs)

with the local unions then existing within the

appropriate bargaining units, viz: (1) the respondent

Marcelo Tire and Rubber Corporation, with the

Marcelo Camelback Tire and Foam Union

(MACATIFU); (2) the respondent Marcelo Rubber

and Latex Products, Inc., with the Marcelo Free

Workers Union (MFWU); and (3) the respondent

Marcelo Steel Corporation with the United Nail

Workers Union (UNWU). These existing CBAs were

entered into by and between the parties while the

aforestated local unions were then affiliated with a

national federation, the Philippine Social Security

Labor Union (PSSLU).

It is well to note from the records that when the

aforestated CBAs of the said local unions were

nearing their respective expiration dates (March

15,1967) for MACATIFU and UNWU, and June 5, 1967

for MFWU), the general situation within the ranks of

labor was far from united. The MACATIFU in

respondent Marcelo Tire and Rubber Corporation,

then headed by Augusto Carreon, did not enjoy

the undivided support of all the workers of the

respondent corporation, as there existed a rival

union, the Marcelo United Employees and Workers

Association (MUEWA) whose president was then

Paulino Lazaro. As events would later develop, the

members of the MACATIFU of Augusto Carreon

joined the MUEWA of Paulino Lazaro, after the latter

filed a petition for direct certification which was

granted by the industrial court's Order of July 5,

1967 recognizing and certifying MUEWA as the sole

and exclusive bargaining representative of all the

regular workers of the respondent corporation. The

union rivalry between MACATIFU and MUEWA did

not, however, end with the Order of July 5. 1967,

but more than ever developed into a more pressing

problem of union leadership because Augusto

Carreon also claimed to be the president of the

MUEWA by virtue of the affiliation of his MACATIFU

members with MUEWA. The records also reveal that

even the ranks of MFWU in respondent Marcelo

Rubber and Latex Products, Inc. was divided

between those supporting Ceferino Ramos and

Cornelio Dizon who both claimed the presidency in

said union. Only the UNWU in respondent Marcelo

Steel Corporation was then enjoying relative peace

as Jose Roque was solely recognized as the union's

president. The events that followed are hereinafter

stated in chronological order for a clearer

understanding of the present situation.

On March 14, 1967, the management of

respondent Marcelo Steel Corporation received a

letter requesting the negotiation of a new CBA

together with a draft thereof, from the PSSLU

president, Antonio Diaz, for and in behalf of UNWU

whose CBA was to expire the following day. Similar

letters and proposals were, likewise, sent to the

management of respondent Marcelo Tire and

Rubber Corporation for and in behalf of MACATIFU,

and to respondent Marcelo Rubber and Latex

Products for and in behalf of MFWU, whose

respective CBAs were both to expire on June 5,

1967.

However, on that very same day of March 14, 1967,

the management of respondent Marcelo Tire and

Rubber Corporation received a letter from the

UNWU president, Jose Roque, disauthorizing the

PSSLU from representing his union.

Then, on April 14, 1967, Paulino Lazaro of MUEWA

requested negotiation of a new CBA with

respondent Marcelo Tire and Rubber Corporation,

submitting therewith his union's own proposals.

Again, on May 3, 1967, the management of

respondents Marcelo Tire and Rubber Corporation

and Marcelo Rubber and Latex Products, Inc.,

received another letter requesting negotiation of

new CBAs also for and in behalf of the MACATIFU

and the MFWU from J.C. Espinas & Associates.

Finally, on May 23, 1967, the management of all the

respondent Marcelo Companies received a letter

from Prudencio Jalandoni, the alleged president of

the complainant LAKAS. In this letter of May 23,

1967, the complainant LAKAS informed

management of the affiliation of the Marcelo

United Labor Union (MULU) with it. Included therein

was a 17-points demand for purposes of the

requested collective bargaining with management.

Confronted with a problem of whom to recognize

as the bargaining representative of all its workers,

the management of all the respondent Marcelo

Companies understandably dealt with the problem

in this wise, viz: (1) it asked proof of authority to

represent the MFWU and the MACATIFU from J.C.

Espinas & Associates; and (2) in a letter dated May

25, 1967, it apprised PSSLU, Paulino Lazaro of

MUEWA and complainant LAKAS of the fact of the

existing conflicting demands for recognition as the

bargaining representative in the appropriate units

involved, consequently suggesting to all to settle

the question by filing a petition for certification

election before the Court of Industrial Relations,

with an assurance that the management will abide

by whatever orders the industrial court may issue

thereon.

PSSLU demurred to management's stand and

informed them of its intention to file an unfair labor

practice case because of management's refusal to

bargain with it, pointedly stating that it was with the

PSSLU that the existing CBAs were entered into.

Again, as events later developed, on or about the

middle of August 1981, PSSLU filed a Notice of Strike

which became the subject of conciliation with the

respondent companies. In the case of MUEWA,

Paulino Lazaro threatened that his union will

declare a strike against respondent Marcelo Tire

and Rubber Corporation. On the other hand,

complainant LAKAS for MULU filed on June 13, 1967

before the Bureau of Labor Relations a Notice of

Strike against all the respondent Marcelo

Companies, alleging as reasons therefore

harrassment of union officers and members due to

union affiliation and refusal to bargain. This

aforestated Notice of Strike was, however,

withdrawn on July 14, 1967.

In the meantime, as stated earlier in this Decision,

the MUEWA filed a petition for direct certification

before the industrial court. There being no other

union or interested person appearing before the

court except the MUEWA, and finding that MUEWA

represented more than the majority of the workers

in respondent Marcelo Tire and Rubber

Corporation, the court granted the petition and by

Order of July 5, 1967, certified MUEWA of Paulino

Lazaro as the sole and exclusive bargaining

representative of all the regular workers in said

respondent.

On July 11, 1967, Augusto Carreon of MACATIFU

wrote the management of respondent Marcelo Tire

and Rubber Corporation expressly stating that no

one was yet authorized to submit proposals for and

in behalf of the union for the renewal of its CBA,

adding that "(a)ny group representing our Union is

not authorized and should not be entertained."

On July 14, 1967, as earlier stated, the Notice of

Strike filed by complainant LAKAS was withdrawn

pursuant to a Memorandum Agreement signed on

the same day by management and LAKAS.

Thereafter, or on July 20, 1967, letters of proposal for

collective bargaining were sent by Prudencio

Jalandoni of LAKAS to all the respondent Marcelo

companies. In answer thereto, management wrote

two (2) letters, both dated July 24, 1967, addressed

to Jalandoni, expressing their conformity to sit down

in conference on the points to be negotiated as

soon as LAKAS can present evidence of authority to

represent the employees of respondent

corporations in said conference. The records

disclose that it was in the atmosphere of constant

reservation on the part of management as to the

question of representation recognition that

complainant LAKAS and management sat down for

CBA negotiations.

The first conference was held on August 14, 1967,

followed by one on August 16, 1967 whereby

management, in formal reply to union's economic

demands, stated its willingness to give pay

adjustments and suggested renewal of other

provisions of the old CBAs. A third conference was

set although no one from LAKAS or the local unions

appeared. On August 29, 1967, the fourth

conference was held where, from a letter dated

August 30, 1967 from Jose Delfin of Management to

Jose B. Roque of UNWU, can be inferred that in the

conference of August 29, 1967, the management

with respect to respondent Marcelo Steel

Corporation, agreed to give pay adjustments from

P0.15 to P0.25 to meritorious cases only, and to

increase its contribution to the retirement fund from

1-1/2% to 3% provided the employees' contribution

will be increased from 1% to 2%. Management

likewise suggested the renewal of the other

provisions of the existing CBA. Management's offers

were not accepted by complainant LAKAS who

insisted on the grant of all its economic demands

and in all of the Marcelo Companies.

As it would later appear during the trial of the ULP

case below, and as found as a fact by the

respondent court, only the economic proposals of

complainant LAKAS were the matters taken up in all

these CBA conferences.

Less than a week after the fourth CBA conference,

or on September 4, 1967, the complainant LAKAS

declared a strike against all the respondent

Marcelo Companies. Acts of violence and

vandalism attended the picketing. Ingress and

egress at the respondents' premises were

successfully blocked. One worker, Plaridel Tiangco,

was manhandled by the strikers and was

hospitalized. Windows of the Chemical Plant were

badly damaged. As a consequence, ten (10)

strikers were later charged before the Municipal

Court of Malabon, Rizal, four of whom were

convicted while the others were at large.

On September 13, 1967, the respondent Marcelo

Companies obtained a writ of preliminary injunction

from the Court of First Instance of Rizal enjoining the

strikers from preventing the ingress and egress at

the respondents' premises. The following day, a

"Return to Work Agreement" (Exhibit "A") was

executed by and among the management,

represented by Jose P. Marcelo and Jose A. Delfin,

and the local unions, together with complainant

LAKAS, represented by Prudencio Jalandoni for

LAKAS, Jose B. Roque for UNWU, Cornelio Dizon for

MFWU and Augusto Carreon for MUEWA, the

representations of the latter two, however, being

expressly subjected by management to non-

recognition. Aside from providing for the immediate

lifting of the picket lines, the agreement, more

pertinently provides, to wit,

4. The management agrees to accept all

employees who struck without discrimination or

harassment consistent with an orderly operation of

its various plants, provided it is understood that

management has not waived and shall continue to

exercise freely its rights and prerogatives to punish,

discipline and dismiss its employees in accordance

with law and existing rules and regulations that

cases filed in court will be allowed to take their

normal course.

By virtue of this agreement, the respondent Marcelo

Companies resumed operations and the strikers

went back to work. As found by the respondent

court, all strikers were admitted back to work,

except four (4) namely, Wilfredo Jarquio, Leonardo

Sakdalan, Jesus Lim and Arlington Glodeviza, who

chose not to report for work because of the criminal

charges filed against them before the municipal

court of Malabon and because of the

administrative investigation conducted by

management in connection with the acts of

violence and vandalism committed during the

September 4 strike. Together with Jesus Lim, three

other strikers who reported for work and were

admitted, namely, Jose Roque, Alfredo Cabel and

Ramon Bataycan, were convicted in said criminal

case.

After the resumption of normal business, the

management of the respondent Marcelo

Companies, the complainant LAKAS together with

the local unions resumed their bargaining

negotiations subject to the conditions earlier

mentioned. On October 4, 1967, the parties met

and discussed the bargaining unit to be covered by

the CBA in case one is entered into, union shop

arrangement, check-off, waiver of the employer of

the notice requirement in case of employees'

separation, separation pay in cash equivalent to

12-days pay for every year of service, retirement

plan, and one or two years duration of the CBA. It

was also agreed in that meeting not to negotiate

with respect to respondent Marcelo Tire and

Rubber Corporation inasmuch as a CBA had

already been entered into by management with

the MUEWA of Paulino Lazaro, the recently certified

union in said respondent.

Finally, on October 13, 1967, the negotiations

reached its final stage when the management of

respondents Marcelo Rubber and Latex Products,

Inc. and Marcelo Steel Corporation gave the

complainant LAKAS a copy of management's drafts

of the collective bargaining proposals for MFWU

and UNWU, respectively.

Unexpectedly and without filing a notice of strike,

complainant LAKAS declared another strike against

the respondent Marcelo Companies on November

7, 1967, resulting in the complete paralyzation of

the business of said respondents. Because of this

second strike, conciliation conferences were again

set by the Conciliation Service Division of the

Department of Labor on November 8, November

23, and December 4, 1967. On the last

aforementioned date, however, neither

complainant LAKAS nor the local unions appeared.

Instead, on December 13, 1967, Prudencio

Jalandoni of complainant LAKAS, in behalf of the

striking unions, coursed a letter (Exhibit "B") to Jose P.

Marcelo of management advising that, "on

Monday, December 18, 1967, at 7:00 o'clock in the

morning, all your striking workers and employees will

return to work under the same terms and conditions

of employment before the strike." The letter was

attested to by Cornelio Dizon for MFWU, Jose Roque

for UNWU and Augusto Carreon for MUEWA. On

December 15,1967, the Bureau of Labor Relations

was informed by the complainant LAKAS who

requested for the Bureau's representative to witness

the return of the strikers to their jobs.

The records reveal that in the meantime, prior to

December 13, 1967, some of the strikers started

going back to work and were admitted; and that

as early as December 4, 1967, the management

started posting notices at the gates of the

respective premises of the respondents for strikers to

return back to work, Similar notices were also

posted on December 18 and December 27, 1967.

Upon their return, the reporting strikers were

requested to fill up a certain form (Exhibit "49")

wherein they were to indicate the date of their

availability for work in order that they may be

scheduled. According to the respondent Marcelo

Companies, this requirement was asked of the

strikers for legitimate business reasons within

management prerogative. Several of the strikers

filled up the required form and were accordingly

scheduled for work. The remaining others, led and

supported by complainant LAKAS, refused and

insisted that they be all admitted back to work

without complying with the aforestated

requirement, alleging that the same constituted a

"screening" of the striking workers. As matters stood,

Management refused to forego the requirement;

on the other hand, the remaining strikers

demanded to be readmitted without filing up the

form for scheduling.

These then constitute the factual background when

the complainant LAKAS, represented by its counsel,

Atty. Benjamin C. Pineda, on December 26, 1967 ,

filed before the respondent court a charge for

unfair labor practice against the respondent

Marcelo Companies, alleging non-readmission of

the striking members of the three (3) affiliated local

unions despite the unconditional offer to return to

work after the strike of November 7, 1967. Based on

the allegations of the foregoing charge and after a

preliminary investigation conducted by the acting

Prosecutor of said respondent court, the acting

Chief Prosecutor, Atty. Antonio Tria Tirona, filed on

February 12, 1968 the instant complaint under

authority of Section 5(b) of Republic Act 875,

otherwise known as the Industrial Peace Act.

The Complaint below alleges, among others, to wit:

1. That complainant is a legitimate labor

organization, with its affiliates, namely: Marcelo Free

Workers Union, United Nail Workers Union, and

Marcelo United Employees Unions, whose members

listed in Annexes "A", "B", and "C" of this complaint

are considered employees of respondent within the

meaning of the Act;

2. ...

xxx xxx xxx

xxx xxx xxx

3. That individual complaints listed in Annexes "A",

"B", and "C" of this complaint are members of the

Marcelo United Employees and Workers

Association, Marcelo Free Workers Union, and

United Nail Workers Union, respectively; that the

members of the Marcelo United Employees and

Workers Union are workers of respondent Marcelo

Tire and Rubber Corporation; that the members of

the Marcelo Free Workers Union compose the

workers of the Marcelo Rubber and Latex Products,

Polaris Marketing Corporation, and the members of

the United Nail Workers Union compose the workers

of the Marcelo Steel Corporation (Nail Plant);

4. That each of the aforesaid local unions, before

their affiliation with the complainant union LAKAS,

had a collective bargaining agreement with

respondents; that after the expiration of the

collective bargaining agreement above-

mentioned and after the above-mentioned local

unions affiliated with the complainant LAKAS, the

said federation sent to respondents' president, Jose

P. Marcelo, on May 23, 1967, a letter, requesting for

a negotiation for collective bargaining, together

with union proposals thereof, but respondents

refused;

5. That after respondents knew of the affiliation of

the aforementioned local unions with the LAKAS,

the said respondents, thru their officers and agents

began harassing the union members, discriminated

against them by transferring some of its officers and

members from one section to another in such a

way that their work was reduced to manual labor,

and by suspending them without justifiable cause.

in spite of long years of service with said

respondents;

6. That as a result of the abovementioned unfair

labor practice of respondents, and after

complainant sent communication thereto,

protesting against the acts of the above-

mentioned, complainant decided to stage a strike

on September 4, 1967, after filing a notice of strike

with the Department of Labor;

7. That on September 14, 1967, however, Jose P.

Marcelo, and Jose A. Delfin, president and vice-

president of the respondents, respectively, on one

hand and the presidents of the three local unions

above-mentioned and the national president of

complainant union on the other, entered into a

Return-to-Work Agreement. providing among

others, as follows:

4. The management agrees to accept all

employees who struck without discrimination or

harassment consistent with an orderly operation of

its various plants provided it is understood that

management has not waived and shall continue to

exercise freely its rights and prerogatives to punish,

discipline and dismiss its employees in accordance

with law and existing rules and regulations and that

cases filed in Court will be allowed to take their

normal course.

8. That, contrary to the above Return-to-Work

agreement, and in violation thereof, respondents

refused to admit the members of the three striking

local unions; that in admitting union members back

to work, they were screened in spite of their long

employment with respondent, but respondents

gave preference to the casual employees;

9. That, because of the refusal of the respondents to

accept some union members, in violation of the

above-mentioned Return-to-Work agreement and

refusal of respondents to bargain in good faith with

complainant, the latter, together with the members

of the three local unions above-mentioned, again

staged a strike on November 7, 1967;

10. That on December 13, 1967, complainant sent a

letter to respondents that the members of the

striking unions abovementioned offered to return to

work on December 18, 1967 without any condition,

but respondents likewise refused, and still continue

to refuse to reinstate them up to the present;

11. That here to attached are the list of names of

the members of the three local unions above-

mentioned who were not admitted back to work

by respondents, marked as Annexes "A ", "B ", and

"C and made as an integral part of this complaint;

12. That the union members listed in Annexes "A",

"B", and "C" hereof were not able to secure

substantial employment in spite of diligent efforts

exerted by them;

13. That the above unfair labor practice acts of

respondents are in violation of Section 4,

subsections 1, 4 and 6 in relation to Sections 13, 14

and 15 of Republic Act No. 875.

The complaint prayed "that after due hearing,

judgment be rendered, declaring respondents

guilty of unfair labor practice, and

(a) Ordering respondents to cease and desist from

further committing the acts complained of;

(b) Ordering respondents to comply with the

Return-to-Work agreement dated September 14,

1967, and to admit back to work the workers listed

in annexes "A", "B " and "C" hereof, with back

wages, without loss of seniority rights and privileges

thereof;

(c) Ordering respondents to bargain in good faith

with complainant union; and

(d) Granting complainant and its complaining

members thereof such other affirmative reliefs and

remedies equitable and proper, in order to

effectuate the policies of the Industrial Peace Act.

On March 16, 1968, after an Urgent Motion for

Extension of Time to File Answer, the respondents

filed their Answer denying the material allegations

of the Complaint and alleging as affirmative

defenses,

I. That the Collective Bargaining Agreement

between respondent Marcelo Steel Corporation

and the United Nail Workers Union expired on

March 15, 1967; The Collective Bargaining

Agreement between the United Rubber Workers

Union (which eventually became the Marcelo Free

Workers Union) and the respondent Marcelo

Rubber and Latex Products, Inc., expired on June 5,

1967; the Collective Bargaining Agreement

between Marcelo Camelback Tire and Foam Union

and the Marcelo Tire and Rubber Corporation

expired on June 5, 1967;

II. That on May 23, 1967, one Mr. Prudencio

Jalandoni of complainant addressed a

communication to Mr. Jose P. Marcelo of

respondents informing him of the alleged affiliation

of the Marcelo United Labor Union with

complainant and submitting a set of collective

bargaining proposal to which counsel for

respondents replied suggesting that a petition for

certification election be filed with the Court of

Industrial Relations in view of the several demands

for representation recognition;

III. That the transfers of workers from one job to

another were made in accordance with needs of

the service. Respondents afforded union officers

and members affected by the transfers the

privilege to watch out for vacancies and select

positions they prefer to be in. No suspensions

without justifiable cause were made as alleged in

the Complaint;

IV. That between May 23, 1967, the date of their first

demand for negotiations, and September 4, 1967,

the start of the first strike, proposals and counter-

proposals were had. Respondents are not aware of

whether or not a notice of strike was filed with the

Court of Industrial Relations;

V. That Mr. Jose P. Marcelo is the President of

Marcelo Rubber and Latex Products, Inc., Marcelo

Tire and Rubber Corporation, and Marcelo Steel

Corporation, while Mr. Jose A. Delfin is the acting

Personnel Manager of respondent Marcelo Rubber

and Latex Products, Inc., Marcelo Tire and Rubber

Corporation, Marcelo Steel Corporation and

Marcelo Chemical and Pigment Corporation;

VI. That respondents did not refuse to admit

members of the striking union. Only four (4) workers

who had criminal cases filed against them

voluntarily failed to report to the Personnel

Department for administrative investigation;

VII. That after September 14, 1967, all workers of the

different respondent corporations returned to work

except the four mentioned in the preceding

paragraph hereof who have pending criminal

cases; between September 14, 1967, and

November 7, 1967 another strike was declared

without justifiable cause;

VIII. That on November 28, 1967, respondent

obtained an injunction from the Court of First

Instance of Rizal, Caloocan City Branch, against the

illegal picketing of the local unions; in the first week

of December, 1967, the striking workers began

returning to work; on December 13, 1967, a letter

was received from complainant advising

respondents that its striking workers were calling off,

lifting the picket line and returning to work, that

from the first week of December, 1967, respondents

invited the striking workers desiring to return to work

to fill out an information sheet stating therein their

readiness to work and the exact dates they were

available so that proper scheduling could be done;

a number of workers showed no interest in reporting

to work; management posted in the Checkpoint,

Bulletin Boards, and the gates notices calling all

workers to return to work but a number of workers

obviously were not interested in returning anymore;

IX. That respondents posted several times lists of

names of workers who had not returned to work

with the invitation to return to work, but they did not

return to work;

X. That a number of workers in the list Annexes "A",

"B" and "C" have resigned after they found more

profitable employment elsewhere;

XI. That the local unions referred to in the Complaint

if they ever had affiliated with complainant union

had subsequently disaffiliated therefrom;

XII. That the strikes called and declared by the

striking unions were illegal;

XIII. That the local unions were bargaining in bad

faith with respondents,

and praying for the dismissal of the Complaint as

well as for the declaration of illegality of the two (2)

strikes called by the striking unions.

Thereafter, the trial commenced. Then on October

24, 1968, a development occurred which gave a

peculiar aspect to the case at bar. A Manifestation

and Motion signed by the respective officers and

members of the MUEWA, headed by Paulino

Lazaro, was filed by the said union, alleging, to wit,

l. That the above-entitled case purportedly shows

that the Marcelo United Employees and Workers

Association is one of the Complainants being

represented by the Petitioner Lakas ng

Manggagawang Makabayan (LMM);

2. That it likewise appears in the above-entitled

case that the services of the herein Petitioner was

sought by a certain Augusto Carreon together with

his cohorts who are not members of the Marcelo

United Employees and Workers Association much

less connected with the Marcelo Tire and Rubber

Corporation wherein the Marcelo United Employees

and Workers Association has an existing Collective

Bargaining Agreement;

3. That to set the records of this Honorable Court

straight, the undersigned officers and members of

the Marcelo United Employees and Workers

Association respectfully manliest that the aforesaid

organization has no complaint whatsoever against

any of the Marcelo Enterprises;

4. ...

5. ..., the Complaint filed by the Petitioner in the

above-entitled case in behalf of the Marcelo

United Employees and Workers Association is

without authority from the latter and therefore the

officers and/or representatives of the petitioning

labor organization should be cited for Contempt of

Court;

6. ...., the Complaint filed by the Petitioner in the

above-entitled case in behalf of the Marcelo

United and Employees and Workers Association

should be considered as withdrawn;

xxx xxx xxx

This was followed by another Manifestation and

Motion flied on November 6, 1968 and signed by

the officers and members of the UNWU, headed by

its President, Juan Balgos, alleging, to wit,

1. That the above-entitled case purportedly shows

that the United Nail Workers Union is being

represented by the Petitioner Lakas ng

Manggagawang Makabayan for the alleged

reason that the former is one of the affiliates of the

latter;

2. That on January 15, 1968, all the Officers and

members of the United Nail Workers Union

disaffiliated from the herein Petitioning labor

organization for the reason that Petitioning labor

organization could not serve the best interest of the

Officers and members of the United Nail Workers

Union and as such is a stumbling block to a

harmonious labor- management relations within all

the Marcelo enterprises; ...

3. That the filing of the above-entitled case by the

herein Petitioning labor organization was made

over and above the objections of the officers and

members of the United Nail Workers Union;

4. That in view of all the foregoing, the Officers and

members of the United Nail Workers Union do

hereby disauthorize the Petitioner of the above-

entitled case (Re:: Lakas ng Manggagawang

Makabayan) from further representing the United

Nail Workers Union in the above-entitled case;

5. That in view further of the fact that the filing of

the above-entitled case was made over and

above the objections of the Officers and members

of the United Nail Workers Union, the latter therefore

manifest their intention to cease and desist as they

hereby ceased and desisted from further

prosecuting the above-entitled case in the interest

of a harmonius labor-management relation within

the Marcelo Enterprises;

xxx xxx xxx

Likewise, a Manifestation and Motion signed by the

Officers and members of the MFWU, headed by its

president, Benjamin Mañaol, dated October 28,

1968 and filed November 6, 1968, stated the same

allegations as the Manifestation and Motion filed by

the UNWU quoted above, except that the

disaffiliation of the MFWU from LAKAS was made

effective January 25, 1968. The Resolutions of

Disaffiliation of both MFWU and UNWU were

attached to these Manifestations.

On November 19, 1968, complainant LAKAS filed an

Opposition to these Manifestations and Motions,

materially alleging that, to wit:

1. That complainants respectfully stated that when

Charge No. 2265 was filed on December 26, 1967 in

this case, giving rise to the instant complaint, the

alleged officers of the union-movants were not yet

officers on the filing of said Charge No. 2265,...

2. That the alleged officers and members who

signed the three (3) Manifestations and Motions are

the very employees who were accepted back to

work by the respondents during the strike by the

complainants on September 4, 1967 and November

7, 1967, and the said alleged officers and members

who signed the said manifestations and motions are

still working up to the present in the establishments

of the respondents.

3. That precisely because of the acceptance back

to work of these alleged officers and members of

the union-movants, and the refusal of respondents

to accept back to work all the individual

complainants in this case mentioned in Annexes "A",

"B" and "C" of the instant complaint, inspite of the

offer to return to work by the complainants herein

made to the respondents without any conditions at

the time of the strike, as per complainants' letter of

December 13, 1967 (Exh. "B", for the complainants),

which fact precisely gave rise to the filing of this

case.

xxx xxx xxx

On January 31, 1969, after the submission of their

respective Memoranda on the motions asking for

the dismissal and withdrawal of the complaint, the

Court of Industrial Relations issued an Order

deferring the resolution of the Motions until after the

trial on the merits. To this Order, two separate

Motions for Reconsideration were filed by the

respondent companies and the movant-unions,

which motions were, however, denied by the

court en banc by its Resolution dated March 5,

1969.

After the trial on the merits of the case, and after

submission by the parties of their respective

memoranda, the respondent court rendered on

July 20, 1973 the Decision subject of these petitions.

On the motions for dismissal or withdrawal of the

complaint as prayed for by MUEWA, UNWU and

MFWU, the respondent court denied the same on

the ground that the instant case was filed by the

Lakas ng Manggagawang Makabayan for and in

behalf of the individual employees concerned and

not for the movants who were not authorized by

said individual complainants to ask for the dismissal.

On the merits of the case, while the Decision

contained opinions to the effect that the

respondent Marcelo Companies were not remiss in

their obligation to bargain, and that the September

4, 1967 strike as well as the November 7, 1967 strike,

were economic strikes, and were, therefore, illegal

because of lack of the required notices of strike

before the strikes were declared in both instances,

the Decision, nevertheless, on the opinion that the

"procedure of scheduling adopted by the

respondents was in effect a screening of those who

were to be readmitted," declared respondent

Marcelo Companies guilty of unfair labor

practice in discriminating against the employees

named in Annexes "A", "B", and "C" by refusing to

admit them back to work other strikers were

admitted back to work after the strike of November

7, 1967. The dispositive portion of the appealed

Decision states, to wit,

WHEREFORE, in view of all the foregoing,

respondents should be, as they are hereby,

declared guilty of unfair labor practice only for the

discrimination on terms or conditions of

employment as hereinbefore discussed in

connection with the return of the strikers

complainants back to work after the second strike,

and, therefore, ordered to pay the individual

complainants appearing in Annexes "A", "B" and "C"

of the Complaint, except Arlington Glodeviza, Jesus

Lim, Wilfredo Jarquio, Leonardo Sakdalan, Jose

Roque, Alfredo Cabel, and those still working, were

dismissed for cause, whose contracts expired or

who had resigned as above indicated, their back

wages from December l8, 1967but only up to June

29, 1970 when this case was submitted for

decision, without reinstatement, minus their

earnings elsewhere for the same period.

As to those who died without having been re-

employed, the back wages shall be from

December 18, 1967 up to the date of their demise,

as indicated in the body of this Decision, but not

beyond June 20, 1970, likewise less their earnings

elsewhere.

The Chief Auditing Examiner of this Court, or his duly

authorized representative, is hereby directed to

proceed to the premises of respondent companies

to examine their books, payrolls, vouchers and

other pertinent papers or documents as may be

necessary to compute the back wages due the

individual complainant in line with this Decision, and

to submit his Report thereon not later than twenty

(20) days after completion of such examination for

further disposition of the Court.

SO ORDERED.

On August 9, 1973, counsel for respondent Marcelo

Companies filed a Motion for Reconsideration of

the above Decision assigning as errors, to wit,

I. The trial court erred in not finding that

complainant Lakas ng Manggagawang

Makabayan (Lakas) has no authority to file and/or

to prosecute the Complaint against respondents in

representation of the local unions and/or individual

complainants and/or members of local unions in

their individual capacities and in not dismissing the

complaint on that ground upon motions of the

local unions concerned and/or their members.

II. The trial court erred in finding that respondent

discriminated against individual complainants who

were not readmitted to work after the November 7,

1967 strike while others were able to return to their

former employment and in holding that the

procedure adopted by respondents was in effect a

screening of those who were readmitted and in

finding respondents guilty of unfair labor practice

by reason thereof. "

On August 14, 1973, the individual complainants

who had earlier disauthorized the counsel of

record, Atty. Benjamin Pineda, from further

representing them and from amicably settling their

claims, on their own behalf filed their arguments in

support of their Motion for Reconsideration, through

a newly retained counsel, Atty. Pablo B. Castillon.

Assigned as errors are, to wit,

I. The findings of the trial court excluding some of

the employees from the aforementioned Decision

as well as from the benefits resulting therefrom is not

in accordance with law and the facts.

II. The findings of the trial court declaring the strikes

of September 4 and November 7, 1967 as illegal for

being an economic strike is not in accordance with

law and the facts adduced in this case.

III. The Honorable trial court in ordering the

reduction of the back wages, without

reinstatement, appears to have departed from the

substantial evidence rule and established

jurisprudence.

By Resolution of January 24, 1974, the Court en

banc denied the two (2) Motions for

Reconsideration filed by both the respondent

Marcelo Companies and the individual

complainants. On February 19, 1974 and on

February 20, 1974, both parties filed their respective

Notices of Appeals. Hence, these petitions.

In L-38258, the petition filed by complainant Lakas

ng Manggagawang Makabayan (LAKAS), the

following were assigned as reversible errors, to wit,

I. The respondent court erred in finding the strikes of

September 4 and November 7, 1967 to be

economic strikes and declaring the said strikes

illegal for non-compliance with the procedural

requirement of Section 14(d) of Republic Act 875,

although its illegality was condoned or waived

because of the Return-to-Work agreement on the

first strike, and the discriminatory rehiring of the

striking employees after the second strike.

II. The respondent court erred in denying

reinstatement to the striking complainants in Case

No. 4951-ULP, and limiting the computation of their

backwages from December 18, 1967 to June 29,

1970 only, despite its findings of unfair labor

practice against private respondents herein as a

consequence of the discriminatory rehiring of the

striking employees after the November 7, 1967

strike.

III. The respondent court erred in excluding the

other individual complainants, except those who

are still working, those who resigned on or before

December 18, 1967, and those whose employment

contract expired, and denying to these individual

complainants the benefits resulting therefrom.

On the other hand, in L-38260 which is the petition

filed by respondents Marcelo Enterprises, Marcelo

Tire and Rubber Corporation, Marcelo Rubber &

Latex Products, Marcelo Steel Corporation, Marcelo

Chemical & Pigment Corporation, and Polaris

Marketing Corporation, the following is the alleged

assignment of errors, to wit,

I. Respondent court erred in not finding that

respondent Lakas ng Manggagawang Makabayan

(LAKAS) had no authority to file and/or to prosecute

the complaint against the petitioners herein in

representation of the local unions and/or individual

complainants and/or members of local unions in

their individual capacities and in not dismissing the

complaint in Case No. 4951-ULP of respondent

court on that ground upon motions of the local

unions concerned and/or their officers and

members.

II. Respondent court erred in finding that petitioners

herein discriminated against individual

complainants in Case No. 4951-ULP of respondent

court who were not readmitted to work after the

November 7, 1967 strike, while others were able to

return to their former employment and in holding

that the procedure adopted by petitioners herein

was in effect a screening of those who were

readmitted and in finding petitioners herein guilty of

unfair labor practice by reasons thereof.

III. Respondent court erred in rendering judgment

ordering petitioners herein to pay individual

complainants in Case No. 4951-ULP of respondent

court backwages from December 18, 1967, to June

29, 1970, minus their earnings elsewhere, except

those who have resigned, those who have been

dismissed for cause, those whose contracts have

expired and those who are already working.

IV. Respondent court erred in holding that

petitioners herein have waived their right to declare

the strikes of September 4, 1967 and November 7,

1967, illegal.

From the aforecited assignments of errors

respectively made in both petitions before Us, We

find that there are only two basic issues posed for

Our resolution, viz: (1) whether or not the complaint

filed by LAKAS against the Marcelo Companies can

be sustained, in view of the alleged fact that its

authority to file and prosecute the same has been

squarely raised in issue at the first instance before

the respondent court; and (2) whether or not the

Marcelo Companies are guilty of unfair labor

practice, for which they should be made liable for

backwages and be obliged to reinstate the

employees appearing in Annexes "A", "B", and "C "

of the complaint, taking into consideration the

prayer of LAKAS anent the correct payment of said

backwages and the non-exclusion of some

employees from the benefits arising from the

appealed Decision.

The first issue poses a procedural question which We

shall dwell on after a resolution of the second issue,

this latter issue being of greater significance to the

correct determination of the rights- of all parties

concerned as it treats of the merits of the present

petitions.

Hence, anent the second issue of whether or not

the complaint for unfair labor practice can be

sustained, this Court rules in favor of the respondent

Marcelo Companies and consequently, the

appealed Decision is reversed. This reversal is

inevitable after this Court has pored through the

voluminuous records of the case as well as after

applying the established jurisprudence and the law

on the matters raised. We are not unmindful of the

plight of the employees in this case but We

consider it oppressive to grant their petition in G.R.

No. L38258 for not only is there no evidence which

shows that the respondent Marcelo Companies

were seeking for an opportunity to discharge these

employees for union activities, or to discriminate

against them because of such activities, but there is

affirmative evidence to establish the contrary

conclusion.

The present controversy is a three-sided conflict,

although focus has been greatly placed upon an

alleged labor dispute between complainant LAKAS

and the respondent Marcelo Companies. It would

bear emphasizing, however, that what had been

patently disregarded by the respondent industrial

court and the parties alike, is the fact that LAKAS

had never been the bargaining representative of

any and an of the local unions then existing in the

respondent Marcelo Companies.

Contrary to the pretensions of complainant LAKAS,

the respondent Marcelo Companies did not ignore

the demand for collective bargaining contained in

its letter of June 20, 1967. Neither did the

companies refuse to bargain at all. What it did was

to apprise LAKAS of the existing conflicting

demands for recognition as the bargaining

representative in the appropriate units involved,

and suggested the settlement of the issue by

means of the filing of a petition for certification

election before the Court of Industrial Relations. This

was not only the legally approved procedure but

was dictated by the fact that there was indeed a

legitimate representation issue. PSSLU, with whom

the existing CBAs were entered into, was

demanding of respondent companies to

collectively bargain with it; so was Paulino Lazaro of

MUEWA, J.C. Espinas & Associates for MACATIFU

and the MFWU, and the complainant LAKAS for

MULU which we understand is the aggrupation of

MACATIFU, MFWU and UNWU. On top of all of these,

Jose Roque of UNWU disauthorized the PSSLU from

representing his union; and similarly, Augusta

Carreon of MACATIFU itself informed management

as late as July 11, 1967 or after the demand of

LAKAS that no group representing his Union "is not

authorized and should not be entertained. "

Indeed, what We said in Philippine Association of

Free Labor Unions (PAFLU) vs. The Bureau of Labor

Relations,69 SCRA 132, applies as well to this case.

..., in a situation like this where the issue of legitimate

representation in dispute is viewed for not only by

one legitimate labor organization but two or more,

there is every equitable ground warranting the

holding of a certification election. In this way, the

issue as to who is really the true bargaining

representative of all the employees may be firmly

settled by the simple expedient of an election.

The above-cited case gives the reason for the need

of determining once and for all the true choice of

membership as to who should be their bargaining

representative, which is that, "(E)xperience teaches

us, one of the root causes of labor or industrial

disputes is the problem arising from a questionable

bargaining representative entering into CBA

concerning terms and conditions of employment. "

Respecting the issue of representation and the right

of the employer to demand reasonable proof of

majority representation on the part of the supposed

or putative bargaining agent, the commentaries in

Rothenberg on Labor Relations, pp. 42943 1, are

forceful and persuasive, thus:

It is essential to the right of a putative bargaining

agent to represent the employees that it be the

delegate of a majority of the employees and,

conversely, an employer is under duty to bargain

collectively only when the bargaining agent is

representative of the majority of the employees. A

natural consequence of these principles is that the

employer has the right to demand of the asserted

bargaining agent proof of its representation of its

employees. Having the right to demonstration of

this fact, it is not an 'unfair labor practice' for an

employer to refuse to negotiate until the asserted

bargaining agent has presented reasonable proof

of majority representation. It is necessary however,

that such demand be made in good faith and not

merely as a pretext or device for delay or evasion.

The employer's right is however to reasonable proof.

...

