G.R. No. 92357July 21, 1993

PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY (PSVSIA), GVM SECURITY AND INVESTIGATION AGENCY (GVM) and ABAQUIN SECURITY AND DETECTIVE AGENCY, INC. (ASDA), petitioners, vs.THE HON. SECRETARY OF LABOR RUBEN D. TORRES AND PGA BROTHERHOOD ASSOCIATION-UNION OF FILIPINO WORKERS, respondents.

NOCON, J.:

The sole issue presented for resolution in this petition for certiorari with prayer for preliminary injunction is whether or not a single petition for certification election or for recognition as the sole and exclusive bargaining agent can validly or legally be filed by a labor union in three (3) corporations each of which has a separate and distinct legal personality instead of filing three (3) separate petitions.

On April 6, 1989, private respondent labor union, PGA Brotherhood Association - Union of Filipino Workers (UFW), hereinafter referred to as "the Union " filed a petition for Direct Certification/Certification Election among the rank and file employees of Philippine Scout Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations Agency, Inc. (GVM). and Abaquin Security and Detective Agency, Inc. (ASDA). These three agencies were collectively referred to by private respondent Union as the "PGA Security Agency," which is actually the first letters of the corporate names of the agencies.

On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA Security Agency) at 82 E. Rodriquez Avenue, Quezon City.

On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three security agencies have separate and distinct corporate personalities while PGA Security Agency is not a business or corporate entity and does not possess any personality whatsoever; the petition was unclear as to whether the rank-and-file employees mentioned therein refer to those of the three security agencies collectively and if so, the labor union cannot seek a certification election in three separate bargaining units in one petition; the labor union included in their organization "security supervisors," in violation of R.A. 6715; and though R.A. 6715 is already in effect, there were still no implementing rules therefor.

On May 4, 1989, the security agencies filed a Consolidated Motion to Dismiss on the grounds that the 721 supporting signatures do not meet the 20% minimum requirement for certification election as the number of employees totals 2374 and that there are no implementing rules yet of R.A. 6715.

On May 8, 1989, the Union filed an Omnibus Reply to Comment and Motion to Dismiss alleging that it is clear that it is seeking a certification election in the three agencies; that the apparent separate personalities of the three agencies were used merely to circumvent the prohibition in R.A. 5847, as amended by P.D. 11 and P.D. 100, that a security agency must not have more than 1,000 guards in its employ; that the three security agencies' administration, management and operations are so intertwined that they can be deemed to be a single entity; and that the security supervisors cannot be deemed part of management since they do not meet the definition of "supervisory employees" found in Articles 212(m), Labor Code, as amended by Section 4, R.A. No. 6715.

On May 18, 1989, the security agencies filed a Rejoinder claiming that there is no violation of R.A. 5487, as amended by P.D. 11 and P.D. 100 since the three agencies were incorporated long before the decrees' issuance; that mere duplication of incorporators does not prove that the three security agencies are actually one single entity; and that security guard supervisors, most especially detachment commanders, fall within the definition of the term "supervisors."

On July 6, 1989, Med-Arbiter Rasidali C. Abdullah issued an Order in favor of the labor union finding that PSVSIA, GVM and ASDA should be deemed as a single entity and bargaining unit for the purpose of union organizing and the holding of a certification election. The dispositive portion of the Order reads as follows:

WHEREFORE, premises considered, let a certification election be conducted among the rank and file security guards of PSVSIA, GVM and ASDA within twenty (20) days from receipt hereof with the usual pre-election conference of the parties. The list of eligible voters shall be based on the security agencies' payroll three (3) months prior to the filing of this petition with the following choices:

a)PGA Brotherhood Association-Union of Filipino Workers (UFW); and

b)No union.

SO ORDERED. 1

On July 21, 1989, the security agencies appealed the Med-Arbiter's Order to the Secretary of Labor and Employment claiming that said Order was issued with grave abuse of discretion when it ruled that the three security agencies could be considered as a single bargaining entity for purposes of the holding of a certification election.

On December 15, 1989, the Labor Secretary Franklin M. Drilon denied the appeal for lack of merit while at the same time affirming the Med-Arbiter's Order of July 6, 1989. He also ordered the immediate conduct of a certification election. The dispositive portion of which reads as follows:

WHEREFORE, premises considered, the Appeal of respondents Security agencies is hereby denied for lack of merit and the Order dated 6 July affirmed.

Let therefore, the pertinent records of this case be immediately forwarded to the Regional Office for he immediate conduct of the certification election.

SO ORDERED. 2

On January 5, 1990, the three security agencies filed a Motion for Reconsideration arguing that they were denied their rights to due process and that jurisdiction was not acquired over them by the labor authorities.

On January 26, 1990, the succeeding Labor Secretary, Ruben D. Torres, likewise denied the Motion for Reconsideration for lack of merit and reiterated the directive that a certification election be conducted without further delay.

On March 14, 1990, the instant petition was filed by the three security agencies, raising the following grounds:

I

SERIOUS ERRORS IN THE FINDINGS OF FACTS.

II

GRAVE ABUSE OF DISCRETION ON THE PART OF THE SECRETARY OF LABOR. 3

Petitioners insist that there are three (3) corporations in this petition, each of which has a separate and distinct corporate personality of its own with separate registrations with the Securities and Exchange Commission (SEC) and different Articles of Incorporation and By-Laws; with separate sets of corporate officers and directors; and no common business address except for GVM and ASDA which are located at 1957 Espaa corner Craig Streets, Sampaloc, Manila.

Petitioners claim that the facts and circumstances of the case of La Campana Coffee Factory, Inc. v. Kaisahan Ng Mga Manggagawa sa La Campana 4 which public respondent claims to be on all fours with the instant case, are very distinct from the facts and circumstance obtaining in the case at bar. As to form of business organization, in the La Campana case, only one of two (2) businesses was a corporation i.e., the La Campana Coffee Factory, Inc. and the other, the La Campana Gaugau Packing, is a "non-entity," being merely a business name. In the case at bar, all three (3) agencies are incorporated. Moreover, the issue involved in the instant case is one of representation while in the La Campana case, the issue involved is the validity of a demand for wage increases and other labor standards benefits.

Petitioners likewise contend that it was error to hold that the three companies should be treated as one in a single bargaining unit in one petition for certification elections resulting in a violation of the right to due process of each corporation as no notice of hearing and other legal processes were served on each of said corporations. Consequently, no jurisdiction was acquired on them by the Department of Labor and Employment.

