LABREV#8

Assignment No.
8 – Cases LabRev1
[1 AND 2]
Already included in Assignment No. 7
1. SMC Employees Union-PTWGO vs. Bersamira. G.R. No. 87700 June 13, 1990.
2. Mcburnie vs. Ganzon. G.R. No. 178034 . October 17, 2013.

Assignment No. 8 – Cases LabRev1
LABOR ORGANIZATIONS (REGISTRATION AND CANCELLATION)
[3]
G.R. No. 196276 June 4, 2014
TAKATA (PHILIPPINES) CORPORATION, Petitioner,

vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG
TAKATA (SALAMAT), Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines

Corporation assailing the Decision 1 dated December 22, 2010 and the Resolution 2 dated
March 28, 2011 of the Court of Appeals in CA-G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE)
Regional Office a Petition3 for Cancellation of the Certificate of Union Registration of
Respondent Samahang Lakas Manggagawa ng Takata (SALAMA1) on the ground that the
latter is guilty of misrepresentation, false statement and fraud with respect to the number of
those who participated in the organizational meeting, the adoption and ratification of its
Constitution and By-Laws, and in the election of its officers. It contended that in the May 1,
2009 organizational meeting of respondent, only 68 attendees signed the attendance sheet,
and which number comprised only 17% of the total number of the 396 regular rank- and-file
employees which respondent sought to represent, and hence, respondent failed to comply
with the 20% minimum membership requirement. Petitioner insisted that the document
"Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged 119 union members;
and that employees were not given sufficient information on the documents they signed; that
the document "Sama-Samang Pahayag ng Pagsapi" was not submitted at the time of the
filing of respondent's application for union registration; that the 119 union members were
actually only 117; and, that the total number of petitioner's employees as of May 1, 2009 was
470, and not 396 as respondent claimed.4
Respondent denied the charge and claimed that the 119 union members were more than
the 20% requirement for union registration. The document "Sama-Samang Pahayag ng
Pagsapi sa Unyon" which it presented in its petition for certification election 5 supported their
claim of 119 members. Respondent also contended that petitioner was estopped from
assailing its legal personality as it agreed to a certification election and actively participated
in the pre-election conference of the certification election proceedings.6 Respondent argued
that the union members were informed of the contents of the documents they signed and
that the 68 attendees to the organizational meeting constituted more than 50% of the total
union membership, hence, a quo rumexisted for the conduct of the said meeting.7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a
Decision8 granting the petition for cancellation of respondent's certificate of registration, the
dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED.
Accordingly, the respondent Union Certificate of Registration No. RO400A-2009-05-01-UR-
LAG, dated May 19, 2009 is hereby REVOCKED (sic) and /or CANCELLED pursuant to
paragraph (a) & (b), Section 3, Rule XIV of Department Order No. 40-03 and the Samahang
Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of legitimate
labor organization of this office.9
In revoking respondent's certificate of registration, the Regional Director found that the 68
employees who attended the organizational meeting was obviously less than 20% of the
total number of 396 regular rank-and-file employees which respondent sought to represent,
hence, short of the union registration requirement; that the attendance sheet which contained
the signatures and names of the union members totalling to 68 contradicted the list of names
stated in the document denominated as "Pangalan ng mga Kasaping Unyon." The document
"Sama-Samang Pahayag ng Pagsapi" was not attached to the application for registration as
it was only submitted in the petition for certification election filed by respondent at a later
date. The Regional Director also found that the proceedings in the cancellation of registration
and certification elections are two different and entirely separate and independent
proceedings which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal

Officer, Domingo P. Mole, filed a Notice and Memorandum of Appeal 10 with the Bureau of
Labor Relations (BLR). However, on September 28,2009, respondent, through its counsels,
Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with
Formal Entry of Appearance11 to the Office of the DOLE Secretary, which the latter
eventually referred to the BLR. Petitioner filed an Opposition to the Appeals 12 praying for
their dismissal on the ground of forum shopping as respondent filed two separate appeals in
two separate venues; and for failing to avail of the correct remedy within the period; and that
the certificate of registration was tainted with fraud, misrepresentation and falsification.
In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal
Officer was no longer authorized to file an appeal on behalf of respondent as the latter's link
with BMP was already terminated and only the Union President was authorized to file the
appeal; and that it complied with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum with Formal

Entry of Appearance and petitioner's Answer, the BLR rendered its Decision14 reversing the
Order of the Regional Director, the decretal portion of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo
S. Martinez, Sr., dated 27 August 2009, is hereby REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the

roster of labor organizations.15
In reversing, the BLR found that petitioner failed to prove that respondent deliberately and
maliciously misrepresented the number of rank-and-file employees. It pointed out petitioner's
basis for the alleged noncompliance with the minimum membership requirement for
registration was the attendance of 68 members to the May 1, 2009 organizational meeting
supposedly comprising only 17% of the total 396 regular rank-and-file employees. However,
the BLR found that the list of employees who participated in the organizational meeting was
a separate and distinct requirement from the list of the names of members comprising at
least 20% of the employees in the bargaining unit; and that there was no requirement for
signatures opposite the names of the union members; and there was no evidence showing
that the employees assailed their inclusion in the list of union members.
Petitioner filed a motion for reconsideration, which was denied by the BLR in a
Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.
After the submission of the parties' respective pleadings, the case was submitted for
decision.
On December 22, 2010, the CA rendered its assailed decision which denied the petition and
affirmed the decision of the BLR. Petitioner's motion for reconsideration was denied in a
Resolution dated March 29, 2011.
Hence this petition for review filed by petitioner raising the following issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR

IN AFFIRMING THE DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY
VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF THE
RULE ON FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND
ITS BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT
BY PUBLIC RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE

APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA
TAKATA (SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING THE
CIRCUMSTANCES OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR
THAT THE SAME IS TAINTED WITH FRAUD, MISREPRESENTATION AND
FALSIFICATION. SALAMAT DID NOT POSSESS THE REQUIREDNUMBER OF
MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR REGISTRATION,
HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND FALSE
STATEMENTS AND FRAUD IN CONNECTION THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed two separate appeals with
two different representations at two different venues, in violation of the rule on multiplicity of
suits and forum shopping, and instead of dismissing both appeals, the appeal erroneously
filed before the Labor Secretary was the one held validly filed, entertained and even granted;
that it is not within the discretion of BLR to choose which between the two appeals should
be entertained, as it is the fact of the filing of the two appeals that is being prohibited and not
who among the representatives therein possessed the authority.
We are not persuaded.

We find no error committed by the CA in finding that respondent committed no forum
shopping. As the CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to
file an appeal on behalf of union SALAMAT and that BMP was duly informed that its services
was already terminated. SALAMAT even submitted before the BLR its "Resolusyon Blg. 01-
2009" terminating the services of BMP and revoking the representation of Mr. Domingo Mole
in any of the pending cases being handled by him on behalf of the union. So, considering
that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal when
it filed the Notice and Memorandum of Appeal to DOLE Regional Office No. IV-A, the same
can no longer be treated as an appeal filed by union SALAMAT. Hence, there is no forum
shopping to speak of in this case as only the Appeal Memorandum with Formal Entry of
Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is
sanctioned by SALAMAT.18
Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such
appeal is considered to have not been filed at all. It has been held that "if a complaint is filed
for and in behalf of the plaintiff who is not authorized to do so, the complaint is not deemed
filed.
An unauthorized complaint does not produce any legal effect."19
Respondent through its authorized representative filed its Appeal Memorandum with Formal
Entry of Appearance before the Labor Secretary, and not with the BLR. As the appeal
emanated from the petition for cancellation of certificate of registration filed with the Regional
Office, the decision canceling the registration is appealable to the BLR, and not with the
Labor Secretary. However, since the Labor Secretary motu propio referred the appeal with
the BLR, the latter can now act on it. Considering that Mole's appeal with the BLR was not
deemed filed, respondent’s appeal, through Banzuela and Associates, which the Labor
Secretary referred to the BLR was the only existing appeal with the BLR for resolution. There
is, therefore, no merit to petitioner's claim that BLR chose the appeal of Banzuela and
Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees

Union20 cited by petitioner is not at all applicable in this case as the issue therein is the
authority of the Labor Secretary to review the decision of the Bureau of Labor Relations
rendered in the exercise of its appellate jurisdiction over decision of the Regional Director in
cases involving cancellations of certificate of registration of labor unions. We found no grave
abuse of discretion committed by the Secretary of Labor in not acting on therein petitioner's
appeal. The decision of the Bureau of Labor Relations on cases brought before it on appeal
from the Regional Director are final and executory. Hence, the remedy of the aggrieved party
is to seasonably avail of the special civil action of certiorari under Rule 65 and the Rules of
Court. In this case, after the Labor Secretary motu propio referred respondent's appeal filed
with it to the BLR which rendered its decision reversing the Regional Director, petitioner went
directly to the CA via a petition for certiorari under Rule 65.
As to the second issue, petitioner seeks the cancellation of respondent's registration on

grounds offraud and misrepresentation bearing on the minimum requirement of the law as
to its membership, considering the big disparity in numbers, between the organizational
meeting and the list of members, and so misleading the BLR that it obtained the minimum
required number of employees for purposes of organization and registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national union or industry or trade

union center or an independent union shall acquire legal personality and shall be entitled to
the rights and privileges granted by law to legitimate labor organizations upon issuance of
the certificate of registration based on the following requirements:
(a) Fifty pesos (₱50.00)registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers
who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining unit
where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it."
And after the issuance of the certificate of registration, the labor organization's registration
could be assailed directly through cancellation of registration proceedings in accordance with
Articles 238 and 239 of the Labor Code. And the cancellation of union certificate of
registration and the grounds thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor
organization, whether national or local, may be cancelled by the Bureau, after due hearing,
only on the grounds specified in Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The following may 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) Misrepresentation, false statements or fraud in connection with the election of

officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.

Petitioner's charge that respondent committed misrepresentation and fraud in securing its
certificate of registration is a serious charge and must be carefully evaluated. Allegations
thereof should be compounded with supporting circumstances and evidence.21 We find no
evidence on record to support petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent
claimed that it has 119 members as shown in the document denominated as "Pangalan ng
mga Kasapi ng Unyon;" hence, respondent misrepresented on the 20% requirement of the
law as to its membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational
meeting must comprise 20% of the employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does not so provide. It is only under
Article 234 (c) that requires the names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to operate. Clearly, the 20%
minimum requirement pertains to the employees’ membership in the union and not to the list
of workers who participated in the organizational meeting. Indeed, Article 234 (b) and (c)
provide for separate requirements, which must be submitted for the union's registration, and
which respondent did submit. Here, the total number of employees in the bargaining unit was
396, and 20% of which was about 79. Respondent submitted a document entitled "Pangalan
ng Mga Kasapi ng Unyon" showing the names of 119 employees as union members, thus
respondent sufficiently complied even beyond the 20% minimum membership requirement.
Respondent also submitted the attendance sheet of the organizational meeting which
contained the names and signatures of the 68 union members who attended the meeting.
Considering that there are 119 union members which are more than 20% of all the
employees of the bargaining unit, and since the law does not provide for the required number
of members to attend the organizational meeting, the 68 attendees which comprised at least
the majority of the 119 union members would already constitute a quorum for the meeting to
proceed and to validly ratify the Constitution and By-laws of the union. There is, therefore,
no basis for petitioner to contend that grounds exist for the cancellation of respondent's union
registration. For fraud and misrepresentation to be grounds for cancellation of union
registration under Article 239 of the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a majority
of union members.22
Petitioner's claim that the alleged union members signed documents without adequate
information is not persuasive. The one who alleges a fact has the burden of proving it and a
mere allegation is not evidence.23 In fact, we note that not one of those listed in the document
denominated as "Pangalan ng Mga Kasaping Unyon" had come forward to deny their
membership with respondent. Notably, it had not been rebutted that the same union
members had signed the document entitled "Sama-Samang Pahayag ng Pagsapi," thus,
strengtheningtheir desire to be members of the respondent union.
Petitioner claims that in the list of members, there was an employee whose name appeared
twice and another employee who was merely a project employee. Such could not be
considered a misrepresentation in the absence of showing that respondent deliberately did
so for the purpose of increasing their union membership. In fact, even if those two names
were not included in the list of union members, there would still be 117 members which was
still more than 20% of the 396 rank-and-file employees.
As to petitioner's argument that the total number of its employees as of May 1, 2009 was
470, and not396 as respondent claimed, still the 117 union members comprised more than
the 20% membership requirement for respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment, 24 we

said:
For the purpose of de-certifying a union such as respondent, it must be shown that there
was 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; or, in
connection with the election of officers, the minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of the newly elected-
appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent’s
certificate of registration. The cancellation of a union’s registration doubtless has an
impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code,
the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate
the consent of a majority of union members.1âwphi1
In this case, we agree with the BLR and the CA that respondent could not have possibly
committed misrepresentation, fraud, or false statements. The alleged failure of respondent
to indicate with mathematical precision the total number of employees in the bargaining unit
is of no moment, especially as it was able to comply with the 20% minimum membership
requirement. Even if the total number of rank-and-file employees of petitioner is 528, while
respondent declared that it should only be 455, it still cannot be denied that the latter would
have more than complied with the registration requirement.25
WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
December 22, 2010 and the Resolution dated March 28, 2011 of the Court of Appeals, in
CA-G.R. SP No. 112406, are AFFIRMED.
SO ORDERED.
[4]
G.R. No. L-45824 June 19, 1985
VOLKSCHEL LABOR UNION, petitioner,

vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR METAL,
WORKERS, DMG, INC., PEOPLE'S CAR, INC., KARBAYAN INC., and RTC TRADING,
INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.
CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14, 1977
of the Bureau of Labor Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the issuance of —
(1) A preliminary mandatory injunction commanding respondents to return to

petitioner the union dues amounting to about P55,000.00 lawfully pertaining
to it but illegally levied upon, collected and handed over by respondent
Bureau, acting through the NLRC sheriff, to respondent Associated Labor
Union for Metal workers, with the collusion of respondents DMG, Inc.,
Karbayan, Inc. and RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents from making

further delivery to respondent Associated Labor Union for Metal workers of
Union dues collected or to be collected through check-off from the wages of
petitioner's members by respondents, DMG, Inc., Karbayan, Inc., RTC
Machineries, Inc., and People's Car, Inc., under or by virtue of the questioned
writ of execution issued by respondent Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal Workers
(ALUMETAL for short). On August 1, 1975, both unions, using the name Volkschel Labor
Union Associated Labor Union for Metal Workers, jointly entered into a collective bargaining
agreement with respondent companies. One of the subjects dealt with is the payment of
union dues which is provided for in Section 3, Article 1, of the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to make payroll

deductions not softener than twice a month of UNION membership dues and
such special assessments fees or fines as may be duly authorized by the
UNION, provided that the same is covered by the individual check-off
authorization of the UNION members. All said deductions shall be promptly
transmitted within five (5) days by the COMPANY to the UNION Treasurer.
The COMPANY shall prepare two (2) checks. One (1) check will be under the
name of the local union as their local fund including local special assessment
funds and the other check will be for the ALU Regional Office regarding the
remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate from

respondent federation in order to operate on its own as an independent labor group pursuant
to Article 241 (formerly Article 240) of the Labor Code of the Philippines, the pertinent portion
of which reads:
Incumbent affiliates of existing federations or national unions may disaffiliate

only for the purpose of joining a federation or national union in the industry or
region in which it properly belongs or for the purpose of operating as an
independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members revoking their
check-off authorization in favor of ALUMETAL and notices thereof were served on
ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting from employees'
wages and remitting union dues to respondent, ALUMETAL which wrote respondent
companies advising them to continue deducting union dues and remitting them to said
federation, respondent companies sought the legal opinion of the respondent Bureau as
regards the controversy between the two unions. On November 11, 1976, Med-Arbiter
George A. Eduvalla of respondent Bureau rendered a Resolution which in effect found the
disaffiliation legal but at the same time gave the opinion that, petitioner's members should
continue paying their dues to ALUMETAL in the concept of agency fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent ALUMETAL
appealed to the Director of respondent Bureau. Petitioner' contended that the Med-Arbiter's
opinion to the effect that petitioner's members remained obligated to pay dues to respondent
ALUMETAL was inconsistent with the dispositive finding that petitioner's disaffiliation from
ALUMETAL was valid. ALUMETAL, on the other hand, assailed the Resolution in question
asserting that the disaffiliation should have been declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L. Estrella,
REVERSED the Med-Arbiter's Resolution., and declared that the Bureau recognized "the
continued affiliation of Volkschel Labor Union with the Associated Labor Union for Metal
Workers." 2
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor know Minister
of Labor and Employment) who, treating the appeal as a Motion for Reconsideration referred
the same back to respondent Bureau On March 14, 1977, the Bureau denied the appeal for
lack of merit.
Hence, the instant petition.

Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of Labor,
Amado Gat Inciong, issued a of execution commanding the Sheriff of the National Labor
Relations Commission to enforce and execute the order of January 25, 1977, which has
become final and executory. 3 Pursuant thereto, the NLRC Sheriff enforced and implemented
the Order of January 25, 1977, as a result of which respondent companies turned over and
handed to respondent federation the union dues and other assessments in accordance with
the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues present themselves
for this Court's resolution.
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues collections

despite revocation by the employees of the check-off authorization? and
III
Is respondent federation entitled to union dues payments from petitioner

union's members notwithstanding their disaffiliation from said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In previous cases,
it has been repeatedly held that a local union, being a separate and voluntary association, is
free to serve the interest of all its members including the freedom to disaffiliate when
circumstances warrant. 4 This right is consistent with the Constitutional guarantee of freedom
of association (Article IV, Section 7, Philippine Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists motives on its part.
Rather it was prompted by the federation's deliberate and habitual dereliction of duties as
mother federation towards petitioner union. Employees' grievances were allegedly left
unattended to by respondent federation to the detriment of the employees' rights and
interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of

Labor is set on a task to restructure the labor movement to the end that the workers will unite
themselves along industry lines. Carried to its complete fruition, only one union for every
industry will remain to bargain collectively for the workers. The clear policy therefore even
now is to conjoin workers and worker groups, not to dismember them. 5 This policy is
commendable. However, we must not lose sight of the constitutional mandate of protecting
labor and the workers' right to self-organization. In the implementation and interpretation of
the provisions of the Labor Code and its implementing regulations, the workingman's welfare
should be the primordial and paramount consideration. In the case at bar, it would go against
the spirit of the labor law to restrict petitioner's right to self-organization due to the existence
of the CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation does not disturb
the enforceability and administration of a collective agreement; it does not occasion a change
of administrators of the contract nor even an amendment of the provisions thereof." 6 But
nowhere in the record does it appear that the contract entered into by the petitioner and
ALUMETAL prohibits the withdrawal of the former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the obligation
of the respondent companies to deduct and remit dues to ALUMETAL is conditioned on the
individual check-off authorization of petitioner's members, In other words, ALUMETAL is
entitled to receive the dues from respondent companies as long as petitioner union is
affiliated with it and respondent companies are authorized by their employees (members of
petitioner union) to deduct union dues. Without said affiliation, the employer has no link to
the mother union. The obligation of an employee to pay union dues is coterminous with his
affiliation or membership. "The employees' check-off authorization, even if declared
irrevocable, is good only as long as they remain members of the union concerned." 7 A
contract between an employer and the parent organization as bargaining agent for the
employees is terminated by the disaffiliation of the local of which the employees are
members. 8 Respondent companies therefore were wrong in continuing the check-off in favor
of respondent federation since they were duly notified of the disaffiliation and of petitioner's
members having already rescinded their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on the
last issue. Suffice it to state that respondent federation is not entitled to union dues payments
from petitioner's members. "A local union which has validly withdrawn from its affiliation with
the parent association and which continues to represent the employees of an employer is
entitled to the check-off dues under a collective bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977 and
March 14, 1977 are REVERSED and SET ASIDE. Respondent ALUMETAL is ordered to
return to petitioner union all the union dues enforced and collected through the NLRC Sheriff
by virtue of the writ of execution dated April 4, 1977 issued by respondent Bureau.
No costs.
SO ORDERED.
[5]
G.R. No. 207971 Januray 23, 2017
ASIAN INSTITUTE OF MANAGEMENT, Petitioner,

vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1assails the January 8, 2013 Decision2 of the Court of
Appeals (CA) which dismissed the Petition for Certiorari3in CA-G.R. SP No. 114122, and its
subsequent June 27, 2013 Resolution 4 denying herein petitioner's Motion for
Reconsideration. 5
Factual Antecedents
Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit

educational institution. Respondent Asian Institute of Management Faculty Association
(AFA) is a labor organization composed of members of the AIM faculty, duly registered under
Certificate of Registration No. NCR-UR-12-4076-2004.
On May 16, 2007, respondent filed a petition for certification election6 seeking to
represent a bargaining unit in AIM consisting of forty (40) faculty members. The case
was docketed as DOLE Case No. NCR-OD-M-0705-007. Petitioner opposed the petition,
claiming that respondent's members are neither rank-and-file nor supervisory, but rather,
managerial employees.7
On July 11, 2007, petitioner filed a petition for cancellation of respondent's certificate of
registration8 - docketed as DOLE Case No. NCROD-0707-001-LRD - on the grounds of
misrepresentation in registration and that respondent is composed of managerial employees
who are prohibited from organizing as a union.
On August 30, 2007, the Med-Arbiter in DOLE Case No. NCR-OD-M-0705-007 issued an
Order9 denying the petition for certification election on the ground that AIM' s faculty
members are managerial employees. This Order was appealed by respondent before the
Secretary of the Department of Labor and Employment (DOLE), 10 who reversed foe same
via a February 20, 2009 Decision 11 and May 4, 2009 Resolution, 12 decreeing thus:
WHEREFORE, the appeal filed by the Asian Institute of Management Faculty Association
(AIMFA) is GRANTED. The Order dated 30 August 2007 of DOLE-NCR Mediator-Arbiter
Michael T. Parado is hereby REVERSED and SET ASIDE.
Accordingly, let the entire records of the case be remanded to DOLEN CR for the conduct
of a certification election among the faculty members of the Asian Institute of Management
(AIM), with the following choices:
1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION (AIMFA); and
2. No Union.
SO ORDERED.13
Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order14 dated February 16,

