THIRD DIVISION

ESTATE OF NELSON R. DULAY, represented

by his wife MERRIDY JANE P. DULAY,
Petitioner,

G.R. No. 172642

Present:
PERALTA, J., Acting Chairperson,*
ABAD,
VILLARAMA, JR.,**
MENDOZA, and
PERLAS-BERNABE, JJ.

- versus

ABOITIZ JEBSEN MARITIME,

GENERAL CHARTERERS, INC.,
Respondents.

INC.

and
Promulgated:

June 13, 2012

x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the Decision [1] and Resolution[2] dated July 11, 2005 and April 18, 2006 of the
Court of Appeals (CA) in CA-G.R. SP No. 76489.
The factual and procedural antecedents of the case, as summarized by the CA, are as
follows:
Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent]
General Charterers Inc. (GCI), a subsidiary of co-petitioner [herein corespondent] Aboitiz Jebsen Maritime Inc. since 1986. He initially worked as
an ordinary seaman and later as bosun on a contractual basis. From
September 3, 1999 up to July 19, 2000, Nelson was detailed in petitioners
vessel, the MV Kickapoo Belle.

On August 13, 2000, or 25 days after the completion of his employment

contract, Nelson died due to acute renal failure secondary to septicemia. At
the time of his death, Nelson was a bona fide member of the Associated
Marine Officers and Seamans Union of the Philippines (AMOSUP), GCIs
collective bargaining agent. Nelsons widow, Merridy Jane, thereafter claimed
for death benefits through the grievance procedure of the Collective
Bargaining Agreement (CBA) between AMOSUP and GCI. However, on

January 29, 2001, the grievance procedure was declared deadlocked as

petitioners refused to grant the benefits sought by the widow.

On March 5, 2001, Merridy Jane filed a complaint with the NLRC SubRegional Arbitration Board in General Santos City against GCI for death and
medical benefits and damages.

On March 8, 2001, Joven Mar, Nelsons brother, received P20,000.00 from

[respondents] pursuant to article 20(A)2 of the CBA and signed a
Certification acknowledging receipt of the amount and releasing AMOSUP
from further liability. Merridy Jane contended that she is entitled to the
aggregate sum of Ninety Thousand Dollars ($90,000.00) pursuant to
[A]rticle 20 (A)1 of the CBA x x x

xxxx

Merridy Jane averred that the P20,000.00 already received by Joven Mar
should be considered advance payment of the total claim of US$90,000.[00].

[Herein respondents], on the other hand, asserted that the NLRC had no
jurisdiction over the action on account of the absence of employer-employee
relationship between GCI and Nelson at the time of the latters death. Nelson
also had no claims against petitioners for sick leave allowance/medical
benefit by reason of the completion of his contract with GCI. They further
alleged that private respondent is not entitled to death benefits because
petitioners are only liable for such in case of death of the seafarer during the
term of his contract pursuant to the POEA contract and the cause of his
death is not work-related. Petitioners admitted liability only with respect to
article 20(A)2 [of the CBA]. x x x

xxxx

However, as petitioners stressed, the same was already discharged.

The Labor Arbiter ruled in favor of private respondent. It took cognizance of

the case by virtue of Article 217 (a), paragraph 6 of the Labor Code and the
existence of a reasonable causal connection between the employeremployee relationship and the claim asserted. It ordered the petitioner to
pay P4,621,300.00, the equivalent of US$90,000.00 less P20,000.00, at the
time of judgment x x x

xxxx

The Labor Arbiter also ruled that the proximate cause of Nelsons death was
not work-related.

On appeal, [the NLRC] affirmed the Labor Arbiters decision as to the grant of
death benefits under the CBA but reversed the latters ruling as to the
proximate cause of Nelsons death.[3]

Herein respondents then filed a special civil action for certiorari with the CA
contending that the NLRC committed grave abuse of discretion in affirming the jurisdiction of
the NLRC over the case; in ruling that a different provision of the CBA covers the death
claim; in reversing the findings of the Labor Arbiter that the cause of death is not workrelated; and, in setting aside the release and quitclaim executed by the attorney-in-fact and
not considering the P20,000.00 already received by Merridy Jane through her attorney-infact.

On July 11, 2005, the CA promulgated its assailed Decision, the dispositive portion of
which reads as follows:

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED

and the case is REFERRED to the National Conciliation and Mediation Board for
the designation of the Voluntary Arbitrator or the constitution of a panel of
Voluntary Arbitrators for the appropriate resolution of the issue on the matter
of the applicable CBA provision.

SO ORDERED.[4]

The CA ruled that while the suit filed by Merridy Jane is a money claim, the same
basically involves the interpretation and application of the provisions in the subject CBA. As
such, jurisdiction belongs to the voluntary arbitrator and not the labor arbiter.

Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution of
April 18, 2006.

Hence, the instant petition raising the sole issue of whether or not the CA committed
error in ruling that the Labor Arbiter has no jurisdiction over the case.

Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act of 1995, vests jurisdiction on the appropriate
branches of the NLRC to entertain disputes regarding the interpretation of a collective
bargaining agreement involving migrant or overseas Filipino workers. Petitioner argues that
the abovementioned Section amended Article 217 (c) of the Labor Code which, in turn,
confers jurisdiction upon voluntary arbitrators over interpretation or implementation of
collective bargaining agreements and interpretation or enforcement of company personnel
policies.

The pertinent provisions of Section 10 of R.A. 8042 provide as follows:

SEC. 10. Money Claims. - Notwithstanding any provision of law to the

contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages.

Article 217(c) of the Labor Code, on the other hand, states that:

xxxx

(c) Cases arising from the interpretation or implementation of collective

bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies shall be disposed by the Labor
Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
On their part, respondents insist that in the present case, Article 217, paragraph (c) as well
as Article 261 of the Labor Code remain to be the governing provisions of law with respect to
unresolved grievances arising from the interpretation and implementation of collective
bargaining agreements. Under these provisions of law, jurisdiction remains with voluntary
arbitrators.

Article 261 of the Labor Code reads, thus:

ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary

Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or

enforcement of company personnel policies referred to in the immediately

preceding article. Accordingly, violations of a Collective Bargaining Agreement,
except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective
Bargaining Agreement. For purposes of this article, gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal
to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes, grievances
or matters under the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and
refer the same to the Grievance Machinery or Voluntary Arbitration provided in
the Collective Bargaining Agreement.

The petition is without merit.

It is true that R.A. 8042 is a special law governing overseas Filipino workers. However, a
careful reading of this special law would readily show that there is no specific provision
thereunder which provides for jurisdiction over disputes or unresolved grievances regarding
the interpretation or implementation of a CBA. Section 10 of R.A. 8042, which is cited by
petitioner, simply speaks, in general, of claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages. On
the other hand, Articles 217(c) and 261 of the Labor Code are very specific in stating that
voluntary arbitrators have jurisdiction over cases arising from the interpretation or
implementation of collective bargaining agreements. Stated differently, the instant case
involves a situation where the special statute (R.A. 8042) refers to a subject in general,
which the general statute (Labor Code) treats in particular. [5] In the present case, the basic
issue raised by Merridy Jane in her complaint filed with the NLRC is: which provision of the
subject CBA applies insofar as death benefits due to the heirs of Nelson are concerned. The
Court agrees with the CA in holding that this issue clearly involves the interpretation or
implementation of the said CBA. Thus, the specific or special provisions of the Labor Code
govern.

In any case, the Court agrees with petitioner's contention that the CBA is the law or contract
between the parties. Article 13.1 of the CBA entered into by and between respondent GCI
and AMOSUP, the union to which petitioner belongs, provides as follows:

The Company and the Union agree that in case of dispute or conflict
in the interpretation or application of any of the provisions of this
Agreement, or enforcement of Company policies, the same shall be
settled through negotiation, conciliation or voluntary arbitration. The
Company and the Union further agree that they will use their best endeavor to
ensure that any dispute will be discussed, resolved and settled amicably by
the parties hereof within ninety (90) days from the date of filing of the dispute
or conflict and in case of failure to settle thereof any of the parties retain their
freedom to take appropriate action.[6] (Emphasis supplied)

From the foregoing, it is clear that the parties, in the first place, really intended to bring to
conciliation or voluntary arbitration any dispute or conflict in the interpretation or application
of the provisions of their CBA. It is settled that when the parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to voluntary arbitration then that
procedure should be strictly observed.[7]

It may not be amiss to point out that the abovequoted provisions of the CBA are in
consonance with Rule VII, Section 7 of the present Omnibus Rules and Regulations
Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended by
Republic Act No. 10022, which states that [f]or OFWs with collective bargaining agreements,
the case shall be submitted for voluntary arbitration in accordance with Articles 261 and 262
of the Labor Code. The Court notes that the said Omnibus Rules and Regulations were
promulgated by the Department of Labor and Employment (DOLE) and the Department of
Foreign Affairs (DFA) and that these departments were mandated to consult with the Senate
Committee on Labor and Employment and the House of Representatives Committee on
Overseas Workers Affairs.

In the same manner, Section 29 of the prevailing Standard Terms and Conditions Governing
the Employment of Filipino Seafarers on Board Ocean Going Vessels, promulgated by the
Philippine Overseas Employment Administration (POEA), provides as follows:

Section 29. Dispute Settlement Procedures. In cases of claims and

disputes arising from this employment, the parties covered by a
collective bargaining agreement shall submit the claim or dispute to
the original and exclusive jurisdiction of the voluntary arbitrator or
panel of arbitrators. If the parties are not covered by a collective bargaining
agreement, the parties may at their option submit the claim or dispute to
either the original and exclusive jurisdiction of the National Labor Relations
Commission (NLRC), pursuant to Republic Act (RA) 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act of 1995 or to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If there
is no provision as to the voluntary arbitrators to be appointed by the parties,
the same shall be appointed from the accredited voluntary arbitrators of the
National Conciliation and Mediation Board of the Department of Labor and
Employment.

The Philippine Overseas Employment Administration (POEA) shall exercise

original and exclusive jurisdiction to hear and decide disciplinary action on
cases, which are administrative in character, involving or arising out of
violations of recruitment laws, rules and regulations involving employers,
principals, contracting partners and Filipino seafarers. (Emphasis supplied)

It is clear from the above that the interpretation of the DOLE, in consultation with their
counterparts in the respective committees of the Senate and the House of Representatives,
as well as the DFA and the POEA is that with respect to disputes involving claims of Filipino
seafarers wherein the parties are covered by a collective bargaining agreement, the dispute
or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel of
arbitrators. It is only in the absence of a collective bargaining agreement that parties may
opt to submit the dispute to either the NLRC or to voluntary arbitration. It is elementary that
rules and regulations issued by administrative bodies to interpret the law which they are
entrusted to enforce, have the force of law, and are entitled to great respect. [8] Such rules

and regulations partake of the nature of a statute and are just as binding as if they have
been written in the statute itself. [9] In the instant case, the Court finds no cogent reason to
depart from this rule.

The above interpretation of the DOLE, DFA and POEA is also in consonance with the policy of
the state to promote voluntary arbitration as a mode of settling labor disputes. [10]

No less than the Philippine Constitution provides, under the third paragraph, Section 3,
Article XIII, thereof that [t]he State shall promote the principle of shared responsibility
between workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace.

Consistent with this constitutional provision, Article 211 of the Labor Code provides the
declared policy of the State [t]o promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as
modes of settling labor or industrial disputes.

On the basis of the foregoing, the Court finds no error in the ruling of the CA that the
voluntary arbitrator has jurisdiction over the instant case.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 76489 dated July 11, 2005 and April 18, 2006, respectively,
are AFFIRMED.

SO ORDERED.

SECOND DIVISION
[G.R. No. 116066. January 24, 2000]
NUEVA ECIJA I ELECTRIC COOPERATIVE, INC., (NEECO I) EMPLOYEES ASSOCIATION,
PRESIDENT RODOLFO JIMENEZ, and members, REYNALDO FAJARDO, ERNESTO
MARIN, EVER GUEVARRA, PETRONILO BAGUISA, VICTORINO CARILLO, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION, NUEVA ECIJA I ELECTRIC
COOPERATIVE,
INC.,
(NEECO
I)
and
PATRICIO
DELA
PEA, respondents.
DECISION
QUISUMBING, J.:
Petitioners assail the decision[1] of the National Labor Relations Commission in NLRC RAB-III03-2673-92, which modified the ruling of the Labor Arbiter, by deleting the award of moral
and exemplary damages, as well as attorneys fees and costs of litigation.
The facts, as found a quo, are as follows:
Petitioners Reynaldo Fajardo, Ernesto Marin, Ever Guevarra, Petronilo Baguisa, Victorino
Carillo, and Erdie Javate were permanent employees of respondent Nueva Ecija I Electric
Cooperative (NEECO I). They were members of petitioner NEECO I Employees Association, a
labor organization established for the mutual aid and protection of its members. Petitioner
Rodolfo Jimenez was the president of the association.
Respondent NEECO I is an electric cooperative under the general supervision and control of
the National Electrification Administration (NEA). The management of NEECO I is vested on
the Board of Directors. Respondent Patricio dela Pea was NEECOs general manager on detail
from NEA.
On February 7, 1987, the Board of Directors adopted Policy No. 3-33, which set the
guidelines for NEECO Is retirement benefits. On October 28, 1987, all regular employees
were ordered by NEECO I to accomplish Form 87, which were applications for either
retirement, resignation, or separation from service.
On October 5, 1991 and February 28, 1992, the applications of Petronilo Baguisa and Ever
Guevarra, respectively, were approved. They were paid the appropriate separation pay.
These successive events, followed by the promotion of certain union officers to supervisory
rank, caused apprehension in the labor association. They were considered as harassment
threatening the union members, and circumventing the employees security of tenure. On
February 29, 1992, to strengthen and neutralize managements arbitrary moves, the union
held a "snap election" of officers.[2] Reynaldo Fajardo was elected Treasurer, while Evaristo
Guevarra, Victorino Carillo and Ernesto Marin were elected Public Relations Officers for Jaen,
Gapan A and Gapan B, respectively.

On March 3, 1992, petitioner labor association passed a resolution withdrawing the

applications for retirement of all its members, thus:
"Upon popular request of all members and officers of the association their
manifestation of willingness to retire on optional basis is hereby WITHDRAWN
by the ASSOCIATION for and in behalf of all its members, EXCEPT those who
are willing to avail their retirement benefits with all their hearts and mind. To
avoid what had happened to EVARISTO GUEVARRA. The union officers and its
members, claimed their right to be protected under the security of tenure
clause under the Labor Code of the Philippines. No employee shall be retired
without his/her consent or approval of the union.
On motion and duly seconded. Approved unanimously. Let copies of the
resolution be furnished NEECO I PS/AGM Patricio S. dela Pea, for his
information and appropriate action."[3]
On March 4, March 17, and April 7, 1992, petitioners Ernesto Marin, Reynaldo Fajardo and
Victorino Carillo were compulsorily retired by management. They received their separation
pay under protest on March 16, March 18, and April 15, 1992, respectively.
On August 21, 1991, Erdie Javate was terminated from employment allegedly due to
misappropriation of funds and dishonesty. He was not paid separation or retirement benefits.
On March 29, 1992, petitioners and Erdie Javate instituted a complaint for illegal dismissal
and damages with the NLRC Regional Arbitration Branch in San Fernando. They alleged they
were purposely singled out for retirement from a listing of employees who were made to
submit retirement forms, even if they were not on top of the list because they were union
officers, past officers or active members of the association. Further, petitioners claimed that
their acceptance of the money offered by NEECO I did not constitute estoppel nor waiver,
since their acceptances were with vehement objections and without prejudice to all their
rights resulting from an illegal dismissal.
Additionally, Javate averred he was framed up and dismissed without due process.
On December 21, 1992, the labor arbiter decided the case as follows:
"WHEREFORE, in view of all the foregoing considerations, judgment is hereby
rendered, as follows:
1. Declaring respondents NEECO I and PS/AGM Engr. Patricio dela Pea guilty of
illegal dismissal and unfair labor practice act, as charged;
2. Ordering respondents to reinstate individual complainants Reynaldo
Fajardo, Ernesto Marin, Ever Guevarra, Petronilo Baguisa, Victorino Carillo, and
Erdie Javate of their former positions under the same terms and conditions of
work obtaining at the time of dismissal, without loss of seniority rights and
other privileges, either physically or in the payroll, at the option of the
respondents, with payment of full backwages, including all benefits and

privileges that they should have received if they were not illegally dismissed,
computed as follows:
1. Reynaldo Fajardoa.) Backwages as of Dec. 31, 1992 P 36,306.55
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 41,056.55
2. Ernesto Marin a.) Backwages as of Dec. 31, 1992 P 37,783.60
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 42,533.60
3. Ever Guevarra a.) Backwages as of Dec. 31, 1992 P 37,783.60
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 42,533.60
4. Petronilo Baguisa -

a.) Backwages as of Dec. 31, 1992 P 56,675.40

b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 61,425.40
5. Victorino Carillo a.) Backwages as of Dec. 31, 1992 P 32,162.78
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 36, 912.78
6. Erdie Javate a.) Backwages as of Dec. 31, 1992 P 15,680.00
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1999 2,000.00
Total P 20,430.00
GRAND TOTAL P244,891.93
3. Ordering respondents to pay complainants moral damages in the amount
of P30,000.00 each or in the total amount of P180,000.00 and exemplary
damages in the amount of P120,000.00;

4. Ordering respondents to pay complainants their attorneys fees equivalent

to ten (10%) percent of their monetary claims in the sum
of P54,489.20;
5. Ordering respondents to pay complainants their cost of litigation in the
amount of P30,000.00
SO ORDERED."[4]
Thereafter, herein private respondents elevated the case to respondent NLRC. They filed
their appeal on December 28, 1992, and posted a surety bond on January 5, 1993, in the
amount of two hundred forty-four thousand, eight hundred ninety one pesos and ninety
three centavos (P244,891.93). But herein petitioners filed an omnibus motion to dismiss on
the ground of late appeal, claiming that insufficient bond was filed by NEECO I only on
January 5, 1993. The bond excluded the award of moral and exemplary damages, attorneys
fees and costs of litigation.
Respondent NLRC denied the motion and instead gave due course to the appeal. On July 16,
1993, the NLRC modified the decision, as follows:
"WHEREFORE, premises considered, the appealed Decision is modified by
deleting the awards of moral and exemplary damages, attorneys fees and cost
of litigation. The amounts of retirement benefits received by the individual
complainants are to be applied to the backwages that may be due to the
herein complainants. All other dispositions stand.
SO ORDERED."[5]
Meanwhile, on March 16, 1993, petitioners were reinstated by NEECO I pending appeal.
On April 22, 1993, Erdie Javate withdrew his complaint and opted to receive his retirement
benefits amounting to forty-two thousand, one hundred fourteen pesos and nine centavos
(P42,114.09).
Herein petitioners filed a motion for reconsideration, which the NLRC denied on August 31,
1993. Likewise, herein private respondents filed a motion for reconsideration but the same
was also denied on September 28, 1993.
Petitioners are now before us, via this special civil action under Rule 65 of the Revised Rules
of Court, raising three issues:
"I. WHETHER OR NOT THE APPEAL TAKEN BY THE RESPONDENT NEECO I FROM
THE DECISION OF NLRC-RAB-III DOLE TO NLRC THIRD DIVISION, MANILA, WAS
NOT PERFECTED WITHIN THE TEN (10) CALENDAR DAYS REGLEMENTARY
PERIOD;
HENCE
THE
APPEAL
SHOULD
NOT
BE
GIVEN
DUE
COURSE;

II. WHETHER OR NOT PUBLIC RESPONDENT NLRC

EXCESS OF JURISDICTION WHEN IT RESOLVED TO
DAMAGES, EXEMPLARY DAMAGES, ATTORNEYS
LITIGATION. FACTUAL BASIS OF WHICH WERE
HONORABLE LABOR ARBITER BELOW;

