Malayang Samahan ng mga Manggagawa sa Greenland (THE LABOR UNION-UWP)

v. Ramos (2000)

Petitioners: Malayang Samahan ng mga Manggagawa sa Greenland (THE LABOR

UNION), et al.

Respondents: HON. CRESENCIO J. RAMOS, United Lumber and General Workers of the
Philippines (ULGWP), et al.

Ponente: PURISIMA

Topic: Registration

FACTS:

 The labor union or the “local union” is an affiliate of the private respondent,
United Lumber and General Workers of the Philippines (ULGWP) , referred to
as the "federation". The collective bargaining agreement names its parties as “M.
GREENFIELD, INC. (B)” (the company) and “MALAYANG SAMAHAN NG
MGA MANGGAGAWA SA M. GREENFIELD (B) (THE LABOR
UNION)/UNITED LUMBER AND GENERAL WORKERS OF THE
PHILIPPINES (ULGWP).”
 The CBA contained in Article II:
o A Union Security clause: “Section 1. Coverage and Scope. All employees
who are covered by this Agreement and presently members of the UNION
shall remain members of the UNION for the duration of this Agreement as a
condition precedent to continued employment with the COMPANY.”
o “Section 4. Dismissal. Any such employee mentioned in Section 2 hereof,
who fails to maintain his membership in the UNION for non-payment of
UNION dues, for resignation and for violation of UNION’s Constitution and
By-Laws and any new employee as defined in Section 2 of this Article shall
upon written notice of such failure to join or to maintain membership in the
UNION and upon written recommendation to the COMPANY by the
UNION, be dismissed from the employment by the COMPANY; provided,
however, that the UNION shall hold the COMPANY free and blameless
from any and all liabilities that may arise should the dismissed employee
question, in any manner, his dismissal; provided, further that the matter of
the employee’s dismissal under this Article may be submitted as a grievance
under Article XIII and, provided, finally, that no such written
recommendation shall be made upon the COMPANY nor shall COMPANY
be compelled to act upon any such recommendation within the period of
sixty (60) days prior to the expiry date of this Agreement conformably to
law."
 On September 12, 1986, a local union election was held under the auspices of the
federation wherein petitioner, Beda Magdalena Villanueva, and the other union
officers were proclaimed as winners.
 On March 21, 1987, a Petition for Impeachment was filed with the federation by the
defeated candidates in the local union election.
 On June 16, 1987, the federation conducted an audit of the local union funds. The
investigation did not yield any unfavorable result and the local union officers were
cleared of the charges of anomaly in the custody, handling and disposition of the
union funds.
 The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local
union officers with the DOLE NCR on November 5, 1987. The same was dismissed
on March 2, 1988, by Med-Arbiter Renato Parungo for failure to substantiate the
charges and to present evidence in support of the allegations.
 On April 17, 1988, the local union held a general membership meeting at the
Caruncho Complex in Pasig. Several union members failed to attend the meeting,
prompting the Executive Board to create a committee tasked to investigate the non-
attendance of several union members in the said assembly, pursuant to Sections 4
and 5, Article V of the Constitution and By-Laws of the union, which read:
o "Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng
hakbangin ng unyon ng sinumang kasapi o pinuno ay maaaring maging sanhi
ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat
araw na nagkulang.”
o “Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong
ay ituturing na pagliban at maparusahan ito ng alinsunod sa Article V,
Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na mahuli
and dating sa takdang oras ng di lalampas sa isang oras ay magmumulta ng
P25.00 at babawasin sa sahod sa pamamagitan ng salary deduction at higit sa
isang oras ng pagdating ng huli ay ituturing na pagliban.”
 On June 27, 1988, the local union wrote the company a letter requesting it to deduct
the union fines from the wages/salaries of those union members who failed to attend
the general membership meeting.
 The Secretary General of the national federation disapproved the resolution of the
local union imposing the P50.00 fine. The local union officers protested such action
by the Federation.
 On July 11, 1988, the Federation wrote the company a letter advising the latter not
to deduct the fifty-peso fine from the salaries of the union members requesting that:
"x x x any and all future representations by [the local union] affecting a number of
members be first cleared from the federation before corresponding action by the
Company."
 The following day, the company sent a reply to the local union’s request in a letter,
stating that it cannot deduct fines from the employees’ salary without going against
certain laws. The company suggested that the union refer the matter to the proper
government office for resolution in order to avoid placing the company in the
middle of the issue.
 The imposition of P50.00 fine became the subject of bitter disagreement between the
Federation and the local union culminating in the latter’s declaration of general
autonomy from the former through Resolution No. 10 passed by the local executive
board and ratified by the general membership on July 16, 1988.
 In retaliation, the federation asked the company to stop the remittance of the local
union’s share in the education funds effective August 1988.
 This was objected to by the local union which demanded that the education fund be
remitted to it in full.
 The company was thus constrained to file a Complaint for Interpleader with a
Petition for Declaratory Relief with the Med-Arbitration Branch of the Department
of Labor and Employment.
 The Med-Arbiter ruled:
o 1. That the [Federation] through its local union officers shall administer the
[CBA].
o 2. That [the company] shall remit the P10,000.00 monthly labor education
program fund to the [federation] subject to the condition that it shall use the
said amount for its intended purpose.
o 3. That the Treasurer of the [local union] shall be authorized to collect from
the 356 union members the amount of P50.00 as penalty for their failure to
attend the general membership assembly on April 17, 1988. However, if
petitioner-labor union Officers could present the individual written
authorizations of the 356 union members, then the company is obliged to
deduct from the salaries of the 356 union members the P50.00 fine."
 On appeal, Director Pura-Ferrer Calleja modified the Med-Arbiter’s ruling: “the
company should remit the amount of five thousand pesos (P5,000.00) of the
P10,000.00 monthly labor education program fund to [the Federation] and the other
P5,000.00 to [the local union], both unions to use the same for its intended purpose."
 Meanwhile, on September 2, 1988, several local unions filed a Petition for Audit and
Examination of the federation and education funds of [the Federation] which was
granted by Med-Arbiter Rasidali Abdullah on December 25, 1988.
 On September 30, 1988, the officials of [the Federation] called a Special National
Executive Board Meeting at Nasipit, Agusan del Norte where a Resolution was
passed placing the [local union] under trusteeship and appointing Cesar Clarete as
administrator.
 On October 27, 1988, Clarete as administrator wrote the company informing the
latter of its designation of a certain Alfredo Kalingking as local union president and
"disauthorizing" the incumbent union officers from representing the employees.
 Petitioners protested this action by the national federation in a letter to the company
dated November 11, 1988.
 On November 13, 1988, the petitioner union officers received identical letters from
the administrator requiring them to explain within 72 hours why they should not be
