2nd list of labrel cases

7/29/2019 2nd List of Labrel Cases

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EMPLOYEES UNION OF BAYER PHILS., FFW and JUANITO S. FACUNDO, in his capacityas President, petitioners, vs. BAYER PHILIPPINES, INC., DIETER J. LONISHEN(President), ASUNCION AMISTOSO (HRD Manager), AVELINA REMIGIO AND

ANASTACIA VILLAREAL, respondents.

FACTS:

- Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agentof all rank-and-file employees of Bayer Philippines (Bayer); also an affiliate of theFederation of Free Workers (FFW).

- 1997: EUBP, headed by its president Juanito S. Facundo (Facundo), negotiated with Bayerfor the signing of a collective bargaining agreement (CBA); it resulted in a bargainingdeadlock (9.9% wage increase proposal was rejected by Facundo)

- Thus, strike by EUBP was staged; DOLE assumed jurisdiction over the dispute- November 1997: pending resolution, respondent Avelina Remigio (Remigio) and 27 other

union members, without any authority from their union leaders, accepted Bayer's wage-increase proposal.

- EUBP's grievance committee questioned Remigio's action and reprimanded Remigio andher allies.

- January 1998: the DOLE Secretary issued an arbitral award ordering EUBP and Bayer toexecute a CBA retroactive to January 1, 1997 til December 31, 2001.

- Meanwhile, the rift between Facundo's leadership and Remigio's group broadened;Remigio solicited signatures from union members in support of a resolution: (1) disaffiliatefrom FFW, (2) rename the union as Reformed Employees Union of Bayer Philippines(REUBP), (3) adopt a new constitution and by-laws for the union, (4) abolish all existingofficer positions in the union and elect a new set of interim officers, and (5) authorizeREUBP to administer the CBA between EUBP and Bayer.

- A tug-of-war then ensued between the two rival groups (Facundos group vs. Remigiosgroup), with both seeking recognition from Bayer and demanding remittance of the uniondues collected from its rank-and-file members.

- September 1998: Remigio's group wrote Facundo, etc. informing them that majoritywished to disaffiliate from FFW. Facundo, meanwhile, sent similar requests toBayer requesting for the remittance of union dues in favor of EUBP and accusing the

company of interfering with purely union matters. Bayer responded by deciding not to dealwith either, and by placing the union dues collected in a trust account until the conflictbetween the two groups is resolved.

- September 1998: EUBP filed a complaint for unfair labor against Bayer for non-remittanceof union dues

- November 1998: EUBP later sent a letter to Bayer asking for a grievance conference. Suchwas unheeded.

- February 1999: while the first ULP case was still pending and despite EUBP's repeatedrequest for a grievance conference, Bayer decided to turn over the collected union duesamounting to P254,857.15 to respondent Anastacia Villareal, Treasurer of REUBP.

- LABOR ARBITER DISMISSED: On June 18, 1999, Labor Arbiter Jovencio Ll. Mayor, Jr.dismissed the first ULP complaint for lack of jurisdiction. The Arbiter explained that the rootcause for Bayer's failure to remit the collected union dues can be traced to the intra-union

conflict between EUBP and Remigio's group and that the charges imputed against Bayershould have been submitted instead to voluntary arbitration. EUBP did not appeal the saiddecision.

- December 1999: petitioners filed a second ULP complaint against, complaining that Bayerrefused to remit the collected union dues to EUBP despite several demands sent to themanagement and also, alleged that notwithstanding the requests sent to Bayer for arenegotiation of the last two years of the 1997-2001 CBA between EUBP and Bayer, thelatter opted to negotiate instead with Remigio's group. On even date, REUBP and Bayeragreed to sign a new CBA.


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- NLRC and LA: Petitioners filed for issuance of RO or Injunction, asserting that theirauthority as the exclusive bargaining representative of all employees of Bayer and

- Regional Director of the Industrial Relations Division of DOLE: DISMISSED for failure toexhaust reliefs within the union and ordering the conduct of a referendum to determinewhich of the two groups should be recognized as union officers.

- Bureau of Labor Relations (BLR): REVERSED the Regional Director's ruling and ordered themanagement of Bayer to respect the authority of the duly-elected officers of EUBP in theadministration of the prevailing CBA.

- Unfortunately, the said BLR ruling came late since Bayer had already signed a newCBA with REUBP on February 21, 2000. The said CBA was eventually ratified by majority ofthe bargaining unit.

- Labor Arbiter: DISMISSED EUBP's second ULP complaint for lack of jurisdiction.

- NLRC: resolved to DISMISS petitioners' motion for a restraining order and/or injunctionstating that the subject matter involved an intra-union dispute, over which the saidCommission has no jurisdiction.

- CA: affirmed LA and NLRC

ISSUES:1. WHETHER OR NOT THE LABOR ARBITER AND THE NLRC HAVE JURISDICTION OVER THE

INSTANT CASE;2. WHETHER OR NOT THE INSTANT CASE INVOLVES AN INTRA-UNION DISPUTE;

HELD:

- Petitioners contention: Pertain to the unfair labor practice to- Respondents contention: Contend that there can be no unfair labor practice on their part since the

requisites for unfair labor practice i.e., that the violation of the CBA should be gross, and that itshould involve violation in the economic provisions of the CBA were not satisfied.

- The petition is partly meritorious.An intra-union dispute refers to any conflict between and among union members, including grievancesarising from any violation of the rights and conditions of membership, violation of or disagreement

over any provision of the union's constitution and by-laws, or disputes arising from chartering ordisaffiliation of the union.

- Clear that the issues raised by petitioners do not fall under any of the aforementionedcircumstances in RULE XI of Dept. Order 40-03 constituting an intra-union dispute. Issue raisedpertained only to the validity of the acts of management in light of the fact that it still has anexisting CBA with EUBP. Thus as to Bayer, Lonishen and Amistoso the question was whether theywere liable for unfair labor practice, which issue was within the jurisdiction of the NLRC. Thedismissal of the second ULP complaint was therefore erroneous.

- However, as to respondents Remigio and Villareal, we find that petitioners' complaint was validlydismissed. Petitioners' ULP complaint cannot prosper as against respondents Remigio and Villarealbecause the issue, as against them, essentially involves an intra-union dispute based on Section 1(n) of DOLE Department Order No. 40-03. To rule on the validity or illegality of their acts, the LaborArbiter and the NLRC will necessarily touch on the issues respecting the propriety of theirdisaffiliation and the legality of the establishment of REUBP issues that are outside the scope oftheir jurisdiction. Accordingly, the dismissal of the complaint was validly made, but only withrespect to these two respondents.

- But Bayer, Lonishen and Amistoso are liable for unfair labor practice.CBA is entered into in order to foster stability and mutual cooperation between labor and capital. Anemployer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agentit had previously contracted with, and decide to bargain anew with a different group if there is nolegitimate reason for doing so and without first following the proper procedure.


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WHEREFORE,the petition for review on certiorari is PARTLY GRANTED. MODIFIED as follows:1)Respondents Bayer Phils., Dieter J. Lonishen and Asuncion Amistoso are found LIABLE forUnfair Labor Practice, and are hereby ORDERED to remit to petitioners P254,857.15representing the collected union dues previously turned over to Avelina Remigio and AnastaciaVillareal; and

2)The complaint, as against respondents Remigio and Villareal is DISMISSED due to the lack

of jurisdiction of the Labor Arbiter and the NLRC, the complaint being in the nature of an intra-union dispute.

ATTY. ALLAN S. MONTAO, petitioner, vs. ATTY. ERNESTO C. VERCELES, respondent.

FACTS:

- Atty. Montao: legal assistant of FFW Legal Center on October 1, 1994; joined the union ofrank-and-file employees, the FFW Staff AssociationJuly 1997: Employees' union presidentNovember 1998: officer-in-charge of FFW Legal Center

- 21st National Convention and Election of National Officers of FFW (March 2001): Atty. Montao wasnominated for the position of National Vice-President.