ACTED WITHOUT OR IN
DELETE EN TOTO MORAL
FEES AND COSTS OF
ASCERTAINED BY THE

III. WHETHER OR NOT THE ORDER TO APPLY AND DEDUCT RECEIVABLE

BACKWAGES FROM RECEIVED BENEFITS MAY BE REASONABLE BUT
UNREALISTIC AND ARBITRARY."
Petitioners contend that although respondent NEECO I filed its appeal on December 28,
1992, such appeal was not completed for failure to file the necessary supersedeas bond,
during the period prescribed by law, or until January 4, 1993. Hence, no appeal was
perfected.
Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in
labor cases may be perfected "only upon the posting of a cash or surety bond." [6]
The Labor Code, as amended by Republic Act No. 6715, clearly provides:
"Art. 223. Appeal - Decisions, awards or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions, awards, or
orders. . .
xxx
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from.
xxx
Also, the perfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional, and noncompliance with such legal requirement is fatal
and effectively renders the judgment final and executory.[7]
However, in a number of cases,[8] this Court relaxed the rule to resolve controversies on the
merits,[9] specifically, when there are special meritorious circumstances and issues. [10] We
relaxed the requirement of posting a supersedeas bond for the perfection of an appeal,
when there was substantial compliance with the rule, so that on balance, we made technical
considerations to give way to equity and justice.[11]
In the case before us, the decision of the labor arbiter was issued on December 21, 1992.
Private respondents filed their appeal on December 28, 1992, barely seven days from
receipt thereof. The bonding company issued the bond dated January 4, 1993, the last day
for filing an appeal. However, it was forwarded to respondent NLRC only on the following

day, January 5, 1993. Considering these circumstances and the holiday season, we find it
equitable to ease the rules and consider that there was substantial compliance with the
requirements of the law.
As to the amount of bond, we note that there had been changes in the Rules promulgated by
the NLRC. Previously the computation of the cash or surety bond to be posted by an
employer who wishes to appeal contained in the original rules was "exclusive of moral and
exemplary damages and attorneys fees."[12] It was later deleted sometime in 1991 and 1992,
then restored on November 20, 1993.[13]
It may be noted that while respondent NLRC in its Resolution No. 11-01-91 dated November
7, 1991 deleted the phrase "exclusive of moral and exemplary damages as well as attorneys
fees" in the determination of the amount of the bond, it provided a safeguard against the
imposition of excessive bonds providing "(T)he Commission may, in meritorious cases and
upon Motion of the Appellant, reduce the amount of the bond." [14]
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, we ruled:
"In the case at bar, the backwages and thirteenth month pay awarded to
petitioner amounted only to P270,000.00, but the moral and exemplary
damages, plus 10% attorneys fees, totalled P2,497,000.00. In other words, the
moral and exemplary damages and attorneys fees are almost ten (10) times
greater than the basic monetary judgment. Private respondents posted a
supersedeas bond of P270,000.00, obviously, on the honest belief that the
amount was sufficient. At the very least, therefore, there was substantial
compliance with the requirement of appeal bond. For to rule otherwise would
negate the interest of justice and deviate from the mandate of the Labor Code
that the rules of procedure should be liberally construed, . . .
xxx
Since private respondents filed a bond which they honestly believed sufficient
for purposes of their appeal, respondent NLRC should have called their
attention that the bond was inadequate, which it did not."[15]
The unreasonable and excessive amount of bond would be oppressive and unjust and would
have the effect of depriving a party of his right to appeal. Besides, private respondents
stress that the petitioners were paid their retirement benefits [16] and that the cooperative
has sufficient assets from which the other claims for damages and attorneys fees may be
obtained.
We come next to the issue of the propriety of the award of moral and exemplary damages.
To warrant an award of moral damages, it must be shown that the dismissal of the employee
was attended to by bad faith, or constituted an act oppressive to labor, or was done in a
manner contrary to morals, good customs or public policy. [17] The Labor Arbiter ruled that
there was unfair labor practice:

"As a backdrop, complainants alleged, and this is supported by documentary

evidence, that on 7 February 1987, the then NEECO I Board of Directors
adopted their own Policy No. 3-33 under Resolution No. 47, series of 1987
requiring all employees to avail of the retirement benefits. All regular
employees, including the complainants were ordered to file their application
for retirement/resignation and/or separation from the service under NEECO I
Form 87. All NEECO I employees have no choice but to manifest their
willingness to retire.
However, the complainants pointed out that the approval of the employees
application for retirement was not done in succession according to the list, but
according to the choice of the respondents, and for which, complainants were
singled out from the list because they were union officers, past officers and
active members of the complainant Association."[18]
xxx
"Clearly, therefore, complainants have established the fact that they were
illegally dismissed by the respondents and their illegal dismissal was even
tainted with unfair labor practice act. ..."[19]
Unfair labor practices violate the constitutional rights of workers and employees to selforganization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect; and disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations. [20] As the conscience of the
government, it is the Courts sworn duty to ensure that none trifles with labor rights. [21]
For this reason, we find it proper in this case to impose moral and exemplary damages on
private respondent. However, the damages awarded by the labor arbiter, to our mind, are
excessive. In determining the amount of damages recoverable, the business, social and
financial position of the offended parties and the business and financial position of the
offender are taken into account. [22] It is our view that herein private respondents had not
fully acted in good faith. However, we are cognizant that a cooperative promotes the welfare
of its own members. The economic benefits filter to the cooperative members. Either equally
or proportionally, they are distributed among members in correlation with the resources of
the association utilized. Cooperatives help promote economic democracy and support
community development. Under these circumstances, we deem it proper to reduce moral
damages to only P10,000.00 payable by private respondent NEECO I to each individual
petitioner. We also deem it sufficient for private respondent NEECO I to pay each individual
petitionerP5,000.00 to answer for exemplary damages, based on the provisions of Articles
2229 and 2232 of the Civil Code.[23]
Having been illegally dismissed, individual petitioners are entitled to reinstatement from the
time they were illegally dismissed, until they were reinstated on March 16, 1993. For that
period they are likewise entitled to backwages minus the amount petitioners were forced to
receive as "retirement" pay. [24] It must be noted that the backwages computed by the labor
arbiter covered only until December 22, 1992 but did not include backwages from January 1,

1993 to March 15, 1993,[25] which should now be computed and included for payment. In the
event that the amount of "retirement" pay received by an individual petitioner exceeds the
amount of his backwages, then the excess should be deemed as advances of salary which
should be refundable until fully repaid by him.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of the NLRC is
AFFIRMED with MODIFICATION. Private respondent Nueva Ecija 1 Electric Cooperative is
hereby ORDERED through its executive officers:
1. to pay individual petitioners their full backwages from the time they were illegally
dismissed until the date of their reinstatement on March 13, 1992, minus the amount they
received as "retirement" pay. In the event that the computed backwages of a concerned
petitioner is less than the amount of so-called "retirement" pay already received, the
difference should be treated as advances refundable from his salary until fully repaid;
2. to pay moral and exemplary damages in the amount of ten thousand (P10,000.00) pesos
and five thousand (P5,000.00) pesos, respectively, to each of the petitioners who were
illegally terminated and/or compulsorily retired;
3. to pay ten (10%) of the total amount due to petitioners as attorneys fees; and
4. to pay the cost of suits.
Respondent NLRC is ORDERED to RECOMPUTE the total monetary benefits awarded and due
to the employees concerned in accordance with the decision and to submit its compliance
thereon within thirty (30) days from notice of this decision, with copies furnished to the
parties.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

Republic
SUPREME
Manila

of

the

Philippines
COURT

SECOND DIVISION

G.R. No. 84433 June 2, 1992

ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138
others, petitioners,
vs.
CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med.
Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et al., respondent.

NARVASA, C.J.:
The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained
the denial by the Med Arbiter of the right to vote of one hundred forty-one (141) members of
the "Iglesia ni Kristo" (INK), all employed in the same company, at a certification election at
which two (2) labor organizations were contesting the right to be the exclusive
representative of the employees in the bargaining unit. That denial is assailed as having
been done with grave abuse of discretion in the special civil action of certiorari at bar,
commenced by the INK members adversely affected thereby.
The certification election was authorized to be conducted by the Bureau of Labor Relations
among the employees of Tri-Union Industries Corporation on October 20, 1987. The
competing unions were Tri-Union Employees Union-Organized Labor Association in Line
Industries and Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied
Services (TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240
actually took part in the election, conducted under the provision of the Bureau of Labor
Relations. Among the 240 employees who cast their votes were 141 members of the INK.
The ballots provided for three (3) choices. They provided for votes to be cast, of course, for
either of the two (2) contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and,
conformably with established rule and practice, 1 for (c) a third choice: "NO UNION."
The final tally of the votes showed the following results:
TUPAS 1
TUEU-OLALIA 95
NO UNION 1

SPOILED 1
CHALLENGED 141
The challenged votes were those cast by the 141 INK members. They were
segregated and excluded from the final count in virtue of an agreement between the
competing unions, reached at the pre-election conference, that the INK members
should not be allowed to vote "because they are not members of any union and
refused to participate in the previous certification elections."
The INK employees promptly made known their protest to the exclusion of their votes. They
filed f a petition to cancel the election alleging that it "was not fair" and the result thereof
did "not reflect the true sentiments of the majority of the employees." TUEU-OLALIA opposed
the petition. It contended that the petitioners "do not have legal personality to protest the
results of the election," because "they are not members of either contending unit, but . . . of
the INK" which prohibits its followers, on religious grounds, from joining or forming any labor
organization. . . ."
The Med-Arbiter saw no merit in the INK employees 1 petition. By Order dated December 21,
1987, he certified the TUEU-OLALIA as the sole and exclusive bargaining agent of the rankand-file employees. In that Order he decided the fact that "religious belief was (being)
utilized to render meaningless the rights of the non-members of the Iglesia ni Kristo to
exercise the rights to be represented by a labor organization as the bargaining agent," and
declared the petitioners as "not possessed of any legal personality to institute this present
cause of action" since they were not parties to the petition for certification election.
The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There
they argued that the Med-Arbiter had "practically disenfranchised petitioners who had an
overwhelming majority," and "the TUEU-OLALIA certified union cannot be legally said to
have been the result of a valid election where at least fifty-one percent of all eligible voters
in the appropriate bargaining unit shall have cast their votes." Assistant Labor Secretary
Cresenciano B. Trajano, then Officer-in-Charge of the Bureau of Labor Relations, denied the
appeal in his Decision of July 22, 1988. He opined that the petitioners are "bereft of legal
personality to protest their alleged disenfrachisement" since they "are not constituted into a
duly organized labor union, hence, not one of the unions which vied for certification as sole
and exclusive bargaining representative." He also pointed out that the petitioners "did not
participate in previous certification elections in the company for the reason that their
religious beliefs do not allow them to form, join or assist labor organizations."
It is this Decision of July 22, 1988 that the petitioners would have this Court annul and set
aside in the present special civil action of certiorari.
The Solicitor General having expressed concurrence with the position taken by the
petitioners, public respondent NLRC was consequently required to file, and did thereafter
file, its own comment on the petition. In that comment it insists that "if the workers who are
members of the Iglesia ni Kristo in the exercise of their religious belief opted not to join any
labor organization as a consequence of which they themselves can not have a bargaining

representative, then the right to be representative by a bargaining agent should not be

denied to other members of the bargaining unit."
Guaranteed to all employees or workers is the "right to self-organization and to form, join, or
assist labor organizations of their own choosing for purposes of collective bargaining." This is
made plain by no less than three provisions of the Labor Code of the Philippines. 2 Article
243 of the Code provides as follows: 3
ART. 243. Coverage and employees right to self-organization. All persons
employed in commercial, industrial and agricultural enterprises and in
religious, charitable, medical, or educational institutions whether operating for
profit or not, shall have the right to self-organization and to form, join, or
assist labor organizations of their own choosing for purposes or collective
bargaining.Ambulant, intermittent and itinerant workers, self-employed
people, rural workers and those without any definite employers may form
labor organizations for their mutual aid and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to
"interfere with, restrain or coerce employees in the exercise of their right to selforganization." Similarly, Article 249 (a) makes it an unfair labor practice for a labor
organization to "restrain or coerce employees in the exercise of their rights to selforganization . . . "
The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as
amended, as might be expected Section 1, Rule II (Registration of Unions), Book V (Labor
Relations) of the Omnibus Rules provides as follows; 4
Sec. 1. Who may join unions; exception. All persons employed in
commercial, industrial and agricultural enterprises, including employees of
government corporations established under the Corporation Code as well as
employees of religious, medical or educational institutions, whether operating
for profit or not, except managerial employees, shall have the right to selforganization and to form, join or assist labor organizations for purposes of
collective bargaining. Ambulant, intermittent and without any definite
employers people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection.
xxx xxx xxx
The right of self-organization includes the right to organize or affiliate with a labor union or
determine which of two or more unions in an establishment to join, and to engage in
concerted activities with co-workers for purposes of collective bargaining through
representatives of their own choosing, or for their mutual aid and protection, i.e., the
protection, promotion, or enhancement of their rights and interests. 5
Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or
resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any
union, and to maintain membership therein. The right to form or join a labor organization

necessarily includes the right to refuse or refrain from exercising said right. It is self-evident
that just as no one should be denied the exercise of a right granted by law, so also, no one
should be compelled to exercise such a conferred right. The fact that a person has opted to
acquire membership in a labor union does not preclude his subsequently opting to renounce
such membership. 6
As early as 1974 this Court had occasion to expatiate on these self-evident propositions
in Victoriano v. Elizalde Rope Workers' Union, et al., 7 viz.:
. . .What the Constitution and Industrial Peace Act recognize and guarantee is
the "right" to form or join associations. Notwithstanding the different theories
propounded by the different schools of jurisprudence regarding the nature and
contents of a "right," it can be safely said that whatever theory one subscribes
to, a right comprehends at least two broad notions, namely: first, liberty or
freedom, i.e., the absence of legal restraint, whereby an employee may act for
himself being prevented by law; second, power, whereby an employee may,
as he pleases, join or refrain from joining an association. It is therefore the
employee who should decide for himself whether he should join or not an
association; and should he choose to join; and even after he has joined, he
still retains the liberty and the power to leave and cancel his membership with
said organization at any time (Pagkakaisa Samahang Manggagawa ng San
Miguel Brewery vs. Enriquez, et al., 108 Phil. 1010, 1019). It is clear, therefore,
that the right to join a union includes the right to abstain from joining any
union (Abo, et al. vs. PHILAME [KG] Employees Union, et al., L-19912, January
20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor Relations). Inasmuch
as what both the Constitution and the Industrial Peace Act have recognized,
the guaranteed to the employee, is the "right" to join associations of his
choice, it would be absurd to say that the law also imposes, in the same
breath, upon the employee the duty to join associations. The law does not
enjoin an employee to sign up with any association.
The right to refuse to join or be represented by any labor organization is recognized not only
by law but also in the rules drawn up for implementation thereof. The original Rules on
Certification promulgated by the defunct Court of Industrial Relations required that the
ballots to be used at a certification election to determine which of two or more competing
labor unions would represent the employees in the appropriate bargaining unit should
contain, aside from the names of each union, an alternative choice of the employee voting,
to the effect that he desires not to which of two or more competing labor unions would
represent the employees in the appropriate bargaining unit should contain, aside from the
names of each union, an alternative choice of the employee voting, to the effect that he
desires not to be represented by any union. 8 And where only one union was involved, the
ballots were required to state the question "Do you desire to be represented by said
union?" as regards which the employees voting would mark an appropriate square, one
indicating the answer, "Yes" the other, "No."
To be sure, the present implementing rules no longer explicitly impose the requirement that
the ballots at a certification election include a choice for "NO UNION" Section 8 (rule VI, Book

V of the Omnibus Rules) entitled"Marketing and canvassing of votes," pertinently provides

that:
. . . (a) The voter must write a cross (X) or a check (/) in the square opposite
the union of his choice. If only one union is involved, the voter shall make his
cross or check in the square indicating "YES" or "NO."
xxx xxx xxx
Withal, neither the quoted provision nor any other in the Omnibus Implementing Rules
expressly bars the inclusion of the choice of "NO UNION" in the ballots. Indeed it is doubtful
if the employee's alternative right NOT to form, join or assist any labor organization or
withdraw or resign from one may be validly eliminated and he be consequently coerced to
vote for one or another of the competing unions and be represented by one of them.
Besides, the statement in the quoted provision that "(i)f only one union is involved, the voter
shall make his cross or check in the square indicating "YES" or "NO," is quite clear
acknowledgment of the alternative possibility that the "NO" votes may outnumber the "YES"
votes indicating that the majority of the employees in the company do not wish to be
represented by any union in which case, no union can represent the employees in
collective bargaining. And whether the prevailing "NO" votes are inspired by considerations
of religious belief or discipline or not is beside the point, and may not be inquired into at all.
The purpose of a certification election is precisely the ascertainment of the wishes of the
majority of the employees in the appropriate bargaining unit: to be or not to be represented
by a labor organization, and in the affirmative case, by which particular labor organization. If
the results of the election should disclose that the majority of the workers do not wish to be
represented by any union, then their wishes must be respected, and no union may properly
be certified as the exclusive representative of the workers in the bargaining unit in dealing
with the employer regarding wages, hours and other terms and conditions of employment.
The minority employees who wish to have a union represent them in collective bargaining
can do nothing but wait for another suitable occasion to petition for a certification election
and hope that the results will be different. They may not and should not be permitted,
however, to impose their will on the majority who do not desire to have a union certified
as the exclusive workers' benefit in the bargaining unit upon the plea that they, the
minority workers, are being denied the right of self-organization and collective bargaining.
As repeatedly stated, the right of self-organization embraces not only the right to form, join
or assist labor organizations, but the concomitant, converse right NOT to form, join or assist
any labor union.
That the INK employees, as employees in the same bargaining unit in the true sense of the
term, do have the right of self-organization, is also in truth beyond question, as well as the
fact that when they voted that the employees in their bargaining unit should be represented
by "NO UNION," they were simply exercising that right of self-organization, albeit in its
negative aspect.
The respondents' argument that the petitioners are disqualified to vote because they "are
not constituted into a duly organized labor union" "but members of the INK which
prohibits its followers, on religious grounds, from joining or forming any labor organization"

 and "hence, not one of the unions which vied for certification as sole and exclusive
bargaining representative," is specious. Neither law, administrative rule nor jurisprudence
requires that only employees affiliated with any labor organization may take part in a
certification election. On the contrary, the plainly discernible intendment of the law is to
grant the right to vote to all bona fide employees in the bargaining unit, whether they are
members of a labor organization or not. As held in Airtime Specialists, Inc. v. Ferrer-Calleja: 9
In a certification election all rank-and-file employees in the appropriate
bargaining unit are entitled to vote. This principle is clearly stated in Art. 255
of the Labor Code which states that the "labor organization designated or
selected by the majority of the employees in an appropriate bargaining unit
shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining." Collective bargaining covers all aspects of
the employment relation and the resultant CBA negotiated by the certified
union binds all employees in the bargaining unit. Hence, all rank-and-file
employees, probationary or permanent, have a substantial interest in the
selection of the bargaining representative. The Code makes no distinction as
to their employment for certification election. The law refers to "all" the
employees in the bargaining unit. All they need to be eligible to support the
petition is to belong to the "bargaining unit".
Neither does the contention that petitioners should be denied the right to vote because they
"did not participate in previous certification elections in the company for the reason that
their religious beliefs do not allow them to form, join or assist labor organizations," persuade
acceptance. No law, administrative rule or precedent prescribes forfeiture of the right to
vote by reason of neglect to exercise the right in past certification elections. In denying the
petitioners' right to vote upon these egregiously fallacious grounds, the public respondents
exercised their discretion whimsically, capriciously and oppressively and gravely abused the
same.
WHEREFORE, the petition for certiorari is GRANTED; the Decision of the then Officer-inCharge of the Bureau of Labor Relations dated December 21, 1987 (affirming the Order of
the Med-Arbiter dated July 22, 1988) is ANNULLED and SET ASIDE; and the petitioners are
DECLARED to have legally exercised their right to vote, and their ballots should be
canvassed and, if validly and properly made out, counted and tallied for the choices written
therein. Costs against private respondents.
SO ORDERED.
Paras, Padilla and Regalado, JJ., concur.
Nocon, J., is on leave.

FIRST DIVISION
G.R. No. 82914 June 20, 1988
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No.
1027), petitioner,
vs.
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND CANNING
DIVISION UNIVERSAL ROBINA CORPORATION and MEAT AND CANNING DIVISION
NEW EMPLOYEES AND WORKERS UNITED LABOR ORGANIZATION, respondents.
Alar, Comia, Manalo and Associates for petitioner.
Danilo Bolos for respondent Robina Corporation.
RESOLUTION
GRIO-AQUINO, J.:
The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027)
hereinafter referred to as "TUPAS," seeks a review of the resolution dated January 27, 1988
(Annex D) of public respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations,
dismissing its appeal from the Order dated November 17, 1987 (Annex C) of the Med-Arbiter
Rasidali C. Abdullah ordering a certification election to be conducted among the regular daily
paid rank and file employees/workers of Universal Robina Corporation-Meat and Canning
Division to determine which of the contending unions:
a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027 (or
"TUPAS" for brevity);
b) Meat and Canning Division New Employees and Workers United Labor
Organization (or "NEW ULO" for brevity);
c) No union.
shall be the bargaining unit of the daily wage rank and file employees in the Meat and
Canning Division of the company.
From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining representative of
the workers in the Meat and Canning Division of the Universal Robina Corporation, with a 3year collective bargaining agreement (CBA) which was to expire on November 15, 1987.
Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an
amended notice of strike on September 28, 1987 as a means of pressuring the company to
extend, renew, or negotiate a new CBA with it.

