[G.R. No. 131235. November 16, 1999]

UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL, petitioners vs. Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and Employment (DOLE), EDUARDO J. MARIÑO JR., MA. MELVYN ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents.

D E C I S I O N

PANGANIBAN, J.:

There is a right way to do the right thing at the right time for the right reasons,[1] and in the present case, in the right forum by the right parties. While grievances against union leaders constitute legitimate complaints deserving appropriate redress, action thereon should be made in the proper forum at the proper time and after observance of proper procedures. Similarly, the election of union officers should be conducted in accordance with the provisions of the union’s constitution and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective bargaining unit may take part in a duly convened certification election, only bona fide members of the UST Faculty Union (USTFU) may participate and vote in a legally called election for union officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law.

The Case

The Petition for Certiorari before us assails the August 15, 1997 Resolution[2] of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiter’s Decision disposed as follows:

“WHEREFORE, premises considered, judgment is hereby rendered declaring the election of USTFU officers conducted on October 4, 1996 and its election results as null and void ab initio.

“Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist from acting and performing the duties and functions of the legitimate officers of [the] University of Santo Tomas Faculty Union (USTFU) pursuant to [the] union’s constitution and by-laws (CBL).

“The Temporary Restraining Order (TRO ) issued by this Office on December 11, 1996 in connection with the instant petition, is hereby made and declared permanent.”[3]

Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio, which denied petitioners’ Motion for Reconsideration.

The Facts

The factual antecedents of the case are summarized in the assailed Resolution as follows:

“Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year Collective Bargaining Agreement with its employer, the University of Santo Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998.

“On 21 September 1996, appellee Collantes, in her capacity as Secretary General of USTFU, posted a notice addressed to all USTFU members announcing a general assembly to be held on 05 October 1996. Among others, the general assembly was called to elect USTFU’s next set of officers. Through the notice, the members were also informed of the constitution of a Committee on Elections (COMELEC) to oversee the elections. (Annex “B”, petition)

“On 01 October 1996, some of herein appellants filed a separate petition with the Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that the COMELEC was not constituted in accordance with USTFU’s

constitution and by-laws (CBL) and that no rules had been issued to govern the conduct of the 05 October 1996 election.

“On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presidents (See paragraph VI, Respondents’ Comment and Motion to Dismiss), issued notices allowing all faculty members to hold a convocation on 04 October 1996 (See Annex ‘C’ Petition; Annexes ‘4’ to ‘10’, Appeal). Denominated as [a] general faculty assembly, the convocation was supposed to discuss the ‘state of the unratified UST-USTFU CBA’ and ‘status and election of USTFU officers’ (Annex ‘11’, Appeal)

“On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a temporary restraining order against herein appellees enjoining them from conducting the election scheduled on 05 October 1996.

“Also on 04 October 1996, and as earlier announced by the UST secretary general, the general faculty assembly was held as scheduled. The general assembly was attended by members of the USTFU and, as admitted by the appellants, also by 'non-USTFU members [who] are members in good standing of the UST Academic Community Collective Bargaining Unit' (See paragraph XI, Respondents’ Comment and Motion to Dismiss). On this occasion, appellants were elected as USTFU’s new set of officers by acclamation and clapping of hands (See paragraphs 40 to 50, Annex '12', Appeal).

“The election of the appellants came about upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the USTFU CBL and 'the rules of the election be suspended and that the election be held [on] that day' (See --paragraph 39, Idem.)

“On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and the nullification of the results of the 04 October 1996 election. Appellees alleged that the holding of the same violated the temporary restraining order issued in Case No. NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees characterized the election as spurious for being violative of USTFU’s CBL, specifically because the general assembly resulting in the election of appellants was not called by the Board of Officers of the USTFU; there was no compliance with the ten-day notice rule required by Section 1, Article VIII of the CBL; the supposed elections were conducted without a COMELEC being constituted by the Board of Officers in accordance with Section 1, Article IX of the CBL; the elections were not by secret balloting as required by Section 1, Article V and Section 6, Article IX of the CBL, and,

the general assembly was convened by faculty members some of whom were not members of USTFU, so much so that non-USTFU members were allowed to vote in violation of Section 1, Article V of the CBL.

“On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary restraining order, this time alleging that appellants had served the former a notice to vacate the union office. For their part, appellants moved to dismiss the original petition and the subsequent motion on jurisdictional grounds. Both the petition and the motion were captioned to be for “Prohibition, Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order.” According to the appellants, the med-arbiter has no jurisdiction over petitions for prohibition, 'including the ancillary remedies of restraining order and/or preliminary injunction, which are merely incidental to the main petition for PROHIBITION' (Paragraph XVIII3, Respondents’ Comment and Motion to Dismiss). Appellants also averred that they now constituted the new set of union officers having been elected in accordance with law after the term of office of appellees had expired. They further maintained that appellees’ scheduling of the 5 October 1996 elections was illegal because no rules and regulations governing the elections were promulgated as required by USTFU’s CBL and that one of the members of the COMELEC was not a registered member of USTFU. Appellants likewise noted that the elections called by the appellees should have been postponed to allow the promulgation of rules and regulations and to 'insure a free, clean, honest and orderly elections and to afford at the same time the greater majority of the general membership to participate' (See paragraph V, Idem). Finally, appellants contended that the holding of the general faculty assembly on 04 October 1996 was under the control of the Council of College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance and that they received the Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001 only on 07 October 1996 and were not aware of the same on 04 October 1996.

“On 03 December 1996, appellants and UST allegedly entered into another CBA covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants’ Rejoinder to the Reply and Opposition).

“Consequently, appellees again moved for the issuance of a temporary restraining order to prevent appellants from making further representations that [they] had entered into a new agreement with UST. Appellees also reiterated their earlier stand that appellants were usurping the former’s duties and functions and should be stopped from continuing such acts.

“On 11 December 1996, over appellants’ insistence that the issue of jurisdiction should first be resolved, the med-arbiter issued a temporary restraining order directing the respondents to cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors of USTFU.

“In the meantime, appellants claimed that the new CBA was purportedly ratified by an overwhelming majority of UST’s academic community on 12 December 1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated as appellees’ petition for prohibition on the ground that this had become moot and academic.”[5]

Petitioners appealed the med-arbiter’s Decision to the labor secretary,[6] who transmitted the records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized to resolve appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor Code.[7]

The Assailed Ruling

Agreeing with the med-arbiter that the USTFU officers’ purported election held on October 4, 1994 was void for having been conducted in violation of the union’s Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners’ contention that it was a legitimate exercise of their right to self-organization. He ruled that the CBL, which constituted the covenant between the union and its members, could not be suspended during the October 4, 1996 general assembly of all faculty members, since that assembly had not been convened or authorized by the USTFU.

Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the recognition of the newly “elected” set of officers by UST or by the alleged ratification of the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio:

"This submission is flawed. The issue at hand is not collective bargaining representation but union leadership, a matter that should concern only the members of USTFU. As pointed out by the appellees, the privilege of determining who the union officers will be belongs exclusively to the members of the union. Said privilege is exercised in an election proceeding in accordance with the union's CBL and applicable law.

“To accept appellants' claim to legitimacy on the foregoing grounds is to invest in appellants the position, duties, responsibilities, rights and privileges of USTFU officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer from interfering with the employees in the latter' exercise of their right to self-organization. To allow appellants to become USTFU officers on the strength of

management's recognition of them is to concede to the employer the power of determining who should be USTFU's leaders. This is a clear case of interference in the exercise by USTFU members of their right to self-organization.”[8]

Hence, this Petition.[9]

The Issues

The main issue in this case is whether the public respondent committed grave abuse of discretion in refusing to recognize the officers “elected” during the October 4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the following questions:[10]

“(1) Whether the Collective Bargaining Unit of all the faculty members in that General Faculty Assembly had the right in that General Faculty Assembly to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of the union[.]

“(2) Whether the suspension of the provisions of the Constitution and By-Laws of the USTFU in that General Faculty Assembly is valid pursuant to the constitutional right of the Collective Bargaining Unit to engage in “peaceful concerted activities” for the purpose of ousting the corrupt regime of the private respondents[.]

“(3) Whether the overwhelming ratification of the Collective Bargaining Agreement executed by the petitioners in behalf of the USTFU with the University of Santo Tomas has rendered moot and academic the issue as to the validity of the suspension of the Constitution and By-Laws and the elections of October 4, 1996 in the General Faculty Assembly[.]”

The Court’s Ruling

The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of the October 4, 1996 general assembly called by the UST administration.

First Issue: Right to Self-Organization and Union Membership

At the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma[11] has held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with this Court over petitions for certiorari. However, inasmuch as the memoranda in the instant case have been filed prior to the promulgation and finality of our Decision in NFL, we deem it proper to resolve the present controversy directly, instead of remanding it to the Court of Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in the present case seriatim.

Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection.[12] Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union.[13]

Corollary to this right is the prerogative not to join, affiliate with or assist a labor union.[14] Therefore, to become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union’s constitution and bylaws.[15] An employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the union’s rules and regulations.

“When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion of his individual freedom is surrendered for the benefit of all members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the legislature bind all of us, to the constitution and by-laws of the union (unless contrary to good morals or public policy, or otherwise illegal), which are duly enacted through democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union; otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union.

“On joining a labor union, the constitution and by-laws become a part of the member’s contract of membership under which he agrees to become bound by the constitution and governing rules of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights.”[16]

Petitioners claim that the numerous anomalies allegedly committed by the private respondents during the latter’s incumbency impelled the October 4, 1996 election of the new set of USTFU officers. They assert that such exercise was pursuant to their right to self-organization.

Petitioners’ frustration over the performance of private respondents, as well as their fears of a “fraudulent” election to be held under the latter’s supervision, could not justify the method they chose to impose their will on the union. Director Bitonio aptly elucidated:[17]

“The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory. Article 3 of the Convention provides that workers’ organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the union’s CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule.”

Union Election vs. Certification Election

A union election is held pursuant to the union’s constitution and bylaws, and the right to vote in it is enjoyed only by union members. A union election should be distinguished from a certification election, which is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the

employees in the appropriate bargaining unit, for purposes of collective bargaining.[18] Specifically, the purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a labor organization and, in the affirmative case, by which particular labor organization.[19]

In a certification election, all employees belonging to the appropriate bargaining unit can vote.[20] Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled to vote in said election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of the union cannot vote in the union election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and elections cannot be decided in a non-union activity.

In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot properly be called a union election, because the procedure laid down in the USTFU’s CBL for the election of officers was not followed. It could not have been a certification election either, because representation was not the issue, and the proper procedure for such election was not followed. The participation of non-union members in the election aggravated its irregularity.

Second Issue: USTFU’s Constitution and ByLaws Violated

The importance of a union’s constitution and bylaws cannot be overemphasized. They embody a covenant between a union and its members and constitute the fundamental law governing the members’ rights and obligations.[21] As such, the union’s constitution and bylaws should be upheld, as long as they are not contrary to law, good morals or public policy.

We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996 election was tainted with irregularities because of the following reasons.

First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of faculty clubs, as indicated in the memorandum sent to all faculty members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo Tomas.[22] It was not convened in accordance with the provision on general membership meetings as found in the USTFU’s CBL, which reads:

“ARTICLE VIII-MEETINGS OF THE UNION

“Section 1. The Union shall hold regular general membership meetings at least once every three (3) months. Notices of the meeting shall be sent out by the Secretary-General at least ten (10) days prior to such meetings by posting in conspicuous places, preferably inside Company premises, said notices. The date, time and place for the meetings shall be determined by the Board of Officers.”[23]

Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called and participated in by management and non-union members. By no legal fiat was such assembly transformed into a union activity by the participation of some union members.

Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2 of Article IX of the USTFU’s CBL, which provide:

“ARTICLE IX - UNION ELECTION

Section 1. There shall be a Committee on Election (COMELEC) to be created by the Board of Officers at least thirty (30) days before any regular or special election. The functions of the COMELEC include the following:

a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly election, whether regular or special;

b) Pass upon qualifications of candidates;

c) Rule on any question or protest regarding the conduct of the election subject to the procedure that may be promulgated by the Board of Officers; and

d) Proclaim duly elected officers.

Section 2. The COMELEC shall be composed of a chairman and two members all of whom shall be appointed by the Board of Officers.

“xxx xxx xxx”[24]

Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of the USTFU’s CBL, as well as Article 241 (c) of the Labor Code.

The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director Bitonio’s finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations,[25] we invalidated the local union elections held at the wrong date without prior notice to members and conducted without regard for duly prescribed ground rules. We held that the proceedings were rendered void by the lack of due process -- undue haste, lack of adequate safeguards to ensure integrity of the voting, and the absence of the notice of the dates of balloting.

Third Issue: Suspension of USTFU’s CBL

Petitioners contend that the October 4, 1996 assembly “suspended” the union’s CBL. They aver that the suspension and the election that followed were in accordance with their “constituent and residual powers as members of the collective bargaining unit to choose their representatives for purposes of collective bargaining.” Again they cite the numerous anomalies allegedly committed by the private respondents as USTFU officers. This argument does not persuade.

First, as has been discussed, the general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not all who attended the assembly were members of the union; some, apparently, were even disqualified from becoming union members, since they represented management. Thus, Director Bitonio correctly observed:

“Further, appellants cannot be heard to say that the CBL was effectively suspended during the 04 October 1996 general assembly. A union CBL is a covenant between the union and its members and among members (Johnson and Johnson Labor Union-FFW, et al. v. Director of Labor Relations, 170 SCRA

469). Where ILO Convention No. 87 speaks of a union’s full freedom to draw up its constitution and rules, it includes freedom from interference by persons who are not members of the union. The democratic principle that governance is a matter for the governed to decide upon applies to the labor movement which, by law and constitutional mandate, must be assiduously insulated against intrusions coming from both the employer and complete strangers if the 'protection to labor clause' of the constitution is to be guaranteed. By appellant’s own evidence, the general faculty assembly of 04 October 1996 was not a meeting of USTFU. It was attended by members and non-members alike, and therefore was not a forum appropriate for transacting union matters. The person who moved for the suspension of USTFU’s CBL was not a member of USTFU. Allowing a non-union member to initiate the suspension of a union’s CBL, and non-union members to participate in a union election on the premise that the union’s CBL had been suspended in the meantime, is incompatible with the freedom of association and protection of the right to organize.

“If there are members of the so-called ‘academic community collective bargaining unit’ who are not USTFU members but who would nevertheless want to have a hand in USTFU’s affairs, the appropriate procedure would have been for them to become members of USTFU first. The procedure for membership is very clearly spelled out in Article IV of USTFU’s CBL. Having become members, they could then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that ‘if a member of the union dislikes the provisions of the by-laws he may seek to have them amended or may withdraw from the union; otherwise he must abide by them.’ Under Article XVII of USTFU’s CBL, there is also a specific provision for constitutional amendments. What is clear therefore is that USTFU’s CBL provides for orderly procedures and remedies which appellants could have easily availed [themselves] of instead of resorting to an exercise of their so-called ‘residual power'.”[26]

Second, the grievances of the petitioners could have been brought up and resolved in accordance with the procedure laid down by the union’s CBL[27]and by the Labor Code.[28] They contend that their sense of desperation and helplessness led to the October 4, 1996 election. However, we cannot agree with the method they used to rectify years of inaction on their part and thereby ease bottled-up frustrations, as such method was in total disregard of the USTFU’s CBL and of due process. The end never justifies the means.

We agree with the solicitor general’s observation that “the act of suspending the constitution when the questioned election was held is an implied admission that the election held on that date [October 4, 1996] could not be considered valid under the existing USTFU constitution xxx.”[29]

The ratification of the new CBA executed between the petitioners and the University of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of the new CBA, not the issue of union leadership -- a matter that should be decided only by union members in the proper forum at the proper time and after observance of proper procedures.

Epilogue

In dismissing this Petition, we are not passing upon the merits of the mismanagement allegations imputed by the petitioners to the private respondents; these are not at issue in the present case. Petitioners can bring their grievances and resolve their differences with private respondents in timely and appropriate proceedings. Courts will not tolerate the unfair treatment of union members by their own leaders. When the latter abuse and violate the rights of the former, they shall be dealt with accordingly in the proper forum after the observance of due process.

WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED. Costs against petitioners.

SO ORDERED.

Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

[1] See Panganiban, Battles in the Supreme Court, 1998 ed., p. 50.1

[2] Rollo, pp. 74-86.2

[3] Rollo, pp. 72-73.3

[4] Rollo, pp. 87-91.4

[5] Rollo, pp. 75-79.5

[6] Rollo, pp. 112-141. The petitioners filed their appeal with the Department of Labor and Employment on March 3, 1997.6

[7] Assailed Resolution, p. 2; rollo, p. 75.7

[8] Ibid., p. 12; rollo, p. 85.8

[9] The case was deemed submitted for resolution upon receipt by the Court of the Memorandum for the private respondents on March 1, 1999. Petitioners’ Memorandum was received on January 11, 1999, and public respondents’ Memorandum on January 18, 1999.9

[10] Rollo, pp. 504-505.10

[11] GR No. 123426, March 10, 1999.11

[12] See Article 244 of the Labor Code in conjunction with Executive Order No. 180, as well as Article 245 of the same Code.12

[13] Art. 277 (c), Labor Code.13

[14] Reyes v. Trajano, 209 SCRA 484, June 2, 1992.14

[15] For example, the following are pertinent provisions as regards membership in USTFU, as set forth in its CBL:

“ARTICLE IV - MEMBERSHIP

Section 1. Every faculty member of the University of Santo Tomas, not otherwise disqualified by law and without regard to sex, race, nationality, religious or political belief or affiliation, is eligible for membership in the UNION.

Section 2. Qualified faculty members of the Company may become members of the UNION by written application approved by the President upon recommendation of the Committee on Membership and after payment in full of the required admission fee.

