SAN MIGUEL CORPORATION EMPLOYEES UNIONPHILIPPINE TRANSPORT AND GENERAL WORKERS

ORGANIZATION (SMCEUPTGWO) vs. SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION

PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP)| 12 September 2007| J. Chico-Nazario
Short Version: SMCEU-PTGWO challenges the legitimacy of SMPPEU-PDMP, a charter of PDMP, as a labor
organization. The Court held that PDMP cannot create a charter because it is merely a trade union center.
Trade union centers are not given by the Labor Code or any statute the power to create locals or charters
therefore, SMPPEU-PDMP must comply with the strict requirements provided for in Art. 234, LC.
Nature: Review on Certiorari under Rule 45 of the Revised Rules of Court, assailing CA decision affirming
the decision of the petitioner Bureau of Labor Relations (BLR) of DOLE which upheld the Certificate of
Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNIONPAMBANSANG DIWA
NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and its resolution denying petitioners MR
Characters in the case
-Petitioner(s): SMCEU-PTGWO is the incumbent bargaining agent for the bargaining unit comprised of the
regular monthly-paid rank and file employees of the three divisions of San Miguel Corporation (SMC),
namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San
Miguel Packaging Products (SMPP), in all offices and plants of SMC, including the Metal Closure and
Lithography Plant in Laguna. It had been the certified bargaining agent for 20 years (1987 to 1997).
-Respondent(s): SMPPEU-PDMP is registered as a chapter PDMP.
Facts

PDMP issued a charter certificate to respondent on 15 June 1999. In compliance with registration
requirements, respondent submitted the requisite documents to the BLR for the purpose of
acquiring legal personality.
Upon submission of its charter certificate and other documents, respondent was issued Certificate
of Creation of Local or Chapter by the BLR on 6 July 1999.
Respondent filed with the Med-Arbiter of the DOLE Regional Officer in NCR (DOLE-NCR), three
separate petitions for certification election to represent SMPP, SMCSU, and SMBP. All three petitions
were dismissed, on the ground that the separate petitions fragmented a single bargaining unit.
17 August 1999: petitioner filed with the DOLE-NCR a petition seeking the cancellation of
respondent's registration and its dropping from the rolls of legitimate labor organizations, accusing
respondent of committing fraud and falsification, and non-compliance with registration
requirements in obtaining its certificate of registration.
o It alleged that respondent violated Articles 239 (a), (b) and (c) and 234 (c) of the Labor
Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a
trade union center, hence, it cannot directly create a local or chapter.
14 July 2000: DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the
allegations. He further ruled that respondent is allowed to directly create a local or chapter.
However, he found that respondent did not comply with the 20% membership requirement and,
thus, ordered the cancellation of its certificate of registration and removal from the rolls of
legitimate labor organizations.
Respondent appealed to the BLR who granted the petition. The BLR ruled that as a chartered local
union, respondent is not required to submit the number of employees and names of all its members
comprising at least 20% of the employees in the bargaining unit where it seeks to operate. Thus,
the revocation of its registration based on non-compliance with the 20% membership requirement
does not have any basis in the rules.
The BLR also held that although PDMP is considered as a trade union center, it is a holder of a
Registration Certificate issued by the BLR on 14 February 1991, which bestowed upon it the status
of a legitimate labor organization with all the rights and privileges to act as representative of its
members for purposes of collective bargaining agreement. On this basis, PDMP can charter or
create a local, in accordance with the provisions of Department Order No. 9.
BLR denied petitioners appeal. CA affirmed BLR decision holding that Department Order No. 9
provides that a registered federation or national union may directly create a local by submitting to
the BLR copies of the charter certificate, the local's constitution and by-laws, the principal office
address of the local, and the names of its officers and their addresses. Upon complying with the
documentary requirements, the local shall be issued a certificate and included in the roster of
legitimate labor organizations. Thus there is no need for SMPPEU to show a membership of 20% of
the employees of the bargaining unit in order to be recognized as a legitimate labor union.