On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the IGLESIA NI
KRISTO sect, registered as a labor union.
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an injunction against the
strike, resulting in an agreement to return to work and for the parties to negotiate a new
CBA.
The next day, October 13, 1987, NEW ULO, claiming that it has "the majority of the daily
wage rank and file employees numbering 191," filed a petition for a certification election at
the Bureau of Labor Relations (Annex A).
TUPAS moved to dismiss the petition for being defective in form and that the members of
the NEW ULO were mostly members of the Iglesia ni Kristo sect which three (3) years
previous refused to affiliate with any labor union. It also accused the company of using the
NEW ULO to defeat TUPAS' bargaining rights (Annex B).
On November 17, 1987, the Med-Arbiter ordered the holding of a certification election within
20 days (Annex C).
TUPAS appealed to the Bureau of Labor Relations BLR. In the meantime, it was able to
negotiate a new 3-year CBA with ROBINA, which was signed on December 3, 1987 and to
expire on November 15, 1990.
On January 27, 1988, respondent BLR Director Calleja dismissed the appeal (Annex D).
TUPAS' motion for reconsideration (Annex E) was denied on March 17, 1988 (Annex F). On
April 30, 1988, it filed this petition alleging that the public respondent acted in excess of her
jurisdiction and with grave abuse of discretion in affirming the Med-Arbiter's order for a
certification election.
After deliberating on the petition and the documents annexed thereto, We find no merit in
the Petition. The public respondent did not err in dismissing the petitioner's appeal in BLR
Case No. A-12-389-87. This Court's decision inVictoriano vs. Elizalde Rope Workers'
Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO sect not to join
a labor union for being contrary to their religious beliefs, does not bar the members of that
sect from forming their own union. The public respondent correctly observed that the
"recognition of the tenets of the sect ... should not infringe on the basic right of selforganization granted by the constitution to workers, regardless of religious affiliation."
The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day
freedom period of the existing CBA, does not foreclose the right of the rival union, NEW ULO,
to challenge TUPAS' claim to majority status, by filing a timely petition for certification
election on October 13, 1987 before TUPAS' old CBA expired on November 15, 1987 and
before it signed a new CBA with the company on December 3, 1987. As pointed out by MedArbiter Abdullah, a "certification election is the best forum in ascertaining the majority status
of the contending unions wherein the workers themselves can freely choose their bargaining
representative thru secret ballot." Since it has not been shown that this order is tainted with

unfairness, this Court will not thwart the holding of a certification election (Associated Trade
Unions [ATU] vs. Noriel, 88 SCRA 96).
WHEREFORE, the petition for certiorari is denied, with costs against the petitioner.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

EN BANC
G.R. No. L-25094

April 29, 1969

PAN
AMERICAN
WORLD
AIRWAYS
vs.
PAN
AMERICAN
EMPLOYEES
ASSOCIATION,
COURT
RELATIONS, respondents.

INC., petitioner,
OF

INDUSTRIAL

Ross,
Selph,
Salcedo,
Del
Rosario,
Bito
and
Misa
for
petitioner.
Jose C. Espinas and Associates for respondent Pan American Employees Association.
FERNANDO, J.:
The failure of the respondent Court of Industrial Relations to indulge petitioner Pan American
World Airways, Inc. in its plea to exclude from a return-to-work order five union officials of
respondent Pan American Employees Association on the ground of having led an illegal
strike, in itself, according to petitioner, a sufficient cause for dismissal thus resulting in their
losing their incentive and motivation for doing their jobs properly with the consequent fear
that they could cause grave injury to it, is challenged in this special civil action
for certiorari as constituting a grave abuse of discretion. Whatever may be said against such
order complained of respondent Court of Industrial Relations, the refusal to grant the prayer
for such exclusion cannot be characterized as an abuse of discretion, much less as one that
possesses an element of gravity.
So it must be unless we are prepared to restrict the broad scope of authority possessed by
respondent Court of Industrial Relations in discharging its power of compulsory arbitration in
cases certified to it by the President, and what is worse, unless an undeserved reflection on
the quality of leadership in the labor movement, indicative of management refusal to accord
to it the presumption of responsibility, is countenanced. The petition thus carries on its face
the seeds of its own infirmity. It cannot hope to succeed.
It was set forth in the petition, after the usual allegation as to the personality of the parties,
that on August 25, 1965, respondent union filed a notice of strike with the Department of
Labor and on August 28, 1965, the same respondent union declared and maintained a strike
against the herein petitioner. 1 Then, on September 17, 1965, the President of the Philippines
certified the strike to the respondent Court of Industrial Relations as being an industrial
dispute affecting the national interest, the parties being called to a conference on
September 20, 1965. 2
Several conferences were held between petitioner and respondent Union before the
Honorable Amando C. Bugayong, Associate Judge of respondent Court on September 20, 21,
23, 24 and 25, 1965. It was the position of the Union that its members would not resume the
performance of their duties unless its officers were likewise included in the return-to-work
order. Petitioner was of a different mind. It was agreeable to having the workers return to
work but not the five officials of respondent Union. It alleged that the strike was illegal, being
offensive to a no-strike clause of an existing collective bargaining agreement the result
being that the officials could, as the responsible parties, be liable for dismissal.

Consequently, it was not agreeable to their being allowed to return to the positions held by
them prior to the strike as they would not be only lacking in "incentive and motivation for
doing their work properly" but would likewise have the opportunity to cause "grave and
irreparable injury to petitioner." 3 Management did offer, however, to deposit their salaries
even if they would not be working, with the further promise that they would not even be
required to refund any amount should the right to remain in their positions be considered as
legally terminated by their calling the alleged illegal strike.
Nonetheless, on September 28, 1965, Judge Bugayong issued an order requiring petitioner
to accept the five union officers pending resolution on the merits of the dispute involved in
the strike. 4 There was a motion for reconsideration which was denied by the court on
October 8, 1965. 5 Hence, this petition, alleging a grave abuse of discretion, consisting in the
failure to grant petitioner's rather unorthodox demand.
As already noted, the inherent weakness of the petition cannot escape attention.
1. Considering that this is a case certified by the President, with respondent Court exercising
its broad authority of compulsory arbitration, the discretion it possesses cannot be so
restricted and emasculated that the mere failure to grant a plea to exclude from the returnto-work order the union officials could be considered as tantamount to a grave abuse
thereof. The law is anything but that.
As far back as 1957, this Court, speaking through Justice Labrador, categorically stated: "We
agree with counsel for the Philippine Marine Radio Officers' Association that upon
certification by the President under Section 10 of Republic Act 875, the case comes under
the operation of Commonwealth Act 103, which enforces compulsory arbitration in cases of
labor disputes in industries indispensable to the national interest when the President
certifies the case to the Court of Industrial Relations. The evident intention of the law is to
empower the Court of Industrial Relations to act in such cases, not only in the manner
prescribed under Commonwealth Act 103, but with the same broad powers and jurisdiction
granted by that Act. If the Court of Industrial Relations is granted authority to find a solution
in an industrial dispute and such solution consists in ordering of employees to return back to
work, it cannot be contended that the Court of Industrial Relations does not have the power
or jurisdiction to carry that solution into effect. And of what use is its power of conciliation
and arbitration if it does not have the power and jurisdiction to carry into effect the solution
it has adopted. Lastly, if the said court has the power to fix the terms and conditions of
employment, it certainly can order the return of the workers with or without backpay as a
term or condition of the employment." 6
Only recently this Court, speaking through Justice Sanchez, emphasized: "The overwhelming
implication from the quoted text of Section 10 is that CIR is granted great breadth of
discretion in its quest for a solution to a labor problem so certified." 7 Hence, as was
announced at to the outset of this opinion, there can be no legal objection to the mode of
exercise of authority in such fashion by respondent Court of Industrial Relations. The
allegation as to the grave abuse of discretion is clearly devoid of merit.
2. That should conclude the matter except for the fact that the question presented
possesses an element of novelty which may require further reflection.

The situation thus presented is the validity of the return to work order insofar as five union
officers are affected, petitioner airline firm rather insistent on their being excluded arguing
that since the strike called by them was illegal, and that in any event there was enough
ground for dismissal, there was present a factor which might make them "lose all their
incentive and motivation for doing their work properly" and which would furnish them "the
opportunity to cause grave and irreparable injury to petitioner."
To be more specific, the apprehension entertained by petitioner was in the petition
expressed by it thus: "The five officers of the union consist of three (3) Passenger Traffic
Representatives and a reservation clerk who in the course of their duties could cause mixups in the reservation and accommodation of passengers which could result in very many
suits for damages against petitioner such as the case of Nicolas Cuenca vs. Northwest
Airlines, G.R. No. L-22425 promulgated August 31, 1965 in which this Honorable Court
required the airline to pay P20,000.00 as nominal damages alone. The other union officer
who, is in the cargo department could underweight or overweigh cargo to the great
detriment of the service or even, of the safety of petitioner's aircraft." 8
Petitioner would attempt to remove the sting from its objection to have the union officers
return to work by offering to deposit the salaries of the five officers with respondent Court to
be paid to them, coupled with what it considered to be a generous concession that if their
right to return to work be not recognized, there would be no need for refund.
Petitioner, perhaps without so intending it, betrayed an inexcusable lack of confidence in the
responsibility of union officials and ultimately in the validity of the collective bargaining
process itself. For it is the basic premise under which a regime of collective bargaining was
instituted by the Industrial Peace Act that through the process of industrial democracy, with
both union and management equally deserving of public trust, labor problems could be
susceptible of the just solution and industrial peace attained. Implicit in such a concept is
the confidence that must be displayed by management in the sense of responsibility of
union officials to assure that the two indispensable elements in industry and production
could-work side by side, attending to the problems of each without neglecting the common
welfare that binds them together.lawphi1.nt
The moment management displays what in this case appears to be grave but unwarranted
distrust in the union officials discharging their functions just because a strike was resorted
to, then the integrity of the collective bargaining process itself is called into question. It
would have been different if there were a rational basis for such fears, purely speculative in
character. The record is bereft of slightest indication that any danger, much less one clear
and present, is to be expected from their return to work. Necessarily, the union officials have
the right to feel offended by the fact that, while they will be paid their salaries in the
meanwhile they would not be considered as fit persons to perform the duties pertaining to
the positions held by them. Far from being generous such an offer could rightfully, be
considered insulting.
The greater offense is to the labor movement itself, more specifically to the right of selforganization. There is both a constitutional and statutory recognition that laborers have the
right to form unions to take care of their interests vis-a-vis their employers. Their freedom

organizations would be rendered nugatory if they could not choose their own leaders to
speak on their behalf and to bargain for them.
If petitioner were to succeed in their unprecedented demand, the laborers in this particular
union would thus be confronted with the sad spectacle of the leaders of their choice
condemned as irresponsible, possibly even constituting a menace to the operations of the
enterprise. That is an indictment of the gravest character, devoid of any factual basis. What
is worse, the result, even if not intended, would be to call into question their undeniable
right to choose their leaders, who must be treated as such with all the respect to which they
are legitimately entitled. The fact that they would be paid but not be allowed to work is, to
repeat, to add to the infamy that would thus attach to them necessarily, but to respondent
union equally.
Apparently, respondent Court was alive to the implication of such an unwarranted demand,
the effect of which would have been to deprive effectively the rank and file of their freedom
of choice as to who should represent them. For what use are leaders so undeserving of the
minimum confidence. To that extent then, their constitutional and statutory right to freedom
of association suffers an impairment hardly to be characterized as inconsequential.
Fortunately, respondent Court was of a different mind it acted, according to law. It had a
realistic concept of what was in store for labor if its decision were otherwise. Nor did it in the
process disregard the rights of management. There is no occasion then for the supervisory
authority of this Court coming into play.
WHEREFORE, this petition for a writ of certiorari is denied. With costs against petitioner.
Reyes, J.B.L., Actg. C.J., Makalintal, Zaldivar, Sanchez, Capistrano, Teehankee and Barredo,
JJ.,
concur.
Concepcion,
C.J.
and
Castro,
J.,
are
on
leave.
Dizon, J., concurs in the result.

FIRST DIVISION
[G.R. No. 121084. February 19, 1997]
TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner, vs. TOYOTA MOTOR
PHILIPPINES CORPORATION LABOR UNION AND THE SECRETARY OF LABOR
AND EMPLOYMENT, respondents.
DECISION
KAPUNAN, J.:
On November 26, 1992, the Toyota Motor Philippines Corporation Labor Union (TMPCLU)
filed a petition for certification election with the Department of Labor, National Capital
Region, for all rank-and-file employees of the Toyota Motor Corporation. [1]
In response, petitioner filed a Position Paper on February 23, 1993 seeking the denial of
the issuance of an Order directing the holding of a certification election on two grounds:
first, that the respondent union, being "in the process of registration" had no legal
personality to file the same as it was not a legitimate labor organization as of the date of the
filing of the petition; and second, that the union was composed of both rank-and-file and
supervisory employees in violation of law. [2] Attached to the position paper was a list of union
members and their respective job classifications, indicating that many of the signatories to
the petition for certification election occupied supervisory positions and were not in fact
rank-and-file employees.[3]
The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for certification
election for lack of merit. In his March 8, 1993 Order, the Med-Arbiter found that the labor
organization's membership was composed of supervisory and rank-and-file employees in
violation of Article 245 of the Labor Code, [4] and that at the time of the filing of its petition,
respondent union had not even acquired legal personality yet. [5]
On appeal, the Office of the Secretary of Labor, in a Resolution [6] dated November 9,
1993 signed by Undersecretary Bienvenido E. Laguesma, set aside the Med-Arbiter's Order
of March 3, 1993, and directed the holding of a certification election among the regular rankand-file employees of Toyota Motor Corporation. In setting aside the questioned Order, the
Office of the Secretary contended that:
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was already a
legitimate labor organization at the time of the filing of the petition on 26 November 1992.
Records show that on 24 November 1992 or two (2) days before the filing of the said
petition, it was issued a certificate of registration.
We also agree with petitioner-appellant that the Med-Arbiter should have not dismissed the
petition for certification election based on the ground that the proposed bargaining unit is a
mixture of supervisory and rank-and-file employees, hence, violative of Article 245 of the
Labor Code as amended.

A perusal of the petition and the other documents submitted by petitioner-appellant will
readily show that what the former really seeks to represent are the regular rank-and-file
employees in the company numbering about 1,800 more or less, a unit which is obviously
appropriate for bargaining purposes. This being the case, the mere allegation of respondentappellee that there are about 42 supervisory employees in the proposed bargaining unit
should have not caused the dismissal of the instant petition. Said issue could very well be
taken cared of during the pre-election conference where inclusion/exclusion proceedings will
be conducted to determine the list of eligible voters.[7]
Not satisfied with the decision of the Office of the Secretary of Labor, petitioner filed a
Motion for Reconsideration of the Resolution of March 3, 1993, reiterating its claim that as of
the date of filing of petition for certification election, respondent TMPCLU had not yet
acquired the status of a legitimate labor organization as required by the Labor Code, and
that the proposed bargaining unit was inappropriate.
Acting on petitioner's motion for reconsideration, the public respondent, on July 13,
1994 set aside its earlier resolution and remanded the case to the Med-Arbiter concluding
that the issues raised by petitioner both on appeal and in its motion for reconsideration were
factual issues requiring further hearing and production of evidence. [8] The Order stated:
We carefully re-examined the records vis-a-vis the arguments raised by the movant, and we
note that movant correctly pointed out that petitioner submitted a copy of its certificate of
registration for the first time on appealand that in its petition, petitioner alleges that it is an
independent organization which is in the process of registration." Movant strongly argues
that the foregoing only confirms what it has been pointing out all along, that at the time the
petition was filed petitioner is (sic) not yet the holder of a registration certificate; that what
was actually issued on 24 November 1992 or two (2) days before the filing of the petition
was an official receipt of payment for the application fee; and, that the date appearing in the
Registration certificate which is November 24, 1992 is not the date when petitioner was
actually registered, but the date when the registration certificate was prepared by the
processor. Movant also ratiocinates that if indeed petitioner has been in possession of the
registration certificate at the time this petition was filed on November 26, 1992, it would
have attached the same to the petition.
The foregoing issues are factual ones, the resolution of which is crucial to the petition. For if
indeed it is true that at the time of filing of the petition, the said registration certificate has
not been approved yet, then, petitioner lacks the legal personality to file the petition and the
dismissal order is proper. Sadly, we can not resolve the said questions by merely perusing
the records. Further hearing and introduction of evidence are required. Thus, there is a need
to remand the case to the Med-Arbiter solely for the purpose.
WHEREFORE, the motion is hereby granted and our Resolution is hereby set aside. Let the
case be remanded to the Med-Arbiter for the purpose aforestated.
SO ORDERED.[9]
Pursuant to the Order, quoted above, Med-Arbiter Brigida C. Fodrigon submitted her
findings on September 28, 1994, stating the following:[10]

[T]he controvertible fact is that petitioner could not have been issued its Certificate of
Registration on November 24, 1992 when it applied for registration only on November 23,
1992 as shown by the official receipt of payment of filing fee. As Enrique Nalus, Chief LEO,
this office, would attest in his letter dated September 8, 1994 addressed to Mr. Porfirio T.
Reyes, Industrial Relations Officer of Respondent company, in response to a query posed by
the latter, "It is unlikely that an application for registration is approved on the date that it is
filed or the day thereafter as the processing course has to pass thought routing, screening,
and assignment, evaluation, review and initialing, and approval/disapproval procedure,
among others, so that a 30-day period is provided for under the Labor Code for this purpose,
let alone opposition thereto by interested parties which must be also given due course."
Another evidence which petitioner presented . . . is the "Union Registration 1992 Logbook of
IRD" . . . and the entry date November 25, 1992 as allegedly the date of the release of the
registration certificate . . . On the other hand, respondent company presented . . . a certified
true copy of an entry on page 265 of the Union Registration Logbook showing the pertinent
facts about petitioner but which do not show the petitioner's registration was issued on or
before November 26, 1992.[11]
Further citing other pieces of evidence presented before her, the Med-Arbiter concluded
that respondent TMPCLU could not have "acquire[d] legal personality at the time of the filing
of (its) petition."[12]
On April 20, 1996, the public respondent issued a new Resolution, "directing the conduct
of a certification election among the regular rank-and-file employees of the Toyota Motor
Philippines Corporation.[13] Petitioner's motion for reconsideration was denied by public
respondent in his Order dated July 14, 1995.[14]
Hence, this special civil action for certiorari under Rule 65 of the Revised Rules of Court,
where petitioner contends that "the Secretary of Labor and Employment committed grave
abuse of discretion amounting to lack or excess of jurisdiction in reversing, contrary to law
and facts the findings of the Med-Arbiters to the effect that: 1) the inclusion of the prohibited
mix of rank-and file and supervisory employees in the roster of members and officers of the
union cannot be cured by a simple inclusion-exclusion proceeding; and that 2) the
respondent union had no legal standing at the time of the filing of its petition for certification
election.[15]
We grant the petition.
The purpose of every certification election is to determine the exclusive representative
of employees in an appropriate bargaining unit for the purpose of collective bargaining. A
certification election for the collective bargaining process is one of the fairest and most
effective ways of determining which labor organization can truly represent the working force.
[16]
In determining the labor organization which represents the interests of the workforce,
those interests must be, as far as reasonably possible, homogeneous, so as to genuinely
reach the concerns of the individual members of a labor organization.
According to Rothenberg,[17] an appropriate bargaining unit is a group of employees of a
given employer, composed of all or less than the entire body of employees, which the

collective interests of all the employees, consistent with equity to the employer indicate to
be best suited to serve reciprocal rights and duties of the parties under the collective
bargaining provisions of law. In Belyca Corporation v. Ferrer Calleja, [18] we defined the
bargaining unit as "the legal collectivity for collective bargaining purposes whose members
have substantially mutual bargaining interests in terms and conditions of employment as will
assure to all employees their collective bargaining rights." This in mind, the Labor Code has
made it a clear statutory policy to prevent supervisory employees from joining labor
organizations consisting of rank-and-file employees as the concerns which involve members
of either group are normally disparate and contradictory. Article 245 provides:
ART. 245 Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. -- Managerial Employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be
a legitimate labor organization. Not being one, an organization which carries a mixture of
rank-and-file and supervisory employees cannot possess any of the rights of a legitimate
labor organization, including the right to file a petition for certification election for the
purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of
an order allowing a certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is challenged on the basis of
Article 245 of the Labor Code.
It is the petitioner's contention that forty-two (42) of the respondent union's members,
including three of its officers, occupy supervisory positions. [19] In its position paper dated
February 22, 1993, petitioner identified fourteen (14) union members occupying the position
of Junior Group Chief II [20] and twenty-seven (27) members in level five positions. Their
respective job-descriptions are quoted below:
LEVEL 4 (JUNIOR GROUP CHIEF II) He is responsible for all operators and assigned stations,
prepares production reports related to daily production output. He oversees smooth flow of
production, quality of production, availability of manpower, parts and equipments. He also
coordinates with other sections in the Production Department.
LEVEL 5 He is responsible for overseeing initial production of new models, prepares and
monitors construction schedules for new models, identifies manpower requirements for
production, facilities and equipment, and lay-out processes. He also oversees other sections
in the production process (e.g. assembly, welding, painting)." (Annex "V" of Respondent
TMP's Position Paper, which is the Job Description for an Engineer holding Level 5 position in
the Production Engineering Section of the Production Planning and Control Department).
While there may be a genuine divergence of opinion as to whether or not union
members occupying Level 4 positions are supervisory employees, it is fairly obvious, from a
reading of the Labor Code's definition of the term that those occupying Level 5 positions are
unquestionably supervisory employees. Supervisory employees, as defined above, are those

who, in the interest of the employer, effectively recommend managerial actions if the
exercise of such authority is not merely routinary or clerical in nature but require the use of
independent judgment.[21] Under the job description for level five employees, such personnel
all engineers having a number of personnel under them, not only oversee production of new
models but also determine manpower requirements, thereby influencing important hiring
decisions at the highest levels. This determination is neither routine nor clerical but involves
the independent assessment of factors affecting production, which in turn affect decisions to
hire or transfer workers. The use of independent judgment in making the decision to hire,
fire or transfer in the identification of manpower requirements would be greatly impaired if
the employee's loyalties are torn between the interests of the union and the interests of
management. A supervisory employee occupying a level five position would therefore find it
difficult to objectively identify the exact manpower requirements dictated by production
demands.
This is precisely what the Labor Code, in requiring separate unions among rank-and-file
employees on one hand, and supervisory employees on the other, seeks to avoid. The
rationale behind the Code's exclusion of supervisors from unions of rank-and-file employees
is that such employees, while in the performance of supervisory functions, become the alter
ego of management in the making and the implementing of key decisions at the submanagerial level. Certainly, it would be difficult to find unity or mutuality of interests in a
bargaining unit consisting of a mixture of rank-and-file and supervisory employees. And this
is so because the fundamental test of a bargaining unit's acceptability is whether or not
such a unit will best advance to all employees within the unit the proper exercise of their
collective bargaining rights.[22] The Code itself has recognized this, in preventing supervisory
employees from joining unions of rank-and-file employees.
In the case at bar, as respondent union's membership list contains the names of at least
twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior
to purging itself of its supervisory employee members, attain the status of a legitimate labor
organization. Not being one, it cannot possess the requisite personality to file a petition for
certification election.
The foregoing discussion, therefore, renders entirely irrelevant, the technical issue
raised as to whether or not respondent union was in possession of the status of a legitimate
labor organization at the time of filing, when, as petitioner vigorously claims, the former was
still at the stage of processing of its application for recognition as a legitimate labor
organization. The union's composition being in violation of the Labor Code's prohibition of
unions composed of supervisory and rank-and-file employees, it could not possess the
requisite personality to file for recognition as a legitimate labor organization. In any case,
the factual issue, albeit ignored by the public respondent's assailed Resolution, was
adequately threshed out in the Med-Arbiter's September 28, 1994 Order.
The holding of a certification election is based on clear statutory policy which cannot be
circumvented.[23] Its rules, strictly construed by this Court, are designed to eliminate fraud
and manipulation. As we emphasized in Progressive Development Corporation v. Secretary,
Department of Labor and Employment, [24] the Court's conclusion should not be interpreted
as impairing any union's right to be certified as the employees' bargaining agent in the
petitioner's establishment. Workers of an appropriate bargaining unit must be allowed to

freely express their choice in an election where everything is open to sound judgment and
the possibility for fraud and misrepresentation is absent. [25]
WHEREFORE, the petition is GRANTED. The assailed Resolution dated April 20, 1995
and Order dated July 14, 1995 of respondent Secretary of Labor are hereby SET ASIDE. The
Order dated September 28, 1994 of the Med-Arbiter is REINSTATED.
SO ORDERED.
Padilla, (Chairman), Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.