Section 3. The following shall not be eligible for membership nor to election or appointment to any position in the UNION:

a) Subversives or persons who profess subversive ideas;

b) Persons who have been convicted of a crime involving moral turpitude; and

c) Persons who are not faculty members of the Company.” (Rollo, p.283).15

[16] Ang Malayang Manggagawa ng Ang Tibay Enterprises et al. v. Ang Tibay, 102 Phil. 669, December 23, 1957, per Bautista Angelo, J.16

[17] August 15, 1997 Resolution, pp. 9-10; rollo, pp. 82-83.17

[18] § 1 (x), Rule I, Book V, Rules and Regulations Implementing the Labor Code.18

[19] Reyes v. Trajano, supra.19

[20] Airtime Specialists v. Ferrer-Calleja, 180 SCRA 749, December 29, 1989.20

[21] Johnson and Johnson Labor Union-FFW v. Director of Labor Relations, 170 SCRA 469, February 21, 1989.21

[22] See Annex “C” of private respondent’s Petition filed with the med-arbiter; rollo, p. 261.22

[23] Rollo, p. 288.23

[24] Rollo, p. 290.24

[25] 165 SCRA 239, August 31, 1988.25

[26] Rollo, pp. 83-84.26

[27] The USTFU’s CBL as regards impeachment and recall reads as follows:

ARTICLE XV- IMPEACHMENT AND RECALL

Section 1. Any of the following shall be grounds for the impeachment or recall of UNION officers:

a) Committing or causing the commission directly or indirectly of acts against the interest and welfare of the UNION.

b) Malicious attack against the UNION, its officers, or against a fellow UNION officer.

c) Failure to comply with the obligation to turn over and return to the UNION Treasurer within three (3) days any unexpended sum or sums of money received from the UNION funds to answer for an authorized UNION purpose.

d) Gross misconduct unbecoming a UNION officer.

e) Misappropriation of UNION funds and property. This is without prejudice to the filing of an appropriate criminal or civil action against the responsible officer or officers by any interested party.

f) Willful violation of any provision of this Constitution and By-Laws or rules, regulations, measures, resolutions or decisions of the UNION.

Section 2. The following procedure shall govern impeachment and recall proceedings:

a) Impeachment or recall proceedings shall be initiated by a formal petition or resolution signed by at least thirty (30) percent of all bonafide members of the UNION and addressed to the Chairman of the Board of Officers.

b) The Board Chairman shall then convene a general membership meeting to consider the impeachment or recall of an officer or a group of officers, whether elective or appointive.

c) UNION officers against whom impeachment or recall charges have been filed shall be given ample opportunity to defend themselves before any impeachment or recall vote is finally taken.

d) A majority of all the members of the UNION shall be required to impeach or recall UNION officers.

e) The UNION officers impeached shall ipso facto be considered resigned or ousted from office and shall no longer be elected or appointed to any position in the UNION.

f) The decision of the general membership on the impeachment or recall charge shall be final and executory.27

UST Faculty union vs. Bitonio, BLR/Mariño

GRN 131235 November 16, 1999

Panganiban, J.:

FACTS:

Private respondent Mariño et al are duly elected officer of UST faculty. The union has a 5-year CBA with its employer and is set to expire on May 31,1998. On September 21, 1996, Sec Gen of the union posted a general assembly announcement to be held on October 5, 1996. Various UST club presidents requested a general faculty assembly thus union and non-union faculty members convened. New set of officers were elected, violative of the CBL and that GA was held with the attendance of non-union members. Current union officers were served with a notice to vacate the union office as new set of offices were already elected. CBA was likewise ratified by an overwhelming majority. Mad-Arbiter declared the election conducted was violative of the union’s CBL. BLR Director Bitonio upheld the decision with a ruling that the CBL which constituted the covenant between the union and its members, could not be suspended during the general assembly of all faculty members, since it had not been authorized by the union.

ISSUE:

Whether or not the public respondent committed grave abuse of discretion in refusing to recognize the officers “elected” during the general assembly.

RULING:

Self-organization is a fundamental right guaranteed by the constitution and labor Code. Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. Therefore, to become a union member, an employee must not only signify the intent to become one but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union’s CBL. An employee who becomes a union member acquires the rights and the concomitant obligations that go with the new status and becomes bound by the union’s rules and regulations.

v Union election – hold pursuant to the union’s CBL, and the right to vote in it is enjoyed only by union members.

v Certification election – is the process of determining, thorough secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate bargaining unit for the purpose of collective bargaining the purpose to ascertain whether or not a majority of the employees wish to be represented by a labor organization and by which particular labor organization.

Case Digest on Barles v. Bitonio, 308 SCRA 288, June 1999- Labor Law

 

Q: Q and L were supervisors whose jobs involved the overseeing of the withdrawal and sorting of sacks of sugar. In

one transaction involving 50,000 Class C sacks, large numbers of sacks were misplaced, and sacks of other classes

were mixed in with the lot.  As they were supervising other operations at the time, Q and L were lax with their duties

to see that the sacks were properly segregated and delivered.  As a result, a large number of sacks was stolen from

the company.  Q and L were subsequently fired for gross negligence.  Are they validly dismissed?

 

A: NO.  While Quimba and Lagrana were partially responsible for the unfortunate incident, their negligence is not

gross or habitual, and as such does not merit outright dismissal.  Thus, they would be entitled to reinstatement, but

the employees have accepted the NLRC’s judgement for separation pay instead due to the animosity between the

parties.

 

[G.R. No. 120270.  June 16, 1999]

MANOLITO BARLES, PATRICIO ELOMINA, AND JUAN SAYO, petitioners, vs. HON. BENEDICTO ERNESTO BITONIO DIRECTOR, BUREAU OF LABOR RELATIONS, JORESTY OQUENDO, LUIS BERNALES, J. OCENA AND JUANITO RAGASA, respondents.

D E C I S I O N

DAVIDE, JR., C.J.:

This special civil action for certiorari under Rule 65 of the Rules of Court originated from a petition for audit of union funds filed by petitioners with the Bureau of Labor Relations (BLR) and appealed to the Secretary of the Department of Labor and Employment (hereafter Secretary of Labor) who subsequently endorsed the appeal to the BLR.  Petitioners now assail BLR Resolutions[1] of 25 April 1995 and 14 March 1995 of the BLR upholding the Bureau’s jurisdiction over appeals on decisions involving the examination of union accounts endorsed to it by the Secretary of Labor.

In February 1991, petitioners Manolito Barles, Patricio Elomina and Juan Sayo were elected president, treasurer and auditor, respectively, of Ilaw Buklod ng Manggagawa’s IBM Local Chapter No. 15.  Private respondents Joresty Oquendo and Juanito Ragasa also ran for the positions of president and secretary in the same election but they lost to petitioners.

On 24 June 1992, the new Executive Board passed a Resolution increasing union dues from P16.00 to P40.00 a month.  This was ratified by the members.  On 3 August

1992, private respondents filed with the BLR a petition for the immediate audit and examination of union funds.

Subsequent events were summarized by the BLR as follows:

On 10 November 1992, this Office issued an order directing one of its staff, Ms. Dorisa Geluz, to ‘proceed with the conduct of the audit.’

The order was appealed to the Office of the Secretary, with the appeal being docketed as OS-MA-A-1-11-93 (BLR-AE No. 8-11-92).  On 08 February 1993, through Undersecretary Laguesma, the Office of the Secretary set aside the order and dismissed the petition on the ground that it 'x x x is a duplication of the complaint earlier filed by the [private respondents] with the Office of the Regional Director.'

On 05 April 1993, upon motion for reconsideration of the [private respondents], the Office of the Secretary reconsidered its 08 February 1993 order.  It thus reinstated the earlier order issued by this Office on 10 November 1992.

On 13 August 1993, upon motion of [petitioners], the Office of the Secretary modified its 08 February 1993 order and ruled that:

'While we sustain the Order for the holding of an account examination of the union, we have deemed it proper to take valid cognizance of the argument that the Bureau of Labor Relations is an improper venue for the same. To give substance to Administrative Order 186 decentralizing line functions, the matter of the conduct for the union account examination is hereby endorsed to the Regional Office.  Let the account examiner of DOLE Regional Office No. IV, perform this task.

Wherefore, premises considered, the motion for reconsideration is hereby denied.  The Order for the conduct of union account examination is affirmed, but modified to the extent that the same shall be conducted by DOLE Regional Office No. IV through its competent personnel.

‘Let the records of the case be forwarded to the Regional Office for the appropriate proceedings therein.’

Pursuant to this order, the account examiner, regional Office No. IV initiated the conduct of audit by calling for a pre-audit conference.  [Petitioners], however, filed a petition for certiorari with the Supreme Court docketed as G.R. No. 111671, seeking to annul and set aside the order of the Office of the Secretary.  In the conference of 30 September 1993, the audit was supposed to have been held in abeyance ‘until the petition for certiorari filed by the [petitioners] is resolved.’

Subsequently, the Regional Office sent notices to both parties setting pre-audit conferences on 26 November 1993, 10 December 1993, and 23 December 1993.  [Petitioners] did not appear in any of these conferences. On record, they formally filed a request dated 03 December 1993 to hold in abeyance the pre-audit conference because of the pendency of their petition for certiorari with the Supreme Court.  Parenthetically, the Supreme Court had earlier dismissed the petition on 22 November 1993; the Court would later on dismiss the petition with finality on 24 January 1994.

In the meantime, on 01 December 1993, the Regional Office sent a letter to the employer of [petitioners] asking for ‘x x x a certification as to the amount of union dues checked-off and other deductions made from the salaries of union members.’ On 28 December 1993, the Regional Office also sent a subpoena duces tecum to [petitioners], directing them to bring ‘x x x all the financial documents of the union for the period from July 1989 to July 1992.’

On 05 April 1994, [petitioners’] employer sent the Regional Office a summary of union collections and remittances from July 1989 to July 1992.  On 18 April 1994, the Regional Office again sent [petitioners’] employer another request, this time asking for ‘x x x a certification as to the amount other than union dues deducted from the salaries of union members and as well as non-union members.’  On 11 May 1994 [petitioners’] employer, through Mr. Antonio de las Alas, issued a certification complying with this request.

On 02 June 1994, the Regional Director issued an order based on the recommendations of the account examiner.  The pertinent portion of the order states:

‘Since it is obvious that the incumbent officers do not want this Office to conduct the examination of the book of accounts x x x, the undersigned (the account examiner) shall have the certification furnished to us by Mr. Antonio De las Alas, Jr., as basis for the audit and no other way except to resolve this case, once and for all, the undersigned recommends the following:

“1. That the incumbent officers hold a general membership meeting and likewise explain the amount of P352,496.00 to the general membership and open the book of accounts to any member as well as the complainants and furnish this Office the minutes of the particular meeting.

“2. The incumbent officers are given 20 days to submit compliance report of the said meeting.

“ x x x.

This Office finds the above-findings and recommendations in order, hence it is hereby adopted.

WHEREFORE, the responsible officers particularly, the union president, union treasurer, the retired former union treasurer, the former union auditor and the union auditor are ordered to comply with the foregoing recommendations. x x x

Consequently, the responsible officers are given twenty (20) days from receipt of this ORDER to convene a general meeting for the purpose of putting into effect the mandate of the ORDER and to make a report of compliance thereon.’[2]

In their appeal to the Secretary of Labor, petitioners asserted that the Regional Director denied them due process, and that the audit was not only barred by prescription but also proscribed by Article 274 of the Labor Code in that union accounts cannot be examined during the sixty-day freedom period or within thirty days immediately preceding the date of election of union members.

On 28 October 1994, Undersecretary Bienvenido E. Laguesma endorsed the appeal and the entire records of the case back to the BLR pursuant to Administrative Order No. 186 and the Rules of Procedure on Mediation-Arbitration, both of which embodied the government’s decentralization policy.

In its resolution of 14 March 1995, the BLR found the appeal unmeritorious, as the Secretary of Labor’s Order of 13 August 1993 authorizing the Regional Director to proceed with the audit of union funds and our Resolution of 24 January 1994 in G.R. No. 111671 establish res judicata.  The BLR noted however, that the “report submitted by the account examiner and adopted by the Regional Director is incomplete,” and it is “not clear whether the account examiner actually conducted an audit;” thus, the BLR ordered Regional Office No. IV to conduct a more exhaustive re-audit.[3]

On 3 April 1995, petitioners moved to strike out or reconsider the aforesaid resolution challenging the jurisdiction of the BLR over appeals from orders, resolutions and decisions of the Regional Director on petitions for union accounts examination.

Petitioners' arguments were later condensed by the BLR in its Resolution of 25 April 1995 in this wise:

The instant case allegedly is an internal dispute covered by Article 241 (p) of the Labor Code. Thus, the appellate procedure established in Article 259 of the Labor Code and Section 5, Rule VIII of the implementing rules should apply.  Accordingly, the decision of the Regional Director should have been appealed to the Office of the Secretary, not to this office.  Respondents further argue that Republic Act No. 6715

stripped this office of adjudicatory powers and transferred the same to the Office of the Secretary.  Consequently, Administrative Order No. 186, which was issued by the Office of the Secretary itself and which served as basis for it to endorse the case to this Office, constitutes an unauthorized amendment of the law.[4]

The BLR, however, denied the motion explaining that its appellate authority over complaints of union account examinations is explicit under the Rules of Procedure on Med-Arbitration issued on 10 April 1992.  In addition, the BLR has the power to examine the financial records of legitimate labor organizations.  This power is either (1) primary, inherent and expressed under Book IV, Title VII, Chapter 4, Section 16 of the Administrative Code of 1987 or (2) delegated upon the DOLE Secretary under Article 274 of the Labor Code, La Tondeña Workers Union v. Secretary of Labor, and Administrative Order No. 189 insofar as it is consistent with the latter case.  The BLR also has original and exclusive authority to hear intra-union disputes (such as a petition to examine union accounts) under Articles 226 and 241 of the Labor Code.  The BLR added that R.A. No. 6715 never stripped it of its quasi-adjudicatory powers particularly over internal union disputes, and Administrative Order No. 186 did not amend but precisely implemented Article 274 of the Labor Code.

Before the Court, petitioners now assail the aforementioned Resolution and reiterate the arguments adduced in their motion to strike out or reconsider the 14 March 1995 resolution of the BLR.  They assert that the BLR Director, in taking cognizance of the appeal from the Order of the Regional Director upon the Secretary of Labor’s endorsement, acted with grave abuse of discretion amounting to lack of jurisdiction or excess in the exercise thereof because the latter can “neither delegate nor abdicate his appellate jurisdiction to a subordinate body or entity" like the BLR.  Petitioners argue that R.A. No. 6715 removed the adjudicatory functions of the BLR.  Hence, Administrative Order No. 186 and the Rules of Procedure on Mediation Arbitration which restored said power to the BLR under the “guise of decentralization policy” consequently amended Articles 259 and 274 of the Labor Code in violation of the principle that administrative laws and regulations must supplement, not supplant substantive law as enunciated by the Court in Philippine Apparel Workers Union vs. NLRC. Petitioners also question the validity and constitutionality of Administrative Order 186 and the Rules of Procedure on Mediation Arbitration.

Public respondent through the Solicitor General insists on its appellate jurisdiction over revisions, etc. relative to complaints for union accounts examination.  Citing La Tondeña v. Secretary of Labor, the Solicitor General points that by endorsing the case to the BLR, the Secretary of Labor, actually authorized the BLR to act on his behalf.  Apart from any endorsement, the power of the BLR to examine union accounts is clear under the Administrative Code and Article 226 of the Labor Code.  Moreover, public respondent asserts that petitioners’ reliance on Article 259 of

the Labor Code is misplaced since this case involves an internal union dispute while the former is concerned with disputes between unions in a certification election.

The only issue under consideration is whether the BLR has jurisdiction to review decisions of the DOLE Regional Director endorsed to it (BLR) by the Secretary of Labor.  No constitutional issue is involved and the attempt to introduce the same here is nothing but a ruse to confuse the issues.

We resolve the issue in the affirmative and approve the BLR ruling on the matter.

Appellate authority over decisions of the Regional Director involving  examinations of union accounts is expressly conferred on the BLR under the Rules of Procedure on Mediation-Arbitration, and we quote:

RULE IIMED-ARBITRATION

SEC. 3.  Jurisdiction of the Regional Director. – the Regional Director shall exercise original and exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and complaints for examination of union’s books of accounts (italics supplied).

SEC. 4. Jurisdiction of the Bureau.-

x      x                                       x

(b)  The Bureau shall exercise appellate jurisdiction over all cases originating from the Regional Director involving union registration or cancellation of certificates of union registration and complaints for examination of union books of accounts (italics supplied).

The language of the law is categorical.  Any additional explanation on the matter is superfluous.

It is clear then that the DOLE Secretary has no appellate jurisdiction over decisions of Regional Directors involving petitions for examinations of union accounts.  Petitioners argument that the DOLE Secretary delegated or even abdicated his appellate powers deserves scant consideration.  He does not possess such power hence he cannot delegate, much more, abdicate powers which he does not own.  The fallacy in petitioners' argument arose from their equally erroneous proposition that since this case stemmed from a petition to audit union funds/accounts – an internal union dispute – the procedure for appeals outlined in Article 259 [5] and Section 5 of Rule VIII of the Implementing Rules apply.[6] Under these provisions, it is the DOLE Secretary who has appellate jurisdiction.  Article 259 however governs appeals on

petitions for certification elections.  As the Solicitor General correctly assessed, a certification election is a dispute between unions; it is not an internal union dispute.  Article 259 is clearly inapplicable.

Section 5 of Rule VIII of the Implementing Rules on the other hand, admittedly applies to internal union conflicts, but again it is not apropos to the case at bar as the relief granted under a complaint averring an intra-union dispute involves an order for the cancellation of the registration certificate of the erring union or the expulsion of the guilty party.[7] The case at bar originated from a petition for an audit of union accounts.  In La Tondeña Workers Union vs. Secretary of Labor,[8] the Court classified such a petition as an intra-union conflict.  The obvious relief that may be granted in a petition for audit is an order for the examinations of the books of accounts.  Section 5 of Rule VIII of the Implementing Rules is likewise inappropriate.