However, the Commission on Election (FFW COMELEC), informed him that he is not qualifiedbecause his candidacy violates the 1998 FFW Constitution and By-Laws

Atty. Montao thus filed an Urgent Motion for Reconsideration: for his name to be included inthe official list

- May 26-27, 2001: Election was held at Subic International Hotel, Olongapo CityDespite the pending motion for reconsideration with the FFW COMELEC, and strong opposition

and protest of respondent Atty. Ernesto C. Verceles (Atty. Verceles), a delegate to the conventionand president of University of the East Employees' Association (UEEA-FFW) which is an affiliate

union of FFW, the convention delegates allowed Atty. Montao's candidacy.He emerged victorious and was proclaimed as the National Vice-President.

PROCEEDINGS BEFORE BUREAU OF LABOR RELATIONS

- May 28, 2001: Atty. Verceles reiterated his protest over Atty. Montao's candidacy to FFW COMELEC-July 2001: Atty. Verceles, as President of UEEA-FFW and officer of the Governing Board of FFW, filed

before the BLR a petition for the nullification of the election of Atty. Montao as FFW National Vice-President and for injunctive relief.

- Atty. Montaos contention: Motion to Dismiss on the ground, among others, that the RegionalDirector of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction overthe case

- BLRs DECISION: Did not give due course to Atty. Montao's MD but ordered the latter to submit hisanswer to the petition pursuant to the rules. The parties thereafter submitted their respective

pleadings and position papers.

- BLRs FINAL DECISIN: Dismissed the petition for lack of meritThere were no grounds to hold Atty. Montao unqualified to run. It held that the applicable

provision in the FFW Constitution and By-Laws to determine whether one is qualified to run foroffice is not Section 76 of Article XIX but Section 26 of Article VIII thereof. Also, the conventiondelegates unanimously decided that Atty. Montao was qualified to run for the position of NationalVice-President.

Atty. Verceles filed a Motion for Reconsideration but was DENIED.

PROCEEDINGS BEFORE COURT OF APPEALS


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- Atty. Verceles on appeal to CA: CA set aside the BLR's DecisionThese are the grounds: (1) While it agreed that jurisdiction was properly lodged with the BLR,

(2) that Atty. Verceles has legal standing to institute the petition, and (3) that the applicableprovision of FFW Constitution and By-Laws is Section 26 of Article VIII and not Section 76 of ArticleXIX, the CA however ruled that Atty. Montao did not possess the qualification requirement underparagraph (d) of Section 26 that candidates must be an officer or member of a legitimate labororganization.

He is only considered a confidential employee, and consequently, ineligible to join FFW StaffAssociation, the rank-and-file union of FFW.

- Atty. Montaos contentions: CA seriously because the FFW Staff Association, of which he is anofficer and member, is not a legitimate labor organization. He asserted that the legitimacy of theunion was never raised as an issue

- CAs DECISION: DENIED BOTH Atty. Montao's motion for reconsideration and FFW StaffAssociation's motion for intervention/clarification (led by Pres. Danilo Laserna).

ISSUE:WoN the CA erred in upholding the exercise of jurisdiction by herein respondent Bureau and innot ordering the dismissal of the case, despite express provision of law granting saidjurisdiction over cases involving protests and petitions for annulment of results of elections tothe Regional Directors of the Dept. of Labor and Employment.

HELD:

- The petition is devoid of merit: BLR has jurisdiction over intra-union disputes involving afederation.

Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors ofDOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include theconduct or nullification of election of union and workers' association officers.

Rule XVI of Book V of the Omnibus Rules Implementing the Labor Code lays down thedecentralized intra-union dispute settlement mechanism. Section 1 states that any complaint in thisregard 'shall be filed in the Regional Office where the union is domiciled.' (Domicile = place where theunion seeks to operate or has established a geographical presence for purposes of collectivebargaining or for dealing with employers concerning terms and conditions of employment.)The matterof venue becomes problematic when the intra-union dispute involves a federation, because thegeographical presence of a federation may encompass more than one administrative region.

Pursuant to its authority under Article 226, this Bureau exercises original jurisdiction over intra-union disputes involving federations. It is well-settled that FFW, having local unions all over thecountry, operates in more than one administrative region.

Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising fromany violation of or disagreement over any provision of its constitution and by-laws.

- SCs RULING: Atty. Montao is NOT qualified to run for the position but NOT for failure to meet therequirement specified under Section 26 (d) of Article VIII of FFW Constitution and By-Laws, BUTBECAUSE of the proscription in the FFW Constitution and By-Laws on federation employees fromsitting in its Governing Board.

- Accordingly, the election of Atty. Montao as FFW Vice-President is null and void.

DIOKNO v. CACDACJuly 4, 2007

Facts: FLAMES (First Line Association of Meralco Supervisory Employees), the Supervisor's Union forMERALCO, held a Union Election. It formed its own COMELEC for the purpose of conducting fairelections, with Dante Tong as its Chairman.

Jimmy Ong and others filed their certificates of candidacy (CoC). But these were rejected by theCOMELEC on the ground that Ong was not a member of FLAMES, and that the others were confidentialemployees.


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Another group, that of Edgardo Daya, also filed their CoCs. Other members of FLAMES petitioned theCOMELEC to have them disqualified. The COMELEC disqualified Daya on the ground that they werecommitting acts of disloyalty which are inimical to the interest FLAMES, as provided for in theirConstitution and By-Laws (CBL). It was alleged that, in their campaign, they had solicited support fromnon-union members, particularly from officers of the MEMABA and the MESALA.

The union elections proceeded, then COMELEC declared Diokno and other petitioners as the new

President, etc. of FLAMES.

Ong's group filed a petition to annul the COMELEC's Order rejecting their CoCs.

Daya's group likewise filed their petition to annul their disqualification, to nullify the electionproceedings and counting of votes, to declare a failure of election, and to declare the holding of a newelection to be controlled and supervised by the DOLE.

And yet another group, that of Gaudencio Jimenez, filed anotherpetition alleging that theunion elections were not free, orderly and peaceful.

All of these petitions were filed separately before the Med-Arb Unit of the DOLE, and weresubsequently consolidated.

Meanwhile, a new election was held, this time with Daya's group participating. Eventually, the CA

upheld the validity of the new elections, and the declaration of Daya's group as the duly electedwinners.

The Med-Arb ruled that Ong's petition was rendered moot and academic, and thatJimenez's petition was premature for non-exhaustion of administrative remedies within the COMELEC.With respect to Daya's petition, the Med-Arb ruled that Daya's disqualification was improper because itwas not supported by substantial evidence, and that the grounds used by the COMELEC as a basis fordisqualifying Daya, Art. IV, Sec. 4(a)(6) of the FLAMES CBL, actually referred to the groundsfor Expulsion of a member from the union, and not Disqualification from the election.

In all cases, the Med-Arb asserted its jurisdiction.

The BLR and the CA affirmed the Med-Arb's decision.

Diokno and his group argued that the Med-Arb was without jurisdiction over the disputes, because Art.226 which grants power to the BLR to resolve inter- and intra-union disputes is dead law, and has beenamended by Sec. 14, RA 6715 whereby the conciliation, mediation and voluntary arbitration functionsof the BLR had been transferred to the NCMB. They also contended that the COMELEC had the sole andexclusive power to rule upon the qualification of any candidate, and therefore it has the correlativepower to disqualify any candidate in accordance with its guidelines.

Issue: Whether or not the BLR has jurisdiction.

Held: Yes. Sec. 14, RA 6715 did not repeal the jurisdiction of the BLR. It only added the clause TheBureau shall have fifteen (15) working days to act on labor cases before it, subject to extension byagreement of the parties.

The BLR has original and exclusive jurisdiction on all inter-union and intra-union conflicts. Since Art.226 has declared that the BLR shall have original and exclusive authority to act on all inter-union and

intra-union conflicts, there should be no more doubt as to its jurisdiction.

As defined, an intra-union conflict would refer to a conflict within or inside a labor union, while an inter-union conflict is one occuring or carried on between or among unions.