removed from their office and expelled from union membership.
 On November 26, 1988, petitioners replied:
o (a) Questioning the validity of the alleged National Executive Board
Resolution placing their union under trusteeship;
o (b) Justifying the action of their union in declaring a general autonomy from
[the federation] due to the latter’s inability to give proper educational,
organizational and legal services to its affiliates and the pendency of the
audit of the federation funds;
o (c) Advising that their union did not commit any act of disloyalty as it has
remained an affiliate of [the federation];
o (d) Giving [the federation] a period of five (5) days to cease and desist from
further committing acts of coercion, intimidation and harassment.
 However, as early as November 21, 1988, the officers were expelled from the
[federation].
 On the same day, the federation advised the company of the expulsion of the 30
union officers and demanded their separation from employment pursuant to the
Union Security Clause in their CBA. This demand was reiterated twice, through
letters dated February 21 and March 4, 1989, respectively, to the company.
 Thereafter, the Federation filed a Notice of Strike with the National Conciliation
and Mediation Board to compel the company to effect the immediate termination of
the expelled union officers.
 On March 7, 1989, under the pressure of a threatened strike, the company terminated
the 30 union officers from employment, serving them identical copies of the
termination letter.
 On that same day, the expelled union officers assigned in the first shift were
physically or bodily brought out of the company premises by the company’s security
guards. Likewise, those assigned to the second shift were not allowed to report for
work. This provoked some of the members of the local union to demonstrate their
protest for the dismissal of the said union officers. Some union members left their
work posts and walked out of the company premises.
 The Federation, having achieved its objective, withdrew the Notice of Strike filed
with the NCMB.
 On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE,
Manila, alleging the following grounds for the strike:
o (a) Discrimination
o (b) Interference in union activities
o (c) Mass dismissal of union officers and shop stewards
o (d) Threats, coercion and intimidation
o (e) Union busting
 The following day, March 9, 1989, a strike vote referendum was conducted and out
of 2, 103 union members who cast their votes, 2,086 members voted to declare a
strike.
 On March 10, 1989, the 30 dismissed union officers filed an urgent petition with the
Office of the Secretary of the Department of Labor and Employment praying for the
suspension of the effects of their termination from employment. However, the
petition was dismissed by then Secretary Franklin Drilon on April 11, 1989: "At this
point in time, it is clear that the dispute at M. Greenfield is purely an intra-union
matter. No mass lay-off is evident as the terminations have been limited to those
allegedly leading the secessionist group leaving PETITIONER-LABOR UNION-
THE FEDERATION to form a union under the KMU. xxx"
 On March 13 and 14, 1989, a total of 78 union shop stewards were placed under
preventive suspension by the company. This prompted the local union members to
again stage a walk-out and resulted in the official declaration of strike at around 3:30
in the afternoon of March 14, 1989. The strike was attended with violence, force and
intimidation on both sides resulting to physical injuries to several employees, both
striking and non-striking, and damage to company properties.
 The employees who participated in the strike and allegedly figured in the violent
incident were placed under preventive suspension by the company. The company
also sent return-to-work notices to the home addresses of the striking employees
thrice successively, on March 27, April 8 and April 31, 1989, respectively.
However, the company admitted that only 261 employees were eventually accepted
back to work. Those who did not respond to the return-to- work notice were sent
termination letters dated May 17, 1989.
 On August 7, 1989, the petitioners filed a verified complaint with the Arbitration
Branch, National Capital Region, DOLE, Manila , charging private respondents
of unfair labor practice which consists of union busting, illegal dismissal, illegal
suspension, interference in union activities, discrimination, threats, intimidation,
coercion, violence, and oppresion.
 After the filing of the complaint, the lease contracts on the company’s office and
factory at Merville Subdivision, Parañaque expired and were not renewed. Upon
demand of the owners of the premises, the company was compelled to vacate its
office and factory. Thereafter, the company transferred its administration and
 account/client servicing department at AFP-RSBS Industrial Park in Taguig, Metro
Manila. For failure to find a suitable place in Metro Manila for relocation of its
factory and manufacturing operations, the company was constrained to move the
said departments to Tacloban, Leyte. Hence, on April 16, 1990, the company
accordingly notified its employees of a temporary shutdown in operations.
Employees who were interested in relocating to Tacloban were advised to enlist on
or before April 23, 1990.
 On December 15, 1992, finding the termination to be valid in compliance with the
union security clause of the collective bargaining agreement, Labor Arbiter
Cresencio Ramos dismissed the complaint.
 Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo
Putong retired from the service, leaving only two commissioners, Commissioner
Vicente Veloso III and Hon. Chairman Bartolome Carale in the First Division.
When Commissioner Veloso inhibited himself from the case, Commissioner Joaquin
Tanodra of the Third Division was temporarily designated to sit in the First Division
for the proper disposition of the case. The First Division affirmed the Labor
Arbiter’s disposition and denied the MR.
 Petitioners contend that
o their dismissal from work was effected in an arbitrary, hasty, capricious and
illegal manner because it was undertaken by the company without any prior
administrative investigation;
o had the company conducted prior independent investigation it would have
found that their expulsion from the union was unlawful similarly for lack of
prior administrative investigation;
o the federation cannot recommend the dismissal of the union officers because
it was not a principal party to the collective bargaining agreement between
the company and the union;
o public respondents acted with grave abuse of discretion when they declared
petitioners’ dismissals as valid and the union strike as illegal and in not
declaring that respondents were guilty of unfair labor practice.
 Private respondents, on the other hand, maintain that
o the thirty dismissed employees who were former officers of the federation
have no cause of action against the company, the termination of their
employment having been made upon the demand of the federation pursuant
to the union security clause of the CBA;
o the expelled officers of the local union were accorded due process of law
prior to their expulsion from their federation;
o the strike conducted by the petitioners was illegal for noncompliance with
the requirements; that the employees who participated in the illegal strike
 and in the commission of violence thereof were validly terminated from
work;
o petitioners were deemed to have abandoned their employment when they did
not respond to the three return to work notices sent to them;
o petitioner labor union has no legal personality to file and prosecute the case
for and on behalf of the individual employees as the right to do so is personal
to the latter; and
o the officers of the company cannot be liable because as mere corporate
officers, they acted within the scope of their authority.