Petitioners' arguments deserve scant consideration. The facts and circumstances extant in the record indicate that the Med-Arbiter and Secretaries Drilon and Torres were not mistaken in holding that the three security companies are in reality a single business entity operating as a single company called the "PGA Security Group" or "PGA Security Services Group." Factual findings of labor officials are conclusive and binding on the Court when supported by substantial evidence. 5

The public repondent noted the following circumstances in the La Campana case similar to the case at bar, as indicative of the fact that the La Campana Coffee Factory and La Campana Gaugau Packing were in reality only one business with two trade names: (1) the two factories occupied the same address, wherein they had their principal place of business; (2) their signboards, advertisements, packages of starch, delivery truck and delivery forms all use one appellation, "La Campana Starch and Coffee Factory"; (3) the workers in either company received their pay from a single cashier, and (4) the workers in one company could easily transfer to the other company, and vice-versa. This Court held therein that the veil of corporate fiction of the coffee factory may be pierced to thwart the attempt to consider it part from the other business owned by the same family. Thus, the fact that one of the businesses is not incorporated was not the decisive factor that led the Court to consider the two factories as one. Moreover, we do not find any materiality in the fact that the La Campana case was instituted to demand wage increases and other labor standards benefits while this case was filed by the labor union to seek recognition as the sole bargaining agent in the establishment. If businesses operating under one management are treated as one for bargaining purposes, there is not much difference in treating such businesses also as one for the preliminary purpose of labor organizing.

Indeed, the three agencies in the case at bar failed to rebut the fact that they are managed through the Utilities Management Corporation with all of their employees drawing their salaries and wages from said entity; that the agencies have common and interlocking incorporators and officers; and that the PSVSIA, GVM and ASDA employees have a single Mutual Benefit System and followed a single system of compulsory retirement.

No explanation was also given by petitioners why the security guards of one agency could easily transfer from one agency to another and then back again by simply filling-up a common pro forma slip called "Request for Transfer". Records also shows that the PSVSIA, GVM and ASDA always hold joint yearly ceremonies such as the "PGA Annual Awards Ceremony". In emergencies, all PSVSIA Detachment Commanders were instructed in a memorandum dated November 10, 1988 to get in touch with the officers not only of PSVSIA but also of GVM and ASDA. All of these goes to show that the security agencies concerned do not exist and operate separately and distinctly from each other with different corporate directions and goals. On the contrary, all the cross-linking of the three agencies' command, control and communication systems indicate their unitary corporate personality. Accordingly, the veil of corporate fiction of the three agencies should be lifted for the purpose of allowing the employees of the three agencies to form a single labor union. As a single bargaining unit, the employees therein need not file three separate petitions for certification election. All of these could be covered in a single petition.

Petitioners' claim of alleged defect in the petition for certification election which although addressed to the three security agencies merely alleged that there are only 1,000 employees when the total number of employees in said security agencies is about 2,374 (PSVSIA - 1252; GVM - 807; and ASDA - 315) thereby failing to comply with the legal requirement that at least twenty percent (20%) of the employees in the bargaining unit must support the petition, betrays lack of knowledge of the amendments introduced by R.A 6715 which became effective on March 21, 1989, prior to the filing of the petition for certification election on April 6, 1989. Under the amendments, there is no need for the labor union to prove that at least 20% of the security guards in the three agencies supported the petition. When a duly organized union files a petition for certification election, the Med-Arbiter has the duty to automatically conduct an election. He has no discretion on the matter. This is clearly the mandate of Article 257 of the Labor Code, as amended by Section 24 of R.A. 6715, which now reads:

Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization.

The designation of the three agencies collectively as "PGA Security Agency" and the service of summons to the management thereof at 82 E. Rodriguez Avenue, Quezon City did not render the petition defective. Labor Secretary Franklin Drilon correctly noted the fact that the affidavits executed separately and under oath by the three managers of the three security agencies indicated their office address to be at PSVSIA Center II, E. Rodriguez Sr. Blvd., Quezon City. Besides, even if there was improper service of summons by the Med-Arbiter, the three (3) security agencies voluntarily submitted themselves to the jurisdiction of the labor authorities. The summons were clearly sent to and received by their lawyer who filed motions and pleadings on behalf of the three security agencies and who always appeared as their legal counsel. It puzzles this Court why petitioners, who claim to be separate entities, continue to be represented by one counsel even in this instant petition.

Finally, except where the employer has to file a petition for certification election pursuant to Article 258 of the Labor Code because of a request to bargain collectively, it has nothing to do with a certification election which is the sole concern of the workers. Its role in a certification election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, 6 as that of a mere by-stander. It has no legal standing in a certification election as it cannot oppose the petition or appeal the Med-Arbiter's orders related thereto. An employer that involves itself in a certification election lends suspicion to the fact that it wants to create a company union.

This Court's disapprobation of management interference in certification elections is even more forceful in Consolidated Farms, Inc. v. Noriel, 7 where we held:

On a matter that should be the exclusive concern of labor, the choice of a collective bargaining representative, the employer is definitely an intruder. His participation, to say the least, deserves no encouragement. This Court should be the last agency to lend support to such an attempt at interference with a purely internal affair of labor.

Indeed, the three security agencies should not even be adverse parties in the certification election itself. We note with disapproval the title given to the petition for certification election of the Union by the Med-Arbiter and the Secretary of Labor naming the three security agencies as respondents. Such is clearly an error. While employers may rightfully be notified or informed of petitions of such nature, they should not, however, be considered parties thereto with concomitant right to oppose it. Sound policy dictates that they should maintain a strictly hands-off policy.

WHEREFORE, finding no reversible error in the questioned decision of the Secretary of Labor, the instant petition for certiorari is hereby DISMISSED for utter lack of merit.

SO ORDERED.G.R. No. 89609January 27, 1992NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP)-TUCP, petitioner, vs.HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations; and the NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents.

MEDIALDEA, J.:

This is a petition for certiorari seeking the nullification of the resolution issued by the respondent Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the order of the Med-Arbiter dated February 8, 1989 denying the motion to dismiss the petition and directing the conduct of a certification election among the rank and file employees or workers of the Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan, Negros Occidental.

The antecedent facts giving rise to the controversy at bar are as follows:

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is a legitimate national labor organization duly registered with the Department of Labor and Employment. Respondent Honorable Pura Ferrer-Calleja is impleaded in her official capacity as the Director of the Bureau of Labor Relations of the Department of Labor and Employment, while private respondent National Federation of Sugar Workers (NFSW-FGT-KMU) is a labor organization duly registered with the Department of Labor and Employment.

Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros Occidental employs about five hundred (500) workers during milling season and about three hundred (300) on off-milling season.

On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered into a collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on November 14, 1987.

When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its renewal. The CBA was extended for another three (3) years with reservation to negotiate for its amendment, particularly on wage increases, hours of work, and other terms and conditions of employment.

However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement. In order to obviate friction and tension, the parties agreed on a suspension to provide a cooling-off period to give them time to evaluate and further study their positions. Hence, a Labor Management Council was set up and convened, with a representative of the Department of Labor and Employment, acting as chairman, to resolve the issues.

On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or certification election among the rank and file workers of Dacongcogon.