2009 was issued by DOLE-NCR Regional Director Raymundo G. Agravante granting AIM's
petition for cancellation of respondent's certificate of registration and ordering its delisting
from the roster of legitimate labor organizations. 1bis Order was appealed by respondent
before the Bureau labor Relations15 (BLR), which, in a December 29, 2009
Decision,16 reversed the same and ordered respondent's retention in the roster of legitimate
labor organizations. The BLR held that the grounds relied upon in the petition for cancellation
are not among the grounds authorized under Article 239 of the Labor Code, 17 and that
respondent's members are not managerial employees. Petitioner moved to reconsider, but
was rebuffed in a March 18, 2010 Resolution. 18
CA-G.R. SP No.109487 and G.R. No.197089
Petitioner filed a Petition for Certiorari before the CA, questioning the DOLE Secretary's
February 20, 2009 Decision and May 4, 2009 Resolution relative to DOLE Case No. NCR-
OD-M-0705-007, or respondent's petition for certification election. Docketed as CA-G.R. SP
No. 109487, the petition is based on the arguments that 1) the bargaining unit within AIM
sought to be represented is composed of managerial employees who are not eligible to join,
assist, or form any labor organization, and 2) respondent is not a legitimate labor
organization that may conduct a certification election.
On October 22, 2010, the CA rendered its Decision19 containing the following
pronouncement:
AIM insists that the members of its tenure-track faculty are managerial employees, and
therefore, ineligible to join, assist or form a labor organization. It ascribes grave abuse of
discretion on SOLE20 for its rash conclusion that the members of said tenure-track faculty
are not managerial employees solely because the faculty's actions are still subject to
evaluation, review or final approval by the board of trustees ("BOT'). AIM argues that the
BOT does not manage the day-to-day affairs, nor the making and implementing of policies
of the Institute, as such functions are vested with the tenure-track faculty.
We agree.
Article 212(m) of the Labor Code defines managerial employees as:
'ART. 212. Definitions. – x x x
(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.'
There are, therefore, two (2) kinds of managerial employees under Art. 212(m) of the Labor
Code. Those who 'lay down x x x management policies', such as the Board of Trustees, and
those who 'execute management policies and/or hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees'.
xxxx
On its face, the SOLE's opinion is already erroneous because in claiming that the 'test of
'supervisory' or 'managerial status' depends on whether a person possesses authority to act
in the interest of his employer in the matter specified in Article 212(m) of the Labor Code
and Section l(m) of its Implementing Rules', he obviously was referring to the old definition
of a managerial employee. Such is evident in his use of 'supervisory or managerial status',
and reference to 'Section l(m) of its Implementing Rules'. For presently, as aforequoted in
Article 212(m) of the Labor Code and as amended by Republic Act 6715 which took effect
on March 21, 1989, a managerial employee is already different from a supervisory
employee. x x x
xxxx
In further opining that a managerial employee is one whose 'authority is not merely
routinary or clerical in nature but requires the use of independent judgment', a
description which fits now a supervisory employee under Section l(t), Rule I, Book V of
the Omnibus Rules Implementing the Labor Code, it then follows that the SOLE was not
aware of the change in the law and thus gravely abused its discretion amounting to lack of
jurisdiction in concluding that AIM's 'tenure-track' faculty are not managerial employees.
SOLE further committed grave abuse of discretion when it concluded that said tenure-track
faculty members are not managerial employees on the basis of a 'footnote' in AIM's Policy
Manual, which provides that 'the policy[-] making authority of the faculty members is
merely recommendatory in nature considering that the faculty standards they formulate
are still subject to evaluation, review or final approval by the [AIM]'s Board of
Trustees'. x x x
xxxx
Clearly, AIM's tenure-track faculty do not merely recommend faculty

standards.1âwphi1 They 'determine all faculty standards', and are thus managerial
employees. The standards' being subjected to the approval of the Board of Trustees would
not make AIM's tenure-track faculty non-managerial because as earlier mentioned,
managerial employees are now of two categories: (1) those who 'lay down policies', such as
the members of the Board of Trustees, and (2) those who 'execute management policies
(etc.)’, such as AIM's tenure-track faculty.
xxxx
It was also grave abuse of discretion on the part of the SOLE when he opined that AIM' s
tenure-track faculty members are not managerial employees, relying on an
impression that they were subjected to rigid observance of regular hours of work as
professors. x x x
xxxx
More importantly, it behooves the SOLE to deny AFA's appeal in light of the February
16, 2009 Order of Regional Director Agravante delisting AFA from the roster of
legitimate labor organizations. For, only legitimate labor organizations are given the
right to be certified as sole and exclusive bargaining agent in an establishment.
xxxx
Here, the SOLE committed grave abuse of discretion by giving due course to AFA's petition
for certification election, despite the fact that: (1) AFA's members are managerial employees;
and (2) AFA is not a legitimate labor organization. 'These facts rendered AFA ineligible, and
without any right to file a petition for certification election, the object of which is to determine
the sole and exclusive bargaining representative of qualified AIM employees.
WHEREFORE, the instant petition is GRANTED. The assailed Decision dated February 20,
2009 and Resolution dated May 4, 2009 are hereby REVERSED and SET ASIDE. The
Order dated August 30, 2007 of Mediator-Arbiter Parado is hereby REINSTATED.
SO ORDERED.21 (Emphasis in the original)
Respondent sought reconsideration, but was denied. It thus instituted a Petition for Review
on Certiorari before this Court on July 4, 2011. The Petition, docketed as G.R. No. 197089,
remains pending to date.
The Assailed Ruling of the Court of Appeals
Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's petition

for cancellation of respondent's certificate of registration, petitioner filed on May 24, 20 l 0 a
Petition for Certiorari22before the CA, questioning the BLR's December 29, 2009 decision
and March 18, 2010 resolution. The petition, docketed as CA-G.R. SP No. 114122, alleged
that the BLR committed grave abuse of discretion in granting respondent's appeal and
affirming its certificate of registration notwithstanding that its members are managerial
employees who may not join, assist, or form a labor union or organization.
On January 8, 2013, the CA rendered the assailed Decision, stating as follows:
The petition lacks merit
xxxx
It is therefore incumbent upon the Institute to prove that the BLR committed grave abuse of
discretion in issuing the questioned Decision.1âwphi1 Towards this end, AIM must lay the
basis by showing that any of the grounds provided under Article 239 of the Labor Code,
exists, to wit:
Article 239. Grounds for cancellation of union registration. - The following may 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) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Article 238 of the Labor Code provides that the enumeration of the grounds for cancellation
of union registration, is exclusive; in other words, no other grow1ds for cancellation is
acceptable, except for the three (3) grounds stated in Article 239. The scope of the grounds
for cancellation has been explained-
For the purpose of de-certifying a union such as respondent, it must be shown that there
was 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; or, in
connection with the election of officers, the minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of the newly elected-
appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent's
certificate of registration. The cancellation of a union's registration doubtless has an
impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor Code,
the nature of the fraud andmisrepresentation must be grave and compelling enough to
vitiate the consent of a majority of union members.23
In this regard, it has also been held that:
Another factor which militates against the veracity of the allegations in the Sinumpaang
Petisyon is the lack of particularities on how, when and where respondent union perpetrated
the alleged fraud on each member. Such details are crucial for, in the proceedings for
cancellation of union registration on the ground of fraud or misrepresentation, what needs to
be established is that the specific act or omission of the union deprived the complaining
employees-members of their right to choose.24
A cursory reading of the Petition shows that AIM did NOT allege any specific act of fraud or
misrepresentation committed by AFA. What is clear is that the Institute seeks the cancellation
of the registration of AFA based on Article 245 of the Labor Code on the ineligibility of
managerial employees to form or join labor unions. Unfortunately for the petitioner, even
assuming that there is a violation of Article 245, such violation will not result in the
cancellation of the certificate of registration of a labor organization.
It should be stressed that a Decision had already been issued by the DOLE in the
Certification Election case; and the Decision ordered the conduct of a certification election
among the faculty members of the Institute, basing its directive on the finding that the
members of AFA were not managerial employees and are therefore eligible to form, assist
and join a labor union. As a matter of fact, the certification election had already been held on
October 16, 2009, albeit the results have not yet been resolved as inclusion/exclusion
proceedings are still pending before the DOLE. The remedy available to the Institute is not
the instant Petition, but to question the status of the individual union members of the AFA in
the inclusion/exclusion proceedings pursuant to Article 245-A of the Labor Code, which
reads:
Article 245-A. Effect of inclusion as members of employees outside the bargaining unit. - The
inclusion as union members of employees outside the bargaining unit shall not be a ground
for the cancellation of the registration of the union. Said employees are automatically
deemed removed from the list of membership of said union.
Petitioner insists that Article 245-A is not applicable to this case as all AF A members are
managerial employees. We are not persuaded.
The determination of whether any or all of the members of AFA should be considered as
managerial employees is better left to the DOLE because,
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.25
From the discussion, it is manifestly clear that the petitioner foiled to prove that the BLR
committed grave abuse of discretion; consequently, the Petition must fail.
WHEREFORE, the Petition is hereby DENIED. The Decision and Resolution of public
respondent Bureau of Labor Relations in BLR-A-C-19-3-6-09 (NCR-OD-0707-001) are
hereby AFFIRMED.
SO ORDERED.26 (Emphasis in the original)
Petitioner filed its Motion for Reconsideration, which was denied by the CA via its June 27,
2013 Resolution. Hence, the instant Petition.
In a November 10, 2014 Resolution,27 the Court resolved to give due course to the Petition.
Issue
Petitioner claims that the CA seriously erred in affirming the dispositions of the BLR and thus
validating the respondent's certificate of registration notwithstanding the fact that its
members are all managerial employees who are disqualified from joining, assisting, or
forming a labor organization.
Petitioner's Arguments
Praying that the assailed CA dispositions be set aside and that the DOLE-NCR Regional
Director's February 16, 2009 Order granting AIM's petition for cancellation of respondent's
certificate of registration and ordering its delisting from the roster of legitimate labor
organizations be reinstated instead, petitioner maintains in its Petition and Reply 28 that
respondent's members are all managerial employees; that the CA erred in declaring that
even if respondent's members are all managerial employees, this alone is not a ground for
cancellation of its certificate of registration; that precisely, the finding in DOLE Case No.
NCR-ODM- 0705-007, which the CA affirmed in CA-G.R. SP No. 109487, is that
respondent's members are managerial employees; that respondent's declaration that its
members are eligible to join, assist, or form a labor organization is an act of
misrepresentation, given the finding in CA-G.R. SP No. 109487 that they are managerial
employees; and that the grounds for cancellation of union registration enumerated in Article
239 of the Labor Code are not exclusive.
Respondent's Arguments
In its Comment,29 respondent maintains that the CA was right to treat petitioner’s case for
cancellation of its union registration with circumspection; that petitioner's ground for filing the
petition for cancellation is not recognized under Article 239; that petitioner's accusation of
misrepresentation is unsubstantiated, and is being raised for the first time at this stage; that
its members are not managerial employees; and that petitioner's opposition to respondent's
attempts at self-organization constitutes harassment, oppression, and violates the latter's
rights under the Labor Code and the Constitution.
Our Ruling
In Holy Child Catholic School v. Hon. Sto. Tomas, 30this Court declared that "[i]n case of
alleged inclusion of disqualified employees in a union, the proper procedure for an employer
like petitioner is to directly file a petition for cancellation of the union's certificate of
registration due to misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended."
On the basis of the ruling in the above-cited case, it can be said that petitioner was correct
in filing a petition for cancellation of respondent's certificate of registration. Petitioner's sole
ground for seeking cancellation of respondent's certificate of registration - that its members
are managerial employees and for this reason, its registration is thus a patent nullity for being
an absolute violation of Article 245 of the Labor Code which declares that managerial
employees are ineligible to join any labor organization --- is, in a sense, an accusation that
respondent is guilty of misrepresentation for registering under the claim that its members are
not managerial employees.
However, the issue of whether respondent's members are managerial employees is still
pending resolution by way of petition for review on certiorari in G.R. No. 197089, which is
the culmination of all proceedings in DOLE Case No. NCR-OD-M-0705-007 -- where the
issue relative to the nature of respondent's membership was first raised by petitioner itself
and is there fiercely contested. The resolution of this issue cannot be pre-empted; until it is
determined with finality in G.R. No. l 97089, the petition for cancellation of respondent's
certificate of registration on the grounds alleged by petitioner cannot be resolved. As a matter
of courtesy and in order to avoid conflicting decisions, We must await the resolution of the
petition in G.R. No. 197089.
x x x If a particular point or question is in issue in the second action, and the judgment will
depend on the determination of that particular point or question, a former judgment between
the same parties or their privies will be final and conclusive in the second if that same point
or question was in issue and adjudicated in the first suit. x x x Identity of cause of action is
not required, but merely identity of issues.31 (Citation omitted)
WHEREFORE, considering that the outcome of this case depends on the resolution of the
issue relative to the nature of respondent's membership pending in G.R. No. 197089, this
case is ordered CONSOLIDATED with G.R. No. 197089. SO ORDERED.
UNFAIR LABOR PRACTICE
[6]
G.R. No. 220383, October 05, 2016
SONEDCO WORKERS FREE LABOR UNION (SWOFLU) / RENATO YUDE,

MARIANITO REGINO, MANUEL YUMAGUE, FRANCISCO DACUDAG, RUDY
ABABAO, DOMINIC SORNITO, SERGIO CAJUYONG, ROMULO LABONETE,
GENEROSO GRANADA, EMILIO AGUS, ARNOLD CAYAO, BEN GENEVE,
VICTOR MAQUE, RICARDO GOMEZ, RODOLFO GAWAN, JIMMY SULLIVAN,
FEDERICO SUMUGAT, JR., ROMULO AVENTURA, JR., JURRY
MAGALLANES, HERNAN EPISTOLA, JR., ROBERTO BELARTE, EDMON
MONTALVO, TEODORO MAGUAD, DOMINGO TABABA, MAXIMO SALE,
CYRUS DIONILLO, LEONARDO JUNSAY, JR., DANILO SAMILLION,
MARIANITO BOCATEJA, JUANITO GEBUSION, RICARDO MAYO, RAUL
ALIMON, ARNEL ARNAIZ, REBENCY BASOY, JIMMY VICTORIO
BERNALDE, RICARDO BOCOL, JR., JOB CALAMBA, WOLFRANDO
CALAMBA, RODOLFO CASISID, JR., EDGARDO DELA PENA, ALLAN
DIONILLO, EDMUNDO EBIDO, JOSE ELEPTICO, JR., MARCELINO FLORES,
HERNANDO FUENTEBILLA, SAUL HITALIA, JOSELITO JAGODILLA,
NONITO JAYME, ADJIE JUANILLO, JEROLD JUDILLA, EDILBERTO
NACIONAL, SANDY NAVALES, FELIPE NICOLASORA, JOSE PAMALO-AN,
ISMAEL PEREZ, JR., ERNESTO RANDO, JR., PHILIP REPULLO, VICENTE
RUIZ, JR., JOHN SUMUGAT, CARLO SUSANA, ROMEO TALAPIERO, JR.,
FERNANDO TRIENTA, FINDY VILLACRUZ, JOEL VILLANUEVA, AND JERRY
MONTELIBANO, Petitioners, v. UNIVERSAL ROBINA CORPORATION,
SUGAR DIVISION-SOUTHERN NEGROS DEVELOPMENT CORPORATION
(SONEDCO), Respondent.
DECISION
LEONEN, J.:
An employer who refuses to bargain with the union and tries to restrict its
bargaining power is guilty of unfair labor practice. In determining whether an
employer has not bargained in good faith, the totality of all the acts of the
employer at the time of negotiations must be taken into account.
This resolves a Petition1 for review assailing the Decision2 dated January 30,
2015 and the Resolution3 dated July 27, 2015 of the Court of Appeals. The Court
of Appeals dismissed the Petition for Certiorari filed by members of SONEDCO
Workers Free Labor Union for lack of merit. 4
On May 6, 2002, Universal Robina Corporation Sugar Division - Southern Negros

Development Corporation (URC-SONEDCO) and Philippine Agricultural
Commercial and Industrial Workers Union (PACIWU-TUCP), then the exclusive
bargaining representative of URC-SONEDCO's rank-and-file employees, entered
into a Collective Bargaining Agreement (2002 Collective Bargaining Agreement)
effective January 1, 2002 to December 31, 2006. 5 Under the 2002 Collective
Bargaining Agreement, rank-and-file employees were entitled to a wage increase
of P14.00/day for 2002 and P12.00/day for the succeeding years until 2006. 6
On May 17, 2002, days after the 2002 Collective Bargaining Agreement was
signed, a certification election was conducted. SONEDCO Workers Free Labor
Union won and replaced PACIWU-TUCP as the exclusive bargaining
representative.7
PACIWU-TUCP questioned the results of the certification election before the

Department of Labor and Employment. On July 8, 2002, Med-Arbiter Romulo
Sumalinog certified SONEDCO Workers Free Labor Union as the sole and
exclusive bargaining representative of URC-SONEDCO.8 This was affirmed by the
Labor Secretary in a Resolution dated December 27, 2002, which became final
on April 15, 2003.9 PACIWU-TUCP elevated the same issue to the Court of
Appeals and thereafter this Court, which on July 11, 2007, resolved that the
certification election was valid. SONEDCO Workers Free Labor Union was
declared the exclusive bargaining agent of URC-SONEDCO's rank-and-file
employees.10
URC-SONEDCO consistently refused to negotiate a new collective bargaining

agreement with SONEDCO Workers Free Labor Union, despite several demands
from SONEDCO Workers Free Labor Union, allegedly due to the 2002 Collective
Bargaining Agreement, which it signed with PACIWU-TUCP.12
Despite being the incumbent exclusive bargaining agent, SONEDCO Workers

Free Labor Union filed before the Department of Labor and Employment a
Petition13 for certification election on December 6, 2006 in view of the
approaching expiration of the 2002 Collective Bargaining Agreement. On
December 31, 2006, the 2002 Collective Bargaining Agreement expired with no
new collective bargaining agreement being signed. 14
On August 28, 2007, with no collective bargaining agreement in effect, URC-

SONEDCO informed the rank-and-file employees that they would be granted the
following economic benefits:chanRoblesvirtualLawlibrary
(1) Wage increase of P16.00/day effective January 1, 2007;
(2) Group life insurance of P50,000.00 coverage/year;
(3) Emergency leave in lieu of bereavement leave, up to five (5) days per year; and
(4) Cash loan in lieu of emergency loan of P5,000.00, payable in 11 months. 15

chanrobleslaw
URC-SONEDCO asked the employees who wished to avail themselves of these-
benefits to sign an acknowledgment receipt/waiver (2007 waiver), which stated
that "[i]n the event that a subsequent [collective bargaining agreement] is
negotiated between Management and Union, the new [Collective Bargaining
Agreement] shall only be effective January 1, 2008." 16 URC-SONEDCO claimed
that the 2007 waiver was designed to avoid and/or prevent double
compensation.17
Several SONEDCO Workers Free Labor Union members refused to sign the 2007
waiver. Hence, they did not receive the benefits given to other members of the
bargaining unit who had done so.18
In 2008, another wage increase of P16.00/day effective January 1, 2008 were

given to employees who signed an acknowledgment receipt/waiver (2008
waiver).19 The 2008 waiver stated that "[s]a panahon na kung saan
may [collective bargaining agreement] na maisasara sa pagitan ng Management
at Uniyon, ito ay magiging epektibo lamang Simula January 1, 2009."20
Again, several SONEDCO Workers Free Labor Union members refused to sign the
2008 waiver. They did not receive the benefits from URC-SONEDCO.20
On August 20, 2008, a certification election was conducted. 21 SONEDCO Workers