Issue: WON respondent is a legitimate labor organization even if it failed to comply with the 20%
requirement as provided in Art. 234, LC. NO.
Dispositive: Petition GRANTED. CA REVERSED AND SET ASIDE.
Ruling
A legitimate labor organization is defined as "any labor organization duly registered with the DOLE,
and includes any branch or local thereof."
Why does the Labor Code demand strict compliance with the requirements on registration?
o Registration requirements are intended to afford a measure of protection to unsuspecting
employees who may be lured into joining unscrupulous or fly-by-night unions whose sole
purpose is to control union funds or use the labor organization for illegitimate ends.
o A legitimate labor organization is entitled to specific rights under the Labor Code, 21 and are
involved in activities directly affecting matters of public interest. Legitimate labor
organizations have exclusive rights under the law which cannot be exercised by nonlegitimate unions, one of which is the right to be certified as the exclusive representative of
all the employees in an appropriate collective bargaining unit for purposes of collective
bargaining.
o 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.
Records show that respondent was chartered by PDMP. Article 234, LC provides that an independent
labor organization acquires legitimacy only upon its registration with the BLR. However, the creation
of a branch, local or chapter is treated differently.
o In Progressive Development Corporation v. Secretary, Department of Labor and
Employment, the Court declared that when an unregistered union becomes a branch, local
or chapter, some of the aforementioned requirements for registration are no longer
necessary or compulsory. Whereas an applicant for registration of an independent union is
mandated to submit, among other things, the number of employees and names of all its
members comprising at least 20% of the employees in the bargaining unit where it seeks to
operate, as provided under Article 234 and Sec. 2, Rule III, Book V of the Implementing
Rules, the same is no longer required of a branch, local or chapter. The intent of the law in
imposing less requirements in the case of a branch or local of a registered federation or
national union is to encourage the affiliation of a local union with a federation or national
union in order to increase the local union's bargaining powers respecting terms and
conditions of labor.
Petitioners argue that PDMP is not a legitimate labor organization, thus cannot form a charter. The
Court held that the personality of a labor organization cannot be attacked collaterally. It may be
questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V,
Book V of the Implementing Rules.
Heres the twist: PDMP is a trade union center, THEREFORE IT CANNOT CREATE LOCALS OR CHARTERS.
Trade union center was never mentioned in the Labor Code. It first appeared only in the
Implementing Rules of Department Order No. 9 which defined a trade union center as any group of
registered national unions or federations organized for the mutual aid and protection of its
members; for assisting such members in collective bargaining; or for participating in the
formulation of social and employment policies, standards, and programs, and is duly registered with
the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.
While a "national union" or "federation" is a labor organization with at least ten locals or chapters or
affiliates, each of which must be a duly certified or recognized collective bargaining agent, a trade
union center, on the other hand, is composed of a group of registered national unions or
federations.
o The Implementing Rules, as amended by Department Order No. 9, provide that only "a duly
registered federation or national union" may directly create a local or chapter.
DO 9 defines a "chartered local" as a labor organization in the private sector operating at the
enterprise level that acquired legal personality through a charter certificate, issued by a duly
registered federation or national union and reported to the Regional Office in accordance with Rule
III, Section 2-E of these Rules (Sec. 1 (i), Rule 1, Book V of the Implementing Rules, as amended by
DO No. 9)

RA 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending
for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of
the Philippines" lapsed into law on 25 May 2007 and became effective on 14 June 2007. This law
further amends the Labor Code provisions on Labor Relations, including trade union centers in Art.
234. However, it still makes no mention that such organizations can create a local or a charter.
[Expressio unius est exclusio alterius, the expression of one thing is the exclusion of another.
Expressium facit cessare tacitum. What is expressed puts an end to what is implied. Casus omissus
pro omisso habendus est. A person, object or thing omitted must have been omitted intentionally. ]
o Therefore, since under the pertinent status and applicable implementing rules, the power
granted to labor organizations to directly create a chapter or local through chartering is
given to a federation or national union, then a trade union center is without authority to
charter directly.
o WHY? To prevent circumvention of labor union requirements. As a legitimate labor
organization is entitled to specific rights under the Labor Code and involved in activities
directly affecting public interest, it is necessary that the law afford utmost protection to the
parties affected.
Digest by Paula P.