THIRD DIVISION
[G.R. No. 142000. January 22, 2003]
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner, vs.
TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO,respondent.
DECISION
CARPIO-MORALES, J.:
Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands
International Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the
Court of Appeals denying its petition to annul the Department of Labor and Employment
(DOLE) Resolutions of November 12, 1998 and December 29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine
Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate
labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a
petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch
No. IV.
THIGCI, in its Comment[1] filed on November 27, 1997, opposed THEUs petition for
certification election on the ground that the list of union members submitted by it was
defective and fatally flawed as it included the names and signatures of supervisors,
resigned, terminated and absent without leave (AWOL) employees, as well as employees of
The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the
192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which
it annexed[2] to its Comment to the petition for certification election. And it therein
incorporated the following tabulation [3] showing the number of signatories to said petition
whose membership in the union was being questioned as disqualified and the reasons for
disqualification:
# of Signatures Reasons for Disqualification
13 Supervisors of THIGCI
6 Resigned employees of THIGCI
2 AWOL employees of THIGCI
53 Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc.
14 Supervisors of The Country Club at Tagaytay Highlands, Inc.

6 Resigned employees of The Country Club at Tagaytay Highlands, Inc.

3 Terminated employees of The Country Club at Tagaytay Highlands, Inc.
1 AWOL employees of The Country Club at Tagaytay Highlands, Inc.
4 Signatures that cannot be deciphered
16 Names in list that were erased
2 Names with first names only
THIGCI also alleged that some of the signatures in the list of union members were
secured through fraudulent and deceitful means, and submitted copies of the handwritten
denial and withdrawal of some of its employees from participating in the petition. [4]
Replying to THIGCIs Comment, THEU asserted that it had complied with all the
requirements for valid affiliation and inclusion in the roster of legitimate labor organizations
pursuant to DOLE Department Order No. 9, series of 1997, [5] on account of which it was duly
granted a Certification of Affiliation by DOLE on October 10, 1997; [6] and that Section 5, Rule
V of said Department Order provides that the legitimacy of its registration cannot be subject
to collateral attack, and for as long as there is no final order of cancellation, it continues to
enjoy the rights accorded to a legitimate organization.
THEU thus concluded in its Reply [7] that under the circumstances, the Med-Arbiter
should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE
Department Order No. 09, automatically order the conduct of a certification election.
By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the holding
of a certification election among the rank-and-file employees of THIGCI in this wise,
quotedverbatim:
We evaluated carefully this instant petition and we are of the opinion that it is complete in
form and substance. In addition thereto, the accompanying documents show that
indeed petitioner union is a legitimate labor federation and its local/chapter was
duly reported to this Office as one of its affiliate local/chapter. Its due reporting
through the submission of all the requirements for registration of a local/chapter is a clear
showing that it was already included in the roster of legitimate labor organizations in this
Office pursuant to Department Order No. 9 Series of 1997 with all the legal right and
personality to institute this instant petition.Pursuant therefore to the provisions of Article
257 of the Labor Code, as amended, and its Implementing Rules as amended by Department
Order No. 9, since the respondents establishment is unorganized, the holding of a
certification election is mandatory for it was clearly established that petitioner is a legitimate
labor organization. Giving due course to this petition is therefore proper and appropriate.
[9]
(Emphasis supplied)
Passing on THIGCIs allegation that some of the union members are supervisory,
resigned and AWOL employees or employees of a separate and distinct corporation, the

Med-Arbiter held that the same should be properly raised in the exclusion-inclusion
proceedings at the pre-election conference. As for the allegation that some of the signatures
were secured through fraudulent and deceitful means, he held that it should be coursed
through an independent petition for cancellation of union registration which is within the
jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that THIGCI
failed to submit the job descriptions of the questioned employees and other
supporting documents to bolster its claim that they are disqualified from joining
THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4,
1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition for
certification election on the ground that there is a clear absence of community or mutuality
of interests, it finding that THEU sought to represent two separate bargaining units
(supervisory employees and rank-and-file employees) as well as employees of two separate
and distinct corporate entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda DimalipisBaldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12,
1998[10]setting aside the June 4, 1998 Resolution dismissing the petition for certification
election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that
since THEU is a local chapter, the twenty percent (20%) membership requirement is not
necessary for it to acquire legitimate status, hence, the alleged retraction and withdrawal of
support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy
it has already acquired before the petition; that rather than disregard the legitimate status
already conferred on THEU by the Bureau of Labor Relations, the names of alleged
disqualified supervisory employees and employees of the Country Club, Inc., a separate and
distinct corporation, should simply be removed from the THEUs roster of membership; and
that regarding the participation of alleged resigned and AWOL employees and those whose
signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings
at the pre-election stage.
The records of the case were thus ordered remanded to the Office of the Med-Arbiter for
the conduct of certification election.
THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been
denied by the DOLE Undersecretary by Resolution of December 29, 1998, [11] it filed a petition
for certiorari before this Court which, by Resolution of April 14, 1999, [12] referred it to the
Court of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. Hon.
Bienvenido E. Laguesma, et al .,[13] and in strict observance of the hierarchy of courts, as
emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.
[14]

By Decision of February 15, 2000, [15] the Court of Appeals 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 bystander rule, hence, the
employer may pray for the dismissal of such petition on the basis of lack of mutuality of
interests of the members of the union as well as lack of employer-employee relationship
following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor

Philippines Corporation Labor Union et al [16]and Dunlop Slazenger [Phils.] v. Hon. Secretary of
Labor and Employment et al,[17] petitioner failed to adduce substantial evidence to
support its allegations.
Hence, the present petition for certiorari, raising the following
ISSUES/ASSIGNMENT OF ERRORS:
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12
NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES
COULDSIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP
INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNIONS STATUS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12
NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES STATUS COULD READILY BE
RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS
THE COURT
PETITIONER
SAME AND
CONTAINED

OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF

HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE
BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND
IN THE RECORDS OF THE CASE[18]

The statutory authority for the exclusion of supervisory employees in a rank-and-file

union, and vice-versa, is Article 245 of the Labor Code, to wit:
Article 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
While above-quoted Article 245 expressly prohibits supervisory employees from joining
a rank-and-file union, it does not provide what would be the effect if a rank-and-file union
counts supervisory employees among its members, or vice-versa.
Citing Toyota[19] 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
of Progressive Development Corp. Pizza Hut v. Ledesma[20] which held that:
The Labor Code requires that in organized and unorganized establishments, a petition for
certification election must be filed by a legitimate labor organization. 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.
In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the
former look into the legitimacy of the respondent Union by a sweeping declaration that the
union was in the possession of a charter certificate so that for all intents and purposes,

Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization, [21] (Underscoring

and emphasis supplied),
petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., 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.[22]
Continuing, petitioner argues that without resolving the status of THEU, the DOLE
Undersecretary conveniently deferred the resolution on the serious infirmity in the
membership of [THEU] and ordered the holding of the certification election which is frowned
upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity
in the membership of the respondent union can be remedied in the pre-election
conference thru the exclusion-inclusion proceedings wherein those employees who are
occupying rank-and-file positions will be excluded from the list of eligible voters. Public
respondent gravely misappreciated the basic antipathy between the interest of supervisors
and the interest of rank-and-file employees. Due to the irreconcilability of their interest we
held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union, viz:
xxx
Clearly, based on this provision [Article 245], a labor organization composed of both rankand-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 posses 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. (Emphasis by petitioner) (Dunlop Slazenger
(Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis
supplied by petitioner.)
The petition fails. After a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack. It may be questioned only in an
independent petition for cancellation in accordance with 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 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. (Emphasis supplied)
The grounds for cancellation of union registration are provided for under Article 239 of
the Labor Code, as follows:

Art. 239. Grounds for cancellation of union registration. The following shall constitute
grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;
(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30)
days from adoption or ratification of the constitution and by-laws or amendments thereto;
(c) Misrepresentation, false statements or fraud in connection with the election of
officers, minutes of the election of officers, the list of voters, or failure to subject these
documents together with the list of the newly elected/appointed officers and their postal
addresses within thirty (30) days from election;
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after
the losing of every fiscal year and misrepresentation, false entries or fraud in the
preparation of the financial report itself;
(e) Acting as a labor contractor or engaging in the cabo system, or otherwise engaging in
any activity prohibited by law;
(f) Entering into collective bargaining agreements which provide terms and conditions of
employment below minimum standards established by law;
(g) Asking for or accepting attorneys fees or negotiation fees from employers;
(h) Other than for mandatory activities under this Code, checking off special assessments or
any other fees without duly signed individual written authorizations of the members;
(i) Failure to submit list of individual members to the Bureau once a year or whenever
required by the Bureau; and
(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied),
while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the
Implementing Rules.
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
above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be considered to
have already acquired juridical personality which may not be assailed collaterally.

As for petitioners allegation that some of the signatures in the petition for certification
election were obtained through fraud, false statement and misrepresentation, the proper
procedure is, as reflected above, for it to file a petition for cancellation of the certificate of
registration, and not to intervene in a petition for certification election.
Regarding the alleged withdrawal of union members from participating in the
certification election, this Courts following ruling is instructive:
[T]he best forum for determining whether there were indeed retractions from some of the
laborers is in the certification election itself wherein the workers can freely express their
choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should
in every possible instance be determined by secret ballot rather than by administrative or
quasi-judicial inquiry. Such representation and certification election cases are not to be taken
as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding
character as to which of the competing unions represents the genuine choice of the workers
to be their sole and exclusive collective bargaining representative with their employer. [23]
As for the lack of mutuality of interest argument of petitioner, it, at all events, does not
lie given, as found by the court a quo, its failure to present substantial evidence that the
assailed employees are actually occupying supervisory positions.
While petitioner submitted a list of its employees with their corresponding job titles and
ranks,[24] there is nothing mentioned about the supervisors respective duties, powers and
prerogatives that would show that they can effectively recommend managerial actions
which require the use of independent judgment. [25]
As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:[26]
Designation should be reconciled with the actual job description of subject employees x x x
The mere fact that an employee is designated manager does not necessarily make him
one. Otherwise, there would be an absurd situation where one can be given the title just to
be deprived of the right to be a member of a union. In the case of National Steel Corporation
vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that:
What is essential is the nature of the employees function and not the nomenclature
or title given to the job which determines whether the employee has rank-and-file or
managerial status or whether he is a supervisory employee. (Emphasis supplied).[27]
WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded
to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the
immediate conduct of a certification election subject to the usual pre-election conference.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.

EN BANC
G.R. No. 91902

May 20, 1991

MANILA
ELECTRIC
COMPANY, petitioner,
vs.
THE HON. SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND TECHNICAL
EMPLOYEES ASSOCIATION OF MERALCO, and FIRST LINE ASSOCIATION OF
MERALCO SUPERVISORY EMPLOYEES,respondents.
Rolando R. Arbues, Atilano S. Guevarra, Jr. and Gil S. San Diego for petitioner.
The Solicitor General for public respondent.
Felipe Gojar for STEAM-PCWF.
Wakay & Wakay Legal Services for First Line Association of Meralco Supervisory Employees.
MEDIALDEA, J.:
This petition seeks to review the Resolution of respondent Secretary of Labor and
Employment Franklin M. Drilon dated November 3, 1989 which affirmed an Order of MedArbiter Renato P. Parungo (Case No. NCR-O-D-M-1-70), directing the holding of a certification
election among certain employees of petitioner Manila Electric Company (hereafter
"MERALCO") as well as the Order dated January 16, 1990 which denied the Motion for
Reconsideration of MERALCO.
The facts are as follows:
On November 22, 1988, the Staff and Technical Employees Association of MERALCO
(hereafter "STEAM-PCWF") a labor organization of staff and technical employees of
MERALCO, filed a petition for certification election, seeking to represent regular employees
of MERALCO who are: (a) non-managerial employees with Pay Grades VII and above; (b) nonmanagerial employees in the Patrol Division, Treasury Security Services Section, Secretaries
who are automatically removed from the bargaining unit; and (c) employees within the rank
and file unit who are automatically disqualified from becoming union members of any
organization within the same bargaining unit.
Among others, the petition alleged that "while there exists a duly-organized union for rank
and file employees in Pay Grade I-VI, which is the MERALCO Employees and Worker's
Association (MEWA) which holds a valid CBA for the rank and file employees, 1 there is no
other labor organization except STEAM-PCWF claiming to represent the MERALCO
employees.
The petition was premised on the exclusion/disqualification of certain MERALCO employees
pursuant to Art. I, Secs. 2 and 3 of the existing MEWA CBA as follows:
ARTICLE I
SCOPE
xxx

xxx

xxx

Sec. 2. Excluded from the appropriate bargaining unit and therefore outside the
scope of this Agreement are:
(a) Employees in Patrol Division;
(b) Employees in Treasury Security Services Section;
(c) Managerial Employees; and
(d) Secretaries.
Any member of the Union who may now or hereafter be assigned or transferred to
Patrol Division or Treasury Security Services Section, or becomes Managerial
Employee or a Secretary, shall be considered automatically removed from the
bargaining unit and excluded from the coverage of this agreement. He shall thereby
likewise be deemed automatically to have ceased to be member of the union, and
shall desist from further engaging in union activity of any kind.
Sec. 3. Regular rank-and-file employees in the organization elements herein below
listed shall be covered within the bargaining unit, but shall be automatically
disqualified from becoming union members:
1. Office of the Corporate Secretary
2. Corporate Staff Services Department
3. Managerial Payroll Office
4. Legal Service Department
5. Labor Relations Division
6. Personnel Administration Division
7. Manpower Planning & Research Division
8. Computer Services Department
9. Financial Planning & Control Department
10. Treasury Department, except Cash Section
11. General Accounting Section
xxx

xxx

xxx

(p. 19, Rollo)

MERALCO moved for the dismissal of the petition on the following grounds:
I

The employees sought to be represented by petitioner are either 1) managerial who

are prohibited by law from forming or joining supervisory union; 2) security services
personnel who are prohibited from joining or assisting the rank-and-file union; 3)
secretaries who do not consent to the petitioner's representation and whom
petitioner can not represent; and 4) rank-and-file employees represented by the
certified or duly recognized bargaining representative of the only rank-and-file
bargaining unit in the company, the Meralco Employees Workers Association (MEWA),
in accordance with the existing Collective Bargaining Agreement with the latter.
II
The petition for certification election will disturb the administration of the existing
Collective Bargaining Agreement in violation of Art. 232 of the Labor Code.
III
The petition itself shows that it is not supported by the written consent of at least
twenty percent (20%) of the alleged 2,500 employees sought to be represented.
(Resolution, Sec. of Labor, pp. 223-224, Rollo)
Before Med-Arbiter R. Parungo, MERALCO contended that employees from Pay Grades VII
and above are classified as managerial employees who, under the law, are prohibited from
forming, joining or assisting a labor organization of the rank and file. As regards those in the
Patrol Division and Treasury Security Service Section, MERALCO maintains that since these
employees are tasked with providing security to the company, they are not eligible to join
the rank and file bargaining unit, pursuant to Sec. 2(c), Rule V, Book V of the then
Implementing Rules and Regulations of the Labor Code (1988) which reads as follows:
Sec. 2. Who may file petition. The employer or any legitimate labor organization
may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among
others:
xxx

xxx

xxx

(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 security guards (As
amended by Sec. 6, Implementing Rules of EO 111)
xxx

xxx

xxx

(p. 111, Labor Code, 1988 Ed.)

As regards those rank and file employees enumerated in Sec. 3, Art. I, MERALCO contends
that since they are already beneficiaries of the MEWA-CBA, they may not be treated as a
separate and distinct appropriate bargaining unit.
MERALCO raised the same argument with respect to employees sought to be represented by
STEAM-PCWF, claiming that these were already covered by the MEWA-CBA.

On March 15, 1989, the Med-Arbiter ruled that having been excluded from the existing
Collective Bargaining Agreement for rank and file employees, these employees have the
right to form a union of their own, except those employees performing managerial functions.
With respect to those employees who had resented their alleged involuntary membership in
the existing CBA, the Med-Arbiter stated that the holding of a certification election would
allow them to fully translate their sentiment on the matter, and thus directed the holding of
a certification election. The dispositive portion of the Resolution provides as follows:
WHEREFORE, premises considered, a certification election is hereby ordered
conducted among the regular rank-and-file employees of MERALCO to wit:
1. Non-managerial employees with Pay Grades VII and above;
2. Non-managerial employees of Patrol Division, Treasury Security Services Section
and Secretaries; and
3. Employees prohibited from actively participating as members of the union.
within 20 days from receipt hereof, subject to the usual pre-election conference with
the following choices:
1. Staff and Technical, Employees Association of MERALCO (STEAM-PCWF);
2. No Union.
SO ORDERED. (p. 222, Rollo)
On April 4, 1989, MERALCO appealed, contending that "until such time that a judicial finding
is made to the effect that they are not managerial employee, STEAM-PCWF cannot represent
employees from Pay Grades VII and above, additionally reiterating the same reasons they
had advanced for disqualifying respondent STEAM-PCWF.
On April 7, 1989, MEWA filed an appeal-in-intervention, submitting as follows:
A. The Order of the Med-Arbiter is null and void for being in violation of Article 245 of
the Labor Code;
B. The Order of the Med-Arbiter violates Article 232 of the Labor Code; and
C. The Order is invalid because the bargaining unit it delineated is not an
appropriated (sic) bargaining unit.
On May 4, 1989, STEAM-PCWF opposed the appeal-in-intervention.
With the enactment of RA 6715 and the rules and regulations implementing the same,
STEAM-PCWF renounced its representation of the employees in Patrol Division, Treasury
Security Services Section and rank-and-file employees in Pay Grades I-VI.
On September 13, 1989, the First Line Association of Meralco
Supervisory Employees. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9-731-89)
seeking to represent those employees with Pay Grades VII to XIV, since "there is no other

supervisory union at MERALCO." (p. 266,Rollo). The petition was consolidated with that of
STEAM-PCWF.
On November 3, 1989, the Secretary of Labor affirmed with modification, the assailed order
of the Med-Arbiter, disposing as follows:
WHEREFORE, premises considered, the Order appealed from is hereby affirmed but
modified as far as the employees covered by Section 3, Article I of the exist CBA in
the Company are concerned. Said employees shall remain in the unit of the rank-andfile already existing and may exercise their right to self organization as above
enunciated.
Further, the First Line Association of Meralco Supervisory Employees (FLAMES) is
included as among the choices in the certification election.
Let, therefore, the pertinent records of the case be immediately forwarded to the
Office of origin for the conduct of the certification election.
SO ORDERED. (p. 7, Rollo)
MERALCO's motion for reconsideration was denied on January 16, 1990.
On February 9, 1990, MERALCO filed this petition, premised on the following ground:
RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN
EXCESS OF JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN RULING THAT:
I. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED INDEPENDENT,
DISTINCT AND SEPARATE FROM THE EXISTING RANK-AND-FILE BARGAINING UNIT.
II. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANK-AND-FILE
EMPLOYEES.
III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE
RANK-AND-FILE UNION AND/OR THE SUPERVISORY UNION. (p. 8, Rollo)
On February 26, 1990, We issued a temporary restraining order (TRO) against the
implementation of the disputed resolution.
In its petition, MERALCO has relented and recognized respondents STEAM-PCWF and
FLAMES' desired representation of supervisory employees from Grades VII up. However, it
believes that all that the Secretary of Labor has to do is to establish a demarcation line
between supervisory and managerial rank, and not to classify outright the group of
employees represented by STEAM-PCWF and FLAMES as rank and file employees.
In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol
Services Section) to be represented by respondents, MERALCO contends that this
contravenes the provisions of the recently passed RA 6715 and its implementing rules
(specifically par. 2, Sec. 1, Rule II, Book V) which disqualifies supervisory employees and
security guards from membership in a labor organization of the rank and file (p. 11, Rollo).