On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the following grounds, to wit:IThe Petition was filed out of time;IIThere is a deadlocked (sic) of CBA negotiation between forced intervenor and respondent-central. (Rollo, p. 25)On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private respondent NFSW-FGT-KMU and directed the conduct of certification election among the rank and file workers of Dacongcogon, the dispositive portion of which provides as follows:

WHEREFORE, premises considered, the Motion to Dismiss the present petition is, as it is hereby DENIED. Let therefore a certification election among the rank and file employees/workers of the Dacongcogon Sugar and Rice Milling Co., situated at Kabankalan, Neg. Occ., be conducted with the following choices:(1)National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP);

(2)National Federation of Sugar Workers (NFSW);

(3)No Union.The designated Representation Officer is hereby directed to call the parties for a pre-election conference to thresh out the mechanics of the election and to conduct and supervise the same within twenty (20) days from receipt by the parties of this Order. The latest payroll shall be used to determine the list of qualified voters.SO ORDERED. (Rollo, p. 34)On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging that the Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to gross incompetence. Hence, private respondent prayed that the order of the Med-Arbiter be set aside and the motion to dismiss be reconsidered.On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying that the motion for reconsideration and/or appeal be denied for lack of merit.On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution reversing the order of the Med-Arbiter, to wit:WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February 1989 is hereby set aside and vacated, and a new one issued dismissing the above-entitled petition for being filed out of time.SO ORDERED. (Rollo, p. 46)

Hence, this petition raising four (4) issues, to wit:

I.RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS, COMMITTED GRAVE ABUSE OF DISCRETION IN RENDERING HER RESOLUTION DATED 26 JUNE 1989 REVERSING THE ORDER DATED FEBRUARY 8, 1989 OF MED-ARBITER FELIZARDO SERAPIO.

II.THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT PURA FERRER-CALLEJA IS CONTRARY TO LAW AND JURISPRUDENCE.

III.THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF RESPONDENT DIRECTOR PURA FERRER-CALLEJA DENIES THE RANK AND FILE EMPLOYEES OF THE DACONGCOGON SUGAR & RICE MILLING COMPANY, AND THE HEREIN PETITIONER NACUSIP-TUCP, THEIR LEGAL AND CONSTITUTIONAL RIGHTS.

IV.THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN RENDERING HER SAID RESOLUTION DATED 26 JUNE 1989 WAS BIASED AGAINST PETITIONER NACUSIP-TUCP. (Rollo,p. 2)

The controversy boils down to the sole issue of whether or not a petition for certification election may be filed after the 60-day freedom period.

Petitioner maintains that respondent Director Calleja committed grave abuse of discretion amounting to excess of jurisdiction in rendering the resolution dated June 26, 1989 setting aside, vacating and reversing the order dated February 8, 1989 of Med-Arbiter Serapio, in the following manner:

1)by setting aside and vacating the aforesaid Order dated February 8, 1989 of Med-Arbiter Felizardo Serapio and in effect dismissing the Petition for Direct or Certification Election of Petitioner NACUSIP-TUCP (Annex "A" hereof) without strong valid, legal and factual basis;

2)by giving a very strict and limited interpretation of the provisions of Section 6, Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, as amended, knowing, as she does, that the Labor Code, being a social legislation, should be liberally interpreted to afford the workers the opportunity to exercise their legitimate legal and constitutional rights to self-organization and to free collective bargaining;

3)by issuing her questioned Resolution of June 26, 1989 knowing fully well that upon the effectivity of Rep. Act No. 6715 on 21 March 1989 she had no longer any appellate powers over decisions of Med-Arbiters in cases of representation issues or certification elections;

4)by ignoring intentionally the applicable ruling of the Honorable Supreme Court in the case of Kapisanan ng Mga Manggagawa sa La Suerte-FOITAF vs. Noriel, L-45475, June 20, 1977;

5)by clearly failing to appreciate the significance (sic) of the fact that for more than four (4) years there has been no certification election involving the rank and file workers of the Company; and,

6)by frustrating the legitimate desire and will of the workers of the Company to determine their sole and exclusive collective bargaining representative through secret balloting. (Rollo, pp. 9-10)

However, the public respondent through the Solicitor General stresses that the petition for certification election was filed out of time. The records of the CBA at the Collective Agreements Division (CAD) of the Bureau of Labor Relations show that the CBA between Dacongcogon and private respondent NFSW-FGT-KMU had expired on November 14, 1987, hence, the petition for certification election was filed too late, that is, a period of more than one (1) year after the CBA expired.

The public respondent maintains that Section 6 of the Rules Implementing Executive Order No. 111 commands that the petition for certification election must be filed within the last sixty (60) days of the CBA and further reiterates and warns that any petition filed outside the 60-day freedom period "shall be dismissed outright." Moreover, Section 3, Rule V, Book V of the Rules Implementing the Labor Code enjoins the filing of a representation question, if before a petition for certification election is filed, a bargaining deadlock to which the bargaining agent is a party is submitted for conciliation or arbitration.

Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain the motion for reconsideration interposed by respondent union from the order of the Med-Arbiter directing a certification election. Public respondent contends that Section 25 of Republic Act No. 6715 is not applicable, "(f)irstly, there is as yet no rule or regulation established by the Secretary for the conduct of elections among the rank and file of employer Dacongcogon; (s)econdly, even the mechanics of the election which had to be first laid out, as directed in the Order dated February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom interposed by respondent union; and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent Director after it filed its opposition to respondent union's Motion for Reconsideration (Annex 'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66)

We find the petition devoid of merit.

A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as amended by the rules implementing Executive Order No. 111 provides that:

Sec. 6.Procedure . . .

In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective bargaining union is questioned by a legitimate labor organization, the Med-Arbiter shall immediately order the conduct of a certification election if the petition is filed during the last sixty (60) days of the collective bargaining agreement. Any petition filed before or after the sixty-day freedom period shall be dismissed outright.

The sixty-day freedom period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement for purposes of certification election.

xxxxxxxxx

The clear mandate of the aforequoted section is that the petition for certification election filed by the petitioner NACUSIP-TUCP should be dismissed outright, having been filed outside the 60-day freedom period or a period of more than one (1) year after the CBA expired.

It is a rule in this jurisdiction that only a certified collective bargaining agreement i.e., an agreement duly certified by the BLR may serve as a bar to certification elections. (Philippine Association of Free Labor Unions (PAFLU) v. Estrella, G.R. No. 45323, February 20, 1989, 170 SCRA 378, 382) It is noteworthy that the Bureau of Labor Relations duly certified the November 14, 1984 collective bargaining agreement. Hence, the contract-bar rule as embodied in Section 3, Rule V, Book V of the rules implementing the Labor Code is applicable.