The DOLE Secretary, however, can properly delegate to the BLR his visitorial powers under Article 274 which includes the power to examine the financial accounts of legitimate labor organizations.  The provision reads as follows:

Article 274.  Visitorial power. – The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under oath and duly supported by the written consent of at least twenty (20%) percent of the total membership of the labor organization concerned and to examine their books of accounts and other records to determine compliance or non-compliance with the law and to prosecute any violations of the law and the union constitution and by-law; Provided, That such inquiry or examination shall not be conducted during the sixty (60)-day freedom period nor within the thirty (30) days immediately preceding the date of election of union officers.

While the provision did not explicitly mention the BLR, and only made a cryptic reference to the DOLE Secretary’s "duly authorized representative”, the latter was identified by the Court as the BLR in La Tondeña Workers Union vs. Secretary of Labor  when it ruled that “union accounts examiners of the Bureau mentioned in Rule 1, Sec. 1 (ff) of “Book V of) the implementing rules as having the power to audit the books of accounts of unions are actually officials of the BLR because the word ‘Bureau’ is defined in Rule 1, Sec. 1 (b) of the same rules as the Bureau of Labor Relations.” The Court additionally declared therein that the DOLE Secretary authorized the BLR to examine union accounts for and in his behalf when he endorse the case to the latter, thus:

[T]he delegation of authority to union accounts examiners in Rule 1, sec. 1 (ff) is not exclusive.  By indorsing the case to the BLR, the Secretary of Labor and Employment must be presumed to have authorized the BLR to act on his behalf.  Xxxx, the

Secretary made two indorsements: first, when he referred to the BLR the letter dated July 27, 1989 of Ramon de la Cruz and Norma Marin seeking the annulment of the audit report of the DOLE NCR, and second, on September 4, 1990, when, instead of acting on the petition for review of the union, he endorsed it to the BLR.[9]

The DOLE Secretary can also delegate his other functions and duties pursuant to Section 40, Chapter 8, Book IV of the Administrative Code provided that the delegation is in writing, indicating the officer or class of officers or employees to whom the delegation is made and only insofar as the delegation is necessary for the latter to implement plans and programs adequately.

In any case, the endorsement of the DOLE Secretary is consistent with Article 226 of the Code, thus:

Art. 226.  Bureau of Labor Relations. – The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, x x x. (italics supplied)

As already held by the Court in La Tondeña Workers Union vs. Secretary of Labor, intra-union conflicts such as examinations of accounts are under the jurisdiction of the BLR.  However, the Rules of Procedure on mediation-Arbitration purposely and expressly separated or distinguished examinations of union accounts from the genus of intra-union conflicts and provided a different procedure for the resolution of the same.  Original jurisdiction over complaints for examinations of union accounts is vested on the Regional Director and appellate jurisdiction over decisions of the former is lodged with the BLR.  This is apparent from Sections 3 and 4 of the Med-Arbitration Rules as already mentioned.  Contrast these two sections from Section 2 and Section 56 of the same rules.  Section 2 expressly vests upon Med-Arbiters original and exclusive jurisdiction to hear and decide inter alia “all other inter-union or internal union disputes.” Section 5 states that the decisions of the Med-Arbiter shall be appealable to the DOLE Secretary.  These are the provisions consistent with Section 5 of Rule VIII of the Implementing Rules of the Labor Code but as already explained inapplicable to the same at bar.

Without doubt, the rules of Procedure on Mediation-Arbitration did not amend or supplant substantive law but implemented and filled in details of procedure left vacuous or ambiguous by the Labor Code and its Implementing Rules.  Petitioners’ reliance on Philippine Apparel Workers Union vs. NLRC,[10] in support of their “amendment theory” is therefore misplaced.  In said case, the Court nullified the rules issued by the DOLE Secretary supposed to implement but in effect supplanted P.D. No. 1123.  The Mediation-Arbitration Rules do not suffer from the same legal infirmity.

Administrative Order No. 189 is a different matter but completely irrelevant here.  True, the DOLE Secretary ostensibly endorsed the appeal to the BLR on the basis of said administrative order, but it was already established herein that the endorsement was procedurally tenable under the Rules of Procedure on Med-Arbitration and consistent with the authority of the BLR to inquire into the financial accounts of legitimate labor organizations.  In other words, irrespective and independent of any endorsement, it is the BLR which has jurisdiction over complaints for examinations of union accounts.  It is worth mentioning at this point that the BLR, independent or any delegation, can moto propio or upon its own authority inspect a union’s financial status under Book IV, Title VII, Chapter 4, Section 16 of the Administrative Code of 1987, thus:

Section 16.  Bureau of Labor Relations – The Bureau of Labor Relations shall set policies, standards, and procedures on the registration and supervision of legitimate labor union activities including denial, cancellation and revocation of labor union permits.  It shall also set policies, standards, and procedure relating to collective bargaining agreements, and examination of financial records of accounts of labor organizations to determine compliance with relevant laws. (italics supplied)

In sum, the BLR did not exceed its jurisdiction or committed grave abuse of discretion in taking cognizance of petitioners’ appeal.  At any rate, this Court’s ruling in G.R. No. 111671 dismissing the petition for certiorarifiled by petitioners in their quest to nullify the 13 August 1993 order of the office of the DOLE Secretary requiring the Regional office to proceed with the audit constitutes res judicata.  This should put an end to this litigation already prolonged by procedural ploys which this Court will no longer tolerate.  This case involves a simple matter of auditing union accounts which should have been conducted with dispatch eons ago.

WHEREFORE, the instant petition is dismissed for lack of merit.  The resolutions of the Bureau of Labor Relations promulgated on 25 March 1995 and 14 March 1995 dismissing petitioners’ appeal are hereby affirmed in toto.  The Regional Office No. IV of the Department of Labor and Employment is hereby ordered to proceed immediately with the audit and examination of the Ilaw Buklod ng Manggagawa IBM Local Chapter No. 15.

Costs against petitioners.

SO ORDERED.

G.R. No. 171153 September 12, 2007

SAN MIGUEL CORPORATION EMPLOYEES UNION–PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU–PTGWO), petitioner,

vs.

SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION–PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEU–PDMP), respondent1.

D E C I S I O N

CHICO-NAZARIO, J.:

In this Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, petitioner SAN MIGUEL CORPORATION EMPLOYEES UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU-PTGWO) prays that this Court reverse and set aside the (a) Decision2 dated 9 March 2005 of the Court of Appeals in CA-G.R. SP No. 66200, affirming the Decision3 dated 19 February 2001 of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE) which upheld the Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION–PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEU–PDMP); and (b) the Resolution4 dated 16 January 2006 of the Court of Appeals in the same case, denying petitioner's Motion for Reconsideration of the aforementioned Decision.

The following are the antecedent facts:

Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna. It had been the certified bargaining agent for 20 years – from 1987 to 1997.

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). PDMP issued Charter Certificate No. 112 to respondent on 15 June 1999.5 In compliance with registration requirements, respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality.6 Upon submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local or Chapter PDMP-01 by the BLR on 6 July 1999.7 Thereafter,

respondent filed with the Med-Arbiter of the DOLE Regional Officer in the National Capital Region (DOLE-NCR), three separate petitions for certification election to represent SMPP, SMCSU, and SMBP.8 All three petitions were dismissed, on the ground that the separate petitions fragmented a single bargaining unit.9

On 17 August 1999, petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's registration and its dropping from the rolls of legitimate labor organizations. In its petition, petitioner accused respondent of committing fraud and falsification, and non-compliance with registration requirements in obtaining its certificate of registration. It raised allegations that respondent violated Articles 239(a), (b) and (c)10 and 234(c)11 of the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a trade union center, hence, it cannot directly create a local or chapter. The petition was docketed as Case No. NCR-OD-9908-007-IRD.12

On 14 July 2000, DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations of fraud and misrepresentation, and irregularity in the submission of documents by respondent. Regional Director Lim further ruled that respondent is allowed to directly create a local or chapter. However, he found that respondent did not comply with the 20% membership requirement and, thus, ordered the cancellation of its certificate of registration and removal from the rolls of legitimate labor organizations.13 Respondent appealed to the BLR. In a Decision dated 19 February 2001, it declared:

As a chartered local union, appellant is not required to submit the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate. Thus, the revocation of its registration based on non-compliance with the 20% membership requirement does not have any basis in the rules.

Further, although PDMP is considered as a trade union center, it is a holder of Registration Certificate No. FED-11558-LC issued by the BLR on 14 February 1991, which bestowed upon it the status of a legitimate labor organization with all the rights and privileges to act as representative of its members for purposes of collective bargaining agreement. On this basis, PDMP can charter or create a local, in accordance with the provisions of Department Order No. 9.

WHEREFORE, the appeal is hereby GRANTED. Accordingly, the decision of the Regional Director dated July 14, 2000, canceling the registration of appellant San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) is REVERSED and SET ASIDE. Appellant shall hereby remain in the roster of legitimate labor organizations.14

While the BLR agreed with the findings of the DOLE Regional Director dismissing the allegations of fraud and misrepresentation, and in upholding that PDMP can directly create a local or a chapter, it reversed the Regional Director's ruling that the 20% membership is a requirement for respondent to attain legal personality as a labor organization. Petitioner thereafter filed a Motion for Reconsideration with the BLR. In a Resolution rendered on 19 June 2001 in BLR-A-C-64-05-9-00 (NCR-OD-9908-007-IRD), the BLR denied the Motion for Reconsideration and affirmed its Decision dated 19 February 2001.15

Invoking the power of the appellate court to review decisions of quasi-judicial agencies, petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure docketed as CA-G.R. SP No. 66200. The Court of Appeals, in a Decision dated 9 March 2005, dismissed the petition and affirmed the Decision of the BLR, ruling as follows:

In Department Order No. 9, a registered federation or national union may directly create a local by submitting to the BLR copies of the charter certificate, the local's constitution and by-laws, the principal office address of the local, and the names of its officers and their addresses. Upon complying with the documentary requirements, the local shall be issued a certificate and included in the roster of legitimate labor organizations. The [herein respondent] is an affiliate of a registered federation PDMP, having been issued a charter certificate. Under the rules we have reviewed, there is no need for SMPPEU to show a membership of 20% of the employees of the bargaining unit in order to be recognized as a legitimate labor union.

x x x x

In view of the foregoing, the assailed decision and resolution of the BLR are AFFIRMED, and the petition is DISMISSED.16

Subsequently, in a Resolution dated 16 January 2006, the Court of Appeals denied petitioner's Motion for Reconsideration of the aforementioned Decision.

Hence, this Petition for Certiorari under Rule 45 of the Revised Rules of Court where petitioner raises the sole issue of:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT PRIVATE RESPONDENT IS NOT REQUIRED TO SUBMIT THE NUMBER OF EMPLOYEES AND NAMES OF ALL ITS MEMBERS COMPRISING AT LEAST 20% OF THE EMPLOYEES IN THE BARGAINING UNIT WHERE IT SEEKS TO OPERATE.

The present petition questions the legal personality of respondent as a legitimate labor organization.

Petitioner posits that respondent is required to submit a list of members comprising at least 20% of the employees in the bargaining unit before it may acquire legitimacy, citing Article 234(c) of the Labor Code which stipulates that any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

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

b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

c. The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

d. If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification and the list of the members who participated in it.17

Petitioner also insists that the 20% requirement for registration of respondent must be based not on the number of employees of a single division, but in all three divisions of the company in all the offices and plants of SMC since they are all part of one bargaining unit. Petitioner refers to Section 1, Article 1 of the Collective Bargaining Agreement (CBA),18 quoted hereunder:

ARTICLE 1

SCOPE

Section 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all regular rank and file employees paid on the basis of fixed salary per month and employed by the COMPANY in its Corporate Staff Units (CSU), San Miguel Brewing Products (SMBP) and San Miguel Packaging Products (SMPP) and in different operations existing in the City of Manila and suburbs, including Metal Closure and Lithography Plant located at Canlubang, Laguna subject to the provisions of Article XV of this Agreement provided however, that if during the term of this Agreement, a plant within the territory covered by this Agreement is transferred outside but within a radius of fifty (50) kilometers from the Rizal Monument, Rizal Park, Metro Manila, the employees in the transferred plant shall remain in the bargaining unit covered by this Agreement. (Emphasis supplied.)

Petitioner thus maintains that respondent, in any case, failed to meet this 20% membership requirement since it based its membership on the number of employees of a single division only, namely, the SMPP.

There is merit in petitioner's contentions.

A legitimate labor organization19 is defined as "any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof."20 The mandate of the Labor Code is to ensure strict compliance with the requirements on registration because a legitimate labor organization is entitled to specific rights under the Labor Code,21 and are involved in activities directly affecting matters of public interest. Registration requirements are intended to afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends.22 Legitimate labor organizations have exclusive rights under the law which cannot be exercised by non-legitimate unions, one of which is the right to be certified as the exclusive representative23 of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining.24 The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained

the status of a legitimate labor organization.25

A perusal of the records reveals that respondent is registered with the BLR as a "local" or "chapter" of PDMP and was issued Charter Certificate No. 112 on 15 June 1999. Hence, respondent was directly chartered by PDMP.

The procedure for registration of a local or chapter of a labor organization is provided in Book V of the Implementing Rules of the Labor Code, as amended by Department Order No. 9 which took effect on 21 June 1997, and again by Department Order No. 40 dated 17 February 2003. The Implementing Rules as amended by D.O. No. 9 should govern the resolution of the petition at bar since respondent's petition for certification election was filed with the BLR in 1999; and that of petitioner on 17 August 1999.26

The applicable Implementing Rules enunciates a two-fold procedure for the creation of a chapter or a local. The first involves the affiliation of an independent union with a federation or national union or industry union. The second, finding application in the instant petition, involves the direct creation of a local or a chapter through the process of chartering.27

A duly registered federation or national union may directly create a local or chapter by submitting to the DOLE Regional Office or to the BLR two copies of the following:

(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and

(c) The local/chapter's constitution and by-laws; Provided, That where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.28

The Implementing Rules stipulate that a local or chapter may be directly created by a federation or national union. A duly constituted local or chapter created in accordance with the foregoing shall acquire legal personality from the date of filing of the complete documents with the BLR.29 The issuance of the certificate of registration by the BLR or the DOLE Regional Office is not the operative act that vests legal personality upon a local or a chapter under Department Order No. 9. Such legal personality is acquired from the filing of the complete documentary requirements enumerated in Section 1, Rule VI.30

Petitioner insists that Section 3 of the Implementing Rules, as amended by Department Order No. 9, violated Article 234 of the Labor Code when it provided for less stringent requirements for the creation of a chapter or local. This Court disagrees.

Article 234 of the Labor Code provides that an independent labor organization acquires legitimacy only upon its registration with the BLR:

Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

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

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. (Italics supplied.)

It is emphasized that the foregoing pertains to the registration of an independent labor organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently. This Court, in the landmark case of Progressive Development Corporation v. Secretary, Department of Labor and Employment,31 declared that when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated to submit, among other things, the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer required of a branch, local or chapter.32 The intent of the law in imposing less requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor.33

Subsequently, in Pagpalain Haulers, Inc. v. Trajano34 where the validity of Department Order No. 9 was directly put in issue, this Court was unequivocal in finding that there is no inconsistency between the Labor Code and Department Order No. 9.

As to petitioner's claims that respondent obtained its Certificate of Registration through fraud and misrepresentation, this Court finds that the imputations are not impressed with merit. In the instant case, proof to declare that respondent committed fraud and misrepresentation remains wanting. This Court had, indeed, on several occasions, pronounced that registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights.35

This Court emphasizes, however, that a direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of the case are devoid of such evidence. Furthermore, this Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.36

Still, petitioner postulates that respondent was not validly and legitimately created, for PDMP cannot create a local or chapter as it is not a legitimate labor organization, it being a trade union center.

Petitioner's argument creates a predicament as it hinges on the legitimacy of PDMP as a labor organization. Firstly, this line of reasoning attempts to predicate that a trade union center is not a legitimate labor organization. In the process, the legitimacy of PDMP is being impugned, albeit indirectly. Secondly, the same contention premises that a trade union center cannot directly create a local or chapter through the process of chartering.

Anent the foregoing, as has been held in a long line of cases, the legal personality of a legitimate labor organization, such as PDMP, cannot be subject to a collateral attack. The law is very clear on this matter. Article 212 (h) of the Labor Code, as amended, defines a legitimate labor organization37 as "any labor organization duly registered with the DOLE, and includes any branch or local thereof."38 On the other hand, a trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.39

The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack.40 It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules. The aforementioned provision is enunciated in the following:

Sec. 5. Effect of registration. The labor organization or workers' association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal

personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules.

PDMP was registered as a trade union center and issued Registration Certificate No. FED-11558-LC by the BLR on 14 February 1991. Until the certificate of registration of PDMP is cancelled, its legal personality as a legitimate labor organization subsists. Once a union acquires legitimate status as a labor organization, it continues to be recognized as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.41 It bears to emphasize that what is being directly challenged is the personality of respondent as a legitimate labor organization and not that of PDMP. This being a collateral attack, this Court is without jurisdiction to entertain questions indirectly impugning the legitimacy of PDMP.

Corollarily, PDMP is granted all the rights and privileges appurtenant to a legitimate labor organization,42 and continues to be recognized as such until its certificate of registration is successfully impugned and thereafter cancelled or revoked in an independent action for cancellation.

We now proceed to the contention that PDMP cannot directly create a local or a chapter, it being a trade union center.

This Court reverses the finding of the appellate court and BLR on this ground, and rules that PDMP cannot directly create a local or chapter.