Free Labor Union won again and proceeded to negotiate a new collective
bargaining agreement, which became effective January 1, 2009 to December 31,
2013 (2009 Collective Bargaining Agreement).22
On July 2, 2009, SONEDCO Workers Free Labor Union and its members who
refused to sign the 2007 and 2008 waivers filed a complaint for unfair labor
practices against URC-SONEDCO.23 They argued that the requirement of a waiver
before the release of the wage increase violated their right to self-organization,
collective bargaining, and concerted action.24
The Labor Arbiter found that URC-SONEDCO did not commit unfair labor practice
when it increased the wages of the rank-and-file employees for 2007 and
2008.25 He found that, the requirement of a waiver aside, it was benevolent for
URC-SONEDCO to give its employees additional benefits outside the Collective
Bargaining Agreement.26 However, the Labor Arbiter ordered URC-SONEDCO to
pay the employees who refused to sign the 2007 and 2008 waivers of the benefits
received by their fellow employees for 2007 and 2008. As a new collective
bargaining agreement had already been renegotiated and did not include the
years 2007 and 2008, the purpose of the waivers was already served.
On appeal, the National Labor Relations Commission sustained 27 the Labor

Arbiter's Decision that the requirement of a waiver before the release of the
benefits for 2007 and 2008 did not constitute unfair labor
practice:chanRoblesvirtualLawlibrary
Such an act does not constitute interference, restraining or coercing employees
in the exercise of their right to self organization or to bargain collectively, neither
is it tantamount to discrimination against union members who refused to waive
wage increase in a CBA. As aptly termed by respondents, it is an "offer" during
the absence of a Collective Bargaining Agreement (CBA) and during the time
when there was an unresolved union representation, which this Commission
considers as reasonable.29
chanrobleslaw
The National Labor Relations Commission likewise affirmed the decision to award
the wage increase to the employees who initially refused to sign the waiver.30
Aggrieved, members of SONEDCO Workers Free Labor Union filed before the
Court of Appeals a Petition for Certiorari assailing the National Labor Relations
Commission Decision. The Court of Appeals found no grave abuse of discretion
in the assailed decision and dismissed the Petition.31
Hence, on October 22, 2015, this Petition32 was filed.
In the Resolution33 dated January 11, 2016, this Court required respondent URC-
SONEDCO to file its comment on the Petition. Respondent filed its Comment34 on
March 22, 2016.
Petitioners now argue that the Court of Appeals failed to consider the totality of
respondent's dealings with them.35 They allege that despite their several
invitations, respondent consistently failed to bargain with them, and the wage
increase was just another move to avoid negotiations. 36 Petitioners claim that
the benefits given by respondent was an economic incentive meant to encourage
individual employees to give up agreement bargaining for 2007 and
2008.37 Moreover, petitioners maintain that the wage increase for 2007 and 2008
should be considered as a continuing benefit over what was already provided in
the 2009 Collective Bargaining Agreement because Article XXI of the 2009
Collective Bargaining Agreement excluded claims pending before the
courts. 38 Article XXI provides:chanRoblesvirtualLawlibrary
ARTICLE XXI
COMPLETE SETTLEMENT
The parties agree that this Agreement is full and complete settlement of all
demands, requests, claims and disputes of any nature, written or verbal, that
either party have or may have against the other prior to the effectivity hereof,
except those subject of pending cases before the NLRC or its arbitration branch,
or before the DOLE or regular courts. 39
chanrobleslaw
Respondent points out that petitioners merely rehashed the same matters
already ruled upon by the Court of Appeals.40 It reiterates that both the National
Labor Relations Commission and the Court of Appeals found them not guilty of
unfair labor practice since the waivers did not violate the employees' right to
organize.41 Moreover, the employees freely signed the waivers; even petitioners
did not accuse respondent of coercing employees to sign these
waivers.42 Respondent claims that the benefits that it offered were higher than
what the employees had previously received; there was no diminution of benefits
involved.43
For resolution are the following issues:cralawlawlibrary
First, whether respondent committed unfair labor

practice;ChanRoblesVirtualawlibrary
Second, whether petitioners, who refused to sign the 2007 and 2008 waivers,
are entitled to the wage increase and other economic benefits as a continuing
employee benefit notwithstanding the 2009 Collective Bargaining Agreement;
and
Lastly, whether respondent is liable for damages.chanroblesvirtuallawlibrary
Respondent is guilty of unfair labor practice.
Both the National Labor Relations Commission and the Court of Appeals ruled
that respondent did not commit unfair labor practice since the requirement of a
waiver for 2007 and 2008 did not interfere with the employees 5 exercise of their
right to self-organization.44 However, the Court of Appeals failed to take into
account that unfair labor practice not only involves acts that violate the right to
self-organization but also covers several acts enumerated in Article 259 of the
Labor Code, thus:chanRoblesvirtualLawlibrary
ARTICLE 259. [248] Unfair Labor Practices of Employers. — It shall be unlawful
for an employer to commit any of the following unfair labor
practices:cralawlawlibrary
(a) To interfere with, restrain or coerce employees in the exercise of their

right to self-organization;
(b) To require as a condition of employment that a person or an employee shall

not join a labor organization or shall withdraw from one to which he
belongs;ChanRoblesVirtualawlibrary
(c) To contract out services or functions being performed by union members

when such will interfere with, restrain or coerce employees in the exercise of
their right to self-organization;ChanRoblesVirtualawlibrary
(d) To initiate, dominate, assist or otherwise interfere with the formation or

administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters;ChanRoblesVirtualawlibrary
(e) To discriminate in regard to wages, hours of work and other terms
and conditions of employment in order to encourage or discourage
membership in any labor organization. Nothing in this Code or in any other
law shall stop the parties from requiring membership in a recognized collective
bargaining agent as a condition for employment, except those employees who
are already members of another union at the time of the signing of the collective
bargaining agreement. Employees of an appropriate bargaining unit who are not
members of the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by members of the
recognized collective bargaining agent, if such non-union members accept the
benefits under the collective bargaining agreement: Provided, That the individual
authorization required under Article 242, paragraph (o) of this Code 204 shall
not apply to the non-members of the recognized collective bargaining
agent;ChanRoblesVirtualawlibrary
(f) To dismiss, discharge or otherwise prejudice or discriminate against an

employee for having given or being about to give testimony under this
Code;ChanRoblesVirtualawlibrary
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney's fees to the union or its officers or agents as
part of the settlement of any issue in collective bargaining or any other dispute;
or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and
agents of corporations, associations or partnerships who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable. (Emphasis supplied)
chanrobleslaw
Under this provision, an employer is guilty of unfair labor practice when it fails
in its duty to bargain in good faith.
Although it Is well-settled that the findings of fact of quasi-judicial agencies such

as the National Labor Relations Commission are accorded great respect, this rule
does admit exceptions.45 One of these exceptions is when, as in this case, the
Court of Appeals errs in appreciating the facts. In Culili v. Eastern
Telecommunications Philippines, Inc.:46chanroblesvirtuallawlibrary
While it is true that factual findings made by quasi-judicial and administrative
tribunals, if supported by substantial evidence, are accorded great respect and
even finality by the courts, this general rule admits of exceptions. When there is
a showing that a palpable and demonstrable mistake that needs rectification has
been committed or when the factual findings were arrived at arbitrarily or in
disregard of the evidence on record, these findings may be examined by the
courts.47
chanrobleslaw
In ruling that respondent did not commit unfair labor practice, the National Labor
Relations Commission and the Court of Appeals failed to consider the totality of
respondent's acts, which showed that it violated its duty to bargain collectively.
This constitutes unfair labor practice under Article 259(g) of the Labor Code.
Article 263 of the Labor Code defines the duty to bargain

collectively:chanRoblesvirtualLawlibrary
ARTICLE 263. [252] Meaning of Duty to Bargain Collectively. — The duty to
bargain collectively means the performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work and all other terms and
conditions of employment including proposals for adjusting any grievances or
questions arising under such agreement and executing a contract incorporating
such agreements if requested by either party but such duty does not compel any
party to agree to a proposal or to make any concession.
chanrobleslaw
Respondent repeatedly refused to meet and bargain with SONEDCO Workers
Free Labor Union, the exclusive bargaining agent of its rank-and-file employees.
In its Position Paper48 before the National Labor Relations Commission,
respondent cited the different instances when petitioners sent it letters trying to
set meetings to discuss a new collective bargaining agreement. 49 Respondent
admitted that it refused to meet with petitioners in light of the 2002 Collective
Bargaining Agreement, which it signed with PACIWU-TUCP, the previous
bargaining representative. It claimed that the 2002 Collective Bargaining
Agreement remained in full force and effect without change until December 31,
2006, despite PACIWU-TUCP losing the May 17, 2002 certification election to
SONEDCO Workers Free Labor Union.50
Respondent's argument has no merit. Respondent's reliance on the 2002

Collective Bargaining Agreement as basis for not negotiating with petitioners is
unjustified. The Collective Bargaining Agreement that respondent invoked had
been entered into when a Petition for Certification Election was already filed.
In Associated Trade Unions v. Trajano,50 this Court ruled on the temporary

nature of this type of collective bargaining
agreement:chanRoblesvirtualLawlibrary
The Court will not rule on the merits and/or defects of the new CBA and shall
only consider the fact that it was entered into at a time when the petition for
certification election had already been filed by TUP AS and was then pending
resolution. The said CBA cannot be deemed permanent, precluding the
commencement of negotiations by another union with the management. In the
meantime however, so as not to deprive the workers of the benefits of the said
agreement, it shall be recognized and given effect on a temporary basis, subject
to the results of the certification election. The agreement may be continued in
force if ATU is certified as the exclusive bargaining representative of the workers
or may be rejected and replaced in the event that TUP AS emerges as the
winner.51 (Emphasis supplied)
chanrobleslaw
Respondent claimed that it refused to bargain with petitioners because the issue
of representation was still pending before the courts. It claimed that when the
2002 Collective Bargaining Agreement expired on December 31, 2006, it had no
bargaining agent to deal with as SONEDCO Workers Free Labor Union had filed
before the Department of Labor and Employment a Petition for Certification
Election on December 6, 2006, which resulted in the absence of a duly elected
bargaining representative.52 Respondent claimed it was only on September 25,
2008 that SONEDCO Workers Free Labor Union was certified by the Department
of Labor and Employment as the exclusive bargaining agent of respondent's
rank-and-file employees.53
This argument fails to persuade.
The Department of Labor and Employment, in its Order 54 dated May 4, 2007
granting SONEDCO Workers Free Labor Union's second Petition for Certification
Election, illustrated why respondent's argument is
untenable:chanRoblesvirtualLawlibrary
Let it be noted that based on the results of the certification election conducted
in the establishment on 17 May 2002, Mediator-Arbiter Sumalinog, declared and
certified SWOFLU as the sole and exclusive bargaining agent of the rank-and-file
employees of SONEDCO. The office of the Secretary affirmed SWOFLU's
certification in OS-A-6-63-01, and the decision became final and executory on
15 April 2003. As such, the suspension of the running of the one (1) year period
referred in Section 3(a) Rule VIII was automatically lifted on 15 April 2003.
Hence, the one (1) year bar cannot be used to deny the subject petition.
Furthermore, despite PACIWU-TUCP's act of questioning the Office of the
Secretary's affirmation before the Court of Appeals by way of a petition for
certiorari, no restraining order was issued to stay the implementation of the
decision.
In other words, as far as this Office is concerned, SWOFLU is the incumbent sole
and exclusive bargaining agent of the rank-and-file employees of SONEDCO. As
such, there was actually no necessity for SWOFLU to file the subject petition, as
its representation status remains to be effective unless challenged by other
legitimate labor organizations during the freedom period of the CBA that was
entered into by PACIWU-TUCP and employer SONEDCO.
Incidentally, the Office of the Secretary declared in OS-A-6-63-01 that SWOFLU

had the option to adopt the interim CBA or negotiate with SONEDCO a new CBA.
Whether SWOFLU was able to actually administer the said CBA, or whether it
attempted to negotiate with the employer for a new CBA but was rejected, the
issues are already moot and academic by reason of the expiration of the
effectivity of the agreement.56 (Emphasis supplied)
chanrobleslaw
Respondent's duty to bargain with SONEDCO Workers Free Labor Union as the
incumbent bargaining agent is clear. The last paragraph of Article 268 of the
Labor Code states:chanRoblesvirtualLawlibrary
ARTICLE 268 [256]. Representation issue in organized establishments. — In
organized establishments, when a verified petition questioning the majority
status of the incumbent bargaining agent is filed before the Department of Labor
and Employment within the sixty-day period before the expiration of the
collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written
consent of at least twenty-five percent (25%) of all the employees in the
bargaining unit to ascertain the will of the employees in the appropriate
bargaining unit. To have a valid election, at least a majority of all eligible voters
in the unit must have cast their votes. The labor union receiving the majority of
the valid votes cast shall be certified as the exclusive bargaining agent of all the
workers in the unit. When an election which provides for three or more choices
results in no choice receiving a majority of the valid votes cast, a run-off election
shall be conducted between the labor unions receiving the two highest number
of votes: Provided, that the total number of votes for all contending unions is at
least fifty percent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize
the majority status of the incumbent bargaining agent where no petition for
certification election is filed. (Emphasis supplied)
chanrobleslaw
When petitioners held a conference on May 26, 2003, respondent refused to
attend.57 Because respondent failed to appear in the conference, petitioners
wrote their demands in a letter sometime in July 2003. The letter included,
among others, a wage increase of P50.00/day from September 2003 to
2006.58 Instead of explaining its non-attendance to the conference or making a
counter-offer, respondent replied on August 15, 2003 acknowledging the receipt
and contents of the July 2003 letter but invoking the 2002 Collective Bargaining
Agreement as an excuse not to answer petitioners' demands to negotiate. 59 This
is contrary to Article 261 of the Labor Code, which requires the other party to
reply within 10 days from receipt of the written
demand:chanRoblesvirtualLawlibrary
ARTICLE 261. [250] Procedure in Collective Bargaining. — The following

procedures shall be observed in collective bargaining:cralawlawlibrary
(a) When a party desires to negotiate an agreement, it shall serve a written

notice upon the other party with a statement of its proposals. The other party
shall make a reply thereto not later than ten (10) calendar days from receipt of
such notice[.]
chanrobleslaw
This was not respondent's only violation of Article 261. Respondent likewise failed
to reply to the collective bargaining agreement proposal sent by petitioners on
August 21, 2007.60 The September 22, 2007 letter, sent with the agreement
proposal, also went unheeded.61
Respondent's reliance on the 2002 Collective Bargaining Agreement is contrary

to jurisprudence. In Associated Labor Unions v. Trajano,62 this Court explicitly
held that the winning union had the option to either continue the existing
collective bargaining agreement or negotiate a new
one:chanRoblesvirtualLawlibrary
The new CBA negotiated by petitioners whether or not submitted to the MOLE in
accordance with Article 231 of the Labor Code cannot be deemed permanent,
precluding commencement of negotiations by another union with management,
considering that it was entered into at a time when the petition for certification
election had already been filed by respondent union. . . . Meantime, this interim
agreement must be recognized and given effect on a temporary basis so as not
to deprive the workers of the favorable terms of the agreement. . . .
If, as a result of the certification election, respondent union or a union other than
petitioner union which executed the interim agreement is certified as the
exclusive bargaining representative of the rank and file employees of respondent
company, then, such union may adopt the interim collective bargaining
agreement or negotiate with management for a new collective bargaining
agreement[.]63 (Citations omitted, emphasis supplied)
chanrobleslaw
As petitioners asked for a P50.00 wage increase, as opposed to the P12.00 wage
increase they had been receiving under the 2002 Collective Bargaining
Agreement, petitioners were justified in demanding a renegotiation. Respondent
was remiss in its duty when it repeatedly refused negotiations with petitioners.
Respondent's refusal is even more unfounded considering that the Labor

Secretary's Resolution,64 which upheld the result of the May 17, 2002
certification election and declared SONEDCO Workers Free Labor Union as the
exclusive bargaining agent, became final and executory as early as April 15,
2003.65 Even though there had been a pending petition for certiorari questioning
the election results, no temporary restraining order was issued to preclude
respondent from bargaining with SONEDCO Workers Free Labor Union, the
declared incumbent union.
Even if we consider respondent's refusal to bargain as merely a mistake made in

good faith, its subsequent acts show an attempt to restrict petitioners'
negotiating power.
First, the 2002 Collective Bargaining Agreement was done on May 6, 2002, only
days before the May 17, 2002 certification election. When respondent and
PACIWU-TUCP entered into the 2002 Collective Bargaining Agreement, they had
been aware that a certification election was going to be conducted in a few days.
In pushing through with negotiations instead of waiting for the outcome of the
election, respondent risked needing to renegotiate with a new union if PACIWU-
TUCP loses. It cannot, thus, invoke the hastily concluded 2002 Collective
Bargaining Agreement as an excuse not to bargain with petitioners. If respondent
had truly intended to bargain in good faith, it could have easily waited a few
more days to know the result of the certification election.
Second, when the 2002 Collective Bargaining Agreement expired in December

2006, the Labor Secretary's Resolution declaring SONEDCO Workers Free Labor
Union as the bargaining agent of respondent's rank-and-file employees was
already final and executory. Respondent's initial basis for refusal to bargain had
expired, and since no temporary restraining order was issued, nothing was
legally preventing respondent from negotiating a new collective bargaining
agreement with petitioners. That it chose to refuse negotiations and instead
entered into an agreement with its employees to essentially waive negotiations
for 2007 and 2008 betrays its intention of limiting petitioners' bargaining power.
The 2007 waiver provided, in part:chanRoblesvirtualLawlibrary

In the event that a subsequent CBA is negotiated between Management and
Union, the new CBA shall only be effective January 1, 2008.66
chanrobleslaw
The 2008 waiver provided, in part:chanRoblesvirtualLawlibrary
Sa panahon na kung saan may CBA na maisasara sa pagitan ng Management at
Unyon, ito ay magiging epektibo lamang Simula January l, 2009. 67
chanrobleslaw
The wording of the waivers shows a clear attempt to limit petitioners' bargaining
power by making them waive the negotiations for 2007 and 2008. In stipulating
that the collective bargaining agreement that would be entered into would only
be effective the year following the 2008 waiver, respondent limited when the
collective bargaining agreement could be deemed effective. Tn other words,
respondent asked petitioners to forego any benefits they might have received
under a collective bargaining agreement in exchange for the company-granted
benefits.
Both the National Labor Relations Commission and the Court of Appeals regarded
the incentives as a magnanimous move because it gave the employees a P16.00
wage increase, P4.00 more than the P12.00 increase under the 2002 Collective
Bargaining Agreement. However, respondent's claim of benevolence falls short:
the wage increase proposed by petitioners in 2007 was P50.00. If a collective
bargaining agreement had been concluded in 2007, employees who signed the
waivers would have lost the chance to receive P34.00 wage increase for that
year.
Lastly, when the 2007 waiver was circulated, respondent already had a copy of
petitioners' agreement proposal. Respondent was aware that petitioners asked
for a P50.00 wage increase. More importantly, the last bar preventing respondent
from recognizing SONEDCO Workers Free Labor Union as the bargaining agent
has been resolved by the time it issued the waivers. The Petition for Certiorari
relative to the May 17, 2002 certification election was denied with finality by this
Court on July 11, 2007.68 There was no reason to doubt that SONEDCO Workers
Free Labor Union was the sole and exclusive bargaining representative. If
respondent did indeed act in good faith, it would have undergone agreement
negotiations with petitioners. However, respondent incessantly refused to meet
with petitioners to discuss the agreement proposal even after petitioners sent
their September 22, 2007 letter.69 Instead of negotiating the proposed P50.00
wage increase, respondent granted a P16.00 wage increase on the condition that
if a collective bargaining agreement was to be signed, it would only be effective
the succeeding year. In effect, respondent hindered petitioners' bargaining
power when it made them waive the bargaining efforts for 2007 and
2008.chanroblesvirtuallawlibrary
II
The National Labor Relations Commission did not err in granting the benefits for
2007 and 2008 to the employees who did not sign the waiver.
After SONEDCO Workers Free Labor Union was again declared as the exclusive
bargaining representative in the August 20, 2008 certification election, the 2009
Collective Bargaining Agreement was created to cover 2009 to 2013. 70 Since the
2009 Collective Bargaining Agreement did not include the years 2007 and 2008,
the alleged purpose of the waivers, which was to prevent double compensation,
was already served.71 It would be unfair for the employees to still not receive the
benefits for 2007 and 2008 simply because they refused to sign a waiver that
was already moot.
However, there is no need for the continuation of the wage increase for 2007
and 2008 since the 2009 Collective Bargaining Agreement contains wage
increase provisions for 2009 to 2013. As explained in Samahang Manggagawa
sa Top Form Manufacturing v. National Labor Relations Commission, 72 if a
proposal is not printed in the collective bargaining agreement, it cannot be
demanded:chanRoblesvirtualLawlibrary
The CBA is the law between the contracting parties — the collective bargaining
representative and the employer-company. Compliance with a CBA is mandated
by the expressed policy to give protection to labor, hi the same vein, CBA
provisions should be "construed liberally rather than narrowly and technically,
and the courts must place a practical and realistic construction upon it, giving
due consideration to the context in which it is negotiated and purpose which it is
intended to serve." This is founded on the dictum that a CBA is not an ordinary
contract but one impressed with public interest. It goes without saying, however,
that only provisions embodied in the CBA should be so interpreted and complied
with. Where a proposal raised by a contracting party does not find print in the
CBA, it is not a part thereof and the proponent has no claim whatsoever to its
implementation.72 (Citations omitted)
chanrobleslaw
If petitioners wanted the wage increase for 2007 and 2008 to be carried on, the
proper recourse would have been to demand that this be included in the 2009
Collective Bargaining Agreement.chanroblesvirtuallawlibrary
III
Respondent is liable to pay moral and exemplary damages. In Nueva Ecija