... Although an employer has the undoubted right

to bargain with a bargaining agent whose authority

has been established, without the requirement that

the bargaining agent be officially certified by the

National Labor Relations Board as such, if the

informally presented evidence leaves a real doubt

as to the issue, the employer has a right to demand

a certification and to refuse to negotiate until such

official certification is presented."

The clear facts of the case as hereinbefore restated

indusputably show that a legitimate representation

issue confronted the respondent Marcelo

Companies. In the face of these facts and in

conformity with the existing jurisprudence.

We hold that there existed no duty to bargain

collectively with The complainant LAKAS on the

part of said companies. And proceeding from this

basis, it follows that all acts instigated by

complainant LAKAS such as the filing of the Notice

of strike on June 13, 1967 (although later withdrawn)

and the 'two strikes of September 4, 1967 and

November 7, 1967 were calculated , designed and

intended to compel the respondent Marcelo

Companies to recognize or bargain with it

notwithstanding that it was an uncertified union, or

in the case of respondent Marcelo Tire and Rubber

Corporation, to bargain with it despite the fact that

the MUEWA of Paulino Lazaro vas already certified

as the sole bargaining agent in said respondent

company. These concerted activities executed

and carried into effect at the instigation and

motivation of LAKAS ire all illegal and violative of

the employer's basic right to bargain collectively

only with the representative supported by the

majority of its employees in each of the bargaining

units. This Court is not unaware of the present

predicament of the employees involved but much

as We sympathize with those who have been

misled and so lost their jobs through hasty, ill-

advised and precipitate moves, We rule that the

facts neither substantiate nor support the finding

that the respondent Marcelo Companies are guilty

of unfair labor practice.

There are also other facts which this Court cannot

ignore. the complaint of LAKAS charge that after

their first strike of September 4, 1967, management

and the striking employees entered into a Return-

to-Work Agreement but that it was violated by the

respondent companies who "refused to admit the

members of the three striking local unions ... and

gave reference to the casual employees." (No. 8,

Complaint). It is also alleged that the strike of

November 7, 1967 was staged "because of the

refusal of the respondents to accept some union

members ... and refusal of respondents to bargain

in good faith with complainant" (No. 9, Complaint).

We find however, that in making these charges,

complainant LAKAS lacked candor, truth and

fidelity towards the courts.

It is a fact found by the respondent court, and as

revealed by he records of the case, that the

respondent Marcelo Companies did not violate the

terms of the Return-to-Work Agreement negotiated

after the first strike. All of the strikers were admitted

back to work except four (4) who opted not to

report for work because of the administrative

investigation conducted in connection with the

acts of violence perpetrated during the said strike.

It is also evident from the records that the charge of

bargaining in bad faith imputed to the respondent

companies, is hardly credible. In fact, such charge

is valid as only against the complainant LAKAS. The

parties had a total of five (5) conferences for

purposes of collective bargaining. It is worth

considering that the first strike of September 4, 1967

was staged less than a week after the fourth CBA

conference and without any benefit of any

previous strike notice. In this connection, it must be

stated that the notice of strike filed on June 13, 1967

could not have been the strike notice for the first

strike because it was already withdrawn on July 14,

1967. Thus, from these stated facts can be seen that

the first strike was held while the parties were in the

process of negotiating. Nor can it be sustained that

the respondent Marcelo Companies bargained in

bad faith since there were proposals offered by

them, but the complainant LAKAS stood pat on its

position that all of their economic demands should

be met and that all of these demands should be

granted in all of the respondent Marcelo

Companies. The companies' refusal to accede to

the demands of LAKAS appears to be justified since

there is no showing that these companies were in

the same state of financial and economic affairs.

There is reason to believe that the first strike was

staged only for the purpose of compelling the

respondent Marcelo Companies to accede to the

inflexible demands of the complainant LAKAS. The

records further establish that after the resumption of

normal operations following the first strike and the

consequent Return-to-Work Agreement, the striking

unions led by complainant LAKAS and the

management of the respondent Marcelo

Companies resumed their bargaining negotiations.

And that on October 13, 1967, complainant LAKAS

sent the final drafts of the collective bargaining

proposals for MFWU and UNWU. The second strike of

November 7, 1967 was then staged immediately

after which strike, as before, was again lacking of a

strike notice. All of these facts show that it was

complainant LAKAS, and not the respondent

Marcelo Companies, which refused to negotiate in

the pending collective bargaining process. AR that

the facts show is that the bargaining position of

complainant LAKAS was inflexible and that it was in

line with this uncompromising attitude that the

strikes were declared, significantly after notice that

management did not or could not meet all of their

17-points demand.

Respondent court, upholding the contention of

petitioner LAKAS that after the second strike, the

respondent Marcelo Companies, despite the

strikers' unconditional offer to return to work, refused

to readmit them without "screening" which LAKAS

insists to be "discriminatory hiring of the striking

employees, " declared that although the two strikes

were illegal, being economic strikes held in violation

of the strike notice requirement, nevertheless held

the Marcelo Companies guilty of unfair labor

practice in discriminating against the complaining

employees by refusing to readmit them while other

strikers were admitted back to work. We do not

agree.

It is the settled jurisprudence that it is an unfair labor

practice for an employer not to reinstate, or refuse

re-employment of members of union who abandon

their strike and make unconditional offer to return to

work. 1 As indeed Exhibit "B" presents an

unconditional offer of the striking employees to

return to work under the same terms and conditions

of employment before the strike, the question then

confronting Us is whether or not on the part of the

respondent companies, there was refusal to

reinstate or re-employ the strikers.

We find as a fact that the respondent Marcelo

Companies did not refuse to reinstate or re-employ

the strikers, as a consequence of which We overrule

the finding of unfair labor practice against said

companies based on the erroneous conclusion )f

the respondent court. It is clear from the records

that even before the unconditional offer to return

to work contained in , Exhibit "B" was made, the

respondent Marcelo Companies had already

posted notices for the strikers to return back to work.

It is true that upon their return, the strikers were

required to fill up a form (Exhibit "49") wherein they

were to indicate the date of their availability for

work. But We are more impressed and are

persuaded to accept as true the contention of the

respondent Marcelo Companies that the

aforestated requirement was only for purposes of

proper scheduling of the start of work for each

returning striker. It must be noted that as a

consequence of the two strikes which were both

attended by widespread acts of violence and

vandalism, the businesses of the respondent

companies were completely paralyzed. It would

hardly be justiciable to demand of the respondent

companies to readmit all the returning workers in

one big force or as each demanded readmission.

There were machines that were not in operating

condition because of long disuse during the strikes.

Some of the machines needed more than one

worker to operate them so that in the absence of

the needed team of workers, the start of work by

one without his teammates would necessarily be

useless, and the company would be paying for his

time spent doing no work. Finally, We take judicial

cognizance of the fact that companies whose

businesses were completely paralyzed by major

strikes cannot resume operations at once and in the

same state or force as before the strikes.

But what strikes Us most in lending credence to

respondents' allegation that Exhibit "49" was not

meant to screen the strikers, is the fact that an of

the returning strikers who filled up the form were

scheduled for work and consequently started with

their jobs. It is only those strikers who refused or

failed to fill-up the required form, like the herein

complaining employees, who were not scheduled

for work and consequently have not been re-

employed by the respondent Marcelo Companies.

Even if there was a sincere belief on their part that

the requirement of Exhibit "49" was a ruse at

"screening" them, this fear would have been

dispelled upon notice of the fact that each and all

of their co-strikers who rued up the required form

were in fact scheduled for work and started to

work. The stoppage of their work was not, therefore,

the direct consequence of the respondent

companies' complained act, Hence, their

economic loss should not be shifted to the

employer. 2

It was never the state policy nor Our judicial

pronouncement that the employees' right to self-

organization and to engage in concerted activities

for mutual aid and protection, are absolute or be

upheld under an circumstances. Thus, in the case

of Royal Interocean Lines, et al. vs. CIR, 3 We cited

these authorities giving adequate panoply to the

rights of employer, to wit:

The protection of workers' right to self-organization

in no way interfere with employer's freedom to

enforce such rules and orders as are necessary to

proper conduct of his businesses, so long as

employer's supervision is not for the purpose of

intimidating or coercing his employees with respect

to their self-organization and representation.

(National Relations Board vs. Hudson Motor Car Co.,

C.C.A., 1942, 123 F 2d. 528). "

It is the function of the court to see that the rights of

self-organization and collective bargaining

guaranteed by the Act are amply secured to the

employee, but in its effort to prevent the prescribed

unfair labor practice, the court must be mindful of

the welfare of the honest employer (Martel Mills

Corp. vs. M.L.R.L., C.C.A., 1940,11471 F2d. 264)."

In Pagkakaisang Itinataguyod ng mga

Manggagawa sa Ang Tibay (PIMA), Eliseo Samson,

et al., vs. Ang Tibay, Inc., et al., L-22273, May 16,

1967, 20 SCRA 45, We held that the exaction, by the

employer, from the strikers returning to work, of a

promise not to destroy company property and not

to commit acts of reprisal against union members

who did not participate in the strike, cannot be

considered an unfair labor practice because it was

not intended to discourage union membership. It

was an act of a self- preservation designed to insure

peace and order in the employer's premises. It was

also held therein that what the Industrial Peace Act

regards as an unfair labor practice is the

discrimination committed by the employer in

regard to tenure of employment for the purpose of

encouraging or discouraging union membership.

In the light of the above ruling and taking the facts

and circumstances of the case before Us in relation

to the requirement by the respondent companies in

the filling up of Exhibit "49", We hold and rule that

the requirement was an act of self-preservation,

designed to effect cost-savings as well as to insure

peace and order within their premises. Accordingly,

the petition in G. R. No. L-38258 should be dismissed,

it having failed to prove, substantiate and justify the

unfair labor practice charges against the

respondent Marcelo Companies.

Now to the procedural question posed in the first

issue brought about by the respondent court's

denial of the motions to withdraw the complaint

respectively filed by MUEWA, UNWU and MFWU. In

their petition (G.R. L-38260) the respondent Marcelo

Companies maintain that the respondent court

erred in not dismissing the complaint even as it

knew fully well that the very authority of LAKAS to

represent the labor unions who had precisely

disaffiliated from the LAKAS, was open to serious

question and was being ventilated before it. On the

other hand, the respondent court rationalized the

denial of the aforestated motions to withdraw by

holding that the complaint was filed by LAKAS on

behalf of the individual employees whose names

were attached to the complaint and hence, that

the local unions who were not so authorized by

these individual employees, cannot withdraw the

said complaint. The lower court's opinion is

erroneous.

Firstly, LAKAS cannot bring any action for and in

behalf of the employees who were members of

MUEWA because, as intimated earlier in this

Decision, the said local union was never an affiliate

of LAKAS. What appears clearly from the records is

that it was Augusto Carreon and his followers who

joined LAKAS, but then Augusto Carreon was not

the recognized president of MUEWA and neither he

nor his followers can claim any legitimate

representation of MUEWA. Apparently, it is this split

faction of MUEWA, headed by Augusta Carreon,

who is being sought to be represented by LAKAS.

However, it cannot do so because the members

constituting this split faction of MUEWA were still

members of MUEWA which was on its own right a

duly registered labor union. Hence, any suit to be

brought for and in behalf of them can be made

only by MUEWA, and not LAKAS. It appearing then

that Augusta Carreon and his cohorts did not

disaffiliate from MUEWA nor signed any individual

affiliation with LAKAS, LAKAS bears no legal interest

in representing MUEWA or any of its members.

Nor will the lower court's opinion be availing with

respect to the complaining employees belonging

to UNWU and MFWU. Although it is true, as alleged

by LAKAS, that when it filed the charge on

December 26, 1967, the officers of the movant

unions were not yet then the officers thereof,

nevertheless, the moment MFWU and UNWU

separated from and disaffiliated with 'LAKAS to

again exercise its rights as independent local

unions, registered before as such, they are no

longer affiliates of LAKAS, as what transpired here.

Naturally, there would no longer be any reason or

occasion for LAKAS to continue representing them.

Notable is the fact that the members purportedly

represented by LAKAS constitute the mere minority

of the movant unions, as may be inferred from the

allegations of the movant unions as well as the

counter-allegations of LAKAS filed below. As such,

they cannot prevail or dictate upon the will of the

greater majority of the unions to which they still

belong, it appearing that they never disaffiliated

from their unions; or stated in another way, they are

bound by the action of the greater majority.4

In NARIC Workers' Union vs. CIR, 5 We ruled that, "(a)

labor union would go beyond the limits of its

legitimate purposes if it is given the unrestrained

liberty to prosecute any case even for employees

who are not members of any union at all. A suit

brought by another in representation of a real party

in interest is defective." Under the uncontroverted

facts obtaining herein, the aforestated ruling is

applicable, the only difference being that, here, a

labor federation seeks to represent members of a

registered local union never affiliated with it and

members of registered local unions which, in the

course of the proceedings before the industrial

court, disaffiliated from it.

This is not to say that the complaining employees

were without any venue for redress. Under the

aforestated considerations, the respondent court

should have directed the amendment of the

complaint by dropping LAKAS as the complainant

and allowing the suit to be further prosecuted in the

individual names of those who had grievances. A

class suit under Rule 3, Section 12 of the Rules of

Court is authorized and should suffice for the

purpose.

In fairness to the complaining employees, however,

We treated their Motion for Reconsideration of the

Decision subject of appeal as curing the defect of

the complaint as the said motion expressly

manifested their collective desire to pursue the

complaint for and in their own behalves and

disauthorizing LAKAS' counsel from further

representing them. And We have also treated their

petition before Us in the same manner, disregarding

the fact that LAKAS remained the petitioning party,

as it appears from the verification that the petition

in L38258 was for and in behalf of the complaining

employees. The merits of their petition, however, fall

short of substantiating the charge of unfair labor

practice against the respondent Marcelo

Companies. On the other hand, the appeal of the

Marcelo Companies in L-38260 must be upheld and

sustained.

WHEREFORE, upon the foregoing considerations,

the petition in L-38258 is dismissed and the petition

in L-38260 is granted. The decision of the Court of

Industrial Relations is hereby REVERSED and SET

ASIDE and a new judgment is rendered holding that

the respondent Marcelo Companies are not guilty

of unfair labor practice.

No costs.

SO ORDERED.

Makasiar (Chairman), Concepcion, Jr., Abad

Santos, De Castro and Escolin, JJ., concur.

Aquino, J., concur in the result.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-39387 June 29, 1982

PAMPANGA SUGAR DEVELOPMENT CO.,

INC., petitioner,

vs.

COURT OF INDUSTRIAL RELATIONS AND SUGAR

WORKERS ASSOCIATION, respondents.

MAKASIAR, J.:

Petitioner Pampanga Sugar Development

Company, Inc. seeks the reversal of the order

dated June 6, 1974 of respondent Court of Industrial

Relations awarding to respondent Sugar Workers

Association's (Union) counsel attorney's fees

equivalent to 20% of the judgment in CIR Case No.

4264- ULP and ordering the lower court's Examining

Division to compute the wage and fringe benefits

differentials due the 28 individual workers who did

not execute quitclaims as well as attorney's fees

corresponding to 20% of the benefits due to 53

workers who entered into agreements waiving their

rights and benefits under the decision dated

December 4, 1972 in the aforecited case; also, the

setting aside of the CIR resolution of September 3,

1974 denying petitioner's motion for reconsideration

of the questioned order (pp. 15 & 57, rec.).

For a better appreciation of this case, certain

prefatory facts must be recalled. Sometime in

February, 1956, the workers' affiliates of respondent

Union staged a strike against petitioner company.

This labor dispute was certified by the President to

the Court of Industrial Relations which was

docketed as Case No. 13-IPA. After six years, the

said Court issued an order on November 8, 1962

directing petitioner company to reinstate the

members of respondent union. On March 12, 1963

some 88 union members were thus reinstated by

petitioner. However, petitioner discriminated

against the reemployed workers with respect to

wage rates, off-season pay, cost of living

allowance, milling bonus and Christmas bonus by

depriving them of aforesaid benefits or by granting

to some members benefits lesser than those given

to members of the Pasudeco Workers Union,

another labor group in the service of petitioner. By

reason of such denial and/or grant of lower benefits

to respondent's members because of their union

affiliation and union activities, respondent filed with

the CIR a complaint dated September 10, 1964 for

unfair labor practice against petitioner which case

was docketed as Case No. 4264-ULP.

On December 4, 1972, the CIR handed down a

decision adjudging herein petitioner guilty of unfair

labor practice acts as charged and finding the

same to have been committed, and thereby

directing petitioner to cease and desist from further

committing the said unfair labor practice acts and

directing petitioner to pay wage differentials to

certain workers and fringe benefits as would be

found due and payable to them and to readmitted

seasonal and casual members of respondent union

totalling 88 with the exception of 7 workers.

In a resolution dated May 28, 1973, the CIR denied

petitioner's motion for reconsideration of aforesaid

decision filed on December 14, 1972. Petitioner

appealed the above decision and resolution to this

Court on June 15, 1973 praying in its petition for the

nullification of said decision and motion for being

contrary to law, and for the rendition of a new

judgment dismissing CIR Case No. 4264-ULP.

This Court, in its resolution of July 31, 1973, denied

the said petition for review (docketed as G.R. No. L-

36994) for lack of merit. Petitioner then moved for

reconsideration of aforesaid denial which was

denied on October 4, 1973 for lack of merit. Said

resolution denying the motion for reconsideration

thus became final and executory on October 12,

1973.

With the finality of the December 4, 1972 decision

having been settled, respondent Union filed with

the CIR a motion for computation of final judgment

and a petition for attorney's lien both dated

October 17, 1973 (pp. 47 & 50, rec.).

Petitioner company filed its answer to motion for

computation of final judgment and the petition for

attorney's lien under date of November 20, 1973 (p.

52, rec.).

The CIR, acting on the aforesaid motions of

respondent Union, issued its order of June 6, 1974

approving and granting to respondent's counsel,

Atty. Ignacio Lacsina, attorney's fees equivalent to

20% of the total amount of final judgment or

whatever recovery or settlement is made and

directing its Examining Division to compute the

wage and fringe benefits differentials due the 28

individual workers who did not waive or quitclaim

their rights established by the decision of December

4, 1972 as well as the attorney's fees equivalent to

20% of the total wage and fringe benefits

differentials due the fifty-three (53) individual

workers who executed agreements with the

company waiving and quitclaiming their rights,

benefits and privileges under the aforesaid decision

(pp. 15 & 57, rec.).

Petitioner moved for reconsideration of aforecited

order on June 26, 1974 and on July 5, 1974, the

arguments supporting said motion for

reconsideration followed (pp. 63 & 65, rec.).

Respondent Union then filed its motion to strike out

the motion for reconsideration dated July 23, 1974

(p. 72, rec.). In a resolution of September 3, 1974,

respondent lower court denied petitioner's motion

for reconsideration.

Thus, this appeal from the subject order and

resolution of the CIR.

Petitioner alleges the following assignment of errors:

1. The Court of Industrial Relations erred in awarding

attorney's fees to the union's counsel equivalent to

20% of the total amount of final judgment or

whatever recovery or settlement is made

thereunder; because, aside from being inequitable,

exorbitant, excessive and unconscionable, the

same is without legal basis.

2. The Court of Industrial Relations erred in ordering

the Chief of its examining division or his duly

authorized representative to examine the payrolls,

vouchers, books of account and other pertinent

documents of petitioner, and to compute the

wage and fringe-benefits differentials allegedly due

the members of respondent Union because such

examination and computation have become

academic.

3. The Court of Industrial Relations erred in not

denying or dismissing the two motions filed by

respondent union on October 18, 1973 praying

therein that the union's counsel be awarded

attorney's fees and that an order be issued

directing the examining division of the court to

compute the wage and fringe benefits differentials

allegedly due the members of the union under the

decision of December 4, 1972.

Respondents, however, contend that —

1. The issue of quitclaims is now res judicata;

2. The CIR finding that 81 members of respondent

union are entitled to adjudged benefits is no longer

alterable after decision has become final;

3. The CIR power to adjust unfair labor practices is

unaffected by individual settlements;

4. The rights of labor are unwaivable; quitclaims null

and void; and

5. The question regarding alleged

unreasonableness of award of attorney's fees, not

raised before Court a quo, is barred on appeal.

After a careful evaluation of the petitioners' and

respondents' pleadings, this Court, finds the

allegations of petitioner to be without merit.

On the first assignment of error, paragraph (a), the

petitioner failed to raise the issue before the trial

court. This Court notes that petitioner's answer to

the motion for computation of final judgment and

to petition for attorney's lien filed by the respondent

in the trial court did not raise the foregoing issue. It is

a well-settled doctrine in this jurisdiction that issues

not raised in the trial court may not be raised on

appeal. Otherwise, there will be no end to litigations

thus defeating the ends of justice.

Nevertheless, this Court finds the allegations to be

devoid of merit. Petitioner's contention that there is

no basis for respondent's petition for attorney's lien

filed with the trial court containing allegations

relative to attorney's fees as agreed upon between

him and his client, the complainant Sugar Workers'

Association, is untenable. The written conformity of

the President of said Sugar Workers Association on

behalf thereof confirms the existence of such an

agreement on attorney's fees and constitutes an

irrefutable evidence of such agreement. The trial

court, therefore, had sufficient evidence upon

which it based its decision. The petitioner did not

contest the allegations contained in the

respondent's petition for attorney's lien before the

trial court. This constitutes an implied admission

thereof. Moreover, it is evident from the tenor of the

trial court's order issued on June 6, 1974 that the

said court carefully evaluated the respondent's

petition for attorney's lien and even reduced the

percentage from 25 IC to 20 %.

On the first assignment of error, paragraph (b), this

Court likewise finds the same to be without merit.

This issue has already been resolved by this Court

when the petitioner filed its first petition

for certiorari (G.R. No. L- 36994) seeking nullification

of the trial court's judgment on the same issue.

Petitioner's allegations were rejected by this Court in

said case. It may not now be repeated and raised

on appeal before this Court, the same being res

judicata.

Be that as it may, the allegations of petitioner to the

effect that by reason of the quitclaims there is

nothing upon which the attorney's lien attaches, is

not valid. This Court finds the quitclaims not

valid. Firstly, said quitclaims were secured on

December 27, 1972 by petitioner after it lost its case

in the lower court when the latter promulgated its

decision on the case on December 4, 1972.

Obviously in its desire to deny what is due the sugar

workers concerned and frustrate the decision of the

lower court awarding benefits to them, it used its

moral ascendancy as employer over said workers

to secure said quitclaims. Predicated on said

quitclaims, petitioner filed a petition for certiorari

before this Court but the same was denied by the

Court on July 31, 1973 and October 4, 1973.

Petitioner now has the audacity to return before this

Court still invoking said quitclaims, which We again

reject.

Secondly, while rights may be waived, the same

must not be contrary to law, public order, public

policy, morals or good customs or prejudicial to a

third person with a right recognized by law (Art. 6,

New Civil Code). The quitclaim agreements contain

the following provisions in paragraph I 1, No. 3,

thereof:

3. Nothing herein stipulated shall be construed as

an admission and/or recognition by the Party of The

Second Part of its failure refusal and/or omission as

employer, to faithfully comply with the pertinent

laws, rules and regulations and/or agreements, nor

its liability therefor and thereunder.

Needless to state, the foregoing provisions are

contrary to law, It exempts the petitioner from any

legal liability. The above- quoted provision renders

the quitclaim agreements void ab initio in their

entirety since they obligated the workers

concerned to forego their benefits, while at the

same time, exempted the petitioner from any

liability that it may choose to reject. This runs

counter to Article 22 of the New Civil Code which

provides that no one shall be unjustly enriched at

the expense of another.

Thirdly, the alleged quitclaim agreements are

contrary to public policy. Once a civil action is filed

in court, the cause of action may not be the

subject of compromise unless the same is by leave

of the court concerned. Otherwise, this will render

the entire judicial system irrelevant to the prejudice

of the national interest. Parties to litigations cannot

be allowed to trifle with the judicial system by

coming to court and later on agreeing to a

compromise without the knowledge and approval

of the court. This converts the judiciary into a mere

tool of party-litigants who act according to their

whims and caprices. This is more so when the court

has already rendered its decision on the issues

submitted.

In the case at bar, the lower court has already

rendered a decision on the issues presented before

the alleged quitclaims agreements were made. The

quitclaim agreements were secured by petitioner

while it filed a petition for certiorari before this Court

for a review of the lower court's decision. The

quiclaim agreements taken together with the

petitioner's petition for certiorari of the trial court's

decision clearly and unmistakably shows the bad

faith of the petitioner and its outright refusal to

comply with its legal obligations. And now it has the

temerity to attempt to use this Court as its

instrument for the purpose.

This Court rejects the contention of petitioner to the

effect that the lien of an attorney on the judgment

or decree for the payment of money and the

preference thereof which he has secured in favor

of his client takes legal effect only from and after,

but not before notice of said lien has been entered

in the record and served on the adverse party,

citing the cases of Menzi and Co. vs. Bastida (63

Phil. 16) and Macondray & Co. vs. Jose (66 Phil. 590)

in support thereof.

This Court finds the petitioner's contentions and

citations applicable only when the case has

already been decided with finality. In the case at

bar, the original case was decided with finality only

after this Court denied the petitioner's motion for

reconsideration of this Court's denial of its petition

for certiorari on the lower court's decision.

This Court is appalled by the attempt of petitioner

to mislead it by alleging that the lower court

recognized the validity and effectivity of the 53

individual agreements when it declared allegedly

that "rights may be waived. " The records show that

the lower court qualified its statement to the effect

that the waiver must not be contrary to law, public

order, public policy, morals or good customs, or

prejudicial to a third person with a right recognized

by law citing Article 6 of the New Civil Code. This

attempt by petitioner casts a serious doubt on the

integrity and good faith not only of the petitioner

but also of its counsel.

This Court rejects the allegation of petitioner to the

effect that the 53 agreements gave substance to

the policy of the Industrial Peace Act of

encouraging the parties to make all reasonable

efforts to settle their differences by mutual

agreement, citing the case of Filomena Dionela, et

al. vs. CIR, et al. (L-18334, August 31, 1963).

Petitioner's contention and the case cited in

support thereof apply only where there is good faith

on the part of the party litigants. In the case at bar,

petitioner acted with evident bad faith and malice.

Petitioner secured the 53 quitclaim agreements

individually with the 53 sugar workers without the

intervention of respondent's lawyer who was

representing them before the lower court. This

subterfuge is tantamount to a sabotage of the

interest of respondent association. Needless to say,

the means employed by petitioner in dealing with

the workers individually, instead of collectively

through respondent and its counsel, violates good

morals as they undermine the unity of respondent

union and fuels industrial disputes, contrary to the

declared policy in the Industrial Peace Act.

This Court likewise rejects petitioner's allegation that

the 53 quitclaim agreements were in the nature of

a compromise citing the case of Republic vs.

Estenzo, et al., (L-24656, September 25, 1968, 25

SCRA 122) and Articles 2028 and 2040 of the New

Civil Code.

Petitioner's allegations and citations apply only to

compromises between the party-litigants done in

good faith. In the case at bar, there was no

compromise between the petitioner and the

respondent Sugar Workers Association. In respect of

the 53 quitclaims, these are not compromise

agreements between the petitioner and

respondent union. They are separate documents of

renunciation of individual rights. Compromise

involves the mutual renunciation of rights by both

parties on a parity basis. The quitclaims, however,

bind the workers to renounce their rights while the

petitioner not only does not renounce anything but

also acquires exemption from any legal liability in

connection therewith.

On the First Assignment of Error, Paragraph (c), the

petitioner anchors his allegations on the technical

procedural requirements of Section 37, Rule 138 of

the New Rules of Court. This Court, however, finds

petitioner's allegation without merit. Said provision

of the Rules of Court is meant to protect the interest

of an attorney's client and the adverse party by

seeing to it that they are given the opportunity to

contest the creation of the attorney's lien. It will be

noted from the records that the client Sugar

Workers Union was not only notified but also affixed

its conformity to the respondents' motion for

attorney's lien. With respect to the adverse party,

the petitioner in this case, said adverse party's

interest was amply protected by the lower court

when the latter admitted petitioner's answer to

respondent's motion for computation of final

judgment and to respondent's counsel's petition for

attorney's lien. Petitioner did not raise the aforesaid

technicality in its answer before the lower court. It

cannot now raise it for the first time on appeal.

On the First Assignment of Error, Paragraph (d), this

Court finds petitioner's allegations to the effect that

the attorney's fees awarded are inequitable,

exorbitant, excessive and unconscionable, citing in

the process the case of Meralco Workers' Union vs.

Gaerlan (32 SCRA 419), completely without basis

nor merit.

Again, petitioner did not raise this issue in the lower

court. It cannot now raise said issue for the first time

on appeal before this Court. Nevertheless,

petitioner has failed to prove any of its allegations.

Hence, this Court finds the same worthless. The

Meralco case does not apply in this case for the

reason that the facts and circusmtances are

entirely different.

On the Second Assignment of Error, this Court finds

petitioner's allegation to the effect that the lower

court erred in ordering the computation of

judgment on the ground that by reason of the

quitclaim agreements the computation of

judgment has become academic, to be without

merit and grossly inane.

The allegations of petitioner are premised on its

previous allegations regarding the quitclaims. This

Court has earlier stated that the quitclaim

agreements are void ab initio. The lower court was

correct in directing the computation of judgment,

there being a basis therefor.

On the Third Assignment of Error, this Court likewise

finds petitioner's allegations which are based on its

allegations in support of the first and second

assignments of errors, without merit, as heretofore

discussed.

WHEREFORE, THE PETITION IS HEREBY DISMISSED AND

RESPONDENT CIR (NOW THE NLRC) IS HEREBY

DIRECTED TO IMPLEMENT ITS ORDER DATED JUNE

6,1974.

COSTS AGAINST PETITIONER.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 76988 January 31, 1989

GENERAL RUBBER AND FOOTWEAR

CORPORATION, petitioner,

vs.

THE HON. FRANKLIN DRILON IN HIS CAPACITY AS THE

MINISTER OF LABOR & EMPLOYMENT and THE

GENERAL RUBBER WORKERS' UNION-

NATU, respondents.

Paez & Pascual Law Office for petitioners.

The Solicitor General for public respondent.

Marcelino Lontok, Jr. for private respondent.

R E S O L U T I O N

FELICIANO, J.:

The present petition involves the question of

whether or not union members who did not ratify a

waiver of accrued wage differentials are bound by

the ratification made by a majority of the union

members.

On 26 December 1984, Wage Order No. 6 was

issued, increasing the statutory minimum wage rate

(by P2.00) and the mandatory cost of living

allowance (by P3.00 for non-agricultural workers) in

the private sector, to take effect on 1 November

1984, Petitioner General Rubber and Footwear

Corporation applied to the National Wages Council

("Council") for exemption from the provisions of

Wage Order No. 6. The Council, in an Order dated

4 March 1985, denied petitioner's application,

stating in part that:

[Y]ou are hereby ordered to pay your covered

employees the daily increase in statutory minimum

wage rate of P 2.00 and living allowance of P3.00

effective November 1, 1984. ...

This decision is final. 1 (Emphasis supplied)

Petitioner filed a Motion for Reconsideration of this

Order on 27 May 1985.

On 25 May 1985, some members of respondent

General Rubber Workers' Union-NATU, led by one

Leopoldo Sto. Domingo, declared a strike against

petitioner. 2 Three (3) days later, on 28 May 1985,

petitioner and Sto. Domingo, the latter purporting

to represent the striking workers, entered into a

Return-to-Work Agreement ("Agreement"), Article 4

of which provided:

4. The COMPANY agrees to implement in full Wage

Order No. 6 effective May 30, 1985, and agrees to

withdraw the Motion for Reconsideration which it

filed with the National Wages Council in connection

with the Application for Exemption. In

consideration, the UNION, its officers and members,

agrees not to demand or ask from the COMPANY

the corresponding differential pay from November

1, 1984 to May 29 1985 arising out of the non-

compliance of said wage order during the said

period.3 (Emphasis supplied)

This agreement was subsequently ratified on 30 July

1985 in a document entitled "Sama-samang

Kapasyahan sa Pagpapatibay ng Return-to-Work

Agreement" 4 by some two hundred and sixty-eight

(268) members of respondent union, each member

signing individually the instrument of ratification.

Before the ratification of the Agreement, petitioner

filed, on 5 June 1985, a Motion with the Council

withdrawing its pending Motion for Reconsideration

of the Council's Order of 4 March 1985. By a letter

dated 13 June 1985, the Council allowed the

withdrawal of petitioner's Motion for

Reconsideration, which letter in part stated:

In view of your compliance with Wage Order No. 6

effective May 30, 1985 pursuant to the Return to

Work Agreement ... , this Council interposes no

objection to your Motion to Withdraw ... 5 (Emphasis

supplied)

Meanwhile, there were some one hundred (100)

members of the union who were unhappy over the

Agreement, who took the view that the Council's

Order of 4 March 1985 bad become final and

executory upon the withdrawal of petitioner's

Motion for Reconsideration and who would not sign

the instrument ratifying the Agreement. On 10 July

1985, these minority union members with

respondent union acting on their behalf, applied for

a writ of execution of the Council's Order. 6

Petitioner opposed the Motion for a writ of

execution, contending that the Council's approval

of its deferred compliance with the implementation

of the Wage Order, 7 together with the majority

ratification of the Agreement by the individual

workers, 8 bound the non-ratifying union members

represented by respondent union.

Respondent union countered that the Agreement

— despite the majority ratification — was not

binding on the union members who had not

consented thereto, upon the ground that

ratification or non-ratification of the Agreement,

involving as it did money claims, was a personal

right under the doctrine of "Kaisahan ng

Manggagawa sa La Campana v. Honorable Judge

Ulpiano Sarmiento and La Campana." 9

Finding for the Union members represented by

respondent union, the then Ministry (now

Department) of Labor and Employment, in an order

dated 20 September 1985 issued by National

Capital Region Director Severo M. Pucan, directed

the issuance of a writ of execution and required

petitioner to pay the minority members of

respondent union their claims for differential pay

under Wage Order No. 6, which totalled

P90,090.00. 10

Petitioner then moved to quash the writ of

execution upon the ground that the Council's order

could not be the subject of a writ of execution,

having been superseded by the Agreement. 11 In

another Order dated 15 January 1986. Director

Pucan, reversed his previous order and sustained

petitioner's contention that the minority union

members represented by respondent union were

bound by the majority ratification, holding that the

Council's 20 September 1985 Order sought to be

enforced by writ of execution should not have

been issued. 12

Respondent union filed a Motion for

Reconsideration, which was treated as an appeal

to the Minister of Labor. In a decision dated 19

December 1986, the Minister of Labor set aside the

appealed Order of Director Pucan. The Minister's

decision held that:

It is undisputed that the 100 numbers did not sign

and ratify the Return-to-Work Agreement and

therefore they cannot be bound by the waiver of

benefits therein. This, in essence, is the ruling of the

High Tribunal in the La Campana case.

Accordingly, the benefits under Wage Order No. 6

due them by virtue of the final and executory Order

of the National Wages Council dated March 4,

1985 subsists in their favor and can be subject for

execution.

xxx xxx xxx

The writ of execution dated September 20, 1985 ...

was clearly based on the final Order of the National

Wages Council sought to be enforced in a Motion

for Execution filed by the union. While the Return-to-

Work Agreement was mentioned in the writ, the

respondent allegedly failing 'to comply with the

above-stated Agreement which had become final

and executory,' we find the Agreement indeed not

the basis for the issuance of the writ.

WHEREFORE, the Order of the Director dated

January 15, 1986 is hereby set aside. Let a writ of

execution be issued immediately to enforce the

payment of the differential pay under Wage Order

No. 6 from November 1, 1984 to May 29, 1985 of the

100 workers who did not sign any waiver, in

compliance with the final Order of the National

Wages Council. The entire record is hereby

remanded to the Regional Director, National

Capital Region for this purpose.

SO ORDERED . 13 (Emphasis supplied)

Not pleased with the adverse decision of the

Minister, petitioner filed the instant Petition

for Certiorari.

Petitioner argues once again that the National

Wages Council's Order of 4 March 1985 did not

become final and executory because it had been

superseded by the Return-to-Work Agreement

signed by petitioner corporation and the union. At

the same time, petitioner also argues that the

Return-to-Work Agreement could not be enforced

by a writ of execution, because it was a

contractual document and not the final and

executory award of a public official or agency.

Petitioner's contention is more clever than

substantial. The core issue is whether or not Article 4

of the Return-to-Work Agreement quoted above,

could be deemed as binding upon all members of

the union, without regard to whether such members

had or had not in fact individually signed and

ratified such Agreement. Article 4 of that

Agreement provided for, apparently, a quid pro

quo arrangement: petitioner agreed to implement

in full Wage Order No. 6 starting 30 May 1985 (and

not 1 November 1984, as provided by the terms of

Wage Order No. 6) and to withdraw its previously

filed Motion for Reconsideration with the National

Wages Council; in turn, the union and its members

would refrain from requiring the company to pay

the differential pay (increase in pay) due under

Wage Order No. 6 corresponding to the preceding

seven-month period from 1 November 1984 to 29

May 1985.

Thus, Kaisahan ng Mangagawa sa La Campana v.

Sarmiento, (supra) is practically on all fours with the

instant case. In La Campana, what was at stake

was the validity of a compromise agreement

entered into between the union and the company.

In that compromise agreement, the union

undertook to dismiss and withdraw the case it had

filed with the then Court of Industrial Relations, and

waived its right to execute any final judgment

rendered in that case. The CIR had in that case,

rendered a judgment directing reinstatement of

dismissed workers and payment of ten (10) years

backwages. The Secretary of Labor held that that

compromise agreement was void for lack of

ratification by the individual members of the union.

The Supreme Court upheld the decision of the

Secretary of Labor, stating among other things that:

Generally, a judgment on a compromise

agreement puts an end to a litigation and is

immediately executory. However, the Rules [of

Court] require a special authority before an

attorney can compromise the litigation of [his]

clients. The authority to compromise cannot lightly

be presumed and should be duly established by

evidence. (Esso Philippine, Inc. v. MME, 75 SCRA 91).