The controversy in the case at bar is an intra-union dispute. There is no question that this is one whichinvolves a dispute within or inside FLAMES, a labor union. At issue is the propriety of thedisqualification of Daya by the FLAMES COMELEC in the unionelections.


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It must also be stressed that even as the dispute involves allegations that Daya sought the help ofnon-union members in their election campaign, the same does not detract from the real character ofthe controversy. It remains as one which involves the grievance over the CBL of a union, and it is acontroversy involving members of the union.

MAGBANUA V. UYG.R. No. 161003. May 6, 2005

Facts: As a final consequence of the final and executory decision of the Supreme Court which affirmedwith modification the decision of the NLRC, hearings were conducted to determine the amount of wagedifferentials due the eight petitioners. The petitioners filed a Motion for Issuance of Writ of Execution.Rizalino Uy filed a Manifestation requesting that the cases be terminated and closed, stating that thejudgment award as computed had been complied with to the satisfaction of petitioners. SaidManifestation was also signed by the eight petitioners. Together with the manifestation is a JointAffidavit dated May 5, 1997 of petitioners, attesting to the receipt of payment from respondent andwaiving all other benefits due them in connection with their complaint. On October 20, 1997, six of theeight petitioners filed a Manifestation requesting that the cases be considered closed and terminatedas they are already satisfied of what they have received from respondent. Together with saidManifestation is a Joint Affidavit in the local dialect, of the six petitioners attesting that they have nomore collectible amount from respondent and if there is any, they are abandoning and waiving the

same.

Issues: 1. Whether or not the final and executory judgment of the Supreme Court could be subject tocompromise settlement;2. Whether or not the petitioners affidavit waiving their awards in the labor case executed without theassistance of their counsel and labor arbiter is valid.

Held: 1. There is no justification to disallow a compromise agreement, solely because it was enteredinto after final judgment. The validity of the agreement is determined by compliance with therequisites and principles of contracts, not by when it was entered into. Petitioners voluntarily enteredinto the compromise agreement. Circumstances also reveal that respondent has already complied withits obligation pursuant to the compromise agreement. Having already benefited from the agreement,estoppel bars petitioners from challenging it.2. The presence or the absence of counsel when a waiver is executed does not determine its validity.

There is no law requiring the presence of a counsel to validate a waiver. The test is whether it wasexecuted voluntarily, freely and intelligently; and whether the consideration for it was credible andreasonable. Where there is clear proof that a waiver was wangled from an unsuspecting or a gullibleperson, the law must step in to annul such transaction. In the present case, petitioners failed topresent any evidence to show that their consent had been vitiated.

SOLOMON ET AL. V. POWERTECH CORPJANUARY 22, 2008

Facts:The case stems from a complaint for illegal dismissal and other money claims filed by theNagkakaisang Manggagawa Ng Powertech Corporation in behalf of its 52 individual members and non-union members against their employer, Powertech. The case was dismissed as to twenty-seven (27)employees by virtue of duly executed affidavits of repudiation and quitclaim. The case proceeded withrespect to the remaining twenty-five (25) employees, petitioners in this case.


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On June 25, 1999, Labor Arbiter Renell Joseph R. Dela Cruz rendered a Decision declaring illegal thetermination of twenty (20) of petitioners and granting their monetary claims in the total amount ofP2,538,728.84.

Powertech appealed to the NLRC. During its pendency, Carlos Gestiada, for himself and on behalf ofother petitioners, executed a quitclaim, release and waiver in favor of Powertech in consideration ofthe amount of P150,000.00. Earlier, Gestiada was appointed by his co-petitioners as their attorney-in-

fact. The appointment was evidenced by a special power of attorney dated October 8, 1999. Thecompromise amount was paid to Gestiada by check.

On March 15, 2000, Gestiada terminated the services of their counsel, Atty. Evangelista and, instead,retained Atty. Manuel Luis Felipe of the Public Attorneys Office.

Powertech paid P150,000.00 to Gestiada purportedly as compromise amount for all of petitioners.That same day, Gestiada, through Atty. Felipe, and Powertech filed a joint motion to dismiss with theNLRC based on the compromise agreement. Atty. Evangelista opposed the motion, alleging that thecompromise agreement is unconscionable, that he was illegally terminated as counsel for the otherpetitioners without their consent, and that the P150,000.00 was received by Gestiada as paymentsolely for his backwages and other monetary claims.

Issue:

Whether or not the Compromise Agreement between Gestiada and Powertech Corp was valid andwhether NLRC properly assumed jurisdiction over the issue

Held:

Compromise Agreement is invalid. NLRC properly assumed jurisdiction.

First, the P150,000 compromise is rather measly when taken in light of the more than P2.5 millionjudgment on appeal to the NLRC. Petitioners already won on the arbiter level P2.5 million pesos. It ishighly improbable that they would suddenly agree to accept P150,000 as compromise for the P2.5million.

We contrast the monetary judgment to the P150,000.00 received by Gestiada, which appears to be hisshare in the P2.5 million based on the calculation of the NLRC. We find no plausible reason to

disbelieve his claim that the sum represents payment solely of his backwages.

Second, even granting for the mere sake of argument that the P150,000 was a fair and reasonablecompromise for all, petitioners failed to receive a single centavo from the compromise. Thisconclusively indicates that Gestiada received the P150,000 in payment of his backwages and no other.

Third, We give credence to the admission of Gestiada that he received the P150,000.00 as paymentfor his own backwages. In his letter to Atty. Evangelista, Gestiada said that he was pressured byPowertech to sign the waiver and quitclaim for petitioners in order to receive his share in the P2.5million judgment. Having no stable job after his dismissal, Gestiada had no other choice but to breachhis fiduciary obligation to petitioners. He succumbed to the pressure of Powertech in signing thewaiver, release and quitclaim in exchange for the P150,000.00. In short, he colluded with Powertechto the detriment of petitioners.

Fourth, the events that led to the execution of the compromise agreement show that Powertech was

negotiating in bad faith. More importantly, they show that Powertech colluded with Gestiada to defraudpetitioners of their share of the P2.5 million Labor Arbiter judgment.

To give effect to the collusion, Gestiada had to get rid of Atty. Evangelista, who had previouslysucceeded in nullifying the compromise agreement. He fired Atty. Evangelista without cause basinghis dismissal on his plenary authority as agent of petitioners. He then procured the services of anotherlawyer, Atty. Felipe.

All these circumstances indicate that the P150,000.00 was received by Gestiada solely as payment forhis backwages and not a whit of a settlement for the monetary claim of petitioners.


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Collusion is a species of fraud. Article 227 of the Labor Code empowers the NLRC to void a compromiseagreement for fraud, thus:

Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon bythe parties with the assistance of the Bureau or the regional office of the Department of Labor, shall befinal and binding upon the parties. The National Labor Relations Commission or any court shall not

assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there isprima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

PHILIPPINE JOURNALISTS INC V. NLRCSEPTEMBER 5, 2006

Facts:

The Philippine Journalists, Inc. (PJI) is a domestic corporation engaged in the publication and sale ofnewspapers and magazines. The exclusive bargaining agent of all the rank-and-file employees in thecompany is the Journal Employees Union (Union for brevity).

Sometime in April 2005, the Union filed a notice of strike before the National Conciliation andMediation Board (NCMB), claiming that PJI was guilty of unfair labor practice. PJI was then going toimplement a retrenchment program due to "over-staffing or bloated work force and continuing actuallosses sustained by the company for the past three years resulting in negative stockholders equity ofP127.0 million." The Secretary of the Department of Labor and Employment (DOLE) certified4 the labordispute to the National Labor Relations Commission (NLRC) for compulsory arbitration.

The parties were required to submit their respective position papers. PJI filed a motion to dismiss,contending that the Secretary of Labor had no jurisdiction to assume over the case and thus erred incertifying it to the Commission. The NLRC denied the motion. PJI, thereafter, filed a Motion to DeferFurther Proceedings, alleging, among others, that the filing of its position paper might jeopardizeattempts to settle the matter extrajudicially, which the NLRC also denied. The case was, thereafter,submitted for decision.