Electric Cooperative, Inc. v. National Labor Relations
Commission:73chanroblesvirtuallawlibrary
Unfair labor practices violate the constitutional rights of workers and employees
to self-organization, 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. As the conscience of the government, it is the Courts
sworn duty to ensure that none trifles with labor rights.
For this reason, we find it proper in this case to impose moral and exemplary
damages on private respondent.74
chanrobleslaw
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals
dated January 30, 2015 and the Resolution dated July 27, 2015 in CA-GR. SP
No. 05950 are SET ASIDE. Respondent Universal Robina Corporation. Sugar
Division - Southern Negros Development Corporation is GUILTY of unfair labor
practice and is ORDERED to pay each of the petitioners the wage increase of
P16.00 for the years 2007 and 2008; and to pay SONEDCO Workers Free Labor
Union moral damages in the amount of P100,000.00; and exemplary damages
in the amount of P200,000.00.
SO ORDERED.
COLLECTIVE BARGAINING AGREEMENT AND ADMINISTRATION
[7]
G.R. No. 96189 July 14, 1992
UNIVERSITY OF THE PHILIPPINES, petitioner,

vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations,
Department of Labor and Employment, and THE ALL U.P. WORKERS' UNION,
represented by its President, Rosario del Rosario, respondent.
NARVASA, C.J.:
In this special civil action of certiorari the University of the Philippines seeks the nullification
of the Order dated October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor
Relations holding that "professors, associate professors and assistant professors (of the
University of the Philippines) are . . rank-and-file employees . . ;" consequently, they should,
together with the so-called non-academic, non-teaching, and all other employees of the
University, be represented by only one labor organization. 1 The University is joined in this
undertaking by the Solicitor General who "has taken a position not contrary to that of
petitioner and, in fact, has manifested . . that he is not opposing the petition . . ." 2
The case 3 was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990
by a registered labor union, the "Organization of Non-Academic Personnel of UP"
(ONAPUP). 4 Claiming to have a membership of 3,236 members — comprising more than
33% of the 9,617 persons constituting the non-academic personnel of UP-Diliman, Los
Baños, Manila, and Visayas, it sought the holding of a certification election among all said
non-academic employees of the University of the Philippines. At a conference thereafter held
on March 22, 1990 in the Bureau, the University stated that it had no objection to the election.
On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed a
comment, as intervenor in the certification election proceeding. Alleging that its membership
covers both academic and non-academic personnel, and that it aims to unite all UP rank-
and-file employees in one union, it declared its assent to the holding of the election provided
the appropriate organizational unit was first clearly defined. It observed in this connection
that the Research, Extension and Professional Staff (REPS), who are academic non-
teaching personnel, should not be deemed part of the organizational unit.
For its part, the University, through its General Counsel, 6 made of record its view that there
should be two (2) unions: one for academic, the other for non-academic or administrative,
personnel considering the dichotomy of interests, conditions and rules governing these
employee groups.
Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the appropriate
organizational unit . . should embrace all the regular rank-and-file employees, teaching and
non-teaching, of the University of the Philippines, including all its branches" and that there
was no sufficient evidence "to justify the grouping of the non-academic or administrative
personnel into an organization unit apart and distinct from that of the academic or teaching
personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer unit

consisting of rank-and-file employees, unless circumstances otherwise
require.
and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC.
2, Resolution of Public Sector Labor Management Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational unit may refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or controlled

corporations with original charters.
She went on to say that the general intent of EO 180 was "not to fragmentize the
employer unit, as "can be gleaned from the definition of the term "accredited
employees' organization," which refers to:
. . a registered organization of the rank-and-file employees as defined in these

rules recognized to negotiate for the employees in an organizational unit
headed by an officer with sufficient authority to bind the agency, such as . . .
. . . state colleges and universities.
The Director thus commanded that a certification election be "conducted among rank-and-
file employees, teaching and non-teaching" in all four autonomous campuses of the UP, and
that management appear and bring copies of the corresponding payrolls for January, June,
and July, 1990 at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational Division
of the DOLE, 8 the University sought further clarification of the coverage of the term, "rank-
and-file" personnel, asserting that not every employee could properly be embraced within
both teaching and non-teaching categories since there are those whose positions are in truth
managerial and policy-determining, and hence, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking
the exclusion from the organizational unit of those employees holding supervisory positions
among non-academic personnel, and those in teaching staff with the rank of Assistant
Professor or higher, submitting the following as grounds therefor:
1) Certain "high-level employees" with policy-making, managerial, or confidential functions,

are ineligible to join rank-and-file employee organizations under Section 3, EO 180:
Sec. 3. High-level employees whose functions are normally considered as
policy-making or managerial or whose duties are of a highly confidential
nature shall not be eligible to join the organization of rank-and file government
employees;
2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-
and file: just as there are those occupying managerial positions within the non-teaching
roster, there is also a dichotomy between various levels of the teaching or academic staff;
3) Among the non-teaching employees composed of Administrative Staff and Research

personnel, only those holding positions below Grade 18 should be regarded as rank-and-
file, considering that those holding higher grade positions, like Chiefs of Sections, perform
supervisory functions including that of effectively recommending termination of appointments
or initiating appointments and promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those
holding appointments at the instructor level may be so considered, because those holding
appointments from Assistant Professor to Associate Professor to full Professor take part, as
members of the University Council, a policy-making body, in the initiation of policies and
rules with respect to faculty tenure and promotion. 9
The ONAPUP quite categorically made of record its position; that it was not opposing the
University's proferred classification of rank-and file employees. On the other hand, the "All
UP Workers' Union" opposed the University's view, in a Position Paper presented by it under
date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the
"sole issue" of "whether or not professors, associate professors and assistant professors are
included in the definition of high-level employee(s)" in light of Rule I, Section (1) of the
Implementing Guidelines of Executive Order No. 180, defining "high level employee" as
follows:
1. High Level Employee — is one whose functions are normally considered

policy determining, managerial or one whose duties are highly confidential in
nature. A managerial function refers to the exercise of powers such as:
1. To effectively recommend such managerial actions;
2. To formulate or execute management policies and

decisions; or
3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or

discipline employees.
The Director adjudged that said teachers are rank-and-file employees "qualified to join
unions and vote in certification elections." According to her —
A careful perusal of the University Code . . shows that the policy-making

powers of the Council are limited to academic matters, namely, prescribing
courses of study and rules of discipline, fixing student admission and
graduation requirements, recommending to the Board of Regents the
conferment of degrees, and disciplinary power over students. The policy-
determining functions contemplated in the definition of a high-level employee
pertain to managerial, executive, or organization policies, such as hiring,
firing, and disciplining of employees, salaries, teaching/working hours, other
monetary and non-monetary benefits, and other terms and conditions of
employment. They are the usual issues in collective bargaining negotiations
so that whoever wields these powers would be placed in a situation of
conflicting interests if he were allowed to join the union of rank-and-file
employees.
The University seasonably moved for reconsideration, seeking to make the following points,
to wit:
1) UP professors do "wield the most potent managerial powers: the power to rule on tenure,
on the creation of new programs and new jobs, and conversely, the abolition of old programs
and the attendant re-assignment of employees.
2) To say that the Council is "limited to (acting on) academic matters" is error, since academic
decisions "are the most important decisions made in a University . . (being, as it were) the
heart, the core of the University as a workplace.
3) Considering that the law regards as a "high level" employee, one who performs either
policy-determining, managerial, or confidential functions, the Director erred in applying only
the "managerial functions" test, ignoring the "policy-determining functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an
administrative officer of the College of Law is a high level employee, while a full Professor
who has published several treatises and who has distinguished himself in argument before
the Supreme Court is a mere rank-and-file employee. A dormitory manager is classified as
a high level employee, while a full Professor or Political Science with a Ph. D. and several
Honorary doctorates is classified as rank-and-file." 10
The motion for reconsideration was denied by Director Calleja, by Order dated November
20, 1990.
The University would now have this Court declare void the Director's Order of October 30,
1990 as well as that of November 20, 1990. 11 A temporary restraining order was issued by
the Court, by Resolution dated December 5, 1990 conformably to the University's application
therefor.
Two issues arise from these undisputed facts. One is whether or not professors, associate
professors and assistant professors are "high-level employees" "whose functions are
normally considered policy determining, managerial or . . highly confidential in nature." The
other is whether or not, they, and other employees performing academic functions, 12 should
comprise a collective bargaining unit distinct and different from that consisting of the non-
academic employees of the University, 13 considering the dichotomy of interests, conditions
and rules existing between them.
As regards the first issue, the Court is satisfied that it has been correctly resolved by the
respondent Director of Bureau Relations. In light of Executive Order No. 180 and its
implementing rules, as well as the University's charter and relevant regulations, the
professors, associate professors and assistant professors (hereafter simply referred to as
professors) cannot be considered as exercising such managerial or highly confidential
functions as would justify their being categorized as "high-level employees" of the institution.
The Academic Personnel Committees, through which the professors supposedly exercise
managerial functions, were constituted "in order to foster greater involvement of the faculty
and other academic personnel in appointments, promotions, and other personnel matters
that directly affect them." 14 Academic Personnel Committees at the departmental and
college levels were organized "consistent with, and demonstrative of the very idea of
consulting the faculty and other academic personnel on matters directly affecting them" and
to allow "flexibility in the determination of guidelines peculiar to a particular department or
college." 15
Personnel actions affecting the faculty and other academic personnel should, however, "be
considered under uniform guidelines and consistent with the Resolution of the Board (of
Regents) adopted during its 789th Meeting (11-26-69) creating the University Academic
Personnel Board." 16 Thus, the Departmental Academic Personnel Committee is given the
function of "assist(ing) in the review of the recommendations initiated by the Department
Chairman with regard to recruitment, selection, performance evaluation, tenure and staff
development, in accordance with the general guidelines formulated by the University
Academic Personnel Board and the implementing details laid down by the College Academic
Personnel Committee;" 17 while the College Academic Personnel Committee is entrusted
with the following functions: 18
1. Assist the Dean in setting up the details for the implementation of policies,
rules, standards or general guidelines as formulated by the University
Academic Personnel Board;
2. Review the recommendation submitted by the DAPCs with regard to

recruitment, selection, performance evaluation, tenure, staff development,
and promotion of the faculty and other academic personnel of the College;
3. Establish departmental priorities in the allocation of available funds for

promotion;
4. Act on cases of disagreement between the Chairman and the members of

the DAPC particularly on personnel matters covered by this Order;
5. Act on complaints and/or protests against personnel actions made by the

Department Chairman and/or the DAPC.
The University Academic Personnel Board, on the other hand, performs the following
functions: 19
1. Assist the Chancellor in the review of the recommendations of the CAPC'S.

2. Act on cases of disagreement between the Dean and the CAPC.
3. Formulate policies, rules, and standards with respect to the selection,

compensation, and promotion of members of the academic staff.
4. Assist the Chancellor in the review of recommendations on academic

promotions and on other matters affecting faculty status and welfare.
From the foregoing, it is evident that it is the University Academic Personnel Committee,
composed of deans, the assistant for academic affairs and the chief of personnel, which
formulates the policies, rules and standards respecting selection, compensation and
promotion of members of the academic staff. The departmental and college academic
personnel committees' functions are purely recommendatory in nature, subject to review and
evaluation by the University Academic Personnel Board. In Franklin Baker Company of the
Philippines vs. Trajano, 20 this Court reiterated the principle laid down in National
Merchandising Corp. vs. Court of Industrial Relations, 21 that the power to recommend, in
order to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical
nature but should require the use of independent judgment." 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 effective and not an exercise of independent judgment as required by law.
Significantly, the personnel actions that may be recommended by the departmental and
college academic personnel committees must conform with the general guidelines drawn up
by the university personnel academic committee. This being the case, the members of the
departmental and college academic personnel committees are not unlike the chiefs of
divisions and sections of the National Waterworks and Sewerage Authority whom this Court
considered as rank-and-file employees in National Waterworks & Sewerage Authority vs.
NWSA Consolidated Unions, 22 because "given ready policies to execute and standard
practices to observe for their execution, . . . they have little freedom of action, as their main
function is merely to carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively recommend such
managerial actions, to formulate or execute management policies or decisions and/or to hire,
transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" 23 is exercised to
a certain degree by the university academic personnel board/committees and ultimately by
the Board of Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of the University,

professors, instructors, lecturers and other employees of the University; to fix
their compensation, hours of service, and such other duties and conditions as
it may deem proper; to grant them in its discretion leave of absence under
such regulations as it may promulgate, any other provision of law to the
contrary notwithstanding, and to remove them for cause after investigation
and hearing shall have been had.
Another factor that militates against petitioner's espousal of managerial employment status
for all its professors through membership in the departmental and college academic
personnel committees is that not all professors are members thereof. Membership and the
number of members in the committees are provided as follows: 25
Sec. 2. Membership in Committees. — Membership in committees may be

made either through appointment, election, or by some other means as may
be determined by the faculty and other academic personnel of a particular
department or college.
Sec. 3. Number of Members. — In addition to the Chairman, in the case of a

department, and the Dean in the case of a college, there shall be such number
of members representing the faculty and academic personnel as will afford a
fairly representative, deliberative and manageable group that can handle
evaluation of personnel actions.
Neither can membership in the University Council elevate the professors to the status of
high-level employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26
Sec. 6. The Board of Regents shall have the following powers and duties . . .
;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline drawn up by the
University Council as hereinafter provided; . . .
Sec. 9. There shall be a University Council consisting of the President of the

University and of all instructors in the university holding the rank of professor,
associate professor, or assistant professor. The Council shall have the power
to prescribe the courses of study and rules of discipline, subject to the
approval of the Board of Regents. It shall fix the requirements for admission
to any college of the university, as well as for graduation and the receiving of
a degree. The Council alone shall have the power to recommend students or
others to be recipients of degrees. Through its president or committees, it
shall have disciplinary power over the students within the limits prescribed by
the rules of discipline approved by the Board of Regents. The powers and
duties of the President of the University, in addition to those specifically
provided in this Act shall be those usually pertaining to the office of president
of a university.
It is readily apparent that the policy-determining functions of the University Council are
subject to review, evaluation and final approval by the Board of Regents. The Council's
power of discipline is likewise circumscribed by the limits imposed by the Board of Regents.
What has been said about the recommendatory powers of the departmental and college
academic personnel committees applies with equal force to the alleged policy-determining
functions of the University Council.
Even assuming arguendo that UP professors discharge policy-determining functions

through the University Council, still such exercise would not qualify them as high-level
employees within the context of E.O. 180. As correctly observed by private respondent,
"Executive Order No. 180 is a law concerning public sector unionism. It must therefore be
construed within that context. Within that context, the University of the Philippines represents
the government as an employer. 'Policy-determining' refers to policy-determination in
university mattes that affect those same matters that may be the subject of negotiation
between public sector management and labor. The reason why 'policy-determining' has been
laid down as a test in segregating rank-and-file from management is to ensure that those
who lay down policies in areas that are still negotiable in public sector collective bargaining
do not themselves become part of those employees who seek to change these policies for
their collective welfare." 27
The policy-determining functions of the University Council refer to academic matters, i.e.
those governing the relationship between the University and its students, and not the
University as an employer and the professors as employees. It is thus evident that no conflict
of interest results in the professors being members of the University Council and being
classified as rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all rank-and-file
employees of the university are to be organized into a single collective bargaining unit?
A "bargaining unit" has been defined as a group of employees of a given employer,

comprised of all or less than all of the entire body of employees, which the collective interest
of all the employees, consistent with equity to the employer, indicate to be the best suited to
serve the reciprocal rights and duties of the parties under the collective bargaining provisions
of the law. 28
Our labor laws do not however provide the criteria for determining the proper collective
bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the
Industrial Peace Act, simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for Labor

Organizations. — The labor organization designated or selected for the
purpose of collective bargaining by the majority of the employees in an
appropriate collective bargaining unit shall be the exclusive representative of
all the employees in such unit for the purpose of collective bargaining in
respect to rates of pay, wages, hours of employment, or other conditions of
employment; Provided, That any individual employee or group of employees
shall have the right at any time to present grievances to their employer.
Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the
Labor Code with minor changes, no guidelines were included in said Code for determination
of an appropriate bargaining unit in a given case. 30 Thus, apart from the single descriptive
word "appropriate," no specific guide for determining the proper collective bargaining unit
can be found in the statutes.
Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section
9, is that "(t)he appropriate organizational unit shall be the employer unit consisting of rank-
and-file employees, unless circumstances otherwise require." Case law fortunately furnishes
some guidelines.
When first confronted with the task of determining the proper collective bargaining unit in a
particular controversy, the Court had perforce to rely on American jurisprudence.
In Democratic Labor Association vs. Cebu Stevedoring Company, Inc., decided on February
28, 1958, 31 the Court observed that "the issue of how to determine the proper collective
bargaining unit and what unit would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound
. . (to which resort may be had) considering that our present Magna Carta has been patterned
after the American law on the subject." Said the Court:
. . . Under these precedents, there are various factors which must be satisfied
and considered in determining the proper constituency of a bargaining unit.
No one particular factor is itself decisive of the determination. The weight
accorded to any particular factor varies in accordance with the particular
question or questions that may arise in a given case. What are these factors?
Rothenberg mentions a good number, but the most pertinent to our case are:
(1) will of the employees (Globe Doctrine); (2) affinity and unit of employees'
interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions; (3) prior collective bargaining history;
and (4) employment status, such as temporary, seasonal probationary
employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining

unit is given in the 10th Annual Report of the National Labor Relations Board
wherein it is emphasized that the factors which said board may consider and
weigh in fixing appropriate units are: the history, extent and type of
organization of employees; the history of their collective bargaining; the
history, extent and type of organization of employees in other plants of the
same employer, or other employers in the same industry; the skill, wages,
work, and working conditions of the employees; the desires of the employees;
the eligibility of the employees for membership in the union or unions involved;
and the relationship between the unit or units proposed and the employer's
organization, management, and operation. . . .
. . In said report, it is likewise emphasized that the basic test in determining

the appropriate bargaining unit is that a unit, to be appropriate, must affect a
grouping of employees who have substantial, mutual interests in wages,
hours, working conditions and other subjects of collective bargaining (citing
Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . .
The Court further explained that "(t)he test of the grouping is community or mutuality of
interests. And this is so because 'the basic test of an asserted bargaining unit's acceptability
is whether or not it is fundamentally the combination which will best assure to all employees
the exercise of their collective bargaining rights' (Rothenberg on Labor Relations, 490)."
Hence, in that case, the Court upheld the trial court's conclusion that two separate bargaining
units should be formed, one consisting of regular and permanent employees and another
consisting of casual laborers or stevedores.
Since then, the "community or mutuality of interests" test has provided the standard in
determining the proper constituency of a collective bargaining unit. In Alhambra Cigar &
Cigarette Manufacturing Company, et al. vs. Alhambra Employees' Association
(PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative, sales and
dispensary departments of a cigar and cigarette manufacturing firm perform work which have
nothing to do with production and maintenance, unlike those in the raw lead (malalasi), cigar,
cigarette, packing (precintera) and engineering and garage departments, authorized the
formation of the former set of employees into a separate collective bargaining unit. The ruling
in the Democratic Labor Association case, supra, was reiterated in Philippine Land-Air-Sea
Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were
barred from joining the union of the permanent and regular employees.
Applying the same "community or mutuality of interests" test, but resulting in the formation
of only one collective bargaining units is the case of National Association of Free Trade
Unions vs. Mainit Lumber Development Company Workers Union-United Lumber and
General Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said
case, the Court ordered the formation of a single bargaining unit consisting of the Sawmill
Division in Butuan City and the Logging Division in Zapanta Valley, Kitcharao, Agusan Norte
of the Mainit Lumber Development Company. The Court reasoned:
Certainly, there is a mutuality of interest among the employees of the Sawmill