As aptly held by the Secretary of Labor, the records

are bereft of showing that the individual members

consented to the said agreement. Now were the

members informed of the filing of the civil case

before the Court of First Instance. If the parties to

said agreement acted in good faith, why did they

not furnish the Office of the president with a copy

of the agreement when they knew all the while that

the labor case was then pending appeal therein?

Undoubtedly, the compromise agreement was

executed to the prejudice of the complainants who

never consented thereto, hence, it is null and

void. The judgment based on such agreement does

not bind the individual members or complainants

who are not parties thereto nor signatories therein.

Money claims due to laborers cannot be the object

of settlement or compromise effected by a union or

counsel without the specific individual consent of

each laborer concerned. The beneficiaries are the

individual complainants themselves. The union to

which they belong can only assist them but cannot

decide for them. Awards in favor of laborers after

long years of litigation must be attended to with

mutual openness and in the best of faith. (Danao

Development Corp. v. NLRC, 81 SCRA 487-505).

Only thus can we really give meaning to the

constitutional mandate of giving laborers maximum

protection and security. It is about time that the

judgment in Case No. 584-V(7) be fully

implemented considering the unreasonable delay

in the satisfaction thereof. This unfortunate incident

may only weaken the workingmen's faith in the

judiciary's capacity to give them justice when

due. 14

xxx xxx xxx

(Emphasis supplied)

In the instant case, there is no dispute that private

respondents had not ratified the Return-to-Work

Agreement. It follows, and we so hold, that private

respondents cannot be held bound by the Return-

to-Work Agreement. The waiver of money claims,

which in this case were accrued money claims, by

workers and employees must be regarded as a

personal right, that is, a right that must be personally

exercised. For a waiver thereof to be legally

effective, the individual consent or ratification of

the workers or employees involved must be shown.

Neither the officers nor the majority of the union

had any authority to waive the accrued rights

pertaining to the dissenting minority members, even

under a collective bargaining agreement which

provided for a "union shop." The same

considerations of public policy which impelled the

Court to reach the conclusion it did in La

Campana, are equally compelling in the present

case. The members of the union need the

protective shield of this doctrine not only vis-a-

vis their employer but also, at times, vis-a-vis the

management of their own union, and at other times

even against their own imprudence or

impecuniousness.

It should perhaps be made clear that the Court is

not here saying that accrued money claims

can never be effectively waived by workers and

employees. What the Court is saying is that, in the

present case, the private respondents never

purported to waive their claims to accrued

differential pay. Assuming that private respondents

had actually and individually purported to waive

such claims, a second question would then have

arisen: whether such waiver could be given legal

effect or whether, on the contrary, it was violative

of public policy. 15 Fortunately, we do not have to

address this second question here.

Since Article 4 of the Return-to-Work Agreement

was not enforceable against the non-consenting

union members, the Order of the National Wages

Council dated 4 March 1985 requiring petitioner to

comply with Wage Order No. 6 from 1 November

1984 onward must be regarded as having become

final and executory insofar as the non-consenting

union members were concerned. Enforcement by

writ of execution of that Order was, therefore,

proper. It follows further that the decision of 19

December 1986 of the respondent Minister of Labor,

far from constituting a grave abuse of discretion or

an act without or in excess of jurisdiction, was fully in

accordance with law as laid down in La Campana

and here reiterated.

WHEREFORE, the Court Resolved to DISMISS the

Petition for certiorari for lack of merit. Costs against

petitioner.

Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ.,

concur.

THIRD DIVISION

[G.R. No. 146073. January 13, 2003]

JERRY E. ACEDERA, ANTONIO PARILLA, AND OTHERS

LISTED IN ANNEX “A,”[1] petitioners-appellants, vs.

INTERNATIONAL CONTAINER TERMINAL SERVICES,

INC. (ICTSI), NATIONAL LABOR RELATIONS

COMMISSION and HON. COURT OF

APPEALS, respondents-appellees.

D E C I S I O N

CARPIO-MORALES, J.:

For consideration is the petition for review on

certiorari assailing the decision of the Court of

Appeals affirming that of the National Labor

Relations Commission (NLRC) which affirmed the

decision of the Labor Arbiter denying herein

petitioners-appellants’ Complaint-in-Intervention

with Motion for Intervention.

The antecedent facts are as follows:

Petitioners-appellants Jerry Acedera, et al. are

employees of herein private respondent

International Container Terminal Services, Inc.

(ICTSI) and are officers/members of Associated Port

Checkers & Workers Union-International Container

Terminal Services, Inc. Local Chapter (APCWU-

ICTSI), a labor organization duly registered as a

local affiliate of the Associated Port Checkers &

Workers Union (APCWU).

When ICTSI started its operations in 1988, it

determined the rate of pay of its employees by

using 304 days, the number of days of work of the

employees in a year, as divisor.[2]

On September 28, 1990, ICTSI entered into its first

Collective Bargaining Agreement (CBA) with

APCWU with a term of five years effective until

September 28, 1995.[3] The CBA was renegotiated

and thereafter renewed through a second CBA

that took effect on September 29, 1995, effective

for another five years.[4] Both CBAs contained an

identically-worded provision on hours and days of

work reading:

Article IX

Regular Hours of Work and Days of Labor

Section 1. The regular working days in a week shall

be five (5) days on any day from Monday to

Sunday, as may be scheduled by the COMPANY,

upon seven (7) days prior notice unless any of this

day is declared a special holiday.[5](Underscoring

omitted)

In accordance with the above-quoted provision of

the CBA, the employees’ work week was reduced

to five days or a total of 250 days a year. ICTSI,

however, continued using the 304-day divisor in

computing the wages of the employees.[6]

On November 10, 1990, the Regional Tripartite

Wage and Productivity Board (RTWPB) in the

National Capital Region decreed a P17.00 daily

wage increase for all workers and employees

receiving P125.00 per day or lower in the National

Capital Region.[7] The then president of APCWU,

together with some union members, thus requested

the ICTSI’s Human Resource Department/Personnel

Manager to compute the actual monthly increase

in the employees’ wages by multiplying the RTWPB

mandated increase by 365 days and dividing the

product by 12 months.[8]

Heeding the proposal and following the

implementation of the new wage order, ICTSI

stopped using 304 days as divisor and started using

365 days in determining the daily wage of its

employees and other consequential

compensation, even if the employees’ work week

consisted of only five days as agreed upon in the

CBA.[9]

In early 1997, ICTSI went on a retrenchment

program and laid off its on-call employees.[10] This

prompted the APCWU-ICTSI to file a notice of strike

which included as cause of action not only the

retrenchment of the employees but also ICTSI’s use

of 365 days as divisor in the computation of

wages.[11] The dispute respecting the retrenchment

was resolved by a compromise settlement[12] while

that respecting the computation of wages was

referred to the Labor Arbiter.[13]

On February 26, 1997, APCWU, on behalf of its

members and other employees similarly situated,

filed with the Labor Arbiter a complaint against

ICTSI which was dismissed for APCWU’s failure to file

its position paper.[14] Upon the demand of herein

petitioners-appellants, APCWU filed a motion to

revive the case which was granted. APCWU

thereupon filed its position paper on August 22,

1997.[15]

On December 8, 1997, petitioners-appellants filed

with the Labor Arbiter a Complaint-in-Intervention

with Motion to Intervene.[16] In the petition at bar,

they justified their move to intervene in this wise:

[S]hould the union succeed in prosecuting the case

and in getting a favorable reward it is actually they

that would benefit from the decision. On the other

hand, should the union fail to prove its case, or to

prosecute the case diligently, the individual workers

or members of the union would suffer great and

immeasurable loss. … [t]hey wanted to insure by

their intervention that the case would thereafter be

prosecuted with all due diligence and would not

again be dismissed for lack of interest to prosecute

on the part of the union.[17]

The Labor Arbiter rendered a decision, the

dispositive portion of which reads:

WHEREFORE, decision is hereby rendered declaring

that the correct divisor in computing the daily

wage and other labor standard benefits of the

employees of respondent ICTSI who are members

of complainant Union as well as the other

employees similarly situated is two hundred fifty

(250) days such that said respondent is hereby

ordered to pay the employees concerned the

differentials representing the underpayment of said

salaries and other benefits reckoned three (3) years

back from February 26, 1997, the date of filing of

this complaint or computed from February 27 1994

until paid, but for purposes of appeal, the salary

differentials are temporarily computed for one year

in the amount of Four Hundred Sixty Eight Thousand

Forty Pesos (P468,040.00).[18]

In the same decision, the Labor Arbiter denied

petitioners-appellants’ Complaint-in-Intervention

with Motion for Intervention upon a finding that

they are already well represented by APCWU.[19]

On appeal, the NLRC reversed the decision of the

Labor Arbiter and dismissed APCWU’s complaint for

lack of merit.[20] The denial of petitioners-appellants’

intervention was, however, affirmed.[21]

Unsatisfied with the decision of the NLRC, APCWU

filed a petition for certiorari with the Court of

Appeals while petitioners-appellants filed theirs with

this Court which referred the petition[22] to the Court

of Appeals.

The Court of Appeals dismissed APCWU’s petition

on the following grounds: failure to allege when its

motion for reconsideration of the NLRC decision

was filed, failure to attach the necessary

appendices to the petition, and failure to file its

motion for extension to file its petition within the

reglementary period.[23]

As for petitioners-appellants’ petition for certiorari, it

was dismissed by the Court of Appeals in this wise:

It is clear from the records that herein petitioners,

claiming to be employees of respondent ICTSI,

are already well represented by its employees

union, APCWU, in the petition before this Court (CA-

G.R. SP. No. 53266) although the same has been

dismissed. The present petition is, therefore a

superfluity that deserves to be

dismissed. Furthermore, only Acedera signed the

Certificate of non-forum shopping. On this score

alone, this petition should likewise be dismissed. We

find that the same has no merit considering that

herein petitioners have not presented any

meritorious argument that would justify the reversal

of the Decision of the NLRC.

Article IX of the CBA provides:

REGULAR HOURS OF WORK AND DAYS OF LABOR

“Section 1. The regular working days in a week shall

be five (5) days on any day from Monday to

Sunday, as may be scheduled by the COMPANY,

upon seven (7) days prior notice unless any of this

day is declared a special holiday.”

This provision categorically states the required

number of working days an employee is expected

to work for a week. It does not, however, indicate

the manner in which an employee’s salary is to be

computed. In fact, nothing in the CBA makes any

referral to any divisor which should be the basis for

determining the salary. The NLRC, therefore,

correctly ruled that” xxx the absence of any express

or specific provision in the CBA that 250 days should

be used as divisor altogether makes the position of

the Union untenable.”

x x x

Considering that herein petitioners themselves

requested that 365 days be used as the divisor in

computing their wage increase and later did not

raise or object to the same during the negotiations

of the new CBA, they are clearly estopped to now

complain of such computation only because they

no longer benefit from it. Indeed, the 365 divisor for

the past seven (7) years has already become

practice and law between the company and its

employees.[24](Emphasis supplied)

x x x

Hence, the present petition of petitioners-

appellants who fault the Court of Appeals as

follows:

I

. . . IN REJECTING THE CBA OF THE PARTIES AS THE

SOURCE OF THE DIVISOR TO DETERMINE THE

WORKERS’ DAILY RATE TOTALLY DISREGARDED THE

APPLICABLE LANDMARK DECISIONS OF THE

HONORABLE SUPREME COURT ON THE MATTER.

II

. . . [IN] DISREGARD[ING] APPLICABLE DECISIONS OF

THIS HONORABLE COURT WHEN IT RULED THAT THE

PETITIONERS-APPELLANTS ARE ALREADY IN ESTOPPEL.

III

. . . IN RULING THAT THE PETITIONERS-APPELLANTS

HAVE NO LEGAL RIGHT TO INTERVENE IN AND

PURSUE THIS CASE AND THAT THEIR INTERVENTION IS

A SUPERFLUITY.

IV

. . . IN HOLDING, ALTHOUGH MERELY AS AN OBITER

DICTUM, THAT ONLY PETITIONER JERRY ACEDERA

SIGNED THE CERTIFICATE OF NON-FORUM

SHOPPING.[25]

The third assigned error respecting petitioners-

appellants’ right to intervene shall first be passed

upon, it being determinative of their right to raise

the other assigned errors.

Petitioners-appellants anchor their right to intervene

on Rule 19 of the 1997 Rules of Civil Procedure,

Section 1 of which reads:

Section 1. Who may intervene.- A person who has

legal interest in the matter in litigation, or in the

success of either of the parties, or an interest

against both, or is so situated to be adversely

affected by a distribution or other disposition of

property in the custody of the court or of an officer

thereof may, with leave of court, be allowed to

intervene in the action. The court shall consider

whether or not the intervention will unduly delay or

prejudice the adjudication of the rights of the

original parties, and whether or not the intervenor’s

right may be fully protected in a separate

proceeding.

They stress that they have complied with the

requisites for intervention because (1) they are the

ones who stand to gain or lose by the direct legal

operation and effect of any judgment that may be

rendered in this case, (2) no undue delay or

prejudice would result from their intervention since

their Complaint-in-Intervention with Motion

for Intervention was filed while the Labor Arbiter

was still hearing the case and before any decision

thereon was rendered, and (3) it was not possible

for them to file a separate case as they would be

guilty of forum shopping because the only forum

available for them was the Labor Arbiter.[26]

Petitioners-appellants, however, failed to consider,

in addition to the rule on intervention, the rule on

representation, thusly:

Sec. 3. Representatives as parties.- Where the

action is allowed to be prosecuted or defended by

a representative or someone acting in a fiduciary

capacity, the beneficiary shall be included in the

title of the case and shall be deemed to be the real

party in interest. A representative may be a trustee

of an express trust, a guardian, an executor or

administrator, or a party authorized by law or these

Rules. . . [27] (Emphasis supplied)

A labor union is one such party authorized to

represent its members under Article 242(a) of the

Labor Code which provides that a union may act

as the representative of its members for the purpose

of collective bargaining. This authority includes the

power to represent its members for the purpose of

enforcing the provisions of the CBA. That APCWU

acted in a representative capacity “for and in

behalf of its Union members and other employees

similarly situated,” the title of the case filed by it at

the Labor Arbiter’s Office so expressly states.

While a party acting in a representative capacity,

such as a union, may be permitted to intervene in a

case, ordinarily, a person whose interests are

already represented will not be permitted to do the

same[28]except when there is a suggestion of fraud

or collusion or that the representative will not act in

good faith for the protection of all interests

represented by him.[29]

Petitioners-appellants cite the dismissal of the case

filed by ICTSI, first by the Labor Arbiter, and later by

the Court of Appeals.[30] The dismissal of the case

does not, however, by itself show the existence of

fraud or collusion or a lack of good faith on the part

of APCWU. There must be clear and convincing

evidence of fraud or collusion or lack of good faith

independently of the dismissal. This, petitioners-

appellants failed to proffer.

Petitioners-appellants likewise express their fear that

APCWU would not prosecute the case diligently

because of its “sweetheart relationship” with

ICTSI.[31] There is nothing on record, however, to

support this alleged relationship which allegation

surfaces as a mere afterthought because it was

never raised early on. It was raised only in

petitioners-appellants’ reply to ICTSI’s comment in

the petition at bar, the last pleading submitted to

this Court, which was filed on June 20, 2001 or more

than 42 months after petitioners-appellants filed

their Complaint-in-Intervention with Motion to

Intervene with the Labor Arbiter.

To reiterate, for a member of a class to be

permitted to intervene in a representative action,

fraud or collusion or lack of good faith on the part

of the representative must be proven. It must be

based on facts borne on record. Mere assertions, as

what petitioners-appellants proffer, do not suffice.

The foregoing discussion leaves it unnecessary to

discuss the other assigned errors.

WHEREFORE, the present petition is hereby DENIED.

SO ORDERED.

Puno, J., (Chairman), Panganiban, Sandoval-

Gutierrez, and Corona, JJ., concur.

SECOND DIVISION

[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 Order[1] 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 period[2] 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

letter[3] containing its proposals[4]covering political

provisions[5] 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.[13] Even 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

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-proposal[20] 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 same[21]

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 Unionand the Bank failed

to agree on the remaining economic provisions of

the CBA. The Union declared a deadlock[25] 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

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. TheUnion 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:

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

theUnion’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 theUnion’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.

“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 Service[36] 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 labor organizations, 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.[43] Article

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.

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 onAugust 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

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 counter-proposals 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 counter-proposal, 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:

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

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 that 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.

Puno, (Chairman), Quisumbing, Austria-

Martinez, and Tinga, JJ., concur.

FIRST DIVISION

[G.R. No. 121241. December 10, 1997]

FURUSAWA RUBBER PHILIPPINES,

INC., petitioner, vs. HON. SECRETARY OF LABOR AND

EMPLOYMENT and FURUSAWA EMPLOYEES UNION-

INDEPENDENT (FEU-IND), respondents.

D E C I S I O N

BELLOSILLO, J.:

This petition for certiorari assails the resolution of

respondent Secretary of Labor and Employment

dated 28 June 1995 which affirmed the order of the

Med-Arbiter dated 3 April 1995 allowing a

certification election to be conducted among the

regular rank and file employees of petitioner

Furusawa Rubber Philippines, Inc., (FURUSAWA). The

subsequent order of the Secretary of Labor dated

26 July 1995 denying petitioner’s motion for

reconsideration is likewise challenged herein.

On 8 March 1995 private respondent Furusawa

Employees Union - Independent (FEU-IND) filed a

petition for certification

election among the rank and file employees

of Furusawa Rubber Philippines, Inc., a domestic

corporation engaged in the manufacture of rubber

and other related products for export. On 3 April

1995 petitioner herein moved to dismiss the petition

for certification election on the ground that

respondent FEU-IND was not a legitimate labor

organization not having complied with all the

requisites of law.

The main issue presented by petitioner was whether

a photocopy of its certificate of registration

submitted by the petitioning union which has not

been duly authenticated and not supported by

any other documentary evidence constitutes

conclusive proof that FEU-IND has acquired

legitimate status and therefore entitled to pursue its

petition for certification election.

On 3 April 1995 the Med-Arbiter ruled in the

affirmative thus -

It appearing from the records of the case that the

petitioner union is a legitimate labor organization as

evidenced by the attached xerox copy of the

certificate of registration, the instant petition

therefore is hereby given due course.

WHEREFORE, premises considered, it is hereby

ordered that a certification election be conducted

among the regular rank and file employees of

Furusawa Rubber Philippines Corporation. The

eligible voters shall be based on the Company

payroll three (3) months prior to the filing of the

petition. The representation Officer of this Office is

hereby directed to conduct the usual pre-election

conference.

The choices in the certification election are as

follows: (1) Furusawa Employees Union -

Independent (FEU-IND); and, (2) No union.[1]

FURUSAWA appealed to the Secretary of Labor but

the latter affirmed the order of the Med-Arbiter. On

13 July 1995 FURUSAWA moved for a

reconsideration but the motion was again denied.

The main contention of petitioner is that FEU-IND is

not a legitimate labor organization so that, under

the law, it could not file a petition for certification

election. The basis of this argument is the failure of

the petitioning union to submit an original copy of

its certificate of registration.

We cannot sustain petitioner. We agree with

respondent Secretary of Labor and Employment

that FEU-IND is a legitimate labor organization. As

such, it enjoys all the rights and privileges

recognized by law.[2] The fact that FEU-IND has

been issued Certificate of Registration No. RO-400-

9502-UR-003 by Regional Office No. 14 of the

Department of Labor and Employment (DOLE) is

sufficient proof of its legitimacy. The presentation of

the xerox copy of the certificate of registration to

support its claim of being a duly registered labor

organization instead of the submission of the

original certificate is not a fatal defect and does

not in any way affect its legitimate status as a labor

organization conferred by its registration with

DOLE. The issuance of the certificate of registration

evidently shows that FEU-IND has complied with the

requirements of Art. 234 of the Labor Code. The

requirements for registration being mandatory, they

are complied with before any labor organization,

association or group of unions or workers acquires

legal personality and be entitled to the rights and

privileges granted by law to legitimate labor

organizations.

One of the rights of a legitimate labor organization

is to represent its members in collective bargaining

agreements; [3] also, to be certified as the

exclusive representative of all employees in an

appropriate unit for purposes of collective barg

aining. [4] Hence the petition of FEU-IND, as a

legitimate labor organization, for certification

election may rightfully be granted.[5]

FEU-IND filed a petition for certification election

precisely to determine the will of the employees for

purposes of collective bargaining. Basically, a

petition for certification election is principally the

concern of the workers. [6] The only exception is

where the employer has to file a petition for

certification election so that it can bargain

collectively as mandated by Art. 258 of the Labor

Code. Thereafter, the role of the employer in the

certification process ceases. It becomes merely a

by-stander. In one case this court ruled that since

the petition for certification election was filed by a

legitimate labor organization under Art. 258 of the

Labor Code, the employer should not have

involved itself in the process. [7]

To circumvent the law on the fundamental right of

the workers to self-organization would render such

constitutional provision meaningless. Section 3, Art.

XIII, of the 1987 Constitution underscores the right of

the workers to organize with others or to join any

labor organization which he believes can assist and

protect him in the successful pursuit of his daily

grind. The choice is his. Any attempt on the part

of management or employers to curtail or stifle this

right of the workers will be deemed unconstitutional

and considered as unfair labor practice on the

part of management. Briefly, this right to self-

organization is a fundamental right - to give the

workers the freedom to form or join any labor

organization voluntarily without fear of suppression

or reprisal from management. PD No. 828

encourages trade unionism to supplement and

strengthen the exercise of the workers' right to self-

organization.[8]

We quote with emphasis our ruling in Filipino Metal

Corp. v. Ople, [9] that -

x x x this Court has authoritatively laid down the

controlling doctrine as to when an employer may

have an interest sufficient in law enabling him to

contest a certification election. There is relevance

to this excerpt from Consolidated Farms, Inc. v.

Noriel (No. L-47752, 31 July 1978, 84 SCRA 469,

473.): 'The record of this proceeding leaves no

doubt that all the while the party that offered the

most obdurate resistance to the holding of a

certification election is management x x x x That

circumstance of itself militated against the success

of this petition. On a matter that should be the

exclusive concern of labor, the choice of a

collective bargaining representative, the employer

is definitely an intruder. His participation, to say the

least, deserves no encouragement. This court

should be the last agency to lend support to such

an attempt at interference with a purely internal

affair of labor' (underscoring supplied).

Petitioner FURUSAWA further argues that the Med-

Arbiter ignored the fact that FEU-IND does not

represent at least 20% of the employees in the

bargaining unit which it seeks to represent. Public

respondent however has found the petition to be

sufficient in form and substance, there being

compliance with the required 20% support

signatures. Article 257 of the Labor Code provides

that in an unorganized establishment where there is

no certified bargaining agent, a certification

election shall automatically be conducted by

the Med-Arbiter upon filing of a petition by a

legitimate labor organization for a certification

election.[10]

The alleged termination of the union members who

are signatories to the petition for certification

election was not substantiated by hard

evidence. It in fact further indicated the need to

hold such certification election which is the best

and most appropriate means of ascertaining the

will of the employees as to their choice of an

exclusive bargaining representative. That there are

no competing unions involved should not alter this

means, the freedom of choice by the employees

being the primordial consideration and the fact

that the employees can still choose between FEU-

IND and NO UNION. [11] Moreover, even on the

assumption that the evidence is clearly insufficient

and the number of signatories less than 30%, in this

case, 20% this cannot militate against the favorable

response to such petition for certification election.

We find no merit in the petition. The issue on the

legitimacy of the petitioning union should be settled

in its favor. The submission of a xerox copy of the

union’s certificate of registration to prove its

legitimacy is sufficient, hence, the Med-Arbiter

correctly granted the petition for certification

election. As it been held in a long line of cases, a

certification proceeding is not a litigation in the

sense that the term is ordinarily understood, but an

investigation of a fact-finding and non-

adversarial character. It is not covered by the

technical rules of evidence. Thus, as provided in

Art. 221 of the Labor Code, proceedings before the

National

Labor Relations Commission are not covered by

the technical rules of evidence and

procedure. The court has already construed Art.

221 of the Labor Code in favor of allowing the NLRC

or the labor arbiter to decide the case on the basis

of position papers and other documents submitted

without resorting to technical rules of evidence as

observed in regular courts of justice.[12] Indeed, the

technical rules of evidence do not apply if the

decision to grant the petition proceeds from an

examination of its sufficiency as well as a careful

look into the arguments contained in position

papers and other documents. In this regard, the

factual findings of the Med-Arbiter appear to be

supported by substantial evidence, hence, we must

accord them great weight and respect.

Under the premises, or at the very least, when

conflicting interests of labor and capital are to be

weighed on the scales of social justice, the heavier

influence of the latter should be balanced by

sympathy and compassion which the law must

accord the underprivileged worker. This is only in

keeping with the constitutional mandate that the

State shall afford full protection to labor. [13]

WHEREFORE, the instant petition is DISMISSED. The

assailed resolution and order dated 28 June 1995

and 26 July 1995, respectively, of respondent

Secretary of Labor and Employment are AFFIRMED.

SO ORDERED.

Davide, Jr. (Chairman), Vitug, and Kapunan, JJ.,

concur.

THIRD DIVISION

[G.R. No. 123782. September 16, 1997]

CALTEX REFINERY EMPLOYEES ASSOCIATION

(CREA), petitioner, vs. HON. JOSE S. BRILLANTES, in

his capacity as Acting Secretary of the Department

of Labor and Employment, and CALTEX

(PHILIPPINES), Inc., respondents.

R E S O L U T I O N

PANGANIBAN, J.:

Unless shown to be clearly whimsical, capricious or

arbitrary, the orders or resolutions of the secretary of

labor and employment resolving conflicts on what

should be the contents of a collective bargaining

agreement will be respected by this Court. We

realize that, oftentimes, such orders and resolutions

are based neither on definitive shades of black or

white, nor on what is legally right or wrong. Rather,

they are grounded largely on what is possible, fair

and reasonable under the peculiar circumstances

of each case.

Statement of the Case

Petitioner Caltex Refinery Employees Association

(CREA) seeks through Rule 65 of the Rules of Court

“reversal or modification” of three orders of public

respondent, then Acting Secretary of Labor of

Employment Jose S. Brillantes, in Case No. OS-AJ-

0044-95 [1] entitled “ In re: Labor Dispute at Caltex

(Phils.), Inc.” The disposition of the first assailed

Order [2] of public respondent dated October 29,

1995: [3]

“WHEREFORE, ON THE BASIS OF THE FOREGOING,

the Caltex Refinery Employees Association and

Caltex Philippines, Inc. are hereby directed to

execute a new collective bargaining agreement

embodying therein the appropriate dispositions

above spelled out including those subject of

previous agreements.

Provisions in the old CBA, or existing benefits subject

of Company policy or practice not otherwise

modified or improved herein are deemed

maintained.

New demands not otherwise touched upon or

disposed of are hereby denied.”

The motions for reconsideration and clarification of

the above Order filed by both petitioner and

private respondent were denied in the second

assailed Order dated November 21, 1995, which

disposed: [4]

“WHEREFORE, except the modifications

hereinabove set forth, the Order dated 9 October

1995 is hereby affirmed.

Moreover, pursuant to the Agreement reached by

the parties on 13 September 1995 for this Office to

commence the proceedings concerning the

legality of strike and the termination of the union

officers, after the resolution of the CBA issues, both

parties are hereby directed to submit their position

papers and evidence within ten (10) days from

receipt of a copy of this Order. For this purpose,

Atty. Tito F. Genilo is hereby designated as Hearing

Officer and authorized as such, to immediately

conduct hearings and receive evidence and,

thereafter, submit his report and recommendations

thereon.”

Petitioner’s second motion for reconsideration of

the above Order was likewise denied by the third

assailed Order dated January 9, 1996, as follows: [5]

“WHEREFORE, PREMISES CONSIDERED, our Order of

21 November 1995 is hereby affirmed en

toto, subject to the afore-mentioned clarification

on the issue of Sunday work.

No further motions of this nature shall be

entertained by this Office.

The parties are given another ten (10) days from

receipt hereof to submit their respective position

papers and evidences (sic) relative to the issue of

the legality of strike and termination of the union

officers.”

The Facts

Anticipating the expiration of their Collective

Bargaining Agreement on July 31, 1995, petitioner

and private respondent negotiated the terms and

conditions of employment to be contained in a

new CBA. The negotiation between the two parties

was participated in by the National Conciliation

and Meditation Board (NCMB) and the Office of

the Secretary of Labor and Employment. Some

items in the new CBA were amicably arrived at and

agreed upon, but some others were unresolved.

To settle the unresolved issues, eight meetings

between the parties were conducted. Because

the parties failed to reach any significant progress

in these meetings, petitioner declared a

deadlock. On July 24, 1995, petitioner filed a notice

of strike. Six (6) conciliation meetings conducted by

the NCMB failed to settle the parties’

differences. Then, the parties held marathon

meetings at the plant level, but this remedy proved

also unavailing.

During a strike vote on August 16, 1995, the

members of petitioner opted for a walkout. Private

respondent then filed with the Department of Labor

and Employment (DOLE) a petition for assumption

of jurisdiction in accordance with Article 263 (g) of

the Labor Code.

In an Order dated August 22, 1995, public

respondent assumed jurisdiction “over the entire

labor dispute at Caltex (Philippines) Inc.,” with the

following disposition: [6]

“WHEREFORE ABOVE PREMISES CONSIDERED, this

Office hereby assumes jurisdiction over the entire

labor dispute at Caltex (Philippines) Inc. pursuant to

Article 263 (g) of the Labor Code, as amended.

Accordingly, any strike or lockout, whether actual

or intended, is hereby enjoined.

The parties are further directed to cease and desist

from committing any and all acts which might

exacerbate the situation.

To expedite the resolution of the instant dispute, the

parties are further directed to submit their

respective position papers and evidence within ten

(10) days from receipt hereof.”

In defiance of the above Order expressly restraining

any strike or lockout, petitioner began a strike and

set up a picket in the premises of private

respondent on August 25, 1995. Thereafter, several

company notices directing the striking employees

to return to work were issued, but the members of

petitioner defied them and continued their mass

action.

In the course of the strike, DOLE Undersecretary

Bienvenido Laguesma interceded and conducted

several conciliation meetings between the

contending parties. He was able to convince the

members of the union to return to work and to enter

into a memorandum of agreement with private

respondent. On September 9, 1995, the picket lines

were finally lifted. Thereafter, the contending

parties filed their position papers pertaining to

unresolved issues. [7]

Because of the strike, private respondent

terminated the employment of some officers of

petitioner union. The legality of these dismissals

brought additional contentious issues. [8]

Again, the parties tried to resolve their differences

through conciliation. Failing to come to any

substantial agreement, the parties stopped further

negotiation and, on September 13, 1995, decided

to refer the problem to the secretary of labor and

employment: [9]

“It appearing that the possibility of an amicable

settlement appears remote, the parties agreed to

submit their respective position paper and

evidence simultaneously on 27 September 1995 at

the Office of the Secretary. The parties further

agreed that there will be no extension of time for

filing and no further pleading will be filed.

The decision of the Secretary of Labor and

Employment will be rendered on or before October

9, 1995.

The proceedings concerning the legal issues

involving the legality of strike and the termination of

the Union officers will be commenced by the Office

of the Secretary after the resolution of the CBA

issues.”

As already stated, public respondent issued as

scheduled on October 9, 1995 the assailed Order

resolving the deadlock, followed by two more

assailed Orders on November 21, 1995 and January

16, 1996 disposing of the motions for

reconsideration/clarification of both

parties. Dissatisfied with these Orders issued by

public respondent, petitioner sought remedy from

this Court.

After realizing the urgency of the case and after

meticulously reviewing the Petition dated February

23, 1996; Comment by the private respondent

dated April 16, 1996 which was adopted as its own

by the public respondent; Reply by the petitioner

dated September 7, 1996; Rejoinder dated October

3, 1996 and Sur-Rejoinder dated November 12,

1996, the Court resolved to give due course to the

petition and to consider the case submitted for

resolution without requiring memoranda from the

parties.

The Issues

Petitioner does not specifically pinpoint the issues it

wants the Court to rule upon. It appears, however,

that petitioner questions public respondent’s

resolution of five issues in the CBA, specifically on

wage increase, union security clause, retirement

benefits or application of the new retirement plan,

signing bonus and grievance and arbitration

machineries.

Private respondent, on the other hand, submits this

lone issue: [10]

“Whether or not the Honorable Secretary of Labor

and Employment committed grave abuse of

discretion in resolving the instant labor dispute.”

The Court’s Ruling

The petition is partly meritorious.

Preliminary Matter: Certiorari in Labor Cases

At the outset, we must reiterate several 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. [11] It is well-

established that findings of these administrative

agencies are generally accorded not only respect

but even finality. [12]

Second, substantial evidence in labor cases is such

amount of relevant evidence which a reasonable

mind will accept as adequate to justify a

conclusion. [13]

Third, in Flores vs. National Labor Relations

Commission [14] 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.”

We shall thus use the foregoing time-tested

standards in deciding this petition.

1. Wage Increase

The main assailed Order dated October 9, 1995

resolved the ticklish demand for wage increase as

follows: [15]

“With this in mind and taking into view similar factors

as financial capacity, position in the industry,

package of existing benefits, inflation rate, seniority,

and maintenance of the wage differentiation

between and among the various classes of

employees within the entire Company, this Office

hereby finds the following improved benefits fair,

reasonable and equitable:

1. Wage Increases

Effective August 1, 1995 - 14%

Effective August 1, 1996 - 14%

Effective August 1, 1997 - 13%

2. meal subsidy - P15.00”

In denying the motions for

reconsideration/clarification of the above award,

public respondent rules in the challenged Order

dated November 21, 1995: [16]

“First, on the matter of wages, we find no

compelling reasons to alter or modify our award

after having sufficiently passed upon the same

arguments raised by both parties in our previous

Order. The subsequent agreement on a package

of wage increases at Shell Company, adverted to

by the Union as the usual yardstick for purposes of

developing its own package of improved wage

increases, would not be sufficient basis to grant the

same increases to the Union members herein

considering that other factors, among which is

employment size, were carefully taken into

account. While it is true that inflation has direct

impact on wage increases, it is not quite accurate

to state that inflation ‘as of September 1995’ is

already registered at 11.8%. The truth of the matter

is that the average inflation for the first ten (10)

months was only 7.496% and Central Bank

projections indicate that it will take a 13.5% inflation

for November and December to record an

average inflation of 8.5% for the year. We,

therefore, maintain the reasonableness of the

package of wage increases that we awarded.”

Petitioner belittles the awarded increases. It insists

that the increase should be ruled on the basis of

four factors: “(a) the economic needs of the

[u]nion’s members; (b) the [c]ompany’s financial

capacity; (c) the bargaining history between the

[u]nion and the [c]ompany; and (d) the traditional

parity in wages between Caltex and Shell Refinery

Employees.” [17]

Petitioner contends that the “inflation rate rose to

11.8% in September [1995], rose further in October,

and is still a double-digit figure at the time of this

writing.” Therefore, public respondent’s so-called

“improved benefits” are in reality “retrogressive.” [18]

Petitioner tries to show private respondent’s

“immense financial capacity” by citing Caltex’s

“Banaba Housing Up-grading” which would cost

“not less than P200,000,000.00” [19] Petitioner does

“not begrudge” private respondent’s “pampering

of its [r]efinery [m]anagers and supervisors,” but asks

that the rank and file employees be “not left too far

behind.” [20]

Petitioner maintains that the salaries of Shell Refinery

employees be used as a “reference point” in

upgrading the compensation of private

respondent’s employees because these two

companies are in the “same industry and their

refineries are both in Batangas.” Thus, the wage

increase of petitioner’s members should be

“15%/15%/15%.” [21]

Private respondent counters with a “proposed 9%

7% 7% increase for the same period with automatic

adjustment should the increase fall short of the

inflation rate.” Hence, the Secretary’s award of

“14% 14% 13%” increase really comes “closer to the

Union’s position.” [22]

Petitioner’s arguments fail to impress us. First, the

matter of inflation rate was clearly addressed in

public respondent’s Order dated November 21,

1995. Contrary to petitioners undocumented claim

of 11.8% inflation in September of 1995, the “truth of

the matter is that the average inflation for the first

ten (10) months was only 7.496%, and Central Bank

projections indicate that it will take a 13.5% inflation

for November and December to record an

average inflation of 8.5% for the year.” [23] Second,

private respondent’s financial capacity has been

insufficiently explained in its Comment dated April

16, 1996 in which it stated that the Banaba

“upgrading” should not be construed as a yardstick

of its financial standing: [24]

“It is equally amazing how the Union (petitioner)

desperately justifies their demands by comparing

the ‘upgrading cost’ of the Company’s (private

respondent) Banaba Housing Facilities, a matter

totally unrelated to the case, to the cost of their

demands. The Union not only errs in its choice of

yardstick of the Company’s capacity to pay, it

likewise displays its ignorance of the Banaba

Housing Program.

The Banaba Housing Facility is not a benefit. It is an

integral part of an indispensable requirement for

smooth Plant operations and assurance of an

emergency response crew in times of calamities

and accidents. Employees who are required to

stay in the housing facility are members of the

Refinery’s emergency response organization. It is

also not a case of ‘upgrading’. The Banaba

Housing Facility was built in 1954. A significant

number of its structure are dilapidated and in dire

need of rehabilitation and preservation. Finally,

Banaba is not a yardstick of the Company’s

capacity to pay, but rather, an eloquent

demonstration of the Company’s will to survive and

remain globally competitive.”