After an exhaustive study of the governing labor law provisions, both statutory and regulatory,43 we find no legal justification to support the conclusion that a trade union center is allowed to directly create a local or chapter through chartering. Apropos, we take this occasion to reiterate the first and fundamental duty of this Court, which is to apply the law. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein.44

Presidential Decree No. 442, better known as the Labor Code, was enacted in 1972. Being a legislation on social justice,45 the provisions of the Labor Code and the Implementing Rules have been subject to several amendments, and they continue to evolve, considering that labor plays a major role as a socio-economic force. The Labor Code was first amended by Republic Act No. 6715, and recently, by Republic Act No. 9481. Incidentally, the term trade union center was never mentioned under Presidential Decree

No. 442, even as it was amended by Republic Act No. 6715. The term trade union center was first adopted in the Implementing Rules, under Department Order No. 9.

Culling from its definition as provided by Department Order No. 9, a trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules.46 The same rule provides that the application for registration of an industry or trade union center shall be supported by the following:

(a) The list of its member organizations and their respective presidents and, in the case of an industry union, the industry where the union seeks to operate;

(b) The resolution of membership of each member organization, approved by the Board of Directors of such union;

(c) The name and principal address of the applicant, the names of its officers and their addresses, the minutes of its organizational meeting/s, and the list of member organizations and their representatives who attended such meeting/s; and

(d) A copy of its constitution and by-laws and minutes of its ratification by a majority of the presidents of the member organizations, provided that where the ratification was done simultaneously with the organizational meeting, it shall be sufficient that the fact of ratification be included in the minutes of the organizational meeting.47

Evidently, while a "national union" or "federation" is a labor organization with at least ten locals or chapters or affiliates, each of which must be a duly certified or recognized collective bargaining agent;48 a trade union center, on the other hand, is composed of a group of registered national unions or federations.49

The Implementing Rules, as amended by Department Order No. 9, provide that "a duly registered federation or national union" may directly create a local or chapter. The provision reads:

Section 1. Chartering and creation of a local/chapter. – A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following:

(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

(b) The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and

(c) The local/chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President.50

Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or chapter through chartering – a duly registered federation or a national union. Department Order No. 9 defines a "chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal personality through a charter certificate, issued by a duly registered federation or national union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules.51

Republic Act No. 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines" lapsed52 into law on 25 May 2007 and became effective on 14 June 2007.53 This law further amends the Labor Code provisions on Labor Relations.

Pertinent amendments read as follows:

SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby further amended to read as follows:

ART. 234. Requirements of Registration. — A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

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

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

(c) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it.

SECTION 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as follows:

ART. 234-A. Chartering and Creation of a Local Chapter. — A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate:

(a) The names of the chapter's officers, their addresses, and the principal office of the chapter; and

(b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and by-laws are the same as that of the federation or the national union, this fact shall be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president. (Emphasis ours.)

Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for chartering or creating a local or chapter, namely Article 234-A, still makes no mention of a "trade union center."

Also worth emphasizing is that even in the most recent amendment of the implementing rules,54 there was no mention of a trade union center as being among the labor organizations allowed to charter.

This Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded.55 Where the terms are expressly limited to certain matters, it may not, by interpretation or construction, be extended to other matters.56 Such is the case here. If its intent were otherwise, the law could have so easily and conveniently included "trade union centers" in identifying the labor organizations allowed to charter a chapter or local. Anything that is not included in the enumeration is excluded therefrom, and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein.57 The rule is restrictive in the sense that it proceeds from the premise that the legislating body would not have made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.58 Expressium facit cessare tacitum.59 What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object or thing omitted must have been omitted intentionally.

Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor organizations to directly create a chapter or local through chartering is given to a federation or national union, then a trade union center is without authority to charter directly.

The ruling of this Court in the instant case is not a departure from the policy of the law to foster the free and voluntary organization of a strong and united labor movement,60 and thus assure the rights of workers to self-organization.61 The mandate of the Labor Code in ensuring strict compliance with the procedural requirements for registration is not without reason. It has been observed that the formation of a local or chapter becomes a handy tool for the circumvention of union registration requirements. Absent the institution of safeguards, it becomes a convenient device for a small group of employees to foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for wholehearted voluntariness, which is basic to free unionism.62 As a legitimate labor organization is entitled to specific rights under the Labor Code and involved in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties affected.63 However, as this Court has enunciated in Progressive Development Corporation v. Secretary of Department of Labor and Employment, it is not this Court's function to augment the requirements prescribed by law. Our only recourse, as previously discussed, is to exact strict compliance with what the law provides as requisites for local or chapter formation.64

In sum, although PDMP as a trade union center is a legitimate labor organization, it has no power to directly create a local or chapter. Thus, SMPPEU-PDMP cannot be created under the more lenient requirements for chartering, but must have complied with the more stringent rules for creation and registration of an independent union, including the 20% membership requirement.

WHEREFORE, the instant Petition is GRANTED. The Decision dated 09 March 2005 of the Court of Appeals in CA-GR SP No. 66200 is REVERSED and SET ASIDE. The Certificate of Registration of San Miguel Packaging Products Employees Union–Pambansang Diwa ng Manggagawang Pilipino is ORDERED CANCELLED, and SMPPEU-PDMP DROPPED from the rolls of legitimate labor organizations.

Costs against petitioner.

SO ORDERED.

Ynares-Santiago, Chairperson, Austria_Martinez, Nachura, Reyes, JJ., concur.

Footnotes

1 The Bureau of Labor Relations (BLR) was omitted as public respondent from the title of the case.

In appeals via Petition for Certiorari under Rule 45 of the Revised Rules of Court, the tribunal promulgating the appealed Decision is not impleaded.

2 Penned by Associate Justice Mario L. Guarina III with Associate Justices Marina L. Buzon and Santiago Javier Ranada, concurring; Rollo, pp. 23-31.

3 CA rollo, pp. 17-21.

4 Rollo, p. 51.

5 Charter Certificate; CA rollo, p. 45.

6 The following documents were submitted:

a. Charter Certificate

b. Constitution and By-Laws

c. Lists and Addresses of Union Officers

d. Financial Report

e. Organization Meeting and Joint Resolution and Petition for Certification Election

7 Certificate of Creation of Chapter/local; CA rollo, p. 44.

8 On 15 June 1999, within the freedom period of the Collective Bargaining Agreement, respondent filed a Petition for Certification Election covering SMC-SMPP. The three petitions were consolidated on appeal with an earlier petition for certification election filed by San Miguel Corporation Employees Union Greater Manila and Canlubang Area (SMCEU-GMCA) docketed as OS-A-2-17-00.

9 Id. at 18; Section 2 of Rule XI, Book V of the Implementing Rules, as amended by D.O. No. 9 provides that where two or more petitions for certification election involving the same bargaining unit are filed in one Regional Office, the same shall be automatically consolidated.

10 Article 239. Grounds for Cancellation of Union Registration. The following shall constitute grounds for cancellation of union registration:

a. Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;

b. Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws of amendments thereto;

c. Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; x x x.

11 The Labor Code stipulates the following:

Article 234. Requirements of Registration. Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

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

b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

c. The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

d. If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification and the list of the members who participated in it.

12 CA rollo, pp. 33-39.

13 Id. at 25-32.

14 Id. at 20-21.

15 Id. at 22-24.

16 Rollo, pp. 29-30.

17 Article 234, Labor Code.

18 CA rollo, pp. 31-32.

19 A labor organization is any union or association of employees which exists in whole or in part for the purpose of collective bargaining or for dealing with employers concerning terms and conditions of employment. [Section 1(h), Rule 1, Book V of the Implementing Rules, as amended by Department Order No. 9].

20 Article 212(g), Labor Code; Section 1(i), Rule 1, Book V of the Implementing Rules, as amended by Department Order No. 9.

21 Article 242 of the Labor Code grants the following:

Rights of Legitimate Labor Organizations. A legitimate labor organization shall have the right:

(a) To act as the representative of its members for the purpose of collective bargaining;

(b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining;

(c) To be furnished by the employer, upon written request, with the annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representatives of the employees in the bargaining unit, or within sixty

(60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

(d) To own property, real or personal, for the use and benefit of the labor organization and its members;

(e) To sue and be sued in its registered name; and

(f) To undertake all other activities designed to benefit the organization and its members including cooperative, housing welfare and other projects not contrary to law.

22 Progressive Development Corporation v. Secretary, Department of Labor and Employment, G.R. No. 96425, 4 February 1992, 205 SCRA 802, 808.

23 Provided there is compliance with the requirements.

24 San Miguel Foods, Inc-Cebu B-Meg Feed Plant v. Laguesma, 331 Phil. 356, 371 (1996).

25 Progressive Development Corporation-Pizza Hut v. Laguesma, 338 Phil. 310, 321 (1997).

26 Section 1, Rule XXVI, Department Order No. 40, which states:

Section 1. Rules governing prior applications, petitions, complaints, cases. - All applications, petitions, complaints, cases or incidents commenced or filed prior to the effectivity of these amendatory Rules shall be governed by the old rules as amended by Department Order No. 9, series of 1997.

27 Rule VI, Book V, Implementing Rules, as amended by Department Order No. 9. Additionally, section 2 thereof provides that a duly registered workers' association may likewise charter any of its branches, subject to the filing of the documents prescribed under Section 1.

28 Section 1, Rule VI, Book V of the Implementing Rules, as amended by Department Order No. 9.

29 Section 3, Rule VI of the Implementing Rules of Book V, as amended by Department Order No. 9, clearly states:

SEC. 3. Acquisition of legal personality by local/chapter. A local/chapter constituted in accordance with Section 1 of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein. Upon compliance with all documentary requirements, the Regional Office or Bureau shall issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor organizations. (Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and Employment, G.R. No. 157146, 29 April 2005, 457 SCRA 730, 740.

30 Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 22.

31 Id.

32 Progressive Development Corporation v. Secretary, Department of Labor and Employment, id.; San Miguel Foods, Inc.-Cebu B-Meg Feed Plant v. Laguesma, supra note 24.

33 Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 22.

34 369 Phil. 618, 627 (1999).

35 Progressive Development Corporation–Pizza Hut v. Laguesma, supra note 25.

36 Seastar Marine Services, Inc. v. Bul-An, Jr., G.R. No. 142609, 25 November 2004, 444 SCRA 140, 154-155; Naguiat v. National Labor Relations Commission, 336 Phil. 545, 553 (1997).

37 A labor organization is any union or association of employees which exists in whole or in part for the purpose of collective bargaining or for dealing with employers concerning terms and conditions of employment. [Section 1(h), Rule 1, Book V of the Implementing Rules, as amended by Department Order No. 9].

38 Article 212(g), Labor Code; Section 1(i), Rule 1, Book V of the Implementing Rules, as amended by Department Order No. 9.

39 Section 1(p), Rule I, Book V, of the Implementing Rules, as amended by Department Order No. 9.

40 Tagaytay Highlands International Golf Club Incorporated v. Tagaytay Highlands Employees Union-PGTWO, 443 Phil. 841, 852 (2003).

41 Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and Employment, supra note 29.

42 Under Article 234 of the Labor Code, any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration upon compliance with the documentary requirements.

43 As amended by Department Order No. 9, Department Order No. 40-03, and Department Order No. 40-B-03.

44 Agote v. Lorenzo, G.R. No. 142675, 22 July 2005, 464 SCRA 60, 76.

45 As aptly put by Justice Laurel, social justice is the humanization of laws and the equalization of

social and economic forces by the state so that justice in its rational and objectively secular conception may at least be approximated.

46 Section 1(p), Rule I, Book V, of the Implementing Rules, as amended by Department Order No. 9.

47 Under a different section; Section 2 (III), Rule III, Book V of the Implementing Rules, as amended by Department Order No. 9.

48 Rule I(m), Book V, Implementing Rules, as amended by Department Order No. 9.

49 Rule (p), id.

50 Section 1, Rule VI, Book V, id.

51 Section 1(i), Rule I, Book V, Implementing Rules, as amended by Department Order No. 40-03.

52 Republic Act No. 9481 was not signed by the President, but lapsed into law by virtue of the provisions of the 1987 Philippine Constitution.

53 Republic Act No. 9481 was published on 30 May 2007 in a newspaper of general circulation (MALAYA). The date of effectivity is computed 15 days from date of publication.

54 Subsequently amended by Department Order No. 40-B-03, Department Order No. 40-C-05, and Department Order No. 40-D-05.

55 Black's Law Dictionary, p. 581; Office of the Ombudsman v. Valera, G.R. No. 164250, 5 September 2005, 471 SCRA 715, 746 and City Government of San Pablo, Laguna v. Reyes, 364 Phil. 842, 853 (1999).

56 Sarmiento, III v. Mison, G.R. No. 79974, 17 December 1987, 156 SCRA 549, 552; Integrated Bar of the Philippines v. Zamora, 392 Phil. 618, 642 (2000).

57 Singapore Airlines Local Employees Association v. National Labor Relations Commission, 215 Phil. 420, 428 (1984).

58 San Pablo Mfg. Corp. v. Commissioner of Internal Revenue, G.R. No. 147749, 22 June 2006, 492 SCRA 192, 200.

59 Abakada Guro Party List v. Ermita, G.R. No. 168056, 1 September 2005, 469 SCRA 1, Espiritu v. Cipriano, G.R. No. 32743, February 15, 1974, 55 SCRA 533, 538.

60 Chapter 1, Book V, Labor Code, as amended by Republic Act No. 6715.

61 As embodied under Article 3 of the Labor Code.

62 Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 22.

63 Article 242 of the Labor Code grants the following:

Rights of Legitimate Labor Organizations. A legitimate labor organization shall have the right:

(a) To act as the representative of its members for the purpose of collective bargaining;

(b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining;

(c) To be furnished by the employer, upon written request, with the annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representatives of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

(d) To own property, real or personal, for the use and benefit of the labor organization and its members;

(e) To sue and be sued in its registered name; and

(f) To undertake all other activities designed to benefit the organization and its members including cooperative, housing welfare and other projects not contrary to law.

[G.R. No. 115180.  November 16, 1999]

FILIPINO PIPE AND FOUNDRY CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL LABOR UNION – TUCP, and EULOGIO LERUM, respondents.

D E C I S I O N

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court seeking to annul and set aside the Decision [1] of the National Labor Relations Commission,[2] dated September 29, 1993, in NLRC NCR CA No. 003806-92, which reversed the Decision[3] of the Labor Arbiter,[4] dated August 31, 1992, in NLRC Case No. 4-1309-86, disposing thus:

‘WHEREFORE, premises considered, the appeal of complainant corporation is hereby dismissed for lack of merit; the appeal of Atty. Lerum and NLU is hereby granted, and the Decision dated August 31, 1992 is hereby annulled and set side, and

a new judgment is hereby entered declaring the complaint below dismissed for lack of merit insofar as respondent NLU and Atty. Lerum are concerned.

SO ORDERED.”[5]

The antecedent facts can be culled as follows:

On February 10, 1986, respondent National Labor Union-Trade Union Congress of the Philippines (NLU-TUCP), a national federation of labor unions, filed with the then Ministry of Labor and Employment, in behalf of its local chapter, the Filipino Pipe Workers Union-National Labor Union (FPWU-NLU, hereinafter referred to as Union), a notice of strike signed by its national president, Atty. Eulogio R. Lerum, against the petitioner, Filipino Pipe and Foundry Corporation, alleging as grounds therefor union busting and non-implementation of the Collective Bargaining Agreement.[6]

The initial conciliation conference was set on February 24, 1986 but due to lack of notice thereof to petitioner company, as well as the failure of FPWU-NLU to furnish the latter a copy of the notice of strike, the initial conciliation conference was re-set to March 3, 1986.

In the early morning of March 3, 1986, however, without waiting for the outcome of the conciliation conference scheduled on said date, the FPWU-NLU staged the strike in question which lasted until June 13, 1986, when a return to work agreement was reached by the union and petitioner company.[7]

On April 8, 1986, petitioner company interposed before the Arbitration Branch of the then Ministry of Labor and Employment, a petition to declare the strike illegal with prayer for damages against FPWU-NLU, NLU-TUCP and its national president, Atty. Eulogio Lerum.

On December 23, 1988, petitioner company moved for the partial dismissal of the Complaint against forty-three (43) officers and members of FPWU-NLU, but maintained the action against the NLU-TUCP and Atty. Eulogio Lerum.[8]

On August 31, 1992, the Labor Arbiter came out with a decision for petitioner company, ruling as follows:

“WHEREFORE, judgment is hereby rendered declaring that the strike staged by respondents from March 3, 1986 to June 13, 1986 was ILLEGAL.  Accordingly and in conformity with the Return-to-Work Agreement, respondent National Labor Union-TUCP is hereby directed to pay the complainant company the following:

a) Actual damages in the form of loss of revenue during the duration of the strike which lasted for 100 days or in the amount of ONE MILLION PESOS (P1,000,000.00);

b) Damages to the good business standing and commercial credit of the company in the amount of THREE HUNDRED FIFTY THOUSAND PESOS (P350,000.00); and

c) Exemplary damages to deter others similarly inclined from committing similar acts and to serve as an example for the public good, in the amount of TWO HUNDRED FIFTY THOUSAND PESOS (P250,000.00).

Further, respondent NLU is hereby directed to pay the attorney’s fees equivalent to 10% of the actual damages, or the amount of ONE HUNDRED THOUSAND PESOS (P100, 000.00).

For lack of showing that respondent Lerum acted in his personal capacity, he is hereby ABSOLVED from any liability.

Pursuant to the Agreement, the complaint against all the other individual respondents are hereby DISMISSED.