The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212,
then par. (k), of the 1988 Labor Code defining "managerial" and "rank and file" employees,
the law then in force when the complaint was filed. At the time, only two groups of
employees were recognized, the managerial and rank and file. This explains the absence of
evidence on job descriptions on who would be classified managerial employees. It is perhaps
also for this reason why the Secretary of Labor limited his classification of the Meralco
employees belonging to Pay Grades VII and up, to only two groups, the managerial and rank
and file.
However, pursuant to the Department of Labor's goal of strenghthening the constitutional
right of workers to self-organization, RA 6715 was subsequently passed which reorganized
the employee-ranks by including a third group, or the supervisory employees, and laying
down the distinction between supervisory employees and those of managerial ranks in Art.
212, renumbered par. [m], depending on whether the employee concerned has the power to
lay down and execute management policies, in the case of managerial employees, or merely
to recommend them, in case of supervisory employees.
In this petition, MERALCO has admitted that the employees belonging to Pay Grades VII and
up are supervisory (p. 10, Rollo). The records also show that STEAM-PCWF had
"renounced its representation of the employees in Patrol Division, Treasury Security Service
Section and rank and file employees in Pay Grades I-VI" (p. 6, Rollo); while FLAMES, on the
other hand, had limited its representation to employees belonging to Pay Grades VIIXIV,generally accepted as supervisory employees, as follows:
It must be emphasized that private respondent First Line Association of Meralco
Supervisory Employees seeks to represent only the Supervisory Employees with Pay
Grades VII to XIV.
Supervisory Employees with Pay Grades VII to XIV are not managerial employees. In
fact the petition itself of petitioner Manila Electric Company on page 9, paragraph 3
of the petition stated as follows, to wit:
There was no need for petitioner to prove that these employees are not rankand-file. As adverted to above, the private respondents admit that these are
not the rank-and-file but the supervisory employees, whom they seek to
represent. What needs to be established is the rank where supervisory ends
and managerial begins.
and First Line Association of Meralco Supervisory Employees herein states that Pay
Grades VII to XIV are not managerial employees. In fact, although employees with
Pay Grade XV carry the Rank of Department Managers, these employees only enjoys
(sic) the Rank Manager but their recommendatory powers are subject to evaluation,
review and final action by the department heads and other higher executives of the
company. (FLAMES' Memorandum, p. 305, Rollo)
Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been
recognized and accepted as supervisory. On the other hand, those employees who have
been automatically disqualified have been directed by the Secretary of Labor to remain in
the existing labor organization for the rank and file, (the condition in the CBA deemed
as not having been written into the contract, as unduly restrictive of an employee's exercise
of the right to self-organization). We shall discuss the rights of the excluded employees (or
those covered by Sec. 2, Art. I, MEWA-CBA later.

Anent the instant petition therefore, STEAM-PCWF, and FLAMES would therefore represent
supervisory employees only. In this regard, the authority given by the Secretary of Labor for
the establishment of two labor organizations for the rank and file will have to be disregarded
since We hereby uphold certification elections only for supervisory employees from Pay
Grade VII and up, with STEAM-PCWF and FLAMES as choices.
As to the alleged failure of the Secretary of Labor to establish a demarcation line for
purposes of segregating the supervisory from the managerial employees, the required
parameter is really not necessary since the law itself, Art. 212-m, (as amended by Sec. 4 of
RA 6715) has already laid down the corresponding guidelines:
Art. 212. Definitions. . . .
(m) "Managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions
if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of the
above definitions are considered rank-and-file employees for purposes of to Book.
In his resolution, the Secretary of Labor further elaborated:
. . . Thus, the determinative factor in classifying an employee as managerial,
supervisory or rank-and-file is the nature of the work of the employee concerned.
In National Waterworks and Sewerage Authority vs. National Waterworks and
Sewerage Authority Consolidated Unions (11 SCRA 766) the Supreme Court had the
occasion to come out with an enlightening dissertation of the nature of the work of a
managerial employees as follows:
. . . that the employee's primary duty consists of the management of the
establishment or of a customarily recognized department or subdivision
thereof, that he customarily and regularly directs the work of other employees
therein, that he has the authority to hire or discharge other employees or that
his suggestions and recommendations as to the hiring and discharging and or
to the advancement and promotion or any other change of status of other
employees are given particular weight, that he customarily and regularly
exercises discretionary powers . . . (56 CJS, pp. 666-668. (p. 226, Rollo)
We shall now discuss the rights of the security guards to self-organize. MERALCO has
questioned the legality of allowing them to join either the rank and file or the
supervisory union, claiming that this is a violation of par. 2, Sec. 1, Rule II, Book V of
the Implementing Rules of RA 6715, which states as follows:
Sec 1. Who may join unions. . . .
xxx

xxx

xxx

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; . . .

xxx

xxx

xxx

(emphasis ours)
Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of
the implementing rules of RA 6715:
Rule
REPRESENTATION
INTERNAL-UNION CONFLICTS

CASES

V.
AND

Sec. 1. . . .
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:
(a) . . .
(b) . . .
(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;
xxx

xxx

xxx

(emphasis ours)
Both rules, barring security guards from joining a rank and file organization, appear to have
been carried over from the old rules which implemented then Art. 245 of the Labor Code,
and which provided thus:
Art. 245. Ineligibility of security personnel to join any labor organization.Security
guards and other personnel employed for the protection and security of the person,
properties and premises of the employer shall not be eligible for membership in any
labor organization.
On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which eliminated the
above-cited provision on the disqualification of security guards. What was retained was the
disqualification of managerial employees, renumbered as Art. 245 (previously Art. 246), as
follows:
Art. 245. Ineligibility of managerial employees to joint any labor organization.
Managerial employees are not eligible to join, assist or form any labor organization.
With the elimination, security guards were thus free to join a rank and file organization.

On March 2, 1989, the present Congress passed RA 6715.

245, to read as follows:

Section 18 thereof amended Art.

Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees.Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees but may join, assist, or form
separate labor organizations of their own. (emphasis ours)
As will be noted, the second sentence of Art. 245 embodies an amendment
disqualifying supervisory employeesfrom membership in a labor organization of the rankand-file employees. It does not include security guards in the disqualification.
The implementing rules of RA 6715, therefore, insofar as they disqualify security guards
from joining a rank and file organization are null and void, for being not germane to the
object and purposes of EO 111 and RA 6715 upon which such rules purportedly derive
statutory moorings. In Shell Philippines, Inc. vs. Central Bank, G.R. No. 51353, June 27, 1988,
162 SCRA 628, We stated:
The rule-making power must be confined to details for regulating the mode or
proceeding to carry into effect the law as it has been enacted. The power cannot be
extended to amending or expanding the statutory requirements or to embrace
matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned. (citing University of Sto. Tomas vs. Board of Tax Appeals, 93 Phil. 376).
While therefore under the old rules, security guards were barred from joining a labor
organization of the rank and file, under RA 6715, they may now freely join a labor
organization of the rank and file or that of the supervisory union, depending on their rank.
By accommodating supervisory employees, the Secretary of Labor must likewise apply the
provisions of RA 6715 to security guards by favorably allowing them free access to a labor
organization, whether rank and file or supervisory, in recognition of their constitutional right
to self-organization.
We are aware however of possible consequences in the implementation of the law in
allowing security personnel to join labor unions within the company they serve. The law is
apt to produce divided loyalties in the faithful performance of their duties. Economic reasons
would present the employees concerned with the temptation to subordinate their duties to
the allegiance they owe the union of which they are members, aware as they are that it is
usually union action that obtains for them increased pecuniary benefits.
Thus, in the event of a strike declared by their union, security personnel may neglect or
outrightly abandon their duties, such as protection of property of their employer and the
persons of its officials and employees, the control of access to the employer's premises, and
the maintenance of order in the event of emergencies and untoward incidents.
It is hoped that the corresponding amendatory and/or suppletory laws be passed by
Congress to avoid possible conflict of interest in security personnel.1wphi1
ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the
Resolution of the Secretary of Labor dated November 3, 1989 upholding an employee's right
to self-organization. A certification election is hereby ordered conducted among supervisory
employees of MERALCO, belonging to Pay Grades VII and above, using as guideliness an
employee's power to either recommend or execute management policies, pursuant to Art.

212 (m), of the Labor Code, as amended by Sec. 4 of RA 6715, with respondents STEAMPCWF and FLAMES as choices.
Employees of the Patrol Division, Treasury Security Services Section and Secretaries may
freely join either the labor organization of the rank and file or that of the supervisory union
depending on their employee rank. Disqualified employees covered by Sec. 3, Art. I of the
MEWA-CBA, shall remain with the existing labor organization of the rank and file, pursuant to
the Secretary of Labor's directive:
By the parties' own agreement, they find the bargaining unit, which includes the
positions enumerated in Section 3, Article I of their CBA, appropriate for purposes of
collective bargaining. The composition of the bargaining unit should be left to the
agreement of the parties, and unless there are legal infirmities in such agreement,
this Office will not substitute its judgment for that of the parties. Consistent with the
story of collective bargaining in the company, the membership of said group of
employees in the existing rank-and-file unit should continue, for it will enhance
stability in that unit already well establish. However, we cannot approve of the
condition set in Section 3, Article I of the CBA that the employees covered are
automatically disqualified from becoming union members. The condition unduly
restricts the exercise of the right to self organization by the employees in question. It
is contrary to law and public policy and, therefore, should be considered to have not
been written into the contract. Accordingly, the option to join or not to join the union
should be left entirely to the employees themselves. (p. 229, Rollo)
The Temporary Restraining Order (TRO) issued on February 26, 1990 is hereby LIFTED. Costs
against petitioner.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Sarmiento, Grio-Aquino, Regalado and Davide, Jr., JJ., concur.

THIRD DIVISION
[G.R. No. 113638. November 16, 1999]
A.

D.
GOTHONG
MANUFACTURING
CORPORATION
EMPLOYEES
UNIONALU, petitioner, vs. HON. NIEVES CONFESOR, SECRETARY, DEPARTMENT OF
LABOR AND EMPLOYMENT and A. D. GOTHONG MANUFACTURING
CORPORATION, Subangdaku, Mandaue City,respondents.

DECISION
GONZAGA_REYES, J.:
Petitioner A. D. Gothong Manufacturing Corporation Employees Union-ALU seeks to
reverse and set aside the decision of the Secretary of Labor promulgated on September 30,
1993 affirming in toto the Resolution of Mediator-Arbiter, Achilles V. Manit declaring Romulo
Plaza and Paul Michael Yap as rank- and-file employees of A. D. Gothong Manufacturing
Corporation.
On May 12, 1993, petitioner A. D. Gothong Manufacturing Corporation Employees UnionALU (Union) filed a petition for certification election in its bid to represent the unorganized
regular rank-and-file employees of respondent A. D. Gothong Manufacturing Corporation
(Company) excluding its office staff and personnel. Respondent Company opposed the
petition as it excluded office personnel who are rank and file employees. In the inclusionexclusion proceedings, the parties agreed to the inclusion of Romulo Plaza and Paul Michael
Yap in the list of eligible voters on condition that their votes are considered challenged on
the ground that they were supervisory employees.
The certification election was conducted as scheduled and yielded the following results:
YES - - - - - - - - - - - - - - - 20
NO - - - - - - - - - - - - - - - - 19
Spoiled - - - - - - - - - - - - - - 0
Challenged - - -- - - - - - - - _2
Total votes cast - - - - - - - -41
Both Plaza and Yap argued that they are rank-and-file employees. Plaza claimed that he
was a mere salesman based in Cebu, and Yap argued that he is a mere expediter whose job
includes the facilitation of the processing of the bills of lading of all intended company
shipments.

Petitioner Union maintains that both Plaza and Yap are supervisors who are disqualified
to join the proposed bargaining unit for rank-and-file employees. In support of its position
paper, the petitioner Union submitted the following:
1. Joint affidavit of Ricardo Caete, et al. which alleges that Michael Yap is a
supervisory employee of A. D. Gothong Manufacturing Corporation and can
effectively recommend for their suspension/dismissal.
2. Affidavit of Pedro Diez which alleges that the affiant is a supervisor in the
production department of A. D. Gothong Manufacturing Corporation; that the
affiant knows the challenged voters because they are also supervisory
employees of the same corporation; that the challenged voters used to attend
the quarterly meeting of the staff employees of A. D. Gothong Manufacturing
Corporation;
3. Photocopy of the memorandum dated January 4, 1991 regarding the compulsory
attendance of department heads/supervisors to the regular quarterly meeting of
all regular workers of A. D. Gothong Manufacturing Corporation on January 13,
1991. Appearing therein are the names ROMULO PLAZA and MICHAEL YAP;
4. A not-so-legible photocopy of a memorandum dated March 1, 1989 wherein the
name ROMY PLAZA is mentioned as the acting OIC of GT Marketing in Davao; and
5. Photocopy of the minutes of the regular quarterly staff meeting on August 13,
1989 at Mandaue City wherein Michael Yap is mentioned as a shipping assistant
and a newly hired member of the staff.[1]
The Med-Arbiter declared that the challenged voters Yap and Plaza are rank-and-file
employees.
Petitioner Union appealed to the Secretary of Labor insisting that Yap and Plaza are
supervisor and manager respectively of the corporation and are prohibited from joining the
proposed bargaining unit of rank-and-file employees. In an attempt to controvert the
arguments of petitioner, respondent Company stressed that Pacita Gothong is the companys
corporate secretary and not Baby L. Siador, who signed the minutes of the meeting
submitted in evidence. Respondent also argued that Romulo Plaza could not qualify as a
manager of the Davao Branch the opening of which branch never materialized.
Respondent Secretary of Labor affirmed the finding of the Med-Arbiter. Motion for
Reconsideration of the above resolution having been denied, petitioner Union appeals to this
Court by petition for review oncertiorari alleging the following grounds:
I. THAT THE SECRETARY OF LABOR AND EMPLOYMENT CLEARLY COMMITTED
MISAPPREHENSION OF FACTS/EVIDENCE AND IF IT WERE NOT FOR SUCH
MISAPPREHENSION IT WOULD HAVE ARRIVED AT DIFFERENT CONCLUSION
FAVORABLE TO PETITIONER.

II. THAT THE SECRETARY OF LABOR AND EMPLOYMENT ACTED WITH GRAVE ABUSE
OF DISCRETION AND CONTRARY TO LAW IN AFFIRMING IN TOTO THE DECISION
OF HONORABLE ACHILLES V. MANIT, DEPARTMENT OF LABOR AND EMPLOYMENT,
REGIONAL OFFICE No. 7, CEBU CITY IN DENYING PETITIONERS MOTION FOR
RECONSIDERATION.[2]
We find no merit in the instant petition.
The Labor Code recognizes two (2) principal groups of employees, namely, the
managerial and the rank and file groups. Article 212 (m) of the Code provides:
(m) Managerial employee is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees.Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of this Book.
Under Rule I, Section 2 (c), Book III of the Implementing Rules of the Labor Code, to be a
member of managerial staff, the following elements must concur or co-exist, to wit: (1) that
his primary duty consists of the performance of work directly related to management
policies; (2) that he customarily and regularly exercises discretion and independent
judgment in the performance of his functions; (3) that he regularly and directly assists in the
management of the establishment; and (4) that he does not devote more than twenty
percent of his time to work other than those described above.
In the case of Franklin Baker Company of the Philippines vs. Trajano [3], this Court stated:
The test of supervisory or managerial status depends on whether a person possess authority
to act in the interest of his employer in the matter specified in Article 212 (k) of the Labor
Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely
routinary or clerical in nature, but requires the use of independent judgment. Thus, where
such recommendatory powers as in the case at bar, are subject to evaluation, review and
final action by the department heads and other higher executives of the company, the same,
although present, are not exercise of independent judgment as required by law. [4]
It has also been established that in the determination of whether or not certain
employees are managerial employees, this Court accords due respect and therefore sustains
the findings of fact made by quasi-judicial agencies which are supported by substantial
evidence considering their expertise in their respective fields. [5]
The petition has failed to show reversible error in the findings of the Med-Arbiter and the
Secretary of the Department of Labor.
In ruling against petitioner Union, the Med-Arbiter ruled that the petitioner Union failed
to present concrete and substantial evidence to establish the fact that challenged voters are

either managerial or supervising employees; the Med-Arbiter evaluated the evidence as

follows:
The said joint affidavit of Ricardo Caete, et al. and that of Pedro Diez merely tagged the
challenged voters as supervisors, but nothing is mentioned about their respective duties,
powers and prerogatives as employees which would have indicated that they are indeed
supervisory employees. There is no statement about an instance where the challenged
voters effectively recommended such managerial action which required the use of
independent judgment.
The aforementioned documents have not been properly identified which renders them
inadmissible in evidence. But, granting that they are the exact replica of a genuine and
authentic original copy, there is nothing in them which specifically and precisely tells that
the challenged voters can exercise the powers and prerogatives to effectively recommended
such managerial actions which require the use of independent judgment. [6]
In upholding the above findings, the respondent Secretary of Labor rationalized:
Based on the foregoing, Romulo Plaza and Paul Michael Yap can not qualify as managerial
and supervisory employees, respectively, because there is nothing in the documentary
evidence offered by herein petitioner-appellant showing that they are actually conferred or
actually exercising the said managerial/supervisory attributes.
In the case of Romulo Plaza, we note that indeed there is nothing in the minutes of the staff
meeting held on 05 March 1993, particularly on the report of the Sales Department,
indicating that said appellee had been exercising managerial prerogatives by hiring workers
and issuing a check for the payment of rentals of a warehouse, relative to the company
branch in Davao City. The imputation on the exercise of the said prerogative is misleading if
not malicious because a plain reading of that portion of the report shows in clear and simple
language that one who made the said hiring and payment was no other than Mr. John Chua,
the Sales Manager. The only instance when the name of Romy Plaza was mentioned in the
said report was in reference to his designation as an OIC of the Davao City Branch while all
the aspect of the creation of the said branch is awaiting final approval by the Company
president and general manager (p. 197, last paragraph, records). The setting up of said
branch however, did not materialize, as evidenced by the certification issued by the
Revenue District Office and Office of the Mayor in Davao City (pp. 198-199, records).
Likewise, evidence pinpointing that Paul Michael Yap is a supervisory employee is altogether
lacking. The fact that he was designated as shipping assistant/expediter is of no moment,
because titles or nomenclatures attached to the position is not controlling.
Finally, the job descriptions extant on records vividly exhibit no trace of the performance of
managerial or supervisory functions (pp. 124-126, records).[7]
In this petition, petitioner Union claims that the documentary evidence was
misapprehended by public respondent. Petitioner Union reiterates that: (1) in minutes of the
staff meeting of respondent Company on August 13, 1989, duly signed by the President
Albino Gothong and attested by Jose F. Loseo presiding officer/VP and Gertrudo Lao,

Assistant General Manager, Paul Michael Yap was listed as one of the staff; (2) in the regular
quarterly meeting on January 4, 1991, the names of Yap and Plaza are listed under the
heading Department Heads/Supervisors duly signed by President/General Manager Albino
Gothong and Asst. General Manager Gertrudo Lao; and (3) in the staff meeting of March 5,
1993, Plaza was assigned as officer-in-charge of the companys branch in Davao.
We find no cogent reason to disturb the finding of the Med-Arbiter and the Secretary of
Labor that the copies of the minutes presented in evidence do not prove that Yap and Plaza
were managerial or supervisory employees. We have examined the documentary evidence,
and nowhere is there a statement therein about any instance where the challenged voters
effectively recommended any managerial action which would require the use of independent
judgment. The last piece of evidence was not discussed by the Med-Arbiter; however a
perusal thereof would show that while one J. Chua of the Sales Department reported that
Romy Plaza was in Davao right now acting as OIC, the same document states that the Davao
operations still had to be finalized. On the other hand, the claim of respondent Company
that Plaza is the head of the Davao branch is belied by the certification of the City Treasurer
of Davao and of the Bureau of Internal Revenue of Mandaue City that the plan to open a
branch in Davao City did not materialize.[8]
The reliance of petitioner on the affidavit of Jose Loseo, Personnel Manager, that Plaza
and Yap were hired by him as department head and supervisor of the respondent Company
cannot be sustained in light of the affidavit of said Loseo dated September 28, 1993,
attesting that he was forced to sign the earlier memorandum on the job assignment of Yap
and Plaza. This affidavit is sought to be discarded by respondent Company for being
perjurious and ill-motivated.[9] Petitioner Union however reiterates that Loseos affidavit is
corroborated by the other public documents indicating that Plaza and Yap are not rank-andfile employees.[10]
The issue raised herein is basically one of fact: whether in the light of the evidence
submitted by both parties, Plaza and Yap are managerial employees or rank-and-file
employees.
This Court is not a trier of facts. As earlier stated, it is not the function of this Court to
examine and evaluate the probative value of all evidence presented to the concerned
tribunal which formed the basis of its impugned decision or resolution. Following established
precedents, it is inappropriate to review that factual findings of the Med-Arbiter regarding
the issue whether Romulo Plaza and Paul Michael Yap are or are not rank-and-file employees
considering that these are matters within their technical expertise. [11] They are binding on
this Court as we are satisfied that they are supported by substantial evidence, and we find
no capricious exercise of judgment warranting reversal by certiorari.
WHEREFORE, the petition is denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.