ISSUES:

 WoN the NLRC gravely abused its discretion in upholding the dismissal of the
union officers by the company as valid
o YES, the NLRC did. The reason behind the enforcement of union security
clauses which is the sanctity and inviolability of contracts cannot override
one’s right to due process.
o In the case of Cariño vs. NLRC, while the company, under a maintenance of
membership provision of the CBA, is bound to dismiss any employee
expelled by the union for disloyalty upon its written request, this undertaking
should not be done hastily and summarily. The company acts in bad faith in
dismissing a worker without giving him the benefit of a hearing.
o Relying merely upon the federation’s allegations, the company terminated
petitioners from employment when a separate inquiry could have revealed if
the federation had acted arbitrarily and capriciously in expelling the union
officers. The company’s allegation that petitioners were accorded due
process is belied by the termination letters received by the petitioners which
state that the dismissal shall be immediately effective. As held in Cariño,
"the right of an employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with either the
company or his own union is not wiped away by a union security clause or a
union shop clause in a collective bargaining agreement. An employee is
entitled to be protected not only from a company which disregards his rights
but also from his own union the leadership of which could yield to the
temptation of swift and arbitrary expulsion from membership and mere
dismissal from his job."
o In its decision, public respondent also declared that if complainants (herein
petitioners) have any recourse in law, their right of action is against the
federation and not against the company or its officers, relying on the findings
of the Labor Secretary that the issue of expulsion of petitioner union officers
by the federation is a purely intra-union matter.
o Again, such a contention is untenable. While it is true that the issue of
expulsion of the local union officers is originally between the local union and
the federation, hence, intra-union in character, the issue was later on
converted into a termination dispute when the company dismissed the
petitioners from work without the benefit of a separate notice and hearing.
As a matter of fact, the records reveal that the the termination was effective
on the same day that the termination notice was served on the petitioners.
o Anent petitioners’ contention that the federation was not a principal party to
the CBA between the company and the union, suffice it to say that the matter
was already ruled upon in the Interpleader case filed by the company. Med-
Arbiter Anastacio Bactin thus ruled: “PETITIONER-LABOR UNION was
not yet a registered labor organization at the time of the signing of the CBA.
Hence, the union referred to in the CBA is the federation.” This was affirmed
on appeal by Director Calleja.
o Although the issue of whether or not the federation had reasonable
grounds to expel the petitioner union officers is properly within the
original and exclusive jurisdiction of the Bureau of Labor Relations, being an
intra-union conflict, this Court deems it justifiable that such issue be
nonetheless ruled upon, as the Labor Arbiter did, for to remand the same to
the Bureau of Labor Relations would be to intolerably delay the case.
o In its decision, the Labor Arbiter declared that the act of disaffiliation and
declaration of autonomy by the local union was part of its "plan to take over
the respondent federation." This is purely conjecture and speculation on the
part of public respondent, totally unsupported by the evidence.
o A local union has the right to disaffiliate from its mother union or declare its
autonomy. A local union, being a separate and voluntary association, is free
to serve the interests of all its members including the freedom to disaffiliate
or declare its autonomy from the federation to which it belongs when
circumstances warrant, in accordance with the constitutional guarantee of
freedom of association.
o The purpose of affiliation by a local union with a mother union or a
federation "xxx is to increase by collective action the bargaining power in
respect of the terms and conditions of labor. Yet the locals remained the
basic units of association, free to serve their own and the common interest of
all, subject to the restraints imposed by the Constitution and By-Laws of the
Association, and free also to renounce the affiliation for mutual welfare upon
the terms laid down in the agreement which brought it into existence.
(Tropical Hut Employees’ Union-CGW vs. Tropical Hut Food Market Inc.;
Adamson, Inc. vs. CIR; Liberty Cotton Mills Worker Union vs. Liberty
Cotton Mills, Inc.)
 o The evidence on hand does not show that there is such a provision in the
federation’s constitution. Respondents’ reliance upon Article V, Section 6, of
the federation’s constitution is not right because said section, in fact, bolsters
the petitioner union’s claim of its right to declare autonomy:
 “Section 6. The autonomy of a local union affiliated with THE
FEDERATION shall be respected insofar as it pertains to its internal
affairs, except as provided elsewhere in this Constitution”
o There is no disloyalty to speak of, neither is there any violation of the
federation’s constitution because there is nothing in the said constitution
which specifically prohibits disaffiliation or declaration of autonomy. Hence,
there cannot be any valid dismissal because Article II, Section 4 of the union
security clause in the CBA limits the dismissal to only three (3) grounds, to
wit: failure to maintain membership in the union (1) for non-payment of
union dues, (2) for resignation; and (3) for violation of the union’s
Constitution and By-Laws.
o To support the finding of disloyalty, the Labor Arbiter gave weight to the
fact that on February 26, 1989, the petitioners declared as vacant all the
responsible positions of THE FEDERATION, filled these vacancies through
an election and filed a petition for the registration of UWP as a national
federation. It should be pointed out, however, that these occurred after the
federation had already expelled the union officers. The expulsion was
effective November 21, 1988. Therefore, the act of establishing a different
federation, entirely separate from the federation which expelled them, is but
a normal retaliatory reaction to their expulsion.
 WoN the NLRC gravely abused its discretion in holding that the strike staged by the
petitioners as illegal
o YES, the NLRC did. On the submission that the strike was illegal for being
grounded on a non-strikeable issue, that is, the intra-union conflict between
the federation and the local union, when the company dismissed the union
officers, the issue was transformed into a termination dispute and brought the
company into the picture.
o Another reason why the Labor Arbiter declared the strike illegal is due to the
existence of a no strike no lockout provision in the CBA. Again, such a
ruling is erroneous. A no strike, no lock out provision can only be invoked
when the strike is economic in nature, i.e. to force wage or other concessions
from the employer which he is not required by law to grant. Such a provision
cannot be used to assail the legality of a strike which is grounded on unfair
labor practice, as was the honest belief of herein petitioners. Again, whether
or not there was indeed unfair labor practice does not affect the strike.
o On the allegation of violence committed in the course of the strike, it must be
remembered that the Labor Arbiter and the NLRC found that "the parties are
 agreed that there were violent incidents x x x resulting to injuries to both
sides, the union and management." The evidence on record show that the
violence cannot be attributed to the striking employees alone for the
company itself employed hired men to pacify the strikers. With violence
committed on both sides, the management and the employees, such violence
cannot be a ground for declaring the strike as illegal.
 WoN the NLRC gravely abused its discretion in holding that the petitioner
employees were deemed to have abandoned their work and hence, validly dismissed
by the company
o YES, the NLRC did. Respondents failed to prove that there was a clear
intention on the part of the striking employees to sever their employer-
employee relationship. Although admittedly the company sent three return to
work notices to them, it has not been substantially proven that these notices
were actually sent and received by the employees. As a matter of fact, some
employees deny that they ever received such notices. Others alleged that they
were refused entry to the company premises by the security guards and were
advised to secure a clearance from the federation and to sign a waiver. Some
employees who responded to the notice were allegedly told to wait for
further notice from the company as there was lack of work.
o Furthermore, this Court has ruled that an employee who took steps to protest
his lay-off cannot be said to have abandoned his work.
 WoN the NLRC gravely abused its discretion in not finding the company and
respondent federation officers guilty of acts of unfair labor practice
o NO, the NLRC did not. Union security clauses in collective bargaining
agreements, if freely and voluntarily entered into, are valid and binding.
Corrolarily, dismissals pursuant to union security clauses are valid and legal
subject only to the requirement of due process, that is, notice and hearing
prior to dismissal. Thus, the dismissal of an employee by the company pursuant to
a labor unions demand in accordance with a union security agreement does not
constitute unfair labor practice.31cräläwvirtualibräry
o However, the dismissal was invalidated in this case because of respondent
companys failure to accord petitioners with due process, that is, notice and
hearing prior to their termination. Also, said dismissal was invalidated
because the reason relied upon by respondent Federation was not valid.
Nonetheless, the dismissal still does not constitute unfair labor practice.

 Since petitioners were terminated without the requisite written notice at least 30
days prior to their termination, following the recent ruling in the case of Ruben
Serrano vs. NLRC and Isetann Department Store, the company is hereby ordered to
pay full backwages to petitioner-employees while the Federation is also ordered to
pay full backwages to petitioner-employees while the Federation is also ordered to
 pay full backwages to petitioner-union officers who were dismissed upon its
instigation. Since the dismissal of petitioners was without cause, backwages shall be
computed from the time the herein petitioner employees and union officers were
dismissed until their actual reinstatement. Should reinstatement be not feasible, their
backwages shall be computed from the time petitioners were terminated until the
finality of this decision. (Note: Agabon v. NLRC overruled Serrano v. NLRC in
2004. Recall Labor I.)

NOTES:

Petitioners contend that the decision rendered by the First Division of the NLRC is not valid
because Commissioner Tanodra, who is from the Third Division, did not have any lawful
authority to sit, much less write the ponencia, on a case pending before the First Division. It
is claimed that a commissioner from one division of the NLRC cannot be assigned or
temporarily designated to another division because each division is assigned a particular
territorial jurisdiction. Thus, the decision rendered did not have any legal effect at all for
being irregularly issued.

Petitioners’ argument is misplaced. Article 213 of the Labor Code in enumerating the
powers of the Chairman of the National Labor Relations Commission provides: "The
concurrence of two (2) Commissioners of a division shall be necessary for the
pronouncement of a judgment or resolution. Whenever the required membership in a
division is not complete and the concurrence of two (2) commissioners to arrive at a
judgment or resolution cannot be obtained, the Chairman shall designate such number of
additional Commissioners from the other divisions as may be necessary." xxx

There is nothing irregular at all in such a temporary designation for the law empowers the
Chairman to make temporary assignments whenever the required concurrence is not met.
The law does not say that a commissioner from the first division cannot be temporarily
assigned to the second or third division to fill the gap or vice versa. The territorial divisions
do not confer exclusive jurisdiction to each division and are merely designed for
administrative efficiency.