The above reasoning convinces us that such

upgrading should not be equated with private

respondent’s financial capacity to pay the

proposed wage increase, but should be evaluated

as a business judgment “to survive and remain

globally competitive.” We believe that the

standard proof of a company’s financial standing is

its financial statements duly audited by

independent and credible external

auditors. [25] Third, the traditional parity in wages

used by petitioner to justify its proposal is flimsy and

trivial. Aside from its bare allegation of “similarity” in

salaries and locations, petitioner did not proffer any

substantial reason to impute grave abuse of

discretion on the part of the public respondent. On

the other hand, we find private respondent’s

discussion of this matter reasonable, as the

following shows: [26]

“It is further amazing that the Union continues to use

an outmoded concept of the ‘Shell yardstick’ and

‘relative parities in wages’ to justify an imperative

need for them to keep their traditional edge in pay

over their industry counterparts. It is not just a

matter of being above the rest. Sound

compensation principle of higher productivity

equals higher pay, as well as, recent developments

in the industry have negated this argument. Both

Shell and Petron continue to benefit from increasing

manpower productivity. Shell, for instance,

produces 155,000 barrels per day on a 120

manpower complement of operatives and rank

and file; while the Company only produces 65,000

barrels per day with its 221 manpower

complement. In addition, the counterpart union at

Shell incurs an average overtime rate of 37%, as a

percentage of base pay; the Union’s overtime rate

is 102%.

Thus, the issue is productivity, not sales, and so far,

the Company’s Refinery is not as productive as

Shell’s or Petron’s. To ask for relative parity in the

face of this reality is not only unreasonable, it is

likewise illogical.

As it is, the wage increase of 14%, 14% and 13% will

result in an average basic salary of P23,510.00 at

the end of the three-year cycle. The resulting pay is

excessive and disproportionately high compared

with the value of the jobs within the bargaining

unit. Stated differently, this average salary will be

unreasonably high for the skills and qualifications

needed for the job.

Even now, with an average monthly salary (prior to

the DOLE awarded CBA increases)

of P16,010 plus overtime, holiday and other

premiums way above those mandated by law, the

Union members are already the highest paid in the

Philippines, in terms of gross income.”

The alleged “similarity” in the situation of Caltex and

Shell cannot be considered a valid ground for a

demand of wage increase, in the absence of a

showing that the two companies are also similar in

“substantial aspects,” as discussed above. Private

respondent is merely asking that an employee

should be paid on the basis of work done. If such

employee is absent on a certain day, he should

not, as a rule, be paid wages for that day. And if

the employee has worked only for a portion of a

day, he is not entitled to the pay corresponding to

a full day. A contrary precept would ultimately

result in the financial ruin of the employer. The age-

old general rule governing relations between labor

and capital, or management and employee, is “a

fair day’s wage for a fair day’s work.” If no work is

performed by the employee, there can be no

wage or pay unless, of course, the laborer was

ready, willing and able to work but was locked out,

dismissed, suspended or otherwise illegally

prevented from working. [27] True, union members

have the right to demand wage increases through

their collective force; but it is equally cogent that

they should also be able to justify an appreciable

increase in wages. We observe that private

respondent’s detailed allegations on productivity

are unrebutted. It is noteworthy that petitioner

ignored this argument of private respondent and

based its demand for wage increase not on the

ground that they were as productive as the Shell

employees. Thus, we cannot attribute grave abuse

of discretion to public respondent.

2. Union Security Clause

In the impugned Order dated October 9, 1995,

public respondent’s contested resolution on the

“union [security] clause” reads: [28]

“The relevant provisions found in Article III of the

CBA, which is hereby read, thus:

‘Section 1. Employees of the COMPANY who at the

signing of this Agreement are members of the

UNION and those who subsequently become

members thereof shall maintain their membership

with the UNION for the duration of this Agreement

as a condition of employment.

Section 2. Members of the UNION who cease to be

members of the UNION in good standing by reason

of resignation or expulsion shall not be retained in

the employment of the COMPANY.

x x x x x x x’

are sought to be amended by the Union, to read as

follows:

‘Section 1. Employees of the Company who at the

signing of this Agreement are members of the Union

and those who subsequently become members

thereof shall maintain their membership in GOOD

STANDING with the Union for the duration of this

Agreement as a condition of CONTINUOUS

employment.

Section 2. PURSUANT TO THE FOREGOING, ANY

UNION MEMBER WHO CEASES TO BE SUCH MEMBER

ON GROUNDS PROVIDED IN ITS CONSTITUTION AND

BY-LAWS SHALL , UPON PRIOR WRITTEN NOTICE BY

THE UNION TO THE COMPANY, BUT SUBJECT TO THE

OBSERVANCE OF DUE PROCESS AND THE EXPRESS

RATIFICATION OF THE MAJORITY OF THE UNION

MEMBERSHIP, BE DISMISSED FROM EMPLOYMENT BY

THE COMPANY; PROVIDED, HOWEVER, THAT THE

UNION SHALL HOLD THE COMPANY FREE AND

BLAMELESS FROM ANY LIABILITY IN THE EVENT THAT

THE EMPLOYEE IN ANY MANNER QUESTIONS HIS

DISMISSAL.’

The proposed amendment of the Union gives the

same substantial effect as the existing

provision. Rather, the same tackles more on

procedure which, to our belief, is already sufficiently

provided under its constitution and by-laws. Insofar

as Union security is concerned, this is sufficiently

addressed by the present provisions in the

CBA. Hence, we find we are not competent to

arbitrarily incorporate any modification thereof. We

are convinced that any amendment on this matter

should be a product of mutual concern and

agreement.” [29]

Petitioner contends that the foregoing disposition

leaving to the parties the decision on the union

security clause issue is “contrary to the whole idea

of assumption of jurisdiction.” Petitioner argues that

in spite of the provisions on the “union security

clause,” it may expel a member only on any of

three grounds: non-payment of dues, subversion, or

conviction for a crime involving moral turpitude. If

the employee’s act does not constitute any of

these three grounds, the member would continue

to be employed by private respondent. Thus, the

disagreement between petitioner and private

respondent on this issue is not only “procedural” but

also “substantial.” [30]

On the other hand, private respondent argues that

nothing prevents petitioner from expelling its

members; however, termination of employment

should be based only on these three grounds

agreed upon in the existing CBA. Further, private

respondent explains that petitioner’s citation of

Article 249 (a) [31] of the Labor Code is out of

context. It adds that the cited section provides only

for the right of a union to prescribe its own rules with

respect to the acquisition and retention of

membership, and that upholding the arguments of

petitioner would make the private respondent a

policeman of the union. [32]

We agree with petitioner. The disagreement

between petitioner and private respondent on the

union security clause should have been definitively

resolved by public respondent. The labor secretary

should take cognizance of an issue which is not

merely incidental to but essentially involved in the

labor dispute itself, or which is otherwise submitted

to him for resolution. [33] In this case, the parties have

submitted the issue of the union security clause for

public respondent’s disposition. But the secretary of

labor has given no valid reason for avoiding the

said issue; he merely points out that this issue is a

procedural matter. Such vacillation clearly

sidesteps the nature of the union security clause as

one intended to strengthen the contracting union

and to protect it from the fickleness or perfidy of its

own members. Without such safeguard, group

solidarity becomes uncertain; the union becomes

gradually weakened and increasingly vulnerable to

company machinations. In this security clause lies

the strength of the union during the enforcement of

the collective bargaining agreement. It is this

clause that provides labor with substantial power in

collective bargaining. The secretary of labor

assumed jurisdiction over this labor dispute in an

industry indispensable to national interest, precisely

to settle once and for all the disputes over which he

has jurisdiction at his level. In not performing his

duty, the secretary of labor committed a grave

abuse of discretion.

3. New Retirement Plan

Public respondent’s contested resolution on

“retirement benefits (application of the new

retirement plan)”in the Order dated November 21,

1995 reads: [34]

“Third, the matter of retirement benefits deserves a

second look considering that the concerned

employees were already previously granted the

option to choose between the old and the new

plan at the time the latter was initiated and they

choose to be covered under the Old Plan. To

accede to the Union’s demand to cover them

under the new plan entails a different arrangement

under a new scheme and likewise requires the

approval of a Board of Trustees. It is, therefore,

understood that the new Retirement Plan does not

apply to the more or less 40 employees being

sought by the Union to be covered under the New

Plan.”

Petitioner contends that “40 of its members who are

still covered by the Old Retirement Plan because

they were not able to exercise the option to shift to

the New Retirement Plan, for one reason or

another, when such option was given in the past”

are included in the New Retirement Plan. Petitioner

argues that the exclusion of forty employees from

the New Plan constitutes grave abuse of discretion

for three reasons. First, “ it is a case of the left hand

taking away, so to speak, what the right hand had

given.” Second, the change “was done for a very

shallow reason.” The new scheme was no longer

new, “as the New Retirement Plan had been in

place for at least two years.” Third, in not applying

the New Retirement Plan to the 40 employees,

public respondent was perpetrating his

department’s discriminatory practice. [35]

Private respondent counters that “these 40 or so

employees have opted to remain covered by the

old plan despite opportunities given them in 1985 to

shift to the New Plan.” [36]

We hold that public respondent did not commit

grave abuse of discretion in respecting the free and

voluntary decision of the employees in regard to

the Provident Plan and the irrevocable one-time

option provided for in the New Retirement

Plan. Although the union has every right to

represent its members in the negotiation regarding

the terms and conditions of their employment, it

cannot negate their wishes on matters which are

purely personal and individual to them. In this case,

the forty employees freely opted to be covered by

the Old Plan; their decision should be

respected. The company gave them every

opportunity to choose, and they voluntarily

exercised their choice. The union cannot pretend

to know better; it cannot impose its will on them.

4. Grievance Machinery and Arbitration

The public respondent’s contested resolution on

“grievance and arbitration machineries” in the

Order dated November 21, 1995 reads: [37]

“Seventh, we are constrained to take a closer look

at the existing procedure concerning grievance in

relation to the modifications being proposed by the

Union. In this regard, we affirm our resolution to

shorten the periods to process/resolve grievances

based on existing practice from (45) days to (30)

days at the first step and (10) days to seven (7) days

at the second step which is the level of the VP for

manufacturing. We further reviewed the steps

through which a grievance may be processed and

in line with the principle to expedite the early

resolution of grievances, we find that the

establishment of a joint Council as an additional

step in the grievance procedure, may only serve to

protract the proceeding and, therefore, no longer

necessary. Instead, the unresolved grievance, if,

not settled within (7) days at the level of the VP for

Manufacturing, shall automatically be referred by

both parties to voluntary arbitration in accordance

with R.A. 6715. As to the number of Arbitrators for

which the Union proposes to employ only one

instead of a panel of three Arbitrators, we find it

best to leave the matter to the agreement of both

parties. Finally, we hereby advise the parties that

the list of accredited voluntary arbitrators is now

being maintained and disseminated by the

National Conciliation and Meditation Board and no

longer by the Bureau of Labor Relations.”

Petitioner contends that public respondent

“derailed the grievance and arbitration scheme

proposed by the Union.” [38] Petitioner argues that

the proposed “Grievance Settlement Council” is

intended to “supplement the effort of the Vice

President for Manufacturing in reviewing the

grievance elevated to him, so that instead of

acting alone x x x he will be obliged to convoke a

conference of the Council to afford the grievant a

thorough hearing.” Petitioner’s recommendation for

a “single arbitrator is based on the proposition that

if voluntary arbitration should be resorted to at all,

this recourse should entail the least

possible expense.” [39]

Private respondent counters that the disposition on

the grievance machinery is likewise “fair and

reasonable under the circumstances and in fact

was merely a reiteration of the (u)nion’s position

during the conciliation meetings conducted by

Undersecretary Bienvenido Laguesma.” [40]

No particular setup for a grievance machinery is

mandated by law. Rather, Article 260 of the Labor

Code, as incorporated by RA 6715, provides for

only a single grievance machinery in the company

to settle problems arising from “interpretation or

implementation of their collective bargaining

agreement and those arising from the interpretation

or enforcement of company personnel

policies.” Article 260, as amended, reads:

Article 260. Grievance Machinery and Voluntary

Arbitration. The parties to a Collective Bargaining

Agreement shall include therein provisions that will

ensure the mutual observance of its terms and

conditions. They shall establish a machinery for the

adjustment and resolution of grievances arising

from the interpretation or implementation of their

Collective Bargaining Agreement and those arising

from the interpretation or enforcement of company

personnel policies.

All grievances submitted to the grievance

machinery which are not settled within seven (7)

calendar days from the date of its submission shall

automatically be referred to voluntary arbitration

prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining

Agreement shall name and designate in advance

a Voluntary Arbitrators or panel of voluntary

arbitrators, include in the agreement a procedure

for the selection of such Voluntary Arbitrator or

panel of Voluntary Arbitrators, preferably from the

listing of qualified Voluntary Arbitrators duly

accredited by the Board. In case the parties fail to

select a Voluntary Arbitrator or panel of Voluntary

Arbitrators, the Board shall designate the Voluntary

Arbitrator or panel of Voluntary Arbitrators, as may

be necessary, pursuant to the selection procedure

agreed upon in the Collective Bargaining

Agreement, which shall act with same force and

effect as if the Arbitrator or panel of Arbitrators has

been selected by the parties as described above.”

We believe that the procedure described by public

respondent sufficiently complies with the minimum

requirement of the law. Public respondent even

provided for two steps in hearing grievances prior to

their referral to arbitration. The parties will decide

on the number of arbitrators who may hear a

dispute only when the need for it arises. Even the

law itself does not specify the number of

arbitrators. Their alternatives – whether to have one

or three arbitrators – have their respective

advantages and disadvantages. In this matter,

cost is not the only consideration; full deliberation

on the issues is another, and it is best accomplished

in a hearing conducted by three arbitrators. In

effect, the parties are afforded the latitude to

decide for themselves the composition of the

grievance machinery as they find appropriate to a

particular situation. At bottom, we cannot really

impute grave abuse of discretion to public

respondent on this issue.

5. Signing Bonus

The public respondent’s contested resolution on the

“signing bonus” in the Order dated November 21,

1995 reads: [41]

“Fifth, specifically on the issue of whether the

signing bonus is covered under the ‘maintenance

of existing benefits’ clause, we find that a

clarification is indeed imperative. Despite the

expressed provision for a signing bonus in the

previous CBA, we uphold the principle that the

award for a signing bonus should partake the

nature of an incentive and premium for peaceful

negotiations and amicable resolution of disputes

which apparently are not present in the instant

case. Thus, we are constrained to rule that the

award of signing bonus is not covered by the

‘maintenance of existing benefits’ clause.”

Petitioner asseverates that the “signing bonus is an

existing benefit embodied in the old CBA.” [42] It

explains that public respondent erred in removing

the award of a signing bonus which is “given not

only as an incentive for peaceful negotiations and

amicable settlement of disputes but also as an

extra award to the workers following the settlement

of a CBA dispute by whatever means.” [43]

Private respondent disagrees, contending that a

signing bonus is not awarded when CBA

negotiations “result in a strike.” There are two

reasons therefor: First, “the grant of a signing bonus

is a matter of discretion and cannot be demanded

as a matter of right;” and second, the signing

bonus is meant as an incentive for a peaceful

negotiation. Once these negotiations result in a

strike, an illegal one at that, the basis or rationale for

such an award is lost.” [44]

Although proposed by petitioner, [45] the signing

bonus was not accepted by private

respondent. [46] Besides, a signing bonus is not a

benefit which may be demanded under the

law. Rather, it is now claimed by petitioner under

the principle of “maintenance of existing benefits”

of the old CBA. However, as clearly explained by

private respondent, a signing bonus may not be

demanded as a matter of right. If it is not agreed

upon by the parties or unilaterally offered as an

additional incentive by private respondent, the

condition for awarding it must be duly satisfied. In

the present case, the condition sine qua non for its

grant – a non strike – was not complied with. In

fact, private respondent categorically stated in its

counter-proposal – to the exclusion of those agreed

upon before – that new collective bargaining

agreement would constitute the only agreement

between the parties, as follows:

“SECTION 4. Scope of Agreement. – The terms and

conditions of employment of the employees within

the appropriate bargaining unit are embodied in

this Agreement. On the other hand, all such

benefits which are not expressly provided for in this

Agreement, but which are now being accorded,

may in the future be accorded, or might have

been previously accorded to employees, by the

COMPANY shall be deemed as purely discretionary

or pure acts of grace and magnanimity on the part

of the COMPANY in each particular case, and the

continuance or repetition thereof now or in the

future, no matter how long or how often, shall not

be construed as establishing a right for the

employee and/or obligation on the part of the

COMPANY.” [47]

This provision on the scope of the agreement is

further buttressed by the clause on waiver: [48]

“The parties acknowledge that during the

negotiations which resulted in the execution of this

Agreement, each of them had the unlimited

opportunity to make demands and proposals with

respect to any and all subjects and matters proper

for collective bargaining and not prohibited by

law; and the parties further acknowledge that the

understandings and agreements arrived at by them

after the exercise of that right and unlimited

opportunity are fully set forth in this

Agreement. Therefore, the COMPANY and the

UNION during the life of this Agreement, each

voluntarily and unqualifiedly waives the right and

each agrees that the other shall not be obligated

to bargain collectively with respect to any subject

or matter referred to or covered in this Agreement

or with respect to any subject or matter not

specifically referred to or covered in this Agreement

even though such subject or matter may not have

been within the knowledge or contemplation of

either or both parties at the time they negotiated or

signed this Agreement.”

Epilogue

We have carefully reviewed the assailed

Orders. Other than his failure to rule on the issue of

union security, the secretary of labor cannot be

indicted for grave abuse of discretion amounting to

want or excess of jurisdiction.

“Basically, there is grave abuse of discretion

amounting to lack of jurisdiction where the

respondent board, tribunal or officer exercising

judicial functions exercised its judgment in a

capricious, whimsical, arbitrary or despotic

manner. However, it has also been said that grave

abuse is committed when “the lower court acted

capriciously, and whimsically or the petitioner’s

contention appears to be clearly tenable or the

broader interest of justice or public policy [so]

require x x x.” Also, grave abuse of discretion is

committed when the board, tribunal or officer

exercising judicial function fails to consider

evidence adduced by the parties.” [49]

In Saballa vs. National Labor Relations

Commission, [50] we ruled on how a decision of an

administrative body must be drawn:

“The Court has previously held that judges and

arbiters should draw up their decisions and

resolutions with due care, and make certain that

they truly and accurately reflect their conclusions

and their final dispositions. x x x The same thing goes

for the findings of fact made by the NLRC, as it is a

settled rule that such findings are entitled to great

respect and even finality when supported by

substantial evidence; otherwise, they shall be struck

down for being whimsical and capricious and

arrived at with grave abuse of discretion. It is a

requirement of due process and fair play that the

parties to a litigation be informed of how it was

decided, with an explanation of the factual and

legal reasons that led to the conclusions of the

court. A decision that does not clearly and

distinctly state the facts and the law of which it is

based leaves the parties in the dark as to how it

was reached and is especially prejudicial to the

losing party, who is unable to pinpoint the possible

errors of the court for review by a higher tribunal.”

In the present case, the foregoing requirements has

been sufficiently met. Petitioner’s claim of grave

abuse of discretion is anchored on the simple fact

that public respondent adopted largely the

proposals of private respondent. It should be

understood that bargaining is not equivalent to an

adversarial litigation where rights and obligations

are delineated and remedies applied. It is simply a

process of finding a reasonable solution to a

conflict and harmonizing opposite positions into a

fair and reasonable compromise. When parties

agree to submit unresolved issues to the secretary

of labor for his resolution, they should not expect

their positions to be adopted in toto. It is

understood that they defer to his wisdom and

objectivity in insuring industrial peace. And unless

they can clearly demonstrate bias, arbitrariness,

capriciousness or personal hostility on the part of

such public officer, the Court will not interfere or

substitute the said officer’s judgment with its

own. In this case, it is possible that this Court, or

some its members at least, may even agree with

the wisdom of petitioner’s claims. But unless grave

abuse of discretion is cogently shown, this Court will

refrain from using its extraordinary power of

certiorari to strike down decisions and orders of

quasi-judicial officers specially tasked by law to

settle administrative questions and disputes. This is

particularly true in the resolution of controversies in

collective bargaining agreements where the

question is rarely one of legal right or wrong – nay,

of black and white – but one of wisdom, cogency

and compromise as to what is possible, fair and

reasonable under the circumstances.

WHEREFORE, premises considered, the petition is

partly GRANTED. The assailed Orders are AFFIRMED

with the modification that the issue on the union

security clause be REMANDED to the Department of

Labor and Employment for definite resolution within

one month from the finality of this Decision. No

costs.

SO ORDERED.

Narvasa, C.J., (Chairman), Romero,

Melo and Francisco, JJ., concur.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 78131 January 20, 1988

EDUARDO TANCINCO, OSCAR E. BARTOLO, DANIEL

DE LEON, EDDIE POE, VIRGILIO SAN PEDRO, MA.

LUISA QUIBIN, FE MUDLONG and HENRY

MADRIAGA, petitioners,

vs.

DIRECTOR PURA FERRER-CALLEJA, EDWIN

LACANILAO, BOYET DALMACIO, JOSEFINO

ESGUERRA, TESSIE GATCHALIAN, LITO CUDIA and

DING PAGAYON, respondents.

GANCAYCO, J.:

This special civil action for certiorari seeks to annul

the Resolution of February 12, 1987 and the

Decision of December 10, 1986 of the Bureau of

Labor Relations * in BLR Case No. A922186, setting

aside the order of July 25, 1986 which decreed the

inclusion and counting of the 56 segregated votes

for the determination of the results of the election of

officers of Imperial Textile Mills Inc. Monthly

Employees Association (ITM-MEA).

Private respondents are the prime organizers of ITM-

MEA. While said respondents were preparing to file

a petition for direct certification of the Union as the

sole and exclusive bargaining agent of ITM's

bargaining unit, the union's Vice-President, Carlos

Dalmacio was promoted to the position of

Department Head, thereby disqualifying him for

union membership. Said incident, among others led

to a strike spearheaded by Lacanilao group,

respondents herein. Another group however, led by

herein petitioners staged a strike inside the

company premises. After four (4) days the strike was

settled. On May 10, 1986 an agreement was

entered into by the representatives of the

management, Lacanilao group and the Tancinco

group the relevant terms of which are as follows:

"1. That all monthly-paid employees shall be United

under one union, the ITM Monthly Employees

Association (ITM-MEA), to be affiliated with ANGLO;

2. That the management of ITM recognizes ANGLO

as the sole and exclusive bargaining agent of all

the monthly-paid employees;

3. That an election of union officers shall be held on

26 May l986, from 8:00 a.m. to 5:00 p.m.;

4. That the last day of filing of candidacy shall be

on l9 May l986 at 4:00 p.m.;

5. That a final pre-election conference to finalize

the list of qualified voters shall be held on 19 May

1986, at 5:00 p.m.;" 1

On May 19, 1986, a pre-election conference was

held, but the parties failed to agree on the list of

voters. During the May 21, 1986 pre-election

conference attended by MOLE officers, ANGLO

through its National Secretary, a certain Mr.

Cornelio A. Sy made a unilateral ruling excluding

some 56 employees consisting of the Manila office

employees, members of Iglesia ni Kristo, non-time

card employees, drivers of Mrs. Salazar and the

cooperative employees of Mrs. Salazar. Prior to the

holding of the election of union officers

petitioners, 2 through a letter addressed to the

Election Supervisor, MOLE San Fernando

Pampanga, protested said ruling but no action was

taken. On May 26, 1986, the election of officers was

conducted under the supervision of MOLE wherein

the 56 employees in question participated but

whose votes were segregated without being

counted. Lacanilao's group won. Lacanilao

garnered 119 votes with a margin of three (3) votes

over Tancinco prompting petitioners to make a

protest. Thereafter, petitioners filed a formal protest

with the Ministry of Labor Regional Office in San

Fernando, Pampanga 3 claiming that the

determination of the qualification of the 56 votes is

beyond the competence of ANGLO. Private

respondents maintain the contrary on the premise

that definition of union's membership is solely within

their jurisdiction.

On the basis of the position papers submitted by

the parties MOLE's Med Arbiter 4 issued an order

dated July 25, 1986 directing the opening and

counting of the segregated votes. 5 From the said

order private respondents appealed to the Bureau

of Labor Relations (BLR) justifying the

disenfranchisement of the 56 votes. Private

respondents categorized the challenged voters into

four groups namely, the Manila Employees, that

they are personal employees of Mr. Lee; the Iglesia

ni Kristo, that allowing them to vote will be

anomalous since it is their policy not to participate

in any form of union activities; the non-time card

employees, that they are managerial employees;

and the employees of the cooperative as non-ITM

employees. 6 On December 10, 1986, BLR rendered

a decision 7 holding the exclusion of the 56

employees as arbitrary, whimsical, and wanting in

legal basis 8 but set aside the challenged order of

July 26, 1986 on the ground that 51 ** of 56

challenged voters were not yet union members at

the time of the election per April 24, 1986 list

submitted before the Bureau. 9 The decision

directed among others the proclamation of

Lacanilao's group as the duly elected officers and

for ITM-MEA to absorb in the bargaining unit the

challenged voters unless proven to be managerial

employees. 10 Petitioners' motion for reconsideration

was likewise denied.

Dissatisfied with the turn of events narrated above

petitioners elevated the case to this Court by way

of the instant petition for certiorari under Rule 65 of

the Rules of Court. Petitioners allege that public

respondent director of Labor Relations committed

grave abuse of discretion in ordering the Med-

Arbiter to disregard the 56 segregated votes and

proclaim private respondents as the duly elected

officers of ITM-MEA whereas said respondent ruled

that the grounds relied upon by ANGLO for the

exclusion of voters are arbitrary, whimsical and

without legal basis.

The petition is impressed with merit. The record of

the case shows that public respondent

categorically declared as arbitrary, whimsical and

without legal basis the grounds 11 relied upon by

ANGLO in disenfranchising the 56 voters in question.

However, despite said finding public respondent

ruled to set aside the Resolution of July 25, 1986 of

the Med-Arbiter based on its own findings 12 that 51

of the 56 disenfranchised voters were not yet union

members at the time of the election of union

officers on May 26, 1986 on the ground that their

names do not appear in the records of the Union

submitted to the Labor Organization Division of the

Bureau of Labor on April 24, 1986.

The finding does not have a leg to stand on.

Submission of the employees names with the BLR as

qualified members of the union is not a

condition sine qua non to enable said members to

vote in the election of union's officers. It finds no

support in fact and in law. Per public respondent's

findings, the April 24, 1986 list consists of 158 union

members only 13 wherein 51 of the 56 challenged

voters' names do not appear. Adopting however a

rough estimate of a total number of union members

who cast their votes of some 333 14 and excluding

therefrom the 56 challenged votes, if the list is to be

the basis as to who the union members are then

public respondent should have also disqualified

some 175 of the 333 voters. It is true that under

article 242(c) of the Labor Code, as amended, only

members of the union can participate in the

election of union officers. The question however of

eligibility to vote may be determined through the

use of the applicable payroll period and

employee's status during the applicable payroll

period. The payroll of the month next preceding the

labor dispute in case of regular employees 15 and

the payroll period at or near the peak of operations

in case of employees in seasonal industries. 16

In the case before Us, considering that none of the

parties insisted on the use of the payroll period-list

as voting list and considering further that the 51

remaining employees were correctly ruled to be

qualified for membership, their act of joining the

election by casting their votes on May 26, 1986 after

the May 10, 1986 agreement is a clear

manifestation of their intention to join the union.

They must therefore be considered ipso

facto members thereof Said employees having

exercised their right to unionism by joining ITM-MEA

their decision is paramount. Their names could not

have been included in the list of employee

submitted on April 24, 1986 to the Bureau of Labor

for the agreement to join the union was entered

into only on May 10, 1986. Indeed the election was

supervised by the Department of Labor where said

56 members were allowed to vote. Private

respondents never challenged their right to vote

then.

The Solicitor General in his manifestation agreed

with petitioners that public respondent committed

a grave abuse of discretion in deciding the issue on

the basis of the records of membership of the union

as of April 24, 1986 when this issue was not put

forward in the appeal.

It is however the position of private respondents

that since a collective bargaining agreement

(CBA) has been concluded between the local

union and ITM management the determination of

the legal question raised herein may not serve the

purpose which the union envisions and may destroy

the cordial relations existing between the

management and the union.

We do not agree. Existence of a CBA and cordial

relationship developed between the union and the

management should not be a justification to

frustrate the decision of the union members as to

who should properly represent them in the

bargaining unit. Neither may the inclusion and

counting of the 56 segregated votes serve to

disturb the existing relationship with management

as feared by herein private respondents.

Respondents themselves pointed out that

petitioners joined the negotiating panel in the

recently concluded CBA. This fact alone is

conclusive against herein petitioners and hence will

estop them later if ever, from questioning the CBA

which petitioners concurred with. Furthermore, the

inclusion and counting of the 56 segregated votes

would not necessarily mean success in favor of

herein petitioners as feared by private respondents

herein. Otherwise, could this be the very reason

behind their fears why they made it a point to nullify

said votes?

WHEREFORE, premises considered, the petition for

certiorari is GRANTED. The temporary restraining

order issued by this Court on May 13, 1987 is hereby

made permanent. The questioned Resolution of

February 12, 1987 and the Decision of December

10, 1986 are hereby set aside for being null and void

and the Order of July 25, 1986 of the Mediator

Arbiter is hereby declared immediately executory.

Cost against private respondents.

SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Paras, JJ.,

concur.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 70067 September 15, 1986

CARLOS P. GALVADORES, ET AL., petitioners,

vs.

CRESENCIANO B. TRAJANO, Director of the Bureau

of Labor Relations, MANGGAGAWA NG

KOMUNIKASYON SA PILIPINAS (FIWU), PHILIPPINE

LONG DISTANCE COMPANY (PLDT), and JOSE C.

ESPINAS, respondents.

Dante A. Carandang for petitioners.

Jose C. Espinas for respondents.

R E S O L U T I O N

MELENCIO-HERRERA, J.:

Petitioner employees of the Philippine Long

Distance Telephone Company (PLDT) and members

of respondent Free Telephone Workers Union, now

the Manggagawa ng Komunikasyon sa Pilipinas

(simply referred to hereinafter as the Union),

question the legality of the check-off for attorney's

fees amounting to P1M, more or less, of respondent

Atty. Jose C. Espinas (hereinafter referred to as

"Respondent Counsel") from the monetary benefits

awarded to PLDT employees in a deadlocked

collective bargaining agreement negotiations

between the PLDT and the Union.

The case stemmed from the following facts:

Respondent Counsel has been the legal counsel of

respondent Union since 1964. For his services, he

was hired on a case to case contingent fee basis.

On September 7, 1983, he received a letter from

the Union President reading:

The Free Telephone Workers Union once again

request you to appear as counsel in the on going

labor dispute at PLDT. In consideration of your

services therein, the union binds itself to

compensate you for your fees and expenses therein

on a contingent basis. The amount shall be 10% of

any improvement, with retroactive effect, of the

PLDT's last offer to the deadlock in CBA negotiations

which we know will result in a compulsory

arbitration. A supporting board resolution will later

confirm the letter. 1

PLDT's "last offer" referred to on the wage increases

was: P230 for the first year of the proposed CBA;

P100 for the second year; and P90 for the third

year. 2

On September 9, 1983, the Minister of Labor and

Employment assumed jurisdiction over all

unresolved issues in the bargaining deadlock

between PLDT and the Union and proceeded to

resolve the same by compulsory arbitration.

On October 23, 1983, the Minister of Labor awarded

across-the-board wage increases of P 330/month

effective November 9, 1982; P155/month effective

November 9, 1983, and P155/month effective

November 9, 1984, in addition to the Christmas

bonus of 1/2 month pay per employee effective

December, 1983, and other fringe benefits. As will

be noted, there were improvements obtained from

PLDT's "last offer."

On October 29, 1983, the Executive Board of the

Union passed a resolution requesting PLDT to

deduct P115.00 per employee for the legal services

extended to the Union by respondent Counsel.

On November 2, 1983, petitioners initially numbering

600 and finally 5,258, filed a letter-complaint before

the MOLE through their authorized representative,

petitioner Carlos Galvadores assailing the

imposition of P130.00 (later corrected to P155.00)

per employee as attorney's fees of respondents

counsel. Annexed to the complaint were the

written statements of the employee authorizing

Galvadores to act for and in their behalf. Petitioners

took the position that the attorney's fees of

respondent counsel were not only unreasonable

but also violative of Article 242(o) of the Labor

Code; and that he deductions cannot given legal

effect by a mere Board resolution but needs the

ratification by the general membership of the

Union.

Respondents Union and Counsel, on the other

hand, proferred the argument that the attorney s

fees being exacted pertained to his services during

compulsory arbitration proceedings and cannot be

considered as negotiation fees or attorney's fees

within the context of Article 242(o) of the Labor

Code and that contrary to petitioners' claim that

Respondent Counsel surfaced only as lawyer of the

Union when the employees themselves engaged in

mass action to force a solution to the deadlock in

their negotiations, he appeared continuously from

September 8, 1983 until the decision in the case was

rendered on October 23, 1983. Petitioners proposed

a solution offering to pay P10.00 per employee, but

Respondent Counsel refused.

In the meantime, on November 4, 1983, PLDT filed

notice that assessment had been withheld from the

differential pay due petitioners but that the same

would not be turned over to the Union without prior

MOLE authority so as not to involve management in

the intra-union disagreement.

February 13, 1984, the Minister of Labor referred the

dispute to the Bureau of Labor Relations for being

intra-union nature. Several hearings were held by

that Bureau.

On March 22, 1984, the Union filed a Manifestation

to the effect that about 6,067 members of the

Union ratified the October 29, 1983 resolution of the

legislative council in a plebiscite called for that

purpose. On the basis thereof, Counsel moved for

the payment of his legal fees under the September

7, 1983 contract.

Petitioners questioned the plebiscite on the ground

that Question No. 2, which reads:

Question No. 2. Do you approve of the use of P1

million (P500,000.00 to be withdrawn from PECCI

and another P500,000.00 from IBAA) from our CBA

negotiation fund together with the attorney's fees

(P1 million) that was collected and to be loaned to

the MKP/FTWU as our counterpart of the seed

money to start the housing program as agreed by

the PLDT management and our union panel and

included in the award of the MOLE?

was misleading and deceptive as it assumed that

there was no dispute regarding the deduction of

attorney's fees from the monetary benefits

awarded to PLDT employees.

On February 18, 1985, respondent Director of the

Bureau of Labor Relations dismissed petitioners'

complaint for lack of merit reasoning that "the

outcome of the plebiscite negates any further

question on the right of the union counsel to collect

the amount of P115 from each of the employees

involved."

It is this Decision that is assailed by petitioners

principally on the ground that the individual written

authorization of an the employees must first be

obtained before any assessment can be made

against the monetary benefits awarded to them

pursuant to Article 242(o) of the Labor Code; and

that assuming that Respondent Counsel is entitled

to attorney's fees, the same should be taken from

Union funds.

In their Comment, respondents Union and Counsel

argue that compulsory arbitration is a "mandatory

activity" and an exception to Article 242(o) of the

Labor Code, and that the Union members

approved the questioned deduction in the

plebiscite of January, 1984, under the condition

that P lM of the same would be made available for

the Union's housing project.

In his Comment, the Solicitor General agrees with

petitioners that the issue presented is squarely

covered by Article 222(b) of the Labor Code, as

amended by P.D. No. 1691 so that attorney's fees, if

legally payable, can only be charged against

Union funds.

The Court resolved to give due course.

Article 222(b) of the Labor Code provides:

Article 222. Appearance and Fees.

xxx xxx xxx

(b) No attorney's fees, negotiation fees or similar

charges of any kind arising from any collective

bargaining negotiations or conclusion of the

collective bargaining agreement shall be imposed

on any individual member of the contracting union;

Provided, however, that attorney's fees may be

charged against union funds in an amount to be

agreed upon by the parties. Any contract,

agreement or arrangement of any sort to the

contrary shall be null and void.

While Article 242 of the same Code reads:

Art. 242. Rights and conditions of membership in a

labor organization. The following are the rights and

conditions of membership in a labor organization:

xxx xxx xxx

(o) Other than for mandatory activities under the

Code, no special assessment, attorney's fees,

negotiation fees or any other extraordinary fees

may be checked off "from any amount due an

employee without individual written authorization

duly signed by the employee. The authorization

should specifically state the amount, purpose and

beneficiary of the deduction.

The Omnibus Rules Implementing the Labor Code

also provide that deductions from wages of the

employees may only be made by the employer in

cases authorized by law, including deductions for

insurance premiums advanced by the employer on

behalf of the employees as well as union dues

where the right to check-off is authorized in writing

by the individual employee himself. 3

The provisions are clear. No check-offs from any

amounts due employees may be effected without

individual written authorizations duly signed by the

employee specifically stating the amount, purpose

and beneficiary of the deduction. The required

individual authorizations in this case are wanting. In

fact, petitioner employees are vigorously objecting.

The question asked in the plebiscite, besides not

being explicit, assumed that there was no dispute

relative to attorney's fees.

Contrary to respondent Union's and Counsel's

stand, the benefits awarded to PLDT employees still

formed part of the collective bargaining

negotiations although placed already under

compulsory arbitration. This is not the "mandatory

activity" under the Code which dispenses with

individual written authorizations for check-offs,

notwithstanding its "compulsory" nature. It is a

judicial process of settling disputes laid down by

law. Besides, Article 222(b) does not except a CBA,

later placed under compulsory arbitration, from the

ambit of its prohibition. The cardinal principle should

be borne in mind that employees are protected by

law from unwarranted practices that diminish their

compensation without their knowledge and

consent. 4

ACCORDINGLY, the assailed Decision of February

18, 1985 rendered by respondent Director of the

Bureau of Labor Relations, is hereby SET ASIDE. The

attorney's fees herein involved may be charged

against Union funds pursuant to Article 222(b) of the

Labor Code, as may be agreed upon between

them.

SO ORDERED.

Yap (Chairman), Narvasa, Gutierrez, Jr. and Paras,

JJ., concur.

Cruz, J., took no part.

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-78061 November 24, 1988

LITTON MILLS EMPLOYEES ASSOCIATION-KAPATIRAN

AND ROGELIO ABONG, petitioners,

vs.

HONORABLE PURA FERRER-CALLEJA, in her capacity

as Director of the Bureau of Labor Relations,

RODOLFO UMALI AND LITTON MILLS,

INC., respondents.

Paterno D. Menzon Law Office for petitioners.

The Solicitor General for public respondent.

Ferdinand M. Casis for private respondent Umali.