In its Resolution6

dated May 31, 2001, the NLRC declared that the 31 complainants were illegallydismissed and that there was no basis for the implementation of petitioner's retrenchment program.

Thereafter, the parties executed a Compromise Agreement8 dated July 9, 2001, where PJI undertook toreinstate the 31 complainant-employees effective July 1, 2001 without loss of seniority rights andbenefits; 17 of them who were previously retrenched were agreed to be given full and completepayment of their respective monetary claims, while 14 others would be paid their monetary claimsminus what they received by way of separation pay. The agreement stated that the parties enteredthe agreement "[i]n a sincere effort at peace and reconciliation as well as to jointly establish a new erain labor management relations marked by mutual trust, cooperation and assistance, enhanced byopen, constant and sincere communication with a view of advancing the interest of both the companyand its employees."

However, despite the compromise agreement, the Union claimed that 29 employees were illegallydismissed from employment, and that the salaries and benefits14 of 50 others had been illegally

reduced.15 After the retrenchment program was implemented, 200 Union members-employees whocontinued working for petitioner had been made to sign five-month contracts. The Union also allegedthat the company, through its legal officer, threatened to dismiss some 200 union members fromemployment if they refused to conform to a 40% to 50% salary reduction; indeed, the 29 employeeswho refused to accede to these demands were dismissed on June 28, 2002. The Union prayed that thedismissed employees be reinstated with payment of full backwages and all other benefits or theirmonetary equivalent from the date of their dismissal on July 3, 2002 up to the actual date ofreinstatement; and that the CBA benefits (as of November 2002) of the 29 employees and 50 othersbe restored.
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Issue:

Whether or not the union can appeal to the NLRC over the issue of the 29 dismissed employees evenafter the compromise agreement between the petitioner and the union since compromise agreementis considered as res judicata thus the issue may not be reopened by the NLRC

Held:

Yes the union may appeal the case despite the compromise agreement. The NLRC obtained jurisdictionover the said controvery.

The nature of a compromise is spelled out in Article 2028 of the New Civil Code: it is "a contractwhereby the parties, by making reciprocal concessions, avoid litigation or put an end to one alreadycommenced." Parties to a compromise are motivated by "the hope of gaining, balanced by the dangersof losing."26 It contemplates mutual concessions and mutual gains to avoid the expenses of litigation,or, when litigation has already begun, to end it because of the uncertainty of the result. 27 Article 227 ofthe Labor Code of the Philippines authorizes compromise agreements voluntarily agreed upon by theparties, in conformity with the basic policy of the State "to promote and emphasize the primacy of freecollective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, asmodes of settling labor or industrial disputes."

Under Article 2037 of the Civil Code, "a compromise has upon the parties the effect and authority of

res judicata," even when effected without judicial approval; and under the principle of res judicata, anissue which had already been laid to rest by the parties themselves can no longer be relitigated.

The Court went on to state that a judgment approving a compromise agreement cannot have theeffect of res judicata upon non-signatories since the requirement of identity of parties is not satisfied.A judgment upon a compromise agreement has all the force and effect of any other judgment, and,conclusive only upon parties thereto and their privies, hence, not binding on third persons who are notparties to it.

A careful perusal of the wordings of the compromise agreement will show that the parties agreed thatthe only issue to be resolved was the question of the monetary claim of several employees.

To reiterate, the rule is that when judgment is rendered based on a compromise agreement, thejudgment becomes immediately executory, there being an implied waiver of the parties' right to

appeal from the decision.43

The judgment having become final, the Court can no longer reverse, muchless modify it.

COLLEGIO DE SAN JUAN DE LETRAN v. ASSOCIATION OF EMPLOYEES AND FACULTY OFLETRAN ET AL.SEPTEMBER 18, 2000

Facts:

On December 1992, Salvador Abtria, then President of respondent union, Association of Employeesand Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitionerColegio de San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-

1994. On the same year, the union elected a new set of officers wherein private respondent EleanorAmbas emerged as the newly elected President.

Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimedthat the CBA was already prepared for signing by the parties. The parties submitted the disputed CBAto a referendum by the union members, who eventually rejected the said CBA.

On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on anew five-year CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to
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petitioner, which notified the union six days later or on February 13, 1996 that the same had beensubmitted to its Board of Trustees. In the meantime, Ambas was informed through a letter datedFebruary 15, 1996 from her superior that her work schedule was being changed from Monday to Fridayto Tuesday to Saturday. Ambas protested and requested management to submit the issue to agrievance machinery under the old CBA.

Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on

March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996,the union received petitioner's letter dismissing Ambas for alleged insubordination. Hence, the unionamended its notice of strike to include Ambas' dismissal.

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

Issue:

Whether or not the petitioners could stop the negotiations on the ground of receiving information thata new group of employees filed a petition for certification election

Held:

No.

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

We disagree. In order to allow the employer to validly suspend the bargaining process there must be avalid petition for certification election raising a legitimate representation issue. Hence, the mere filingof a petition for certification election does not ipso facto justify the suspension of negotiation by theemployer. The petition must first comply with the provisions of the Labor Code and its ImplementingRules. Foremost is that a petition for certification election must be filed during the sixty-day freedom

period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementingthe Labor Code, provides that: " . If a collective bargaining agreement has been duly registered inaccordance with Article 231 of the Code, a petition for certification election or a motion for interventioncan only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule isbased on Article 232, in relation to Articles 253, 253-A and 256 of the Labor Code. No petition forcertification election for any representation issue may be filed after the lapse of the sixty-day freedomperiod. The old CBA is extended until a new one is signed. The rule is that despite the lapse of theformal effectivity of the CBA the law still considers the same as continuing in force and effect until anew CBA shall have been validly executed. Hence, the contract bar rule still applies. The purpose is toensure stability in the relationship of the workers and the company by preventing frequentmodifications of any CBA earlier entered into by them in good faith and for the stipulated originalperiod.

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

Moreover, Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to makea timely reply to the proposals presented by the latter. More than a month after the proposals were


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submitted by the union, petitioner still had not made any counter-proposals. This inaction on the partof petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner couldonly offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matteras its excuse for failing to file its reply. This is a clear violation of Article 250 of the Labor Codegoverning the procedure in collective bargaining,

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

bargaining:

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

Mariwasa Siam Ceramics Inc vs. Sec. of LaborG.R. No. 183317December 21, 2009Facts:Respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent)was issued a Certificate of Registration as a legitimate labor organization by DOLE Region IV-A.Petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union Registration against

respondent, claiming that the latter violated Article 234 of the Labor Code for not complying with the20% requirement, and that it committed massive fraud and misrepresentation in violation of Article239 of the same code. Regional Director of DOLE IV-A issued an Order granting the petition, revokingthe registration of respondent, and delisting it from the roster of active labor unions. Aggrieved,respondent appealed to the Bureau of Labor Relations. BLR ruled in favor of the respondent sayingthat respondent remains in the roster of legitimate labor organizations. CA also dismissed the appeal.Petitioner insists that respondent failed to comply with the 20% union membership requirement for itsregistration as a legitimate labor organization because of the disaffiliation from the total number ofunion members of 102 employees who executed affidavits recanting their union membership.

Issue:Whether or not respondent union complied with the 20% membership requirement.Held:

Respondent union complied.

Even assuming the veracity of the affidavits of recantation, the legitimacy of respondent as a labororganization must be affirmed. While it is true that the withdrawal of support may be considered as aresignation from the union, the fact remains that at the time of the unions application for registration,the affiants were members of respondent and they comprised more than the required 20%membership for purposes of registration as a labor union. Article 234 of the Labor Code merelyrequires a 20% minimum membership during the application for union registration. It does notmandate that a union must maintain the 20% minimum membership requirement all throughout itsexistence. The total union membership at the time of registration was 169. Since the total number ofrank-and-file employees at that time was 528, 169 employees would be equivalent to 32% of the totalrank-and-file workers complement, still very much above the minimum required by law.