Going into the merits of the case, the court finds that the Complaint for unfair labor practice
filed by the petitioners against the company which charges union busting, illegal dismissal,
illegal suspension, interference in union activities, discrimination, threats, intimidation,
coercion, violence, and oppression actually proceeds from one main issue which is the
termination of several employees by the company upon the demand of the labor federation
pursuant to the union security clause embodied in their collective bargaining agreement.
PROGRESSIVE DEVELOPMENT CORPORATION vs.
THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYME
NT, MED-ARBITER EDGARDO DELA CRUZ and PAMBANSANG KILUSAN NG 
PAGGAWA (KILUSAN)-TUCP G.R. No. 96425, 4 February 1992  

 Topic: Government Regulation: Union Registration Requirements

FACTS:

1.     Respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP filed with the

Department of Labor and Employment (DOLE) a petition for certification election among
the rank-and-file employees of the petitioner alleging that it is a legitimate labor federation
and its local chapter, Progressive Development Employees Union, was issued charter
certificate No. 90-6-1-153.

2.     Respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP claimed that there

was no existing collective bargaining agreement and that no other legitimate labor
organization existed in the bargaining unit.

3.     Petitioner PDC filed its motion to dismiss contending that the local union failed to
comply with Rule II Section 3, Book V of the Rules Implementing the Labor Code, as
amended, which requires the submission of: (a) the constitution and by-laws; (b) names,
addresses and list of officers and/or members; and (c) books of accounts.

4.     Respondent KILUSAN-TUCP submitted a rejoinder to PDC's motion to dismiss

claiming that it had submitted the necessary documentary requirements for registration,
such as the constitution and by-laws of the local union, and the list of officers/members with
their addresses. Kilusan further averred that no books of accounts could be submitted as the
local union was only recently organized.

5.     Petitioner PDC insisted that upon verification with the Bureau of Labor Relations
(BLR), it found that the alleged minutes of the organizational meeting was unauthenticated,
the list of members did not bear the corresponding signatures of the purported members,
and the constitution and by-laws did not bear the signature of the members and was not
duly subscribed. It argued that the private respondent KILUSAN-TUCP therefore failed to
substantially comply with the registration requirements provided by the rules.

6.     MED-ARBITER Dela Cruz: held that there was substantial compliance with the
requirements for the formation of the chapter. He further stated that mere issuance of the
charter certificate by the federation was sufficient compliance with the rules. Considering
that the establishment was unorganized, he maintained that a certification election should be
conducted to resolve the question of representation.
7.     Petitioner filed an MR to the Office of the Secretary.

8.     SECRETARY Laguesma: denied the MR.

9.     Hence, this petition for certiorari.

 ISSUE:

 Whether or not the petitioner was correct that a labor organization such as the
respondent (KILUSAN)-TUCP may not validly invest the status of legitimacy upon
a local or chapter through the mere expedient of issuing a charter certificate and
submitting such certificate to the BLR and as such local or chapter must at the same
time comply with the requirement of submission of duly subscribed constitution and
by-laws, list of officers and books of accounts

RULING:
1. YES, because, the failure of the secretary of PDEU-Kilusan to certify the
required documents under oath is fatal to its acquisition of a legitimate status.

In the case of union registration, the rationale for requiring that the submitted
documents and papers be certified under oath by the secretary or treasurer, as the
case may be, and attested to by president is apparent.

The submission of the required documents (and payment of P50.00 registration fee)
becomes the Bureau's basis for approval of the application for registration. Upon
approval, the labor union acquires legal personality and is entitled to all the rights
and privileges granted by law to a legitimate labor organization. The employer
naturally needs assurance that the union it is dealing with is a bona fide
organization, one which has not submitted false statements or misrepresentations to
the Bureau. The inclusion of the certification and attestation requirements will in a
marked degree allay these apprehensions of management. Not only is the issuance of
any false statement and misrepresentation a ground for cancellation of registration
(see Article 239 (a), (c) and (d)); it is also a ground for a criminal charge of perjury.

In the case of the union affiliation with a federation, the documentary requirements
are found in Rule II, Section 3(e), Book V of the Implementing Rules, which we
again quote as follows:

(c) The local chapter of a labor federation or national union shall have and
maintain a constitution and by-laws, set of officers and books of accounts.
For reporting purposes, the procedure governing the reporting of
independently registered unions, federations or national unions shall be
observed. (Emphasis supplied)
 Since the "procedure governing the reporting of independently registered unions"
refers to the certification and attestation requirements contained in Article 235,
paragraph 2, it follows that the constitution and by-laws, set of officers and books of
accounts submitted by the local and chapter must likewise comply with these
requirements. The same rationale for requiring the submission of duly subscribed
documents upon union registration exists in the case of union affiliation. Moreover,
there is greater reason to exact compliance with the certification and attestation
requirements because, as previously mentioned, several requirements applicable to
independent union registration are no longer required in the case of formation of a
local or chapter. The policy of the law in conferring greater bargaining power upon
labor unions must be balanced with the policy of providing preventive measures
against the commission of fraud.

 Whether or not a  local union need to be a Legitimate Labor Union on despite its 
issuance of charter certificate

HELD:
Yes. But while Article 257 cited by the Solicitor General directs the automatic cond
uct of a certification election in an unorganized establishment, it also requires that th
e petition for certification election must be filed by a legitimate labor organization. 
Article 242 enumerates the exclusive  rights  of  a  legitimate  labor  organization amo
ng which is the right to be certified as the exclusive representative of all the employe
es in an appropriate collective bargaining unit for purposes of collective bargaining.

Meanwhile, Article 212(h) defines a legitimate labor organization as “any labor orga
nization duly registered with the DOLE and  includes  any  branch  or  local  thereof.” 
(Emphasis supplied) Rule I, Section 1(j), Book V of the Implementing Rules likewis
e defines a legitimate labor organization as “any labor organization duly registered 
with the DOLE and includes  any  branch,  local  or  affiliate  thereof.”

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, In
c., 66 SCRA 512 [1975]), the Court held that the mother union, acting for and in beh
alf 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 o
nly to the restraints imposed by the constitution and bylaws of the association. Thus, 
whereas in this case the petition for certification election was filed by the federation 
which is merely an agent, the petition is deemed to be filed by the chapter, the princi
pal, which must be a legitimate labor organization. The chapter cannot merely rely o
n the legitimate status of the mother union.
SAN MIGUEL CORPORATION (MANDAUE PACKAGING PRODUCTS PLANTS),
petitioner, vs. MANDAUE PACKING PRODUCTS PLANTS-SAN PACKAGING
PRODUCTS –SAN MIGUEL CORPORATION MONTHLIES RANK-AND-FILE
UNION – FFW (MPPP-SMPP-SMAMRFU-FFW), respondent.

Topic: Effect of Filing Registration Document

Facts:

On 15 June 1998, respondent, identifying itself as an affiliate of Federation of Free Workers

(FFW), filed a petition for certification election with the DOLE Regional Office No. VII. In
the petition, respondent stated that it sought to be certified and to represent the permanent
rank-and-file monthly paid employees of the petitioner. The following documents were
attached to the petition: (1) a Charter Certificate issued by FFW on 5 June 1998 certifying
that  respondent as of that date was duly certified as a local or chapter of FFW; (2) a copy of
the constitution of respondent prepared by its Secretary and attested by its President; (3) a
list of respondent’s officers and their respective addresses; (4) a certification signifying that
respondent had just been organized and no amount had yet been collected from its
members, signed by respondent’s treasurer and (5) a list of all the rank-and-file monthly
paid employees of the Mandaue Packaging Products Plants and Mandaue Glass Plant.