Marquinez, Juanitas, Perez, Gonzales, Bolos &

Associates for respondent, Litton Mills, Inc.

PADILIA, J.:

This is a petition for review on certiorari, with prayer

for preliminary injunction, seeking to prevent private

respondent Rodolfo Umali from affiliating the

petitioner-union, Litton Mills Employees Association-

Kapatiran (LMEA-K, for short), with the National

Union of Garments, Textile Cordage and General

Workers of the Philippines (GATCORD, for short), and

to enjoin the latter or any of its representatives from

representing petitioner-union in any capacity

whatsoever. The petition also seeks to declare as

null and void petitioner union's affiliation with

GATCORD: that LMEA-K union President, Rodolfo

Umali, be declared impeached, and that

respondent company, Litton Mills, Inc. (LMI, for

short) be ordered by this Court to terminate Umali

from his employment.

Petitioner union, LMEA-K, is a legitimate labor

organization in the respondent company, LMI, while

individual petitioner, Rogelio Abong, and individual

respondent, Rodolfo Umali, are the vice- president,

respectively, of LMEA-K.

The facts of the case are as follows:

On 14 August 1986, without the knowledge and

approval of the general membership of LMEA-K,

Umali "Affiliated" petitioner-union with the

federation of GATCORD. This is evidenced by the

Pledge of Allegiance signed by the union's newly

appointed shop steward, Norberto David, dated 14

August 1986, which was attested to by Timoteo

Aranjuez GATCORD's President, as inducting

officer. 1

Umali then caused mimeographed leaflets to be

distributed to the union-members, urging them to

continue affiliating with GATCORD, at the same time

maligning petitioner union's legal counsel Paterno

D. Menzon, as well as Messrs. Badillo and Abong,

the former and incumbent vice-president of

petitioner-union. 2

As a consequence, a majority of the union-

members, numbering 725 3 out of a total

membership of 1,100, more or less, opposed the

affiliation of LMEA-K with GATCORD, and expressly

manifested their intention to remain as an

independent-union, in a statement, "Sama-Samang

Kapasiyahan", dated 18 August 1986 4 which,

among others, also authorized petitioner Abong to

take appropriate steps against respondent Umali,

including impeachment, should the latter continue

the affiliation of the petitioner-union with GATCORD.

Despite the opposition of a majority of the union

membership to the petitioner- union's affiliation with

GATCORD, Umali continued with it, as evidenced by

a letter he wrote to LMI, dated 20 August 1986,

which was written on paper with the letterhead of

GATCORD printed on it. The said letter, which was in

reference to the number of workers of LMI who were

to be given regular appointments, and those who

were to be terminated and replaced, was again

attested to by Timoteo Aranjuez GATCORD's

National

President. 5

Thereafter, Abong and the majority of the elected

union officers signed a letter, dated 24 August 1986,

addressed to Umali, accusing him of disloyalty by

reasons of his affiliation with GATCORD, and

advising him to appear before them on August 1986

at 2:00 p.m. in the company canteen, to refute the

charge of disloyalty against him. The same letter

warned Umali that his failure to attend said meeting

would be interpreted as an admission on his part of

the charge levelled against him. Umali did not show

up at the appointed confrontation of 27 August

1986.

Consequently, the majority of the union officers, led

by Abong, voted to impeach Umali, who was

informed of this fact by letter, dated 30 August 1986,

addressed to him, with copy furnished Mr. James

Go, the senior vice-president of LMI. Abong also

wrote the latter, informing him, of Umali's

impeachment, and invoking the provision of the

collective bargaining agreement on union security,

i.e., that the petitioner union may request LMI to

dismiss an impeached officer or members of the

union.

The company's position on the request of the

petitioners, as stated in its letter to the petitioners,

dated 10 September 1986, was that the petitioner

should first comply with the provision of the CBA, to

wit:

An employee who is expelled from the Union for

cause shall, upon demand by the Union, be

terminated from employment, provided that all

pertinent requirements of the Ministry of Labor and

Employment are first complied with; provided that

the Union shall hold the company free from any

liability that may arise due to said termination 5-A

In other words, LMI required the petitioners to first

thresh out the matter with the proper office of the

Department of Labor and Employment, before it

could act on petitioners' request to terminate Umali

from his employment with LMI.

On 25 September 1986, petitioners lodged a

complaint against Umali and LMI before the med-

arbiter section of the National Capital Region of the

Department of Labor and Employment, docketed

as NCR-LRD-M-9-718-86, praying that, after notice

and hearing, an order be issued declaring as valid

the impeachment of Rodolfo Umali and that

respondent company be ordered to comply with

Sec. 5, par. b Article IV of the CBA, by terminating

the employment of Umali, and proclaiming Rogelio

Abong, the union's vice-president, as the new

president of the union. 6

Umali filed his answer, after which petitioners filed

their reply averring that Umali's open defiance of

the will of the majority of the union members for the

union to remain an independent union, and Umali's

contention that the majority wanted to affiliate with

GATCORD, without submitting up to that time any

evidence to support such contention were clear

evidence of his disloyalty to petitioner-union, for

which he ought to be impeached. Thereafter,

petitioners filed a Supplemental Reply stating,

among others, that of the 700 signatures of union

members eventually submitted by Umali, as

belonging to those who supported affiliation with

GATCORD, a) 111 signatures were forged or faked

signatures, b) 6 were those of resigned employees,

and c) 44 were by those who signed 2 or 3 times,

summing up to a total of 161 signatures that should

be excluded from Umali's submission of 700

affirming signatures, thereby leaving only 539

signatures in favor of affiliation with GATCORD.

Aside from averring unauthorized affiliation of

LMEA-K with GATCORD, petitioner-union (LMEAK)

alleged in its supplemental reply that the mere use

by Umali of falsified signatures of union members

was enough reason for his expulsion as president of

LMEA-K.

On 15 November 1986, Med-Arbiter Residali

Abdullah issued an order declaring that the issue of

affiliation cannot be dealt with in the complaint filed

by petitioners, and that the impeachment of Umali

was null and void.

The Med-Arbiter found no valid ground to sustain

the impeachment of Rodolfo Umali as president of

the petitioner union, since Umali was not afforded

his right to due process, his impeachment having

been approved without compliance with the

procedure laid down in the petitioner-union's

constitution and by-laws. The Med-Arbiter also

considered the petitioner union's "Sama-Samang

Kapasiyahan" as mere declarations of some union

members opposing the proposed affiliation of the

union with GATCORD, and stating their preference

to remain an independent union, but not as a

petition charging respondent Umali with a specific

offense against the union.

The Med-Arbiter further held that the letter-decision

of the petitioner-union which impeached

respondent Umali was bereft of any legal merit,

because the non-appearance of Umali at the first

scheduled meeting of 27 August 1986 cannot be

legally construed as an admission on his part of the

charges levelled against him. The Med-Arbiter then

held thus:

Again, even on the assumption that respondent

Umali urged the general membership of the

complainant union to join with him in his move to

affiliate the union with the federation but [sic] such

act on the part of Rodolfo Umali cannot to our mind

be considered union disloyalty to warrant his

removal from office and his expulsion from the

union. It should be noted that Litton MiIIs Employees

Association-KAPATIRAN is an independent

registered labor organization without any affiliation.

So that, respondent Umali cannot be held liable

under Par. (b), Section 5, Art. IV of the union's

constitution and by-laws as he was only trying to

affiliate the union with the federation for reason,

perhaps, to avail [sic] the services and assistance of

the federation and not organizing or joining another

labor union. Organizing or joining another labor

union is different from affiliation of the union. The

former implies abandonment of the union

membership as what the [sic] respondent Umali did.

On this score, respondent Umali cannot be stripped

of his membership much less to remove him (sic)

from the union presidency. ...

As to the second issue, it appearing that the

impeachment of respondent Umali is adjudged to

be without valid ground, the union security clause

of the existing CBA does not apply. Hence, the

prayer of the complainants to terminate the

employment of Rodolfo Umali with Litton Mills, Inc.

should not be given due course.

Petitioners appealed the Med-Arbiter's order to the

public respondent, who, in a Resolution, dated 13

February 1987, dismissed the appeal for lack of

merit, and affirmed in toto the order of the Med-

Arbiter, dated 17 November 1986. Petitioner's

motion for reconsideration was denied in an order,

dated 1 April 1987.

Hence, the present recourse.

The controversy, in the case at bar stems from

respondent Umali's act of affiliating the petitioner-

union with GATCORD, which caused the union

officers to impeach Umali for disloyalty to the union.

The impeachment is anchored on a provision in the

petitioner union's Constitution and By-Laws, which

reads as follows:

Art. IV, Section 5. Membership may be lost under

the following grounds:

xxx xxx xxx

b) Organizing or joining another labor union or any

federation.

xxx xxx xxx 7-a

(Emphasis supplied)

One of the grounds for losing membership in the

union, as aforestated, is by joining a federation.

There is no dispute in the present case that

GATCORD is a labor federation, to which

respondent Umali affiliated the petitioner-union as

evidenced by mimeographed leaflets he caused to

be distributed among the union-members, urging

them to continue affiliating with GATCORD, the

Pledge of Allegiance of newly-appointed Shop

Steward Norberto David, and the letter of Umali to

LMI, dated 20 August 1986, the last two (2) being

attested to by GATCORD's National President

Timoteo Aranjuaez and the fact that the letter dated

20 August 1986 was written on paper with

GATCORD's letterhead Also, the affiliation of the

petitioner union with GATCORD was affirmed by

Umali himself, when he presented the alleged 700

signatures of union-members who supported his

move of affiliating the union LMEAK with GATCORD.

Hence, it cannot be denied that Umali did not only

propose the affiliation, but in fact affiliated the

petitioner union with GATCORD, in contravention of

the above-cited prohibition in Section 5, Article IV

of the petitioner union's Constitution and By-Laws.

And yet, if the act of Umali in affiliating the

petitioner-union with GATCORD, is with the consent

of a majority of the union membership, then any

violation of the petitioner-union's Constitution and

By-Laws becomes of little consequence. It will

appear in such case that the union itself has ratified

the act of affiliation. It will be noted that Umali,

albeit belatedly, presented the signatures of 700

members of the union, as proof of the support he

had from them for the union's affiliation with

GATCORD.

On the other hand, petitioners presented 725

signatures, or 65.9% of the entire union membership,

who signed the "Sama-Samang Kapasiyahan", as

proof of those who opposed the affiliation, in

addition to petitioners' allegation that out of the 700

signatures presented by Umali, 161 signatures were

either forged or faked, twice or thrice written, or

signatures of already resigned employees.

This Court takes notice of the fact that in all of the

pleadings submitted by respondent Umali, lie never

bothered to refute the charge of the petitioners as

to the questioned 161 signatures; neither has he

denied that the union members who opposed the

affiliation were more than those who supported it.

Hence, this Court finds that the affiliation of the

petitioner union with GATCORD was done by Umali

without the support of the majority of the union

membership.

Furthermore, the Court notes that the collective

bargaining agreement of the petitioner-union

LMEAK with LMI was to expire only on 31 October

1987, whereas, Umali affiliated the union around

August 1986, or about 14 months before the

expiration of said CBA. The affiliation of the

petitioner-union with GATCORD converted the

former's status from that of an independent union to

that of a local of a labor federation. Such change in

status not only affects the Identity of the petitioner

union but also its powers, duties and privileges, for

as a local, it will have to contend with and consult

the federation, in matters affecting the union.

The act of affiliating with a federation is a major

modification in the status of the petition union. And

such act is a violation of the rule that no

modification of the CBA can be made during its

existence, unless either party serves written notice

to terminate or modify the agreement at least sixty

(60) days prior to its expiration date. 8 Hence, there

was a violation of the existing CBA, on the part of

Umali.

As to the impeachment of a union officer, Section 2,

Article XV of the

petitioner-union's Constitution and By-Laws provides

the procedures to be followed, to wit: (1)

Impeachment should be initiated by petition signed

by at least 30% of all bona fide members of the

union, and addressed to the Chairman of the

Executive Board; (b) A general membership

meeting shall be convened by the Board Chairman

to consider the impeachment of an officer; (c)

Before any impeachment vote is finally taken, the

union officer against whom impeachment charges

have been filed shall be given ample opportunity to

defend himself , and (d) A majority of all the

members of the union shall be required to impeach

or recall union officers.

It clearly appears that the above cited procedure

was not followed by the petitioners when they

impeached Umali. To be sure, there was difficulty

on the part of the petitioners in complying with the

required procedure for impeachment, considering

that the petition to impeach had to be addressed to

the Chairman of the Executive Board of the Union,

and that the majority membership which would

decide on the impeachment had to be convened

only upon call of the Chairman of the Executive

Board who, in the case at bar, happened to be

respondent Umali himself.

Nevertheless, despite the practical difficulties in

complying with the said procedure, petitioners

should have shown substantial compliance with

said impeachment procedure, by giving Umali

ample opportunity to defend himself, as contrasted

to an outright impeachment, right after he failed to

appear before the first and only investigation

scheduled on 27 August 1986 in the Litton Canteen.

The above conclusions notwithstanding, the Court

believes that the union-members themselves know

what is best for them, i.e., whether they still want

respondent Umali as their Union President, and

whether they wish to affiliate their union with

GATCORD. And, the best and most appropriate

means of ascertaining the will of the union

members is through a certification election.

Consistent with the foregoing observations, it

appears from from the record that a group of

employees headed by petitioner Rogelio Abong

broke away from the petitioner-union and formed a

new union, called Litton Mills Workers Union, and

that in a certification election that followed, said

Litton Mills Workers Union, headed by petitioner

Abong, was chosen as the collective bargaining

agent. 9

Because of this supervening event, it now appears

clear that the majority of the heretofore members of

petitioner-union LMEAK do not wish respondent

Umali to continue as their president; neither do they

wish their union to be affiliated with the GATCORD

federation. Consequently, the issues in this petition

have become moot and academic.

The Manifestation of the petitioners, dated 9

October 1987, after informing the Court of the

election of the Litton Mills Workers union headed by

petitioner Abong, as the collective bargaining

representative in LMI, reiterates the prayer that

respondent Umali be considered and declared as

impeached. This issue has, to the mind of the Court,

likewise become moot and academic for it is

inconceivable that Umali will be retained as

president of the new collective bargaining agent,

the Litton Mills Workers Union, while Umali's

continued presidency of LMEAIC as a minority union

if still existing in LMI, has ceased to be of any

moment in the instant case.

WHEREFORE, the petition is DENIED for having

become moot and academic. Without

pronouncement as to costs.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Sarmiento and

Regalado, JJ., concur.

SECOND DIVISION

[G.R. No. 152322. February 15, 2005]

ERNESTO C. VERCELES, DIOSDADO F. TRINIDAD,

SALVADOR G. BLANCIA, ROSEMARIE DE LUMBAN,

FELICITAS F. RAMOS, MIGUEL TEAÑO, JAIME BAUTISTA

and FIDEL ACERO, as Officers of the University of the

East Employees’ Association, petitioners, vs. BUREAU

OF LABOR RELATIONS-DEPARTMENT OF LABOR AND

EMPLOYMENT, DEPARTMENT OF LABOR AND

EMPLOYMENT-NATIONAL CAPITAL REGION, RODEL E.

DALUPAN, EFREN J. DE OCAMPO, PROCESO TOTTO,

JR., ELIZABETH ALARCA, ELVIRA S. MANALO, and

RICARDO UY, respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

Before Us is a petition for review on certiorari under

Rule 45 of the 1997 Rules of Civil Procedure,

assailing the Decision[1] and Resolution[2] rendered

by the Court of Appeals, dated 24 October 2001

and 15 February 2002, respectively.

The Facts

Private respondents Rodel E. Dalupan, Efren J. De

Ocampo, Proceso Totto, Jr., Elizabeth Alarca, and

Elvira S. Manalo are members of the University of

the East Employees’ Association (UEEA). On 15

September 1997, they each received a

Memorandum from the UEEA charging them with

spreading false rumors and creating disinformation

among the members of the said association. They

were given seventy-two hours from receipt of the

Memorandum to submit their Answer.[3]

The acts of the respondents allegedly fall under

General Assembly Resolution No. 4, Series of 1979,

to wit:

1. Circulating false rumors about the progress of the

negotiations for collective bargaining;

2. Creating distrust or loss of trust and confidence of

members in the Association;

3. Creating dissension among the members;

4. Circulating false rumors about the work of the

Association or sabotaging the same;

5. Withholding from the Association and/or

members material information as to their rightful

entitlement to benefits and/or money claims;

6. Acting as a spy against the Association or

divulging confidential matters to persons not

entitled thereto;

7. Such other offenses, which may injure or disrupt

the functions of the Association.[4]

Through a collective reply dated 19 September

1997, private respondents denied the allegations.

Thereafter, on 23 September 1997, they sent a letter

dated 22 September 1997 to the Chairman and

Members of UEEA’s Disciplinary Committee,

informing them that the Memorandum of 15

September 1997 was vague and without legal basis,

therefore, no intelligent answer may be made by

them. They likewise stated that any sanction that

will be imposed by the committee would be

violative of their right to due process.[5]

The Disciplinary Committee issued another

Memorandum, dated 24 September 1997, giving

the respondents another seventy-two hours from

receipt within which to properly reply, explaining

that the collective reply letter and supplemental

answer which were earlier submitted were not

responsive to the first Memorandum. Their failure

would be construed as an admission of the

truthfulness and veracity of the charges.[6]

On 01 October 1997, the respondents issued a

denial for the second time, and inquired from the

Disciplinary Committee as to whether they were

being formally charged.[7]

On 09 October 1997, Ernesto Verceles, in his

capacity as president of the association, through a

Memorandum, informed Rodel Dalupan, et al., that

their membership in the association has been

suspended and shall take effect immediately upon

receipt thereof. Verceles said he was acting upon

the disciplinary committee’s finding of a prima

facie case against them.[8] Respondent Ricardo Uy

also received a similar memorandum on 03

November 1997.[9]

On 01 December 1997, a complaint[10] for illegal

suspension, willful and unlawful violation of UEEA

constitution and by-laws, refusal to render financial

and other reports, deliberate refusal to call general

and special meetings, illegal holdover of terms and

damages was filed by the respondents against

herein petitioners Ernesto C. Verceles, Diosdado F.

Trinidad, Salvador G. Blancia, Rosemarie De

Lumban, Felicitas Ramos, Miguel Teaño, Jaime

Bautista and Fidel Acero before the Department of

Labor and Employment, National Capital Region

(DOLE-NCR).

A few days after the filing of the complaint, i.e., on

10 December 1997, a resolution[11] was passed by

UEEA which reads as follows:

R E S O L U T I O N

WHEREAS, the Association has gone thru a most

arduous, difficult, and trying times in working to

obtain the best terms and conditions of

employment for its members, specifically for the

period 1992 to 1996;

WHEREAS, said difficulties are in the form of near

strikes, cases with the Department of Labor and

Employment and its agencies, as well as with the

Supreme Court;

WHEREAS, the general membership (has) shown

exceptional patience and perseverance and

generally (had) demonstrated full trust and

confidence in the Association officers and

accordingly approved the manner and/or actions

undertaken in pursuing said difficult task of arriving

at a most beneficial agreement for the general

membership;

NOW, THEREFORE, be it resolved as it is hereby

resolved that:

. . .

b) the general membership reiterate its loyalty to

the Association and commends the Association

officers for their effort expended in working for the

benefit of the whole membership.

APPROVED.

Manila. 10 December 1997.

On 22 November 1999, a decision[12] was rendered

by Regional Director Maximo B. Lim, adverse to

petitioners, the dispositive portion of which reads:

WHEREFORE, premises considered, respondent[s]

[are] hereby ordered:

1. to immediately lift suspension imposed upon the

complainants;

2. to hold a general membership meeting wherein

they (respondents) make open and available the

union’s/association’s books of accounts and other

documents pertaining to the union funds [and]

thereby explain the financial status of the union;

3. to regularly conduct special and general

membership meetings in accordance with the

union’s constitution and by-laws;

4. to immediately hold/conduct an election of

officers in accordance with the union’s constitution

and by-laws.

Accordingly, the claims of complainants for

damages [are] hereby ordered dismissed for lack of

jurisdiction.

However, within ten (10) days upon receipt of this

Order, the complainants are hereby directed to

submit a written report whether or not the

respondents had complied with this Order.

The petitioners appealed to the Bureau of Labor

Relations of the Department of Labor and

Employment (BLR-DOLE). During the pendency of

this appeal, or on 07 April 2000, an election of

officers was held by the UEEA. The appeal,

however, was dismissed for lack of merit in a

Resolution[13] dated 22 September 2000, the

decretal portion of which reads:

WHEREFORE, the appeal is hereby DISMISSED for

lack of merit and the decision dated 22

(November) 1999 of Regional Director Maximo B.

Lim, DOLE-NCR, is AFFIRMED.

Meanwhile, Resolution No. 8, Series of 2000, was

passed by the UEEA, wherein the members

allegedly reiterated their support and approval of

the acts and collateral actions of the officers.[14]

A Motion for Reconsideration[15] was filed by the

petitioners with the BLR-DOLE, but was denied in a

Resolution[16] dated 15 January 2001.

A special civil action for certiorari[17] was thereafter

filed before the Court of Appeals citing grave abuse

of discretion amounting to lack or excess of

jurisdiction. In a Resolution[18] dated 22 February

2001, the Court of Appeals dismissed the petition

outright for failure to comply with the provisions of

Section 1, Rule 65 in relation to Section 3, Rule 46 of

the 1997 Rules of Civil Procedure. A Motion for

Reconsideration[19] was filed which was granted in a

Resolution[20] dated 24 April 2001, thus, reinstating

the petition.

On 24 October 2001, the Court of Appeals rendered

a Decision[21] dismissing the petition, the dispositive

portion of which reads:

WHEREFORE, premises considered, the instant

petition is DENIED DUE COURSE and DISMISSED for

lack of merit. No pronouncement as to costs.

A Motion for Reconsideration[22] was thereafter filed

by the petitioners. In a Resolution[23] dated 15

February 2002, the Court of Appeals modified its

earlier decision. The decretal portion of which

states:

WHEREFORE, the questioned decision of this court is

MODIFIED. The 22 September 2000 and 15 January

2001 resolutions of the BLR insofar as they affirmed

the part of the 22 November 1999 decision of the

Regional Director of DOLE-NCR ordering the

immediate holding of election are

HEREBY ANNULLED AND SET ASIDE. All the other

aspects of the assailed Resolutions are AFFIRMED.

Not satisfied, the petitioners filed a petition for

review on certiorari[24] before this Court.

The Issues

The petitioners raise the following issues:

1. WHETHER OR NOT THERE IS REVERSIBLE ERROR IN

THE COURT OF APPEALS’ UPHOLDING THE DOLE-NCR

AND BLR-DOLE DECISIONS BASED ONLY ON THE

COMPLAINT AND ANSWER;

2. WHETHER OR NOT IT IS REVERSIBLE ERROR FOR THE

COURT OF APPEALS TO HOLD THE ELECTION OF APRIL

7, 2000 AS INVALID AND A NULLITY;

3. WHETHER OR NOT IT IS REVERSIBLE ERROR TO

UPHOLD BLR-DOLE’S FINDING THAT THE SUSPENSION

WAS ILLEGAL; and

4. WHETHER OR NOT THE ALLEGED NON-HOLDING OF

MEETINGS AND ALLEGED NON-SUBMISSION OF

REPORTS ARE MOOT AND ACADEMIC, AND WHETHER

THE DECISION TO HOLD MEETINGS AND SUBMIT

REPORTS CONTRADICT AND OVERRIDE THE

SOVEREIGN WILL OF THE MAJORITY.[25]

The Court’s Rulings

We shall discuss the issues in seriatim.

First Issue: was the court a quo correct in upholding

the DOLE-NCR and BLR-DOLE decisions based only

on the complaint and answer?

Petitioners contend that the complaint filed by the

private respondents in DOLE-NCR was a mere

recital of bare, self serving and unsubstantiated

allegations. Both parties did not submit position

papers, and the DOLE-NCR resolved the case

based only on the complaint and answer. Also, by

failing to submit a reply to the answer, private

respondents, in effect admitted the petitioners’

controversion of the charges.[26]They further argue

that the private respondents did not exhaust

administrative remedies and that the requirement of

support by at least 30% of the members of the

association pursuant to Section 1, Rule XIV, Article I,

Department Order No. 9 of DOLE, was not complied

with.[27]

Private respondents, on the other hand, assert that

the records show that despite their failure to submit

their position papers, they nonetheless moved that

the case be resolved by DOLE-NCR based on the

complaint, answer and available exhibits or

annexes integrated with the aforesaid

pleadings.[28] The principle of non-exhaustion of

administrative remedies that would warrant the

dismissal of the case should not operate against

them because they were deprived of their right to

due process when they were indefinitely suspended

without the benefit of a formal charge which is

sufficient in form and substance.[29] The respondents

also point out that the thirty percent (30%) support

requirement pursuant to Section 1, Rule XIV, Article

I, Department Order No. 9, is not applicable to them

because their complaint was primordially

predicated on their suspension while the rest of the

causes of action were mere collateral

consequences of the principal cause of action.[30]

It is worthy to note that the BLR-DOLE, in its

Resolution dated 22 September 2000, underscored

the negligence of herein petitioners not only in the

submission of their pleadings but also in attending

the hearings called for the purpose.[31] Even the

Court of Appeals, in its decision, made this

observation, thus:

It is apparent, however, that petitioners were to

blame for their predicament. They repeatedly failed

to appear in a series of conferences scheduled by

the DOLE-NCR, asked for resetting of hearings, and

requested for extension of time to file its answer.

Hence, when they again did not attend a hearing

on a date they themselves asked for, private

respondents (complainants therein) moved for the

submission of the case based on their complaint,

position paper and annexes attached thereto.

When DOLE-NCR directed the parties to submit their

respective position papers, petitioners again moved

for extension of time to file the same. When another

notice was given to the parties to comply with the

directive, petitioners prayed for another extension

of time. (Private respondents, however, reiterated

their earlier motion to have the case resolved

based on available pleadings.) After six (6) months

or so, petitioners finally filed not their position paper

but their answer.[32]

The Court of Appeals was justified in upholding the

DOLE-NCR and BLR-DOLE decisions based on the

complaint and answer. We cannot accept

petitioners’ line of reasoning that since no position

papers were submitted, no decision may be made

by the adjudicating body. As ruled by Regional

Director Maximo B. Lim in his decision, the

complaint and the answer thereto were adopted as

the parties’ position papers. Thereafter, the case

shall be deemed submitted for resolution.[33]

Labor laws mandate the speedy disposition of

cases, with the least attention to technicalities but

without sacrificing the fundamental requisites of due

process.[34] The essence of due process is simply an

opportunity to be heard.[35] In this case, it cannot be

said that there was a denial of due process on the

part of the petitioners because they were given all

the chances to refute the allegations of the private

respondents, and the delay in the proceedings

before the DOLE-NCR was clearly attributable to

them.

The argument that there was failure to exhaust

administrative remedies cannot be sustained. One

of the instances when the rule of exhaustion of

administrative remedies may be disregarded is

when there is a violation of due process.[36] In this

case, the respondents have chronicled from the

very beginning that they were indefinitely

suspended without the benefit of a formal charge

sufficient in form and substance. Therefore, the rule

on exhaustion of administrative remedies cannot

squarely apply to them.

On the matter concerning the 30% support

requirement needed to report violations of rights

and conditions of union membership, as found in

the last paragraph of Article 241 of the Labor

Code,[37] we likewise cannot sanction the

petitioners. We have already made our

pronouncement in the case of Rodriguez v. Director,

Bureau of Labor Relations[38] that the 30%

requirement is not mandatory. In this case, the

Court, speaking through Chief Justice Andres R.

Narvasa,[39] held in part:

The respondent Director’s ruling, however, that the

assent of 30% of the union membership, mentioned

in Article 242 of the Labor Code, was mandatory

and essential to the filing of a complaint for any

violation of rights and conditions of membership in

a labor organization (such as the arbitrary and

oppressive increase of union dues here complained

of), cannot be affirmed and will be reversed. The

very article relied upon militates against the

proposition. It states that a report of a violation of

rights and conditions of membership in a labor

organization may be made by “(a)t least thirty

percent (30%) of all the members of a union or any

member or members specially concerned.” The use

of the permissive “may” in the provision at once

negates the notion that the assent of 30% of all the

members is mandatory. More decisive is the fact

that the provision expressly declares that the report

may be made, alternatively by “any member or

members specially concerned.” And further

confirmation that the assent of 30% of the union

members is not a factor in the acquisition of

jurisdiction by the Bureau of Labor Relations is

furnished by Article 226 of the same Labor Code,

which grants original and exclusive jurisdiction to

the Bureau, and the Labor Relations Division in the

Regional Offices of the Department of Labor,

over “all inter-union and intra-union conflicts, and

all disputes, grievances or problems arising from or

affecting labor management relations,” making no

reference whatsoever to any such 30%-support

requirement. Indeed, the officials mentioned are

given the power to act “on all inter-union and intra-

union conflicts (1) “ upon request of either or both

parties” as well as (2) “at their own initiative.”

Second Issue: was the election held on 07 April

2000 valid or a nullity?

This issue arose from the fact that the original

decision of the DOLE-NCR dated 22 November

1999, ordered petitioners, among other things, to

“immediately hold/conduct an election of officers .

. .” Petitioners, it must be recalled, appealed from

the DOLE-NCR decision to the BLR-DOLE. During the

pendency of the appeal, however, an election of

officers was held on 07 April 2000. Subsequently,

the BLR-DOLE affirmed the decision of the DOLE-

NCR, but with the pronouncement that “. . . the

supposed election conducted on (07) April 2000 is

null and void and cannot produce legal effects

adverse to appellants.”[40]

The petitioners contend that since the election was

held on 07 April 2000, and the original complaint

before the DOLE-NCR was filed on 01 December

1997, the former could not have been the subject of

the complaint. There was, according to petitioners,

reversible error in the BLR-DOLE’s adding to the

DOLE-NCR’s decision, the nullification of the 07 April

2000 election. The BLR–DOLE should have limited

itself to affirming, modifying or setting aside and

canceling the provisions of the dispositive portion of

the DOLE-NCR’s decision which was subject of the

appeal. The election was held because the term of

the petitioners (extended for five years under

Republic Act No. 6715[41]) expired on 07 April 2000.

As amended by Republic Act 6715, paragraph (c)

of Article 241 of the Labor Code now reads:

(c) The members shall directly elect their officers in

the local union, as well as their national officers in

the national union or federation to which they or

their local union is affiliated, by secret ballots at

intervals of five (5) years.

It just so happened that the holding of the election

coincided with the DOLE-NCR decision.[42]

The private respondents, in answer to this, point out

that the 07 April 2000 election, as appearing in the

22 September 2000 Resolution of the BLR-DOLE, was

set aside not on the flimsy reason that there was no

complaint to invalidate it, but due to the appeal of

the petitioners questioning the BLR-DOLE’s order.

The appeal effectively suspended the effect of the

DOLE-NCR Regional Director’s order for the

immediate holding of election of officers in

accordance with the union’s constitution and by-

laws.[43]

On this matter, the Court of Appeals made the

following observation:

Consequently, the Regional Director of DOLE-NCR

erred in ordering the immediate holding of election

of officers of UEEA, and the Bureau of Labor

Relations (BLR)-Department of Labor and

Employment, insofar as it affirmed this particular

order, committed an act amounting to grave abuse

of discretion.

Nonetheless, despite of this finding, the election of

UEEA officers on 7 April 2000 cannot acquire a

semblance of legality. First, it was conducted

pursuant to the aforesaid (erroneous) order of the

Regional Director as manifested by the petitioners.

Second, it was purposely done to pre-empt the

resolution of the case by the BLR and to deprive

private respondents their substantial right to

participate in the election. Third, petitioners cannot

be allowed to take an inconsistent position to later

on claim that the election of 7 April 2000 was held

because it was already due while previously

declaring that it was made in line with the order of

the Regional Director, for this would go against the

principle of fair play.

Thus, while the BLR was wrong in affirming the order

of the Regional Director for the immediate holding

of election, it was right in nullifying the 7 April 2000

UEEA election of officers. It was simply improper for

the petitioners to implement the said order which

was then one of the subjects of their appeal in the

BLR. To hold otherwise would be to dispossess the

BLR of its inherent power to control the conduct of

the proceedings of cases pending before it for

resolution.[44]

Based on the prevailing facts of this case, we affirm

the foregoing findings of the court a quo. We

cannot hold the election of 07 April 2000 valid as

this would make us condone an iniquitous act. Said

election was perceptibly done to hinder any

resolution or decision that would be made by BLR-

DOLE. The Regional Director indeed ordered the

immediate holding of an election in its Order dated

22 November 1999. The records show that the

petitioners questioned this order of the Regional

Director before the BLR-DOLE by way of

appeal,[45] and yet, they conducted the election,

allegedly because it was due under Republic Act

No. 6715. Why this was done by the petitioners

escapes us. But as rightfully observed by the BLR-

DOLE:

. . . Indeed, it is obvious that the general

membership meeting and election of officers was

done purposely to pre-empt our resolution of this

case and, more importantly, the participation of

appellees in the election. This cannot be

tolerated.[46]

Third Issue: was the indefinite suspension of the

private respondents illegal?

We rule in the affirmative.

The petitioners posit the theory that the records do

not support the findings of the BLR-DOLE that no

investigation was conducted making the

suspension illegal because of lack of due process.

It is best to remind the petitioners that this Court, as

we have held in a long line of decisions, is not a trier

of facts.[47] The instant case is a petition for review

on certiorari[48] where only questions of law may be

raised. The exceptions[49] to this rule find no

application here. This being the case, the findings of

fact of the DOLE-NCR and the BLR-DOLE as affirmed

by the Court of Appeals to the effect that no

investigation was conducted, shall not be

disturbed. As properly held by the court a quo:

Petitioners have failed to show that the findings of

facts and conclusions of law of both the DOLE-NCR

and BLR-DOLE were arrived at with grave abuse of

discretion or without substantial evidence. A careful

review of the pleadings before Us reveals that the

decision and resolutions of the concerned agencies

were correctly anchored in law and on substantial

evidence.[50]

Fourth Issue: is the non-holding of meetings and

non-submission of reports by the petitioners moot

and academic, and whether the decision to hold

meetings and submit reports contradict and

override the sovereign will of the majority?

We do not believe so.

This issue was precipitated by the Court of Appeals

decision affirming the order of DOLE Regional

Director Maximo B. Lim for the petitioners to hold a

general membership meeting wherein they make

open and available the union’s/association’s books

of accounts and other documents pertaining to the

union funds, and to regularly conduct special and

general membership meetings in accordance with

the union’s constitution and by-laws.[51] It is to be

recalled that the private respondents, when they

filed a complaint before the DOLE-NCR also

complained of petitioners’ refusal to render

financial and other reports, and deliberate refusal to

call general and special meetings.

Petitioners do not hide the fact that they belatedly

submitted their financial reports and the minutes of

their meetings to the DOLE. The issue of belatedly

submitting these reports, according to the

petitioners, had been rendered moot and

academic by their eventual compliance. Besides,

this has been the practice of the association.[52]

Moreover, the petitioners likewise maintain that the

passage of General Assembly Resolution No. 10

dated 10 December 1997 and Resolution No. 8,

Series of 2000, following the application of the

principle that the sovereign majority rules, cured

any liability that may have been brought about by

their belated actions.[53]

As found by the Court of Appeals, the financial

statements for the years 1995 up to 1997 were

submitted to DOLE-NCR only on 06 February 1998

while that for the year 1998 was submitted only on

16 March 1999.[54] The last association’s meeting

was conducted on 21 April 1995, and the copy of

the minutes thereon was submitted to BLR-DOLE only

on 24 February 1998.

The passage of General Assembly Resolution No. 10

dated 10 December 1997 and Resolution No. 8,

Series of 2000,[55] which supposedly cured the

lapses committed by the association’s officers and

reiterated the approval of the general membership

of the acts and collateral actions of the

association’s officers cannot redeem the petitioners

from their predicament. The obligation to hold

meetings and render financial reports is mandated

by UEEA’s constitution and by-laws. This fact was

never denied by the petitioners. Their eventual

compliance, as what happened in this case, shall

not release them from the obligation to accomplish

these things in the future.

Prompt compliance in rendering financial reports

together with the holding of regular meetings with

the submission of the minutes thereon with the BLR-

DOLE and DOLE-NCR shall negate any suspicion of

dishonesty on the part of UEEA’s officers. This is not

only true with UEEA, but likewise with other

unions/associations, as this matter is imbued with

public interest. Undeniably, transparency in the

official undertakings of union officers will bolster

genuine trade unionism in the country.

WHEREFORE, in view of all the foregoing, the

Decision and Resolution of the Court of Appeals

subjects of the instant case, are AFFIRMED. Costs

against the petitioners.

SO ORDERED.

Puno, (Chairman), Austria-Martinez and Callejo, Sr.,

JJ., concur.

Tinga, J., no part.

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-24864 April 30, l985

FORTUNATO HALILI, doing business under the name

and style HALILI TRANSIT (substituted by EMILIA DE

VERA DE HALILI), petitioner

vs.

COURT OF INDUSTRIAL RELATIONS and HALILI BUS

DRIVERS and CONDUCTORS UNION

(PTGWO),respondents.

G.R. No. L-27773 April 30, l985

EMILIA DE VERA VDA. DE HALILI, petitioner,

vs.

COURT OF INDUSTRIAL RELATIONS and HALILI BUS

DRIVERS AND CONDUCTORS UNION

(PTGWO),respondents.

G.R. No. L-38655 April 30, l985

FELICIDAD M. TOLENTINO, et al., petitioners,

vs.

COURT OF INDUSTRIAL RELATIONS, et

al., respondents.

G.R. No. L-30110 April 30, l985

EMILIA DE VERA VDA. DE HALILI petitioner,

vs.

HALILI BUS DRIVERS AND CONDUCTORS UNION-

PTGWO and COURT OF INDUSTRIAL

RELATIONS,respondents.