SO ORDERED.”[9]

Therefrom, both parties appealed to the NLRC which on September 29, 1993, rendered the assailed decision.  Dissatisfied therewith, the petitioner company found its way to this Court via the present petition; theorizing that:

I

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION ERRED IN LAW, CAPRICIOUSLY AND WHIMSICALLY DISREGARDED THE EVIDENCE SUBMITTED IN THE CASE AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT HELD THAT PRIVATE RESPONDENTS NATIONAL LABOR UNION (NLU)-TUCP AND ATTY. EULOGIO LERUM ARE NOT PRIMARILY RESPONSIBLE AND, THEREFORE, NOT LIABLE FOR DAMAGES SUFFERED BY PETITIONER ON ACCOUNT OF THE ILLEGAL STRIKE THEY HAD DIRECTLY AIDED, ASSISTED, ABETTED AND PARTICIPATED IN.

II

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR

EXCESS OF JURISDICTION AND ACTED CAPRICIOUSLY AND WHIMSICALLY IN TOTAL DISREGARD OF THE EVIDENCE PRESENTED IN THE CASE WHEN IT HELD THAT PRIVATE RESPONDENTS MERELY ASSISTED THE LOCAL CHAPTER AND ITS MEMBERS IN STAGING A STRIKE AGAINST PETITIONER AND THAT SUCH ASSISTANCE WAS NOT THE CAUSE NOR WAS IT AN INDESPENSABLE ELEMENT OF THE STRIKE.

III

PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ERRED IN LAW AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT CONCLUDED THAT PETITIONER LOST ITS CAUSE OF ACTION AGAINST PRIVATE RESPONDENTS AFTER THE LOCAL UNION HIRED A NEW COUNSEL AND PETITIONER MOVED FOR PARTIAL DISMISSAL OF ITS COMPLAINT AGAINST THE STRIKING WORKERS INASMUCH AS PRIVATE RESPONDENTS ARE MERE THIRD PARTIES.[10]

Rule XXII, Book V, of the Rules Implementing the Labor Code, provides:

“Section 1.  Grounds for strike and lockout. – A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor practices.  Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable.  No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or on issues brought to voluntary or compulsory arbitration.”

xxx  xxx       xxx

“Section 3. – Notice of strike or lockout.- In cases of bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been served on the other party concerned.  x x x"

xxx  xxx       xxx

"Section 6.  Conciliation. - Upon receipt of the notice, the regional branch of the Board shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably.  The regional branch of the Board may, upon consultation, recommend to the parties to submit the dispute to voluntary arbitration.

During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute.  They are obliged as part of the duty to bargain collectively in good faith, to participate fully and promptly in the conciliation meetings called by the regional branch of the board.  The regional branch of the Board shall have the power to issue subpoenas requiring the attendance of the parties to the meetings.  xxx"

Applying the aforecited provision of law in point to the case under consideration, the Court is of the finding and conclusion that the strike staged by FPWU-NLU was illegal for want of any legal basis.  Contrary to the grounds advanced by the union in the notice of strike, it turned out during the March 3, 1986 conciliation conference that the purpose of the strike was to pressure the petitioner company to:

1) include in the salary of the strikers the P3.00 wage increase[11] effective March 1, 1986.

2) compute their backwages covering the period from December 1, 1980 to February 28, 1986, including vacation leave and sick leave.

A thorough sifting of the pertinent records discloses that the alleged union busting was not substantiated and the supposed non-implementation of the collective bargaining agreement was groundless because the demands of FPWU-NLU, at the time the notice of strike was filed and at the time the union actually struck, were the subject of a pending application for a writ of execution filed by the union in Case No. AB-7933-80 (NCR-CA-8-674-80), which application was granted on April 4, 1986 by the Labor Arbiter.[12] Verily, the strike staged by FPWU-NLU was baseless since it was still pre-mature then for the union to insist on the implementation of the adverted provision of the collective bargaining agreement, which was the subject of a pending writ of execution.

Then too, the failure of the union to serve petitioner company a copy of the notice of strike is a clear violation of Section 3 of the aforestated Rules.  The constitutional precepts of due process mandate that the other party be notified of the adverse action of the opposing party.  So also, the same Section provides for a mandatory thirty (30) day cooling-off period which the union ignored when it struck on March 3, 1986, before the 30th day from the time the notice of strike was filed on February 10, 1986.

What is more, the same strike blatantly disregarded the prohibition on the doing of any act which may impede or disrupt the conciliation proceedings, when the union staged the strike in the early morning of March 3, 1986, the very same day the conciliation conference was scheduled by the former Ministry of Labor.

In light of the foregoing, it is beyond cavil that subject strike staged by the union was illegal.

Anent the responsibility for the damages allegedly sustained by petitioner company on account of the illegal strike, the latter theorized that the liability therefor

should be borne by NLU-TUCP and its national president, Atty. Eulogio Lerum, for having directly participated in aiding and abetting the illegal strike.  It is argued that FPWU-NLU is a mere agent of respondent NLU-TUCP, because FPWU-NLU, which was formed by respondent NLU-TUCP is not registered as a local unit or chapter but directly affiliated with the latter and therefore, could not have acted on its own.  Otherwise stated, petitioner is of the view that FPWU-NLU, a local union, cannot act as the principal of respondent NLU-TUCP, a mother federation, because it is not a legitimate labor organization.[13] In support of this stance, petitioner cited the following letter of Atty. Lerum to the company, to wit:

“NATIONAL LABOR UNION

An Affiliate of the Trade Union of the Philippines

3199 Ramon Magsaysay Blvd., Manila, Philippines

Tel. 61-42-65

March 29, 1983

Dear Sirs:

Please be informed that we have formed a local union in your company and the officers thereof are the following:

President -     Virgilio Bernal

Vice-Pres.     -     Ramon Alborte

Secretary     -     Ernesto Ballesteros

Treasurer     -     Arsenio Agustin

Auditor     -     Genaro Gabule

Board Members:

1.  Eduardo Cenina        4.  Felimon Simborio

2.  Dante Canete        5.  Joseph Olazo

3.  Reynaldo Adelante      6.  Virgilio Elnar

Shop Stewards:

1.  Pablito Fajardo

2.  Ruperto Manlangit

3.  Ruben Bongaos

We have given them full authority to deal with you on all matters covered by our authority as sole collective bargaining representative of your rank and file workers.

Very truly yours,                         

(Sgd)                                           

EULOGIO R. LERUM

National President”[14]

In Progressive Development Corporation vs. Secretary, Department of Labor and Employment,[15] the Court explained the nature of the relationship between a mother union/federation and a local union, thus:

“At this juncture, it is important to clarify the relationship between the mother union and the local union.  In the case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975], the Court held that the mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the association.  x x x”[16]

The same is true even if the local union is not a legitimate labor organization.  Conformably, in the abovecited case the Court ruled that the mother federation was a mere agent and the local chapter/union was the principal, notwithstanding the failure of the local union to comply with the procedural requirements that would make it a legitimate labor organization.

Evidently, in the case under scrutiny, whether or not FPWU, the local chapter, complied with the procedural requirements that would make it a legitimate labor organization is immaterial.  It would not affect its status as the principal and basic unit of the association.  The requirement laid down in the Progressive Development case, that the local union must be a legitimate labor organization, pertains to the conditions before a union may file a petition for certification election and to be certified as sole

and exclusive bargaining agent.  In the present case, there is no dispute that FPWU-NLU is the sole and exclusive bargaining representative of the rank and file employees of petitioner company.  The union's status as a legitimate labor organization is therefore of no moment in the resolution of the controversy here.  As the local union, it is considered as the principal; the entity which staged the illegal strike and the one responsible for the resulting damages allegedly sustained by petitioner company.

Furthermore, the petitioner company is now estopped from reneging on the recognition it extended to the FPUW-NLU as the bargaining representative of its rank and file workers, by belatedly attacking its status which petitioner company had voluntarily recognized.  It should be noted that even as early as 1981, when the collective bargaining agreement sought to be implemented by the union was entered into, the latter was already the bargaining representative of the employees concerned.  It is not, therefore, true that it was respondent NLU-TUCP which formed FPWU.  At most, the entry into the picture of the private respondent on March 23, 1983, merely affirmed the status of FPWU as the recognized bargaining representative of the rank and file employees of petitioner company.

Evidently, direct and primary responsibility for the damages allegedly caused by the illegal strike sued upon fall on the local union FPWU, being the principal, and not on respondent NLU-TUCP, a mere agent of FPWU-NLU which assisted the latter in filing the notice of strike.  Being just an agent, the notice of strike filed by Atty. Eulogio Lerum, the national president of NLU-TUCP, is deemed to have been filed by its principal, the FPWU-NLU.  Having thus dismissed the claim for damages against the principal, FPWU-NLU, the action for damages against its agent, respondent NLU-TUCP, and Atty. Lerum, has no more leg to stand on and should also be dismissed.

Premises studiedly considered, the Court is of the ineluctable conclusion, and so holds, that the National Labor Relations Commission did not act with grave abuse of discretion in reversing the Decision of the Labor Arbiter in NLRC CASE No. 4-1309-86.

WHEREFORE, for lack of merit, the Petition is DISMISSED, and the Decision of the National Labor Relations Commission in NLRC NCR CA No. 003806-92 AFFIRMED.  No pronouncement as to costs.

SO ORDERED.

Manila Electric Company vs. Secretary of Labor Case DigestManila Electric Company vs. Secretary of Labor G.R. No. 130439October 26, 1999

Facts: MEWA is the duly recognized labor organization of the rank-and-file employees of MERALCO. On September 7, 1995, MEWA informed MERALCO of its intention to re-negotiate the terms and conditions of their existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining period of two years starting from December 1, 1995 to November 30, 1997. MERALCO signified its willingness to re-negotiate through its letter dated October 17, 1995 and formed a CBA negotiating panel for the purpose. On November 10, 1995, MEWA submitted its proposal to MERALCO, which, in turn, presented a counter-proposal. Thereafter, collective bargaining negotiations proceeded. However, despite the series of meetings between the negotiating panels of MERALCO and MEWA, the parties failed to arrive at “terms and conditions acceptable to both of them.” 

On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region Branch of the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) which was docketed as NCMB-NCR-NS-04-152-96, on the grounds of bargaining deadlock and unfair labor practices. The NCMB then conducted a series of conciliation meetings but the parties failed to reach an amicable settlement. MERALCO filed a petition to let the Secretary of DOLE to assume jurisdiction over the case which was granted. 

Issue: Whether the members of MEWA are entitled to benefits given as bonuses, being negotiated in the CBA. 

Ruling: The members of MEWA are entitled to the benefits although in the form of benefits which is a subject of the negotiation of CBA. 

As a rule, a bonus is not a demandable and enforceable obligation; it may nevertheless be granted on equitable consideration as when the giving of such bonus has been the company’s long and regular practice. To be considered a “regular practice,” the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. 

The ruling in National Sugar Refineries Corporation vs. NLRC: “The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof.” 

In this case, the record shows the MERALCO, aside from complying with the regular 13th month bonus, has further been giving its employees an additional Christmas bonus at the tail-end of the year since 1988. While the special bonuses differed in amount and bore different titles, it can not be denied that these were given voluntarily and continuously on or about Christmas time. 

The considerable length of time MERALCO has been giving the special grants to its employees indicates a unilateral and voluntary act on its part, to continue giving said benefits knowing that such act was not required by law. 

Indeed, a company practice favorable to the employees has been established and the payments made by MERALCO pursuant thereto ripened into benefits enjoyed by the employees. Consequently, the giving of the special bonus can no longer be withdrawn by the company as this would amount to a diminution of the employee’s existing benefits.

G.R. No. 91902 May 20, 1991

MANILA ELECTRIC COMPANY, petitioner, vs.

THE HON. SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND TECHNICAL EMPLOYEES ASSOCIATION OF MERALCO, and FIRST LINE ASSOCIATION OF MERALCO SUPERVISORY EMPLOYEES,respondents.

Rolando R. Arbues, Atilano S. Guevarra, Jr. and Gil S. San Diego for petitioner.

The Solicitor General for public respondent.

Felipe Gojar for STEAM-PCWF.

Wakay & Wakay Legal Services for First Line Association of Meralco Supervisory Employees.

 

MEDIALDEA, J.:p

This petition seeks to review the Resolution of respondent Secretary of Labor and Employment Franklin M. Drilon dated November 3, 1989 which affirmed an Order of Med-Arbiter Renato P. Parungo (Case No. NCR-O-D-M-1-70), directing the holding of a certification election among certain employees of petitioner Manila Electric Company (hereafter "MERALCO") as well as the Order dated January 16, 1990 which denied the Motion for Reconsideration of MERALCO.

The facts are as follows:

On November 22, 1988, the Staff and Technical Employees Association of MERALCO (hereafter "STEAM-PCWF") a labor organization of staff and technical employees of MERALCO, filed a petition for certification election, seeking to represent regular employees of MERALCO who are: (a) non-managerial employees with Pay Grades VII and above; (b) non-managerial employees in the Patrol Division, Treasury Security Services Section, Secretaries who are automatically removed from the bargaining unit; and (c) employees within the rank and file unit who are automatically disqualified from becoming union members of any organization within the same bargaining unit.

Among others, the petition alleged that "while there exists a duly-organized union for rank and file employees in Pay Grade I-VI, which is the MERALCO Employees and Worker's Association (MEWA) which holds a valid CBA for the rank and file employees, 1 there is no other labor organization except STEAM-PCWF claiming to represent the MERALCO employees.

The petition was premised on the exclusion/disqualification of certain MERALCO employees pursuant to Art. I, Secs. 2 and 3 of the existing MEWA CBA as follows:

ARTICLE I

SCOPE

xxx xxx xxx

Sec. 2. Excluded from the appropriate bargaining unit and therefore outside the scope of this Agreement are:

(a) Employees in Patrol Division;

(b) Employees in Treasury Security Services Section;

(c) Managerial Employees; and

(d) Secretaries.

Any member of the Union who may now or hereafter be assigned or transferred to Patrol Division or Treasury Security Services Section, or becomes Managerial Employee or a Secretary, shall be considered automatically removed from the bargaining unit and excluded from the coverage of this agreement. He shall thereby likewise be deemed automatically to have ceased to be member of the union, and shall desist from further engaging in union activity of any kind.

Sec. 3. Regular rank-and-file employees in the organization elements herein below listed shall be covered within the bargaining unit, but shall be automatically disqualified from becoming union members:

1. Office of the Corporate Secretary

2. Corporate Staff Services Department

3. Managerial Payroll Office

4. Legal Service Department

5. Labor Relations Division

6. Personnel Administration Division

7. Manpower Planning & Research Division

8. Computer Services Department

9. Financial Planning & Control Department

10. Treasury Department, except Cash Section

11. General Accounting Section

xxx xxx xxx

(p. 19, Rollo)

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

I

The employees sought to be represented by petitioner are either 1) managerial who are prohibited by law from forming or joining supervisory union; 2) security services personnel who are prohibited from joining or assisting the rank-and-file union; 3)

secretaries who do not consent to the petitioner's representation and whom petitioner can not represent; and 4) rank-and-file employees represented by the certified or duly recognized bargaining representative of the only rank-and-file bargaining unit in the company, the Meralco Employees Workers Association (MEWA), in accordance with the existing Collective Bargaining Agreement with the latter.

II

The petition for certification election will disturb the administration of the existing Collective Bargaining Agreement in violation of Art. 232 of the Labor Code.

III

The petition itself shows that it is not supported by the written consent of at least twenty percent (20%) of the alleged 2,500 employees sought to be represented. (Resolution, Sec. of Labor, pp. 223-224, Rollo)

Before Med-Arbiter R. Parungo, MERALCO contended that employees from Pay Grades VII and above are classified as managerial employees who, under the law, are prohibited from forming, joining or assisting a labor organization of the rank and file. As regards those in the Patrol Division and Treasury Security Service Section, MERALCO maintains that since these employees are tasked with providing security to the company, they are not eligible to join the rank and file bargaining unit, pursuant to Sec. 2(c), Rule V, Book V of the then Implementing Rules and Regulations of the Labor Code (1988) which reads as follows:

Sec. 2. Who may file petition. — The employer or any legitimate labor organization may file the petition.

The petition, when filed by a legitimate labor organization, shall contain, among others:

xxx xxx xxx

(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require, and provided, further: that the appropriate bargaining unit of the rank and file employees shall not include security guards (As amended by Sec. 6, Implementing Rules of EO 111)

xxx xxx xxx

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

As regards those rank and file employees enumerated in Sec. 3, Art. I, MERALCO contends that since they are already beneficiaries of the MEWA-CBA, they may not be treated as a separate and distinct appropriate bargaining unit.

MERALCO raised the same argument with respect to employees sought to be represented by STEAM-PCWF, claiming that these were already covered by the MEWA-CBA.

On March 15, 1989, the Med-Arbiter ruled that having been excluded from the existing Collective Bargaining Agreement for rank and file employees, these employees have the right to form a union

of their own, except those employees performing managerial functions. With respect to those employees who had resented their alleged involuntary membership in the existing CBA, the Med-Arbiter stated that the holding of a certification election would allow them to fully translate their sentiment on the matter, and thus directed the holding of a certification election. The dispositive portion of the Resolution provides as follows:

WHEREFORE, premises considered, a certification election is hereby ordered conducted among the regular rank-and-file employees of MERALCO to wit:

1. Non-managerial employees with Pay Grades VII and above;

2. Non-managerial employees of Patrol Division, Treasury Security Services Section and Secretaries; and

3. Employees prohibited from actively participating as members of the union.

within 20 days from receipt hereof, subject to the usual pre-election conference with the following choices:

1. Staff and Technical, Employees Association of MERALCO (STEAM-PCWF);

2. No Union.

SO ORDERED. (p. 222, Rollo)

On April 4, 1989, MERALCO appealed, contending that "until such time that a judicial finding is made to the effect that they are not managerial employee, STEAM-PCWF cannot represent employees from Pay Grades VII and above, additionally reiterating the same reasons they had advanced for disqualifying respondent STEAM-PCWF.