On 27 July 1998, petitioner filed a motion to dismiss the petition for certification election
on the sole ground that herein respondent is not listed or included in the roster of legitimate
labor organizations based on the certification issued by the Officer-In-Charge, Regional
Director of the DOLE Regional Office No. VII, Atty. Jesus B. Gabor, on 24 July 1998.

On 20 August 1998, petitioner filed a petition to cancel the union registration of

respondent.  However, this petition was denied, and such denial was subsequently affirmed
by the Court of Appeals in a decision that has since become final.

Respondent promptly appealed the 15 September 1998 Order to the DOLE.  On 22

February 1999, DOLE Undersecretary rendered a Decision reversing the Order.

Issue 1: WON the Union acquired legal personality.

Held:

Yes.

Section 3, Rule VI of Department Order No. 9 provides when the local/chapter acquires
legal personality.

Section 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 the 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.

It is evident based on this rule that the local/chapter acquires legal personality from the
date of the filing of the complete documentary requirements , and not from the issuance
of a certification to such effect by the Regional Office or Bureau.  On the other hand, a
labor organization is deemed to have acquired legal personality only on the date of issuance
of its certificate of registration, which takes place only after the Bureau of Labor Relations
or its Regional Offices has undertaken an evaluation process lasting up until thirty (30)
days, within which period it approves or denies the application. In contrast, no such period
of evaluation is provided in Department Order No. 9 for the application of a local/chapter,
and more importantly, under it such local/chapter is deemed to acquire legal personality
“from the date of filing” of the documents enumerated under Section 1, Rule VI, Book V.

Issue 2: Whether or Not Rank and File and Supervisors may be a member of same union.

Held: 

We rule in the negative.

Under the law, a 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." A supervisory employee is "one who, in the
interest of the employer, effectively recommends managerial actions if the exercise of such
recommendatory authority is not merely routinary or clerical in nature but requires the use
of independent judgment.’" Finally, "all employees not falling within the definition of
managerial or supervisory employee are considered rank-and-file employees". It is also
well-settled that the actual functions of an employee, not merely his job title, are
determinative in classifying such employee as managerial, supervisory or rank and file.

Xxxx

We take administrative notice of the realities in union organizing, during which the
organizers must take their chances, oftentimes unaware of the fine distinctions between
managerial, supervisory and rank and file employees. The grounds for cancellation of union
registration are not meant to be applied automatically, but indeed with utmost discretion.
Where a remedy short of cancellation is available, that remedy should be preferred. In this
case, no party will be prejudiced if Bathan were to be excluded from membership in the
union. The vacancy he will thus create can then be easily filled up through the succession
provision of appellee union’s constitution and by-laws. What is important is that there is an
unmistakeable intent of the members of appellee union to exercise their right to organize.
We cannot impose rigorous restraints on such right if we are to give meaning to the
protection to labor and social justice clauses of the Constitution.
G.R. No. 167141               March 13, 2009

SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG

KAPATIRANG HALIGI NG ALYANSA (SAMMA-LIKHA), Petitioner, 
vs.
SAMMA CORPORATION, Respondent.

Topic: Filing of Registration Documents

FACTS: Petitioner Samahan ng mga Manggagawa sa Samma– Lakas sa Industriya ng

Kapatirang Haligi ng Alyansa (SAMMA-LIKHA) filed a petition for certification
election on July 24, 2001 in the Department of Labor and Employment (DOLE), Regional
Office IV.4 It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate
labor organization registered with the DOLE; (2) it sought to represent all the rank-and-file
employees of respondent Samma Corporation; (3) there was no other legitimate labor
organization representing these rank-and-file employees; (4) respondent was not a party to
any collective bargaining agreement and (5) no certification or consent election had been
conducted within the employer unit for the last 12 months prior to the filing of the petition.

Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation
failed to establish its legal personality; (2) petitioner failed to prove its existence as a local
chapter; (3) it failed to attach the certificate of non-forum shopping and (4) it had a
prohibited mixture of supervisory and rank-and-file employees.

Med-arbiter ordered the dismissal. , Acting Secretary Manuel G. Imson, treating the
motion for reconsideration as an appeal, rendered a decision reversing the order of the med-
arbiter. He ruled that the legal personality of a union cannot be collaterally attacked but may
only be questioned in an independent petition for cancellation of registration. Thus, he
directed the holding of a certification election among the rank-and-file employees of
respondent, subject to the usual pre-election conference and inclusion-exclusion
proceedings. CA reversed. Hence, this petition.

ISSUE: whether a certificate for non-forum shopping is required in a petition for

certification election

HELD: NO

In ruling against petitioner, the CA declared that under Administrative Circular No. 04-94, a
certificate of non-forum shopping was required in a petition for certification election. The
circular states:

The complaint and other initiatory pleadings referred to and subject of this Circular
are the original civil complaint, counterclaim, cross-claim, third (fourth, etc.) party
complaint, or complaint-in-intervention, petition, or application wherein a party
asserts his claim for relief. (Emphasis supplied)
According to the CA, a petition for certification election asserts a claim,  i.e., the conduct of
a certification election. As a result, it is covered by the circular.

We disagree.

The requirement for a certificate of non-forum shopping refers to complaints, counter-

claims, cross-claims, petitions or applications where contending parties litigate their
respective positions regarding the claim for relief of the complainant, claimant, petitioner or
applicant. A certification proceeding, even though initiated by a “petition,” is not a
litigation but an investigation of a non-adversarial and fact-finding character. Such
proceedings are  not predicated upon an allegation of misconduct requiring relief, but,
rather, are merely of an inquisitorial nature.

The Board’s functions are not judicial in nature, but are merely of an investigative
character. The object of the proceedings is not the decision of any alleged commission of
wrongs nor asserted deprivation of rights but is merely the determination of proper
bargaining units and the ascertainment of the will and choice of the employees in respect of
the selection of a bargaining representative. The determination of the proceedings does not
entail the entry of remedial orders to redress rights, but culminates solely in an official
designation of bargaining units and an affirmation of the employees’ expressed choice of
bargaining agent.

Under the omnibus rules implementing the Labor Code as amended by D.O. No. 9,22 it is
supposed to be filed in the Regional Office which has jurisdiction over the principal office
of the employer or where the bargaining unit is principally situated.23 The rules further
provide that where two or more petitions involving the same bargaining unit are filed in one
Regional Office, the same shall be automatically consolidated.24 Hence, the filing of
multiple suits and the possibility of conflicting decisions will rarely happen in this
proceeding and, if it does, will be easy to discover.

Notably, under the Labor Code and the rules pertaining to the form of the petition for
certification election, there is no requirement for a certificate of non-forum shopping either
in D.O. No. 9, series of 1997 or in D.O. No. 40-03, series of 2003 which replaced the
former.

Considering the nature of a petition for certification election and the rules governing it, we
therefore hold that the requirement for a certificate of non-forum shopping is inapplicable to
such a petition.

Legal Personality of Petitioner

Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file
employees was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to
file a petition for certification election.

We agree.
LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-
FED-LC. Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01. 29 With
certificates of registration issued in their favor, they are clothed with legal personality as legitimate labor
organizations:

Section 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.30

-0-

Section 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 the documentary requirements, the Regional Office or Bureau
of Labor Relations shall issue in favor of the local/chapter a certificate indicating that it is included in the
roster of legitimate labor organizations.31

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of registration. 32 Unless petitioner’s union registration is
cancelled in independent proceedings, it shall continue to have all the rights of a legitimate labor organization,
including the right to petition for certification election.

Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal
personality of a labor organization are the following: (a) petitioner is not listed by the Regional Office or the
Bureau of Labor Relations in its registry of legitimate labor organizations or (b) its legal personality has been
revoked or cancelled with finality in accordance with the rules.33

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14,
2002. In a resolution dated April 14, 2003, petitioner’s charter certificate was revoked by the DOLE. But on
May 6, 2003, petitioner moved for the reconsideration of this resolution. Neither of the parties alleged that this
resolution revoking petitioner’s charter certificate had attained finality. However, in this petition, petitioner
prayed that its charter certificate be "reinstated in the roster of active legitimate labor [organizations]." 34 This
cannot be granted here. To repeat, the proceedings on a petition for cancellation of registration are
independent of those of a petition for certification election. This case originated from the latter. If it is shown
that petitioner’s legal personality had already been revoked or cancelled with finality in accordance with the
rules, then it is no longer a legitimate labor organization with the right to petition for a certification election.
National Union of Bank Employees v. Philnabank Empoyees Association G.R.
No.174287

FACTS:

Philippine National Bank (PNB) used to be a government-owned and controlled banking

institution established under The 1986 Revised Charter. Its rank-and-file employees, being
government personnel, were represented for collective negotiation by the Philnabank
Employees Association (PEMA), a public sector union.

In 1996, the Securities and Exchange Commission approved PNB’s new Articles of
Incorporation and By-laws and its changed status as a private corporation. PEMA affiliated
with petitioner National Union of Bank Employees (NUBE), which is a labor federation
composed of unions in the banking industry, adopting the name NUBE-PNB Employees
Chapter (NUBE-PEC). NUBE-PEC was certified as the sole and exclusive bargaining
agent of the PNB rank-and-file employees. A collective bargaining agreement (CBA) was
subsequently signed between NUBE-PEC and PNB covering the period of January 1, 1997
to December 31, 2001.

Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the
monthly membership fee and other assessments imposed by the union from the salary of
each union member, and agency fee from the salary of the rank- and-file employees within
the bargaining unit who are not union members.

Moreover, during the effectivity of the CBA, NUBE, being the Federation union, agreed
that PNB shall remit P15.00 of the P65.00 union dues per month collected by PNB from
every employee, and that PNB shall directly credit the amount to NUBE’s current account
with PNB.

Following the expiration of the CBA, the Philnabank Employees Association-FFW

(PEMA-FFW) filed a petition for certification election among the rank-and-file employees
of PNB. The petition sought the conduct of a certification election to be participated in by
PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant events
transpired – the independent union registration of NUBE- PEC and its disaffiliation with
NUBE.

With a legal personality derived only from a charter issued by NUBE, NUBE-PEC, under
the leadership of Mariano Soria, decided to apply for a separate registration with DOLE.
Thereafter, the Board of Directors of NUBE-PEC adopted a Resolution disaffiliating itself
from NUBE, because the latter has miserably failed to extend and provide satisfactory
services and support to the former in the form of legal services, training assistance,
educational seminars, and the like.

PNB informed NUBE of PEMA’s letter and its decision to continue the deduction of the
P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE
that the amounts collected would be held in a trust account pending the resolution of the
issue on PEMA’s disaffiliation.

NUBE replied that it remains as the exclusive bargaining representative of the PNB rank-
and-file employees; by signing the Resolution (on disaffiliation), the chapter officers have
abandoned and committed an act of disloyalty to NUBE-PEC and the general membership

ISSUE: Whether or not there was an effective disaffiliation?

RULING: Yes there is a valid disaffiliation from NUBE. Whether there was a valid
disaffiliation is a factual issue. It is elementary that a question of fact is not appropriate for a
petition for review on certiorari under Rule 45 of the Rules of Court.

A local labor union is a separate and distinct unit primarily designed to secure and maintain
an equality of bargaining power between the employer and their employee-members. A
local union does not owe its existence to the federation with which it is affiliated. It is a
separate and distinct voluntary association owing its creation to the will of its members.

The mere act of affiliation does not divest the local union of its own personality, neither
does it give the mother federation the license to act independently of the local union. It only
gives rise to a contract of agency where the former acts in representation of the latter.

The purpose of affiliation by a local union with a mother union [or] a federation is to
increase by collective action the bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association, free to serve their own and the
common interest of all, subject to the restraints imposed by the Constitution and By-Laws
of the Association, and free also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it into existence.

Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-
observance of the procedure that union members should make such determination through
secret ballot and after due deliberation, conformably with Article 241 (d) of the Labor Code,
as amended. Conspicuously, other than citing the opinion of a "recognized labor law
authority," NUBE failed to quote a specific provision of the law or rule mandating that a
local union’s disaffiliation from a federation must comply with Article 241 (d) in order to
be valid and effective.

Granting, for argument’s sake, that Article 241 (d) is applicable, still, We uphold PEMA’s
disaffiliation from NUBE. First, non-compliance with the procedure on disaffiliation, being
premised on purely technical grounds cannot rise above the employees’ fundamental right
to self-organization and to form and join labor organizations of their own choosing for the
purpose of collective bargaining. Second, the Article nonetheless provides that when the
nature of the organization renders such secret ballot impractical, the union officers may
make the decision in behalf of the general membership.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously
bound the two entities was completely severed. As NUBE was divested of any and all
power to act in representation of PEMA, any act performed by the former that affects the
interests and affairs of the latter, including the supposed expulsion of Serrana et al., is
rendered without force.

Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The
moment that PEMA separated from and left NUBE and exists as an independent labor
organization with a certificate of registration, the former is no longer obliged to pay dues
and assessments to the latter; naturally, there would be no longer any reason or occasion for
PNB to continue making deductions.

On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as
represented by Serrana et al. Since PEMA had validly separated itself from NUBE, there
would be no restrictions which could validly hinder it from collectively bargaining with
PNB.
ASSOCIATED WORKERS UNION-PTGWO, petitioner, vs. THE NATIONAL
LABOR RELATIONS COMMISION

NATURE:

Multiple separate certiorari petitions- on a staggered and piecemeal basis

FACTS:

On 26 October 1984, petitioner Associated Workers Union ("AWU")—PTGWO, the then

bargaining representative of the dockworkers at South Harbor, Port Area, Manila, filed a
Notice of Strike against respondent Metro Port Service, Inc. ("Metro"), the then arrastre
contractor in the South Harbor, on the issues, among others, of unfilled vacancies and union
busting.

MOLE- forbade the holding of strike and lock-outs and order NLRC for compulsory
arbitration.

In the latter case, one of the demands raised by AWU was that Metro terminate the
employment of respondents Adriano Yumul and ten (10) others (individual respondents),
for having organized, on 26 October 1984, the Associated Workers Union in Metroport
("AWUM") among the rank-and-file employees of Metro, ostensibly as a local or chapter
of AWU. AWU had earlier expelled individual respondents from membership in AUW for
disloyalty and, pursuant to the closed-shop provision of the existing AWU-Metro collective
bargaining agreement ("CBA"), sought the termination of their employment.

Metro initially resisted AWU's request to terminate the employment of individual

respondents, contending that the termination would be premature as individual respondents
had not been afforded due process, and that the termination would be violative of the status
quo agreement but later on because of the threat of strike by AWU made a compromise
agreement to suspend the involved employees.