R E S O L U T I O N

MAKASIAR, J.:

Before Us for resolution is the urgent motion to cite

Atty. Benjamin C. Pineda, Ricardo Capuno and

Manila Bank (Cubao Branch) in contempt for the

alleged continued failure of aforenamed parties to

comply with the temporary mandatory restraining

order issued by this Court on September 1, 1983 and

with the resolution dated September 13, 1983 which

again directed Atty. Pineda and union administrator

Capuno to comply with the aforesaid mandatory

restraining order and which ordered the Manila

Bank to transfer the funds allocated for the workers

to the NLRC (p. 376, L-24864, rec.; p. 301, L027773

rec.).

The issuance of the temporary mandatory

restraining order stemmed from the questioned

orders of September 23, 1982 and February 9, 1983

issued by Labor Arbiter Raymundo Valenzuela in

Case No. 1099-V before the NLRC which orders

respectively allowed the sale of the property

awarded to satisfy or answer for the claims of the

union members in these four cases and authorized

the distribution of the proceeds of the purchase.

For a better appreciation of the aforesaid motion for

contempt, We must recall certain prefatory facts

which the Solicitor General has so aptly summed

up. Thus:

The above-entitled cases involve disputes

regarding claims for overtime of more than five

hundred bus drivers and conductors of Halili Transit.

Litigation initially commenced with the filing of a

complaint for overtime with the defunct Court of

Industrial Relations on August 20, 1958 docketed as

CIR Case No. 1099-V. The disputes were eventually

settled when the contending parties reached an

Agreement on December 23, 1974, the pertinent

portions of which are as follows:

WHEREAS, in the face of this strong urging on the

part of the Supreme Court Justices upon the parties

to put an immediate end to this case by amicable

settlement, the parties repeatedly came to

conference, conscientiously explored all avenues

of settlement, and finally arrived at the tentative

agreement (tentative because of the condition that

the same be sanctioned by the court in the estate

case) whereby the Administratrix would transfer to

the employees title to that tract of land, covered by

TCT No. 36389, containing an area of approximately

33,952 square meters, situated in the Barrio of San

Bartolome, Municipality of Caloocan, Province of

Rizal, and pay in addition the cash amount of

P25,000.00 in full and final satisfaction of all the

claims and causes of action of all of the employees

against the estate of Fortunato F. Halili subject of

CIR Case No. 1099-V.

xxx xxx xxx

NOW, THEREFORE, for and in consideration of the

foregoing and of the covenants, stipulations and

undertakings hereinafter contained, the parties

have agreed as follows:

l. The UNION, its officers and members-claimants

relative to CIR Case No. 1099-V, shall withdraw and

dismiss with prejudice Case No. 1099-V filed by the

UNION in behalf of its members-claimants before

the Court of Industrial Relations and all its incidents

thereto.

2. The ESTATE shall deliver or cause to be delivered,

to the UNION the following:

(a) Deed of Transfer of a parcel of land situated in

Barrio San Bartolome, Caloocan City, containing an

area of THIRTY-THREE THOUSAND NINE HUNDRED

FIFTY-TWO (33,952) Square Meters, more or less, and

covered by Transfer Certificate of Title No. 35389 of

the Registry of Deeds of Rizal, to be made, upon

authority and approval granted by the Court of First

of Rizal, Branch IV, at Quezon City, in Proc. No. Q-

10852 in the name of the Halili Bus Drivers &

Conductors Union (PTGWO), free from any and all

liens encumbrances, and any and all claims

whatsoever.

(b) Negotiable Check for TWENTY-FIVE THOUSAND

(P25,000.00) PESOS in the name of Domingo D.

Cabading, President of the UNION.

3. The transfer of the above-described parcel of

land and receipt of the amount of P25,000.00

constitute the full and final satisfaction of the claims

and award in said CIR Case No. 1099-V, as well as

any and all attorney's liens in said case, for and in

consideration of which the UNION members-

claimants in CIR Case No. 1099-V by these present

now and forever release and quitclaim Halili

Enterprises, Halili Transit, Fortunato F. Halili his estate,

heirs and successors by reason of CIR Case No.

1099-V, it being their intention that they be

absolutely, completely and finally absolved and

released from any and all liability in said case,

including attorneys' liens the transfer of the property

and payment of the amount hereinabove stated

constituting for all intents and purposes a full, final

and complete settlement and satisfaction of the

award in CIR Case No. 1099-V and all incidents

thereto.

4. The UNION and its undersigned officers hereby

warrant that the UNION is a duly registered labor

organization and that in a special meeting called

for the purpose they were duly authorized on

December 22, 1974, by all the members- claimants

in CIR Case No. 1099-V to sign this Memorandum of

Agreement with Release and Quitclaim which was

unanimously approved and ratified by said

members-claimants as evidenced by a Resolution

dated December 22, 1974, a copy of which is

attached hereto and made a part hereof as Annex

"B", and hereby jointly and severally hold the estate

and heirs of Fortunato F. Halili free and harness from,

and undertake to indemnify them for, any and all

liability for any claims by members of the UNION,

their heirs, assigns and agents relating to CIR Case

No. 1099-V or attorneys' liens in connection

therewith (69 SCRA 509-510).

On January 6, 1975, pursuant to the Agreement, the

administratrix of the estate of Fortunato F, Halili

executed a Deed of Conveyance of Real Property,

transferring the aforementioned parcel of land to

the Halili Bus and Conductors Union (PTGWO) in trust

for the members of the union claimants. The parcel

of land was eventually registered in the name of the

Union on February 14, 1975. Hence, on February 10,

1976, the contending parties moved for the

dismissal of G.R. No. L-30110 and G.R. No. L-38655,

which this Honorable Court granted on February 27,

1976 (69 SCRA 505). The two other cases, G.R. No. L-

24864 and G.R. No. L- 27773, were previously

disposed of on February 26, 1968 and December 28,

1970, respectively (22 SCRA 785. and 36 SCRA 522).

On August 9, 1982, the Union, through Atty.

Benjamin C. Pineda, filed an urgent motion with the

Ministry of Labor and Employment (MOLE)

requesting for authority to sell and dispose of the

property. The motion was granted in an order dated

September 23, 1982. A prospective buyer, the

Manila Memorial Park Cemetery, inc. expressed its

misgivings on the authority of the Union to sell the

property in view of sec. 66 of PD 1529 which requires

no less than an order from a court of competent

jurisdiction as authority to sell property in trust. So,

Atty. Pineda filed a motion with the Supreme Court

on December 1, 1982 requesting for authority to sell

the property, This Honorable Court, however, merely

noted the motion in a resolution dated December 8,

1982.

Nevertheless, Atty. Pineda, without authority from

the Supreme Court but relying on the earlier

authority given him by the Ministry of Labor, filed

another urgent motion with the latter, praying that

the Union be authorized to sell the lot to the Manila

Memorial Park Cemetery, Inc. and to make

arrangements with it such that payment will be

advanced for the real estate taxes inclusive of

penalties, attorney's lien which is equivalent to a

thirty-five percent (35%) of the total purchase price,

and home developer's fee of P69,000.00.

Apparently, the prospective purchaser had

decided to withdraw its objection regarding the

Union's authority to sell. In an Order dated February

9, 1983, Labor Arbiter Raymundo R. Valenzuela

granted the motion. So, the sale was finally

consummated on June 7, 1983, resulting in the

execution of an escrow agreement on June 8, 1983

wherein the purchase price was deposited under

escrow with the Manila Bank-Cubao Branch. The

Bank then released the amounts due the claimants

in accordance with the escrow agreement" (pp.

352- 356, L-24864 rec.).

The dispositive portion in L-24864 is re-stated

hereunder:

WHEREFORE, the appealed order and resolution en

banc are hereby affirmed and the Court of

Industrial Relations is hereby enjoined to make a

judicial determination of the union membership of

the claimants, while the Examining Division of said

court shall proceed with its computation of the

compensable hours of work rendered by, and the

corresponding compensation payable to, the

drivers and conductors admitted by both parties to

be union members since October 1, 1956 and those

contended by the union to be such members but

disputed by the employer. No costs. So ordered (p.

186, L-24864 rec.).

When Atty. Jose C. Espinas (herein movant and

alleged original counsel for the Union) learned of

the sale and apportionment of the proceeds from

past Union president Amado Lopez, he requested

Labor Arbiter Raymundo Valenzuela to allow him to

look into the records of Case No. 1099-V. The latter,

however, told him that the records of the aforecited

case were missing. Thereupon, Atty. Espinas

requested Director Pascual Reyes of the NLRC to

locate the records (p. 356, L24864 rec.).

Hence, Atty. Espinas filed the urgent motion with

prayer for a temporary mandatory restraining order

on August 26, 1983 and the supplement thereto on

August 29, 1983 (pp. 215, 227, L-24864 rec.).

On August 30, 1983, the records of Case No. 1099-V

were finally found and Atty. Espinas was dully

informed of the development,

The above two motions question the legality of the

orders dated September 23, 1982 and February 9,

1983 issued by Labor Arbiter Raymundo Valenzuela

in Case No. 1099-V before the NLRC which

authorized the sale of the awarded property and

the distribution of the proceeds from such purchase.

Movants Union and counsel Espinas upon filing of

the motions urgently pray of thisourt to:

1. Require Atty. Benjamin C. Pineda to deposit with

the NLRC the amount of P712,992.00 paid to him or

deposited to his account at Manila Bank, Cubao

Branch,allegedly representing 35% attorney's fees

on the sale of 33,952 square meters of the lot

registered in the name of the Union;

2. Require the Halili Drivers and Conductors Union

through Domingo Cabading or any of his

representatives to deposit with the NIRC the 6%

alleged union expenses paid to them or similarly

deposited to their account;

3. Implead with leave of court this Manila Bank

Cubao Branch to require the said bank to prevent

further withdrawals of amount deposited in the

name of Atty. Pineda and/or the Halili Drivers and

Conductors Union or any of its officers and to turn

over any remaining deposits to the NLRC for proper

disposition;

4. Should Atty. Pineda and the Union officers have

already withdrawn the deposits or parts thereof,

require them to post a bond in the equivalent

amounts of 35% (attorney's fee), 6% (union

expenses), and 5% (broker's fee) respectively of the

total proceeds of the sale of the property, solidarity

(p. 219, L-24864 rec.; p. 160, L-27773 rec.).

Likewise, and after due consideration of the merits,

movants prayed that—

1. the order of Arbiter Valenzuela dated February 9,

983 be nullified insofar as it allows Atty. Pineda 35%

attorney's fees;

2. the NLRC be directed to locate the records of

Case No. 1099-V or reconstitute the same and

thereafter to equitably dispose 20% as fees to all

lawyers who participated in the proceedings and

any excess amounts to be again distributed to the

workers; and

3. these cases be remanded to the NLRC with

instructions as above-stated and that the proper

penalty be imposed on those involved and who

have acted fraudulently and illegally (p. 220, L-

24864 rec.; p. 165, L-27773 rec.).

The succeeding pleadings and developments

which are common to all these cases are now

presented chronologically.

On August 29, 1983, Atty. Espinas, for himself and

members of the respondent Union, filed a

supplement to urgent motion stating that the

prayers in the urgent motion of August 26, 1983 are

reiterated and praying for the nullification of Arbiter

Valenzuela's order not only on the award of

attorney's fees but also on the allowance of

payment of "union obligations" not previously

authorized nor approved by the NLRC (p. 227, L-

24864, rec.; p. 176, L-27773 rec.).

In its resolution dated September 1, 1983, this Court

impleaded the Manila Bank, Cubao Branch as party

respondent and directed the issuance of a

temporary mandatory restraining order (p. 234, L-

24864 rec. & p. 187, L-27773 rec.). This Court

correspondingly issued a temporary mandatory

restraining order on the same date which enjoined

Atty. Benjamin C. Pineda or his agents or any

person acting in his stead to deposit with the NLRC

the amount of P712,992.00 paid to him or deposited

in his account at Manila Bank, Cubao Branch

allegedly representing 35% attorney's fees on the

sale of 33,952 square meters of the lot registered in

the name of Halili Drivers and Conductors Union;

directed the Union thru Domingo Cabading or his

agents to deposit with the NLRC 6% alleged union

expenses paid to the Union or similarly deposited to

its account; and ordered the NLRC and Manila

Bank, Cubao Branch, or their agents or persons in

their stead not to allow withdrawals of amounts

deposited in the name of Atty. Benjamin C. Pineda

and/or the Union or any of its officers (P. 235, L-

24864; p. 188, L-27773 rec.).

On September 6, 1983, respondent Union, thru Atty.

Pineda, filed its comment, in compliance with the

resolution of September 1, 1983, on the urgent

motion and the supplement thereto both filed by

counsel Espinas, alleging therein that the subject

matter sought to be enjoined or mandated by the

restraining order ceased to exist rendering the

same moot and academic, and thus praying for the

dismissal of the said motion and the supplement

thereto (p. 237, L-24864 rec.; p. 191, L-27773 rec.).

On September 7, 1983, Atty. Pedro Lopez, an

original associate of Atty. Espinas, filed his motion

for leave to intervene, with the submission that the

lawyers involved should only divide 20% fees as per

the workers' contract and the rest refunded by Atty.

Pineda and the alleged "union officers" for

redistribution to the members (p. 265, L-24864, rec.;

p. 219. L-27773 rec.).

Atty. Espinas, in behalf of the workers, filed a

manifestation and motion to require Atty, Pineda

and the union to comply with the temporary

mandatory restraining order on September 9, 1983,

with prayer that the Manila Bank be ordered to

transfer the funds allocated for the workers to the

NLRC, which should be instructed to pay the

workers upon proper Identification (without

prejudice to additional shares) or to mail such

amounts by money order or manager's check to

the workers' addresses as furnished to the NLRC (p.

274, L-24864, rec.; p. 231, L-27773 rec.).

On September 12, 1983, petitioner filed a

manifestation in compliance with the resolution of

September 2, 1983 stating, among other things, that

its liability had been completely extinguished with

the approval of the Memorandum of Agreement

with Release and Quitclaim in L-38655 and L-30110;

that said agreement operated as an absolute and

complete release of petitioner from any liability to

the Union; and that petitioner had not been given

any notice of any proceedings respecting cases

subsequent to the promulgation of the decisions

aforestated (p. 281, L-24864, rec.; p. 237, L-27773

rec.).

Counsel Espinas (for the workers involved) filed his

reply to comments of respondent Union on

September 14, 1983 praying for this Court to:

1. nullify the order of February 9, 1983 issued by

Arbiter Raymundo Valenzuela in CIR Case No. 1099-

V and others connected therewith regarding the

distribution of proceeds of the sale of the land

belonging to the members-claimants for lack of

due process and for being contrary to law;

2. nullify the 35% attorney's fees of Atty. Benjamin

Pineda as illegal and unconscionable and in

disregard of other lawyers in the case;

3. require reimbursement to the members-from the

Union P101,856.00 allocated without their consent

as Union expenses; P101,856 unreceipted brokers'

fees less P4,020.40 expenses for the transfer of title;

to refund the 1 % of the net proceeds, P9,596.18, for

named claimants; and to secure a refund of

P308,000.00 from the P712,992.00 fees of Atty.

Pineda (the excess of 20% fees for all lawyers);

4. subject the balance of P404,992.00 of the

remainder of Atty. Pineda's 35% fees for distribution

among the three lawyers as may be determined by

the NLRC; and

5. should this Court so decides, fix the fees (p. 285,

L- 24864 rec.; p. 240, L-27773 rec.).

On September 13, 1983, the Solicitor General filed

his comment on the urgent motion and the

supplement thereto dated August 25, 1983 and

August 29, 1983, respectively with the

recommendations that (1) the orders of Arbiter

Valenzuela dated September 23, 1982 and February

9, 1983 be nullified for having been issued without

due process; (2) the case must be remanded to the

NLRC for further proceedings; and (3) the temporary

restraining order issued by this Court on September

1, 1983 be maintained, pending final resolution by

the NLRC (p. 351, L-24864 rec.).

The Solicitor General, on October 6, 1983, filed his

manifestation and motion in lieu of comment on the

motion of Atty. Pedro Lopez for leave to intervene in

L-24864 and L-27773 (p. 360, L-24864 rec.; p. 289, L-

27773 rec.).

On October 6, 1983, counsel Espinas filed his

comment on the intervention of Atty. Pedro Lopez

wherein he offers no objection to the latter's

intervention and states that said counsel is also

entitled to attorney's fees in accordance with his

participation (p. 364, L-24864 rec.; p. 292, L-27773

rec.).

Atty. Pineda filed his comment and manifestation

on October 7, 1983, in compliance with the

resolution of September 13, 1983, alleging therein

that as per Retainer's Contract dated January 1,

1967, he handled Case No. 1099-V before the Court

of Industrial Relations alone. On the mandatory

restraining order, Atty. Pineda claims that as of

October 4, 1983, he had a balance of P2,022.70 in

his account with the Manila Bank (p. 370, L-24864

rec.; p. 295, L-27773 rec.).

In its resolution dated October 18, 1983, this Court

(1) set, aside as null and void the orders of

September 23, 1982 and February 9, 1983 of Arbiter

Raymundo R. Valenzuela; (2) allowed the

intervention of Atty. Pedro Lopez; (3) directed the

Manila Bank (Cubao Branch), Atty. Benjamin

Pineda, and the Halili Drivers and Conductors Union

through Domingo Cabading or any of his

representatives, to comply with the temporary

mandatory restraining order issued on September 1,

1983 and the resolution dated September 13, 1983,

within ten [10] days from receipt thereof; and (4)

remanded these cases to the NLRC for further

proceedings (p. 374, L-24864 rec.; p. 299, L-27773

rec.).

The day before or on October 17, 1983, Sergio de

Pedro, as representative of the workers and assisted

by Atty. Espinas, thus fided the urgent motion to cite

Atty. Pineda, Ricardo Capuilo and Manila Bank

(Cubao Branch) in contempt, alleging therein that

after two letters dated October 6 and October l4,

l983 to the NLRC which inquired as to whether or not

compliant, with the restraining order had been

made, the Commission certified that as of October

14, 1983, no deposits had been effected by the

parties so (directed (p. 376, L-24864 rec.; p. 301, L-

27773 rec.).

In its manifestation and motion filed on November 2,

1983, respondent Manila Banking Corporation

(Rustan-Cubao Branch), in compliance with this

Court's resolution of September 13, 1983, stated that

it transmitted or paid to the NLRC the amount of

P417,380.64 under Cashier's Check No. 34084190 for

the account of the Union and P2,022.70 under

Cashier's Check No. 34084191 for the account of

Atty. Pineda and thus prayed therein that the

aforesaid transmittals be deemed as sufficient

compliance with the aforecited resolution and that

the urgent motion to cite respondents in contempt

dated October 17, 1983 be considered moot and

academic (p. 390, L-24864 rec.).

On November 8, 1983, respondent Atty. Pineda filed

his manifestation and motion in lieu of comment in

compliance with this Court's resolution of October

20, 1983, stating that he and respondent Union

thereby adopt the aforecited manifestation and

motion of respondent Manila Banking Corporation

and thus prayed that since they have complied

with this Court's resolution of September 13, 1983,

the urgent motion to cite them for contempt be

considered moot and academic (p. 394, L-24864

rec.; p. 310, L-27773 rec.).

On November 10, 1983, respondent Manila Banking

Corporation filed another manifestation and motion

in lieu of commence, by way of compliance with

the Court's resolution of October 20, 1983 with

prayer that its previous manifestation and motion

dated October 28, 1983 and filed on November 2,

1983 be considered as sufficient compliance with

the resolution of September 13, 1983 which would

render the urgent motion to cite respondents in

contempt moot and academic (p. 396, L-24864 rec.

p. 312, L-27773 rec.).

On the foregoing manifestations and motions,

representative Sergio de Pedro, with the assistance

of Atty. Espinas, filed a comment on November

16,1983 wherein he alleged that out of the

P2,037,120.00 purchase price, only Pl,940,127.29

was deposited with the Manila Bank; that Atty.

Pineda has yet to return the balance of P710,969,30;

and that the Union has still to account for

P111,452.18 (p. 399, L- 24864 rec.; p. 315, L-27773

rec.).

December 14, 1983, respondent Union filed its reply

to Mr. de Pedro's above unsigned comment therein

stating among other things that the alleged missing

amount of P96.992.71 was used for the payment of

outstanding real estate taxes on real property of

said Union covered by TCT No. 205755 and that the

amount of P2,022.70 only was remitted by Manila

Bank to the NLRC for the account of Atty. Pineda (p.

323, L-27773 rec.)

On December 20, 1983, Mr. de Pedro and Atty.

Espinas, for the workers involved, filed their

rejoinder to the comment of Atty. Pineda and Mr.

Capuno reiterating therein their plea to declare

Atty. Pineda and Mr. Capuno in contempt of court

and to mete out the proper penalty (p. 328, L-27773

rec.).

The Manila Banking Corporation filed its

compliance with the Court resolution of November

22, 1983 on February 3, 1984, praying that its report

to the NLRC on the amount of withdrawals be

considered as sufficient compliance with the said

resolution (p. 343, L-27773 rec.).

Atty. Espinas filed his comment and motion on

March 15, 1984, stating among other things that as

per report of the Manila Bank to the NLRC, Atty.

Pineda has not yet complied with the said order. He

thus moved that Atty. Pineda be required to post a

bond on the undeposited balance in the amounts

of P710,969.30 and that Mr. Capuno be also

required to post a bond before the NLRC on the

undeposited balance of P52,236.04 during the

pendency of the motion for contempt (p. 373, L-

27773 rec.).

On April 4, 1984, Mr. Sergio de Pedro filed his reply

to the aforesaid comment of the Union administrator

and Atty. Pineda stating therein that there are still

questions to be resolved on the merits before the

NLRC and hence, prays that Arbiter Antonio Tirona

be required to continue hearing the merits of the

case pending in the said Commission (p. 377, L-

27773 rec.).

Before We resolve the motion for contempt, certain

crucial facts which have surfaced and which

precipitated Our issuance of the resolution of

October 18, 1983 declaring the two questioned

orders of Arbiter Valenzuela as null and void, must

be retraced.

Then Union President Amado Lopez, in a letter

dated August 21, 1958, informed J.C. Espinas and

Associates that the general membership of the said

Union had authorized a 20% contingent fee for the

law firm based on whatever amount would be

awarded the Union (p. 267, L-24864 rec.).

Atty. Jose C. Espinas, the original counsel,

established the award of 897 workers' claim in the

main cases before the defunct CIR and the

Supreme Court. In L-24864, the Notice of Judgment

of this Court dated February 26, 1968 was served on

Messrs. J.C. Espinas & Associates (p. 188, L-24864

rec.). In L-27773, the Notice of Judgment dated

December 29, 1970 was sent to Atty. B.C. Pineda &

Associates under same address-716 Puyat Bldg.,

Suit 404 at Escolta, Manila (p. 147, L-27773 rec.)

Note that this is the same address of Atty. J.C.

Espinas & Associates.

When Atty. 'Pineda appeared for the Union in these

cases, still an associate of the law firm, his

appearance carried the firm name B.C. Pineda and

Associates," giving the impression that he was the

principal lawyer in these cases.

Atty. Pineda joined the law firm of Atty. Espinas in

1965 when these cases were pending resolution. He

always held office in the firm's place at Puyat

Building, Escolta until 1974, except in 1966 to 1967

when he transferred to the Lakas ng Manggagawa

Offices. During this one-year stint at the latter office,

Atty. Pineda continued handling the case with the

arrangement that he would report the

developments to the Espinas firm. When he rejoined

the law firm in 1968, he continued working on these

cases and using the Puyat Building office as his

address in the pleadings.

When Atty. Pineda rejoined the Espinas firm in 1968,

he did not reveal to his partners (he was made the

most senior partner) that he had a retainer's

contract entered into on January 1, 1967 which

allegedly took effect in 1966. He stayed with the law

firm until 1974 and still did not divulge the 1967

retainer's contract. Only the officers of the Union

knew of the contract.

The alleged retainer's contract between Atty.

Pineda and the Union appears anomalous and

even illegal as well as unethical considering that-

1. The contract was executed only between Atty.

Pineda and the officers of the Union chosen by

about 125 members only. It was not a contract with

the general membership, Only 14% of the total

membership of 897 was represented. This violates

Article 242 (d) of the Labor Code which provides:

The members shall determine by secret ballot, after

due deliberation, any question of major policy

affecting the entire membership of the organization,

unless the nature of the organization or force

majeure renders such secret ballot impractical, in

which case the board of directors of the

organization may make the decision in behalf of

the general membership (emphasis supplied).

2. The contingent fee of 30% for those who were still

working with Halili Transit and the 45% fee for those

who were no longer working worked to the

prejudice of the latter group who should and were

entitled to more benefits. Thus, too, when the

alleged retainer's contract was executed in 1967,

the Halili Transit had already stopped operations in

Metro Manila. By then, Atty. Pineda knew that all the

workers would be out of work which would mean

that the 45% contingent fee would apply to all.

3. The contract which retroactively took effect on

January 1, 1966, was executed when Atty. Espinas

was still handling the appeal of Halili Transit in the

main case before the Supreme Court. Atty. Pineda

would have but did not substitute himself in place of

Atty. Espinas or the law firm on the basis of such

contract.

4. When Atty. Pineda filed his motion for approval of

his attorney's lien with Arbiter Valenzuela on

February 8, 1983, he did not attach the retainer's

contract.

5. The retainer's contract was not even notarized (p.

248, L-24864 rec.).

The Manila Memorial Park Cemetery, Inc., as the

prospective buyer, initially expresses its misgivings

over the authority of the Union to sell subject

property conformably with Section 66 of P.D. No.

1529, which requires an order from a court of

competent jurisdiction authorizing the sale of a

property in trust. The pertinent portion of Section 66

provides:

No instruments which transfers or mortgages or in

any way deals with registered land in trust shall be

registered, unless the enabling power thereto is

expressly conferred in the trust instrument, or unless

a final judgment or order of a court of competent

jurisdiction has construed the instrument in favor of

the power, in which case a certified copy of such

judgment or order may be registered.

The decision of aforenamed purchaser to stop

questioning the Union's authority to sell and the

expeditious manner by which Arbiter Valenzuela

granted Atty. Pineda's motion for such authority to

sell the property make the entire transaction

dubious and irregular.

Thus, without notice to the other lawyers and

parties, Atty. Pineda commenced the proceeds

before the NLRC with the filing of a motion and

manifestation on August 9, 1982 with Arbiter

Valenzuela of the NLRC Office of the Labor Ministry

wherein he asked for authority to sell the property.

On September 23, 1983 or just over a month, Arbiter

Valenzuela approved the motion per order of the

same date. Notably, only Atty. Pineda and the

lawyers of the purchaser were informed of such

order.

On February 4, 1983, again without notice to Atty.

Espinas and Atty. Lopez, Atty. Pineda filed a motion

with Arbiter Valenzuela wherein he asked for

authority to distribute the proceeds of the sale of the

property. This distribution would include his

attorney's fee which was allegedly the subject of a

retainer contract entered into between him and the

alleged Union officers, On February 9, 1983, or

barely five days from the day the motion was filed,

Arbiter Valenzuela, without informing the other

lawyers and relying exclusively on the unverified

motion of Atty. Pineda (the records of the case were

not on hand), approved the said motion which

authorized the appointment.

This Court, as earlier stated, nullified said orders

dated September 23, 1982 and February 9, 1983 of

Labor Arbiter Valenzuela as violative of the due

process clause. It is a settled rule that in

administrative proceedings, or cases coming

before administrative tribunals exercising quasi-

judicial powers, due process requires not only

notice and hearing, but also the consideration by

the administrative tribunal of the evidence

presented; the existence of evidence to support the

decision; its substantiality a decision based thereon

or at least contained in the record and disclosed to

the parties; such decision by the administrative

tribunal resting on its own independent

consideration of the law and facts of the

controversy; and such decision acquainting the

parties with the various issued involved and the

reasons therefore (Ang Tibay vs. Court, 69 Phil. 635,

cited on p. 84, Philippine Constitutional Law,

Fernando, 1984 ed.)

Significantly Atty. Pineda's act of filing a motion with

this Court on December 1, 1982 praying for authority

to sell was by itself an admission on his part that he

did not possess the authority to sell the property and

that this Court was the proper body which had the

power to grant such authority. He could not and did

not even wait for such valid authority but instead

previously obtained the same from the labor arbiter

whom he knew was not empowered to so

authorize. Under Article 224 (a) of the Labor Code,

only final decisions or awards of the NLRC, the Labor

Arbiter, or compulsory or voluntary arbitrators may

be implemented or may be the subject of

implementing orders by aforenamed body or

officers.

When Atty. Espinas discovered the sale of the

property, he went to Arbiter Valenzuela to look into

the transaction who told him that the records of CIR

Case No. 1099-V were missing. It took director

Pascual Reyes of the NLRC to locate the records.

The 45% attorney's lien on the award of those union

members who were no longer working and the 30%

lien on the benefits of those who were still working

as provided for in the alleged retainer's contract are

very exorbitant and unconscionable in view of

Section 11, Rule VIII of Book III which explicitly

provides:

Sec. 11. Attorney's fees—Attorney's fees on any

judicial or administrative proceedings for the

recovery of wages shall not exceed 10% of the

amount awarded. The fees may be deducted from

the total amount due the winning party.

The amount of P101,856.00 which Atty. Pineda

donated to the Union and which actually

corresponds to 5% of the total 35% attorney's fees

taken from the proceeds (p. 263, L-24864, rec.)

appears improper since it amounts to a rebate or

commission. This amount was subsequently treated

as union miscellaneous operating expenses without

the consent of the general membership.

Thus, in the case of Amalgamated Laborers'

Association vs. Court of Industrial Relations (L-23467,

22 SCRA 1267 [March 27, 1968]), We declared:

We strike down the alleged oral agreement that the

union president should share in the attorney's fees.

Canon 34 of Legal Ethics condemns this

arrangement in terms clear and explicit. It says: 'No

division of fees for legal services is proper, except

with another lawyer, based upon a division of

service or responsibility.' The union president is not

the attorney for the laborers. He may seek

compensation only as such president. An

agreement whereby a union president is allowed to

share in attorney's fees is immoral. Such a contract

we emphatically reject. It cannot be justified.

A contingent fee contract specifying the

percentage of recovery an attorney is to receive in

a suit 'should be reasonable under all the

circumstances of the case, including the risk and

uncertainty of the compensation, but should always

be subject to the supervision of a court, as to its

reasonableness. (emphasis supplied).

A deeper scrutiny of the pleadings in L-24864

notably indicates a fraudulent or deceitful pattern in

the actuations of Atty. Pineda. Thus, in his motion for

execution of judgment filed on September 18, 1965

in this case, he signed for and in behalf of "J.C.

Espinas & Associates" (p. 323, rec.). In his

manifestation dated December 10, 1968, he signed

as "B.C. Pineda," lone counsel for petitioner (p. 327,

rec.); and yet, he carried the address of Espinas &

Associates at 716 G. Puyat Building, Escolta.

However, in the October 29, 1968 resolution of this

Court, a copy thereof was served on "Messrs. J.C.

Espinas, B.C Pineda, J.J. dela Rosa & Associates" at

Puyat Building, Escolta (p. 324, rec.). In the notice of

judgment dated December 29, 1970, this Court

addressed the said pleading to "Attys. B.C. Pineda &

Associates with the same Puyat Building address (p.

325, rec.). Notably also, then Union President

Amado Lopez addressed his letter dated August 21,

1958 to J.C. Espinas & Associates" wherein he

informed the latter that the general membership of

the Union had authorized them a 20%, contingent

fee on whatever award would be given the workers

(p. 267, rec.).

The Manila Banking Corporation (Cubao Branch)

has manifested that it turned over to the NLRC the

amount of P417,380.64 for the Union's account,

which appears to be the balance of P950,021.76

corresponding to the net proceeds for distribution to

the workers after deducting P525,480.40, the total

payments to claimants. The amount of P417,380.64

appears lacking, since accurately computed, the

balance should be P424,541,36.

However, the Union has yet to account for

P101,856.00, the 5% donation or share from Atty.

Pineda's attorney's fee of 35%.

For the account of Atty. Pineda, the Manila Banking

Corporation has remitted to the NLRC the amount of

P2,022.70 only. This means that Atty. Pineda is still

accountable for the amount of P710,969.30. He is

directed to return the amount of P712,992.00

representing the 35% attorney's fees he unlawfully

received.

In view of Our resolution of October 18, 1983, which

set aside as null and void the questioned orders

dated September 23, 1982 and February 9, 1983

issued by Arbiter Raymundo Valenzuela, the sale of

the Union property and the distribution of the

proceeds therefrom had been effected without

authority and, therefore, illegal Consequently. Atty.

Pineda and Arbiter Valenzuela become liable for

their unauthorized acts,

Atty. Pineda should be cited for indirect contempt

under paragraphs (b), (c) and (d) of Section 3, Rule

71 of the Revised Rules of Court, The said

paragraphs read thus:

Sec. 3. indirect contempts to be punished after

charge and hearing.—

xxx xxx xxx

(b) Disobedience of or resistance to a lawful writ,

process, order, judgment, or company court, or

injunction granted by a court or judge, including

the act of a person who, after being dispossessed or

ejected from any real property by the judgment or

process of any court of competent jurisdiction,

enters or attempts or induces another to enter into

or upon such real property, for the purpose of

executing acts of ownership or possession, or in any

manner disturbs the possession given to the person

adjudged to be entitled thereto;

(c) Any abuse of or any interference with the

process or proceedings of a court not constituting

direct contempt under section 1 of this rule;

(d) Any improper conduct tending, directly or

indirectly to impede, obstruct, or degrade the

administration of justice.

Contempt of court is a defiance of the authority,

justice or dignity of the court; such conduct as

tends to bring the authority and administration of

the law into disrespect or to interfere with or

prejudice parties litigant or their witnesses during

litigation (12 Am. jur. 389, cited in 14 SCRA 813).

Contempt of court is defined as a disobedience to

the court by acting in opposition to its authority,

justice and dignity. It signifies not only a willful

disregard or disobedience of the court's orders, but

such conduct as tends to bring the authority of 'the

court and the administration of law into disrepute or

in some manner to impede the due administration

of justice (17 C.J.S. 4).

This Court has thus repeatedly declared that the

power to punish for contempt is inherent in all courts

and is essential to the preservation of order in

judicial proceedings and to the enforcement of

judgments, orders, and mandates of the court, and

consequently, to the due administration of justice

(Slade Perkins vs. Director of Prisons, 58 Phil. 271; In

re Kelly, 35 Phil. 944; Commissioner of Immigration

vs. Cloribel, 20 SCRA 1241; Montalban vs. Canonoy,

38 SCRA 1).

In the matter of exercising the power to punish

contempts, this Court enunciated in the Slade

Perkins case that "the exercise of the power to

punish contempts has a twofold aspect, namely (1)

the proper punishment of the guilty party for his

disrespect to the court or its order; and (2) to

compel his performance of some act or duty

required of him by the court which he refuses to

perform. Due to this twofold aspect of the exercise

of the power to punish them, contempts are

classified as civil or criminal. A civil contempt is the

failure to do something ordered to be done by a

court or a judge for the benefit of the opposing

party therein; and a criminal contempt, is conduct

directed against the authority and dignity of a court

or of a judge, as in unlawfully assailing or

discrediting the authority or dignity of the court or

judge, or in doing a duly forbidden act. Where the

punishment imposed, whether against a party to a

suit or a stranger, is wholly or primarily to protect or

vindicate the dignity and power of the court, either

by fine payable to the government or by

imprisonment, or both, it is deemed a judgment in a

criminal case. Where the punishment is by fine

directed to be paid to a party in the nature of

damages for the wrong inflicted, or by

imprisonment as a coercive measure to enforce the

performance of some act for the benefit of the party

or in aid of the final judgment or decree rendered in

his behalf, the contempt judgment will, if made

before final decree, be treated as in the nature of

an interlocutory order, or, if made after final decree,

as remedial in nature, and may be reviewed only

on appeal from the final decree, or in such other

mode as is appropriate to the review of judgments

in civil cases. ... The question of whether the

contempt committed is civil or criminal, does not

affect the jurisdiction or the power of a court to

punish the same. ... (58 Phil. 271, 272).

For civil contempt, Section 7, Rule 71 of the Revised

Rules of Court explicitly provides:

Sec. 7, Rule 71. Imprisonment until order obeyed.

When the contempt consists in the omission to do

an act which is yet in the power of the accused to

perform, he may be imprisoned by order of a

superior court until he performs it.

Thus, in the case of Harden vs. Director of Prisons (L-

2349, 81 Phil. 741 [Oct. 22, 1948]), where petitioner

was confined in prison for contempt of court, this

Court, in denying the petition and resolving the

question of petitioner's indefinite confinement, had

the occasion to apply and clarify the aforequoted

provision in the following tenor:

The penalty complained of is neither cruel unjust

nor excessive. In Ex-parte Kemmler 136 U.S. 436, the

United States Supreme Court said that 'punishments

are cruel when they involve torture or a lingering

death, but the punishment of death is not cruel,

within the meaning of that word as used in the

constitution. It implies there something inhuman and

barbarous, something more than the

extinguishment of life.

The punishment meted out to the petitioner is not

excessive. It is suitable and adapted to its

objective; and it accords with section 7, Rule 64 of

the Rules of Court which provides that "when the

contempt consists in the omission to do an act

which is yet in the power of the accused to perform,

he may be imprisoned by order of a superior court

until he performs it."

If the term of imprisonment in this case is indefinite

and might last through the natural life of the

petitioner, yet by the terms of the sentence the way

is left open for him to avoid serving any part of it by

complying with the orders of the court, and in this

manner put an end to his incarceration. In these

circumstances, the judgment cannot be said to be

excessive or unjust. (Davis vs. Murphy [1947], 188 P.,

229- 231.) As stated in a more recent case (De

Wees [1948], 210 S.W., 2d, 145-147), 'to order that

one be imprisoned for an indefinite period in a civil

contempt is purely a remedial measure. Its purpose

is to coerce the contemner to do an act within his or

her power to perform. He must have the means by

which he may purge himself of the contempt . The

latter decision cites Staley vs. South Jersey Realty

Co., 83 N.J. Eq., 300, 90 A., 1042, 1043, in which the

theory is expressed in this language:

In a "civil contempt" the proceeding is remedial, it is

a step in the case the object of which is to coerce

one party for the benefit of the other party to do or

to refrain from doing some act specified in the order

of the court. Hence, if imprisonment be ordered, it is

remedial in purpose and coercive in character, and

to that end must relate to something to be done by

the defendant by the doing of which he may

discharge himself. As quaintly expressed, the

imprisoned man carries the keys to his prison in his

own pocket (pp. 747-748).