This rule simply provides that a petition for certification election or a motion for intervention can only be entertained within sixty days prior to the expiry date of an existing collective bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the existence of a collective bargaining agreement except within the freedom period, as it is called, when the said agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and for the stipulated original period. (Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No. 77539, April 12, 1989, 172 SCRA 49, 57 citing Associated Trade Unions (ATU v. Trajano, G.R. No. L-75321, 20 June 1988, 162 SCRA 318, 322-323)

Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent NFSW-FGT-KMU and Dacongcogon had not concluded a new CBA, We need only to stress what was held in the case of Lopez Sugar Corporation v. Federation of Free Workers, Philippine Labor Union Association (G.R. No. 75700-01, 30 August 1990, 189 SCRA 179, 191) quoting Article 253 of the Labor Code that "(i)t 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." Despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed. Hence, the contract bar rule still applies.

Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was extended for another three (3) years and that the deadlock was submitted to the Labor Management Council.

All premises considered, the Court is convinced that the respondent Director of the Bureau of Labor Relations did not commit grave abuse of discretion in reversing the order of the Med-Arbiter.

ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the Bureau of Labor Relations is hereby AFFIRMED.G.R. No. 99266March 2, 1999SAN MIGUEL CORPORATION, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN MIGUEL CORPORATION EMPLOYEES UNION (SMCEU) PTGWO, respondents.

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court, assailing the Resolution 1 of the National Labor Relations Commission in NLRC NCR CASE NO. 00094-90, which dismissed the complaint of San Miguel Corporation (SMC), seeking to dismiss the notice of strike given by the private respondent union and to compel the latter to comply with the provisions of the Collective Bargaining Agreement (CBA) 2 on grievance machinery, arbitration, and the no-strike clause, with prayer for the issuance of a temporary restraining order.

The antecedent facts are as follows:

In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due to financial loses, shut down some of its plants and declared 55 positions as redundant listed as follows: seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in the Ayala Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station ("Magnolia-MBS"). 3 Consequently, the private respondent union filed several grievance cases for the said retrenched employees, praying for the redeployment of the said employees to the other divisions of the company.

The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties' 1990 Collective Bargaining Agreement providing for the following procedures, to wit:

Sec.5. Processing of Grievance. Should a grievance arise, an earnest effort shall be made to settle the grievance expeditiously in accordance with the following procedures:

Step 1. The individual employee concerned and the Union Directors, or the Union Steward shall, first take up the employee's grievance orally with his immediate superior. If no satisfactory agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20) working days from the occurrence of the cause or event which gave rise to the grievance, be filed in writing with the Department Manager or the next level superior who shall render his decision within ten (10) working days from the receipt of the written grievance. A copy of the decision shall be furnished the Plant Personnel Officer.

Step 2. If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in writing to the Plant Manager/Director or his duly authorized representative within twenty (20) working days from the receipt of the Decision of the Department Manager, Otherwise, the decision in Step 1 shall be deemed accepted by the employee.

The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity, of conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant Personnel Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as may be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled at least twice a month.

The Plant Manager shall give his written comments and decision within ten (10) working days after his receipt of such grievance or the date of submission of the grievance for resolution, as the case may be. A copy of his Decision shall be furnished the Employee Relations Directorate.

Step 3. If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working days from the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the decision in Step 2 shall be deemed accepted by the employee.The Conciliation Board shall meet on the grievance in such dates as shall be designated by the Division/Business Unit Manager or his representative. In every Division/Business Unit, Grievance Meetings of the Conciliation Board shall be scheduled at least once a month.

The Conciliation Board shall have fifteen (15) working days from the date of submission of the grievance for resolution within which to decide on the grievance.

Sec. 6.Conciliation Board. There shall be a conciliation Board per Business Unit or Division. Every Conciliation Board shall be composed of not more than five (5) representatives each from the Company and the Union. Management and the Union may be assisted by their respective legal counsels.

In every Division/Business Unit, the names of the Company and Union representatives to the Conciliation Board shall be submitted to the Division/Business Unit Manager not later than January of every year. The Conciliation Board members shall act as such for one (1) year until removed by the Company or the Union, as the case may be.xxxxxxxxxSec. 8.Submission to Arbitration. If the employee or Union is not satisfied with the Decision of the Conciliation Board and desires to submit the grievance to arbitration, the employee or the Union shall serve notice of such intention to the Company within fifteen (15) working days after receipt of the Board's decision. If no such written notice is received by the Company within fifteen (15) working days, the grievance shall be considered settled on the basis of the company's position and shall no longer be available for arbitration. 4

During the grievance proceedings, however, most of the employees were redeployed, while others accepted early retirement. As a result only 17 employees remained when the parties proceeded to the third level (Step 3) of the grievance procedure. In a meeting on October 26, 1990, petitioner informed private respondent union that if by October 30, 1990, the remaining 17 employees could not yet be redeployed, their services would be terminated on November 2, 1990. The said meeting adjourned when Mr. Daniel S. L. Borbon II, a representative of the union, declared that there was nothing more to discuss in view of the deadlock. 5

On November 7, 1990, the private respondent filed with the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) a notice of strike on the following grounds: a) bargaining deadlock; b) union busting; c) gross violation of the Collective Bargaining Agreement (CBA), such as non-compliance with the grievance procedure; d) failure to provide private respondent with a list of vacant positions pursuant to the parties side agreement that was appended to the 1990 CBA; and e) defiance of voluntary arbitration award. Petitioner on the other hand, moved to dismiss the notice of strike but the NCMB failed to act on the motion.On December 21, 1990, petitioner SMC filed a complaint 6 with the respondent NLRC, praying for: (1) the dismissal the notice of strike; (2) an order compelling the respondent union to submit to grievance and arbitration the issue listed in the notice of strike; (3) the recovery of the expenses of litigation.On April 16, 1991, respondent NLRC came out with a minute resolution dismissing the complaint; holding, thus:NLRC NCR IC NO. 000094-90, entitled San Miguel Corporation, Complainant -versus- San Miguel Employees Union-PTWO (SMCEU), Respondent. Considering the allegations in the complaint to restrain Respondent Union from declaring a strike and to enforce mutual compliance with the provisions of the collective bargaining agreement on grievance machinery, and the no-strike clause, with prayer for issuance of temporary restraining order, and the evidence adduced therein, the Answer filed by the respondent and the memorandum filed by the complainant in support of its application for the issuance of an injunction, the Second Division, after due deliberation, Resolved to dismiss the complaint for lack of merit. 7Aggrieved by the said resolution, petitioner found its way to this court via the present petition, contending that:IIT IS THE POSITIVE LEGAL DUTY OR RESPONDENT NLRC TO COMPEL ARBITRATION AND TO ENJOIN A STRIKE IN VIOLATION OF A NO STRIKE CLAUSE.IIINJUNCTION IS THE ONLY IMMEDIATE, EFFECTIVE SUBSTITUTE FOR THE DISASTROUS ECONOMIC WARFARE THAT ARBITRATION IS DESIGNED TO AVOID. 8On June 3, 1991, to preserve the status quo, the Court issued a Resolution 9 granting petitioners prayer for the issuance of a Temporary Restraining Order.