LA- order to provisionally reinstate the individual respondents

NLRC -directed Metro to comply with the Agreement, and Metro complied and re-
suspended individual respondents.
Both AWU and Metro filed separate motions for reconsideration of the consolidated
Decision. Meanwhile, on 21 July 1986, petitioner Marina Port Services, Inc. ("Marina"), by
virtue of a Special Permit issued by the Philippine Ports Authority, started operations as the
arrastre operator at the Manila South Harbor vice Metro. On November 1986, individual
respondents in a Motion/Manifestation prayed that Marina be included as party-respondent
as sanctioned by Par. "7" of the Special Permit granted to Marina which states that "Labor
and personnel of previous operator, except those positions of trust and confidence, shall be
absorbed by the grantee."

NLRC rendered decision that Metro/Marina and AWU will be held solidarily liable with
AWU except as to the time that respondent NLRC ordered it to re- suspend the private
respondents and the case to be remanded to LA of origin for writ of execution.

LA- issued MARINA to reinstate these individuals.

ISSUES:

1) WON there was grave abuse of discretion when NLRC held that respondent Metro
cannot be compelled to fill up vacancies?

HELD:

The existing CBA grants respondent Metro the right to compulsorily retire any member of
AWU who had reached 60 years of age, which right has been exercised by Metro.

2) WON the expulsion made by AWU with these involved individuals is valid?

HELD: YES.

While it is true that AWUM as a local union, being an entity separate and distinct from
AWU, is free to serve the interest of all its members and enjoys the freedom to disaffiliate,
such right to disaffiliate may be exercised, and is thus considered a protected labor activity,
only when warranted by circumstances. Generally, a labor union may disaffiliate from the
mother union to form a local or independent union only during the 60-day freedom period
immediately preceding the expiration of the CBA. 6 Even before the onset of the freedom
period (and despite the closed-shop provision in the CBA between the mother union and
management) disaffiliation may still be carried out, but such disaffiliation must be effected
by a majority of the members in the bargaining unit . 7 This happens when there is a
substantial shift in allegiance on the part of the majority of the members of the union. In
such a case, however, the CBA continues to bind the members of the new or disaffiliated
and independent union up to the CBA's expiration date. 8
The record does not show that individual respondents had disaffiliated during the freedom
period. The record does, however, show that only eleven (11) members of AWU (individual
respondents) had decided to disaffiliate from AWU and form AWUM. Respondent Metro
had about 4,000 employees, and around 2,000 of these were members of AWU 9 It is
evident that individual respondents had failed to muster the necessary majority in order to
justify their disaffiliation. So the expulsion was justified and therefore valid.

3) WON METRO is liable to the suspended individuals?

HELD:

YES.

By failure of Metro to accord individual respondents procedural due process by giving them
reasonable opportunity to explain their side before suspending or dismissing them, such
dismissal was accordingly in violation of the Labor Code. Notwithstanding AWU's closed-
shop clause in the CBA, Metro was bound to conduct its own inquiry to determine the
existence of substantial basis for terminating the employment of individual respondents.

4) WON MARINA should be compelled to recognize the legality of the organization

and registration of AWUM (now MWU)?

HELD: NO.

What was in fact eventually established by individual respondents was a separate,

independent union called Metro Port Workers Union (MWU) which was not entitled, during
the time periods here relevant, to recognition as the bargaining unit in CBA negotiations.
MWU cannot have its own organization because it is still within the prohibited period and
not within the 60 FREEDOM DAY PERIOD and thus still bound by the CBA Agreement
that has not expired yet. And with it they still cannot be recognized as the bargaining unit in
CBA negotiation.
GABRIEL VS. SECRETARY OF LABOR

NOVEMBER 13, 2013 ~ VBDIAZ

G.R. No. 115949 March 16, 2000

EVANGELINE J. GABRIEL, TERESITA C. LUALHATI, EVELYN SIA,
RODOLFO EUGENIO, ISAGANI MAKISIG, and DEMETRIO SALAS, petitioners,
vs.
THE HONORABLE SECRETARY OF LABOR AND EMPLOYMENT and SIMEON
SARMIENTO et. al (AND ALL OTHER SOLID BANK UNION MEMBERS)

FACTS: Petitioners comprise the Executive Board of the SolidBank Union, the duly
recognized collective bargaining agent for the rank and file employees of Solid Bank
Corporation. Private respondents are members of said union.
The union’s Executive Board decided to retain anew the service of Atty. Ignacio P.
Lacsina (now deceased) as union counsel in connection with the negotiations for a new
Collective Bargaining Agreement (CBA); majority of all union members approved and
signed a resolution confirming the decision of the executive board to engage the services of
Atty. Lacsina as union counsel.

As approved, the resolution provided that ten percent (10%) of the total economic benefits
that may be secured through the negotiations be given to Atty. Lacsina as attorney’s fees. It
also contained an authorization for SolidBank Corporation to check-off said attorney’s fees
from the first lump sum payment of benefits to the employees under the new CBA and to
turn over said amount to Atty. Lacsina and/or his duly authorized representative.

The bank then, on request of the union, made payroll deductions for attorney’s fees from the
CBA benefits paid to the union members in accordance with the abovementioned
resolution.
Private respondents instituted a complaint against the petitioners and the union counsel
before the Department of Labor and Employment (DOLE) for illegal deduction of
attorney’s fees as well as for quantification of the benefits in the 1992 CBA.

Med-arbiter granted the complaint; Secretary partially granted and the Order of the Med-
Arbiter dated 22 April 1993 is hereby modified as follows: (1) that the ordered refund shall
be limited to those union members who have not signified their conformity to the check-off
of attorney’s fees; and (2) the directive on the payment of 5% attorney’s fees should be
deleted for lack of basis. Hence, this petition.

ISSUE: WON the deductions made by petioner-company is valid.

HELD: NO

Private respondent’s contention: claim that the check-off provision in question is illegal
because it was never submitted for approval at a general membership meeting called for the
purpose and that it failed to meet the formalities mandated by the Labor Code.
In check-off, the employer, on agreement with the Union, or on prior authorization from
employees, deducts union dues or agency fees from the latter’s wages and remits them
directly to the union. It assures continuous funding; for the labor organization. As this Court
has acknowledged, the system of check-off is primarily for the benefit of the union and only
indirectly for the individual employees.

The pertinent legal provisions on check-offs are found in Article 222 (b) and Article 241 (o)
of the Labor Code.

Art. 222 (b) states:

No attorney’s fees, negotiation fees or similar charges of any kind arising from any
collective bargaining negotiations or conclusions of the collective agreement shall
be imposed on any individual member of the contracting union: Provided, however,
that attorney’s fees may be charged against unions funds in an amount to be agreed
upon by the parties. Any contract, agreement or arrangement of any sort to the
contrary shall be null and void. (Emphasis ours)

Art. 241 (o) provides:

Other than for mandatory activities under the Code, no special assessment,
attorney’s fees, negotiation fees or any other extraordinary fees may be checked off
from any amount due to an employee without an individual written authorization
duly signed by the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction. (Emphasis ours).

Art. 241 has three (3) requisites for the validity of the special assessment for union’s
incidental expenses, attorney’s fees and representation expenses. These are: 1) authorization
by a written resolution of the majority of all the members at the general membership
meeting called for the purpose; (2) secretary’s record of the minutes of the meeting; and (3)
individual written authorization for check off duly signed by the employees concerned.
Clearly, attorney’s fees may not be deducted or checked off from any amount due to an
employee without his written consent.

After a thorough review of the records, we find that the General Membership Resolution of
October 19, 1991 of the SolidBank Union did not satisfy the requirements laid down by law
and jurisprudence for the validity of the ten percent (10%) special assessment for union’s
incidental expenses, attorney’s fees and representation expenses. There were no individual
written check off authorizations by the employees concerned and so the assessment cannot
be legally deducted by their employer.