On April 7, 1989, MEWA filed an appeal-in-intervention, submitting as follows:

A. The Order of the Med-Arbiter is null and void for being in violation of Article 245 of the Labor Code;

B. The Order of the Med-Arbiter violates Article 232 of the Labor Code; and

C. The Order is invalid because the bargaining unit it delineated is not an appropriated (sic) bargaining unit.

On May 4, 1989, STEAM-PCWF opposed the appeal-in-intervention.

With the enactment of RA 6715 and the rules and regulations implementing the same, STEAM-PCWF renounced its representation of the employees in Patrol Division, Treasury Security Services Section and rank-and-file employees in Pay Grades I-VI.

On September 13, 1989, the First Line Association of Meralco

Supervisory Employees. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9-731-89) seeking to represent those employees with Pay Grades VII to XIV, since "there is no other supervisory union at MERALCO." (p. 266,Rollo). The petition was consolidated with that of STEAM-PCWF.

On November 3, 1989, the Secretary of Labor affirmed with modification, the assailed order of the Med-Arbiter, disposing as follows:

WHEREFORE, premises considered, the Order appealed from is hereby affirmed but modified as far as the employees covered by Section 3, Article I of the exist CBA in the Company are concerned. Said employees shall remain in the unit of the rank-and-file already existing and may exercise their right to self organization as above enunciated.

Further, the First Line Association of Meralco Supervisory Employees (FLAMES) is included as among the choices in the certification election.

Let, therefore, the pertinent records of the case be immediately forwarded to the Office of origin for the conduct of the certification election.

SO ORDERED. (p. 7, Rollo)

MERALCO's motion for reconsideration was denied on January 16, 1990.

On February 9, 1990, MERALCO filed this petition, premised on the following ground:

RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN EXCESS OF JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN RULING THAT:

I. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED INDEPENDENT, DISTINCT AND SEPARATE FROM THE EXISTING RANK-AND-FILE BARGAINING UNIT.

II. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANK-AND-FILE EMPLOYEES.

III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE RANK-AND-FILE UNION AND/OR THE SUPERVISORY UNION. (p. 8, Rollo)

On February 26, 1990, We issued a temporary restraining order (TRO) against the implementation of the disputed resolution.

In its petition, MERALCO has relented and recognized respondents STEAM-PCWF and FLAMES' desired representation of supervisory employees from Grades VII up. However, it believes that all that the Secretary of Labor has to do is to establish a demarcation line between supervisory and managerial rank, and not to classify outright the group of employees represented by STEAM-PCWF and FLAMES as rank and file employees.

In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol Services Section) to be represented by respondents, MERALCO contends that this contravenes the

provisions of the recently passed RA 6715 and its implementing rules (specifically par. 2, Sec. 1, Rule II, Book V) which disqualifies supervisory employees and security guards from membership in a labor organization of the rank and file (p. 11, Rollo).

The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212, then par. (k), of the 1988 Labor Code defining "managerial" and "rank and file" employees, the law then in force when the complaint was filed. At the time, only two groups of employees were recognized, the managerial and rank and file. This explains the absence of evidence on job descriptions on who would be classified managerial employees. It is perhaps also for this reason why the Secretary of Labor limited his classification of the Meralco employees belonging to Pay Grades VII and up, to only two groups, the managerial and rank and file.

However, pursuant to the Department of Labor's goal of strenghthening the constitutional right of workers to self-organization, RA 6715 was subsequently passed which reorganized the employee-ranks by including a third group, or the supervisory employees, and laying down the distinction between supervisory employees and those of managerial ranks in Art. 212, renumbered par. [m], depending on whether the employee concerned has the power to lay down and execute management policies, in the case of managerial employees, or merely to recommend them, in case of supervisory employees.

In this petition, MERALCO has admitted that the employees belonging to Pay Grades VII and up are supervisory (p. 10, Rollo). The records also show that STEAM-PCWF had "renounced its representation of the employees in Patrol Division, Treasury Security Service Section and rank and file employees in Pay Grades I-VI" (p. 6, Rollo); while FLAMES, on the other hand, had limited its representation to employees belonging to Pay Grades VII-XIV,generally accepted as supervisory employees, as follows:

It must be emphasized that private respondent First Line Association of Meralco Supervisory Employees seeks to represent only the Supervisory Employees with Pay Grades VII to XIV.

Supervisory Employees with Pay Grades VII to XIV are not managerial employees. In fact the petition itself of petitioner Manila Electric Company on page 9, paragraph 3 of the petition stated as follows, to wit:

There was no need for petitioner to prove that these employees are not rank-and-file. As adverted to above, the private respondents admit that these are not the rank-and-file but the supervisory employees, whom they seek to represent. What needs to be established is the rank where supervisory ends and managerial begins.

and First Line Association of Meralco Supervisory Employees herein states that Pay Grades VII to XIV are not managerial employees. In fact, although employees with Pay Grade XV carry the Rank of Department Managers, these employees only enjoys (sic) the Rank Manager but their recommendatory powers are subject to evaluation, review and final action by the department heads and other higher executives of the company. (FLAMES' Memorandum, p. 305, Rollo)

Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been recognized and accepted as supervisory. On the other hand, those employees who have been automatically disqualified have been directed by the Secretary of Labor to remain in the existing

labor organization for the rank and file, (the condition in the CBA deemed as not having been written into the contract, as unduly restrictive of an employee's exercise of the right to self-organization). We shall discuss the rights of the excluded employees (or those covered by Sec. 2, Art. I, MEWA-CBA later.

Anent the instant petition therefore, STEAM-PCWF, and FLAMES would therefore represent supervisory employees only. In this regard, the authority given by the Secretary of Labor for the establishment of two labor organizations for the rank and file will have to be disregarded since We hereby uphold certification elections only for supervisory employees from Pay Grade VII and up, with STEAM-PCWF and FLAMES as choices.

As to the alleged failure of the Secretary of Labor to establish a demarcation line for purposes of segregating the supervisory from the managerial employees, the required parameter is really not necessary since the law itself, Art. 212-m, (as amended by Sec. 4 of RA 6715) has already laid down the corresponding guidelines:

Art. 212. Definitions. . . .

(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of to Book.

In his resolution, the Secretary of Labor further elaborated:

. . . Thus, the determinative factor in classifying an employee as managerial, supervisory or rank-and-file is the nature of the work of the employee concerned.

In National Waterworks and Sewerage Authority vs. National Waterworks and Sewerage Authority Consolidated Unions (11 SCRA 766) the Supreme Court had the occasion to come out with an enlightening dissertation of the nature of the work of a managerial employees as follows:

. . . that the employee's primary duty consists of the management of the establishment or of a customarily recognized department or subdivision thereof, that he customarily and regularly directs the work of other employees therein, that he has the authority to hire or discharge other employees or that his suggestions and recommendations as to the hiring and discharging and or to the advancement and promotion or any other change of status of other employees are given particular weight, that he customarily and regularly exercises discretionary powers . . . (56 CJS, pp. 666-668. (p. 226, Rollo)

We shall now discuss the rights of the security guards to self-organize. MERALCO has questioned the legality of allowing them to join either the rank and file or the supervisory union, claiming that this is a violation of par. 2, Sec. 1, Rule II, Book V of the Implementing Rules of RA 6715, which states as follows:

Sec 1. Who may join unions. . . .

xxx xxx xxx

Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; . . .

xxx xxx xxx

(emphasis ours)

Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of the implementing rules of RA 6715:

Rule V.REPRESENTATION CASES ANDINTERNAL-UNION CONFLICTS

Sec. 1. . . .

Sec. 2. Who may file.—Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition.

The petition, when filed by a legitimate labor-organization shall contain, among others:

(a) . . .

(b) . . .

(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards;

xxx xxx xxx

(emphasis ours)

Both rules, barring security guards from joining a rank and file organization, appear to have been carried over from the old rules which implemented then Art. 245 of the Labor Code, and which provided thus:

Art. 245. Ineligibility of security personnel to join any labor organization.—Security guards and other personnel employed for the protection and security of the person, properties and premises of the employer shall not be eligible for membership in any labor organization.

On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which eliminated the above-cited provision on the disqualification of security guards. What was retained was the disqualification of managerial employees, renumbered as Art. 245 (previously Art. 246), as follows:

Art. 245. Ineligibility of managerial employees to joint any labor organization.—Managerial employees are not eligible to join, assist or form any labor organization.

With the elimination, security guards were thus free to join a rank and file organization.

On March 2, 1989, the present Congress passed RA 6715. 2 Section 18 thereof amended Art. 245, to read as follows:

Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees.—Managerial employees are not eligible to join, assist or form any labor organization.Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist, or form separate labor organizations of their own. (emphasis ours)

As will be noted, the second sentence of Art. 245 embodies an amendment disqualifying supervisory employeesfrom membership in a labor organization of the rank-and-file employees. It does not include security guards in the disqualification.

The implementing rules of RA 6715, therefore, insofar as they disqualify security guards from joining a rank and file organization are null and void, for being not germane to the object and purposes of EO 111 and RA 6715 upon which such rules purportedly derive statutory moorings. In Shell Philippines, Inc. vs. Central Bank, G.R. No. 51353, June 27, 1988, 162 SCRA 628, We stated:

The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (citing University of Sto. Tomas vs. Board of Tax Appeals, 93 Phil. 376).

While therefore under the old rules, security guards were barred from joining a labor organization of the rank and file, under RA 6715, they may now freely join a labor organization of the rank and file or that of the supervisory union, depending on their rank. By accommodating supervisory employees, the Secretary of Labor must likewise apply the provisions of RA 6715 to security guards by favorably allowing them free access to a labor organization, whether rank and file or supervisory, in recognition of their constitutional right to self-organization.

We are aware however of possible consequences in the implementation of the law in allowing security personnel to join labor unions within the company they serve. The law is apt to produce divided loyalties in the faithful performance of their duties. Economic reasons would present the employees concerned with the temptation to subordinate their duties to the allegiance they owe the union of which they are members, aware as they are that it is usually union action that obtains for them increased pecuniary benefits.

Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly abandon their duties, such as protection of property of their employer and the persons of its officials and employees, the control of access to the employer's premises, and the maintenance of order in the event of emergencies and untoward incidents.

It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid possible conflict of interest in security personnel.

ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the Resolution of the Secretary of Labor dated November 3, 1989 upholding an employee's right to self-organization. A certification election is hereby ordered conducted among supervisory employees of MERALCO, belonging to Pay Grades VII and above, using as guideliness an employee's power to either recommend or execute management policies, pursuant to Art. 212 (m), of the Labor Code, as amended by Sec. 4 of RA 6715, with respondents STEAM-PCWF and FLAMES as choices.

Employees of the Patrol Division, Treasury Security Services Section and Secretaries may freely join either the labor organization of the rank and file or that of the supervisory union depending on their employee rank. Disqualified employees covered by Sec. 3, Art. I of the MEWA-CBA, shall remain with the existing labor organization of the rank and file, pursuant to the Secretary of Labor's directive:

By the parties' own agreement, they find the bargaining unit, which includes the positions enumerated in Section 3, Article I of their CBA, appropriate for purposes of collective bargaining. The composition of the bargaining unit should be left to the agreement of the parties, and unless there are legal infirmities in such agreement, this Office will not substitute its judgment for that of the parties. Consistent with the story of collective bargaining in the company, the membership of said group of employees in the existing rank-and-file unit should continue, for it will enhance stability in that unit already well establish. However, we cannot approve of the condition set in Section 3, Article I of the CBA that the employees covered are automatically disqualified from becoming union members. The condition unduly restricts the exercise of the right to self organization by the employees in question. It is contrary to law and public policy and, therefore, should be considered to have not been written into the contract. Accordingly, the option to join or not to join the union should be left entirely to the employees themselves. (p. 229, Rollo)

The Temporary Restraining Order (TRO) issued on February 26, 1990 is hereby LIFTED. Costs against petitioner.

SO ORDERED.

G.R. No. 110854 February 13, 1995

PIER 8 ARRASTRE & STEVEDORING SERVICES, INC., petitioner, vs.HON. MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of Labor and Employment, and GENERAL MARITIME & STEVEDORES UNION (GMSU), respondents.

 

PUNO, J.:

Petitioner corporation and private respondent labor union entered into a three-year Collective Bargaining Agreement (CBA) with expiry date on November 27, 1991. During the freedom period the National Federation of Labor Unions (NAFLU) questioned the majority status of Private respondent through a petition for certification election. The election conducted on February 27, 1992 was won by

private respondent. On March 19, 1992, private respondent was certified as the sole and exclusive bargaining agent of petitioner's rank-and-file employees.

On June 22, 1992, private respondent's CBA proposals were received by petitioner. Counter-proposals were made by petitioner. Negotiations collapsed, and on August 24, 1992, private-respondent filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB). The NCMB tried but failed to settle the parties' controversy.

On September 30, 1992, public respondent Secretary of Labor assumed jurisdiction over the dispute. She resolved the bargaining deadlock between the parties through an Order, dated March 4, 1993, which reads, in part:

xxx xxx xxx

A. The non-economic issues

1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:

The Company recognizes the Union as the sole and exclusive collective bargaining representative of all the stevedores, dockworkers, gang bosses, foremen, rank and file employees working at Pier 8, North Harbor and its offices and said positions are [sic] listed in ANNEX "A" hereof.

As such representative the UNION is designated as the collective bargaining agent with respect to and concerning the terms and conditions of employment and the interpretations and implementation of the provisions and conditions of this Agreement.

Annex "A" of the CBA is the listing of positions covered thereby. These are:

1. Foremen;2. Gang bosses;3. Winchmen;4. Signalmen;5. Stevedores;6. Dockworkers;7. Tallymen;8. Checkers;9. Forklift and crane operators;10. Sweepers;11. Mechanics;12. Utilitymen;13. Carpenters; and14. Other rank and file employees;

The company argues in the first instance that under Article 212(m) in relation to Article 245 of the Labor Code, supervisors are ineligible for. membership in a labor organization of rank and file. Being supervisors, foremen should be excluded from the bargaining unit.

The Company likewise seeks the exclusion on the ground of lack of community of interest and divergence in functions, mode of compensation and working conditions of the following:

1. Accounting clerk;2. Audit clerk;3. Collector;4. Payroll clerk;5. Nurse;6. Chief biller;7. Biller;8. Teller/biller;9. Personnel clerk;10. Timekeeper;11. Asst. timekeeper;12. Legal secretary;13. Telephone operator;14. Janitor/Utility; and15. Clerk

These positions, the Company argues, cannot be lumped together with the stevedores or dockworkers who mostly comprise the bargaining unit. Further, notwithstanding the check-off provisions of the CBA, the incumbents in these positions have never paid union dues. Finally, some of them occupy confidential positions and therefore ought to be excluded from the bargaining unit.

The Union generally argues that the Company's proposed exclusions retrogressive. . . .

We see no compelling justification to order the modification of Article I of the 1988 CBA as worded. For by lumping together stevedores and other rank and file employees, the obvious intent of the parties was to treat all employees not disqualified from union membership as members of one bargaining unit. This is regardless of working conditions, mode of compensation, place of work, or other considerations. In the absence of mutual agreement of the parties or evidence that the present compositions of the bargaining unit is detrimental to the individual and organizational rights either of the employees or of the Company, this expressed intent cannot be set aside.

It may well be that as a consequence of Republic Act No. 6715, foremen are ineligible to join the union of the rank and file. But this provision can be invoked only upon proof that the foremen sought to be excluded from the bargaining unit are cloaked with effective recommendatory powers such as to qualify them under the legal definitions of supervisors.

xxx xxx xxx

7. Effectivity of the CBA. The Union demands that the CBA should be fully retroactive to 28 November 1991. The Company is opposed on the ground that under Article 253-A of the labor code, the six-month period within which the parties must come to an agreement so that the same will be automatically retroactive is long past.

The Union's demand for full retroactivity, we note, will result in undue financial burden to the Company. On the other hand, the Company's reliance on Article 253-A is misplaced as this applies only to the renegotiated terms of an existing CBA. Here, the deadlock arose from negotiations for a new CBA.

These considered, the CBA shall be effective from the time we assumed jurisdiction over the dispute, that is, on 22 September 1992, and shall remain e effective for five (5) years thereafter. It shall be understood that except for the representation aspect all other provisions thereof shall be renegotiated not later than three (3) years after its effectivity, consistently with Article 253-A of the Labor Code.

B. The economic issues

The comparative positions of the parties are:

COMPANY UNION

xxx xxx xxx

5. Vacation and sick leave 17 days vacation and sick leave i) For all covered employees

17 days sick leave per year and 17 days sick than gang

for employment with at least gang bosses:

five years of service.

15 working days vacation and

15 working days sick leave

for those with at least 1 year

of service

20 working days vacation and

20 working days sick leave

for those with more than one

year of service up to 5 years

of service

25 working days vacation and

25 working days sick leave

for those with more than 5

years of service up to 10

years of service

30 working days vacation and

30 working days sick leave

for those with more than 10

years of service

Provided that in the case Provided that in the case of a

of a rotation worker, he rotation worker, he must have

must have work for at worked for 140 days in a

least 160 days in a year calendar year as a condition

for availment for availment.

Provided, further that in the

event a rotation worker fails

to complete 140 days work in

a calendar year, he shall still

be entitled to vacation and

sick leave with pay, as follows:

139 - 120 days worked: 90%

119 - 110 days worked: 50%

ii) For Gang bosses:

Same as the above schedule

except that:

1) the condition that a gang

bosses must have worked for at

least 120 days in a calendar

year shall be reduced to 110

days; and

2) where the above number of

days worked is not met, the

gang boss shall still be entitled

to vacation and sick leave with

pay, as follows:

109 - 90 days worked: 90%

89 - 75 days worked: 50%

xxx xxx xxx

7. Death aid P1,500.00 to heirs P10,000.00 to heirs of covered

of covered employees employees

P5,000.00 assistance for death

of immediate member of

covered employee's family

xxx xxx xxx

12. Emergency loan

a) amount of P700.00 but damage 30 days salary payable through

entitlement to dwelling by fire shall payroll deduction in twelve

be included monthly installments

b) cash bond None The company shall put up a cash

for loss, damage bond of not less than P40,000.00

or accident for winchmen, crane and forklift

operators.