The Petition is impressed with merit.

Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code 10, reads:

Sec.1.Grounds for strike and lockout. A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor practices. Violations of the 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.

In the case under consideration, the grounds relied upon by the private respondent union are non-strikeable. The issues which may lend substance to the notice of strike filed by the private respondent union are: collective bargaining deadlock and petitioner's alleged violation of the collective bargaining agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is defined as "the situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate" 11 This situation, is non-existent in the present case since there is a Board assigned on the third level (Step 3) of the grievance machinery to resolve the conflicting views of the parties. Instead of asking the Conciliation Board composed of five representatives each from the company and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of strike. For failing to exhaust all the steps in the grievance machinery and arbitration proceedings provided in the Collective Bargaining Agreement, the notice of strike should have been dismissed by the NLRC and private respondent union ordered to proceed with the grievance and arbitration proceedings. In the case of Liberal Labor Union vs. Phil. CanCo. 12, the court declared as illegal the strike staged by the union for not complying with the grievance procedure provided in the collective bargaining agreement, ruling that:

. . . the main purpose of the parties in adopting a procedure in the settlement of their disputes is to prevent a strike. This procedure must be followed in its entirety if it is to achieve its objective. . . . strikes held in violation of the terms contained in the collective bargaining agreement are illegal, specially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and respected if their ends have to be achieved. . . . 13

As regards the alleged violation of the CBA, we hold that such a violation is chargeable against the private respondent union. In abandoning the grievance proceedings and stubbornly refusing to avail of the remedies under the CBA. private respondent violated the mandatory provisions of the collective bargaining agreement.

Abolition of departments or positions in the company is one of the recognized management prerogatives. 14 Noteworthy is the fact that the private respondent does not question the validity of the business move of petitioner. In the absence of proof that the act of petitioner was ill-motivated, it is presumed that petitioner San Miguel Corporation acted in good faith. In fact, petitioner acceded to the demands of the private respondent union by redeploying most of the employees involved; such that from an original 17 excess employees in BLD, 15 were successfully redeployed. In AOC, out of the 17 original excess, 15 were redeployed. In the Magnolia Manila Buying Station, out of 18 employees, 6 were redeployed and only 12 were terminated. 15

So also, in filing complaint with the NLRC, petitioner prayed that the private respondent union be compelled to proceed with the grievance and arbitration proceedings. Petitioner having evinced its willingness to negotiate the fate of the remaining employees affected, there is no ground to sustain the notice of strike of the private respondent union.

All things studiedly considered. we are of the ineluctable conclusion, and so hold, that the NLRC gravely abused its discretion in dismissing the complaint of Petitioner SMC for the dismissal of the notice of strike, issuance of a temporary restraining order, and an order compelling the respondent union to settle the dispute under the grievance machinery of their CBA..

WHEREFORE, the instant petition is hereby GRANTED. Petitioner San Miguel Corporation and private respondent San Miguel Corporation Employees Union PTGWO are hereby directed to complete the third level (Step 3) of the Grievance Procedure and proceed with the Arbitration proceedings if necessary. No pronouncement as to costs.

G.R. No. 172666 December 7, 2011PICOP RESOURCES, INCORPORATED (PRI), Represented in this Petition by MR. WILFREDO D. FUENTES, in his capacity as Senior Vice-President and Resident Manager, Petitioner, vs.RICARDO DEQUILLA, ELMO PABILANDO, CESAR ATIENZA and ANICETO ORBETA, JR., and NAMAPRI-SPFI, Respondents.

This is a petition for review assailing the April 14, 2005 Decision1 of the Court of Appeals (CA) which reversed and set aside the Resolutions2 of the National Labor Relations Commission (NLRC) dated December 27, 2002 and March 28, 2003, and reinstated the June 9, 2001 Decision3 of the Labor Arbiter (LA), which declared the dismissal of the private respondents as illegal.

The Facts

Ricardo Dequilla, Cesar Atienza and Aniceto Orbeta (private respondents) were regular rank-and-file employees of Picop Resources, Inc. (PICOP) and members of the NAMAPRI-SPFL, a duly registered labor organization and existing bargaining agent of the PICOP rank-and-file employees. PICOP and NAMAPRI-SPFL had a collective bargaining agreement (CBA) which would expire on May 22, 2000.

On May 16, 2000, the late Atty. Proculo P. Fuentes, Jr. (Atty. Fuentes), then National President of the Southern Philippines Federation of Labor (SPFL), advised the PICOP management to terminate about 800 employees due to acts of disloyalty, specifically, for allegedly campaigning, supporting and signing a petition for the certification of a rival union, the Federation of Free Workers Union (FFW) before the 60-day "freedom period" and during the effectivity of the CBA. Such acts of disloyalty were construed to be a valid cause for termination under the terms and conditions of the CBA. Based on the CBA, the freedom period would start on March 22, 2000.

Acting on the advice of Atty. Fuentes, Atty. Romero Boniel (Atty. Boniel), Manager of the PICOP Legal and Labor Relations Department, issued a memorandum directing the employees concerned to explain within seventy-two (72) hours why their employment should not be terminated due to alleged acts of disloyalty. Upon receiving their explanation letters, Atty. Boniel endorsed the same to Atty. Fuentes who then requested the termination of 46 employees found guilty of acts of disloyalty.

On October 16, 2000, PICOP served a notice of termination due to acts of disloyalty to 31 of the 46 employees. Private respondents were among the 31 employees dismissed from employment by PICOP on November 16, 2000.

Enraged at what management did to them, private respondents filed a complaint before the NLRC Regional Arbitration Branch No. XIII, Butuan City, for Unfair Labor Practice and Illegal Dismissal with money claims, damages and attorneys fees.

LA Ruling

On June 9, 2001, after the parties submitted their respective position papers, the LA rendered a decision declaring as illegal the termination of the private respondents. The dispositive portion of the LA Decision reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

2. Ordering respondents PRI and NAMPRI-SPFL to reinstate complainants to their former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages in the total amount of P 177,403.68, as shown in the computation, hereto attached and marked as Annex "A" hereof, plus damages in the amount of P 10,000.00 each and attorneys fees equivalent to 10% of the total monetary award.

SO ORDERED. 4

NLRC Ruling

PICOP elevated the LA decision to the NLRC but its appeal was dismissed in the November 19, 2002 NLRC Resolution.5 On motion for reconsideration, however, the NLRC issued another resolution,6 dated December 27, 2002, reversing and setting aside its November 19, 2002 Resolution, the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the above resolution dated November 19, 2002, is Reversed and Set Aside. In lieu thereof, a new judgment is rendered DISMISSING the above-entitled case for lack of merit.