Likewise. American courts had long enunciated

these rulings:

The commitment of one found in contempt of a

court order only until the contemnor shall have

purged himself of such contempt by complying with

the order is a decisive characteristic of civil

contempt. Maggio v. Zeitz, 333 US 56, 92 L. ed. 476,

68 S Ct 401.

Civil or quasi-criminal contempt is contemplated by

a statute providing that if any person refused to

obey or perform any rule, order, or judgment of

court, such court shall have power to fine and

imprison such person until the rule, order, or

judgment shall be complied with. Evans v. Evans,

193 Miss 468, 9 So 2d. 641. (17 Am. Jur. 2d.)

The reason for the inherent power of courts to punish

for contempt is that respect of the courts

guarantees the stability of the judicial institution.

Without such guarantee said institution would be

resting on a very shaky foundation (Salcedo vs.

Hernandez, 61 Phil. 724; Cornejo vs. Tan, 85 Phil.

722),

Likewise, Atty. Pineda should be subject to

disbarment proceedings under Section 27 of Rule

138 of the Revised Rules of Court which provides:

Sec. 27. Attorneys removed or suspended by

Supreme Court on what grounds.—A member of the

bar may be removed or suspended from his office

as attorney by the Supreme Court for any deceit,

malpractice, or other gross misconduct in such

office, grossly immoral conduct, or by reason of his

conviction of a crime involving moral turpitude, or

for any violation of the oath which he is required to

take before admission to practice, or for a willful

disobedience of any lawful order of a superior

court, or for corrupt or willfully appearing as an

attorney for a party to a case without authority so to

do. The practice of soliciting cases at law for the

purpose of gain, either personally or through paid

agents or brokers, constitutes malpractice.

The Court may suspend or disbar a lawyer for any

conduct on his part showing his unfitness for the

confidence and trust which characterize the

attorney and client relations, and the practice of

law before the courts, or showing such a lack of

personal honesty or of good moral character as to

render him unworthy of public confidence (7 C.J.S.

733).

It is a well-settled rule that the statutory grounds for

disbarment or suspension are not to be taken as a

limitation on the general power of the courts in this

respect. The inherent powers of the court over its

officers cannot be restricted (In re Pelaez, 44 Phil.

567).

Finally, Atty. Pineda could be prosecuted for

betrayal of trust by an attorney under Article 209 of

the Revised Penal Code. Said article provides:

Art. 209. Betrayal of must by an attorney or solicitor.

Revelation of secrets.—In addition of the proper

administrative action , the penalty of prision

correccional in its minimum period, or a fine

ranging from 200 to 1,000 pesos, or both shall be

imposed upon any attorney-at-law or solicitor

(procurador judicial) who, by any malicious breach

of professional duty or inexcusable negligence or

ignorance,shall prejudice his client, or reveal any of

the secrets of the latter learned by him in his

professional capacity (emphasis supplied).

The aforequoted criminal sanction for

unprofessional conduct of an attorney is without

prejudice to proper administrative action, such as

disbarment or suspension of attorneys (p. 503,

Criminal Law Annotated, Padilla, 1972 Ed.).

Labor Arbiter Raymundo Valenzuela should be

made to answer for having acted without or

beyond his authority in proper administrative

charges. He could also be prosecuted before the

Tanodbayan under the provisions of the Anti-Graft

Law. Independently of his liabilities as a

government officer, he could be the subject of

disbarment proceedings under Section 27, Rule 138

of the Revised Rules of Court.

Atty. Benjamin Pineda could also be held liable

under Section 4(b) of R.A. No. 3019 (Anti-Graft and

Corrupt Practices Act) which makes it unlawful for

any person knowingly to induce or cause any

public official to commit any of the offenses defined

in Section 3 of said act. Section 3 enumerates the

corrupt practices which public officers may be

prosecuted for. Atty. Pineda knowingly induced or

caused Labor Arbiter Valenzuela to issue the

questioned orders without or beyond the latter's

authority and to which orders the former was not

entitled, considering that he was not the sole and

proper representative.

The Manila Banking Corporation (Cubao Branch)

per manifestation and motion dated October 28,

1983 and reiterated on November 10, 1983, had

transmitted to the NLRC the remaining balance of

P417,380.64 and P2,022.70 for the account of the

Union and Atty. Pineda, respectively. This turnover

of the aforecited amounts is a sufficient compliance

with Our restraining order and resolution of

September 13, 1983 and hence, the Manila Banking

Corporation can no longer be liable for contempt of

court.

Very recently, on August 23, 1984, respondent

Union, thru Acting Administrator Ricardo Capuno,

filed its motion to drop Halili Bus Drivers and

Conductors Union from the contempt charge in

view of these reasons:

1. The Manila Bank has already turned over to the

NLRC the amount of P59,716.14 which represents the

remaining balance of 5% earmarked for Union

expenses incurred in the case aside from the

amounts deposited in escrow for the workers. The

amount of P42,140.00 was spent legitimately by the

Union for administration purposes relative to the

subject property. The Union asserts that it is ready

and willing to account for all expenses and

withdrawals from the bank before the NLRC.

2. The alleged 5% donation of Atty. Pineda to the

Union taken from the 35% attorneys' fees was given

to and received by then President Domingo

Cabading alone, who thereafter left for the United

States.

3. The 1% allocated for unknown claimants or those

not previously listed in the amount of P9,596.18 can

easily be accounted for by the Union before the

NLRC.

In the same motion, Mr. Capuno clarifies that with

regard to attorneys' fees, Atty. Pineda made the

Union officers believe that he would be the one to

pay the fees of Attys. Espinas and Lopez for which

reason, the 35% increased fees was approved by

the Union's board in good faith. The Union likewise

confirms that Atty. Pineda came into the picture

only when he was assigned by Atty. Espinas in, 1965

to execute the CIR decision which, thru Atty.

Espinas handling, was upheld by this Court in L-

24864 in 1968. The Union officers were aware that

Atty. Espinas was the principal counsel even after

Atty. Pineda's assignment. They also knew of the

original contract for 20% attorney's fees which was

increased to 35% by Atty. Pineda upon the

arrangement that with the increase, he would

answer for the payment of Attys. Espinas and Lopez'

fees and for necessary representation expenses (p.

450, L-24864 rec.).

Acting on the aforesaid motion, this Court in its

resolution of August 28, 1964, dropped the Union

and its officers from the within contempt charge (p.

455, L-24864 rec.).

WHEREFORE, ATTY. BENJAMIN PINEDA IS HEREBY

FOUND GUILTY OF INDIRECT CONTEMPT OF COURT

FOR WHICH HE IS HEREBY SENTENCED TO

IMPRISONMENT IN THE MANILA CITY JAIL UNTIL THE

ORDERS OF THIS COURT DATED SEPTEMBER 1 AND

SEPTEMBER 13, 1983 ARE COMPLIED WITH.

ATTY. BENJAMIN PINEDA IS ALSO DIRECTED TO SHOW

CAUSE WHY HE SHOULD NOT BE DISBARRED UNDER

RULE 138 OF THE REVISED RULES OF COURT.

LET COPIES OF THIS RESOLUTION AND THE

RESOLUTION OF OCTOBER 18, 1983 BE FURNISHED THE

MINISTRY OF LABOR AND THE TANODBAYAN FOR

APPROPRIATE ACTION.

SO ORDERED.

THIRD DIVISION

[G.R. No. 106518. March 11, 1999]

ABS – CBN SUPERVISORS EMPLOYEE UNION

MEMBERS, petitioner, vs. ABS – CBN BROADCASTING

CORP., HERBERT RIVERA, ALBERTO BERBON, CINDY

MUNOZ, CELSO JAMBALOS, SALVADOR DE VERA,

ARNULFO ALCAZAR, JAKE MADERAZO, GON

CARPIO, OSCAR LANDRITO, FRED GARCIA, CESAR

LOPEZ and RUBEN BARRAMEDA, respondents.

D E C I S I O N

PURISIMA, J.:

At bar is a special civil action

for Certiorari[1] seeking the reversal of the

Order[2] dated July 31, 1992 of public respondent

Department of Labor and Employment

Undersecretary Bienvenido E. Laguesma[3] in Case

No. NCR – OD – M – 90 – 07 - 037.

From the records on hand, it can be gathered, that:

On December 7, 1989, the ABS-CBN Supervisors

Emloyees Union (“the Union”), represented by

respondent Union Officers, and ABS-CBN

Broadcasting Corporation (“the Company”) signed

and concluded a Collective Bargaining Agreement

with the following check-off provision, to wit:

“Article XII – The [C]ompany agrees to advance to

the Union a sum equivalent to 10% of the sum total

of all the salary increases and signing bonuses

granted to the Supervisors under this collective

Bargaining Agreement and upon signing hereof to

cover the Union’s incidental expenses, including

attorney’s fees and representation expenses for its

organization and (sic) preparation and conduct

hereof, and such advance shall be deducted from

the benefits granted herein as they accrue.”

On September 19, 1990, Petitioners[4] filed with the

Bureau of Labor Relations, DOLE-NCR, Quezon City,

a Complaint against the Union Officers[5] and ABS-

CBN Broadcasting corporation, praying that (1) the

special assessment of ten percent (10%) of the sum

total of all salary increases and signing bonuses

granted by respondent Company to the members

of the Union be declared illegal for failure to

comply with the labor Code, as amended,

particularly Article 241, paragraphs (g), (n), and (o);

and in utter violation of the Constitution and By-

Laws of the ABS-CBN Supervisors Employees

Union; (2) respondent Company be ordered to

suspend further deductions from petitioners’ salaries

for their shares thereof.

In their Answers, respondent Union Officers and

Company prayed for the dismissal of the Complaint

for lack of merit. They argued that the check-off

provision is in accordance with law as majority of

the Union membersindividually executed a written

authorization giving the Union officers and the

Company a blanket authority to deduct subject

amount.

On January 21, 1991, Med-Arbiter Rasidali C.

Abdula issued the following Order:[6]

“WHEREFORE, premises considered, judgment is

hereby rendered:

a) declaring the special assessment of 10% of the

sum total of CBA benefits as illegal;

b) ordering respondents union officers to refund to

the complainants and other union members the

amount of five Hundred Thousand Pesos

(P500,000.00) advanced by the respondent

Company as part of the 10% sum total of CBA

benefits without unnecessary delay;

c) ordering the respondent company to stop and

desist from further making advances and

deductions from the union members’ salaries their

share in the advances already made to the union;

d) ordering the respondent Company to remit

directly to the complainants and other union

members the amount already deducted from the

union members’ salaries as part of their share in the

advances already made to the union and which it

had kept in trust during the pendency of this case;

and

e) directing the respondents union officers and

respondent Company to submit report on the

compliance thereof.

SO ORDERED.”

On appeal, respondent DOLE Undersecretary

Bienvenido E. Laguesma handed down a

Decision[7] on July 1, 1991, disposing as follows:

“WHEREFORE, the appeals are hereby denied, the

Order of the Med-Arbiter is affirmed en toto.”

On July 5, 1991, the aforesaid Decision was

received by the respondent Union Officers and

respondent Company. On July 13, 1991, they filed

their Motion for Reconsideration stating, inter

alia that the questioned ten percent (10%) special

assessment is valid pursuant to the ruling in Bank of

the Philippine Islands Employee Union – ALU vs.

NLRC.[8]

On July 31, 1992, Undersecretary B.E. Laguesma

issued an Order[9]; resolving, thus:

"WHEREFORE, the Decision dated 01 July 1991 is

hereby SET ASIDE. In lieu thereof, a new one is

hereby entered DISMISSING the Complaint/Petition

for lack of merit."

Hence, the present petition seeking to annul and

set aside the above-cited Order of public

respondent Undersecretary B.E. Laguesma, for

being allegedly tainted with grave abuse of

discretion amounting to lack of jurisdiction.

Did the public respondent act with grave abuse of

discretion in issuing the challenged Order reversing

his own Decision of July 1, 1991? Such is the sole

issue posited,which we resolve in the negative. The

petition is unmeritorious.

Petitioners claim[10] that the Decision of the

Secretary of Labor and Employment dated July 1,

1991, affirming in toto the Order of Med-Arbiter

Rasidali Abdullah dated January 31,

1991, cannot be a subject of a motion for

reconsideration because it is final and

unappealable pursuant to Section 8, Rule VIII, Book

V of the Omnibus Rule Implementing the Labor

Code. It is further argued that the only remedy of

the respondent Union Officers' is to file a petition

for certiorari with this Court.

Section 8, Rule VIII, Book V of the Omnibus Rules

Implementing the Labor Code, provides:

"The Secretary shall have fifteen (15) calendar days

within which to decide the appeal from receipt of

the records of the case. The decision of the

Secretary shall be final and inappealable."

[Underscoring supplied]. (Comment, p. 101)

The aforecited provision cannot be construed to

mean that the Decision of the public respondent

cannot be reconsidered since the same is

reviewable by writ of certiorari under Rule 65 of the

Rules of Court. As a rule, the lawrequires a motion

for reconsideration to enable the public respondent

to correct his mistakes, if any. In Pearl S. Buck

Foundation, Inc., vs. NLRC,[11] this Court held:

"Hence, the only way by which a labor case may

reach the Supreme Court is through a petition for

certiorari under Rule 65 of the Rules of Court

alleging lack or excess of jurisdiction or grave

abuse of discretion. Such petition may be filed

within a reasonable time from receipt of the

resolution denying the motion for reconsideration of

the NLRC decision." [Underscoring; supplied].

Clearly, before a petition for certiorari under Rule 65

of the Rules of Court may be availed of, the filing of

a motion for reconsideration is a condition sine qua

non to afford an opportunity for the correction of the

error or mistake complained of.

So also, considering that a decision of the Secretary

of Labor is subject to judicial review only through a

special civil action of certiorari and, as a rule,

cannot be resorted to without the aggrieved party

having exhausted administrative remedies through

a motion for reconsideration, the aggrieved party,

must be allowed to move for a reconsideration of

the same so that he can bring a special civil action

for certiorari before the Supreme Court.[12]

Furthermore, it appears that the petitioners filed with

the public respondent a Motion for Early

Resolution[13] dated June 24, 1992. Averring that

private respondents' Motion for Reconsideration did

not contain substantial factual or legal grounds for

the reversal of subject decision. Consequently,

petitioners are now estopped from raising the issue

sought for resolution. In Alfredo Marquez vs.

Secretary of Labor,[14] the Court said:

"xxx The active participation of the party against

whom the action was brought, coupled with his

failure to object to the jurisdiction of the court or

quasi-judicial body where the action is pending, is

tantamount to an invocation of that jurisdiction and

a willingness to abide by the resolution of the case

and will bar said party from later on impugning the

court or body's jurisdiction."

What is more, it was only when the public

respondents issued the Order adverse to them that

the petitioners raised the question for the first time

before this Court. Obviously, it is a patent

afterthought which must be abhorred.

Petitioners also argued that the check-off provision

in question is illegal because it was never submitted

for consideration and approval to "all the members

at a general membership meeting called for the

purpose"; and further alleged that the formalities

mandated by Art. 241, paragraphs (n) and (o) of

the Labor Code, as amended, were not complied

with.

"A check-off is a process or device whereby the

employer, on agreement with the Union,

recognized as the proper bargaining

representative, or on prior authorization from its

employees, deducts union dues or agency fees

from the latter's wages and remits them directly to

the union."[15] Its desirability in a labor organization

is quite evident. It is assured thereby of continuous

funding. As this Court has acknowledged, the

system of check-off is primarily for the benefit of the

Union and only indirectly, for the individual

employees.

The legal basis of check-off is found in statutes or in

contracts.[16] The statutory limitations on check-offs

are found in Article 241, Chapter II, Title IV, Book

Five of the Labor Code, which reads:

"Rights and conditions of membership in a labor

organization. - The following are the rights and

conditions of membership in a labor organization:

x x x

(g) No officer, agent, member of a labor

organization shall collect any fees, dues, or other

contributions in its behalf or make any disbursement

of its money or funds unless he is duly authorized

pursuant to its constitution and by-laws.

x x x

(n) No special assessment or other extraordinary

fees may be levied upon the members of a labor

organization unless authorized by a written

resolution of a majority of all the members of a

general membership meeting duly called for the

purpose. The secretary of the organization shall

record the minutes of the meeting including the list

of all members present, the votes cast, the purpose

of the special assessment or fees and the recipient

of such assessment or fees. The record shall be

attested to by the president.

(o) Other than for mandatory activities under the

Code, no special assessments, attorney's fees,

negotiation fees or any other extraordinary fees

may be checked off from any amount due to an

employee with an individual written

authorization duly signed by the employee. The

authorization should specifically state the amount,

purpose and beneficiary of the deductions.

[Underscoring; supplied]

Article 241 of the Labor Code, as amended, must

be read in relation to Article 222, paragraph (b) of

the same law, which states:

"No attorney's fees, negotiation fees or similar

charges of any kind arising from collective

bargaining negotiations or conclusion of the

collective agreement shall be imposed on any

individual member of the contracting

union: Provided, however, that attorney's fees may

be charged against union funds in an amount to be

agreed upon by the parties. Any contract,

agreement or arrangement of any sort to the

contrary shall be null and void." [Underscoring;

supplied]

And this court elucidated the object and import of

the said provision of law in Bank of Philippine Islands

Employees Union - Association Labor Union (BPIEU-

ALU) vs. National Labor Relations Commission:[17]

"The Court reads the afore-cited provision (Article

222 [b] of the Labor Code) as prohibiting the

payment of attorney's fees only when it is effected

through forced contributions from the workers from

their own funds as distinguished from the union

funds. xxx"

Noticeably, Article 241 speaks of three (3) requisites

that must be complied with in order that the special

assessment for Union's incidental expenses,

attorney's fees and representation expenses, as

stipulated in Article XII of the CBA, be valid and

upheld namely: 1) authorization by a written

resolution of the majority of all the members at the

general membership meeting duly called for the

purpose; (2) secretary's record of the minutes of the

meeting; and (3)individual written authorization for

check-off duly signed by the employee concerned.

After a thorough review of the records on hand, we

find that the three (3) requisites for the validity of the

ten percent (10%) special assessment for Union's

incidental expenses, attorney's fees and

representation expenses were met.

It can be gleaned that on July 14, 1989, the ABS-

CBN Supervisors Employee Union held its general

meeting, whereat it was agreed that a ten percent

(10%) special assessment from the total economic

package due to every member would be

checked-off to cover expenses for negotiation,

other miscellaneous expenses and attorney's

fees. The minutes of the said meeting were

recorded by the Union's Secretary, Ma. Carminda

M. Munoz, and noted by its President, Herbert

Rivera.[18]

On May 24, 1991, said Union held its General

Membership Meeting, wherein majority of the

members agreed that "in as much as the Union had

already paid Atty. P. Pascual the amount

of P500,000.00, the same must be shared by all the

members until this is fully liquidated."[19]

Eighty-five (85) members of the same Union

executed individual written authorizations for

check-off, thus:

"Towards that end, I hereby authorize the

Management and/or Cashier of ABS-CBN

BROADCASTING CORPORATION to deduct from my

salary the sum of P30.00 per month as my regular

union dues and said Management and/or Cashier

are further authorize (sic) to deduct a sum

equivalent to 10% of all and whatever benefits that

will become due to me under the COLLECTIVE

BARGAINING AGREEMENT (CBA) that may be

agreed upon by the UNION and MANAGEMENT and

to apply the said sum to the advance that

Management will make to our Union for incidental

expenses such as attorney's fees, representations

and other miscellaneous expenses pursuant to

Article XII of the proposed CBA."[20]

Records do not indicate that the aforesaid check-

off authorizations were executed by the eighty-five

(85) Union members under the influence of force or

compulsion. There is then, the presumption that

such check-off authorizations were executed

voluntarily by the signatories thereto. Petitioner’s

contention that the amount to be deducted

is uncertain[21] is not persuasive because the check-

off authorization clearly stated that the sum to be

deducted is equivalent to ten percent (10%) of all

and whatever benefits may accrue under the

CBA. In other words, although the amount is not

fixed, it is determinable.

Petitioners further contend that Article 241 (n) of the

Labor Code, as amended, on special assessments,

contemplates a general meeting after the

conclusion of the collective bargaining agreement.

Subject Article does not state that the general

membership meeting should be called after the

conclusion of a collective bargaining

agreement. Even granting ex gratia argumenti that

the general meeting should be held after the

conclusion of the CBA, such requirement was

complied with since the May 24, 1991 General

Membership Meeting was held after the conclusion

of the Collective Bargaining Agreement, which was

signed and concluded on December 7, 1989.

Considering that the three requisites afforesaid for

the validity of a special assessment were observed

or met, we uphold the validity of the ten percent

(10%) special assessment authorized in Article XII of

the CBA.

We also concur in the finding by public respondent

that the Bank of the Philippine Islands Employees

Union – ALU vs. NLRC[22] is apposite in this case. In

BPIEU-ALU, the petitioners, impugned the Order of

the NLRC, holding that the validity of the five

percent (5%) special assessment for attorney’s fees

is contrary to Article 222, paragraph (b) of the Labor

Code, as amended. The court ratiocinated, thus:

“The Court reads the aforecited provision as

prohibiting the payment of attorney’s fees only

when it is effected through forced contributions from

the workers from their own funds a distinguished

from the union funds. The purpose of the provision is

to prevent imposition on the workers of the duty to

individually contribute their respective shares in the

fee to be paid the attorney for his services on behalf

of the union in its negotiations with the

management. xxx” [Underscoring supplied]

However, the public respondent overlooked the

fact that in the said case, the deduction of the

stipulated five percent (5%) of the total economic

benefits under the new collective bargaining

agreement was applied only to workers who gave

their individual signed authorizations. The Court

explained:

“xxx And significantly, the authorized deduction

affected only the workers who adopted and signed

the resolution and who were the only ones from

whose benefits the deductions were made by

BPI. No similar deductions were taken from the

other workers who did not sign the resolution and so

were not bound by it.” [Underscoring; supplied]

While the court also finds merit in the finding by the

public respondents that Palacol vs. Ferrer-

Calleja[23] is inapropos in the case under scrutiny, it

does not subscribe to public respondent’s

reasoning – that Palacol should not be retroactively

applied to the present case in the interest of justice,

equity and fairplay.[24] The inapplicability

of Palacol lies in the fact that it has a different

factual milieu from the present case. In Palacol, the

check-off authorization was declared

invalid because majority of the Union members had

withdrawn their individual authorizations, to wit:

“Paragraph (o) on the other hand requires an

individual written authorization duly signed by every

employee in order that special assessment maybe

validly check-off. Even assuming that the special

assessment was validly levied pursuant to

paragraph (n), and granting that individual written

authorizations were obtained by the Union,

nevertheless there can be no valid check-off

considering that the majority of the Union members

had already withdrawn their individual

authorizations. A withdrawal of individual

authorization is equivalent to no authorization at

all.” xxx [Underscoring; supplied]

In this case, the majority of the Union members

gave their individual written check-off

authorizations for the ten percent (10%) special

assessment. And they have never withdraw their

individual written authorizations for check-off.

There is thus cogent reason to uphold the assailed

Order, it appearing from the records of the case

that twenty (20)[25] of the forty-two (42) petitioners

executed as Compromise Agreement[26] ratifying

the controversial check-off provision in the CBA.

Premises studiedly considered, we are of the

irresistable conclusion and, so find, that the ruling

in BPIEU-ALU vs. NLRC that (1) the prohibition against

attorney’s fees in Article 222, paragraph (b) of the

Labor Code applies only when the payment of

attorney’s fees is effected through forced

contributions from the workers; and (2) that no

deductions must be taken from the workers who did

not sign the check-off authorization, applies to the

case under consideration.

WHEREFORE, the assailed Order, dated July 31, 1992,

of DOLE Undersecretary B.E. Laguesma is AFFIRMED

except that no deductions shall be taken from the

workers who did not give their individual written

check-off authorization. No pronouncement as to

costs.

SO ORDERED.

Romero (Chairman), Vitug,

Panganiban, and Gonzaga-Reyes, JJ., concur.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-39154 September 9, 1982

LITEX EMPLOYEES ASSOCIATION and DOMINGO

RANCES, petitioners,

vs.

THE COURT OF INDUSTRIAL RELATIONS, LIRAG TEXTILE

MILLS, RAFAEL GALLEMA, ANTONIO LORZANO, ET AL.,

respondents.

GUTIERREZ, JR., J.:

This is a petition for review of a resolution of the

Court of Industrial Relations en banc, dated July 29,

1974 affirming an order of the Hon. Alberto S.

Veloso, dated March 2, 1973 dismissing an unfair

labor practice charge filed by Litex Employees

Association and Domingo Rances against Lirag

Textile Mills and the former officers of the

complainant union.

On February 10, 1972, petitioner Domingo Rances, a

chemical mixer of Lirag Textile Mills, in his capacity

as board member of the union (Lirag Employees

Association-PTGWO), wrote a letter to the

respondent Antonio G. Lorzano, then president of

the union, requesting the latter and the other

members of the board to consider the amendment

to the union's constitution and by-laws as having

been ratified and to implement the same. He further

suggested that the matter be submitted to the

union's constitutional convention for final decision.

For having written the said letter, Rances was

informed by respondent Lorzano that he had no

legal personality to write such letter and that such

act was in violation of the union's constitution and

by-laws.

In a letter dated February 22, 1972, respondent

Lorzano informed Rances of a resolution of the

union's Board of Directors' to charge him for

violation of paragraphs (b) and (c), Section 5 of the

Amended Constitution and By-Laws of the Litex

Employees Association, to wit:

(b) Refusal to obey the provision of the Constitution

and By-Laws and the duly enacted rules and

regulations of the Union.

(c) Acts prejudicial to the interest of the Union

and/or its members.

for signing the mimeographed letter dated February

10, 1972 address to Mr. Antonio G. Lorzano and

distributing the same to the members of the union.

He was informed that after proper hearing, if found

guilty, he would be expelled as a member of the

union and be dismissed from his employment at the

Lirag Textile Mills.

The letter of the union president required him to

answer in writing within 72 hours and to show cause

why he should not be expelled from the union and

be dismissed from his employment.

Rances failed to answer within the required period

and the union's Board of Directors resolved on

March 1, 1972 to expel him from the union and to

recommend his dismissal from his employment.

On March 2, 1972, respondent Antonio Lorzano sent

the Notice of Expulsion from LEA-PTGWO and the

Recommendation for Dismissal from Lirag Textile

Mills, Inc., to petitioner Rances, a copy of which was

furnished the management.

On March 20, 1972, respondent Antonio Manabat of

the Lirag Textile Mills, Inc. sent a letter to petitioner-

Rances asking him to comment on the notice of

expulsion from the union and the recommendation

for dismissal from the company which they

received from respondent Antonio Lorzano.

Petitioner Rances failed to make any comment. On

March 29, 1972, respondent Rafael J. Gallema Vice-

President for Industrial Relations of the Lirag Textile

Mills, Inc., sent a letter to petitioner Rances

informing him that due to his failure to submit his

comment inspite of his promise to do so on March

28, 1972, he was deemed to have no interest in the

matter and was considered dismissed from the

company effective at the close of office hours on

April 4, 1972.

An election of the officers of the union was held on

March 30, 1972 and a new set of officers was

elected.

On April 1, 1972, petitioner Rances wrote a letter to

the new president of the union, Johnny de Leon,

requesting a reinvestigation of his expulsion. Mr. de

Leon and the new Board of Directors passed

Resolution No. 6, Series of 1972, dated April 9, 1972

entitled Resolution Rescinding and Revoking the

Resolution of the Board of Directors, dated March 2,

1972 Expelling Domingo Rances from the Litex

Employees Association-PTGWO and pursuant to the

CBA Union Security Clause recommended the

immediate reinstatement of petitioner Rances to his

former employment at the Lirag Textile Mills.

On April 11, 1972, Johnny de Leon wrote a letter to

the management through respondent Major Rafael

Gallema recommending the immediate

reinstatement of petitioner Rances under the same

terms and conditions of employment before his

dismissal. This was answered by Major Gallema, on

April 14, 1972, rejecting the recommendation on the

ground that the action of the company was already

final.

On April 26, 1972, at a union-management

grievance meeting, the union represented by its

officers and the representative of the labor

federation PTGWO, reiterated the reinstatement of

petitioner Rances with full backwages under the

same terms and conditions of employment but the

management, represented by respondent Rafael

Gallema, refused the petitioner union's

recommendation and stated that petitioner Rances

may be accepted only as a casual employee.

In the second union-management grievance

meeting held on May 26, 1972, the management

represented by no less than Mr. Basilio Lirag,

President of the respondent company, and Major

Rafael J. Gallema, agreed to accept petitioner

Rances as a regular employee effective

immediately provided he will accept his guilt (as

charged by the management) and for this reason

he would not be paid for his two months leave.

Petitioner Rances did not accept the proposal.

On May 29, 1972, the petitioners Litex Employees

Association and Domingo Rances, as complainants,

filed a charge for unfair labor practice against the

Lirag Textile Mills Inc., Rafael J. Gallema, Antonio

Manabat, Antonio Lorzano, et al., with the

Prosecution Division of the Court of Industrial

Relations. Docketed as Charge No. 5098 the

complaint was for causing the dismissal of petitioner

Rances because of union activities.

In the preliminary investigation conducted by

Acting Chief Prosecutor Bienvenido Millares of the

CIR Prosecution Division, petitioners, as

complainants, submitted the affidavit of Domingo

Rances with supporting documents.

On November 3, 1972, the Acting Chief Prosecutor

filed a Motion to Dismiss Charge No. 5098 before

the Court of Industrial Relations for failure of

complainants (herein petitioners) to establish a

prima facie case to warrant the filing of a formal

complaint in the charge which motion was granted

by the Honorable Associate Judge Alberto S.

Veloso of the Court of Industrial Relations on March

2, 1972.

Their motion for reconsideration having been

denied by the Court of Industrial Relations en

banc on July 29, 1974, petitioners filed the present

petition contending-

That the Chief Prosecutor of the Court of Industrial

Relations, who conducted the preliminary

investigation of Charge No. 5098, erred in his finding

that the 'complainants failed to establish a prima

facie case to warrant the filing of a formal

complaint' based on his erroneous conclusion that

petitioner Rances failed to exhaust the internal

union procedures in accordance with the second

requirement of Section 17 of Republic Act 875.

The main ground of the Acting Chief Prosecutor in

his motion to dismiss is that petitioner Rances failed

to comply with the requirement of Section 17 of

Republic Act No. 875, as amended, which is the

exhaustion of internal procedures as provided by

the union's constitution and by-laws to correct the

alleged violation, when he refused to submit for

investigation to the respondent officers of the union

and to comment on the union's recommendation of

dismissal as required by the respondent company.

Petitioner Rances maintains that his submitting to

the investigation called by the respondent union

officers would have resulted in farcical proceedings

as the private respondents would have acted as

prosecutor, investigator, and judge at the same

time. We find this claim of petitioner Rances

meritorious. In Kapisanan Ng Mga Manggagawa sa

MRR v. Rafael Hernandez, et al. (20 SCRA 109) this

Court held:

It is true that under the statute redress must first be

sought within the organization itself in accordance

with its constitution and by-laws. However, it has

been held that this requirement is not absolute, but

yields exception under varying circumstances. In

the case at bar, noteworthy is the fact that the

complaint was filed against the union and its

incumbent officers, some of whom were members

of the board of directors. The constitution and by-

laws of the union provide that charges for any

violation thereof shall be filed before the said

board. But as explained by the lower court, if the

complainants had done so, the board of directors

would in effect be acting as respondent,

investigator and judge at the same time. To follow

the procedure indicated would be a farce under

the circumstances. Where exhaustion of remedies

within the union itself would practically amount to a

denial of justice, or would be illusory or vain, it will

not be insisted upon, particularly where property

rights of the members are involved, as a condition

to the right to invoke the aid of a court.

It is also argued by petitioner Rances that he should

not be held liable under the provisions of Section 5,

"b" and "c" of the constitution and by-laws of the

union for writing the February 10, 1972 questioned

letter because as a member and an officer of the

union he had a right under Republic Act No. 875 to

call the attention of the members to the refusal of

the Board of Directors to obey the mandate of the

general membership.

We have examined the controversial letter and We

cannot sustain the contention that petitioner Rances

committed acts prejudicial to the interest of the

union and/or its members in writing it.

The letter dated February 10, 1972 addressed to the

union president was a comment on the latter's

written observation that a proposed amendment of

their constitution did not get the required two thirds

vote of their general membership.

Rances wrote that, in the first place, the January 18,

1972 plebiscite was unnecessary because the

submitted proposal had already been approved in

an earlier plebiscite by the required 2/3 majority.

And assuming the need for the plebiscite, Rances

wrote that the 938 votes in favor of the amendment

was more than 2/3 of the 1,320 bona fide paying

members of their union. Rances informed Lorzano of

serious voting irregularities and described them. He

also asked the union president to inform the

members that Article X of their constitution on

limiting and excluding aspirants for union offices

was contrary to the provisions and spirit of Republic

Act 875.

Undoubtedly, the real cause of the expulsion of

Rances from the union and his consequent dismissal

from employment was due to his union activities

which displeased the then union president and his

group.

For having sent a mimeographed letter to the union

president which the union board considered

"libelous" and which formed the basis of the finding

of their constitutional convention chairman that the

proposed amendment had been ratified. Rances

was found guilty of violating their existing

constitution-(b) refusal to obey the provision of the

constitution and by-laws and the duly enacted rules

and regulations of the union, and (c) acts

prejudicial to the interest of the union and/or its

members-and was expelled from union

membership.

The dismissal of Rances from employment was

effective April 4, 1972. However, on March 30, 1972

an election of union officers was held. After a new

set of union officers took over from the Lorzano

group, two union-management grievance meetings

were held to discuss the reinstatement of Rances as

recommended by the union. In the first meeting, the

management manifested its willingness to reinstate

Rances on condition that he be accepted only as a

casual employee, In the second meeting, the

company agreed to accept Rances as a regular

employee effective immediately provided he

admitted his guilt so that his pay for his two months

leave would not be paid.

Under the facts of this case, it cannot be said that

the dismissal of petitioner Rances was not an unfair

labor practice and, therefore, his reinstatement is

warranted.

The company pointed out to the new union

president that it merely acted on the union's

recommendation pursuant to their collective

bargaining agreement when it dismissed Rances

and that the stability of company relations with the

union would be impaired if the company

reconsiders final acts every time the union changes

its minds. This argument is, however, belied by the

fact that the company did reconsider its "final act"

when it offered to reinstate Rances as a casual

employee and later to his former position as a

regular employee but with an express admission of

guilt and non-payment of two months leave. The

failure of Rances to submit written explanations to

the company representatives is explained by the

fact that his dismissal arose from purely union

controversies. He was dismissed not because he

committed any acts against his employer but

because he ceased to be a union member.

Obviously, Rances and the new set of union officers

were wary of management attitudes towards them

vis-a-vis the former officers. We also fail to see what

kind of admission of guilt the assistant vice-

president for industrial relations of Lirag Textile Mills

wanted to elicit from a man who was dismissed

from employment for writing a letter on purely union

matters to his union president.

Considering the foregoing, the reinstatement of

petitioner Rances under the same terms and

conditions of his employment is warranted. And

following a long line of precedents he should

receive three (3) years backwages without

deduction or qualification. (Liberty Cotton Mills

Workers Union vs. Liberty Cotton Mills, Inc., 90 SCRA

391; Mercury Drug Co., Inc., et al. vs. CIR, et al., 56

SCRA 694; L.R. Aguinaldo, Inc., et al. vs. CIR, et al.,

82 SCRA 309; Danao Development Corporation vs.

NLRC, et al., 81 SCRA 489; Monteverde, et al. vs.

CIR, et al., 79 SCRA 259; Insular Life Insurance Co.,

Ltd. Employees Association-NATU vs. Insular Life

Assurance Co., Ltd., 76 SCRA 50; and People's Bank

and Trust Company, et al. vs. People's; Bank and

Trust Company Employees Union, et al., 69 SCRA

10).

WHEREFORE, the resolution of the Court of Industrial

Relations dated July 29, 1974 and the affirmed order

dated March 2, 1973 of Judge Alberto S. Veloso are

hereby set aside. The respondent Lirag Textile Mills,

Inc. is ordered to reinstate petitioner Domingo

Rances under the same terms and conditions of

employment and to pay him three (3) years

backwages without deduction or qualification.

Costs against the private respondents.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-62306 January 21, 1985

KAPISANAN NG MANGGAGAWANG PINAGYAKAP

(KMP), ISAGANI GUTIERREZ, FLORENCIA CARREON,

JOSE FLORES, DENNIS ALINEA, ELADIO DE LUNA and

CRISANTO DE VILLA, petitioners,

vs.

THE HONORABLE CRESENCIANO TRAJANO,

DIRECTOR OF THE BUREAU OF LABOR RELATIONS,

CATALINO SILVESTRE, and CESAR

ALFARO, respondents.

Jose C. Espinas for petitioners.

Balagtas P. Ilagan for private respondents.

RELOVA, J.:

Petitioners seek to annul the resolution and order,

dated August 13 and October 19, 1982,

respectively, of public respondent Director

Cresenciano B. Trajano of the Bureau of Labor

Relations, Ministry of Labor and Employment, in BLR

Case No. A-0100-82 (RO4-A-LRD-M-9-35-81),

entitled: "Catalino Silvestre, et al., vs. Kapisanan ng

Manggagawang Pinagyakap (KMP) Labor Union

and its Officers" affirming Med-Arbiter Antonio D.