Division and the Logging Division. Their functions mesh with one another.
One group needs the other in the same way that the company needs them
both. There may be difference as to the nature of their individual assignments
but the distinctions are not enough to warrant the formation of a separate
bargaining unit.
In the case at bar, the University employees may, as already suggested, quite easily be
categorized into two general classes: one, the group composed of employees whose
functions are non-academic, i.e., janitors, messengers, typists, clerks, receptionists,
carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers; 32 and two, the
group made up of those performing academic functions, i.e., full professors, associate
professors, assistant professors, instructors — who may be judges or government
executives — and research, extension and professorial staff. 33 Not much reflection is
needed to perceive that the community or mutuality of interests which justifies the formation
of a single collective bargaining unit is wanting between the academic and non-academic
personnel of the university. It would seem obvious that teachers would find very little in
common with the University clerks and other non-academic employees as regards
responsibilities and functions, working conditions, compensation rates, social life and
interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the
dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in the
compensation and working conditions of the academic and non-academic personnel dictate
the separation of these two categories of employees for purposes of collective bargaining.
The formation of two separate bargaining units, the first consisting of the rank-and-file non-
academic personnel, and the second, of the rank-and-file academic employees, is the set-
up that will best assure to all the employees the exercise of their collective bargaining rights.
These special circumstances, i.e., the dichotomy of interests and concerns as well as the
dissimilarity in the nature and conditions of work, wages and compensation between the
academic and non-academic personnel, bring the case at bar within the exception
contemplated in Section 9 of Executive Order No. 180. It was grave abuse of discretion on
the part of the Labor Relations Director to have ruled otherwise, ignoring plain and patent
realities.
WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it
declares the professors, associate professors and assistant professors of the University of
the Philippines as rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the
sense that the non-academic rank-and-file employees of the University of the Philippines
shall constitute a bargaining unit to the exclusion of the academic employees of the institution
— i.e., full professors, associate professors, assistant professors, instructors, and the
research, extension and professorial staff, who may, if so minded, organize themselves into
a separate collective bargaining unit; and that, therefore, only said non-academic rank-and-
file personnel of the University of the Philippines in Diliman, Manila, Los Baños and the
Visayas are to participate in the certification election.
SO ORDERED.
[8]
[G.R. No. 91915. September 11, 1992.]
DIVINE WORD UNIVERSITY OF TACLOBAN, Petitioner, v. SECRETARY OF

LABOR AND EMPLOYMENT and DIVINE WORD UNIVERSITY EMPLOYEES
UNION-ALU, Respondents.
Generosa R. Jacinto for Petitioner.
Joji L. Barrios for Private Respondent.
DECISION
ROMERO, J.:
Assailed in this petition for certiorari for being violative of the "constitutional
right of employees to self-organization which includes the right to form, join or
assist labor organizations of their own choosing for purposes of collective
bargaining," 1 are the Orders of May 23, 1989 and January 17, 1990 issued by
then Secretary of Labor and Employment Franklin H. Drilon and Acting Secretary
of Labor and Employment Dionisio D. de la Serna, respectively.chanrobles virtual
lawlibrary
Culled from the records are the following facts which led to the filing of the instant
petition:chanrob1es virtual 1aw library
On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the Divine

Word University Employees Union (DWUEU) as the sole and exclusive bargaining
agent of the Divine Word University (University for brevity). On March 7, 1985,
DWUEU submitted its collective bargaining proposals. On March 26, 1985, the
University replied and requested a preliminary conference to be held on May 28,
1985. However, two days before the scheduled conference or on May 26, 1985,
DWUEU’s resigned vice-president Mr. Brigido Urminita (or Urmeneta) wrote a
letter addressed to the University unilaterally withdrawing the CBA proposals.
Consequently, the preliminary conference was cancelled. 2
After almost three years, or on March 11, 1988, DWUEU, which had by then
affiliated with the Associated Labor Union, 3 requested a conference with the
University for the purpose of continuing the collective bargaining negotiations. 4
Not having heard from the University, DWUEU-ALU sent a follow-up letter on
March 23, 1988 reiterating its request for a conference and warning the
University against committing acts of interference through its various meetings
with both the academic and non-academic employees regarding their union
affiliation and activities. Despite the letter, the University persisted in
maintaining silence.
On April 25, 1988, DWUEU-ALU filed with the National Conciliation and Mediation
Board of the Department of Labor and Employment a notice of strike on the
grounds of bargaining deadlock and unfair labor practice acts, specifically, refusal
to bargain, discrimination and coercion on (sic) employees. 5 The conferences
which were held after the filing of the notice of strike led to the conclusion of an
agreement between the University and DWUEU-ALU on May 10, 1888 with the
following terms:chanrobles virtual lawlibrary
"1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for
whatever action management will take.
2. Union and management agrees (sic) to sit down and determine (sic) the
number of employees that will represent their bargaining unit.
3. Conciliation proceedings is (sic) temporarily suspended until the parties inform

this office of further development.
4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is settled.
5. Issue (sic) on coercion and refusal to bargain shall be subject of continuing

dialogue.
6. Atty. Jacinto shall be given 10 days notice in the next conciliation meeting." 6
However, it turned out that an hour before the May 10, 1988 agreement was
concluded, the University had filed a petition for certification election with the
Region VIII office of the Department of Labor and Employment. 7
On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the
agreement, submitted its collective bargaining proposals. These were ignored by
the University. Thereafter, through the National Conciliation and Mediation Board
(NCMB) of Region VIII, marathon conciliation conferences were conducted but to
no avail. Hence, on August 25, 1988, then Secretary of Labor Franklin M. Drilon,
exercising his powers under Art. 263(g) of the Labor Code, issued an Order
assuming jurisdiction over the labor dispute and directing all striking workers to
report back to work within twenty-four (24) hours and the management to accept
them back under the same terms and conditions prevailing prior to the work
stoppage. The Secretary also designated the NCMB to hear the case and to
submit its report thereon. 8
On the same day, Med-Arbiter Rodolfo S. Milado, acting on the University’s

petition for certification election, issued an Order directing the conduct of a
certification election to be participated in by DWUEU-ALU and "no union," after
he found the petition to be "well-supported in fact and in law." 9
Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an
urgent motion seeking to enjoin Milado from further acting on the matter of the
certification election. On September 20, 1988, the Labor Secretary granted said
motion and directed Milado to hold in abeyance any and all certification election
proceedings at the University pending the resolution of the labor dispute. 10 The
Labor Secretary’s Order, predicated on his extraordinary powers under Art. 263
(g) of the Labor Code, conformed with this Court s Resolution of October 29,
1987 in the Bulletin Today cases (G.R. Nos. 79276 and 79883) where the issue
of strong disagreement among the parties on the question of representation was
deemed subsumed in the labor dispute certified for compulsory arbitration. The
Secretary added:jgc:chanrobles.com.ph
"Underscoring the necessity to conform with this settled doctrine is the fact that
the dispute over which this Office assumed jurisdiction arose from the alleged
continued refusal by the University to negotiate a CBA with the Union despite the
latter’s certification as exclusive bargaining agent in 1984. Necessarily related
thereto is the representativity issue raised by the University in its certification
election petition. The resolution of these issues in one proceeding is, in the words
of the Supreme Court, ‘meet and proper in view of the very special circumstances
obtaining in this case, and will prevent split jurisdiction and that multiplicity of
proceedings which the law abhors’ (24 December 1987 [should be December 17,
1987] resolution of the Supreme Court in the Bulletin Today cases,
supra).chanrobles virtual lawlibrary
Moreover, to allow a certification election to proceed at this point in time might

further rupture the already strained labor-management relations pervading at
the University. The assumption order issued by this Office merely served as a
temporary bond to hold together such a fragile relationship. More importantly,
the projected election hastily decreed would preempt the proper resolution of the
issues raised and pursued so zealously by the employees that prompted them to
stage their strike." 11
The NCMB of Region VIII conducted hearings on the case from October 17-18,
1988. On October 26, 1988, the Divine Word University Independent Faculty and
Employees Union (DWUIFEU), which was registered earlier that day, filed a
motion for intervention alleging that it had "at least 20% of the rank and file
employees" of the University. 12
Exercising once again his extraordinary powers under Art. 263(g) of the Labor
Code, the Secretary consolidated "the entire labor dispute including all incidents
arising therefrom, or necessarily related thereto" in his Order of May 23, 1989
13 and the following cases were "subsumed or consolidated to the labor dispute"
: the petition for certification election docketed as MED-ARB-Case No. 5-04-88,
the DWUEU’s complaint docketed as NLRC Case No. 8-0321-88, and the
University’s complaint docketed as NLRC Case No. 8-0323-88. Thus, in said
Order of May 23, 1989, the Secretary of Labor resolved these issues:" (1)
whether there was refusal to bargain and an impasse in bargaining; (2) whether
the complaints for unfair labor practices against each other filed by both parties,
including the legality of the strike with the NLRC, which later on was subsumed
by the assumption Order, are with merits; and, (3) whether or not the
certification election can be passed upon by this Office."cralaw virtua1aw library
On the first issue, the Secretary of Labor said:jgc:chanrobles.com.ph
"It is a matter of record that when the Union filed its Notice of Strike (Exh. A)
two of the issues it raised were bargaining deadlock and refusal to bargain. It is
also worth mentioning that the CBA proposals by the Union were submitted on
March 7, 1985 (Exh. 9) after Med-Arbiter Bienvenido Elorcha issued a
certification election Order dated September 6, 1984 (Exh. 4). An examination
of the CBA proposals submitted by the Union of the University showed there was
(sic) some negotiations that has (sic) taken place as indicated on the handwritten
notations made in the CBA proposal (Exh. F). The said proposals include among
others, union scope, union recognition, union security, union rights, job security,
practices and privileges, terms and conditions of work, leave of absence, hours
of work, compensation salary and wages, workers’ rights and safety, workers’
education, retirement longevity pay, strike and lockouts and grievance
machinery.
The said CBA proposals were indorsed by DWU President to Atty. Generosa R.
Jacinto, Divine Word University legal counsel together with a copy of the Union
CBA proposals. The submission of the CBA proposals and the reply letter of the
DWU counsel, dated March 26, 1985 to the Union indicated that the CBA
negotiations process was set into motion. DWU’s counsel even suggested that
the preliminary conference between the union and the university be scheduled
on 28 May 1985 at 2:30 P.M. which unfortunately did not take place due to the
alleged withdrawal of the CBA proposals.
Undeniably, the Union and the DWU have not been able to conclude a CBA since
its certification on 6 September 1984 by then Med-Arbiter Bienvenido Elorcha.
But the non-conclusion of a CBA within one year, as in this case, does not
automatically authorize the holding of a certification election when it appears
that a bargaining deadlock issue has been submitted to conciliation by the
certified bargaining agent. The records show that the Notice of Strike was filed
by the Union on 25 April 1988, citing bargaining deadlock as one of the grounds
(Annex ‘1’), while the Petition for Certification Election was filed by the DWU on
10 May 1988. The filing of the notice of strike was precipitated by the University’s
act of not replying to the Union’s letters of March 11 and March 23, 1988.
This being the case, Section 3, Rule V, Book V of the Rules Implementing the
Labor Code applies and we quote:chanrobles.com:cralaw:red
‘Sec. 3. When to file. In the absence of a collective bargaining agreement

submitted in accordance with Article 231 of the Code, a petition for certification
election may be filed at any time. However, no certification election may be held
within one year from the date of issuance of declaration of a final certification
election result. Neither may a representation question be entertained it (sic)
before the filing of a petition for certification election, a bargaining deadlock to
which an incumbent or certified bargaining agent is a party has been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike
or lockout.’
Clearly, a bargaining deadlock exists and as a matter of fact this is being

conciliated by the National Conciliation and Mediation Board at the time the
University filed its Petition for Certification Election on 10 May 1988. In fact the
deadlock remained unresolved and was in fact mutually agreed upon to be
conciliated further by the NCMB as per items 1 and 5 of the ‘Agreement’ (Exhibit
‘L’).
The aforequoted rule clearly barred the Med-Arbiter from further entertaining the
petition for certification election. Furthermore, the various communications sent
to the University by the Union prior to the filing of the notice of strike was enough
opportunity for the former to raise the issue of representation if it really casts
doubt to the majority status of the Union. More importantly, if DWU indeed
doubted the status of the union, how come it entered into an agreement with the
latter on May 10, 1988. Apparently, the move to file the petition on the same
day was an afterthought on the part of the University which this Office considers
as fatal." 14
The same Order dismissed not only the case filed by DWUEU-ALU for unfair labor
practice on the ground of the union’s failure to prove the commission of the unfair
labor practice acts specifically complained of (NLRC Case No. 8-0321-88) but
also the complaint filed by the University for unfair labor practices and illegal
strike for "obvious lack of merit brought about by its utter failure to submit
evidence" (NLRC Case No. 8-0323-88).
Citing the Bulletin Today cases, the said Order pronounced as untenable the
University s claim that the assumption Order earlier issued by the Office of the
Secretary of Labor merely held in abeyance the holding of a certification election
and that the representation issue was not deemed consolidated by virtue of the
said assumption Order. Accordingly, the Order has this dispositive
portion:jgc:chanrobles.com.ph
"WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine Word

University of Tacloban and the Divine Word University Employees Union are
hereby directed to enter into a collective bargaining agreement by adopting the
Union’s CBA proposals sent to the DWU President on 19 May 1988 (Exhibit ‘6’).
DWU is hereby warned that any unwarranted delay in the execution of the
collective bargaining agreement will be construed as an unfair labor practice act.
Moreover, the petition for certification election filed by the University is hereby
dismissed for lack of merit and the Order of Med-Arbiter Rodolfo Milado set aside.
Likewise, NLRC CASES Nos. 8-0321-88 and 8-0323 filed by the Union and the
DWU, respectively, are hereby dismissed for lack of merit.
SO ORDERED." 15
The University filed a motion for the reconsideration of said Order. It was
opposed by the DWUEU-ALU. However, since on May 5, 1989 the DWUEU-ALU
had filed a second notice of strike charging the University with violation of the
return-to-work order of the Secretary of Labor and unfair labor practices such as
dismissal of union officers, coercion of employees and illegal suspension, 16 the
Office of the Secretary called for a series of conciliation and mediation
conferences between the parties. At the July 5, 1989 conference, the University
agreed to submit its proposals on how to settle amicably the labor dispute on or
before July 17, 1989.
On said date, however, the University failed to appear. Instead, its

representative phoned in a request for the resetting of the conference
purportedly because its Board of Directors had failed to muster a quorum. Hence,
after so informing ALU’s Eastern Visayas Vice-President, the conference was
rescheduled for July 19, 1989. The University once again failed to
appear.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
In view of the University’s intransigence, the DWUEU-ALU pursued its second

notice of strike on November 24, 1989. Four days later, the University filed with
the Office of the Secretary of Labor a motion praying that said Office assume
jurisdiction over the dispute or certify the same to the NLRC for compulsory
arbitration on the ground that the strike affected not only the University but also
its other academic and non-academic employees, the students and their parents.
On December 4, 1989, the Office of the Secretary of Labor received a Resolution
passed by the students of the University urging said Office’s assumption of
jurisdiction over the labor dispute and the earliest resolution of the case.
Consequently, on December 29, 1989, Secretary Drilon issued an Order

reiterating the August 28, 1988 Order which assumed jurisdiction over the labor
dispute. He ordered all striking workers to return to work within 24 hours and
the University to accept them back under the same terms and conditions of
employment; deemed the issues raised in the May 5, 1989 notice of strike as
"subsumed in this case" ; ordered the Director of Regional Office No. VIII to hear
the issues raised in said notice of strike and to submit his findings and
recommendations within ten days from submission of the case by the parties,
and enjoined the parties to cease and desist from any act that may "aggravate
the employer-employee relationship."cralaw virtua1aw library
On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna,

"dismissed" for lack of merit the University’s motion for reconsideration and
affirmed the Order of May 23, 1989. He noted the fact that the March 7, 1985
collective bargaining proposals of the DWUEU had not been validly withdrawn as
the union’s Vice-President had resigned and the withdrawal was signed only by
three of the eight members of the Executive Board of said union. Granting that
the withdrawal was valid, the Acting Secretary believed that it did not "exculpate
the University from the duty to bargain with the Union" because the collective
bargaining processes had been "set in motion from the time the CBA proposals
was (sic) received by the University until the impasse took place on account of
its failure to reply to the Union’s letters pursuing its CBA Proposals dated March
11 and 23, 1988."cralaw virtua1aw library
On the University’s assertion that no negotiations took place insofar as the March
7, 1985 collective bargaining proposals are concerned, the Acting Secretary
found that:jgc:chanrobles.com.ph
". . . The records indicate otherwise Conciliation meetings were conducted

precisely to discuss the CBA proposals the Union submitted to the University on
March 7, 1985. As a matter of fact, the University admitted the existence of the
deadlock when a provision was incorporated in the agreement it signed on May
10, 1988 with the Union which reads:chanrob1es virtual 1aw library
‘a. That on the matter of Bargaining Deadlock —
1. Union will submit their (renewed) CBA proposals on Friday May 13, 1988 for
whatever action management will take.
2. Union and Management agree to sit down and determine the number of
employees that will represent (constitute) their bargaining unit;
x x x’
On account of the deadlock regarding the March 7, 1985 CBA proposals, it was
agreed that the Union submit a renewed CBA proposal which it did on May 19,
1988. The records indicate that no response was made by the University. The
uncooperative posture of the University to respond and continue with the
negotiations could very well be explained when one (1) hour prior to the start of
the conciliation on May 10, 1988, the University filed a Petition for Certification
with (sic) Regional Office. The surreptitious filing of the petition and at the same
time cunningly entering into an agreement which required the Union to submit a
renewed CBA proposal, is patently negotiating in bad faith. The University should
have candidly and timely raised the issue of representation, if it believed that
such issue was valid, not by entering into an agreement. The May 10, 1988
Agreement only served to falsely heighten the expectations of the Union and this
Office that a mutually acceptable settlement of the dispute was in the offing. This
Office cannot tolerate such actuations by the University." 17
The Acting Secretary then concluded that for reneging on the agreement of May
10, 1988 and for its "reluctance and subscription to legal delay," the University
should be "declared in default." He also maintained that since under the
circumstances the University cannot claim deprivation of due process, the Office
of the Secretary of Labor may rightfully impose the Union’s May 19, 1988
collective bargaining agreement proposals motu proprio. On the University’s
contention that the motion for intervention of the DWU-IFEU was not resolved,
the Acting Secretary ruled that said motion was in effect denied when the petition
for certification election filed by the University was dismissed in the Order of May
23, 1989.chanrobles virtual lawlibrary
Hence, the University had recourse to instant petition.
In its petition for certiorari and prohibition with preliminary injunction filed on
February 9, 1990, the University raises as grounds therefor the
following:jgc:chanrobles.com.ph
"A. Respondent Secretary committed grave and patent abuse of discretion

amounting to lack of jurisdiction in issuing his order dated 17 January 1990
finally denying petitioner’s motion for reconsideration in the face of the order
dated 29 December 1989 and subsequent acts of DOLE official subsuming the
second notice of strike with the first notice of strike.
B. In the absence of a certified CBA and there having been no certification

election held in petitioner unit for more than five (5) years, a certification election
is mandatory.
C. Respondent Secretary committed grave and patent abuse of discretion in