For the purpose of de-certifying a union such as respondent, it must be shown that there wasmisrepresentation, false statement or fraud in connection with the adoption or ratification of the

constitution and by-laws or amendments thereto; the minutes of ratification; or, in connection with theelection of officers, the minutes of the election of officers, the list of voters, or failure to submit thesedocuments together with the list of the newly elected-appointed officers and their postal addresses tothe BLR. And for fraud and misrepresentation to be grounds for cancellation of union registrationunder the Labor Code, the nature of the fraud and misrepresentation must be grave and compellingenough to vitiate the consent of a majority of union members.


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Electromat Manufacturing and Recording Corp vs. LagunzadGR No. 172699July 27, 2011

Facts:The private respondent Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto (union), a

charter affiliate of the Workers Advocates for Struggle, Transformation and Organization (WASTO),applied for registration with the Bureau of Labor Relations (BLR). Supporting the application were thefollowing documents: (1) copies of its ratified constitution and by-laws (CBL); (2) minutes of the CBLsadoption and ratification; (3) minutes of the organizational meetings; (4) names and addresses of theunion officers; (5) list of union members; (6) list of rank-and-file employees in the company; (7)certification of non-existence of a collective bargaining agreement (CBA) in the company; (8)resolution of affiliation with WASTO, a labor federation; (9) WASTOs resolution of acceptance; (10)Charter Certificate; and (11) Verification under oath. BLR thereafter issued the union a Certification ofCreation of Local Chapter (equivalent to the certificate of registration of an independent union)pursuant to Department Order No. (D.O.) 40-03. Petitioner Electromat Manufacturing and RecordingCorporation (company) filed a petition for cancellation of the unions registration certificate, for theunions failure to comply with Article 234 of the Labor Code. It argued that D.O. 40-03 is anunconstitutional diminution of the Labor Codes union registration requirements under Article 234.Both DOLE and BLR dismissed the companys appeal.

Petitioner assails as unconstitutional Section 2(E), Rule III of D.O. 40-03 which provides:The report of creation of a chartered local shall be accompanied by a charter certificate issued by thefederation or national union indicating the creation or establishment of the chartered local.

The company points out that D.O. 40-03 delisted some of the requirements under Article 234 of theLabor Code for the registration of a local chapter. It contends that the enumeration of therequirements for union registration under the law is exclusive and should not be diminished, and thatthe same requirements should apply to all labor unions whether they be independent labororganizations, federations or local chapters. It adds that in making a different rule for local chapters,D.O. 40-03 expanded or amended Article 234 of the Labor Code, resulting in an invalid exercise by theDOLE of its delegated rule-making power. It thus posits that the unions certificate of registrationwhich was issued in violation of the letters of Article 234 of the Labor Code is void and of no effect,

Issue:

Whether or not said D.O. is a valid exercise of the rule-making power of DOLE even if somerequirements of Art. 234 are not listed.

Held:It is valid.

The Court encountered a similar question in an earlier case which it said that by force of law, the localor chapter of a labor federation or national union becomes a legitimate labor organization uponcompliance with Section 3, Rule II, Book V of the Rules Implementing the Labor Code, the onlyrequirement being the submission of the charter certificate to the BLR. Further, the Court noted thatSection 3 omitted several requirements which are otherwise required for union registration.Notwithstanding these omissions, the Court upheld the governments implementing policy expressedin the old rules when it declared in said earlier case Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local of aregistered 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 unions bargaining powers respecting terms andconditions of labor.

It was this same Section 3 of the old rules that D.O. 40-03 fine-tuned when the DOLE amended therules on Book V of the Labor Code, thereby modifying the governments implementing policy on theregistration of locals or chapters of labor federations or national unions.D.O. 40-03 represents an expression of the governments implementing policy on trade unionism. Itbuilds upon the old rules by further simplifying the requirements for the establishment of locals orchapters. As in D.O. 9, we see nothing contrary to the law or the Constitution in the adoption by the


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Secretary of Labor and Employment of D.O. 40-03 as this department order is consistent with theintent of the government to encourage the affiliation of a local union with a federation or nationalunion to enhance the locals bargaining power. If changes were made at all, these were those made torecognize the distinctions made in the law itself between federations and their local chapters, andindependent unions; local chapters seemingly have lesser requirements because they and theirmembers are deemed to be direct members of the federation to which they are affiliated, whichfederations are the ones subject to the strict registration requirements of the law.

EAGLE RIDGE GOLF & COUNTRY CLUB vs. COURT OF APPEALS and EAGLE RIDGE EMPLOYEESUNION (EREU)

G.R. No. 178989 March 18, 2010

FACTS:Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf courses. It had, atthe end of CY 2005, around 112 rank-and-file employees. On December 6, 2005, at least 20% of EagleRidges rank-and-file employeesthe percentage threshold required under Article 234(c) of the LaborCode for union registrationhad a meeting where they organized themselves into an independentlabor union, named "Eagle Ridge Employees Union" (EREU or Union), elected a set of officers, andratified their constitution and by-laws.

On December 19, 2005, EREU formally applied for registration before the Department of Labor and

Employment (DOLE) Regional Office IV (RO IV). In time, DOLE RO IV granted the application. The EREUthen filed a petition for certification election in Eagle Ridge Golf & Country Club. Eagle Ridge opposedthis petition, followed by its filing of a petition for the cancellation of the application.

Eagle Ridges petition ascribed misrepresentation, false statement, or fraud to EREU in connection withthe adoption of its constitution and by-laws, the numerical composition of the Union, and the electionof its officers. Petitioner alleged that the EREU declared in its application for registration having 30members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26members. The misrepresentation was exacerbated by the discrepancy between the certification issuedby the Union secretary and president that 25 members actually ratified the constitution and by-laws onDecember 6, 2005 and the fact that 26 members affixed their signatures on the documents, makingone signature a forgery. Finally, petitioner contended that five employees who attended theorganizational meeting had manifested the desire to withdraw from the union. The five executedindividual affidavits or Sinumpaang Salaysay on February 15, 2006, attesting that they arrived late at

said meeting which they claimed to be drinking spree; that they did not know that the documents theysigned on that occasion pertained to the organization of a union; and that they now wanted to beexcluded from the Union. The withdrawal of the five, Eagle Ridge maintained, effectively reduced theunion membership to 20 or 21, either of which is below the mandatory minimum 20% membershiprequirement under Art. 234(c) of the Labor Code. Reckoned from 112 rank-and-file employees of EagleRidge, the required number would be 22 or 23 employees.

As a counterpoint, EREU alleged that discrepancies are not real for before filing of its application onDecember 19, 2005, four additional employees joined the union on December 8, 2005, thus raising theunion membership to 30 members as of December 19, 2005; that the understatement by one memberwho ratified the constitution and by-laws was a typographical error, which does not make it eithergrave or malicious warranting the cancellation of the unions registration; that the retraction of 5 unionmembers should not be given any credence for the reasons that:(a) the sworn statements of the five retracting union members sans other affirmative evidencepresented hardly qualify as clear and credible evidence considering the joint affidavits of the other

members attesting to the orderly conduct of the organizational meeting;(b) the retracting members did not deny signing the union documents;(c) it can be presumed that "duress, coercion or valuable consideration" was brought to bear on theretracting members; and(d) once the required percentage requirement has been reached, the employees withdrawal fromunion membership taking place after the filing of the petition for certification election will not affectthe petition.

After due proceedings, the DOLE Regional Director, focusing on the question of misrepresentation,issued an Order finding for Eagle Ridge. Aggrieved, the Union appealed to the BLR, which affirmed the


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appealed order of the DOLE Regional Director. Undeterred by successive set backs, EREU interposed amotion for reconsideration which was granted. Eagle Ridge sought but was denied reconsideration.Eagle Ridge thereupon went to the CA, which dismissed the petition for certiorari. The CA later deniedEagle Ridges motion for reconsideration, hence the recourse with the SC.