SO ORDERED.7

CA Ruling

Upon the denial of their motion for reconsideration, the private respondents brought the case to the CA. On April 14, 2005, the CA rendered the subject decision reversing and setting aside the December 27, 2002 NLRC resolution and reinstating the June 9, 2001 Decision of the LA. The decretal portion of the CA decision reads:

WHEREFORE, premises considered, [the] instant petition is GRANTED and the assailed resolutions of the Public Respondent NLRC are hereby REVERSED and SET ASIDE. In view thereof, ordered REINSTATED is the Decision of Acting Executive Labor Arbiter Rogelio P. Legaspi dated 09 June 2001 which reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

2. Ordering Respondents PRI and NAMPRI-SPFL to reinstate Complainants to their former or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages in the total amount of P 177,403.68, plus damages in the amount of P 10,000.00 each and attorneys fees equivalent to 10% of the total monetary award.

SO ORDERED.8

The CA ruled, among others, that although private respondents signed an authorization for the filing of the petition for certification election of a rival union, PICOP Democratic Trade Unionist-Federation of Free Workers (FFW), such act was not a sufficient ground to terminate the employment of private respondents. It explained:

Ruminating from the alleged violation of the CBA, We see no reason, sufficient and compelling enough, to sustain the Public Respondents raison detre in overturning the Labor Arbiters ruling in favor of the Petitioners. While it is true that Petitioners signed the authorization in support of the Petition for certification election of FFW before the "freedom period," such act is not a sufficient ground to terminate the employment of the Petitioners in as much as the petition itself was filed during the freedom period. Hence, there is nil a basis to impute acts of disloyalty to Petitioners. Imputations of an alleged violation of the CBA should not arise from a vague and all embracing definition of alleged "acts of disloyalty." Neither should it arise from speculative inferences where no evidence appears from the record that Respondent NAMAPRI-SPFL expressly defined "acts of disloyalty." Besides, to Our mind, signing an authorization for the filing of the petition for certification election does not constitute an act of disloyalty per se. There must be proof of contemporaneous acts of resignation or withdrawal of their membership from the Respondent NAMAPRI-SPFL to which they are members. Respondents miserably failed to present evidence to justify a valid termination of employees in pursuance to the CBA allegedly violated. Petitioners, in fact remained in good standing, a continuing requirement for retaining their employment in the Respondent PRI. Petitioners neither joined nor affiliated with FFW and continuously paid their union dues with Respondent NAMAPRI-SPFL. Consequently, this lends credence to the Labor Arbiters ruling that Petitioners dismissal was indeed illegal.

Likewise, the advise of the Respondent NAMAPRI-SPFL to the Respondent PRI to effect the termination of employees, including herein Petitioners, finds no basis in fact and in law considering that at the time the Respondent PRI dismissed the Petitioners, among others, on 16 November 2000, there was no more CBA to speak of after it had already expired on 22 May 2000.9

The CA further agreed with private respondents that Article 256 and not Article 253, of the Labor Code applied in this case. The CA discussed this point as follows:

We are inclined to favor Petitioners stance that Article 256, supra, is applicable. The issue of acts of disloyalty relates more to a direct connection on the alleged violation or breach of loyalty to the majority status of the incumbent union than on violation of the terms and conditions of the agreement under Article 253, supra, as the Respondents would want Us to believe. Article 256 provides that at the expiration of the 60-day period reckoned from the expiration date of the CBA, the employer shall continue to recognize the majority status of the incumbent bargaining agent only where no petition for certification election is filed. However, as earlier pointed, a petition was already filed by the Petitioners, among others, during the 60-day freedom period. Clearly, from the imports of said provision, it will render nugatory the purpose of the law providing for a freedom period for the filing of a petition for certification election should the act of signing/filing the said petition be interpreted as an act of disloyalty and will render farce the need for a certification election as an instrument of ascertaining the true expression of the will of the workers as to which labor organization would represent them.

To construe the provision of law in Article 253, supra, as imposing a restriction against the signing and filing a petition for certification election during the freedom period, is to violate the constitutional right of the employees to organize freely. It is a basic precept of statutory construction that statutes should be construed not so much according to the letters that killeth but in line with the purpose for which they have been enacted.10

Not in conformity with the CA decision, PICOP filed this petition for review posing the following

ISSUES

WHETHER [OR NOT] AN EXISTING COLLECTIVE BARGAINING AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND EFFECT IN ALL ITS TERMS AND CONDITIONS INCLUDING ITS UNION SECURITY CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN ENTERED INTO?

WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR CONCLUSION OF LAW FALLS WITHIN THE AMBIT OF THE EXTRA ORDINARY REMEDY OF CERTIORARI UNDER RULE 65, REVISED RULES OF COURT.11

PICOP basically argues that Article 253 of the Labor Code applies in this case. Article 253 of the Labor Code provides that the terms and conditions of a CBA remain in full force and effect even beyond the 5-year period when no new CBA has yet been reached. It claims that the private respondents violated this provision when they campaigned for, supported and signed FFWs petition for certification election on March 19 and 20, 2000, before the onset of the freedom period. It further argues that private respondents were not denied due process when they were terminated. Finally, it claims that the decision of the NLRC on the issues raised was not without merit. Even assuming that it erred in its judgment on the legal issues raised, its error is not equivalent to an abuse of discretion that should fall within the ambit of the extraordinary remedy of certiorari.

Private respondents position

Private respondents argue that the substantial arguments raised by PICOP in this petition are basically a rehash of the same issues and arguments contained in its Motion for Reconsideration of the CA decision. Private respondents adopted and repleaded the ruling of the CA in their Comment12 on this petition.

The Courts Ruling

The petition merits a denial.

There is no question that in the CBA entered into by the parties, there is a union security clause. The clause imposes upon the workers the obligation to join and maintain membership in the companys recognized union as a condition for employment.

"Union security" is a generic term, which is applied to and comprehends "closed shop," "union shop," "maintenance of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.13

There is no dispute that private respondents were members of NAMAPRI-SPFL who were terminated by PICOP due to alleged acts of disloyalty. It is basic in labor jurisprudence that the burden of proof rests upon management to show that the dismissal of its worker was based on a just cause. When an employer exercises its power to terminate an employee by enforcing the union security clause, it needs to determine and prove the following: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union.14

In this case, the resolution thereof hinges on whether PICOP was able to show sufficient evidence to support the decision of the union to expel private respondents from it.

PICOP basically contends that private respondents were justly terminated from employment for campaigning, supporting and signing a petition for the certification of FFW, a rival union, before the 60-day "freedom period" and during the effectivity of the CBA. Their acts constitute an act of disloyalty against the union which is valid cause for termination pursuant to the Union Security Clause in the CBA.

The Court finds Itself unable to agree.