issuing his orders dated 23 May 1989 and 17 January 1990 disregarding evidence
on record, provisions of law and established jurisprudence.
D. Petitioner was denied due process." 18
Citing the dispositive portion of the December 29, 1989 Order of the Secretary
of Labor which states that the issues raised in the May 5, 1989 notice of strike
"are ordered subsumed in this case" and elaborating on the meaning of the word
"subsume," i.e., "to include within a larger class, group, order, etc.," 19 the
petitioner University argues that the Secretary of Labor "cannot resolve
petitioner’s and (intervenor) DWU-IFEU’s motions for reconsideration (in the NS.
1) of the Order dated 23 May 1989 until the proceedings in the subsumed NS. 2
are terminated." It opines that since the Regional Director is an extension of the
Secretary of Labor, the latter should have waited for the recommendation of the
former on the issues in notices of strike nos. 1 and 2 before the he issued the
Order of January 17, 1990.
We agree with the Acting Secretary of Labor’s observation that the action for
intervention had in effect been denied by the dismissal of the petition for
certification election in the May 23, 1989 Order. The sub silencio treatment of
the motion for intervention in said Order does not mean that the motion was
overlooked. It only means, as shown by the findings of facts in the same Order,
that there was no necessity for the holding of a certification election wherein the
DWU-IFEU could participate. In this regard, petitioner’s undue interest in the
resolution of the DWU-IFEU’s motion for intervention becomes significant since
a certification election is the sole concern of employees except where the
employer itself has to file a petition for certification election. But once an
employer has filed said petition, as the petitioner did in this case, its active role
ceases and it becomes a mere bystander. Any uncalled-for concern on the part
of the employer may give rise to the suspicion that it is batting for a company
union. 20
Petitioner’s contention that the Acting Secretary of Labor should have deferred
the issuance of the Order of January 17, 1990 until after his receipt of the
Regional Director’s recommendation on the notices of strike is, under the
circumstances, untenable. Ideally, a single decision or order should settle all
controversies resulting from a labor dispute. This is in consonance with the
principle of avoiding multiplicity of suits. However, the exigencies of a case may
also demand that some matters be threshed out and resolved ahead of the
others. Any contrary interpretation of the Secretary of Labor’s powers under Art.
263(g) of the Labor Code on this matter would only result in confusion and delay
in the resolution of the manageable aspects of the labor dispute.chanrobles
lawlibrary : rednad
In this case, resolution of the motion for reconsideration at the earliest possible
time was urgently needed to set at rest the issues regarding the first notice of
strike, the certification election and the unfair labor practice cases filed by the
University and the DWUEU-ALU. The nature of the business of the University
demanded immediate and effective action on the part of the respondent public
officials. Otherwise, not only the contending parties in the dispute would be
adversely affected but more importantly, the studentry and their parents. It
should be emphasized that on January 17, 1990, the second notice of strike could
not have been resolved as yet considering that at that time, Regional Director
Teddy S. Cabeltes was still conducting the conference between the parties in
pursuance of the directive in the Order of December 19, 1989. The Secretary, or
for that matter, the Acting Secretary, could not have intended the efforts of the
Regional Director to be inutile or fruitless. Thus, when he set aside the issues
raised in the second notice of strike, the Acting Secretary was acting in
accordance with the exigencies of the circumstances of the case. Hardly can it
be said to be an abuse of his discretion.
On the issue of whether or not a certification election should have been ordered
by the Secretary of Labor, pertinent are the following respective provisions of
the Labor Code and Rule V, Book V of the Implementing Rules and Regulations
of the same Code:jgc:chanrobles.com.ph
"ART. 258. When an employer may file petition. — When requested to bargain
collectively, an employer may petition the Bureau for an election. If there is no
existing certified collective bargaining agreement in the unit, the Bureau shall,
after hearing, order a certification election.
All certification cases shall be decided within twenty (20) working days.
The Bureau shall conduct a certification election within twenty (20) days in
accordance with the rules and regulations prescribed by the Secretary of Labor.
Sec. 3. When to file. — In the absence of a collective bargaining agreement duly

registered in accordance with Article 231 of the Code, a petition for certification
election may be filed at any time. However, no certification election may be held
within one year from the date of issuance of a final certification election result.
Neither may a representation question be entertained if, before the filing of a
petition for certification election, a bargaining deadlock to which an incumbent
or certified bargaining agent is a party had been submitted to conciliation or
arbitration or had become the subject of valid notice of strike or lockout.
(Emphasis supplied)
If a collective bargaining agreement has been duly registered in accordance with

Article 231 of the Code, a petition for certification election or a motion for
intervention can only be entertained within sixty (60) days prior to the expiry
date of such agreement."cralaw virtua1aw library
These provisions make it plain that in the absence of a collective bargaining

agreement, an employer who is requested to bargain collectively may file a
petition for certification election any time except upon a clear showing that one
of these two instances exists: (a) the petition is filed within one year from the
date of issuance of a final certification election result or (b) when a bargaining
deadlock had been submitted to conciliation or arbitration or had become the
subject of a valid notice of strike or lockout.
While there is no question that the petition for certification election was filed by
the herein petitioner after almost four years from the time of the certification
election and, therefore, there is no question as to the timeliness of the petition,
the problem appears to lie in the fact that the Secretary of Labor had found that
a bargaining deadlock exists.chanrobles lawlibrary : rednad
A "deadlock" is defined as the "counteraction of things producing entire

stoppage: a state of inaction or of neutralization caused by the opposition of
persons or of factions (as in government or a voting body): standstill." 21 There
is a deadlock when there is a "complete blocking or stoppage resulting from the
action of equal and opposed forces; as, the deadlock of a jury or legislature." 22
The word is synonymous with the word impasse 23 which, within the meaning of
the American federal labor laws, "presupposes reasonable effort at good faith
bargaining which, despite noble intentions, does not conclude in agreement
between the parties." 24
A thorough study of the records reveals that there was no "reasonable effort at
good faith bargaining" specially on the part of the University. Its indifferent
attitude towards collective bargaining inevitably resulted in the failure of the
parties to arrive at an agreement. As it was evident that unilateral moves were
being undertaken only by the DWUEU-ALU, there was no "counteraction" of
forces or an impasse to speak of. While collective bargaining should be initiated
by the union, there is a corresponding responsibility on the part of the employer
to respond in some manner to such acts. This is clear from the provisions of the
Labor Code Art. 250(a) of which states:jgc:chanrobles.com.ph
"ART. 250. Procedure in collective bargaining. — The following procedures shall

be observed in collective bargaining:chanrob1es virtual 1aw library
(a) When a party desires to negotiate an agreement, it shall serve a written

notice upon the other party with a statement of its proposals. The other party
shall make a reply thereto not later than ten (10) calendar days from receipt of
such notice.
(b) Should differences arise on the basis of such notice and reply, either party
may request for a conference which shall begin not later than ten (10) calendar
days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either
or both parties or at its own initiative and immediately call the parties to
conciliation meetings. The Board shall have the power to issue subpoenas
requiring the attendance of the parties to such meetings. It shall be the duty of
the parties to participate fully and promptly in the conciliation meetings the
Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited
from doing any act which may disrupt or impede the early settlement of the
disputes; andchanrobles.com.ph : virtual law library
(e) The Board shall exert all efforts to settle disputes amicably and encourage
the parties to submit their case to a voluntary arbitrator."cralaw virtua1aw library
Considering the procedure outlined above, the Court cannot help but notice that
the DWUEU was not entirely blameless in the matter of the delay in the
bargaining process. While it is true that as early as March 7, 1985, said union
had submitted its collective bargaining proposals and that, its subsequent
withdrawal by the DWUEU Vice-President being unauthorized and therefore
ineffective, the same proposals could be considered as subsisting, the fact
remains that said union remained passive for three years. The records do not
show that during this three-year period, it exerted any effort to pursue collective
bargaining as a means of attaining better terms of employment.
It was only after its affiliation with the ALU that the same union, through the ALU
Director for Operations, requested an "initial conference" for the purpose of
collective bargaining. 25 That the DWUEU abandoned its collective bargaining
proposals prior to its affiliation with ALU is further confirmed by the fact that in
the aforequoted May 10, 1988 agreement with the University, said Union bound
itself to submit a new set of proposals on May 13, 1988. Under the
circumstances, the agreement of May 10, 1988 may as well be considered the
written notice to bargain referred to in the aforequoted Art. 250(a) of the Labor
Code, which thereby set into motion the machinery for collective bargaining, as
in fact, on May 19, 1988, DWUEU-ALU submitted its collective bargaining
proposals.
Be that as it may, the Court is not inclined to rule that there has been a deadlock
or an impasse in the collective bargaining process. As the Court earlier observed,
there has not been a "reasonable effort at good faith bargaining" on the part of
the University. While DWUEU-ALU was opening all possible avenues for the
conclusion of an agreement, the record is replete with evidence on the
University’s reluctance and thinly disguised refusal to bargain with the duly
certified bargaining agent, such that the inescapable conclusion is that the
University evidently had no intention of bargaining with it. Thus, while the Court
recognizes that technically, the University has the right to file the petition for
certification election as there was no bargaining deadlock to speak of, to grant
its prayer that the herein assailed Orders be annulled would put an unjustified
premium on bad faith bargaining.
Bad faith on the part of the University is further exemplified by the fact that an
hour before the start of the May 10, 1988 conference, it surreptitiously filed the
petition for certification election. And yet during said conference, it committed
itself to "sit down" with the Union. Obviously, the University tried to preempt the
conference which would have legally foreclosed its right to file the petition for
certification election. In so doing, the University failed to act in accordance with
Art. 252 of the Labor Code which defines the meaning of the duty to bargain
collectively as "the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith." Moreover, by filing the petition for
certification election while agreeing to confer with the DWUEU-ALU, the
University violated the mandate of Art. 19 of the Civil Code that" (e)very person
must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith."cralaw
virtua1aw library
Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU is also

betrayed by its belated questioning of the status of the said union. The
communications between them afforded the University ample opportunity to
raise the issue of representation if indeed it was doubtful of the DWUEU-ALU’s
status as a majority union, but it failed to do so. On the other hand, in the
agreement of May 10, 1988, the University even agreed "to sit down and
determine the number of employees that will represent their bargaining unit."
This clearly indicates that the University recognized the DWUEU-ALU as the
bargaining representative of the employees and is, therefore, estopped from
questioning the majority status of the said union.chanrobles.com.ph : virtual law
library
Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not be

unilaterally imposed on it on the ground that a collective bargaining agreement
is a contract wherein the consent of both parties is indispensable is devoid of
merit. A similar argument had already been disregarded in the case of Kiok Loy
v. NLRC, 26 where we upheld the order of the NLRC declaring the union’s draft
CBA proposal as the collective agreement which should govern the relationship
between the parties. Kiok Loy v. NLRC is applicable in the instant case
considering that the facts therein have also been indubitably established in this
case. These factors are: (a) the union is the duly certified bargaining agent; (b)
it made a definite request to bargain and submitted its collective bargaining
proposals, and (c) the University made no counter proposal whatsoever. As we
said in Kiok Loy," [a] company’s refusal to make counter proposal if considered
in relation to the entire bargaining process, may indicate bad faith and this is
especially true where the Union’s request for a counter proposal is left
unanswered." 27 Moreover, the Court added in the same case that "it is not
obligatory upon either side of a labor controversy to precipitately accept or agree
to the proposals of the other. But an erring party should not be tolerated and
allowed with impunity to resort to schemes feigning negotiations by going
through empty gestures." 28
That being the case, the petitioner may not validly assert that its consent should
be a primordial consideration in the bargaining process. By its acts, no less than
its inaction which bespeak its insincerity, it has forfeited whatever rights it could
have asserted as an employer. We, therefore, find it superfluous to discuss the
two other contentions in its petition.
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. This
decision is immediately executory. Costs against the petitioner.
SO ORDERED.
[9]
G.R. No. 111262 September 19, 1996
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its

President RAYMUNDO HIPOLITO, JR., petitioner,
vs.
HON. MA. NIEVES D. CONFESOR, Secretary of Labor, Dept. of Labor & Employment,
SAN MIGUEL CORPORATION, MAGNOLIA CORPORATION (Formerly, Magnolia Plant)
and SAN MIGUEL FOODS, INC. (Formerly, B-Meg Plant), respondents.
KAPUNAN, J.:
This is a petition for certiorari assailing the Order of the Secretary of Labor rendered
on February 15, 1993 involving a labor dispute at San Miguel Corporation.
The facts are as follows:
On June 28, 1990, petitioner-union San Miguel Corporation Employees Union —

PTGWO entered into a Collective Bargaining Agreement (CBA) with private
respondent San Miguel Corporation (SMC) to take effect upon the expiration of the
previous CBA or on June 30, 1989.
This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
Sec. 1. This Agreement which shall be binding upon the parties hereto and
their respective successors-in-interest, shall become effective and shall
remain in force and effect until June 30, 1992.
Sec. 2. In accordance with Article 253-A of the Labor Code as amended, the
term of this Agreement insofar as the representation aspect is concerned,
shall be for five (5) years from July 1, 1989 to June 30, 1994. Hence, the
freedom period for purposes of such representation shall be sixty (60) days
prior to June 30, 1994.
Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate
negotiations of all provisions of this Agreement, except insofar as the
representation aspect is concerned. If no agreement is reached in such
negotiations, this Agreement shall nevertheless remain in force up to the time
a subsequent agreement is reached by the parties. 1
In keeping with their vision and long term strategy for business expansion, SMC
management informed its employees in a letter dated August 13, 1991 2 that the
company which was composed of four operating divisions namely: (1) Beer, (2)
Packaging, (3) Feeds and Livestocks, (4) Magnolia and Agri-business would undergo
a restructuring. 3
Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off
and became two separate and distinct corporations: Magnolia Corporation
(Magnolia) and San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the
CBA remained in force and effect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of the
CBA and Article 253-A of the Labor Code. Negotiations started sometime in July,
1992 with the two parties submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of SMC
should still include the employees of the spun-off corporations: Magnolia and SMFI;
and that the renegotiated terms of the CBA shall be effective only for the remaining
period of two years or until June 30, 1994.
SMC, on the other hand, contended that the members/employees who had moved to
Magnolia and SMFI, automatically ceased to be part of the bargaining unit at the
SMC. Furthermore, the CBA should be effective for three years in accordance with
Art. 253-A of the Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration of
the CBA, petitioner-union declared a deadlock on September 29, 1990.
On October 2, 1992, a Notice of Strike was filed against SMC.
In order to avert a strike, SMC requested the National Conciliation and Mediation
Board (NCMB) to conduct preventive mediation. No settlement was arrived at despite
several meetings held between the parties.
On November 3, 1992, a strike vote was conducted which resulted in a "yes vote" in
favor of a strike.
On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition
with the Secretary of Labor praying that the latter assume jurisdiction over the labor
dispute in a vital industry.
As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute on
November 10, 1992. 4 Several conciliation meetings were held but still no
agreement/settlement was arrived at by both parties.
After the parties submitted their respective position papers, the Secretary of Labor
issued the assailed Order on February 15, 1993 directing, among others, that the
renegotiated terms of the CBA shall be effective for the period of three (3) years from
June 30, 1992; and that such CBA shall cover only the employees of SMC and not
of Magnolia and SMFI.
Dissatisfied, petitioner-union now comes to this Court questioning this Order of the
Secretary of Labor.
Subsequently, on March 30, 1995, 5 petitioner-union filed a Motion for Issuance of a

Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the holding
of the certification elections in the different companies, maintaining that the
employees of Magnolia and SMFI fall within the bargaining unit of SMC.
On March 29, 1995, the Court issued a resolution granting the temporary restraining
order prayed for. 6
Meanwhile, an urgent motion for leave to intervene 7 in the case was filed by the
Samahan ng Malayang Manggagawa-San Miguel Corporation-Federation of Free
Workers (SMM-SMC-FFW) through its authorized representative, Elmer S. Armando,
alleging that it is one of the contending parties adversely affected by the temporary
restraining order.
The Intervenor cited the case of Daniel S.L. Borbon v. Hon. Bienvenido
B. Laguesma, 8 G.R. No. 101766, March 5, 1993, where the Court recognized the
separation of the employees of Magnolia from the SMC bargaining unit. It then prayed
for the lifting of the temporary restraining order.
Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a petition for
the withdrawal/dismissal of the petition considering that the temporary restraining
order jeopardized the employees' right to conclude a new CBA. At the same time, he
challenged the legal personality of Mr. Raymundo Hipolito, Jr. to represent the Union
as its president when the latter was already officially dismissed from the company on
October 4, 1994.
Amidst all these pleadings, the following primordial issues arise:
1) Whether or not the duration of the renegotiated terms of the CBA is to be effective
for three years of for only two years; and
2) Whether or not the bargaining unit of SMC includes also the employees of the
Magnolia and SMFI.
Petitioner-union contends that the duration for the non-representation provisions of

the CBA should be coterminous with the term of the bargaining agency which in effect
shall be for the remaining two years of the current CBA, citing a previous decision of
the Secretary of Labor on December 14, 1992 in the matter of the labor dispute at
Philippine Refining Company.
However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled
that the renegotiated terms of the CBA at SMC should run for a period of three (3)
years.
We agree with the Secretary of Labor.

Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:
Art. 253-A. Terms of a Collective Bargaining Agreement. — Any Collective

Bargaining Agreement that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be
entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective
Bargaining Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its
execution. Any agreement on such other provisions of the Collective
Bargaining Agreement entered into within six (6) months from the date of
expiry of the term of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately following such
date. If any such agreement is entered into beyond six months, the parties
shall agree on the duration of retroactivity thereof. In case of a deadlock in
the renegotiation of the collective bargaining agreement, the parties may
exercise their rights under this Code. (Emphasis supplied.)
Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act
No. 6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This new
provision states that the CBA has a term of five (5) years instead of three years,
before the amendment of the law as far as the representation aspect is concerned.
All other provisions of the CBA shall be negotiated not later than three (3) years after
its execution. The "representation aspect" refers to the identity and majority status of
the union that negotiated the CBA as the exclusive bargaining representative of the
appropriate bargaining unit concerned. "All other provisions" simply refers to the rest
of the CBA, economic as well as non-economic provisions, except representation. 10
As the Secretary of Labor herself observed in the instant case, the law is clear and
definite on the duration of the CBA insofar as the representation aspect is concerned,
but is quite ambiguous with the terms of the other provisions of the CBA. It is a
cardinal principle of statutory construction that the Court must ascertain the
legislative intent for the purpose of giving effect to any statute. The history of the
times and state of the things existing when the act was framed or adopted must be
followed and the conditions of the things at the time of the enactment of the law
should be considered to determine the legislative intent. 11 We look into the
discussions leading to the passage of the law:
THE CHAIRMAN (REP. VELASCO): . . .the CBA, insofar as the economic

provisions are concerned . . .
THE CHAIRMAN (SEN. HERRERA): Maximum of three years?
THE CHAIRMAN (SEN. VELOSO): Maximum of three years.
THE CHAIRMAN (SEN. HERRERA): Present practice?

THE CHAIRMAN (REP. VELOSO): In other words, after three years pwede
nang magnegotiate in the CBA for the remaining two years.
THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two
years or three years but assuming three years which, I think, that's the
likelihood. . .
THE CHAIRMAN (REP. VELOSO): Yes.
THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming
there will be a change of agent, at least he has one year to administer and to
adjust, to develop rapport with the management. Yan ang importante.
You know, for us na nagne-negotiate, ang hazard talaga sa negotiation, when

we negotiate with somebody na hindi natin kilala, then, we are governed by
our biases na ito ay destroyer ng Labor; ang mga employer, ito bayaran ko
lang ito okay na.
'Yan ang nangyayari, but let us give that allowance for the one year to let
them know.
Actually, ang thrust natin ay industrial peace, and there can be no industrial
peace if you encourage union to fight each other. 'Yan ang problema. 12
xxx xxx xxx
HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the
CBA seem to provide some doubts later on in the implementation. Sabi kasi
rito, insofar as representation issue is concerned, seven years and lifetime. .
.
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Five years, all the others three years.
HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and
conditions, not later than three years.
HON. ISIDRO: Not later than three years, so within three years you have to
make a new CBA.
HON. CHAIRMAN HERRERA: Yes.
HON. ISIDRO: That is again for purposes of renewing the terms, three years
na naman iyan — then, seven years. . .
HON. CHAIRMAN HERRERA: Not later than three years.