ISSUE:

Whether there was fraud in the application to merit the cancellation of the EREUs registration

HELD:NO, a scrutiny of the records fails to show any misrepresentation, false statement, or fraud committedby EREU to merit cancellation of its registration. The Supreme Court succinctly explained this decisionin eight points:

First. The Union submitted the required documents attesting to the facts of the organizational meetingon December 6, 2005, the election of its officers, and the adoption of the Unions constitution and by-laws.

Second. The members of the EREU totaled 30 employees when it applied on December 19, 2005 forregistration. The Union thereby complied with the mandatory minimum 20% membership requirementunder Art. 234(c). Of note is the undisputed number of 112 rank-and-file employees in Eagle Ridge, as

shown in the Sworn Statement of the Union president and secretary and confirmed by Eagle Ridge inits petition for cancellation.

Third. The Union has sufficiently explained the discrepancy between the number of those whoattended the organizational meeting showing 26 employees and the list of union members showing 30.The difference is due to the additional four members admitted two days after the organizationalmeeting as attested to by their duly accomplished Union Membership form.

Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the additional fourmembers allegedly for not complying with what it termed as "the sine qua non requirements" for unionmember applications under the Unions constitution and by-laws, specifically Sec. 2 of Art. IV. We arenot persuaded. Any seeming infirmity in the application and admission of union membership, mostespecially in cases of independent labor unions, must be viewed in favor of valid membership.

The right of employees to self-organization and membership in a union must not be trammeled byundue difficulties. In this case, when the Union said that the four employee-applicants had beenadmitted as union members, it is enough to establish the fact of admission of the four that they hadduly signified such desire by accomplishing the membership form. The fact, as pointed out by EagleRidge, that the Union, owing to its scant membership, had not yet fully organized its differentcommittees evidently shows the direct and valid acceptance of the four employee applicants ratherthan deter their admissionas erroneously asserted by Eagle Ridge.

Fifth. The difference between the number of 26 members, who ratified the Unions constitution and by-laws, and the 25 members shown in the certification of the Union secretary as having ratified it, is, asshown by the factual antecedents, a typographical error. It was an insignificant mistake committedwithout malice or prevarication. The list of those who attended the organizational meeting shows 26members, as evidenced by the signatures beside their handwritten names.

Sixth. In the more meaty issue of the affidavits of retraction executed by six union members, we hold

that the probative value of these affidavits cannot overcome those of the supporting affidavits of 12union members and their counsel as to the proceedings and the conduct of the organizational meetingon December 6, 2005. The DOLE Regional Director and the BLR OIC Director obviously erred in givingcredence to the affidavits of retraction, but not according the same treatment to the supportingaffidavits.

The six affiants of the affidavits of retraction were not presented in a hearing before the HearingOfficer (DOLE Regional Director), as required under the Rules Implementing Book V of the Labor Codecovering Labor Relation. It is settled that affidavits partake the nature of hearsay evidence, since theyare not generally prepared by the affiant but by another who uses his own language in writing the


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affiants statement, which may thus be either omitted or misunderstood by the one writing them. Fortheir non-presentation and consonant to the above-quoted rule, the six affidavits of retraction areinadmissible as evidence against the Union in the instant case.

Seventh. The fact that six union members, indeed, expressed the desire to withdraw their membershipthrough their affidavits of retraction will not cause the cancellation of registration on the ground ofviolation of Art. 234(c) of the Labor Code requiring the mandatory minimum 20% membership of rank-

and-file employees in the employees union.

The six retracting union members clearly severed and withdrew their union membership. The query iswhether such separation from the Union can detrimentally affect the registration of the Union. Weanswer in the negative.

Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a unionmembership of at least 22 employees (112 x 205 = 22.4). When the EREU filed its application forregistration on December 19, 2005, there were clearly 30 union members. Thus, when the certificateof registration was granted, there is no dispute that the Union complied with the mandatory 20%membership requirement. With the withdrawal of six union members, there is still compliance with themandatory membership requirement under Art. 234(c), for the remaining 24 union membersconstitute more than the 20% membership requirement of 22 employees.

Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant case, that

Eagle Ridge has apparently resorted to filing the instant case for cancellation of the Unions certificateof registration to bar the holding of a certification election. This can be gleaned from the fact that thegrounds it raised in its opposition to the petition for certification election are basically the samegrounds it resorted to in the instant case for cancellation of EREUs certificate of registration. Thisamounts to a clear circumvention of the law and cannot be countenanced.


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TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INC v. TAGAYTAY HIGHLANDSEMPLOYEES UNION-PGTWO

395 SCRA 699 January 22, 2003

The Supreme Court ruled that the effect of issuance of certificate of registration to a union is that itbecomes legitimate and its legal personality can only be attacked through a petition for cancellation ofregistration and not thru intervention in a certification election petition.

FACTS:On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport andGeneral Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said torepresent majority of the rank-and-file employees of Tagaytay Highlands International Golf ClubIncorporated (THIGCI), filed a petition for certification election before the DOLE Mediation-ArbitrationUnit, Regional Branch No. IV.

THIGCI, in its Comment, opposed THEUs petition for certification election on the ground that the list ofunion members submitted by it was defective and fatally flawed as it included the names andsignatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as wellas employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that outof the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI. THIGCIthus submitted a list of the names of its 71 actual rank-and-file employees to the petition forcertification election. And it therein incorporated a tabulation showing the number of signatories to

said petition whose membership in the union was being questioned as disqualified and the reasons fordisqualification.

THEU asserted that it complied with all the requirements for valid affiliation and inclusion in the rosterof legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997, on accountof which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997; and thatSection 5, Rule V of said Department Order provides that the legitimacy of its registration cannot besubject to collateral attack, and for as long as there is no final order of cancellation, it continues toenjoy the rights accorded to a legitimate organization. Therefore, the Med-Arbiter should, pursuant toArticle 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automaticallyorder the conduct of a certification election.

On January 28, 1998, DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election.

THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set asidethe said Med-Arbiters Order and accordingly dismissed the petition for certification election on theground that there is a "clear absence of community or mutuality of interests," it finding that THEUsought to represent two separate bargaining units (supervisory employees and rank-and-fileemployees) as well as employees of two separate and distinct corporate entities.

Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, byauthority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998 setting aside the June4, 1998 Resolution dismissing the petition for certification election. She held that since THEU is a localchapter, the twenty percent (20%) membership requirement is not necessary for it to acquirelegitimate status, hence, "the alleged retraction and withdrawal of support by 45 of the 70 remainingrank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition".THIGCIs Motion for Reconsideration was denied by the DOLE Undersecretary hence it filed a petitionfor certiorari with the CA.

The CA denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution dated November 12,1998. It held that while a petition for certification election is an exception to the innocent bystanderrule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutualityof interests of the members of the union as well as lack of employer-employee relationship andpetitioner failed to adduce substantial evidence to support its allegations.

ISSUE:Whether the unions legal personality can be subject to collateral attack after a certificate ofregistration is issued


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HELD:NO, Petition is DENIED, and the records of the case are remanded to the office of origin.

While Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it doesnot provide what would be the effect if a rank-and-file union counts supervisory employees among itsmembers, or vice-versa. Citing Toyota19 which held that "a labor organization composed of both rank-

and-file and supervisory employees is no labor organization at all," and the subsequent case ofProgressive Development Corp. Pizza Hut v. Ledesma20 which held that:

"The Labor Code requires that in organized and unorganized establishments, a petitionfor certification election must be filed by a legitimate labor organization. Theacquisition of rights by any union or labor organization, particularly the right to file apetition for certification election, first and foremost, depends on whether or not thelabor organization has attained the status of a legitimate labor organization.

In the case before us, the Med-Arbiter summarily disregarded the petitioners prayerthat the former look into the legitimacy of the respondent Union by a sweepingdeclaration that the union was in the possession of a charter certificate so that for allintents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimateorganization,"21 (Underscoring and emphasis supplied),

We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in themembership of the respondent union can be remedied in "the pre-election conference thru theexclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positionswill be excluded from the list of eligible voters."