 

xxx xxx xxx

Balancing the right of the Company to remain viable and to just returns to its investments with right of the Union members to just rewards for their labors, we find the following award to be fair and reasonable:

xxx xxx xxx

6. Vacation and Sick Leavea) Non-rotation workers 17 days vacation/17 days sick leave

for those with at least 1 year of service

b) Rotation workers other 17 days vacation/17 days sick leave,

than gang boss provided that the covered worker

must have worked for at least 155 days

in a calendar year

c) Gang bosses 17 days vacation/17 days sick leave,

provided that the gang boss must have

worked for at least 115 days in a

calendar year

 

xxx xxx xxx

8. Death aid P3,000.00 to the heirs of each covered employee

xxx xxx xxx

12. Emergency loan 30 days pay, payable through payroll deductions of 1/12 of monthly salary

WHEREFORE, the Pier 8 Arrastre and Stevedoring Services and the General Maritime Services Union are hereby ordered to execute new collective bargaining agreement the incorporating the dispositions herein contained. These shall be in addition to all other

existing terms, conditions and benefits of employment, except those specifically deleted herein, which have previously governed the relations of the parties. All other disputed items not specifically touched upon herein are deemed denied, without prejudice to such other agreements as the parties may have reached in the meantime. The collective bargaining agreement so executed shall be effective from 22 September 1992 and up to five years thereafter, subject to renegotiation on the third year of its effectivity pursuant to Article 253-A of the Labor Code. 1

Petitioner sought partial reconsideration of the Order. On June 8, 1993, public respondent affirmed her findings, except for the date of effectivity of the Collective Bargaining Agreement which was changed to September 30, 1992. This is the date when she assumed jurisdiction over the deadlock.

Petitioner now assails the Order as follows:

I

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN NOT EXCLUDING CERTAIN POSITIONS FROM THE BARGAINING AGREEMENT UNIT

II

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING THE CBA EFFECTIVE ON SEPTEMBER 30, 1992 WHEN SHE ASSUMED JURISDICTION OVER THE LABOR DISPUTE AND NOT MARCH 4, 1993 WHEN SHE RENDERED JUDGMENT OVER THE DISPUTE

III

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN REDUCING THE NUMBER OF DAYS AN EMPLOYEE SHOULD ACTUALLY WORK TO BE ENTITLED TO VACATION AND SICK LEAVE BENEFITS

IV

THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN INCREASING WITHOUT FACTUAL BASIS THE DEATH AID AND EMERGENCY LOAN 2

The petition is partially meritorious.

Firstly, petitioner questions public respondent for not excluding four (4) foremen, a legal secretary, a timekeeper and an assistant timekeeper from the bargaining unit composed of rank-and-file employees represented by private respondent. Petitioner argues that: (1) the failure of private respondent to object when the foremen and legal secretary were prohibited from voting in the certification election constitutes an admission that such employees holdsupervisory/confidential positions; and (2) the primary duty and responsibility of the timekeeper and assistant timekeeper is "to enforce company rules and regulations by reporting to petitioner . . . those workers who committed infractions, such as those caught abandoning their posts." and hence, they should not be considered as rank-and-file employees.

The applicable law governing the proper composition of bargaining unit is Article 245 of the labor Code, as amended, which provides as follows:

Art. 245. Ineligibility of managerial employees to join any labor organization; employees to join any labor organization; right of supervisory employees. — Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

Article 212(m) of the same Code, as well as Book V, Rule 1, Section 1(o) of the Omnibus Rules Implementing the Labor Code, as amended by the Rules and Regulations Implementing R.A.. 6715, differentiate managerial, supervisory, and rank-and-file employees, thus:

"Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff 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 the Book.

This Court has ruled on numerous occasions that the test of supervisory or managerial status is whether an employee possesses authority to act in the interest of his employer which authority is not merely routinary or clerical in nature but requires use of independent judgment. 3 What governs the determination of the nature of employment is not the employee's title, but his job description. If the nature of the employee's job does not fall under the definition of "managerial" or "supervisory" in the Labor Code, he is eligible to be a member of the rank-and-file bargaining unit.4

Foremen are chief and often especially-trained workmen who work with and commonly are in charge of a group of employees in an industrial plant or in construction work. 5 They are the persons designated by the employer-management to direct the work of employees and to superintend and oversee them. 6 They are representatives of the employer-management with authority over particular groups of workers, processes, operations, or sections of a plant or an entire organization. In the modern industrial plant, they are at once a link in the chain of command and the bridge between the management and labor. 7 In the performance their work, foremen definitely use their independent judgment and are empowered to make recommendations for managerial action with respect to those employees under their control. Foremen fall squarely under the category of supervisory employees, and cannot be part of rank-and-file unions.

Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and clerical. However, they should be differentiated from rank-and-file employees because they, are tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving notices and such other duties as required by the legal personnel of the corporation. 8 Legal secretaries therefore fall under the category of confidential employees. Thus, to them applies our holding in the case of Philips Industrial Development, Inv., v. NLRC, 210 SCRA 339 (1992), that:

. . . By the very functions, they assist confidential capacity to, or have access to confidential. matters of, persons to, exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.

In Bulletin Publishing Co., Inc., vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:

. . . The rationale, for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with Union the latter might not, be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership.

In Golden Farms, Inc., vs. Ferrer-Calleja, 9 this court explicitly made this rationale applicable to confidential employees:

This rationale holds true also for confidential employees . . ., who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. . . .

We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal secretary from the bargaining unit composed of rank-and-file employees.

As for the timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that they are, neither managerial nor supervisory employees. They are merely tasked to report those who commit infractions against company rules and regulations. This reportorial function is routinary and clerical. They do not determine the fate of those who violate company policy rules and regulations function. It follows that they cannot be excluded from the subject bargaining unit.

The next issue is the date when the new CBA of the parties should be given effect. Public respondent fixed the effectivity date on September 30, 1992. when she assumed jurisdiction over the dispute. Petitioner maintains it should be March 4. 1993, when public respondent rendered judgment over the dispute.

The applicable laws are Articles 253 and 253- A of the Labor Code, thus:

Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. — When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.

and;

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 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 collective bargaining agreement, the parties may exercise their rights under this Code.

In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above law as follows:

In light of the foregoing, this Court upholds the pronouncement of the NLRC holding the CBA to be signed by the parties effective upon the promulgation of the assailed resolution. It is clear and explicit from Article 253-A that any agreement on such other provisions of the CBA shall be given retroactive effect only when it is entered into within six (6) months from its expiry date. If the agreement was entered into outside the six (6) month period, then the parties shall agree on the duration of the retroactivity thereof.

The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5, 1989, the expiry date of the past CBA. Based on the provision of Section 253-A, its retroactivity should be agreed upon. by the parties. But since no agreement to that effect was made, public respondent did not abuse its discretion in giving the said CBA a prospective effect. The action of the public respondent is within the ambit of its authority vested by existing law.

In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this Court reiterated the rule that although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. It is the duty of both parties to the to keep the status quo, and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day freedom period and/or until a new agreement is reached by the parties. 10 Applied to the case at bench, the legal effects of the immediate past CBA between petitioner and private respondent terminated, and the effectivity of the new CBA began, only on March 4, 1993 when public respondent resolved their dispute.

Finally, we find no need to discuss at length the merits of the third and fourth assignments of error. The questioned Order relevantly states:

In the resolution of the economic issues, the Company urges us to consider among others, present costs of living, its financial capacity, the present wages being paid by the other cargo handlers at the North Harbor, and the fact that the present average wage of its workers is P127.75 a day, which is higher than the statutory minimum wage of P118.00 a day. The Company's evidence, consisting of its financial statements for the past three years, shows that its net income was P743,423.45 for 1989, P2,108,569.03 for 1990, and P1,479,671.84 for 1991, or an average of P1,443,885.10 over the three-year period. It argues that for just the first year of effectivity of the CBA, the Company's proposals on wages, effect thereof on overtime, 13th month pay, and vacation and sick leave commutation, will cost about P520,723,44, or 35.19% of its net income for 1991. The Company likewise urges us to consider the multiplier effect of its proposals on the second and third years of the CBA. As additional argument, the Company manifests that a portion of its pier will undergo a six-month to one-year renovation starting January 1993.

On the other hand, the Union's main line of argument — that is, aside from being within the financial capacity of the Company to grant, its demands are fair and reasonable — is not supported by evidence controverting the Company's own presentation of its financial capacity. The Union in fact uses statements of the Company for 1989-1991, although it interprets these data as sufficient justification for its own proposals. It also draws our attention to the bargaining history of the parties, particularly the 1988 negotiations during which the company was able to grant wage increases despite operational losses.

Balancing the right of the Company to remain viable and to just returns to its investments with right of the Union members to just rewards for their labors, we find the following award to be fair and reasonable . . . . 11

It is evident that the above portion of the impugned Order is based on well-studied evidence. The conclusions reached by public respondent in the discharge of her statutory duty as compulsory arbitrator, demand the high respect of this Court. The study and settlement of these disputes fall within public respondent's distinct administrative expertise. She is especially trained for this delicate task, and she has within her cognizance such data and information as will assist her in striking the equitable balance between the needs of management, labor and the public. Unless there is clear showing of grave abuse of discretion, this Court cannot and will not interfere with the labor expertise of public respondent Secretary of Labor.

IN VIEW WHEREOF, public respondents Order, dated March 4, 1993, and Resolution, dated June 8, 1993, are hereby MODIFIED to exclude foremen and legal secretaries from the rank-and-file bargaining unit represented by private respondent union, and to fix the date of effectivity of the five-year collective bargaining agreement between petitioner corporation and private respondent union on March 4, 1993. No costs.

SO ORDERED.

Narvasa, C.J., Bidin, Regalado an

[G.R. No. 108855.  February 28, 1996]

METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of the Department of Labor and Employment and METRO DRUG CORPORATION EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS, respondents.

SYLLABUS

1.     REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE AGENCIES; RULE; CASE AT BAR. - We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative agencies supported by substantial evidence are accorded great respect and binds this Court.  The Secretary of Labor ruled, thus: x x x Any act committed during the

pendency of the dispute that tends to give rise to further contentious issues or increase the tensions between the parties should be considered an act of exacerbation.  One must look at the act itself, not on speculative reactions.  A misplaced recourse is not needed to prove that a dispute has been exacerbated. For instance, the Union could not be expected to file another notice of strike.  For this would depart from its theory of the case that the layoff is subsumed under the instant dispute, for which a notice of strike had already been filed. On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic action from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal.  Under a regime of laws, legal remedies take the place of violent ones. x xx Protest against the subject layoffs need not be in the form of violent action or any other drastic measure.  In the instant case the Union registered their dissent by swiftly filing a motion for a cease and desist order.  Contrary to petitioner’s allegations, the Union strongly condemned the layoffs and threatened mass action if the Secretary of Labor fails to timely intervene: x x x 3. This unilateral action of management is a blatant violation of the injunction of this Office against committing acts which would exacerbate the dispute.  Unless such act is enjoined the Union will be compelled to resort to its legal right to mass actions and concerted activities to protest and stop the said management action.  This mass layoff is clearly one which would result in a very serious dispute unless this Office swiftly intervenes. x x x Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner implemented the subject layoffs.  As a result, motions and oppositions were filed diverting the parties’ attention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.

2.     LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; EXERCISE OF MANAGEMENT PREROGATIVES; NOT ABSOLUTE; SUBJECT TO EXCEPTIONS IMPOSED BY LAW. - This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate business decisions of the employer.  However, this privilege is not absolute but subject to limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we issued this reminder: ... the exercise of management prerogatives was never considered boundless.  Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that management’s prerogatives must be without abuse of discretion ...All this points to the conclusion that the exercise of managerial prerogatives is not unlimited.  It is circumscribed by limi(ations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]).

3.     ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes one of the exceptions.  The Secretary of Labor is expressly given the power under the Labor Code to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest.  The disputed injunction is subsumed under this special grant of authority.  Art. 263 (g) of the Labor Code specifically provides that: x x x (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the

national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order.  If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.  The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. . . . That Metrolab’s business is of national interest is not disputed. Metrolab is one of the leading manufacturers and suppliers of medical and pharmaceutical products to the country. Metrolab’s management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered by the limitations set by law, taking into account its special character and the particular circumstances in the case at bench.

4.     ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM AND ASSIST ANY LABOR ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIAL EMPLOYEES. - Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records.

5.     ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE BARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. - Confidential employees cannot be classified as rank and file.  As previously discussed, the nature of employment of confidential employees is quite distinct from the rank and file, thus, warranting a separate category.  Excluding confidential employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.

APPEARANCES OF COUNSEL

Bautista Picazo Buyco Tan & Fider for petitioner.The Solicitor General for public respondent.Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug Corporation.

D E C I S I O N

KAPUNAN, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the Resolution and Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and 25 January 1993, respectively, in OS-AJ-04491-

11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91) on grounds that these were issued with grave abuse of discretion and in excess of jurisdiction.

Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers (hereinafter referred to as the Union) is a labor organization representing the rank and file employees of petitioner Metrolab Industries, Inc. (hereinafter referred to as Metrolab/MII) and also of Metro Drug, Inc.

On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union expired.  The negotiations for a new CBA, however, ended in a deadlock.

Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro Drug Inc.  The parties failed to settle their dispute despite the conciliation efforts of the National Conciliation and Mediation Board.

To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued an assumption order dated 20 September 1991, the dispositive portion of which reads, thus:

WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as amended, this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. - Metro Drug Distribution Division and Metrolab Industries Inc.

Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp. Employees Association - FFW are likewise directed to cease and desist from committing any and all acts that might exacerbate the situation.

Finally, the parties are directed to submit their position papers and evidence on the aforequoted deadlocked issues to this office within twenty (20) days from receipt hereof.

SO ORDERED.[1] (Italics ours.)

On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed items in the CBA and ordered the parties involved to execute a new CBA.

Thereafter, the Union filed a motion for reconsideration.

On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab laid off 94 of its rank and file employees.

On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab from implementing the mass layoff, alleging that such act violated the prohibition against committing acts that would exacerbate the dispute as specifically directed in the assumption order.[2]

On the other hand, Metrolab contended that the layoff was temporary and in the exercise of its management prerogative. It maintained that the company would suffer a yearly gross revenue loss of approximately sixty-six (66) million pesos due to the withdrawal of its principals in the Toll and Contract Manufacturing Department.  Metrolab further asserted that with the automation of the manufacture of its product “Eskinol,” the number of workers required its production is significantly reduced.[3]

Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to availability of work in the production lines.

On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of Metrolab’s 94 rank and file workers illegal and ordered their reinstatement with full backwages.  The dispositive portion reads as follows:

WHEREFORE, the Union’s motion for reconsideration is granted in part, and our order of 28 December 1991 is affirmed subject to the modifications in allowances and in the close shop provision.  The layoff of the 94 employees at MII is hereby declared illegal for the failure of the latter to comply with our injunction against committing any act which may exacerbate the dispute and with the 30-day notice requirement.  Accordingly, MII is hereby ordered to reinstate the 94 employees, except those who have already been recalled, to their former positions or substantially equivalent, positions with full backwages from the date they were illegally laid off on 27 January 1992 until actually reinstated without loss of seniority rights and other benefits. Issues relative to the CBA agreed upon by the parties and not embodied in our earlier order are hereby ordered adopted for incorporation in the CBA. Further, the dispositions and directives contained in all previous orders and resolutions relative to the instant dispute, insofar as not inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and desist from committing any act which may tend to circumvent this resolution.

SO RESOLVED.[4]

On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not aggravate the dispute since no untoward incident occurred as a result thereof.  It, likewise, filed a motion for clarification regarding the constitution of the bargaining unit covered by the CBA.

On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution, however, was without prejudice to the outcome of the issues raised in the reconsideration and clarification motions submitted for decision to the Secretary of Labor.[5]

Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its employees on grounds of redundancy due to lack of work which the Union again promptly opposed on 5 October 1992.

On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order.  Metrolab moved for a reconsideration.[6]

On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the following orders:

        xxx                                        xxx                                        xxx.

1. MII’s motion for partial reconsideration of our 14 April 1992 resolution specifically that portion thereof assailing our ruling that the layoff of the 94 employees is illegal, is hereby denied.  MII is hereby ordered to pay such employees their full backwages computed from the time of actual layoff to the time of actual recall;

2. For the parties to incorporate in their respective collective bargaining agreements the clarifications herein contained; and

3. MII’s motion for reconsideration with respect to the consequences of the second wave of layoff affecting 73 employees, to the extent of assailing our ruling that such layoff tended to exacerbate the dispute, is hereby denied.  But inasmuch as the legality of the layoff was not submitted for our resolution and no evidence had been adduced upon which a categorical finding thereon can be based, the same is hereby referred to the NLRC for its appropriate action.

Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute are hereby lifted.

SO RESOLVED.[7]

Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop provision of the CBA, not from the bargaining unit.

On 4 February 1993, the Union filed a motion for execution. Metrolab opposed.  Hence, the present petition for certiorari with application for issuance of a Temporary Restraining Order.

On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor from enforcing and implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25 January 1993, respectively.

In its petition, Metrolab assigns the following errors:

A

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE OF DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF

ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE AFFECTED EMPLOYEES.*

B

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED HER DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK AND FILE EMPLOYEES.[8]

Anent the first issue, we are asked to determine whether or not public respondent Labor Secretary committed grave abuse of discretion and exceeded her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal on grounds that these unilateral actions aggravated the conflict between Metrolab and the Union who were, then, locked in a stalemate in CBA negotiations.