SECOND DIVISION
[G. R. No.101738. April 12, 2000]
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON.
BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment, HON.
HENRY PABEL, Director of the Department of Labor and Employment Regional
Office No. XI and/or the Representation Officer of the Industrial Relations Division
who will act for and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL
STAFF EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE
WORKERS, respondents.
DECISION
DE LEON, JR., J.: Miso
Before us is a petition for certiorari seeking to annul the Resolution[1] and the Order[2] dated
April 17, 1991 and August 7, 1991, respectively, of public respondent Bienvenido E.
Laguesma, acting then as Undersecretary, now the Secretary, of the Department of Labor
and Employment (DOLE), which reversed the Order dated March 27, 1990 [3] of Med-Arbiter
Phibun D. Pura declaring that supervisors and section heads of petitioner under its new
organizational structure are managerial employees and should be excluded from the list of
voters for the purpose of a certification election among supervisory and technical staff
employees of petitioner.[4]
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the
manufacture of paper and timber products, with principal place of operations at Tabon,
Bislig, Surigao del Sur. It has over 9,000 [5] employees, 944[6] of whom are supervisory and
technical staff employees. More or less 487 of these supervisory and technical staff
employees are signatory members of the private respondent PICOP-Bislig Supervisory and
Technical Staff Employees Union (PBSTSEU).[7]
On August 9, 1989. PBSTSEU instituted a Petition[8] for Certification Election to determine the
sole and exclusive bargaining agent of the supervisory and technical staff employees of
PICOP for collective bargaining agreement (CBA) purposes.
In a Notice[9] dated August 10, 1989, the initial hearing of the petition was set on August 18,
1989 but it was reset to August 25, 1989, at the instance of PICOP, as it requested a fifteen
(15) day period within which to file its comments and/or position paper. But PICOP failed to
file any comment or position paper. Meanwhile, private respondents Federation of Free
Workers (FFW) and Associated Labor Union (ALU) filed their respective petitions for
intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order [10] granting the
petitions for interventions of the FFW and ALU. Another Order [11] issued on the same day set
the holding of a certification election among PICOP's supervisory and technical staff

employees in Tabon, Bislig, Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU; (2)
FFW; (3) ALU; and (4) no union. Nex old
On September 21, 1989, PICOP appealed[12] the Order which set the holding of the
certification election contending that the Med-Arbiter committed grave abuse of discretion in
deciding the case without giving PICOP the opportunity to file its comments/answer, and that
PBSTSEU had no personality to file the petition for certification election.
After PBSTSEU filed its Comments[13] to petitioner's appeal, the Secretary of the
Labor[14] issued a Resolution[15] dated November 17, 1989 which upheld the Med-Arbiter's
Order dated September 17, 1989, with modification allowing the supervising and staff
employees in Cebu, Davao and Iligan City to participate in the certification election.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to
the inclusion of some section heads and supervisors in the list of voters whose positions it
averred were reclassified as managerial employees in the light of the reorganization effected
by it.[16] Under the Revised Organizational Structure of the PICOP, the company was divided
into four (4) main business groups, namely: Paper Products Business, Timber Products
Business, Forest Resource Business and Support Services Business. A vice- president or
assistant vice-president heads each of these business groups. A division manager heads the
divisions comprising each business group. A department manager heads the departments
comprising each division. Section heads and supervisors, now called section managers and
unit managers, head the sections and independent units, respectively, comprising each
department.[17] PICOP advanced the view that considering the alleged present authority of
these section managers and unit managers to hire and fire, they are classified as managerial
employees, and hence, ineligible to form or join any labor organization. [18] Mani kx
Following the submission by the parties of their respective position papers [19] and
evidence[20] on this issue, Med-Arbiter Phibun D. Pura issued an Order [21] dated March 27,
1990, holding that supervisors and section heads of the petitioner are managerial
employees and therefore excluded from the list of voters for purposes of certification
election.
PBSTSEU appealed[22] the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU
likewise appealed.[23] PICOP submitted evidence militating against the appeal. [24] Public
respondent Bienvenido E. Laguesma, acting as the then Undersecretary of Labor, issued the
assailed Order[25] dated April 17, 1991 setting aside the Order dated March 27, 1990 of the
Med-Arbiter and declaring that the subject supervisors and section heads are supervisory
employees eligible to vote in the certification election.
PICOP sought[26] reconsideration of the Order dated April 7, 1991. However, public
respondent in his Order[27] dated August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit: Maniks
I.

THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,

UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS,
ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ACTING WITHOUT OR IN
EXCESS OF JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO
PRESENT ADDITIONAL EVIDENCE TO PROVE THAT SOME OF ITS MANAGERIAL
EMPLOYEES ARE DISQUALIFIED FROM JOINING OR FORMING A UNION
REPRESENTED BY CO-RESPONDENT PBSTSEU, IN VIEW OF A SUPERVENING
EVENT BROUGHT ABOUT BY THE CHANGES IN THE ORGANIZATIONAL
STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED IN
JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED
FOR DECISION.
II.
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO
ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO
ARBITRARILY ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE
TOTALLY DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY
YOUR PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND
MERE ALLEGATIONS OF PRIVATE RESPONDENT, PBSTSEU, THAT THE
REORGANIZATION OF YOUR PETITIONER WAS A SHAM AND CALCULATED
MERELY TO FRUSTRATE THE UNIONIZATION OF YOUR PETITIONER'S
SUPERVISORY PERSONNEL; AND SOLELY ON THIS BASIS, DENIED YOUR
PETITIONER'S URGENT MOTION FOR RECONSIDERATION.[28] Manikan
PICOP's main thesis is that the positions Section Heads and Supervisors, who have been
designated as Section Managers and Unit Managers, as the case may be, were converted to
managerial employees under the decentralization and reorganization program it
implemented in 1989. Being managerial employees, with alleged authority to hire and fire
employees, they are ineligible for union membership under Article 245 [29] of the Labor Code.
Furthermore, PICOP contends that no malice should be imputed against it for implementing
its decentralization program only after the petition for certification election was filed
inasmuch as the same is a valid exercise of its management prerogative, and that said
program has long been in the drawing boards of the company, which was realized only in
1989 and fully implemented in 1991. PICOP emphatically stresses that it could not have
conceptualized the decentralization program only for the purpose of "thwarting the right of
the concerned employees to self-organization."
The petition, not being meritorious, must fail and the same should be as it is hereby
dismissed.
First. In United Pepsi-Co/a Supervisory Union (UPSU) v. Laguesma, [30] we had occasion to
elucidate on the term "managerial employees." Managerial employees are ranked as Top
Managers, Middle Managers and First Line Managers. Top and Middle Managers have the
authority to devise, implement and control strategic and operational policies while the task
of First-Line Managers is simply to ensure that such policies are carried out by the rank-andfile employees of an organization. Under this distinction, "managerial employees" therefore

fall in two (2) categories, namely, the "managers" per se composed of Top and Middle
Managers, and the "supervisors" composed of First-Line Managers. [31] Thus, the mere fact
that an employee is designated manager" does not ipso facto make him one. Designation
should be reconciled with the actual job description of the employee, [32] for it is the job
description that determines the nature of employment.[33] Oldmis o
In the petition before us, a thorough dissection of the job description [34] of the concerned
supervisory employees and section heads indisputably show that they are not actually
managerial but only supervisory employees since they do not lay down company policies.
PICOP's contention that the subject section heads and unit managers exercise the authority
to hire and fire[35] is ambiguous and quite misleading for the reason that any authority they
exercise is not supreme but merely advisory in character. Theirs is not a final determination
of the company policies inasmuch as any action taken by them on matters relative to hiring,
promotion, transfer, suspension and termination of employees is still subject to confirmation
and approval by their respective superior.[36] Thus, where such power, which is in effect
recommendatory in character, is subject to evaluation, review and final action by the
department heads and other higher executives of the company, the same, although present,
is not effective and not an exercise of independent judgment as required by law. [37]
Second. No denial of due process can be ascribed to public respondent Undersecretary
Laguesma for the latter's denial to allow PICOP to present additional evidence on the
implementation of its program inasmuch as in the appeal before the said public respondent,
PICOP even then had already submitted voluminous supporting documents. [38] The record of
the case is replete with position papers and exhibits that dealt with the main thesis it relied
upon. What the law prohibits is the lack of opportunity to be heard. [39] PICOP has long harped
on its contentions and these were dealt upon and resolved in detail by public respondent
Laguesma. We see no reason or justification to deviate from his assailed resolutions for the
reason that law and jurisprudence aptly support them.
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the
holding of certification election, despite numerous opportunities to ventilate the same, only
after respondent Undersecretary of Labor affirmed the holding thereof, simply bolstered the
public respondents' conclusion that PICOP raised the issue merely to prevent and thwart the
concerned section heads and supervisory employees from exercising a right granted them
by law. Needless to stress, no obstacle must be placed to the holding of certification
elections, for it is a statutory policy that should not be circumvented. [40]
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public
respondent Bienvenido E. Laguesma dated April 17, 1991 and August 17, 1991, respectively,
finding the subject supervisors and section heads as supervisory employees eligible to vote
in the certification election are AFFIRMED. Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur. 6/5/00 3:14 PM

THIRD DIVISION
[G.R. No. 96663. August 10, 1999]
PEPSI

- COLA PRODUCTS PHILIPPINES, INC., petitioner, vs. HONORABLE

SECRETARY OF LABOR, MED - ARBITER NAPOLEON V. FERNANDO & PEPSI COLA SUPERVISORY EMPLOYEES ORGANIZATION - UOEF, respondents.

[G.R. No. 103300. August 10, 1999]

PEPSI COLA PRODUCTS PHILIPPINES, petitioner, vs. OFFICE OF THE SECRETARY
DEPARTMENT OF LABOR AND HON. CELENIO N. DAING, in his capacity as
Med-Arbiter Labor Regional Office No. X, Cagayan de Oro City, CAGAYAN DE
ORO PEPSI COLA SUPERVISORS UNION (UOEF),respondents.
DECISION
PURISIMA, J.:
These are petitions for certiorari relating to three (3) cases filed with the Med-Arbiter, to
wit: MED ARB ROX Case No. R100-9101-RU-002 for Certification Election filed by Pepsi Cola
Supervisors Union-UOEF (Union), MED ARB Case No. R1000-9102-RU-008, Re: Petition to Set
Aside, Cancel and/ or Revoke the Charter Affiliation of the Union, and MED-ARB ROX Case No.
R1000-9104-RU-012, for Cancellation of Registration Certificate No. 11492-LC in favor of the
Union.

G. R. No. 96663

The facts that matter can be culled as follows:

Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union) filed a
petition for certification election with the Med-Arbiter seeking to be the exclusive bargaining
agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI).
On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit statement that it
was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together with two
(2) rank and file unions, Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees Union of
the Philippines (PEUP).
On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to Set Aside,
Cancel and/or Revoke Charter Affiliation of the Union, entitled PCPPI v. PCEU-UOEF and
docketed as Case No. 725-90, on the grounds that (a) the members of the Union were
managers and (b) a supervisors union can not affiliate with a federation whose members
include the rank and file union of the same company.
On August 29,1990, PEPSI presented a motion to re-open the case since it was not
furnished with a copy of the Petition for Certification Election.
On September 4, 1990, PEPSI submitted its position paper to the BLR in Case No. 72590.
On September 21, 1990, PEPSI received summons to appear at the pre-trial conference
set on September 25, 1990 but which the hearing officer rescheduled on October 21, 1990.
On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of Appeal with
the Secretary of Labor, questioning the setting of the certification election on the said date

and five (5) days after. It also presented an urgent Ex-Parte Motion to Suspend the
Certification Election, which motion was granted on October 18, 1990.
On November 12, 1990, the Secretary of Labor denied the appeal and Motion for
Reconsideration. Even as the Petition to Cancel, Revoke and Suspend Union Charter
Certificate was pending before the BLR, PEPSI found its way to this Court via the present
petition for certiorari.
On February 6, 1991, the Court granted the prayer for temporary restraining order
and/or preliminary injunction.
The pivot of inquiry here is: whether or not a supervisors union can affiliate with the
same Federation of which two (2) rank and file unions are likewise members, without
violating Article 245 of the Labor Code (PD 442), as amended, by Republic Act 6715, which
provides:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees.- Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
In its Comment dated March 19, 1991, the Federation argued that:
The pertinent portion of Article 245 of the Labor Code states that. Supervisory
employees shall not be eligible for membership in a labor organization of the rank and file
employees but may join, assist or form separate labor organization of their own.
This provision of law does not prohibit a local union composed of supervisory employees
from being affiliated to a federation which has local unions with rank-and-file members as
affiliates.
xxx xxx xxx
xxx the Petition to Cancel, Revoke or Set Aside the Charter Certificate of the private
respondent is anchored on the alleged ground that certain managerial employees are
included as members thereof. The grounds for the cancellation of the registration certificate
of a labor organization are provided in Section 7 of Rule II, Book V of the Omnibus Rules
Implementing the Labor Code, and the inclusion of managerial employees is not one of the
grounds. xxx (in this case, the private respondent herein) remains to be a legitimate labor
organization.[1]
On April 8, 1991, the Secretary of Labor and Employment, through the Office of the
Solicitor General, sent in a Comment, alleging inter alia, that:
xxx under Article 259 of the New Labor Code, only orders of the Med-Arbiter can be
appealed through the Secretary of Labor and only on the ground that the rules and
regulations for the conduct of the certification election have been violated. The Order of the
Representation Officer is interlocutory and not appealable. xxx
xxx until and unless there is a final order cancelling its certificate of registration or charter
certificate, a labor organization remains to be a legitimate labor organization entitled to
exercise all the rights and duties accorded to it by the Labor Code including the right to be
certified as a bargaining representative. xxx

xxx Public respondent cannot be deemed to have committed grave abuse of discretion with
respect to an issue that was never presented before it for resolution. xxx
Article 245 of the New Labor Code does not preclude the supervisors union and the rankand-file union from being affiliated with the same federation.
xxx xxx xxx
A federation of local union is not the labor organization referred to in Article 245 but only
becomes entitled to all the rights enjoyed by the labor organization (at the company level)
when it has complied with the registration requirements found in Articles 234 and
237. Hence, what is prohibited by Article 245 is membership of supervisory employees in a
labor union (at the company level) of the rank and file. xxx
xxx In other words, the affiliation of the supervisory employees union with the same
federation with which the rank and file employees union is affiliated did not make the
supervisory employees members of the rank and file employees union and vice versa. [2] xxx
PEPSI, in its Reply dated May 7, 1991, asserted:
It is our humble contention that a final determination of the Petition to Set-Aside, Cancel,
Revoke Charter Union Affiliation should first be disposed of before granting the Petition for
the Conduct of Certification Election. To allow the conduct of the certification election to
proceed would make any decision arrived at by the Bureau of Labor Relations useless
inasmuch as the same would necessarily be rendered moot and academic. [3]
On June 7, 1991, petitioner again filed a Supplemental Reply stressing:
It is likewise stressed that officials of both the PCLU and PEUP are top ranking officers of
UOEF, the federation of supervisors union, to wit:
POSITION IN RANK AND FILE POSITION IN FEDERATION
UNION
1. Rogelio de la Cruz PCLU -President General Vice President
2. Felix Gatela PEUP - President General Treasurer
3. Carlito Epino PCLU Board Member Educational Research
Director
xxx xxx xxx
The respondent supervisory union could do indirectly what it could not do directly as the
simple expedient of affiliating with UOEF would negate the manifest intent and letter of the
law that supervisory employees can only join, assist or form separate labor organizations of
their own and cannot be eligible for membership in a labor organization of the rank and file
employees.[4]
On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder, claiming
thus:
xxx an employer has no legal standing to question the validity of a certification election.

xxx For this reason, the Supreme Court has consistently held that, as a rule, a certification
election is the sole and exclusive concern of the employees and that the employer is
definitely an intruder or a mere bystander (Consolidated Farms vs. Noriel, L-47752, July 31,
1978, 84 SCRA 469; Filipino Metals Corporation vs. Ople, L- 43861, September 4, 1981, 107
SCRA 211; Trade Unions of the Philippines and Allied Services (TUPAS) vs. Trajano No. L61153, January 17, 1983, 120 SCRA 64].
xxx xxx xxx
In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984, 127 SCRA 268, the
Supreme Court (then dealing with the interpretation of Section 3 of the Industrial Peace Act,
from which Section 245 of the Labor Code was derived) grappled with the issue in the case
at bar. It held that,
There is nothing in the provisions of the Industrial Peace Act which provides that a duly
registered local union affiliating with a national union or federation loses its legal
personality, or its independence.
xxx xxx xxx
However, there is absolutely nothing in the Labor Code that prohibits a federation from
representing or exercising influence over its affiliates. On the contrary, this is precisely the
reason why federations are formed and are allowed by law to exist. [5]
On November 8, 1991, the Union also filed a Rejoinder.
On December 9, 1991, the Court resolved to DISMISS the case for failure to sufficiently
show that the questioned judgment is tainted with grave abuse of discretion.
In a Resolution dated March 2, 1992, the Second Division of the Court resolved to grant
the motion for reconsideration interposed on January 28, 1992.

G.R. No. 103300

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the Decision
and Order of the Secretary of Labor and Employment, dated October 4, 1991 and December
12, 1991, respectively.
The decretal portion of the Med-Arbiter Order under attack, reads:
WHEREFORE, premises considered, an order is hereby issued:
1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102-RU-008 for
lack of merit; and
2. Ordering the conduct of a Certification Election to be participated by and among the
supervisory workers of the respondent company, Pepsi-Cola Products Philippines, Inc. at its
plant at Tin-ao, Cagayan de Oro City, including all the satellite warehouse within the
territorial coverage and control of the Cagayan de Oro Pepsi-Cola Plant. The choices are as
follows:
1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.)