HON. ISIDRO: Assuming that they usually follow the period — three years
nang three years, but under this law with respect to representation — five
years, ano? Now, after three years, nagkaroon ng bagong terms, tapos na
iyong term, renewed na iyong terms, ang karapatan noon sa representation
issue mayroon pang two years left.
HON. CHAIRMAN HERRERA: One year na lang because six years nang
lahat, three plus three.
HON. ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang
ang natatapos. So, another CBA was formed and this CBA mayroon na
naman siyang bagong five years with respect to representation issue.
HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and
conditions for three years.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: One the third year you can start negotiating to
change the terms and conditions.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . .
HON. ISIDRO: Oo.
HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status
now can be questioned, so baka puwedeng magkaroon ng certification
election. If the incumbent union loses, then the new union administers the
contract for one year to give him time to know his counterpart — the employer,
before he can negotiate for a new term. Iyan ang advantage.
HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect
to the terms and conditions and then, so you have to renew that in three years
— you renew for another three years, mayroon na naman another five years
iyong ano . . .
HON. ANIAG: Hindi, ang natitira duon sa representation two years na lang.
HON. CHAIRMAN HERRERA: Two years na lang sa representation.
HON. ANIAG: So that if they changed the union, iyong last year . . .
HON. CHAIRMAN HERRERA: Iyon lang, that you have to administer the
contract. Then, voluntary arbitration na kayo and then mayroon ka nang
probisyon "retroact on the date of the expiry date". Pagnatalo ang incumbent
unyon, mag-aassume ang new union, administer the contract. As far as the
term and condition, for one year, and that will give him time and the employer
to know each other.
HON. JABAR: Boy, let us be realistic. I think if a new union wins a certification
election, it would not want to administer a CBA which has not been negotiated
by the union itself.
HON. CHAIRMAN HERRERA: That is not true, Hon. This is true because
what is happening now in the country is that the term ng contract natin, duon
din mage-expire ang representation. Iyon ang nangyari. That is where you
have the gulo. Ganoon ang nangyari. So, ang nangyari diyan, pag-mayroon
certification election, expire ang contract, ano ang usual issue — company
union. I can you (sic) give you more what the incumbent union is giving. So
ang mangyayari diyan, pag-negotiate mo hardline na agad.
HON. CHAIRMAN VELOSO : Mon, for four years?
HON. ISIDRO: Ang tingin ko lang dito, iyong distinction between the terms
and the representation aspect — why do we have to distinguish between
three and five? What's wrong with having a uniform expiration period?
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Puro three years.
HON. CHAIRMAN HERRERA: That is what we are trying to avoid because

ang reality diyan, Mart, pagpasok mo sa kumpanya, mag-ne-negotiate ka ng
six months, that's the average, aabot pa minsan ng one year. Pagktapos ng
negotiation mo, signing kayo. There will be an allowed period of one year.
Third year na, uumpisahan naman ang organizations, papasok na ang ibang
unyon because the reality in Trade Union committee, they organize, we
organize. So, actually, you have only industrial peace for one year, effective
industrial peace. That is what we are trying to change. Otherwise, we will
continue to discourage the investors and the union will never grow because
every other year it has to use its money for the certification election. Ang
grabe pang practice diyan, mag-a-advance ang federation for three years
union dues para panggastos lang sa certification election. That is what we are
trying to avoid.
HON. JABAR: Although there are unions which really get advances.
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon

ang mangyayari. And I think our responsibility here is to create a legal
framework to promote industrial peace and to develop responsible and fair
labor movement.
HON. CHAIRMAN VELOSO: In other words, the longer the period of the
effectivity . . .
xxx xxx xxx
HON CHAIRMAN VELOSO. (continuing) . . . in other words, the longer the

period of effectivity of the CBA, the better for industrial peace.
HON. CHAIRMAN HERRERA: representation status.
HON. CHAIRMAN VELOSO: Only on —
HON. CHAIRMAN HERRERA: — the representations.
HON. CHAIRMAN VELOSO: But on the economic issues.
HON. CHAIRMAN HERRERA: You have to review that. The parties will have
to review that.
HON. CHAIRMAN VELOSO: At least on second year.
HON. CHAIRMAN HERRERA: Not later than 3 years, ang karamihan ng mga
mag-negotiate when the companyis (interrupted) 13
From the aforesaid discussions, the legislators were more inclined to have the period
of effectivity for three (3) years insofar as the economic as well as non-economic
provisions are concerned, except representation.
Obviously, the framers of the law wanted to maintain industrial peace and stability by
having both management and labor work harmoniously together without any
disturbance. Thus, no outside union can enter the establishment within five (5) years
and challenge the status of the incumbent union as the exclusive bargaining agent.
Likewise, the terms and conditions of employment (economic and non-economic) can
not be questioned by the employers or employees during the period of effectivity of
the CBA. The CBA is a contract between the parties and the parties must respect the
terms and conditions of the agreement. 14 Notably, the framers of the law did not give
a fixed term as to the effectivity of the terms and conditions of employment. It can be
gleaned from their discussions that it was left to the parties to fix the period.
In the instant case, it is not difficult to determine the period of effectivity for the non-
representation provisions of the CBA. Taking it from the history of their CBAs, SMC
intended to have the terms of the CBA effective for three (3) years reckoned from the
expiration of the old or previous CBA which was on June 30, 1989, as it provides:
Sec. 1. This Agreement which shall be binding upon the parties hereto and
their respective successors-in-interest, shall become effective and shall
remain in force and effect until June 30, 1992.
The argument that the PRC case is applicable is indeed misplaced. We quote with
favor the Order of the Secretary of Labor in the light of SMC's peculiar situation as
compared with PRC's company situation.
It is true that in the Philippine Refining Company case (OS-AJ-0031-91) (sic),
Labor Dispute at Philippine Refining Company), we ruled that the term of the
renegotiated provisions of the CBA should coincide with the remaining term
of the agency. In doing so, we placed premium on the fact that PRC has only
two (2) unions and no other union had yet executed a renewed term of 3
years. Nonetheless, in ruling for a shortened term, we were guided by our
considered perception that the said term would improve, rather than ruin, the
general welfare of both the workers and the company. It is equally true that
once the economic provisions of the CBA expire, the residual representative
status of the union is effective for only 2 more years. However, if
circumstances warrant that the contract duration which it is soliciting from the
company for the benefit of the workers, shall be a little bit longer than its
lifespan, then this Office cannot stand in the way of a more ideal situation. We
must not lose sight of the fact that the primordial purpose of a collective
contract is to promote industrial harmony and stability in the terms and
conditions of employment. To our mind, this objective cannot be achieved
without giving due consideration to the peculiarities and unique
characteristics of the employer. In the case at bar, there is no dispute that the
mother corporation (SMC) spun-off two of its divisions and thereby gave birth
to two (2) other entities now known as Magnolia Corporation and San Miguel
Foods, Inc. In order to effect a smooth transition, the companies concerned
continued to recognize the existing unions as the bargaining agents of their
respective bargaining units. In the meantime, the other unions in these
companies eventually concluded their CBA negotiations on the remaining
term and all of them agreed on a 3-year cycle. Notably, the following CBAs
were forged incorporating a term of 3-years on the renegotiated provisions,
to wit:
1. SMC — daily-paid employees union (IBM)
2. SMFI — monthly-paid employees and daily-paid employees at the

Cabuyao Plant.
There is a direct link between the voluntary recognition by the company of the
continuing representative status of the unions after the aforementioned spin-
offs and the stand of the company for a 3-year renegotiated cycle when the
economic provisions of the existing CBAs expired, i.e., the maintain stability
and avoid confusion when the umbilical cord of the two divisions were severed
from their parent. These two cannot be considered independently of each
other for they were intended to reinforce one another. Precisely, the company
conceded to face the same union notwithstanding the spin-offs in order to
preserve industrial peace during the infancy of the two corporations. If the
union would insist on a shorter renegotiated term, then all the advantages
gained by both parties in this regard, would have gone to naught. With this in
mind, this office feels that it will betray its mandate should we order the parties
to execute a 2-year renegotiated term for then chaos and confusion, rather
than tranquillity, would be the order of the day. Worse, there is a strong
likelihood that such a ruling might spawn discontent and possible mass
actions against the company coming from the other unions who had already
agreed to a 3-year renegotiated terms. If this happens, the purpose of this
Office's intervention into the parties' controversy would have been
defeated. 15
The issue as to the term of the non-representation provisions of the CBA need not
belabored especially when we take note of the Memorandum of the Secretary of
Labor dated February 24, 1994 which was mentioned in the Resolution of
Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification
election case involving the SMC employees. 16 In said memorandum, the Secretary
of Labor had occasion to clarify the term of the renegotiated terms of the CBA vis-a-
vis the term of the bargaining agent, to wit:
As a matter of policy the parties are encourages (sic) to enter into a

renegotiated CBA with a term which would coincide (sic) with the aforesaid
five (5) year term of the bargaining representative.
In the event however, that the parties, by mutual agreement, enter into a
renegotiated contract with a term of three (3) years or one which does not
coincide with the said 5-year term, and said agreement is ratified by majority
of the members in the bargaining unit, the subject contract is valid and legal
and therefore, binds the contracting parties. The same will however not
adversely affect the right of another union to challenge the majority status of
the incumbent bargaining agent within sixty (60) days before the lapse of the
original five (5) year term of the CBA.
Thus, we do not find any grave abuse of discretion on the part of the Secretary of
Labor in ruling that the effectivity of the renegotiated terms of the CBA shall be for
three (3) years.
With respect to the second issue, there is, likewise, no merit in petitioner-union's
assertion that the employees of Magnolia and SMFI should still be considered part of
the bargaining unit of SMC.
Magnolia and SMFI were spun-off to operate as distinct companies on October 1,

1991. Management saw the need for these transformations in keeping with its vision
and long term strategy as it explained in its letter addressed to the employees dated
August 13, 1991:
. . . As early as 1986, we announced the decentralization program and spoke

of the need for structures that can react fast to competition, a changing
environment, shorter product life cycles and shifts in consumer preference.
We further stated in the 1987 Annual Report to Stockholders that San
Miguel's businesses will be more autonomous and self sufficient so as to
better acquire and master new technologies, cope with a labor force with
different expertises and expectations, and master and satisfy the changing
needs of our customers and end-consumers. As subsidiaries, Magnolia and
FLD will gain better industry focus and flexibility, greater awareness of
operating results, and speedier, more responsive decision making.
xxx xxx xxx

We only have to look at the experience of Coca-Cola Bottlers Philippines, Inc.,
since this company was organized about ten years ago, to see the benefits
that arise from restructuring a division of San Miguel into a more competitive
organization. As a stand-alone enterprise, CCBPI engineered a dramatic
turnaround and has sustained its sales and market share leadership ever
since.
We are confident that history will repeat itself, and the transformation of
Magnolia and FLD will be successful as that of CCBPI. 17
Undeniably, the transformation of the companies was a management prerogative and

business judgment which the courts can not look into unless it is contrary to law,
public policy or morals. Neither can we impute any bad faith on the part of SMC so
as to justify the application of the doctrine of piercing the corporate veil. 18 Ever
mindful of the employees' interests, management has assured the concerned
employees that they will be absorbed by the new corporations without loss of tenure
and retaining their present pay and benefits according to the existing CBAs. 19 They
were advised that upon the expiration of the CBAs, new agreements will be
negotiated between the management of the new corporations and the bargaining
representatives of the employees concerned. As a result of the spin-offs:
1. Each of the companies are run by, supervised and controlled by different
management teams including separate human resource/personnel
managers.
2. Each Company enforces its own administrative and operational rules and
policies and are not dependent on each other in their operations.
3. Each entity maintains separate financial statements and are audited

separately from each other. 20
Indubitably, therefore, Magnolia and SMFI became distinct entities with separate
juridical personalities. Thus, they can not belong to a single bargaining unit as held
in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople. 21 We
elucidate:
The fact that their businesses are related and that the 236 employees of the
Georgia Pacific International Corporation were originally employees of Lianga
Bay Logging Co., Inc. is not a justification for disregarding their separate
personalities. Hence, the 236 employees, who are now attached to Georgia
Pacific International Corporation, should not be allowed to vote in the
certification election at the Lianga Bay Logging Co., Inc. They should vote at
a separate certification election to determine the collective bargaining
representative of the employees of Georgia Pacific International Corporation.
Petition-union's attempt to include the employees of Magnolia and SMFI in the SMC
bargaining unit so as to have a bigger mass base of employees has, therefore, no
more valid ground.
Moreover, in determining an appropriate bargaining unit, the test of grouping is
mutuality or commonality of interests. The employees sought to be represented by
the collective bargaining agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of work they
performed. 22 Considering the spin-offs, the companies would consequently have
their respective and distinctive concerns in terms of the nature of work, wages, hours
of work and other conditions of employment. Interests of employees in the different
companies perforce differ. SMC is engaged in the business of the beer
manufacturing. Magnolia is involved in the manufacturing and processing of diary
products 23 while SMFI is involved in the production of feeds and the processing of
chicken. 24 The nature of their products and scales of business may require different
skills which must necessarily be commensurated by different compensation
packages. The different companies may have different volumes of work and different
working conditions. For such reason, the employees of the different companies see
the need to group themselves together and organize themselves into distinctive and
different groups. It would then be best to have separate bargaining units for the
different companies where the employees can bargain separately according to their
needs and according to their own working conditions.
We reiterate what we have explained in the case of University of the Philippines

v. Ferrer-Calleja 25 that:
[T]here are various factors which must be satisfied and considered in

determining the proper constituency of a bargaining unit. No one particular
factor is itself decisive of the determination. The weight accorded to any
particular factor varies in accordance with the particular question or questions
that may arise in a given case. What are these factors? Rothenberg mentions
a good number, but the most pertinent to our case are: (1) will of the
employees (Globe Doctrine); (2) affinity and unit of employees' interest, such
as substantial similarity of work and duties, or similarity of compensation and
working conditions; (3) prior collective bargaining history; and (4) employment
status, such as temporary, seasonal and probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining

unit is given in the 10th Annual Report of the National Labor Relations Board
wherein it is emphasized that the factors which said board may consider and
weigh in fixing appropriate units are: the history, extent and type of
organization of employees; the history of their collective bargaining; the
history, extent and type of organization of employees in other plants of the
same employer, or other employers in the same industry; the skill, wages,
work, and working conditions of the employees; the desires of the employees;
the eligibility of the employees for membership in the union or unions involved;
and the relationship between the unit or units proposed and the employer's
organization, management, and operation . . .
. . . In said report, it is likewise emphasized that the basic test in determining

the appropriate bargaining unit is that a unit, to be appropriate, must affect a
grouping of employees who have substantial, mutual interests in wages,
hours, working conditions and other subjects of collective bargaining
(citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . .
Finally, we take note of the fact that the separate interests of the employees of
Magnolia and SMFI from those of SMC has been recognized in the case of Daniel
Borbon v. Laguesma. 26 We quote:
Even assuming in gratia argumenti that at the time of the election they were
regular employees of San Miguel, nonetheless, these workers are no longer
connected with San Miguel Corporation in any manner because Magnolia has
ceased to be a division of San Miguel Corporation and has been formed into
a separate corporation with a personality of its own (p. 305, Rollo). This
development, which was brought to our attention by private respondents,
necessarily renders moot and academic any further discourse on the
propriety of the elections which petitioners impugn via the recourse (p.
319, Rollo).
In view of all the foregoing, we do not find any grave abuse of discretion on the part
of the Secretary of Labor in rendering the assailed Order.
WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary

Restraining Order issued on March 29, 1995 is lifted.
SO ORDERED.
[10]
G.R. No. 99395 June 29, 1993
ST. LUKE'S MEDICAL CENTER, INC., petitioner,

vs.
HON. RUBEN O. TORRES and ST. LUKE'S MEDICAL CENTER ASSOCIATION-
ALLIANCE OF FILIPINO WORKERS ("SLMCEA-AFW"), respondents.
Sofronio A. Ona for petitioner.
Edgar R. Martir for respondent union.
MELO, J.:
In response to the mandate under Article 263(g) of the Labor Code and amidst the labor
controversy between petitioner St. Luke's Medical Center and private respondent St. Luke's
Medical Center Employees Association-Alliance of Filipino Workers (SLMCEA-AFW), then
Secretary of Labor Ruben D. Torres, issued the Order of January 28, 1991 requiring the
parties to execute and finalize their 1990-1993 collective bargaining agreement (CBA) to
retroact to the expiration of the anterior CBA. The parties were also instructed to incorporate
in the new CBA the disposition on economic and non-economic issues spelled out in said
Order (p. 48, Rollo). Separate motions for re-evaluation from the parties were to no avail;
hence, the petition at bar premised on the following ascriptions of error, to wit:
PUBLIC RESPONDENT HON. SECRETARY OF LABOR ACTED IN

EXCESS OF JURISDICTION AND/OR COMMITTED GRAVE ABUSE OF
DISCRETION WHEN HE VIOLATED PETITIONER'S RIGHT TO DUE
PROCESS, PUBLIC RESPONDENT COMPLETELY IGNORED THE
LATTER'S EVIDENCE AND ISSUED THE QUESTIONED AWARDS ON THE
BASIS OF ARBITRARY GUESSWORKS, CONJECTURES AND
INFERENCES.
II
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION

WHEN HE CURTAILED THE PARTIES' RIGHT TO FREE COLLECTIVE
BARGAINING, AND WHEN HE GRANTED MONETARY AWARDS AND
ADDITIONAL BENEFITS TO THE EMPLOYEES GROSSLY
DISPROPORTIONATE TO THE OPERATING INCOME OF PETITIONER.
III
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION

WHEN HE ADOPTED/CONSIDERED THE ALLEGATIONS OF THE UNION
THAT THE HOSPITAL OFFERED SALARY AND MEAL ALLOWANCE
INCREASES IN THE AMOUNT OF P1,140,00 FOR THE FIRST YEAR AND
P700.00 ACROSS THE BOARD MONTHLY SALARY INCREASES FOR
THE SECOND AND THIRD YEARS OF THE NEW CBA.
IV
FINALLY, PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION WHEN HE GAVE HIS AWARD RETROACTIVE EFFECT.
When the collective bargaining agreement for the period August 1, 1987 to July 30, 1990
was forged between petitioner and private respondent, the incumbent national president of
AFW, the federation to which the local union SLMCEA is affiliated, was Gregorio del Prado.
Before the expiration of the 1987-90 CBA, the AFW was plagued by internal squabble
splitting its leadership between Del Prado and Purita Ramirez, resulting in the filing by AFW
and Del Prado of a petition later docketed before the Department of Labor as NCR-00-M-90-
05-077, where a declaration was sought on the legitimacy of Del Prado's faction as bona
fide officers of the federation. Pending resolution of said case, herein private respondent
SLMCEA-AFW brought to the attention of petitioner via a letter dated July 4, 1990 that the
1987-1990 was about to expire, and manifested in the process that private respondent
wanted to renew the CBA. This development triggered round-table talks on which occasions
petitioner proposed, among other items, a maximum across-the-board monthly salary
increase of P375.00 per employee, to which proposal private respondent demanded a
P1,500.00 hike or 50% increase based on the latest salary rate of each employee, whichever
is higher.
In the meantime, relative to the interpleader case (NCR-00-M-90-05-070) initiated by

petitioner to settle the question as to who between Del Prado and Diwa was authorized to
collect federation dues assessed from hospital employees, the Med-Arbiter recognized Del
Prado's right (p. 423, Rollo). This resolution of July 31, 1990 was elevated to the Labor
Secretary.
That talks that then ensued between petitioner and private respondent were disturbed anew
when the other wing in the AFW headed by Purita Ramirez, expressed its objections to the
on-going negotiations, and when a petition for certification election was filed by the
Association of Democratic Labor Organization of petitioner. However, private respondent
emerged victorious after the elections and was thus certified as the exclusive bargaining
entity of petitioner's rank and file employees.
Following the decision dated September 14, 1990 in NCR-00-M-90-05-077 (pp. 444-
445, Rollo) which upheld the legitimacy of Del Prado's
status including the other officers, Bayani Diwa of the Ramirez Wing
appealed; the two cases — NCR-00-M-90-05-070 for interpleader and NCR-00-90-05-077
— were consolidated.
On September 17, 1990, private respondent wrote petitioner for the resumption of their
negotiations concerning the union's proposed CBA. Petitioner reacted by writing a letter on
September 20, 1990 expressing willingness to negotiate a new CBA for the rank and file
employees who are not occupying confidential positions. Negotiations thus resumed.
However, a deadlock on issues, especially that bearing on across-the-board monthly and
meal allowances followed and to pre-empt the impending strike as voted upon by a majority
of private respondent's membership, petitioner lodged the petition below. The Secretary of
Labor immediately assumed jurisdiction and the parties submitted their respective pleadings.
On January 22, 1991, a resolution was issued in the consolidated cases which eventually
declared Gregorio del Prado and his group as the legitimate officials of the AFW and the
acknowledged group to represent AFW (pp. 320-321, Rollo).
On January 28, 1991, public respondent Secretary of Labor issued the Order now under
challenge. Said Order contained a disposition on both the economic and non-economic
issues raised in the petition. On the economic issues, he thus ruled:
First year — P1,140.00 broken down as follows: P510.00 in compliance with