Considering the peculiar circumstances, the Court is of the view that the acts of private respondents are not enough proof of a violation of the Union Security Clause which would warrant their dismissal. PICOP failed to show in detail how private respondents campaigned and supported FFW. Their mere act of signing an authorization for a petition for certification election before the freedom period does not necessarily demonstrate union disloyalty. It is far from being within the definition of "acts of disloyalty" as PICOP would want the Court to believe. The act of "signing an authorization for a petition for certification election" is not disloyalty to the union per se considering that the petition for certification election itself was filed during the freedom period which started on March 22, 2000.

Moreover, as correctly ruled by the CA, the records are bereft of proof of any contemporaneous acts of resignation or withdrawal of union membership or non-payment of union dues. Neither is there proof that private respondents joined FFW. The fact is, private respondents remained in good standing with their union, NAMAPRI-SPFL. This point was settled in the case of PICOP Resources, Incorporated (PRI) v. Anacleto L. Taeca,15 where it was written:

However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate the employment of the respondents.

PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they committed when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for Certification Election among all rank-and-file employees of PRI. It contends that the acts of respondents are a violation of the Union Security Clause, as provided in their Collective Bargaining Agreement.

We are unconvinced.

We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support of the Petition for Certification Election of FFW on March 19, 20 and 21, or before the "freedom period," is not sufficient ground to terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing in the records would show that respondents failed to maintain their membership in good standing in the Union. Respondents did not resign or withdraw their membership from the Union to which they belong. Respondents continued to pay their union dues and never joined the FFW.

Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization letter to file a petition for certification election as they signed it outside the freedom period. However, we are constrained to believe that an "authorization letter to file a petition for certification election" is different from an actual "Petition for Certification Election." Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was filed only on May 18, 2000. Thus, it was within the ambit of the freedom period which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the filing of a petition for certification election outside the 60-day freedom period. This is not the situation in this case. If at all, the signing of the authorization to file a certification election was merely preparatory to the filing of the petition for certification election, or an exercise of respondents right to self-organization.16

Finally, PICOP insists that Article 253 of the Labor Code applies in this case, not Article 256 thereof. The Court agrees with the CA that its argument is misplaced. This issue was tackled and settled in the same PICOP Resources, Incorporated (PRI) v. Taeca case, to wit:

Moreover, PRI anchored their decision to terminate respondents employment on Article 253 of the Labor Code which states that "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." It claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the CBA; hence, the need to terminate the employment of respondents.

Petitioner's reliance on Article 253 is misplaced.

The provision of Article 256 of the Labor Code is particularly enlightening. It reads:

Article 256. Representation issue in organized establishments. - In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor and Employment within the sixty-day period before the expiration of a collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions receiving the two highest number of votes: Provided, That the total number of votes for all contending unions is at least fifty per cent (50%) of the number of votes cast.

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed.

Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do so when no petition for certification election was filed. The reason is, with a pending petition for certification, any such agreement entered into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as the collective bargaining representative. The provision for status quo is conditioned on the fact that no certification election was filed during the freedom period. Any other view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining the true expression of the will of the workers as to which labor organization would represent them.

In the instant case, four (4) petitions were filed as early as May 12, 2000.1awphi1 In fact, a petition for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000. Therefore, following Article 256, at the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold true when petitions for certification election were filed, as in this case.

Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for certification election. When there is a representational issue, the status quo provision in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not be circumvented, or compromised.

Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom to choose who should be their bargaining representative is of paramount importance. The fact that there already exists a bargaining representative in the unit concerned is of no moment as long as the petition for certification election was filed within the freedom period. What is imperative is that by such a petition for certification election the employees are given the opportunity to make known of who shall have the right to represent them thereafter. Not only some, but all of them should have the right to do so. What is equally important is that everyone be given a democratic space in the bargaining unit concerned.

We will emphasize anew that the power to dismiss is a normal prerogative of the employer.1avvphi1 This, however, is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee, because it affects not only his position but also his means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to labor. 17

Considering that private respondents were illegally dismissed, basic law provides that they shall be entitled to the benefit of full backwages and reinstatement unless the latter is no longer viable, in which case, a grant of separation pay shall be awarded equivalent to one month salary for every year of service.

X x x Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision X x x.18

Private respondents are also entitled to an award of attorneys fees equivalent to 10% of the total monetary award as they were compelled to litigate in order to seek redress for their illegal dismissal.WHEREFORE, the petition is DENIED.G.R. No. 141471 September 18, 2000COLEGIO DE SAN JUAN DE LETRAN, petitioner, vs.ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS, respondents.

This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals, promulgated on 9 August 1999, dismissing the petition filed by Colegio de San Juan de Letran (hereinafter, "petitioner") and affirming the Order of the Secretary of Labor, dated December 2, 1996, finding the petitioner guilty of unfair labor practice on two (2) counts.

The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows:

"On December 1992, Salvador Abtria, then President of respondent union, Association of Employees and Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same year, the union elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly elected President (Secretary of Labor and Employment's Order dated December 2, 1996, p. 12).

Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union members, who eventually rejected the said CBA (Ibid, p. 2).

Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission (NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC (Ibid, p. 2).

On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty. Federico Leynes as the union's legal counsel; and (2) refusal to bargain (Ibid, p. 1).

On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to petitioner, which notified the union six days later or on February 13, 1996 that the same had been submitted to its Board of Trustees. In the meantime, Ambas was informed through a letter dated February 15, 1996 from her superior that her work schedule was being changed from Monday to Friday to Tuesday to Saturday. Ambas protested and requested management to submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3).

Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996, the union received petitioner's letter dismissing Ambas for alleged insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal. (Ibid, p. 2-3).

On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner stopped the negotiations after it purportedly received information that a new group of employees had filed a petition for certification election (Ibid, p. 3).

On June 18, 1996, the union finally struck. On July 2, 1996, public respondent the Secretary of Labor and Employment assumed jurisdiction and ordered all striking employees including the union president to return to work and for petitioner to accept them back under the same terms and conditions before the actual strike. Petitioner readmitted the striking members except Ambas. The parties then submitted their pleadings including their position papers which were filed on July 17, 1996 ( Ibid, pp. 2-3).

On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor practice on two counts and directing the reinstatement of private respondent Ambas with backwages. Petitioner filed a motion for reconsideration which was denied in an Order dated May 29, 1997 (Petition, pp. 8-9)."1

Having been denied its motion for reconsideration, petitioner sought a review of the order of the Secretary of Labor and Employment before the Court of Appeals. The appellate court dismissed the petition and affirmed the findings of the Secretary of Labor and Employment. The dispositive portion of the decision of the Court of Appeals sets forth:

WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit in fact and in law.

With cost to petitioner.

SO ORDERED.2

Hence, petitioner comes to this Court for redress.