2. No union
The parties are directed to attend a pre-election conference on June 10, 1991, 2:30 p.m. at
the Regional Office to determine the qualification of the voters and to thresh out the
mechanics of the election.Respondent/employer is directed to submit five (5) copies of the
names of the rank and file workers taken from the payroll on October 1-31, 1991,
alphabetically arranged (sic) indicating their names and positions and dates of employment
and to bring the aforementioned payroll during the pre-election conference for verification
purposes.[6] xxx
The supervisory employees of the Union are:
POSITION
1. Felipe Valdehueza Route Manager
2. Gerberto Vertudazo C & C Manager
3. Paul Mendoza Sales Service Department Manager
4. Gilberto Emano, Jr. Route Manager
5. Jaime Huliganga Chief Checker
6. Elias Edgama, Sr. Accounting Manager
7. Romanico Ramos Route Manager
8. Raul Yacapin Route Manager
9. Jovenal Albaque Route Manager
10. Fulvio Narciso Route Manager
11. Apolinario Opiniano Route Manager
12. Alfredo Panas Route Manager
13. Simplicio Nelie Route Manager
14. Arthur Rodriguez Route Manager
15. Marco Ilano Warehouse Operations Manager and
16. Deodoro Ramos Maintenance Manager
On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and
Employment on the ground of grave abuse of discretion, docketed as Case No. OS-A-232-91.
On October 4, 1991, the Secretary modified the appealed decision, ruling thus:

WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is hereby modified to the
effect that MED ARB ROX Case No. R1000-9104-RU-012 and R1000-9102-RU-008 are hereby
referred to the Office of the Regional Director which has jurisdiction over these cases. The
call for certification election among the supervisory workers of the Pepsi-Cola Products
Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City is hereby sustained. [7]
On October 19, 1991, PEPSI presented a motion for reconsideration of the aforesaid
Order but the same was denied on December 12, 1991.
Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the
Union. Dissatisfied therewith, PEPSI brought the instant petition for certiorari, contending
that:
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT
PRIVATE RESPONDENTS OFFICERS AND MEMBERS ARE NOT MANAGERIAL
EMPLOYEES;
PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF
FEDERATION ALREADY AFFILIATED WITH THE RANK AND FILE UNION;

WITH

PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF DISCRETION IN

RULING THAT THE INSTITUTION OF A PETITION FOR CANCELLATION OF UNION
REGISTRATION DOES NOT CONSTITUTE A PREJUDICIAL QUESTION TO A PETITION
CERTIFICATION ELECTION.[8]
The petitions must fail for want of merit.
At the outset, it must be stressed that on September 1, 1992, there was a Resolution of
the Union withdrawing from the Federation, to wit:
BE IT RESOLVED, as it is hereby RESOLVED, that this UNION WITHDRAW, as it hereby
WITHDRAWS its affiliation from the Union de Obreros Estivadores de Filipinas, and at the
same time, give our thanks to the said federation for its help and guidance rendered to this
Union in the past.[9]
The issue in G.R. No. 96663, whether or not the supervisors union can be affiliated with
a Federation with two (2) rank and file unions directly under the supervision of the former,
has thus become moot and academic in view of the Unions withdrawal from the federation.
In a long line of cases (Narciso Nakpil, et. al., vs. Hon. Crisanto Aragon, et. al.,, G. R. No.
L - 24087, January 22, 1980, 95 SCRA 85; Toribio v. Bidin, et. al., G.R. No. L-37960, February
28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L- 36188 - 37586 February 29, 1980, 96
SCRA 402), the Court dismissed the petition for being moot and academic. In the case of F.
C. Fisher v. Yangco Steamship Co., March 31, 1915, the Court held:
It is unnecessary, however to indulge in academic discussion of a moot question. xxx
xxx The action would have been dismissed at any time on a showing of the facts as they
were . The question left for the court was a moot one. Its Resolution would have been
useless. Its judgment would have been impossible of execution xxx.
However, in the case of University of San Agustin, Inc., et al. vs. Court of Appeals, et al.,
the court resolved the case, ruling that even if a case were moot and academic, a statement

of the governing principle is appropriate in the resolution of dismissal for the guidance not
only of the parties but of others similarly situated. xxx[10]
In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992] decided by the
Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano, Bidin, Romero and now Chief
Justice Davide, Jr., as members it was ratiocinated:
xxx xxx xxx
Thus, if the intent of the law is to avoid a situation where supervisors would merge with the
rank-and-file or where the supervisors labor organization would represent conflicting
interests, then a local supervisors union should not be allowed to affiliate with the national
federation of union of rank-and-file employees where that federation actively participates in
union activity in the company.
xxx xxx xxx
The prohibition against a supervisors union joining a local union of rank and file is replete
with jurisprudence. The Court emphasizes that the limitation is not confined to a case of
supervisors wanting to join a rank-and-file union. The prohibition extends to a supervisors
local union applying for membership in a national federation the members of which include
local unions of rank and file employees. The intent of the law is clear especially where, as in
this case at bar, the supervisors will be co-mingling with those employees whom they
directly supervise in their own bargaining unit.
Anent the issue of whether or not the Petition to cancel/revoke registration is a
prejudicial question to the petition for certification election, the following ruling in the case
of Association of the Court of Appeals Employees (ACAE) vs. Hon. Pura Ferrer-Calleja, in her
capacity as Director, Bureau of Labor Relations et. Al., 203 ACRA 597, 598, [1991], is in
point, to wit:
xxx It is a well-settled rule that a certification proceedings is not a litigation in the sense that
the term is ordinarily understood, but an investigation of a non-adversarial and fact finding
character. (Associated Labor Unions (ALU) v. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine
Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451 [1990]. Thus, the technical
rules of evidence do not apply if the decision to grant it proceeds from an examination of the
sufficiency of the petition as well as a careful look into the arguments contained in the
position papers and other documents.
At any rate, the Court applies the established rule correctly followed by the public
respondent that an order to hold a certification election is proper despite the pendency of
the petition for cancellation of the registration certificate of the respondent union. The
rationale for this is that at the time the respondent union filed its petition, it still had the
legal personality to perform such act absent an order directing the cancellation.
xxx xxx xxx
As regards the issue of whether or not confidential employees can join the labor union of
the rank and file, what was held in the case of National Association of Trade Unions (NATU) Republic Planters Bank Supervisors Chapter vs. Hon. R. D. Torres, et. al., G.R. No. 93468,
December 29, 1994, applies to this case. Citing Bulletin Publishing Corporation vs. Sanchez,
144 SCRA 628,635, Golden Farms vs. NLRC, 175 SCRA 471, and Pier 8 Arrastre and
Stevedoring Services, Inc. vs. Hon. Nieves Roldan-Confessor et al., G.R. No. 110854,
February 14, 1995, the Court ruled:

xxx A confidential employee is one entrusted with confidence on delicate matters, or with
the custody, handling, or care and protection of the employers property. While Art. 245 of
the Labor Code singles out managerial employee as ineligible to join, assist or form any
labor organization, under the doctrine of necessary implication, confidential employees are
similarly disqualified. This doctrine states that what is implied in a statute is as much a part
thereof as that which is expressed, as elucidated in several case; the latest of which is Chua
v. Civil Service Commission where we said:
No statute can be enacted that can provide all the details involved in its application. There is
always an omission that may not meet a particular situation. What is thought, at the time of
the enactment, to be an all embracing legislation maybe inadequate to provide for the
unfolding events of the future. So-called gaps in the law develop as the law is enforced. One
of the rules of statutory construction used to fill in the gap is the doctrine of necessary
implication xxx, Every statute is understood, by implication, to contain all such provisions as
may be necessary to effectuate its object and purpose, or to make effective rights, powers,
privileges or jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its terms. Ex necessitate legis xxx
In applying the doctrine of necessary implication, we took into consideration the rationale
behind the disqualification of managerial employees expressed in Bulletin Publishing
Corporation v. Sanchez, thus xxx if these managerial employees would belong to or be
affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of
evident conflict of interests. The Union can also become company dominated with the
presence of managerial employees in Union membership. Stated differently, in the collective
bargaining process, managerial employees are supposed to be on the side of the employer,
to act as its representatives, and to see to it that its interest are well protected. The
employer is not assured of such protection if these employees themselves are union
members. Collective bargaining in such a situation can become one-sided. It is the same
reason that impelled this Court to consider the position of confidential employees as
included in the disqualification found in Art. 245 as if the disqualification of confidential
employees were written in the provision. If confidential employees could unionize in order to
bargain for advantages for themselves, then they could be governed by their own motives
rather than the interest of the employers. Moreover, unionization of confidential employees
for the purpose of collective bargaining would mean the extension of the law to persons or
individuals who are supposed to act in the interest of the employers. It is not farfetched that
in the course of collective bargaining, they might jeopardize that interest which they are
duty bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. vs.
Ferrer-Calleja reiterated in Philips Industrial Development, Inc., NLRC, that confidential
employees such as accounting personnel, radio and telegraph operators who, having access
to confidential information, may become the source of undue advantage. Said employee(s)
may act as spy or spies of either party to a collective bargaining agreement.
The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers
and Warehouse Operations Managers are supervisors while Credit & Collection Managers
and Accounting Managers are highly confidential employees. Designation should be
reconciled with the actual job description of subject employees. A careful scrutiny of
their job description indicates that they dont lay down company policies. Theirs is not a final
determination of the company policies since they have to report to their respective
superior. The mere fact that an employee is designated manager does not necessarily make
him one. Otherwise, there would be an absurd situation where one can be given the title just
to be deprived of the right to be a member of a union. In the case of National Steel
Corporation v. Laguesma, G. R. No. 103743, January 29,1996, it was stressed that:

What is essential is the nature of the employees function and not the nomenclature or title
given to the job which determines whether the employee has rank and file or managerial
status, or whether he is a supervisory employee.
WHEREFORE, the petitions under consideration are DISMISSED but subject Decision,
dated October 4, 1991, of the Secretary of Labor and Employment is MODIFIED in that Credit
and Collection Managers and Accounting Managers are highly confidential employees not
eligible for membership in a supervisors union. No pronouncement as to costs.
SO ORDERED.
Melo, (Chairman), Vitug, and Gonzaga-Reyes, JJ., concur.
Panganiban, J., in the result.

THIRD DIVISION
TUNAY
NA
PAGKAKAISA
NG
MANGGAGAWA SA ASIABREWERY,
Petitioner,
- versus -

ASIA BREWERY, INC.,

Respondent.

G.R. No. 162025

Present:
CARPIO MORALES, J.,
Chairperson,
BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR., JJ.
Promulgated:

August 3, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the Decision[1] dated November 22, 2002 and
Resolution[2] dated January 28, 2004 rendered by the Court of Appeals (CA) in CA-G.R. SP No.
55578, granting the petition of respondent company and reversing the Voluntary Arbitrators
Decision[3] dated October 14, 1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of
beer, shandy, bottled water and glass products. ABI entered into a Collective Bargaining
Agreement (CBA),[4] effective for five (5) years from August 1, 1997 to July 31, 2002,
with Bisig at Lakas ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the
exclusive bargaining representative of ABIs rank-and-file employees. On October 3, 2000,
ABI and BLMA-INDEPENDENT signed a renegotiated CBA effective from August 1, 2000 to 31
July 2003.[5]
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. The COMPANY recognizes the UNION as the
sole and exclusive bargaining representative of all the regular rank-and-file
daily paid employees within the scope of the appropriate bargaining unit with
respect to rates of pay, hours of work and other terms and conditions of
employment. The UNION shall not represent or accept for membership
employees outside the scope of the bargaining unit herein defined.

Section 2. Bargaining Unit. The bargaining unit shall be comprised of

all regular rank-and-file daily-paid employees of the COMPANY. However, the
following jobs/positions as herein defined shall be excluded from the
bargaining unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staf[6] [EMPHASIS
SUPPLIED.]
Subsequently, a dispute arose when ABIs management stopped deducting union dues from
eighty-one (81) employees, believing that their membership in BLMA-INDEPENDENT violated
the
CBA.
Eighteen
(18)
of
these
affected
employees
are
QA
Sampling
Inspectors/Inspectresses and Machine Gauge Technician who formed part of the Quality
Control Staff. Twenty (20) checkers are assigned at the Materials Department of the
Administration Division, Full Goods Department of the Brewery Division and Packaging
Division. The rest are secretaries/clerks directly under their respective division managers. [7]
BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to selforganization and brought the matter to the grievance machinery. As the parties failed to
amicably settle the controversy, BLMA-INDEPENDENT lodged a complaint before the National
Conciliation and Mediation Board (NCMB). The parties eventually agreed to submit the case
for arbitration to resolve the issue of [w]hether or not there is restraint to employees in the
exercise of their right to self-organization.[8]
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT
after finding that the records submitted by ABI showed that the positions of the subject
employees qualify under the rank-and-file category because their functions are merely
routinary and clerical. He noted that the positions occupied by the checkers and
secretaries/clerks in the different divisions are not managerial or supervisory, as evident
from the duties and responsibilities assigned to them. With respect to QA Sampling
Inspectors/Inspectresses and Machine Gauge Technician, he ruled that ABI failed to establish
with sufficient clarity their basic functions as to consider them Quality Control Staff who
were excluded from the coverage of the CBA. Accordingly, the subject employees were
declared eligible for inclusion within the bargaining unit represented by BLMA-INDEPENDENT.
[9]

On appeal, the CA reversed the Voluntary Arbitrator, ruling that:

WHEREFORE, foregoing premises considered, the questioned decision
of the Honorable Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED
and SET ASIDE, and A NEW ONE ENTERED DECLARING THAT:
a) the 81 employees are excluded from and are not eligible for
inclusion in the bargaining unit as defined in Section 2,
Article I of the CBA;
b) the 81 employees cannot validly become members of
respondent and/or if already members, that their
membership is violative of the CBA and that they should
disaffiliate from respondent; and
c) petitioner has not committed any act that restrained or
tended to restrain its employees in the exercise of their right
to self-organization.
NO COSTS.
SO ORDERED.[10]
BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification
election was held on August 10, 2002 wherein petitioner Tunay na Pagkakaisa ng
Manggagawa sa Asia (TPMA) won. As the incumbent bargaining representative of ABIs rankand-file employees claiming interest in the outcome of the case, petitioner filed with the CA
an omnibus motion for reconsideration of the decision and intervention, with attached
petition signed by the union officers.[11] Both motions were denied by the CA.[12]
The petition is anchored on the following grounds:
(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE
EXCLUDED FROM AND ARE NOT ELIGIBLE FOR INCLUSION IN THE BARGAINING
UNIT AS DEFINED IN SECTION 2, ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 EMPLOYEES
CANNOT VALIDLY BECOME UNION MEMBERS, THAT THEIR MEMBERSHIP IS
VIOLATIVE OF THE CBA AND THAT THEY SHOULD DISAFFILIATE FROM
RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER
(NOW PRIVATE RESPONDENT) HAS NOT COMMITTED ANY ACT THAT
RESTRAINED OR TENDED TO RESTRAIN ITS EMPLOYEES IN THE EXERCISE OF
THEIR RIGHT TO SELF-ORGANIZATION.[13]

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any
labor organization to managerial employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or nature of work are
required to assist or act in a fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records. [14] Confidential employees are
thus excluded from the rank-and-file bargaining unit. The rationale for their separate
category and disqualification to join any labor organization is similar to the inhibition for
managerial employees because if allowed to be affiliated with a Union, the latter might not
be assured of their loyalty in view of evident conflict of interests and the Union can also
become company-denominated with the presence of managerial employees in the Union
membership.[15] Having access to confidential information, confidential employees may also
become the source of undue advantage. Said employees may act as a spy or spies of either
party to a collective bargaining agreement.[16]
In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners division
secretaries, all Staff of General Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are confidential employees not included
within the rank-and-file bargaining unit. [18] Earlier, in Pier 8 Arrastre & Stevedoring Services,
Inc. v. Roldan-Confesor,[19] we declared that legal secretaries who are tasked with, among
others, the typing of legal documents, memoranda and correspondence, the keeping of
records and files, the giving of and receiving notices, and such other duties as required by
the legal personnel of the corporation, fall under the category of confidential employees and
hence excluded from the bargaining unit composed of rank-and-file employees. [20]
Also considered having access to vital labor information are the executive secretaries of the
General Manager and the executive secretaries of the Quality Assurance Manager, Product
Development Manager, Finance Director, Management System Manager, Human Resources
Manager, Marketing Director, Engineering Manager, Materials Manager and Production
Manager.[21]
In the present case, the CBA expressly excluded Confidential and Executive Secretaries from
the rank-and-file bargaining unit, for which reason ABI seeks their disaffiliation from
petitioner. Petitioner, however, maintains that except for Daisy Laloon, Evelyn Mabilangan
and Lennie Saguan who had been promoted to monthly paid positions, the following
secretaries/clerks are deemed included among the rank-and-file employees of ABI: [22]
NAME
DEPARTMENT
IMMEDIATE SUPERIOR
C1 ADMIN DIVISION
1.
2.
3.
4.

Angeles, Cristina C.
Barraquio, Carina P.
Cabalo, Marivic B.
Fameronag, Leodigario C.

Transportation
Transportation
Transportation
Transportation

Mr.
Mr.
Mr.
Mr.

Melito
Melito
Melito
Melito

K.
K.
K.
K.

Tan
Tan
Tan
Tan

1. Abalos, Andrea A.
2. Algire, Juvy L.
3. Anouevo, Shirley P.
4. Aviso, Rosita S.
5. Barachina, Pauline C.
6. Briones, Catalina P.
7. Caralipio, Juanita P.
8. Elmido, Ma. Rebecca S.
9. Giron, Laura P.
10. Mane, Edna A.

Materials
Materials
Materials
Materials
Materials
Materials
Materials
Materials
Materials
Materials

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Andres
Andres
Andres
Andres
Andres
Andres
Andres
Andres
Andres
Andres

G.
G.
G.
G.
G.
G.
G.
G.
G.
G.

Co
Co
Co
Co
Co
Co
Co
Co
Co
Co

1. Laloon, Daisy S.

Brewhouse

Mr. William Tan

1.
2.
3.
4.

Bottling Production
Bottling Production
Bottling Production
Bottling Production

Mr.
Mr.
Mr.
Mr.

1. Mapola, Ma. Esraliza T.

2. Velez, Carmelito A.

Bottling Maintenance
Bottling Maintenance

Mr. Ernesto Ang

Mr. Ernesto Ang

1.
2.
3.
4.

Bordamonte, Rhumela D.
Deauna, Edna R.
Punongbayan, Marylou F.
Saguan, Lennie Y.

Bottled
Bottled
Bottled
Bottled

Mr.
Mr.
Mr.
Mr.

Faustino
Faustino
Faustino
Faustino

Tetonche
Tetonche
Tetonche
Tetonche

1.
2.
3.
4.
5.
6.

Alcoran, Simeon A.
Cervantes, Ma. Sherley Y.
Diongco, Ma. Teresa M.
Mabilangan, Evelyn M.
Rivera, Aurora M.
Salandanan, Nancy G.

Full
Full
Full
Full
Full
Full

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Tsoi
Tsoi
Tsoi
Tsoi
Tsoi
Tsoi

Tung
Tung
Tung
Tung
Tung
Tung

xxxx
C2 BREWERY DIVISION

Arabit, Myrna F.
Burgos, Adelaida D.
Menil, Emmanuel S.
Nevalga, Marcelo G.

Water
Water
Water
Water

Goods
Goods
Goods
Goods
Goods
Goods

Julius
Julius
Julius
Julius

Palmares
Palmares
Palmares
Palmares

Wah
Wah
Wah
Wah
Wah
Wah

1. Magbag, Ma. Corazon C.

Tank Farm/
Cella Services

Mr. Manuel Yu Liat

1. Capiroso, Francisca A.

Quality Assurance

Ms. Regina Mirasol

1.
2.
3.
4.

Engineering
Electrical
Civil Works
Utilities

Mr.
Mr.
Mr.
Mr.

GP
GP
GP
GP

Ms. Susan Bella

Mr. Chen Tsai Tyan
Mr. Noel Fernandez
Mr. Tsai Chen Chih

Alconaba, Elvira C.
Bustillo, Bernardita E.
Catindig, Ruel A.
Sison, Claudia B.

Clemente Wong
Jorge Villarosa
Roger Giron
Venancio Alconaba

xxxx
C3 PACKAGING DIVISION
1. Alvarez, Ma. Luningning L.
2. Caiza, Alma A.
3. Cantalejo, Aida S.
4. Castillo, Ma. Riza R.

Administration
Technical
Engineering
Production

5. Lamadrid, Susana C.
6. Mendoza, Jennifer L.

GP Production
GP Technical

Mr. Robert Bautista

Mr. Mel Oa

As can be gleaned from the above listing, it is rather curious that there would be several
secretaries/clerks for just one (1) department/division performing tasks which are mostly
routine and clerical. Respondent insisted they fall under the Confidential and Executive
Secretaries expressly excluded by the CBA from the rank-and-file bargaining unit. However,
perusal of the job descriptions of these secretaries/clerks reveals that their assigned duties
and responsibilities involve routine activities of recording and monitoring, and other paper
works for their respective departments while secretarial tasks such as receiving telephone
calls and filing of office correspondence appear to have been commonly imposed as
additional duties.[23] Respondent failed to indicate who among these numerous
secretaries/clerks have access to confidential data relating to management policies that
could give rise to potential conflict of interest with their Union membership. Clearly, the
rationale under our previous rulings for the exclusion of executive secretaries or division
secretaries would have little or no significance considering the lack of or very limited access
to confidential information of these secretaries/clerks. It is not even farfetched that the job
category may exist only on paper since they are all daily-paid workers. Quite
understandably, petitioner had earlier expressed the view that the positions were just being
reclassified as these employees actually discharged routine functions.
We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file
employees and not confidential employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician,
there seems no dispute that they form part of the Quality Control Staff who, under the
express terms of the CBA, fall under a distinct category. But we disagree with respondents
contention that the twenty (20) checkers are similarly confidential employees being quality
control staff entrusted with the handling and custody of company properties and sensitive
information.
Again, the job descriptions of these checkers assigned in the storeroom section of the
Materials Department, finishing section of the Packaging Department, and the decorating
and glass sections of the Production Department plainly showed that they perform routine
and mechanical tasks preparatory to the delivery of the finished products. [24] While it may be
argued that quality control extends to post-production phase -- proper packaging of the
finished products -- no evidence was presented by the respondent to prove that these dailypaid checkers actually form part of the companys Quality Control Staff who as such were
exposed to sensitive, vital and confidential information about [companys] products or have
knowledge of mixtures of the products, their defects, and even their formulas which are
considered trade secrets. Such allegations of respondent must be supported by evidence.[25]

Consequently, we hold that the twenty (20) checkers may not be considered
confidential employees under the category of Quality Control Staff who were expressly
excluded from the CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential capacity,
(2) to persons who formulate, determine, and effectuate management policies in the field of
labor relations. The two (2) criteria are cumulative, and both must be met if an employee is to
be considered a confidential employee that is, the confidential relationship must exist between
the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. The exclusion from bargaining units of employees
who, in the normal course of their duties, become aware of management policies relating to
labor relations is a principal objective sought to be accomplished by the confidential employee
rule.[26] There is no showing in this case that the secretaries/clerks and checkers assisted or
acted in a confidential capacity to managerial employees and obtained confidential
information relating to labor relations policies. And even assuming that they had exposure to
internal business operations of the company, respondent claimed, this is notper se ground for
their exclusion in the bargaining unit of the daily-paid rank-and-file employees.[27]
Not being confidential employees, the secretaries/clerks and checkers are not disqualified
from membership in the Union of respondents rank-and-file employees. Petitioner argues
that respondents act of unilaterally stopping the deduction of union dues from these
employees constitutes unfair labor practice as it restrained the workers exercise of their
right to self-organization, as provided in Article 248 (a) of the Labor Code.
Unfair labor practice refers to acts that violate the workers right to organize. The prohibited
acts are related to the workers right to self organization and to the observance of a CBA. For
a charge of unfair labor practice to prosper, it must be shown that ABI was motivated by ill
will, bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals,
good customs, or public policy, and, of course, that social humiliation, wounded feelings or
grave anxiety resulted x x x[28] from ABIs act in discontinuing the union dues deduction from
those employees it believed were excluded by the CBA. Considering that the herein dispute
arose from a simple disagreement in the interpretation of the CBA provision on excluded
employees from the bargaining unit, respondent cannot be said to have committed unfair
labor practice that restrained its employees in the exercise of their right to self-organization,
nor have thereby demonstrated an anti-union stance.
WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and
Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R. SP No. 55578 are
hereby REVERSED and SET ASIDE. The checkers and secretaries/clerks of respondent
company are hereby declared rank-and-file employees who are eligible to join theUnion of
the rank-and-file employees.