the government mandated daily salary increase of P17.00; and P630.00 CBA
across the board monthly salary increase.
Second year — P700.00 across the board monthly salary increase.
Third year — P700.00 across the board monthly salary increase.
It is understood that the second and third year salary increases shall not be
chargeable to future government mandated wage increases. (p. 47, Rollo.)
As earlier stated, both parties moved for reconsideration of the above order, but both motions
were denied. Consequently, petitioner St. Luke's filed the instant petition, a special civil
action on certiorari.
In assailing the Order of January 28, 1991, petitioner St. Luke's focuses on public
respondent's disposition of the economic issues.
First, petitioner finds highly questionable the very basis of public respondent's decision to
award P1,140.00 as salary and meal allowance increases for the first year and P700.00
across-the-board monthly salary increases for the succeeding second and third years of the
new CBA. According to petitioner, private respondent SLMCEA-AFW misled public
respondent into believing that said amounts were the last offer of petitioner St. Luke's
immediately prior to the deadlock. Petitioner vehemently denies having made such offer,
claiming that its only offer consists of the following:
Non-Economic Issues:
St. Luke's submits that it is adopting the non-economic issues proposed and
agreed upon in its Collective Bargaining Agreement with SLMCEA-AFW for
the period covering 1987, 1990. Copy of the CBA is attached as Annex "F"
hereof.
Economic Issue
St. Luke's respectfully offers to give an increase to all its rank and file
employees computed as follows:
First Year — P900 (P700.00 basic + P200.00 food allowance)

for an over all total food allowance of P320.00.
Second Year — P400
Third Year — P400
plus the union will be allowed to operate and manage one (1) canteen for free
to augment their funds. Although the profit shall be divided equally between
union and SLMC, the operation of the canteen will generate for them a
monthly income of no less than P15,000.00, and likewise provide cheap and
subsidized food to Union members.
The wage increase as proposed shall be credited to whatever increases in

the minimum wage or to any across the board increases that may be
mandated by the government or the DOLE. (pp. 20-21, Rollo.)
Petitioner charges that public respondent, in making such award, erroneously relied on the
extrapolated figures provided by respondent SLMCEA-AFW, which grossly inflated petitioner
St. Luke's net income. Petitioner contends that if the disputed award are sustained, the wage
increases and benefits shall total approximately P194,403,000.00 which it claims is
excessive and unreasonable, considering that said aggregate amount is more than its
projected income for the next three years. To illustrate its point, petitioner submits the
following computation:
YR I
A. P1,40 added to basic pay
a) P1,140 x 1,500 (no. of employees) x 12 (months) — P 20,520,000
b) 13th month pay: P1,140 x 1,500 — 1,710,000
c) Overtime pay, 20% of payroll — 4,104,000
d) Holiday pay, PM/Night pay — 1,026,000
e) Sick leave — 855,000
f) Funeral, Paternity, Maternity leaves, retirement

pay — 820,000
B. P230 added to meal allowance
a) P230 x 1,500 x 12 — 4,140,000

C. One day added to sick leave
a) (Ave. pay P3,000 = P1,140) divided by 30 x 1,500 — 222,000
D. Sick leave cash conversion base reduced from 60 to 45 days
a) (P3,300 = P1,140)/30 x 1,200 — 2,664,000
E. Retirement benefits adjustment — 500,000
—————
FIRST YEAR ADDITIONAL COST P 36,561,000
YR II
A. Yr I increase except sick leave cash conversion
from 60 to 45 — P33,897,000
B. P700 added to monthly basic pay
a) P700 x 1,500 x 12 — 2,600,000

b) 13th month pay: P700 x 1,500 — 1,050,000
c) Overtime, pay, 20% of P12.6 M — 2,520,000
d) Holiday pay, PM/Night pay — 630,000
e) Sick leave: 15 days x 700/30 x 1,500 — 525,000
f) Funeral, paternity, maternity leaves, retirement pay — 504,000
————
SECOND YEAR ADDITIONAL COST P51,726,000
YR III
A. Yr I and Yr II increases — 88,287,000
B. P700 added to basic pay
a) P700 x 1,500 x 12 — 12,600,000

b) 13th month pay: P700 x 1,500 — 1,050,000
c) Overtime pay, 20% of P12.6 M — 2,520,000
d) Holiday pay, PM/Night pay — 630,000
e) Sick leave — 525,000
f) Funeral, paternity, maternity, leaves,
retirement pay — 504,000
————
THIRD YEAR ADDITIONAL COST — 106,116,000

TOTAL THREE-YEAR ADDITIONAL
BENEFIT/WAGES — 194,403,000
(pp. 14-16, Rollo).
On the basis of the foregoing, petitioner St. Luke's concludes that it would be in a very poor
position to even produce the resources necessary to pay the wage increases of its rank and
file employees.
Petitioner also impugns public respondent's awards on grounds of prematurity, emphasizing

that the awards in question even preceded collective bargaining negotiations which have to
take place first between both litigants. It denies entering into a round of negotiations with
private respondent SLMCEA-AFW on the theory that the meetings referred to by the latter
were merely informal ones, without any binding effect on the parties because AFW is torn
between two factions vying for the right to represent it. Thus, petitioner maintains that nothing
conclusive on the terms and conditions of the proposed CBA could be arrived at when the
other party, private respondent SLMCEA-AFW is confronted with an unresolved
representation issue.
Petitioner argues further that since no formal negotiations were conducted, it could not have
possibly made an offer of P1,140.00 as salary and meal allowance increases for the first
year and an increase of P700.00 across-the-board monthly salary for the second and third
years of the new CBA. It raises doubts on the veracity of the minutes presented by private
respondent SLMCEA-AFW to prove that negotiations were held, particularly on October 26,
1990, when petitioner allegedly made said offer as its last ditch effort for a compromise prior
to the deadlock. According to petitioner, these minutes, unsigned by petitioner, were merely
concocted by private respondent SLMCEA-AFW.
Finally, petitioner attacks the Order of January 28, 1991 for being violative of Article 253-A
of the Labor Code, particularly its provisions on retroactivity. Said Article pertinently provides:
xxx xxx xxx
Any agreement on such other provisions of the collective bargaining

agreement entered into within six (6) months from the date of expiry of the
term of such other provisions as fixed in the collective bargaining agreement,
shall retroact to the day immediately following such date. If any such
agreement is entered into beyond six months, the parties shall agree on the
duration of retroactivity thereof. In case of a deadlock in the renegotiation of
the collective bargaining agreement, the parties may exercise their rights
under this Code.
Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public
respondent committed an act contrary to the above provision of law, pointing out that the old
CBA expired on July 30, 1990 and the questioned order was issued on January 28, 1991.
Petitioner theorizes that following Article 13 of the Civil Code which provides that there are
30 days in one month, the questioned Order of January 28, 1991 was issued beyond the six-
month period, graphically shown thus:
July 30, 1990 Expiration
July 31 = 1 day
August 1-31, 1990 = 31 days
September 1-30, 1990 = 30 days
October 1-31, 1990 = 31 days
November 1-30, 1990 = 30 days
December 1-31, 1990 = 31 days
January 1-28, 1991 = 28 days
—————————
TOTAL = 182 days
(6 months and 2 days)
(p. 34, Rollo.)
Traversing petitioner's arguments, private respondent SLMCEA-AFW contends that the

formulation of the terms and conditions of the CBA awards is well supported by the factual
findings of public respondent which established that petitioner failed to refute private
respondent's allegation that during their last meeting on October 26, 1990, petitioner stood
pat on its offer of P1,140.00 as salary and meal allowance increases for the first year of the
new CBA and P700.00 across-the-board salary increases for the second and third years
thereof. Said awards, it said, are well within the means of petitioner because its reported net
income of P15 million, P11 million, and 13 million for 1987, 1988, and 1989, respectively,
have been actually understated. Moreover, private respondent claims that petitioner, in
actual terms, does not have to pay the alleged amount of P194,403,000.00 for wages and
benefits in favor of its employees. Such amount, according to private respondent, is bloated
and excessive. Private respondent in substantiating such claim made the following analysis:
First P1,140.00 total salary increase for the first year (1990-1991) of the new
CBA is divided into: P510.00 in compliance with the government mandated
daily salary increase of P17.00 and P630.00 CBA across the board monthly
salary increase, thus, the whole P1,140.00 salary increase is payable only
beginning August 1, 1990 (reckoned from the CBA July 30, 1990 expiry date)
up to October 31, 1990 only following the November 1, 1990 effectivity of
WAGE ORDER NO. NCR-01 which granted the said P17.00 daily wage
increase or P510.00 monthly of
which herein petitioner promptly complied with and paid to its employees and
therefore deductible from P1,140.00 total monthly salary increase (Annex "A"
— Petitioner and Annex "13" hereof);
Second, the remaining P630.00 CBA across the board monthly salary
increase takes effect on November 1, 1990 up to January 7, 1991 only
following the January 8, 1991 effectivity of WAGE ORDER NO. NCR-02 which
mandated P12.00 daily wage increase or P630.00 monthly, hence, reducing
the P630.00 CBA monthly salary increase to P270.00 CBA monthly salary
increase effective January 8, 1991 and onwards till July 31, 1991 (Annexes
"22" and "23" hereof);
Third, that out of an estimated workforce of 1,264 regular employees inclusive
of about 209 supervisors, unit, junior area, division department managers and
top level executives, all occupying permanent positions, and approximately
55 regular but highly confidential employees, only 1,000 rank-and-file
regular/permanent employees (casuals, contractuals, probies and security
guards excluded) are entitled to the CBA benefits for three (3) years (1990-
1993) (as private respondent SLMCEA-AFW gathered and analyzed from the
petitioner's Personnel Strength Report hereto attached as Annex "28"
hereof) vis-a-vis the generalized and inflated 1,500 employees as total
workforce purportedly entitled to CBA benefits per its self-serving and
incredible computation;
Fourth, the petitioner's computed 20% overtime pay of the basic salary is
unrealistic and overstated in view of its extreme cost-cutting/ savings
measures on all expenditures, most specially, on overtime work adopted
since last year and a continuing management priority project up to the
present; and
Fifth, due to the above consideration, the total real award of wages and fringe
benefits is far less than the true annual hefty operating net income of the
petitioner.
The net result is that the first year award of P1,140.00 monthly salary increase
of which P510.00 monthly salary increase is made in compliance with the
P510.00 monthly wage increase at P17.00 daily wage increase effective
November 1, 1990 under Wage Order No. NCR-01 (Annex "13" hereof) or
with the intended P630.00 CBA monthly salary increase is further reduced by
P360.00 monthly wage increase at P12.00 daily wage increase effective
January 8, 1991 under Wage Order No.
NCR-02 (Annex "22" hereof), thereby leaving a downgraded or watered down
CBA monthly increase of P270.00 only.
Comparatively speaking, the 13% monthly salary increase of each employee

average basic monthly salary of P2,500.00 in 1987 or P325.00 monthly salary
increase granted by the petitioner under the first old CBA (1987-1990) is
better than the much diluted P270.00 CBA monthly salary increase (in lieu of
the awarded P630.00 CBA monthly salary increase for the first year of the
new CBA under Order, dated January 28, 1991, of public respondent).
(Annexes "A" and "G" — Petition). (pp. 390-391, Rollo.)
Private respondent concludes that petitioner's version that it will have to pay
P194,403,000.00 is not true because this will be drastically reduced by 40% to 60% in real
terms due to a smaller number of employees covered. It is further explained that the
government-decreed wage increases abovementioned already form part of the P1,140.00
wage and meal allowance increases, not to mention the strict cost-cutting measures and
practices on overtime and expense items adopted by petitioner since 1990.
With respect to public respondent's ruling that the CBA awards should be given retroactive
effect, private respondent agrees with the Labor Secretary's view that Article 253-A of the
Labor Code does not apply to arbitral awards such as those involved in the instant case.
According to private respondent, Article 253-A of the Labor Code is clear and plain on its
face as referring only to collective bargaining agreements entered into by management and
the certified exclusive bargaining agent of all rank-and-file employees therein within six (6)
months from the expiry of the old CBA.
These foregoing contentions and arguments of private respondent have been similarly put
forward by the Office of the Solicitor General in its Consolidated Comment filed on November
23, 1991. The Solicitor General share a the views of private respondent SLMCEA-AFW.
We are now tasked to rule on the petition. Do petitioner's evidence and arguments provide
adequate basis for the charge of alleged grave abuse of discretion committed by public
respondent in his Order of January 28, 1991 as to warrant its annulment by this Court? This
is the sole issue in the case at bar. Consequently, this Court would apply the following
yardstick in resolving the aforestated issue: that public respondent, in the exercise of his
power to assume over subject labor dispute, acted whimsically, capriciously, or in an
arbitrary, despotic manner by reason of passion or personal hostility which was so patent
and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty
enjoined or to act at all in contemplation of law (San Sebastian College vs. Court of Appeals,
197 SCRA 138 [1991]).
Subjected to and measure by this test, the challenged Order, we believe, can withstand even
the most rigorous scrutiny.
Petitioner assails the Order of January 28, 1991 on three grounds:

(a) unreasonable and baselessness; (b) prematurity; and (c) violation of Article 253-A of the
Labor Code.
We rule that the Order, particularly in its disposition on the economic issues, was not
arbitrarily imposed by public respondent. A perusal of the Order shows that public
respondent took into consideration the parties' respective contentions, a clear indication that
he was keenly aware of their contrary positions. Both sides having been heard, they were
allowed to present their respective evidence. The due process requirement was thus clearly
observed. Considering public respondent's expertise on the subject and his observance of
the cardinal principles of due process, the assailed Order deserves to be accorded great
respect by this Court.
Equally worth mentioning is the fact that in resolving the economic issues, public respondent
merely adopted in toto petitioner's proposals. Consequently, petitioner cannot now claim that
the awards are unreasonable and baseless. Neither can it deny having made such
proposals, as it attempted to do in its Motion for Reconsideration of the challenged Order
before public respondent and which it continues to pursue in the instant petition. It is too late
in the day for such pretense, especially so because petitioner failed to controvert private
respondent's allegation contained in its Comment to the petition before the Labor Secretary
that petitioner had offered as its last proposal said salary and meal allowance increases. As
correctly pointed out by public respondent, petitioner failed, when it had the chance, to rebut
the same in its Reply to said Comment, considering that the resolution of the labor dispute
at that was still pending. Any objection on this point is thus deemed waived.
We do not see merit in petitioner's theory that the awards were granted prematurely. In its
effort to persuade this Court along this point, petitioner denies having negotiated with private
respondent SLMCEA-AFW. Petitioner collectively refers to all the talks conducted with
private respondent as mere informal negotiations due to the representation issue involving
AFW. Petitioner thus argues that in the absence of any formal negotiations, no collective
bargaining could have taken place. Public respondent, petitioner avers, should have required
the parties instead to negotiate rather than prematurely issuing his order.
We cannot agree with this line of reasoning. It is immaterial whether the representation issue
within AFW has been resolved with finality or not. Said squabble could not possibly serve as
a bar to any collective bargaining since AFW is not the real party-in-interest to the talks;
rather, the negotiations were confined to petitioner and the local union SLMCEA which is
affiliated to AFW. Only the collective bargaining agent, the local union SLMCEA in this case,
possesses legal standing to negotiate with petitioner. A duly registered local union affiliated
with a national union or federation does not lose its legal personality or independence
(Adamson and Adamson, Inc. vs. The Court of Industrial Relations and Adamson and
Adamson Supervising Union (FFW), 127 SCRA 268 [1984]). In Elisco-Elirol Labor Union
(NAFLU) vs. Noriel (180 SCRA 681 [1977]), then Justice Teehankee re-echoed the words of
Justice Esguerra in Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. (66
SCRA 512 [1975]), thus:
(T)he locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their
employee-members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of the locals into the
national union (as PAFLU) was in furtherance of the same end. These
associations are consensual entities capable of entering into such legal
relations with their members. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and
the common interest of all, subject to the restraints imposed by the
Constitution and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement which
brought it into existence. (at p. 688; emphasis in the original.)
Appending "AFW" to the local union's name does not mean that the federation absorbed the
latter. No such merger can be construed. Rather, what is conveyed is the idea of affiliation,
with the local union and the larger national federation retaining their separate personalities.
Petitioner cannot pretend to be unaware of these legal principles since they enjoy the benefit
of legal advice from their distinguished counsel. Thus, we are constrained to agree with the
position of the Solicitor General that petitioner conveniently used the representation issue
within AFW to skirt entering into bargaining negotiations with the private respondent.
Too, petitioner is in error in contending that the order was prematurely issued. It must be
recalled that immediately after the deadlock in the talks, it was petitioner which filed a petition
with the Secretary of Labor for the latter to assume jurisdiction over the labor dispute. In
effect, petitioner submitted itself to the public respondent's authority and recognized the
latter's power to settle the labor dispute pursuant to article 263(g) of the Labor Code granting
him the power and authority to decide the dispute. It cannot, therefore, be said that public
respondent's decision to grant the awards is premature and pre-emptive of the parties' right
to collectively bargain, simply because the Order of January 28, 1991 was unfavorable to
one or the other party, for as we held in Saulog Transit, Inc. vs. Lazaro, (128 SCRA 591
[1984]):
It is a settled rule that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and after failing to obtain such relief,
repudiate or question that same jurisdiction. A party cannot invoke jurisdiction
at one time and reject it at another time in the same controversy to suit its
interests and convenience. The Court frowns upon and does not tolerate the
undesirable practice of same litigants who submit voluntarily a cause and then
accepting the judgment when favorable to them and attacking it for lack of
jurisdiction when adverse. (Tajonera v. Lamaroxa, 110 SCRA
447, citing Tijam v. Sibonghanoy, 23 SCRA 35). (at p. 601.)
Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the
expiration of the previous CBA, contrary to the position of petitioner. Under the
circumstances of the case, Article 253-A cannot be property applied to herein case. As
correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing
petitioner's Motion for Reconsideration —
Anent the alleged lack of basis for the retroactivity provisions awarded, we
would stress that the provision of law invoked by the Hospital, Article 253-A
of the Labor Code, speak of agreements by and between the parties, and not
arbitral awards . . . (p. 818, Rollo.)
Therefore, in the absence of a specific provision of law prohibiting retroactivity of the

effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263 (g) of
the Labor Code, such as herein involved, public respondent is deemed vested with plenary
and discretionary powers to determine the effectivity thereof.
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit.
SO ORDERED.

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Assignment No.

Already included in Assignment No. 7

2. Mcburnie vs. Ganzon. G.R. No. 178034 . October 17, 2013.

G.R. No. 196276 June 4, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner,

Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines

Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal

On December 9, 2009, after considering respondent's Appeal Memorandum with Formal

Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE

We are not persuaded.

An unauthorized complaint does not produce any legal effect."19

The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees

As to the second issue, petitioner seeks the cancellation of respondent's registration on

We find no merit in the arguments.

Art. 234 of the Labor Code provides:

ART. 234. Requirements of Registration. - A federation, national union or industry or trade

(a) Fifty pesos (₱50.00)registration fee;

(a) Misrepresentation, false statement or fraud in connection with the adoption or

(b) Misrepresentation, false statements or fraud in connection with the election of

(c) Voluntary dissolution by the members.

In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment, 24 we

G.R. No. L-45824 June 19, 1985

VOLKSCHEL LABOR UNION, petitioner,

Ignacio P. Lacsina for petitioner.

William D. Dichoso for respondent DMG, Inc.

Abraham B. Drapiza for private respondent.

(1) A preliminary mandatory injunction commanding respondents to return to

(2) A preliminary restraining order prohibiting respondents from making

Section 3. CHECK-OFF. — The COMPANY agrees to make payroll

On March 10, 1976, a majority of petitioner's members decided to disaffiliate from

Incumbent affiliates of existing federations or national unions may disaffiliate

Hence, the instant petition.

Is petitioner union's disaffiliation from respondent federation valid?

Do respondent companies have the right to effect union dues collections

Is respondent federation entitled to union dues payments from petitioner

We resolve the first issue in the affirmative.

In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of

G.R. No. 207971 Januray 23, 2017

ASIAN INSTITUTE OF MANAGEMENT, Petitioner,

DEL CASTILLO, J.:

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit

Meanwhile, in DOLE Case No. NCR-OD-0707-001-LRD, an Order14 dated February 16,

CA-G.R. SP No.109487 and G.R. No.197089

Article 212(m) of the Labor Code defines managerial employees as:

'ART. 212. Definitions. – x x x

Clearly, AIM's tenure-track faculty do not merely recommend faculty

SO ORDERED.21 (Emphasis in the original)

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's petition

On January 8, 2013, the CA rendered the assailed Decision, stating as follows:

The petition lacks merit

(c) Voluntary dissolution by the members.

vitiate the consent of a majority of union members.23

In this regard, it has also been held that:

SO ORDERED.26 (Emphasis in the original)

G.R. No. 220383, October 05, 2016

SONEDCO WORKERS FREE LABOR UNION (SWOFLU) / RENATO YUDE,