Metrolab argues that the Labor Secretary’s order enjoining the parties from committing any act that might exacerbate the dispute is overly broad, sweeping and vague and should not be used to curtail the employer’s right to manage his business and ensure its viability.

We cannot give credence to Metrolab’s contention.

This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate business decisions of the employer.  However, this privilege is not absolute but subject to limitations imposed by law.[9]

In PAL v. NLRC,[10] we issued this reminder:

        xxx                                         xxx                                         xxx

. . .the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina ( 177 SCRA 565 [1989]), it was held that management’s prerogatives must be without abuse of discretion....

        xxx                                         xxx                                         xxx

All this points to the conclusion that the exercise of managerial prerogatives is not unlimited.  It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)

        xxx                                         xxx                                         xxx.

The case at bench constitutes one of the exceptions.  The Secretary of Labor is expressly given the power under the Labor Code to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest.  The disputed

injunction is subsumed under this special grant of authority.  Art. 263 (g) of the Labor Code specifically provides that:

        xxx                                        xxx                                        xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order.  If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.  The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. . . (Italics ours.)

        xxx                                        xxx                                        xxx.

That Metrolab’s business is of national interest is not disputed.  Metrolab is one of the leading manufacturers and suppliers of medical and pharmaceutical products to the country.

Metro lab’s management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered by the limitations set by law, taking into account its special character and the particular circumstances in the case at bench.

As aptly declared by public respondent Secretary of Labor in its assailed resolution:

         xxx                                       xxx                                        xxx.

MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of management prerogatives such as layoffs.  But it may nevertheless be appropriate to mention here that one of the substantive evils which Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a labor dispute to the further detriment of the national interest.  When a labor dispute has in fact occurred and a general injunction has been issued restraining the commission of disruptive acts, management prerogatives must always be exercised consistently with the statutory objective.[11]

        xxx                                        xxx                                        xxx.

Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no untoward incident occurred after the layoffs were implemented.  There were no work disruptions or stoppages and no mass actions were threatened or

undertaken.  Instead, petitioner asserts, the affected employees calmly accepted their fate “as this was a matter which they had been previously advised would be inevitable.”[12]

After a judicious review of the record, we find no compelling reason to overturn the findings of the Secretary of Labor.

We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative agencies supported by substantial evidence are accorded great respect and binds this Court.[13]

The Secretary of Labor ruled, thus:

        xxx                                        xxx                                        xxx.

Any act committed during the pendency of the dispute that tends to give rise to further contentious issues or increase the tensions between the parties should be considered an act’ of exacerbation.  One must look at the act itself, not on speculative reactions.  A misplaced recourse is not needed to prove that a dispute has been exacerbated.  For instance, the Union could not be expected to file another notice of strike.  For this would depart from its theory of the case that the layoff is subsumed under the instant dispute, for which a notice of strike had already been filed.  On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic action from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal.  Under a regime of laws, legal remedies take the place of violent ones.[14]

        xxx                                        xxx                                        xxx.

Protest against the subject layoffs need not be in the form of violent action or any other drastic measure.  In the instant case the Union registered their dissent by swiftly filing a motion for a cease and desist order.  Contrary to petitioner’s allegations, the Union strongly condemned the layoffs and threatened mass action if the Secretary of Labor fails to timely intervene:

        xxx                                        xxx                                        xxx.

3. This unilateral action of management is a blatant violation of the injunction of this Office against committing acts which would exacerbate the dispute.  Unless such act is enjoined the Union will be compelled to resort to its legal right to mass actions and concerted activities to protest and stop the said management action.  This mass layoff is clearly one which would result in a very serious labor dispute unless this Office swiftly intervenes.[15]

        xxx                                        xxx                                        xxx.

Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner implemented the subject layoffs.  As a result, motions and oppositions were filed diverting the parties’ attention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.

We, likewise, find untenable Metrolab’s contention that the layoff of the 94 rank-and-file employees was temporary, despite the recall of some of the laid off workers.

If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so in the notices it sent to the affected employees and the Department of Labor and Employment. Consider the tenor of the pertinent portions of the layoff notice to the affected employees:

        xxx                                        xxx                                        xxx.

Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng “lay-off” ng mga empleyado sa Rank & File dahil nabawasan ang trabaho at puwesto para sa kanila.  Marami sa atin ang kasama sa “lay-off”dahil wala nang trabaho para sa kanila.  Mahirap tanggapin ang mga bagay na ito subalit kailangan nating gawin dahil hindi kaya ng kumpanya ang magbayad ng suweldo kung ang empleyado ay walang trabaho.  Kung tayo ay patuloy na magbabayad ng suweldo, mas hihina ang ating kumpanya at mas marami ang máaaring maapektuhan.

Sa pagpapatupad ng “lay-off” susundin natin ang LAST IN-FIRST OUT policy. Ang mga empleyadong may pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan.  Ito ay batay na rin sa nakasaad sa ating CBA na ang mga huling pumasok sa kumpanya ang unang masasama sa “lay-off” kapag nagkaroon ng ganitong mga kalagayan.

Ang mga empleyado na kasama sa “lay-off” ay nakalista sa sulat na ito. Ang umpisa ng lay-off ay sa Lunes, Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero 30, 1992.

Hindi po natin matitiyak kung gaano katagal ang “lay-off” ngunit ang aming tingin ay matatagalan bago magkaroon ng dagdag na trabaho.  Dahil dito, sinimulan na namin ang isang “Redundancy Program” sa mga supervisors.  Nabawasan ang mga puwesto para sa kanila, kaya sila ay mawawalan ng trabaho at bibigyan na ng redundancy pay.[16] (Italics ours.)

        xxx                                        xxx                                        xxx.

We agree with the ruling of the Secretary of Labor, thus:

        xxx                                        xxx                                        xxx.

. . .MII insists that the layoff in question is temporary not permanent. It then cites International Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held that the 30-day notice required under Article 283 of the Labor Code need not be complied with if the employer has no intention to permanently severe (sic) the employment relationship.

We are not convinced by this argument.  International Hardware involves a case where there had been a reduction of workload.  Precisely to avoid laying off the employees, the employer therein opted to give them work on a rotating basis. Though on a limited scale, work was available.  This was the Supreme Court’s basis for holding that there was no intention to permanently severe (sic) the employment relationship.

Here, there is no circumstance at all from which we can infer an intention from MII not to sever the employment relationship permanently.  If there was such an intention, MII could have made it very clear in the notices of layoff. But as it were, the notices are couched in a language so uncertain that the only conclusion possible is the permanent termination, not the continuation, of the employment relationship.

MII also seeks to excuse itself from compliance with the 30-day notice with a tautology.  While insisting that there is really no best time to announce a bad news, (sic) it also claims that it broke the bad news only on 27 January 1992 because had it complied with the 30-day notice, it could have broken the bad news on 02 January 1992, the first working day of the year.  If there is really no best time to announce a bad news (sic), it wouldn’t have mattered if the same was announced at the first working day of the year.  That way, MII could have at least complied with the requirement of the law.[17]

The second issue raised by petitioner merits our consideration.

In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on closed-shop and the scope of the bargaining unit in this wise:

        xxx                                        xxx                                        xxx.

Appropriateness of the bargaining unit.

        xxx                                        xxx                                        xxx.

Exclusions.  In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:

These aside, we reconsider our denial of the modifications which the Union proposes to introduce on the close shop provision.  While we note that the provision as presently worded has served’ the relationship of the parties well under previous

CBA’s, the shift in constitutional policy toward expanding the right of all workers to self-organization should now be formally recognized by the parties, subject to the following exclusions only:

1.        Managerial employees; and

2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice President for Sales, Personnel Manager, and Director for Corporate Planning who may have access to vital labor relations information or who may otherwise act in a confidential capacity to persons who determine or formulate management policies.

The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified consistently with the foregoing.

Article I (b) of the 1988-1990 CBA provides:

b)Close Shop. - All Qualified Employees must join the Association immediately upon regularization as a condition for continued employment.  This provision shall not apply to: (i) managerial employees who are excluded from the scope of the bargaining unit; (ii) the auditors and executive secretaries of senior executive officers, such as, the President, Executive Vice-President, Vice-President for Finance, Head of Legal, Vice-President for Sales, who are excluded from membership in the Association; and (iii) those employees who are referred to in Attachment I hereof, subject, however, to the application of the provision of Article II, par. (b) hereof. Consequently, the above-specified employees are not required to join the Association as a condition for their continued employment.

On the other hand, Attachment I provides:

Exclusion from the Scope of the Close Shop Provision

The following positions in the Bargaining Unit are not covered by the Close Shop provision of the CBA (Article I, par. b):

1. Executive Secretaries of Vice-Presidents, or equivalent positions.

2. Executive Secretary of the Personnel Manager, or equivalent positions.

3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.

4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head Office, Accounting Department at Head Office, and Budget Staff, who

because of the nature of their duties and responsibilities need not join the Association as a condition for their employment.

5. Newly-hired secretaries of Branch Managers and Regional Managers.

Both MDD and MII read the exclusion of managerial employees and executive secretaries in our 14 April 1992 resolution as exclusion from the bargaining unit.  They point out that managerial employees are lumped under one classification with executive secretaries, so that since the former are excluded from the bargaining unit, so must the latter be likewise excluded.

This reading is obviously contrary to the intent of our 14 April 1992 resolution.  By recognizing the expanded scope of the right to self-organization, our intent was to delimit the types of employees excluded from the close shop provision, not from the bargaining unit, to executive secretaries only.  Otherwise, the conversion of the exclusionary provision to one that refers to the bargaining unit from one that merely refers to the close shop provision would effectively curtail all the organizational rights of executive secretaries.

The exclusion of managerial employees, in accordance with law, must therefore still carry the qualifying phrase “from the bargaining unit” in Article I (b)(i) of the 1988-1990 CBA.  In the same manner, the exclusion of executive secretaries should be read together with the qualifying phrase “are excluded from membership in the Association” of the same Article and with the heading of Attachment I.  The latter refers to “Exclusions from Scope of Close Shop Provision” and provides that “[t]he following positions in Bargaining Unit are not covered by the close shop provision of the CBA.”

The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification, MII points out that it has done away with the positions of Executive Vice-President, Vice-President for Sales, and Director for Corporate Planning.  Thus, the foregoing group of exclusions is no longer appropriate in its present organizational structure. Nevertheless, there remain MII officer positions for which there may be executive secretaries.  These include the General Manager and members of the Management Committee, specifically i) the Quality Assurance Manager; ii) the Product Development Manager; iii) the Finance Director; iv) the Management System Manager;’ v) the Human Resources Manager; vi) the Marketing Director; vii) the Engineering Manager; viii) the Materials Manager; and ix) the Production Manager.

        xxx                                        xxx                                        xxx

The basis for the questioned exclusions, it should be noted, is no other than the previous CBA between MII and the Union.  If MII had undergone an organizational restructuring since then, this is a fact to which we have never been made privy. In any event, had this been otherwise the result would have been the same.  To repeat, we limited the exclusions to recognize the expanded scope of the right to self-organization as embodied in the Constitution.[18]

Metrolab, however, maintains that executive secretaries of the General Manager and the executive secretaries of the Quality Assurance Manager, Product Development

Manager, Finance Director, Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager, who are all members of the company’s Management Committee should not only be exempted from the closed-shop provision but should be excluded from membership in the bargaining unit of the rank and file employees as well on grounds that their executive secretaries are confidential employees, having access to “vital labor information.”[19]

We concur with Metrolab.

Although Article 245 of the Labor Code[20] limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records.

The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file employees and their disqualification to join any labor organization was succinctly discussed in Philips Industrial Development v. NLRC:[21]

        xxx                                        xxx                                        xxx.

On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI’s “Service Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and file bargaining unit.”

In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations.  As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.

In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:

x x x The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests.  The Union can also become company-dominated with the presence of managerial employees in Union membership.”

In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential employees:

This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage.  Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement.  This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment.  To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded.”

        xxx                                        xxx                                        xxx.

Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v. Torres[22] we declared:

        xxx                                        xxx                                        xxx.

. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential employees, having control, custody and/ or access to confidential matters, e.g., the branch’s cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, this claim is not even disputed by petitioner.  A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property.  While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary, implication, confidential employees are similarly disqualified. . . .

        xxx                                        xxx                                        xxx.

. . .(I)n the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act as its representatives, and to see to it that its interest are well protected.  The employer is not assured of such protection if these employees themselves are union members.  Collective bargaining in such a situation can become one-sided.  It is the same reason that impelled this Court to consider the position of confidential employees as included in the disqualification found in Art. 245 as if the disqualification of confidential employees were written in the provision.  If confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed by their own motives rather than the interest of the employers.  Moreover, unionization of confidential employees for the purpose

of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act “in the interest of the employers.  It is not farfetched that in the course of collective bargaining, they might jeopardize that interest which they are duty-bound to protect. . . .

        xxx                                        xxx                                        xxx.

And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor,[23] we ruled that:

        xxx                                        xxx                                        xxx.

Upon the other hand, legal secretaries are neither managers nor supervisors.  Their work is basically routinary and clerical.  However, they should be differentiated from rank-and-file employees because they are tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving notices, and such other duties as required by the legal personnel of the corporation.  Legal secretaries therefore fall under the category of confidential employees. . . .

        xxx                                        xxx                                        xxx.

We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal secretary from the bargaining unit composed of rank-and-file employees.

        xxx                                        xxx                                        xxx.

In the case at bench, the Union does not disagree with petitioner that the executive secretaries are confidential employees.  It however, makes the following contentions:

        xxx                                        xxx                                        xxx.

There would be no danger of company domination of the Union since the confidential employees would not be members of and would not participate in the decision making processes of the Union.

Neither would there be a danger of espionage since the confidential employees would not have any conflict of interest, not being members of the Union.  In any case, there is always the danger that any employee would leak management secrets to the Union out of sympathy for his fellow rank and filer even if he were not a member of the union nor the bargaining unit.

Confidential employees are rank and file employees and they, like all the other rank and file employees, should be granted the benefits of the Collective Bargaining Agreement.  There is no valid basis for discriminating against them. The mandate of the Constitution and the Labor Code, primarily of protection to Labor, compels such conclusion.[24]

        xxx                                        xxx                                        xxx.

The Union’s assurances fail to convince.  The dangers sought to be prevented, particularly the threat of conflict of interest and espionage, are not eliminated by non-membership of Metrolab’s executive secretaries or confidential employees in the Union.  Forming part of the bargaining unit, the executive secretaries stand to benefit from any agreement executed between the Union and Metrolab.  Such a scenario, thus, gives rise to a potential conflict between personal interests and their duty as confidential employees to act for and in behalf of Metrolab.  They do not have to be union members to affect or influence either side.

Finally, confidential employees cannot be classified as rank and file.  As previously discussed, the nature of employment of confidential employees is quite distinct from the rank and file, thus, warranting a separate category.  Excluding confidential employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.

WHEREFORE, premises considered, the petition is partially GRANTED.  The resolutions of public respondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the extent that executive secretaries of petitioner Metrolab’s General Manager and the executive secretaries of the members of its Management Committee are excluded from the bargaining unit of petitioner’s rank and file employees.

SO ORDERED.

Padilla, Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.

[1] Rollo, p.74.

[2] Id., at 202-204.

[3] Id., at 8-9.[4]

[5] Id., at 303.

[6] Id., at 236-241.

[7] Id., at 70-71.

* Metrolab submits that the issue in the instant petition for certiorari is limited to the determination of whether or not the Secretary of Labor gravely abused her discretion in ruling that the layoff of its 94 workers exacerbated their labor dispute with the Union. Metrolab underscores that the basis for the said layoff “has never been placed in issue.” (Rollo, pp. 327- 328.)

In the same manner, Metrolab prefatorily declared that it does not dispute the Secretary of Labor’s certification to the NLRC of the legality (or illegality) of the second layoff of Metrolab’s 73 rank and file workers on grounds of redundancy (Rollo, pp. 11-12). In its Consolidated Reply, Metrolab states, thus:

5.0. Moreover, the redundancy program of October 1992 is not an issue in the present petition. The assailed Omnibus Order, in no uncertain terms, ordered that this matter be brought before the National Labor Relations Commission (“NLRC”) for adjudication (Please see Annex “A-i” of the Petition). Petitioner herein does not question the said part of the Omnibus Resolution in the present petition. The time for the same is not yet ripe, as the NLRC still has to pass judgment upon the facts surrounding the redundancy program. As of this writing, the said redundancy program is presently being litigated before the Arbitration Branch of the NLRC in NLRC-NCR Case No. 00-05-03325-93 entitled “Metro Drug Corporation Employees Association - FFW v. Metrolab Industries, Inc., et al.” before Labor Arbiter Cornelio Linsangan. (Rollo, p. 330.)

[8] Id., at 13.

[9] Radio Communications of the Philippines, Inc. v. NLRC, 221 SCRA 782 (1993); Corral v. NLRC, 221 SCRA 693(1993); Rubberworld (Phils.), Inc. v. NLRC, 175 SCRA 450 (1989).

[10] 225 SCRA 301 (1993).

[11] Rollo, p. 46.

[12] Id., at 335.

[13] Association of Marine Officers & Seamen of Reyes & Lim Co. v. Laguesma, 239 SCRA 460 (1994); Maya Farms Employees Organization v. NLRC, 239 SCRA 508 (1994); Rabago v. NLRC, 200 SCRA 158 (1991); Pan Pacific Industrial Sales, Co., Inc. v. NLRC, 194 SCRA 633 (1991).

[14] Rollo, p. 57.

[15] Id., at 202-204; 228-234; “Urgent Motion to Resolve Union’s Motion dated 27 January 1992,” Folder 4, Original Record.

[16] Rollo, p. 198.

[17] Id., at 58-59.

[18] Rollo, pp. 59-63.

[19] Id., at 31-32.

[20] Art. 245. Labor Code. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. -Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

[28] Art. 241.28

[29] Public respondent’s Memorandum, p. 13; rollo, pp. 533.29