No costs.
SO ORDERED.

THIRD DIVISION
G.R. No. 161933

April 22, 2008

STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-NUBE), petitioner,

vs.
STANDARD CHARTERED BANK and ANNEMARIE DURBIN, in her capacity as Chief
Executive Officer, Philippines, Standard Chartered Bank, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the Rules of
Court, assailing the Decision1 dated October 9, 2002 and Resolution2 dated January 26, 2004
issued by the Court of Appeals (CA), dismissing their petition and affirming the Secretary of
Labor and Employment's Orders dated May 31, 2001 and August 30, 2001.
Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective
Bargaining Agreement (CBA) in May 2000 as their 1998-2000 CBA already expired. Due to a
deadlock in the negotiations, petitioner filed a Notice of Strike prompting the Secretary of
Labor and Employment to assume jurisdiction over the labor dispute.
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of Labor and
Employment (DOLE) issued an Order with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the Standard Chartered Bank and the
Standard Chartered Bank Employees Union are directed to execute their collective
bargaining agreement effective 01 April 2001 until 30 March 2003 incorporating
therein the foregoing dispositions and the agreements they reached in the course of
negotiations and conciliation. All other submitted issues that were not passed upon
are dismissed.
The charge of unfair labor practice for bargaining in bad faith and the claim for
damages relating thereto are hereby dismissed for lack of merit.
Finally, the charge of unfair labor practice for gross violation of the economic
provisions of the CBA is hereby dismissed for want of jurisdiction.
SO ORDERED.3
Both petitioner and the Bank filed their respective motions for reconsideration, which were
denied by the Secretary per Order dated August 30, 2001. 4
Petitioner sought recourse with the CA via a petition for certiorari, and in the assailed
Decision dated October 9, 20025 and Resolution dated January 26, 2004,6 the CA dismissed
their petition and affirmed the Secretary's Orders.

Hence, herein petition based on the following grounds:

I.
THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO BASIS FOR REVISING
THE SCOPE OF EXCLUSIONS FROM THE APPROPRIATE BARGAINING UNIT UNDER THE
CBA.
II.
THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR LESS TEMPORARY
OCCUPATION OF A POSITION (ACTING CAPACITY) DOES NOT MERIT ADJUSTMENT IN
REMUNERATION.7
The resolution of this case has been overtaken by the execution of the parties' 2003-2005
CBA. While this would render the case moot and academic, nevertheless, the likelihood that
the same issues will come up in the parties' future CBA negotiations is not far-fetched, thus
compelling its resolution. Courts will decide a question otherwise moot if it is capable of
repetition yet evading review.[8]
The CBA provisions in dispute are the exclusion of certain employees from the appropriate
bargaining unit and the adjustment of remuneration for employees serving in an acting
capacity for one month.
In their proposal, petitioner sought the exclusion of only the following employees from the
appropriate bargaining unit all managers who are vested with the right to hire and fire
employees, confidential employees, those with access to labor relations materials, Chief
Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human Resources
(HR) staff.9
In the previous 1998-2000 CBA,10 the excluded employees are as follows:
A. All covenanted and assistant officers (now called National Officers)
B. One confidential secretary of each of the:
1. Chief Executive, Philippine Branches
2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance
4. Head, Human Resources
5. Manager, Cebu
6. Manager, Iloilo

7. Covenanted Officers provided said positions shall be filled by new recruits.

C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any
other branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as
amended by R.A. 6715, casuals or emergency employees; and
G. One (1) HR Staff11
The Secretary, however, maintained the previous exclusions because petitioner failed to
show that the employees sought to be removed from the list qualify for exclusion. 12
With regard to the remuneration of employees working in an acting capacity, it was
petitioner's position that additional pay should be given to an employee who has been
serving in a temporary/acting capacity for one week. The Secretary likewise rejected
petitioner's proposal and instead, allowed additional pay for those who had been working in
such capacity for one month. The Secretary agreed with the Bank's position that a restrictive
provision would curtail management's prerogative, and at the same time, recognized that
employees should not be made to work in an acting capacity for long periods of time without
adequate compensation.
The Secretary's disposition of the issues raised by petitioner were affirmed by the CA. 13 The
Court sustains the CA.
Whether or not the employees sought to be excluded from the appropriate bargaining unit
are confidential employees is a question of fact, which is not a proper issue in a petition for
review under Rule 45 of the Rules of Court. 14 This holds more true in the present case in
which petitioner failed to controvert with evidence the findings of the Secretary and the CA.
The disqualification of managerial and confidential employees from joining a bargaining unit
for rank and file employees is already well-entrenched in jurisprudence. While Article 245 of
the Labor Code limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist
or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.15
In this case, the question that needs to be answered is whether the Bank's Chief Cashiers
and Assistant Cashiers, personnel of the Telex Department and HR staff are confidential
employees, such that they should be excluded.
As regards the qualification of bank cashiers as confidential employees, National
Association of Trade Unions (NATU) Republic Planters Bank Supervisors Chapter v.

Torres16 declared that they are confidential employees having control, custody and/or access
to confidential matters, e.g., the branch's cash position, statements of financial condition,
vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable
instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody,
and therefore, disqualified from joining or assisting a union; or joining, assisting or forming
any other labor organization.17
Golden Farms, Inc. v. Ferrer-Calleja18 meanwhile stated that "confidential employees such as
accounting personnel, radio and telegraph operators who, having access to confidential
information, may become the source of undue advantage. Said employee(s) may act as spy
or spies of either party to a collective bargaining agreement." 19
Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission,20 the
Court designatedpersonnel staf, in which human resources staff may be qualified, as
confidential employees because by the very nature of their functions, they assist and act in
a confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.
Petitioner insists that the foregoing employees are not confidential employees; however, it
failed to buttress its claim. Aside from its generalized arguments, and despite the
Secretary's finding that there was no evidence to support it, petitioner still failed to
substantiate its claim. Petitioner did not even bother to state the nature of the duties and
functions of these employees, depriving the Court of any basis on which it may be concluded
that they are indeed confidential employees. As aptly stated by the CA:
While We agree that petitioner's proposed revision is in accordance with the law, this
does not necessarily mean that the list of exclusions enumerated in the 1998-2000
CBA is contrary to law. As found by public respondent, petitioner failed to show
that the employees sought to be removed from the list of exclusions are
actually rank and file employees who are not managerial or confidential in
status and should, accordingly, be included in the appropriate bargaining
unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of
the Telex department and one (1) HR Staf have mutuality of interest with
the other rank and file employees, then they are rightfully excluded from
the appropriate bargaining unit. x x x21(Emphasis supplied)
Petitioner cannot simply rely on jurisprudence without explaining how and why it should
apply to this case. Allegations must be supported by evidence. In this case, there is barely
any at all.
There is likewise no reason for the Court to disturb the conclusion of the Secretary and the
CA that the additional remuneration should be given to employees placed in an acting
capacity for one month. The CA correctly stated:
Likewise, We uphold the public respondent's Order that no employee should be
temporarily placed in a position (acting capacity) for more than one month without

the corresponding adjustment in the salary. Such order of the public respondent is
not in violation of the "equal pay for equal work" principle, considering that after one
(1) month, the employee performing the job in an acting capacity will be entitled to
salary corresponding to such position.
xxxx
In arriving at its Order, the public respondent took all the relevant evidence into
account and weighed both parties arguments extensively. Thus, public respondent
concluded that a restrictive provision with respect to employees being placed in an
acting capacity may curtail management's valid exercise of its prerogative. At the
same time, it recognized that employees should not be made to perform work in an
acting capacity for extended periods of time without being adequately compensated.
x x x22
Thus, the Court reiterates the doctrine that:
[T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court
requires that it shall raise only questions of law. The factual findings by quasi-judicial
agencies, such as the Department of Labor and Employment, when supported by
substantial evidence, are entitled to great respect in view of their expertise in their
respective fields. Judicial review of labor cases does not go so far as to evaluate the
sufficiency of evidence on which the labor official's findings rest. It is not our function
to assess and evaluate all over again the evidence, testimonial and documentary,
adduced by the parties to an appeal, particularly where the findings of both the trial
court (here, the DOLE Secretary) and the appellate court on the matter coincide, as in
this case at bar. The Rule limits that function of the Court to the review or revision of
errors of law and not to a second analysis of the evidence. x x x Thus, absent any
showing of whimsical or capricious exercise of judgment, and unless lack of any basis
for the conclusions made by the appellate court be amply demonstrated, we may not
disturb such factual findings.23
WHEREFORE, the petition is DENIED.
SO ORDERED.
Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

Republic
SUPREME
Manila

of

the

Philippines
COURT

SECOND DIVISION
G.R. No. 94045 September 13, 1991
CENTRAL
NEGROS
ELECTRIC
COOPERATIVE,
INC.
(CENECO), petitioner,
vs.
HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, and CENECO
UNION OF RATIONAL EMPLOYEES (CURE), respondents.
Enrique S. Tabino for petitioner.
Edmundo G. Manlapao for private respondent.

REGALADO, J.:p
In this special civil action for certiorari, petitioner Central Negros Electric Cooperative, Inc.
(CENECO) seeks to annul the order 1 issued by then Acting Secretary of Labor Bienvenido E.
Laguesma on June 6, 1990, declaring the projected certification election unnecessary and
directing petitioner CENECO to continue recognizing private respondent CENECO Union of
Rational Employees (CURE) as the sole and exclusive bargaining representative of all the
rank-and-file employees of petitioner's electric cooperative for purposes of collective
bargaining.
It appears from the records that on August 15, 1987, CENECO entered into a collective
bargaining agreement with CURE, a labor union representing its rank-and-file employees,
providing for a term of three years retroactive to April 1, 1987 and extending up to March
31, 1990. On December 28, 1989, CURE wrote CENECO proposing that negotiations be
conducted for a new collective bargaining agreement (CBA).
On January 18, 1990, CENECO denied CURE's request on the ground that, under applicable
decisions of the Supreme Court, employees who at the same time are members of an
electric cooperative are not entitled to form or join a union. 2
Prior to the submission of the proposal for CBA renegotiation, CURE members, in a general
assembly held on December 9, 1989, approved Resolution No. 35 whereby it was agreed
that 'tall union members shall withdraw, retract, or recall the union members' membership
from Central Negros Electric Cooperative, Inc. in order to avail (of) the full benefits under the
existing Collective Bargaining Agreement entered into by and between CENECO and CURE,
and the supposed benefits that our union may avail (of) under the renewed CBA. 3 This was
ratified by 259 of the 362 union members. CENECO and the Department of Labor and
Employment, Bacolod District, were furnished copies of this resolution.

However, the withdrawal from membership was denied by CENECO on February 27, 1990
under Resolution No. 90 "for the reason that the basis of withdrawal is not among the
grounds covered by Board Resolution No. 5023, dated November 22, 1989 and that said
request is contrary to Board Resolution No. 5033 dated December 13, 1989, ..." 4
By reason of CENECO's refusal to renegotiate a new CBA, CURE filed a petition for direct
recognition or for certification election, supported by 282 or 72% of the 388 rank-and-file
employees in the bargaining unit of CENECO.
CENECO filed a motion to dismiss on the ground that there are legal constraints to the filing
of the certification election, citing the ruling laid down by this Court in Batangas I Electric
Cooperative Labor Union vs. Romeo A. Young, 5 (BATANGAS case) to the effect that
"employees who at the same time are members of an electric cooperative are not entitled to
form or join unions for purposes of collective bargaining agreement, for certainly an owner
cannot bargain with himself or his co-owners."
Med-Arbiter Felizardo T. Serapio issued an order, 6 granting the petition for certification
election which, in effect, was a denial of CENECO's motion to dismiss, and directing the
holding of a certification election between CURE and No Union.
CENECO appealed to the Department of Labor and Employment which issued the questioned
order modifying the aforestated order of the med-arbiter by directly certifying CURE as the
exclusive bargaining representative of the rank-and-file employees of CURE.
Hence, this petition.
Petitioner CENECO argues that respondent Secretary committed a grave abuse of discretion
in not applying to the present case the doctrine enunciated in the BATANGAS case that
employees of an electric cooperative who at the same time are members of the electric
cooperative are prohibited from forming or joining labor unions for purposes of a collective
bargaining agreement. While CENECO recognizes the employees' right to self-organization, it
avers that this is not absolute. Thus, it opines that employees of an electric cooperative who
at the same time are members thereof are not allowed to form or join labor unions for
purposes of collective bargaining. However, petitioner does not hesitate to admit that the
prohibition does not extend to employees of an electric cooperative who are not members of
the cooperative.
The issue, therefore, actually involves a determination of whether or not the employees of
CENECO who withdrew their membership from the cooperative are entitled to form or join
CURE for purposes of the negotiations for a collective bargaining agreement proposed by the
latter.
As culled from the records, it is the submission of CENECO that the withdrawal from
membership in the cooperative and, as a consequence, the employees' acquisition of
membership in the union cannot be allowed for the following reasons:
1. It was made as a subterfuge or to subvert the ruling in the BATANGAS case:

2. To allow the withdrawal of the members of CENECO from the cooperative

without justifiable reason would greatly affect the objectives and goals of
petitioner as an electric cooperative;
3. The Secretary of Labor, as well as the Med-Arbiter, has no jurisdiction over
the issue of the withdrawal from membership which is vested in the National
Electrification Administration (NEA) which has direct control and supervision
over the operations of electric cooperatives; and
4. Assuming that the Secretary has jurisdiction, CURE failed to exhaust
administrative remedies by not referring the matter of membership
withdrawal to the NEA.
The petition is destitute of merit; certiorari will not lie.
We first rule on the alleged procedural infirmities affecting the instant case. CENECO avers
that the med-arbiter has no jurisdiction to rule on the issue of withdrawal from membership
of its employees in the cooperative which, it claims, is properly vested in the NEA which has
control and supervision over all electric cooperatives.
From a perusal of petitioner's motion to dismiss filed with the med-arbiter, it becomes
readily apparent that the sole basis for petitioner's motion is the illegality of the employees'
membership in respondent union despite the fact that they allegedly are still members of
the cooperative. Petitioner itself adopted the aforesaid argument in seeking the dismissal of
the petition for certification election filed with the med-arbiter, and the finding made by the
latter was merely in answer to the arguments advanced by petitioner. Hence, petitioner is
deemed to have submitted the issue of membership withdrawal from the cooperative to the
jurisdiction of the med-arbiter and it is now estopped from questioning that same jurisdiction
which it invoked in its motion to dismiss after obtaining an adverse ruling thereon.
Under Article 256 of the Labor Code, to have a valid certification election at least a majority
of all eligible voters in the unit must have cast their votes. It is apparent that incidental to
the power of the med-arbiter to hear and decide representation cases is the power to
determine who the eligible voters are. In so doing, it is axiomatic that the med-arbiter should
determine the legality of the employees' membership in the union. In the case at bar, it
obviously becomes necessary to consider first the propriety of the employees' membership
withdrawal from the cooperative before a certification election can be had.
Lastly, it is petitioner herein who is actually questioning the propriety of the withdrawal of its
members from the cooperative. Petitioner could have brought the matter before the NEA if it
wanted to and. if such remedy had really been available, and there is nothing to prevent it
from doing so. It would be absurd to fault the employees for the neglect or laxity of
petitioner in protecting its own interests.
The argument of CENECO that the withdrawal was merely to subvert the ruling of this Court
in the BATANGAS case is without merit. The case referred to merely declared that employees
who are at the same time members of the cooperative cannot join labor unions for purposes
of collective bargaining. However, nowhere in said case is it stated that member-employees

are prohibited from withdrawing their membership in the cooperative in order to join a labor
union.
As discussed by the Solicitor General, Article I, Section 9 of the Articles of Incorporation and
By- Laws of CENECO provides that "any member may withdraw from membership upon
compliance with such uniform terms and conditions as the Board may prescribe." The same
section provides that upon withdrawal, the member is merely required to surrender his
membership certificate and he is to be refunded his membership fee less any obligation that
he has with the cooperative. There appears to be no other condition or requirement imposed
upon a withdrawing member. Hence, there is no just cause for petitioner's denial of the
withdrawal from membership of its employees who are also members of the union. 7
The alleged board resolutions relied upon by petitioner in denying the withdrawal of the
members concerned were never presented nor their contents disclosed either before the
med-arbiter or the Secretary of Labor if only to prove the ratiocination for said denial.
Furthermore, CENECO never averred non-compliance with the terms and conditions for
withdrawal, if any. It appears that the Articles of Incorporation of CENECO do not provide any
ground for withdrawal from membership which accordingly gives rise to the presumption
that the same may be done at any time and for whatever reason. In addition, membership in
the cooperative is on a voluntary basis. Hence, withdrawal therefrom cannot be restricted
unnecessarily. The right to join an organization necessarily includes the equivalent right not
to join the same.
The right of the employees to self-organization is a compelling reason why their withdrawal
from the cooperative must be allowed. As pointed out by CURE, the resignation of the
member- employees is an expression of their preference for union membership over that of
membership in the cooperative. The avowed policy of the State to afford fall protection to
labor and to promote the primacy of free collective bargaining mandates that the
employees' right to form and join unions for purposes of collective bargaining be accorded
the highest consideration.
Membership in an electric cooperative which merely vests in the member a right to vote
during the annual meeting becomes too trivial and insubstantial vis-a-vis the primordial and
more important constitutional right of an employee to join a union of his choice. Besides, the
390 employees of CENECO, some of whom have never been members of the cooperative,
represent a very small percentage of the cooperative's total membership of 44,000. It is
inconceivable how the withdrawal of a negligible number of members could adversely affect
the business concerns and operations of CENECO.
We rule, however, that the direct certification ordered by respondent Secretary is not proper.
By virtue of Executive Order No. 111, which became effective on March 4, 1987, the direct
certification originally allowed under Article 257 of the Labor Code has apparently been
discontinued as a method of selecting the exclusive bargaining agent of the workers. This
amendment affirms the superiority of the certification election over the direct certification
which is no longer available now under the change in said provision. 8
We have said that where a union has filed a petition for certification election, the mere fact
that no opposition is made does not warrant a direct certification. 9 In said case which has

similar features to that at bar, wherein the respondent Minister directly certified the union,
we held that:
... As pointed out by petitioner in its petition, what the respondent Minister
achieved in rendering the assailed orders was to make a mockery of the
procedure provided under the law for representation cases because: ... (c) By
directly certifying a Union without sufficient proof of majority representation,
he has in effect arrogated unto himself the right, vested naturally in the
employee's to choose their collective bargaining representative. (d) He has in
effect imposed upon the petitioner the obligation to negotiate with a union
whose majority representation is under serious question. This is highly
irregular because while the Union enjoys the blessing of the Minister, it does
not enjoy the blessing of the employees. Petitioner is therefore under threat of
being held liable for refusing to negotiate with a union whose right to
bargaining status has not been legally established.
While there may be some factual variances, the rationale therein is applicable to the present
case in the sense that it is not alone sufficient that a union has the support of the majority.
What is equally important is that everyone be given a democratic space in the bargaining
unit concerned. The most effective way of determining which labor organization can truly
represent the working force is by certification election. 10
WHEREFORE, the questioned order for the direct certification of respondent CURE as the
bargaining representative of the employees of petitioner CENECO is hereby ANNULLED and
SET ASIDE. The med-arbiter is hereby ordered to conduct a certification election among the
rank-and- file employees of CENECO with CURE and No Union as the choices therein.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras and Padilla, JJ., concur.
Sarmiento, J., is on leave.