From all the foregoing, we are of the considered view that public respondent did not act
with grave abuse of discretion in ruling that the workers through their union should be made
to shoulder the expenses incurred for the services of a lawyer. And accordingly the
reimbursement should be charged to the union’s general fund or account. No deduction can
be made from the salaries of the concerned employees other than those mandated by law.
Petition is DENIED.

Peninsula Employees Union (PEU) Vs. Michael B. Esquivel, et al.

G.R. No. 218454. December 1, 2016

Facts:

On December 13, 2007, Peninsula Employees Union’ (PEU) Board of Directors passed
Local Board Resolution No. 12, series of 20078 authorizing, among others, the affiliation of
PEU with NUWHRAIN, and the direct membership of its individual members thereto. On
the same day, the said act was submitted to the general membership, and was duly ratified
by 223 PEU members. Beginning January 1, 2009, PEU-NUWHRAIN sought to increase
the union dues/agency fees from one percent (1 % ) to two percent (2%) of the rank and file
employees’ monthly salaries, brought about by PEU’s affiliation with NUWHRAIN, which
supposedly requires its affiliates to remit to it two percent (2%) of their monthly salaries.

The non-PEU members objected to the assessment of increased agency fees arguing that:
(a) the new CBA is unenforceable since no written CBA has been formally signed and
executed by PEU-NUWHRAIN and the Hotel; (b) the 2% agency fee is exorbitant and
unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory requirements
for such increase.

Issues:

1. Whether PEU-NUWHRAIN has right to collect the increased agency fees.

2. Whether PEU-NUWHRAIN failed to comply with the mandatory requirements for

such increase.

3. Whether the agency is exorbitant and unreasonable.

Rulings

1. Yes. The recognized collective bargaining union which successfully negotiated the

CBA with the employer is given the right to collect a reasonable fee called “agency
fee” from non-union members who are employees of the appropriate bargaining
unit, in an amount equivalent to the dues and other fees paid by union members, in
case they accept the benefits under the CBA. While the collection of agency fees is
recognized by Article 259 (formerly Article 248) of the Labor Code, as amended,
the legal basis of the union’s right to agency fees is neither contractual nor statutory,
but quasi-contractual, deriving from the established principle that non-union
employees may not unjustly enrich themselves by benefiting from employment
conditions negotiated by the bargaining union. In the present case, PEU-
NUWHRAIN’s right to collect agency fees is not disputed.
2. Yes. Case law interpreting Article 250 (n) and ( o ) of the Labor Code mandates the
submission of three (3) documentary requisites in order to justify a valid levy of
increased union dues. These are: (a) an authorization by a written resolution of the
majority of all the members at the general membership meeting duly called for the
purpose; (b) the secretary’s record of the minutes of the meeting, which shall include
the list of all members present, the votes cast, the purpose of the special assessment
or fees and the recipient of such assessment or fees; and (c) individual written
authorizations for check-off duly signed by the employees concemed. In the present
case, however, PEU-NUWHRAIN failed to show compliance with the foregoing
requirements. It attempted to remedy the “inadvertent omission” of the matter of the
approval of the deduction of two percent (2%) union dues from the monthly basic
salary of each union member.

While the matter of implementing the two percent (2%) union dues was taken up
during the PEU-NUWHRAIN’s 8th General Membership Meeting on October 28,
2008, there was no sufficient showing that the same had been duly deliberated and
approved. The minutes of the Assembly itself belie PEU-NUWHRAIN’s claim that
the increase in union dues and the corresponding check-off were duly approved
since it merely stated that “the [two percent (2%)] Union dues will have to be
implemented,” meaning, it would still require the submission of such matter to the
Assembly for deliberation and approval.

3. Yes. Having failed to establish due deliberation and approval of the increase in

union dues from one percent ( 1 % ) to two percent (2% ), as well as the deduction
of the two percent (2%) union dues during PEU-NUWHRAIN’s 8th General
Membership Meeting on October 28, 2008, there was nothing to confirm, affirm, or
ratify through the July 1, 2010 GMR. Contrary to the ruling of the OSEC in its
March 6, 2012 Order, the July 1 2010 GMR, by itself, cannot justify the collection
of two percent (2%) agency fees from the non-PEU members beginning July 2010.
The Assembly was not called for the purpose of approving the proposed increase in
union dues and the corresponding check-off, but merely to “confirm and affirm” a
purported prior action which PEU-NUWHRAIN, however, failed to establish.

Corollarily, no individual check-off authorizations can proceed therefrom, and the

submission of the November 2008 check-off authorizations becomes
inconsequential. Jurisprudence states that the express consent of the employee to any
deduction in his compensation is required to be obtained in accordance with the
steps outlined by the law, which must be followed to the letter; however, PEU-
NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is no legal
basis to impose union dues and agency fees more than that allowed in the expired
CBA, .e., at one percent (1 %) of the employee’s monthly basic salary.
AIM V. AIM FACULTY ASSOCIATION, JANUARY 23, 2017

FACTS:

Asian Institute of Management (AIM) Faculty Association (AFA), a duly registered labor
organization composed of AIM faculty, filed a petition for certification election (certificate
election case) seeking to represent a bargaining unit in AIM consisting of 40 faculty
members. AIM opposed the petition alleging that AFA’s members are managerial
employees. In the meantime, AIM filed a petition for cancellation of AFA’s certificate of
registration (cancellation of cert of registration case) on the grounds of misrepresentation in
registration and that AFA is composed of managerial employees who are prohibited from
organizing as a union.

Certificate election case:

 Med-Arbiter: Petition denied; the faculty members are managerial employees.

 Secretary of DOLE: Reversed.
 CA: Reversed SOLE’s decision. The faculty is composed of managerial employees
who determine all faculty standards.
 SC: the petition filed by AFA before the SC is pending at the time this case was
decided.

Cancellation of certificate of registration case:

 DOLE-NCR Regional Director Agravante: Petition for cancellation granted.

 Bureau of Labor Relations: Reversed. Ordered AFA’s retention in the roster of
legitimate labor orgs. The grounds relied upon by AIM are not among the grounds
authorized by Article 239 4 , Labor Code.
 CA: Reversed. AIM did not allege any specific act of fraud or misrepresentation
(which are the grounds before one can file a petition for cancellation of cert of
registration of a labor organization under Art 239) committed by AFA.

ISSUE: Whether AFA’s certificate of registration can be cancelled on the ground that all its
members are managerial employees who are disqualified from joining, assisting, or forming
a labor organization

HELD: NO.

In case of alleged inclusion of disqualified employees in a union, the proper procedure for
an employer is to directly file a petition for cancellation of the union's certificate of
registration due to misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended. (Holy Child Catholic School v.
Hon. Sto. Tomas)
Applying the above in this case, it can be said that AIM was correct in filing a petition for
cancellation of AFA’s certificate of registration. AIM’s sole ground for seeking cancellation
of AFA’s certificate of registration — that its members are managerial employees and for
this reason, its registration is thus a patent nullity for being an absolute violation of Article
245 of the Labor Code which declares that managerial employees are ineligible to join any
labor organization — is, in a sense, an accusation that AFA is guilty of misrepresentation
for registering under the claim that its members are not managerial employees.

However, the issue of whether AFA’s members are managerial employees is still pending
resolution by way of petition for review on certiorari before the SC where the issue relative
to the nature of AFA’s membership was first raised by AIM itself and is there contested.
The resolution of this issue cannot be pre-empted; until it is determined with finality in the
certificate election case, the petition for cancellation of AFA’s certificate of registration on
the grounds alleged by AIM cannot be resolved.