After a certificate of registration is issued to a union, its legal personality cannot be subject tocollateral attack. It may be questioned only in an independent petition for cancellation in accordancewith Section 5 of Rule V, Book IV of the "Rules to Implement the Labor Code" (Implementing Rules)which section reads:

Sec. 5. Effect of registration. The labor organization or workers association shall bedeemed registered and vested with legal personality on the date of issuance of itscertificate of registration. Such legal personality cannot thereafter be subject tocollateral attack, but may be questioned only in an independent petition forcancellation in accordance with these Rules. (Emphasis supplied)

The inclusion in a union of disqualified employees is not among the grounds for cancellation, unlesssuch inclusion is due to misrepresentation, false statement or fraud under the circumstancesenumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the LaborCode. THEU, having been validly issued a certificate of registration, should be considered to havealready acquired juridical personality which may not be assailed collaterally.

As for petitioners allegation that some of the signatures in the petition for certification election wereobtained through fraud, false statement and misrepresentation, the proper procedure is, as reflectedabove, for it to file a petition for cancellation of the certificate of registration, and not to intervene in apetition for certification election.

Regarding the alleged withdrawal of union members from participating in the certification election, thisCourts following ruling is instructive:

"[T]he best forum for determining whether there were indeed retractions from some ofthe laborers is in the certification election itselfwherein the workers can freely expresstheir choice in a secret ballot. Suffice it to say that the will of the rank-and-fileemployees should in every possible instance be determined by secret ballot ratherthan by administrative or quasi-judicial inquiry. Such representation and certificationelection cases are not to be taken as contentious litigations for suits but as mere


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investigations of a non-adversary, fact-finding characteras to which of the competingunions represents the genuine choice of the workers to be their sole and exclusivecollective bargaining representative with their employer."

As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, asfound by the court a quo, its failure to present substantial evidence that the assailed employees areactually occupying supervisory positions.

While petitioner submitted a list of its employees with their corresponding job titles and ranks, there isnothing mentioned about the supervisors respective duties, powers and prerogatives that would showthat they can effectively recommend managerial actions which require the use of independentjudgment.25

As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor, Designation shouldbe reconciled with the actual job description of subject employees x x x The mere fact that anemployee is designated manager does not necessarily make him one. Otherwise, there would be anabsurd situation where one can be given the title just to be deprived of the right to be a member of aunion. In the case ofNational Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), itwas stressed that What is essential is the nature of the employees function and not thenomenclature or title given to the job which determines whether the employee has rank-and-file ormanagerial status or whether he is a supervisory employee.

SS Ventures International Inc. v. SS Ventures Labor UnionJuly 23, 2008 G.R. 161690J. Velasco Jr.

Facts: On March 21, 2000, the Union filed with DOLE-Region III a petition for certification election inbehalf of the rank-and-file employees of Ventures. 542 signatures, 82 of which belong to terminatedVentures employees, appeared on the basic documents supporting the petition.

On August 21, 2000, Ventures filed a Petition to cancel the Unions certificate of registrationinvoking the grounds set forth in Article 239(a) of the Labor Code. The petition alleged the following:

(1) The Union deliberately and maliciously included the names of more or less 82 formeremployees no longer connected with Ventures in its list of members who attended theorganizational 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 formeremployees to make it appear they took part in the organizational meeting and adoption andratification 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 Unions 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 orless 82 of the 500 signatures were forged or invalid, then the remaining valid signatures wouldonly be 418, which is very much short of the 439 minimum (2197 total employees x 20% =439.4) required by the Labor Code.In its Answer, 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 basketballcourt in Mariveles; (2) the 82 employees adverted to in Ventures petition were qualified Unionmembers for, although they have been ordered dismissed, the one-year prescriptive period to questiontheir dismissal had not yet lapsed; (3) it had complied with the 20%-member registration requirementsince it had 542 members; and (4) the "double" signatures were inadvertent human error.

In its supplemental reply memorandum Ventures cited other instances of fraud andmisrepresentation, claiming that the "affidavits" executed by 82 alleged Union members show thatthey were deceived into signing paper minutes or were harassed to signing their attendance in theorganizational meeting. Ventures added that some employees signed the "affidavits" denying havingattended such meeting.

Issue: Whether or not the Certification of Registration of the Union should be revoked


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Held: The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of theConstitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the LaborCode, shall not be abridged. Once registered with the DOLE, a union is considered a legitimate labororganization endowed with the right and privileges granted by law to such organization. While acertificate of registration confers a union with legitimacy with the concomitant right to participate in orask for certification election in a bargaining unit, the registration may be canceled or the union may bedecertified as the bargaining unit, in which case the union is divested of the status of a legitimate

labor organization. Among the grounds for cancellation is the commission of any of the actsenumerated in Art. 239(a) of the Labor Code, such as fraud and misrepresentation in connection withthe adoption or ratification of the unions constitution and like documents. To decertify a union, it isnot enough to show that the union includes ineligible employees in its membership. It must also beshown that there was misrepresentation, false statement, or fraud in connection with the applicationfor registration and the supporting documents, such as the adoption or ratification of the constitutionand by-laws or amendments thereto and the minutes of ratification of the constitution or by-laws,among other documents.

Essentially, Ventures faults both the BLR and the CA in finding that there was no fraud ormisrepresentation on the part of the Union sufficient to justify cancellation of its registration. In thisregard, Ventures makes much of, first, the separate hand-written statements of 82 employees who, ingist, alleged that they were unwilling or harassed signatories to the attendance sheet of theorganizational meeting.

However, as aptly noted by both the BLR and CA, these mostly undated written statementssubmitted 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 Unions filingof a petition for certification election on March 21, 2000. It was held that the employees withdrawalfrom a labor union made before the filing of the petition for certification election is presumedvoluntary, while withdrawal after the filing of such petition is considered to be involuntary and doesnot affect the same. Now then, if a withdrawal from union membership done after a petition forcertification election has been filed does not vitiate such petition, is it not but logical to assume thatsuch withdrawal cannot work to nullify the registration of the union? Upon this light, the Court isinclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when itconcluded 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 ithas submitted the corresponding papers is not ministerial on the part of the BLR. After a labororganization has filed the necessary registration documents, it becomes mandatory for the BLR tocheck if the requirements under Art. 234 of the Labor Code have been complied with. If the unionsapplication is infected by falsification and like serious irregularities, a union should be denied

recognition as a legitimate labor organization. Prescinding from these considerations, the issuance tothe Union of the Certificate of Registration necessarily implies that its application for registration andthe supporting documents thereof are prima facie free from any vitiating irregularities.

The cancellation of a unions registration doubtless has an impairing dimension on the right oflabor to self-organization. Accordingly, we can accord concurrence to the following apt observation ofthe BLR: "For fraud and misrepresentation to be grounds for cancellation of union registration underArticle 239 of the Labor Code, the nature of the fraud and misrepresentation must be grave andcompelling enough to vitiate the consent of a majority of union members."

In its Comment, the Union points out that for almost seven (7) years following the filing of itspetition, no certification election has yet been conducted among the rank-and-file employees. If this bethe case, the delay has gone far enough and can no longer be allowed to continue. The CA is rightwhen it said that Ventures should not interfere in the certification election by actively and persistentlyopposing the certification election of the Union. A certification election is exclusively the concern ofemployees and the employer lacks the legal personality to challenge it. In fact, jurisprudence frownson the employers interference in a certification election for such interference unduly creates the

impression that it intends to establish a company union.


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Heritage Hotel Manila v. NUWHRAIN-HHMSCJanuary 12, 2011 G.R. No. 178296J. Nachura

Facts: On October 11, 1995, respondent filed with the DOLE-NCR a petition for certification

election. The Med-Arbiter granted the petition on February 14, 1996 and ordered the holding of acertification election. On appeal, the DOLE Secretary, in a Resolution dated August 15, 1996, affirmedthe Med-Arbiters order and remanded the case to the Med-Arbiter for the holding of a preelectionconference on February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied onSeptember 23, 1996.