Cabibihan's order dated April 28, 1982, directing the

said Union to hold and conduct, pursuant to its

constitution and by-laws and under the supervision

of the Bureau of Labor Relations, a general

membership meeting, to vote for or against the

expulsion or suspension of the herein petitioner

union officers.

Records show that on June 30, 1981 a written

request for accounts examination of the financial

status of the Kapisanan ng Manggagawang

Pinagyakap (KMP) Labor Union (Union for brevity),

the existing labor union at Franklin Baker Company

in San Pablo City, was filed by private respondent

Catalino Silvestre and thirteen (13) other

employees, who are also members of the said

Union. Acting on said request, Union Account

Examiner Florencio R. Vicedo of the Ministry of

Labor and Employment conducted the necessary

investigation and, thereafter, submitted a report,

with the following findings:

A. Disallowed expenditures — P1,278.00, as

reflected in the following breakdown:

1. January 9, 1980 — Excess claim for refund P1.00

2. March 13, 1980 — Payment for sound system

P90.00

3. March 12, 1980 — Picture taking, entrance fee in

Manila Zoo with Atty. Delos Santos P75.00

4. March 24, 1980 — Payment for sound System

P90.00

5. July 16, 1980 — Jeep hired P264.00

6. August 30, 1980 — Partial payment of traveling

expenses disallowed P68.00

7. October 30, 1980 — Representation expenses

P180.00

8. May 31, 1981 — Payment for long distance call

P10.00

9. May 31, 1981— Payment for legal expenses

P500.00

TOTAL............................................................. P1,278.00

B. Respondent union officers failed to keep,

maintain and submit for verification the records of

union accounts for the years 1977, and 1978, 1979,

or purposely suppressed the same;

C. Respondent union officers failed to maintain

segregated disbursement receipts in accordance

with the five (5) segregated union funds (general

fund, educational funds, mutual aid fund, burial

assistance fund and union building fund) for which

they maintained a distinct and separate bank

accounts for each.

D. The Union's constitution and by-laws is not ratified

by the general membership hence, illegal. (pp. 27-

28, Rollo)

Based on the foregoing revelations, private

respondents filed with the Regional Office No. IV-A,

Quezon City, Ministry of Labor and Employment, a

petition docketed as R04-ALRD-M- 9-35-81, for the

expulsion of the union officers on the ground that

they committed gross violation of the Labor Code,

specifically paragraphs (a), (b), (g), (h), (j) and (k)

of Article 242; and, the constitution and by-laws of

the Union, particularly the provisions of Sections 6

and 7 thereof.

In their Answer, the union officers denied the

imputation and argued that the disallowed

expenditures were made in good faith; that the

same conduced to the benefit of the members;

and, that they are willing to reimburse the same

from their own personal funds. They likewise

asserted that they should not be held accountable

for the non-production of the books of accounts of

the Union for the years 1977, 1978 and 1979

because they were not the officers then and not

one of the former officers of the Union had turned

over to them the records in question. Further, they

averred that the non-ratification of the constitution

and by-laws of the Union and the non-segregation

of the Union funds occurred before they became

officers and that they have already been correcting

the same.

On April 28, 1982, Med-Arbiter Antonio D. Cabibihan

ordered the holding of a referendum, to be

conducted under the supervision of the Bureau of

Labor Relations, to decide on the issue of whether to

expel or suspend the union officers from their

respective positions.

Petitioners appealed the said order of Med-Arbiter

Cabibihan to herein public respondent Director

Trajano of the Bureau of Labor Relations, Ministry of

Labor, Manila, claiming that the same is not in

accordance with the facts contained in the records

and is contrary to law. They pointed out that the

disallowed expenditures of P1,278.00 were made in

good faith and not used for the personal benefit of

herein union officers but, instead, contributed to the

benefit of the members. On the alleged failure to

maintain and submitted the books of accounts for

the years 1977, 1978 and 1979, they argued that

they were elected in 1980 only and, therefore, they

could not be made responsible for the omissions of

their predecessors who failed to turn over union

records for the questioned period. Anent their

alleged failure to maintain segregated

disbursement receipts in accordance with the five

(5) segregated funds, petitioners maintained that

the same did not result to any loss of funds and such

error in procedure had already been corrected.

They also demonstrated that there would be a

general election on October 4, 1982, at which time,

both the election and the desired referendum could

be undertaken to determine the membership at

minimum expense. They prayed that the resolution

on the issue be held in abeyance.

Private respondents, on the other hand, claimed

that the Med-Arbiter erred in calling a referendum

to decide the issue. They reiterated that the

appropriate action should be the expulsion of the

herein union officers.

On August 13, 1982, public respondent Director

Trajano dismissed both appeals of petitioners and

private respondents and affirmed in toto the order

of Med-Arbiter Cabibihan.

Petitioners filed a Motion for Reconsideration of the

Resolution of August 13, 1982 of Public respondent

Director Trajano, reiterating their arguments in their

appeal and further clarifying that what the Union

Account Officer Florencio R. Vicedo found was that

the amount of P1,278.00 was not supported by

official receipts and therefore should not be

allowed as disbursement from the union funds; and

that he did not say that the amount was converted

by them for their own personal benefit. They,

likewise, informed public respondent Director

Trajano that in the general election held on October

4, 1982, all of them, except petitioners Ambrocio

dela Cruz and Eliseo Celerio, who ran for the

positions of Vice-President and member of the

Board of Directors, respectively, were elected by

the overwhelming majority of the members, while

private respondents Catalino Silvestre and Cesar

Alfaro who also ran for the position of Auditor, lost.

Thereafter, they moved for the dismissal of the

appeal for having been rendered moot and

academic by their re-election.

On October 19, 1982, public respondent Director

Trajano issued the second questioned order

denying petitioners' Motion for Reconsideration.

Hence, this petition which We find meritorious for

the following reasons:

1. If herein union officers (also petitioners) were

guilty of the alleged acts imputed against them,

said public respondent pursuant to Article 242 of the

New Labor Code and in the light of Our ruling

in Duyag vs. Inciong, 98 SCRA 522, should have

meted out the appropriate penalty on them, i.e., to

expel them from the Union, as prayed for, and not

call for a referendum to decide the issue;

2. The alleged falsification and misrepresentation of

herein union officers were not supported by

substantial evidence. The fact that they disbursed

the amount of P1,278.00 from Union funds and later

on was disallowed for failure to attach supporting

papers thereon did not of itself constitute

falsification and/or misrepresentation. The

expenditures appeared to have been made in

good faith and the amount spent for the purpose

mentioned in the report, if concurred in or

accepted by the members, are reasonable; and

3. The repudiation of both private respondents to

the highly sensitive position of auditor at the

October 4, 1982 election, is a convincing

manifestation and demonstration of the union

membership's faith in the herein officers' leadership

on one hand and a clear condonation of an act

they had allegedly committed.

By and large, the holding of the referendum in

question has become moot and academic. This is

in line with Our ruling in Pascual vs. Provincial Board

of Nueva Ecija, 106 Phil. 471, which We quote:

The Court should never remove a public officer for

acts done prior to his present term of office. To do

otherwise would be to deprive the people of their

right to elect their officers. When the people have

elected a man to office, it must be assumed that

they did this with knowledge of his life and

character, and that they disregarded or forgave Ms

faults or misconduct, if he had been guilty of any. It

is not for the court, by reason of such faults or

misconduct to practically overrule the will of the

people.

ACCORDINGLY, the resolution and order, dated

August 13 and October 19, 1982, respectively, of

public respondent Director Cresenciano B. Trajano

of the Bureau of Labor Relations, Ministry of Labor,

Manila in BLR Case No. A-0100-82 (RO4-A-LRD-M-9-

35-81) are SET ASIDE and, the petition for expulsion

of herein union officers in R04-A-LRD-M-9-35-81 is

hereby DISMISSED for having been rendered moot

and academic by the election of herein union

officers in the general membership

meeting/election held on October 4, 1982.

SO ORDERED.

[G.R. No. 80141. July 5, 1989.]

SAN MIGUEL CORPORATION EMPLOYEES UNION —

PTGWO, RICARDO ANGELES, ROBERTO AZANES,

ROLANDO BINCE, DANILO CRUZ, REYNALDO

DECENA, RODOLFO DESTURA, IRENEO GALLABO,

TOMAS GALVEZ, RAYMUNDO HIPOLITO, JR.,

TEODORO ISLETA, ROMEO SANTOS, DECLARITO

TORRES, DIONISIO VALERIO, ROQUE YAP, and JOHN

ZAFE in their capacities as UNION

OFFICERS, Petitioners, v. HONORABLE PURA FERRER

CALLEJA, DIRECTOR — BUREAU OF LABOR

RELATIONS-DOLE; NAPOLEON FERNANDO IN HIS

CAPACITY AS MED-ARBITER, NATIONAL CAPITAL

REGION, MANILA, Respondents.

Raymundo Hipolito III, for Petitioners.

Romeo C. Lagman for intervenors.

SYLLABUS

1. REMEDIAL LAW; CONSOLIDATION OF CASES;

FAILURE TO PRAY FOR CONSOLIDATION OF BOTH

PETITIONS IN CASE AT BAR, A MOCKERY OF JUDICIAL

PROCEEDINGS. — Petitioners had filed an election

protest with the Med-Arbiter. Without waiting for its

resolution, petitioners filed the instant petition

for certiorari (G.R. No. 80141) and in their petition

they did not mention the pendency of the election

protest. After the said election protest was dismissed

for lack of merit, the petitioners elevated the same

to this Court by way of another petition

for certiorari (G.R. No. 82183). Although both

petitions seek the nullification of the election held

on October 5, 1987, petitioners did not pray for their

consolidation. This mockery of judicial proceedings

should not be countenanced.

2. ID.; PROVISIONAL REMEDIES; INJUNCTION; DOES

NOT LIE WHERE THE ACT TO BE ESTABLISHED HAS

ALREADY BEEN CONSUMMATED. — In its resolution

dated November 6, 1987, public respondent

already declared and certified the candidates in

said election garnering the highest number of votes

as the duly elected officers, committee members

and board of directors of SMCEU-PTGWO. This is the

very act of public respondent that petitioners seek

to be restrained. Since the act has already been

consummated, injunction or restraining order does

not lie. Moreover, it does not appear that petitioners

are entitled to the main relief sought, so there is no

legal justification for a restraining order or

preliminary injunction.

3. ID.; SPECIAL CIVIL ACTION; CONTEMPT;

PROCLAMATION OF WINNERS BEFORE ISSUANCE OF

RESTRAINING ORDER NOT A CONTUMACIOUS ACT.

— The records show that on December 9, 1987, this

Court issued a temporary restraining order enjoining

"respondents from proclaiming the alleged winners

in the union local election held last October 5, 1987

particularly that of Daniel Borbon as new president

of the union." But the winners in said election were

already proclaimed and sworn into office on

November 11, 1987 by virtue of the order dated

November 6, 1987 of the Med-Arbiter in the election

protest filed by petitioners. Thus, the act intended to

be restrained was already" fait accompli."

Accordingly, said public respondents have not

violated any order of this Court which would make

them guilty of contempt.

4. LABOR CODE; COLLECTIVE BARGAINING;

ELECTIONS; PETITIONERS ESTOPPED FROM CLAIMING

PETITION DID NOT MEET REQUIREMENT. — Petitioners

contend that public respondents acted with grave

abuse of discretion amounting to lack of jurisdiction

when they set the local election on October 5, 1987.

In support of their allegation, they state that there

was no petition for the holding of election of union

officers meeting the requirements of Book V, Rule

VIII, Sections 1, 2 and 3 of the Implementing Rules

and Regulations of the Labor Code and that they

were deprived of due process of law. The above

contentions are without merit. Assuming that the

requirements as delineated in said Sections 1, 2 and

3 of the Implementing Rules and Regulations of the

Labor Code apply to election of union officers,

petitioners are in estoppel to invoke the same. They

filed the petition praying for the conduct of an

election to select the union officers. By filing the

petition, they necessarily affirmed that the petition

was sufficient in form and substance. They therefore

cannot now claim that the petition did not meet

legal requirements.

5. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE

PROCESS; NOT VIOLATED BY DENIAL OF MOTION FOR

RECONSIDERATION. — Anent their claim that they

were denied due process, records show that they

were given their day in court. Their motion for

Reconsideration/Appeal dated September 28, 1978

was duly considered by public Respondent. The

mere fact that their motion was denied does not

mean that they were denied due process of law.

D E C I S I O N

PARAS, J.:

The instant petition seeks to set aside the

decision/orders of public respondent calling for an

election of the officers of petitioner San Miguel

Corporation Employees Union on October 5, 1987;

to nullify the election if held and restrain the

enforcement of its results; and to hold public

respondents in contempt of this Court.

The controversy originated with a petition filed on

December 2, 1984 by San Miguel Corporation

Employees Union with the Department of Labor and

Employment for the election of its officers. The last

election conducted in the union was in December

1981 when Raymundo Hipolito, Jr. was elected

president of the union for a term of three (3) years.

After the required pre-election conferences, the

election was scheduled on December 11, 1984.

However, a restraining order dated December 10,

1984, issued by the National Capital Region, Metro

Manila, (NCR for brevity) suspended the election.

Nevertheless the group of Ricardo Bandal, one of

the contending parties proceeded with the election

and won. This was questioned by Raymundo

Hipolito as the election was conducted in violation

of the restraining order. The NCR sustained Hipolito

and the Bandal group appealed to the Bureau of

Labor Relations (BLR for brevity). On July 22,1985,

the BLR dismissed the appeal and ordered the

holding of another election. This order became final

and so the parties were again summoned for pre-

election conferences. Subsequently, another date

for the election was set, this time on November 25,

1985. Thereafter, however, protracted legal debates

delayed the implementation of the BLR order for the

holding of election. Hipolito raised the issue that the

unit should be described as "SMCEU — PTGWO"

instead of SMCEU only. After his belated motion for

the reconsideration of the July 22, 1985 order of the

BLR which was denied, he came to this Court by

way of a petition for certiorari with prayer for the

issuance of a restraining order to enjoin the holding

of the election which was rescheduled anew to

December 10, 1985. In the petition he also prayed

that the acronym PTGWO be added to SMCEU.

This Court restrained the holding of the scheduled

election and allowed the inclusion of PTGWO as

suffix to SMCEU.

From this Court, the case was remanded to the NCR

on July 7, 1985. There being no further legal

impediment to the holding of the elections, the NCR

again called the parties for the continuance of the

pre-election conference.

Apparently, having a change of mind due perhaps

to considerations of union politics, Hipolito

submitted to the Med-Arbiter two (2) motions dated

July 25, 1986 and August 19, 1986, praying for the

dismissal of the petition which the petitioners filed

with the Department of Labor and Employment on

December 2, 1984. He insisted that in view of the

on-going collective bargaining negotiations

between the union and San Miguel Corporation, it

would be in the interest of everybody that said

negotiations be concluded first before holding the

election.

The NCR accommodated Hipolito repeatedly. But

after the signing of the Collective Bargaining

Agreement, another pre-election conference was

called on July 2, 1987. Finally, on August 11, 1987,

the Med-Arbiter issued an Order the dispositive

portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, in the light of the foregoing, the

election of officers of the San Miguel Corporation

Employees Union-PTGWO is hereby set on 15

September 1987 under the supervision of National

Capital Region (NCR). Let a copy of this Order given

the widest dissemination to the members of the

union and all union members interested to run for

office are given until August 31, 1987 to submit their

respective certificates of candidacy.

"SO ORDERED." (P. 127, Rollo)

Petitioners filed a motion for the reconsideration of

the aforesaid Order on August 27, 1987.

Subsequently, however, they filed their

Manifestation requesting that they would

participate in the election provided that the date of

said election which is on September 15, 1987 be

moved to another date to be fixed by the parties, or

failing which, by the assigned Representation

Officer. In the same manifestation, they signified

that if their request is granted, their motion for

reconsideration can be considered moot and

academic.

On September 4, 1987, the Med-Arbiter issued his

now assailed Order reading as

follows:jgc:chanrobles.com.ph

"Acting on the Manifestation with Motion to re-

schedule election of officers of SMCEU-PTGWO filed

by SMCEU-PTGWO officers led by Raymundo

Hipolito, Jr. on September 4, 1987 to be well taken

and is in consonance with the attainment of

Industrial peace in the company, the Order of this

Office dated August 11, 1987 in so far as fixing of

the date of the election of union officers on

September 15, 1987 is hereby ordered set aside. The

new date of the election may be agreed upon by

the parties during the pre-election conference but,

should the parties fail to agree on the date of the

election, the Representation Officer is hereby

directed to fix the date of the said election.

"Further, pursuant to the abovementioned

Manifestation, filed on September 4, 1987, the

petitioners’ Motion for Reconsideration dated

August 26, 1987 is hereby ordered denied for being

moot and academic.

"SO ORDERED." (p. 24, Rollo)

So pre-election conferences were again held. On

September 22, 1987, the Representation Officer

pursuant to the aforesaid Order of September 4,

1987 fixed the date of the election for October 5,

1987.

In a last effort to again delay the election,

petitioners filed a motion for reconsideration. The

same was denied.

Hence, this petition for certiorari filed with this Court

on October 17, 1987. Sometime in November 1987,

petitioners filed a Supplemental Petition alleging

that the election had been held under the

supervision of the Department of Labor (after almost

three (3) years from the filing of the petition for the

conduct of the election and after almost six (6)

years from the last election of officers of petitioner

union.)

All the individual petitioners herein filed their

certificates of candidacy and actually participated

in the election of October 5, 1987. Petitioner

Raymundo Hipolito, Jr. lost the presidency to

intervenor Daniel Borbon II.

Before filing the instant petition for certiorari,

petitioners had filed likewise an election protest in

the original case which was dismissed for lack of

merit on November 6, 1987. This order was

appealed (petition for certiorari) by petitioners to

this Court under G.R. No. 82183.

On May 4, 1988 this Court (First Division) denied the

said petition for lack of merit. The said Resolution

reads:jgc:chanrobles.com.ph

"After deliberating on the petition and its annexes

we find that the respondent Director of the Bureau

of Labor Relations did not commit a grave abuse of

discretion nor any reversible error in affirming the

order of the Med-Arbiter dismissing petitioner’s

protest against the election of respondent Daniel

Borbon as president of the San Miguel Corporation

Employees Union-PTGWO, in the local election on

October 5, 1987, as it appears that the petitioner

himself, as the president of the SMCEU-PTGWO filed

the petition for election of union officers on

December 2, 1984 because the last union election

was held in December 1981 and the 3-year term of

office of the incumbent union officers as provided in

Article 242(c) of the Labor Code, was about to

expire; that petitioner was estopped from

withdrawing his said petition because the order

directing the conduct of the election had already

been implemented and petitioner himself

participated as a candidate for president in the

election; that 261 union members led by Borbon

filed a petition to hold the election and demand an

accounting of union funds; that petitioner’s petition

to disqualify Daniel Borbon from running for office in

the union had already been resolved in BLR Case

No. 10-354-87 (NCR OD-M-5-421-87) where Borbon

was declared a rank and file employee, hence,

qualified to join, form or assist in the formation of a

labor organization; and, finally, petitioner who lost in

the election, failed to present evidence of fraud in

the conduct of the election. Respondent Calleja’s

resolution dated February 18, 1988 (Annex A)

dismissing petitioner’s appeal from the Med-

Arbiter’s order of November 6, 1987 (Annex B) is

correct." (pp. 75-76, Rollo of G.R. No. 82183)

The petitioners in the said petition (who are the

same petitioners in this case) moved to reconsider

the dismissal. The same was denied in the

Resolution of the First Division dated June 15, 1988

which reads:jgc:chanrobles.com.ph

"The motion for reconsideration mentions for the first

time the pendency before the Second Division of

this Court of G.R. No. 80141 which, in the petitioner’s

own words, involves ‘the same subject matter,

issues and parties.’ In both cases, the petitioner

prays this Court `to cancel and nullify the local

election held on October 5, 1987’ and to set aside

the proclamation of Daniel Borbon as the duly

elected president of the SMCEU-PTGWO. Petitioner

now asks that Our resolution of May 4, 1988

dismissing this case be set aside and/or its

implementation be deferred until G.R. No. 80141

shall have been resolved by the Second Division.

"Since the petitioners in G.R. No. 80141, (are the

same petitioners here) We have here a clear case

of trifling with proceedings in this Court. Petitioner

had probably hoped to obtain from the First Division

of the Court the reliefs which up to this time they

have failed to obtain from the Second Division

where their earlier petition (G.R. No. 80141) has

been pending. Only when We adversely disposed

of their second petition did they reveal the

pendency of the first. Since they themselves set in

motion the processes of this Court by filing this case,

they are estopped to ask for the suspension of these

proceedings on account of the pendency of their

earlier petition." (pp. 96-97, Rollo of G.R. No. 82183)

On June 27, 1988, intervenors filed a motion to

dismiss the instant petition in view of the dismissal of

G.R. No. 82183.

Indeed, this case is a clear instance of trifling with

judicial and quasi-judicial proceedings. Petitioners

filed a petition for election alleging that there was

basis for calling such election. Then, they turned

around and claimed their petition was not proper;

that the election that was held, in which they lost,

be nullified.

Petitioners had filed an election protest with the

Med-Arbiter. Without waiting for its resolution,

petitioners filed the instant petition

for certiorari (G.R. No. 80141) and in their petition

they did not mention the pendency of the election

protest.

After the said election protest was dismissed for

lack of merit, the petitioners elevated the same to

this Court by way of another petition

for certiorari (G.R. No. 82183). Although both

petitions seek the nullification of the election held

on October 5, 1987, petitioners did not pray for their

consolidation. This mockery of judicial proceedings

should not be countenanced.

In its resolution dated November 6, 1987, public

respondent already declared and certified the

candidates in said election garnering the highest

number of votes as the duly elected officers,

committee members and board of directors of

SMCEU-PTGWO. This is the very act of public

respondent that petitioners seek to be restrained.

Since the act has already been consummated,

injunction or restraining order does not lie.

Moreover, it does not appear that petitioners are

entitled to the main relief sought, so there is no legal

justification for a restraining order or preliminary

injunction.

Petitioners contend that public respondents acted

with grave abuse of discretion amounting to lack of

jurisdiction when they set the local election on

October 5, 1987. In support of their allegation, they

state that there was no petition for the holding of

election of union officers meeting the requirements

of Book V, Rule VIII, Sections 1, 2 and 3 of the

Implementing Rules and Regulations of the Labor

Code and that they were deprived of due process

of law.

The above contentions are without merit. Assuming

that the requirements as delineated in said Sections

1, 2 and 3 of the Implementing Rules and

Regulations of the Labor Code apply to election of

union officers, petitioners are in estoppel to invoke

the same. They filed the petition praying for the

conduct of an election to select the union officers.

By filing the petition, they necessarily affirmed that

the petition was sufficient in form and substance.

They therefore cannot now claim that the petition

did not meet legal requirements.

Anent their claim that they were denied due

process, records show that they were given their

day in court. Their motion for

Reconsideration/Appeal dated September 28, 1978

was duly considered by public Respondent. The

mere fact that their motion was denied does not

mean that they were denied due process of law.

In their Supplemental Petition, petitioners pray that

respondent Pura Ferrer-Calleja and Med-Arbiter

Fernando be held in contempt of court for

proceeding to take action on the petition for

election.

The records show that on December 9, 1987, this

Court issued a temporary restraining order enjoining

"respondents from proclaiming the alleged winners

in the union local election held last October 5, 1987

particularly that of Daniel Borbon as new president

of the union." (Resolution dated December 9, 1987,

p. 203, Rollo) But the winners in said election were

already proclaimed and sworn into office on

November 11, 1987 by virtue of the order dated

November 6, 1987 of the Med-Arbiter in the election

protest filed by petitioners. Thus, the act intended to

be restrained was already" fait accompli."

Accordingly, said public respondents have not

violated any order of this Court which would make

them guilty of contempt.

WHEREFORE, for lack of merit, the instant petition is

DISMISSED.

SO ORDERED.

CEBU SEAMEN’S ASSOCIATION, INC., Petitioner, v.

HON. PURA FERRER-CALLEJA, SEAMEN’S

ASSOCIATION OF THE PHILS./DOMINICA C.

NACUA, Respondent. HON. PURA FERRER-CALLEJA,

SEAMEN’S ASSOCIATION OF THE PHILS./DOMINICA

C. NACUA, Respondent.

Paterno P. Natinga for Petitioner.

Romeo S. Occena for Seamen’s Association of the

Philippines.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR

RELATION; MED-ARBITER HAS THE AUTHORITY AND

JURISDICTION TO ACT ON ALL INTER-UNION AND

INTRA-UNION DISPUTES. — There is no doubt that the

controversy between the aforesaid two sets of

officers is an intra-union dispute. Both sets of officers

claim to be entitled to the release of the union dues

collected by the company with whom it had an

existing CBA. The controversy involves claims of

different members/officers to certain rights granted

under the labor code. Article 226 of the Labor Code

vests upon the Bureau of Labor Relations and Labor

Relations Division the original and exclusive

authority and jurisdiction to act on all inter-union

and intra-union disputes. Therefore, the Med-Arbiter

originally, and the Director on appeal, correctly

assumed jurisdiction over the controversy.

2. ID.; ID.; LABOR ORGANIZATION; REGISTRATION

THEREOF WITH THE BUREAU OF LABOR RELATIONS

THAT MAKES IT A LEGITIMATE LABOR ORGANIZATION

WITH RIGHTS AND PRIVILEGES GRANTED UNDER THE

LABOR CODE. — As stated in the findings of fact in

the questioned resolution of Director Pura Ferrer-

Calleja, on October 23, 1950, a group of deck

officers organized the Cebu Seamen’s Association,

Inc., (CSAI), a non-stock corporation and registered

it with the Securities and Exchange Commission

(SEC). The same group registered the organization

with the Bureau of Labor Relations (BLR) as

Seamen’s Association of the Philippines (SAPI). It is

the registration of the organization with the BLR and

not with the SEC which made it a legitimate labor

organization with rights and privileges granted

under the Labor Code.

3. ID.; ID.; EXPULSION OF OFFICER FROM THE

CORPORATION; DOES NOT AFFECT HIS MEMBERSHIP

WITH THE LABOR UNION. — Before the controversy,

private respondent Dominica Nacua was elected

president of the labor union, SAPI. It had an existing

CBA with Aboitiz Shipping Corporation. Before the

end of the term of private respondent Nacua, some

members of the union which included Domingo

Machacon and petitioner Manuel Gabayoyo

showed signs of discontentment with the leadership

of Nacua. This break-away group revived the

moribund corporation and issued an undated

resolution expelling Nacua from the association.

Sometime in February, 1987, it held its own election

of officers supervised by the Securities and

Exchange Commission. It also filed a case of estafa

against Nacua sometime in May, 1986. The

expulsion of Nacua from the corporation, of which

she denied being a member, has however, not

affected her membership with the labor union. In

fact, in the elections of officers for 1987-1989, she

was re-elected as the president of the labor union.

In this connection, We cannot agree with the

contention of Gabayoyo that Nacua was already

expelled from the union. Whatever acts their group

had done in the corporation do not bind the labor

union. Moreover, Gabayoyo cannot claim

leadership of the labor group by virtue of his having

been elected as a president of the dormant

corporation CSAI.

4. ID.; ID.; LEGITIMATE LABOR ORGANIZATION;

ENTITLED TO THE COLLECTION AND CUSTODY OF

UNION DUES. — Public respondent Bureau of Labor

Relations correctly ruled on the basis of the

evidence presented by the parties that SAPI, the

legitimate labor union, registered with its office, is

not the same association as CSAI, the corporation,

insofar as their rights under the Labor Code are

concerned. Hence, the former and not the latter

association is entitled to the release and custody of

union fees with Aboitiz Shipping and other shipping

companies with whom it had an existing CBA.

5. ADMINISTRATIVE LAW; DECISIONS OF

ADMINISTRATIVE OFFICER; GENERALLY NOT

DISTURBED BY COURT; EXCEPTION. — Under the

principles of administrative law in force in this

jurisdiction, decisions of administrative officers shall

not be disturbed by courts, except when the former

acted without or in excess of their jurisdiction or with

grave abuse of discretion.

D E C I S I O N

MEDIALDEA, J.:

This petition seeks the reversal of the resolution of

the Bureau of Labor Relations 1 which affirmed the

decision of the Med-Arbiter holding that the set of

officers of Seamen’s Association of the Philippines

headed by Dominica C. Nacua, as president, was

the lawful set of officers entitled to the release and

custody of the union dues as well as agency fees of

said association. The dispositive portion of the

resolution reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, the Order of the

Med-Arbiter dated 13 July 1987 is hereby affirmed

and the appeal therefrom DISMISSED for lack of

merit." (p. 39, Rollo)

The facts surrounding the controversy in this case,

as stated in the questioned resolution, is as

follows:jgc:chanrobles.com.ph

"The records show that sometime on 23 October

1950, a group of deck officers and marine

engineers on board vessels plying Cebu and other

ports of the Philippines organized themselves into

an association and registered the same as a non-

stock corporation known as Cebu Seamen’s

Association, Inc. (CSAI), with the Securities and

Exchange Commission (SEC). Later, on 23 June

1969, the same group registered its association with

this Bureau as a labor union known as the Seamen’s

Association of the Philippines, Incorporated

(SAPI).chanrobles virtual lawlibrary

"SAPI has an existing collective bargaining

agreement (CBA) with the Aboitiz Shipping

Corporation which will expire on 31 December

1988. In consonance with CBA said company has

been remitting checked-off union dues to said

union until February, 1987 when a group composed

of members of said union, introducing itself to be its

new set of officers, went to the company and

claimed that they are entitled to the remittance and

custody of such union dues. This group, headed by

Manuel Gabayoyo claims that they were elected

as such on January 20, 1987 under the supervision

of the SEC.

"On 26 May 1987, another group headed by

Dominica C. Nacua, claiming as the duly elected

set officers of the union in an election held on 20

December 1986, filed a complaint, for and on

behalf of the union, against the Cebu Seamen’s

Association, Inc. (CSAI) as represented by Manuel

Gabayoyo for the security of the aforementioned

CBA, seeking such relief, among others, as an order

restraining the respondent from acting on behalf of

the union and directing the Aboitiz Shipping Corp.

to remit the checked-off union dues for the months

of March and April 1987.

"On 10 June 1987, respondent CSAI filed its

Answer/Position Paper alleging that the

complainant union and CSAI are one and the same

union: that Dominica C. Nacua and Atty. Prospero

Paradilla who represented the union had been

expelled as members/officers as of November 1984

for lawful causes; and, that its set of officers headed

by Manuel Gabayoyo has the lawful right to the

remittance and custody of the corporate funds

(otherwise known as union dues) in question

pursuant to the resolution of the SEC dated 22 April

1987.

"To bolster further its posture, on the following day,

11 June 1987, the respondent also filled a Motion to

Dismiss the Complaint on the grounds, among

others, that the SEC, not the Med-Arbiter, has

jurisdiction over the dispute as provided under P.D.

NO. 902-A; that there can neither be a complainant

nor respondent in the instant case as the parties

involved are one and the same labor union, and

that Mrs. Dominica C. Nacua and Atty. Prospero

Paradilla have no personality to represent the union

as they had already been expelled as

members/officers thereof in two resolutions of the

Board of Directors dated November 1984 and

January 17, 1987.

"On 19 June 1987, the Med-Arbiter issued an Order

denying said motion but directing the Aboitiz

Shipping Corporation to remit the already checked-

off union dues to the complainant union through its

officers end to continue remitting any checked-off

union dues until further hearing of the complaint on

July 1, 1987.

"On 19 June 1987, the respondent filed a motion for

reconsideration of said order of 19 June 1987,

reiterating its previous position. Thereafter, the Med-

Arbiter issued the assailed Order. . . . ." (pp. 34-35,

Rollo)

From the decision of the Med-Arbiter, Cebu

Seamen’s Association headed by Capt. Gabayoyo

filed an appeal with the Bureau of Labor Relations

(BLR).

The BLR, as already stated, affirmed the decision of

the Med-Arbiter in a resolution dated February 19,

1988. The Gabayoyo group appealed to the Office

of the Secretary, Department of Labor, which

appeal was considered as a motion for

reconsideration of the BLR’s decision. The said

appeal/motion for consideration was denied for

lack or merit on April 11, 1988 (p. 42, Rollo) by the

BLR.

Hence, this petition.

There are three issues presented for resolution in this

petition, to wit:chanrob1es virtual 1aw library

1. WHETHER OR NOT THE MED-ARBITER OF REGION VII

HAS JURISDICTION OVER THE CASE AT BAR.

2. WHETHER OR NOT THE COMPLAINANT-APPELLEE

THE SEAMEN’S ASSOCIATION OF THE PHILIPPINES

WAS REGISTERED AS A LABOR FEDERATION WITH THE

BUREAU OF LABOR RELATIONS.

3. WHETHER OR NOT DOMINICA C. NACUA AND

PROSPERO PARADIL(L)A HAVE (THE) PERSONALITY TO

REPRESENT THE HEREIN COMPLAINANT-APPELLEE,

CONSIDERING THAT BOTH OF THEM HAVE BEEN

EXPELLED FROM THE ASSOCIATION "SEAMEN’S

ASSOCIATION OF THE PHILIPPINES, INC." (FORMERLY

THE CEBU SEAMEN’S ASSOCIATION,

INC.).chanroblesvirtualawlibrary

There is no doubt that the controversy between the

aforesaid two sets of officers is an intra-union

dispute. Both sets of officers claim to be entitled to

the release of the union dues collected by the

company with whom it had an existing CBA. The

controversy involves claims of different

members/officers to certain rights granted under

the labor code.

Article 226 of the Labor Code vests upon the Bureau

of Labor Relations and Labor Relations Division the

original and exclusive authority and jurisdiction to

act on all inter-union and intra-union disputes.

Therefore, the Med-Arbiter originally, and the

Director on appeal, correctly assumed jurisdiction

over the controversy.

The determinative issue in this case is who is entitled

to the collection and custody of the union dues?

Cebu Seamen’s Association headed by Gabayoyo

or Seamen’s Association of the Philippines headed

by Nacua.

As stated in the findings of fact in the questioned

resolution of Director Pura Ferrer-Calleja, on

October 23, 1950, a group of deck officers

organized the Cebu Seamen’s Association, Inc.,

(CSAI), a non-stock corporation and registered it

with the Securities and Exchange Commission

(SEC). The same group registered the organization

with the Bureau of Labor Relations (BLR) as

Seamen’s Association of the Philippines (SAPI). It is

the registration of the organization with the BLR and

not with the SEC which made it a legitimate labor

organization with rights and privileges granted

under the Labor Code.

We gathered from the records that CSAI, the

corporation was already inoperational before the

controversy in this case arose. In fact, on August 24,

1984, the SEC ordered the CSAI to show cause why

its certificate of registration should not be revoked

for continuous inoperation (p. 343, Rollo). There is

nothing in the records which would show that CSAI

answered said show-cause order.

Also, before the controversy, private respondent

Dominica Nacua was elected president of the labor

union, SAPI. It had an existing CBA with Aboitiz

Shipping Corporation. Before the end of the term of

private respondent Nacua, some members of the

union which included Domingo Machacon and

petitioner Manuel Gabayoyo showed signs of

discontentment with the leadership of Nacua. This

break-away group revived the moribund

corporation and issued an undated resolution

expelling Nacua from the association pp. 58-59,

Rollo). Sometime in February, 1987, it held its own

election of officers supervised by the Securities and

Exchange Commission. It also filed a case of estafa

against Nacua sometime in May, 1986 (p. 52,

Rollo).chanrobles.com : virtual law library

The expulsion of Nacua from the corporation, of

which she denied being a member, has however,

not affected or membership with the labor union. In

fact, in the elections of officers for 1987-1989, she

was re-elected as the president of the labor union.

In this connection, We cannot agree with the

contention of Gabayoyo that Nacua was already

expelled from the union. Whatever acts their group

had done in the corporation do not bind the labor

union. Moreover, Gabayoyo cannot claim

leadership of the labor group by virtue of his having

been elected as a president of the dormant

corporation CSAI.

Under the principles of administrative law in force in

this jurisdiction, decisions of administrative officers

shall not be disturbed by courts, except when the

former acted without or in excess of their jurisdiction

or with grave abuse of discretion.

Public respondent Bureau of Labor Relations

correctly ruled on the basis of the evidence

presented by the parties that SAPI, the legitimate

labor union, registered with its office, is not the

same association as CSAI, the corporation, insofar

as their rights under the Labor Code are concerned.

Hence, the former and not the latter association is

entitled to the release and custody of union fees

with Aboitiz Shipping and other shipping companies

with whom it had an existing CBA. As correctly held

by public respondent:jgc:chanrobles.com.ph

"It is undisputed from the records that the election of

the so-called set of officers headed by Manuel

Gabayoyo was conducted under the supervision of

the SEC, presumably in accordance with its

constitution and by-laws as well as the articles of

incorporation of respondent CSAI, and the

Corporation Code. That had been so precisely on

the honest belief of the participants therein that they

were acting in their capacity as members of the

said corporation. That being the case, the

aforementioned set of officers is of the respondent

corporation and not of the complainant union. It

follows, then, that any proceedings and actions

taken by said set of officers can not, in any manner,

affect the union and its members.

"On the other hand, we rule and so hold that the

other set of officers headed by Dominica C. Nacua

is the lawful set of officers of SAPI and therefore, is

entitled to the release and custody of the union

dues as well as the agency fees, if any, there by. A

record check with the Labor Organizations (LOD),

this Bureau, shows that SAPI has submitted to it for

file the list of this new set of officers, in compliance

with the second paragraph of Article 242 (c) of the

Labor Code. This list sufficiently sustains the view

that said officers were lawfully elected, in the

absence of clear and convincing proof to the

contrary." (pp. 9-10, Rollo)

ACCORDINGLY, the petition is DISMISSED. The

questioned resolution of the Bureau of Labor

Relations is AFFIRMED.chanrobles lawlibrary :

rednad

SO ORDERED.

Cruz, Griño-Aquino and Bellosillo, JJ., concur.