The preelection conference was not held as initially scheduled; it was held a year later, or onFebruary 20, 1998. Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. The latter agreed to suspend proceedings until further notice. Thepreelection conference resumed on January 29, 2000.Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of LaborRelations its annual financial report for several years and the list of its members since it filed itsregistration papers in 1995. Consequently, on May 19, 2000, petitioner filed a Petition for Cancellationof Registration of respondent, on the ground of the non-submission of the said documents. Petitionerprayed that respondents Certificate of Creation of Local/Chapter be cancelled and its name be deleted

from the list of legitimate labor organizations. It further requested the suspension of the certificationelection proceedings.On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the

Certification Election Proceedings, arguing that the dismissal or suspension of the proceedings iswarranted, considering that the legitimacy of respondent is seriously being challenged in the petitionfor cancellation of registration. Petitioner maintained that the resolution of the issue of whetherrespondent is a legitimate labor organization is crucial to the issue of whether it may exercise rights ofa legitimate labor organization, which include the right to be certified as the bargaining agent of thecovered employees.

Nevertheless, the certification election pushed through on June 23, 2000. Respondent emergedas the winner.On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results andWinner, stating that the certification election held on June 23, 2000 was an exercise in futility because,once respondents registration is cancelled, it would no longer be entitled to be certified as theexclusive bargaining agent of the supervisory employees. Petitioner also claimed that some of

respondents members were not qualified to join the union because they were either confidentialemployees or managerial employees. It then prayed that the certification of the election results andwinner be deferred until the petition for cancellation shall have been resolved, and that respondentsmembers who held confidential or managerial positions be excluded from the supervisors bargainingunit.

Meanwhile, respondent filed its Answer to the petition for the cancellation of its registration. Itaverred that the petition was filed primarily to delay the conduct of the certification election, therespondents certification as the exclusive bargaining representative of the supervisory employees,and the commencement of bargaining negotiations.


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Issue: Whether or not the certificate of registration should be cancelled

Held: Articles 238 and 239 of the Labor Code give the Regional Director ample discretion in dealingwith a petition for cancellation of a unions registration, particularly, determining whether the unionstill meets the requirements prescribed by law. It is sufficient to give the Regional Director license totreat the late filing of required documents as sufficient compliance with the requirements of the law.After all, the law requires the labor organization to submit the annual financial report and list of

members in order to verify if it is still viable and financially sustainable as an organization so as toprotect the employer and employees from fraudulent or fly-by-night unions. With the submission of therequired documents by respondent, the purpose of the law has been achieved, though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary indenying the petition for cancellation of respondents registration. The union members and, in fact, allthe employees belonging to the appropriate bargaining unit should not be deprived of a bargainingagent, merely because of the negligence of the union officers who were responsible for the submissionof the documents to the BLR.

It is worth mentioning that the Labor Codes provisions on cancellation of union registrationand on reportorial requirements have been recently amended by R.A. No. 9481 which lapsed into lawon May 25, 2007 and became effective on June 14, 2007. The amendment sought to strengthen theworkers right to self-organization and enhance the Philippines compliance with its internationalobligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertainingto the non-dissolution of workers organizations by administrative authority. Thus, R.A. No. 9481amended Article 239 to read:

ART. 239. Grounds for Cancellation of Union Registration.The following may constitutegrounds for cancellation of union registration:(a) Misrepresentation, false statement or fraud in connection with the adoption or ratificationof the constitution and by-laws or amendments thereto, the minutes of ratification, and the listof members who took part in the ratification;(b) Misrepresentation, false statements or fraud in connection with the election of officers,minutes of the election of officers, and the list of voters;(c) Voluntary dissolution by the members.

R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:ART. 242-A. Reportorial Requirements.The following are documents required to be submittedto the Bureau by the legitimate labor organization concerned:(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the listof members who took part in the ratification of the constitution and by-laws within thirty (30)days from adoption or ratification of the constitution and by-laws or amendments thereto;

(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) daysfrom election;(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and(d) Its list of members at least once a year or whenever required by the Bureau.Failure to comply with the above requirements shall not be a ground for cancellation of union

registration but shall subject the erring officers or members to suspension, expulsion frommembership, or any appropriate penalty.

ILO Convention No. 87, which we have ratified in 1953, provides that "workers and employersorganizations shall not be liable to be dissolved or suspended by administrative authority." The ILO hasexpressed the opinion that the cancellation of union registration by the registrar of labor unions, whichin our case is the BLR, is tantamount to dissolution of the organization by administrative authoritywhen such measure would give rise to the loss of legal personality of the union or loss of advantagesnecessary for it to carry out its activities, which is true in our jurisdiction. Although the ILO has allowedsuch measure to be taken, provided that judicial safeguards are in place, i.e., the right to appeal to ajudicial body, it has nonetheless reminded its members that dissolution of a union, and cancellation of

registration for that matter, involve serious consequences for occupational representation. It has,therefore, deemed it preferable if such actions were to be taken only as a last resort and afterexhausting other possibilities with less serious effects on the organization.

It is undisputed that appellee failed to submit its annual financial reports and list of individualmembers in accordance with Article 239 of the Labor Code. However, the existence of this groundshould not necessarily lead to the cancellation of union registration. Article 239 recognizes theregulatory authority of the State to exact compliance with reporting requirements. Yet there is more atstake in this case than merely monitoring union activities and requiring periodic documentationthereof.


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The more substantive considerations involve the constitutionally guaranteed freedom ofassociation and right of workers to self-organization. Also involved is the public policy to promote freetrade unionism and collective bargaining as instruments of industrial peace and democracy. An overlystringent interpretation of the statute governing cancellation of union registration without regard tosurrounding circumstances cannot be allowed. Otherwise, it would lead to an unconstitutionalapplication of the statute and emasculation of public policy objectives. Worse, it can render nugatorythe protection to labor and social justice clauses that pervades the Constitution and the Labor Code.

Moreover, submission of the required documents is the duty of the officers of the union. Itwould be unreasonable to order the cancellation of the union and penalize the entire unionmembership on the basis of the negligence of its officers.

REPUBLIC OF THE PHILIPPINES, represented by DOLE vs.KAWASHIMA TEXTILE MFG.,PHILIPPINES, INC.

G.R. No. 160352 July 23, 2008

Kawashima Free Workers Union (KFWU) filed a Petition for Certification Election to be conducted in thebargaining unit composed of 145 rank-and-file employees of Kawashima Textile Mfg. Phils., Inc.Attached to its petition are a Certificate of Creation of Local/Chapter issued on January 19, 2000 by

DOLE Regional Office No. IV, stating that it [KFWU] submitted to said office a Charter Certificate issuedto it by the national federation Phil. Transport & General Workers Organization (PTGWO), and a Reportof Creation of Local/Chapter.

Kawashima Textile Mfg. Phils., Inc. argues that KFWU did not acquire any legal personality because itsmembership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code,and its failure to submit its books of account.

The Republic of the Philippines filed the present petition to seekclosure on two issues:

1. WON a mixed membership of rank-and-file and supervisory employees in a union is a groundfor the dismissal of a petition for certification election in view of the amendment brought aboutby D.O. 9, series of 1997, which deleted the phraseology in the old rule that "[t]he appropriate

bargaining unit of the rank-and-file employee shall not include the supervisory employeesand/or security guards;" and2. WON the legitimacy of a duly registered labor organization can be collaterally attacked in a

petition for a certification election through a motion to dismiss filed by an employer such asKawashima Textile Manufacturing Phils., Inc.

First ISSUE: NO. [In short: here RA 9841 did not apply. If it did, the held would have beenNO. Yet even without using RA. 9841, the Court still held NO, using 1997 AmendedOmnibus Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and AirPhilippines]

The key to the closure that petitioner seeks could have been Republic Act (R.A.) No. 9481. Sections 8and 9 thereof provide:Section 8. Article 245 of the Labor Code is hereby amended to read as follows:

"Art. 245. Ineligibility of Managerial Employees to Join any Labor Organization; Right ofSupervisory Employees. - Managerial employees are not eligible to join, assist or form anylabor organization. Supervisory employees shall not be eli

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