Petitioner ascribes the following errors to the Court of Appeals:

I

THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO BARGAIN (UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE BARGAINING NEGOTIATIONS WITH RESPONDENT AEFL, DESPITE THE FACT THAT THE SUSPENSION OF THE NEGOTIATIONS WAS BROUGHT ABOUT BY THE FILING OF A PETITION FOR CERTIFICATION ELECTION BY A RIVAL UNION WHO CLAIMED TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE BARGAINING UNIT.

II

THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR PRACTICE FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER DISMISSAL WAS CAUSED BY HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER REFUSAL TO FOLLOW THE PRESCRIBED WORK SCHEDULE.3

The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another legitimate labor organization? (2) whether the termination of the union president amounts to an interference of the employees' right to self-organization?

The petition is without merit.

After a thorough review of the records of the case, this Court finds that petitioner has not shown any compelling reason sufficient to overturn the ruling of the Court of Appeals affirming the findings of the Secretary of Labor and Employment. It is axiomatic that the findings of fact of the Court of Appeals are conclusive and binding on the Supreme Court and will not be reviewed or disturbed on appeal. In this case, the petitioner failed to show any extraordinary circumstance justifying a departure from this established doctrine.

As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain collectively," as follows:

Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession.

Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation.

Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the proposals presented by the latter. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could only offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to file its reply. This is a clear violation of Article 250 of the Labor Code governing the procedure in collective bargaining, to wit:

Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.4

x x x

As we have held in the case of Kiok Loy vs. NLRC,5 the company's refusal to make counter-proposal to the union's proposed CBA is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.6 In the case at bar, petitioner's actuation show a lack of sincere desire to negotiate rendering it guilty of unfair labor practice.

Moreover, the series of events that transpired after the filing of the first notice of strike in January 1996 show petitioner's resort to delaying tactics to ensure that negotiation would not push through. Thus, on February 15, 1996, or barely a few days after the union proposals for the new CBA were submitted, the union president was informed by her superior that her work schedule was being changed from Mondays to Fridays to Tuesdays to Saturdays. A request from the union president that the issue be submitted to a grievance machinery was subsequently denied. Thereafter, the petitioner and the union met on March 27, 1996 to discuss the ground rules for negotiation. However, just two days later, or on March 29, 1996, petitioner dismissed the union president for alleged insubordination. In its final attempt to thwart the bargaining process, petitioner suspended the negotiation on the ground that it allegedly received information that a new group of employees called the Association of Concerned Employees of Colegio (ACEC) had filed a petition for certification election. Clearly, petitioner tried to evade its duty to bargain collectively.

Petitioner, however, argues that since it has already submitted the union's proposals to the Board of Trustees and that a series of conferences had already been undertaken to discuss the ground rules for negotiation such should already be considered as acts indicative of its intention to bargain. As pointed out earlier, the evidence on record belie the assertions of petitioner.

Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the petition for certification election the issue on majority representation of the employees has arose. According to petitioner, the authority of the union to negotiate on behalf of the employees was challenged when a rival union filed a petition for certification election. Citing the case of Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises,7 petitioner asserts that in view of the pendency of the petition for certification election, it had no duty to bargain collectively with the union.

We disagree. In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. The petition must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification election must be filed during the sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: " . If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule is based on Article 232,8 in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed.9 Hence, the contract bar rule still applies.10 The purpose is to ensure stability in the relationship of the workers and the company by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.11

In the case at bar, the lifetime of the previous CBA was from 1989-1994.1wphi1 The petition for certification election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid and existing collective bargaining agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the petition for certification election did not constitute a bar to the ongoing negotiation. Reliance, therefore, by petitioner of the ruling in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises12 is misplaced since that case involved a legitimate representation issue which is not present in the case at bar.

Significantly, the same petition for certification election was dismissed by the Secretary of Labor on October 25, 1996.1wphi1 The dismissal was upheld by this Court in a Resolution, dated April 21, 1997.13

In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith with respondent union.

Concerning the issue on the validity of the termination of the union president, we hold that the dismissal was effected in violation of the employees' right to self-organization.

To justify the dismissal, petitioner asserts that the union president was terminated for cause, allegedly for insubordination for her failure to comply with the new working schedule assigned to her, and pursuant to its managerial prerogative to discipline and/or dismiss its employees. While we recognize the right of the employer to terminate the services of an employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of equity and fair play.14 The employer's right to terminate the services of an employee for just or authorized cause must be exercised in good faith.15 More importantly, it must not amount to interfering with, restraining or coercing employees in the exercise of their right to self-organization because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor Code.

The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union president and when she started negotiating for a new CBA. Thus, it was when she was the union president and during the period of tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination.16 We quote with approval the following findings of the Secretary of Labor on this matter, to wit:

"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid ground to teminate her employment. The disputed management action was directly connected with Ms. Ambas' determination to change the complexion of the CBA. As a matter of fact, Ms. Ambas' unflinching position in faithfully and truthfully carrying out her duties and responsibilities to her Union and its members in getting a fair share of the fruits of their collective endeavors was the proximate cause for her dismissal, the charge of insubordination being merely a ploy to give a color of legality to the contemplated management action to dismiss her. Thus, the dismissal of Ms. Ambas was heavily tainted with and evidently done in bad faith. Manifestly, it was designed to interfere with the members' right to self-organization.

Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her from the premises of the College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance within the scope of the Grievance Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."17

In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the findings of the Secretary of Labor and Employment. The right to self-organization of employees must not be interfered with by the employer on the pretext of exercising management prerogative of disciplining its employees. In this case, the totality of conduct of the employer shows an evident attempt to restrain the employees from fully exercising their rights under the law. This cannot be done under the Labor Code.

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

Philippine Scout Veterans Security vs TorresGR 92357Facts:On April 6, 1989, private respondent labor union, PGA Brotherhood Association Union of Filipino Workers (UFW), hereinafter referred to as the Union filed a petition for Direct Certification/Certification Election among the rank and file employees of Philippine Scout Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations Agency, Inc. (GVM). and Abaquin Security and Detective Agency, Inc. (ASDA). These three agencies were collectively referred to by private respondent Union as the PGA Security Agency, which is actually the first letters of the corporate names of the agencies.On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA Security Agency) at 82 E. Rodriquez Avenue, Quezon City.On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three security agencies have separate and distinct corporate personalities while PGA Security Agency is not a business or corporate entity and does not possess any personality whatsoever; the petition was unclear as to whether the rank-and-file employees mentioned therein refer to those of the three security agencies collectively and if so, the labor union cannot seek a certification election in three separate bargaining units in one petition.Issue: WON petitioners can interfere with the certification election proceeding.Held:Except where the employer has to file a petition for certification election pursuant to Article 258 of the Labor Code because of a request to bargain collectively, it has nothing to do with a certification election which is the sole concern of the workers. Its role in a certification election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as that of a mere by-stander. It has no legal standing in a certification election as it cannot oppose the petition or appeal the Med-Arbiters orders related thereto. An employer that involves itself in a certification election lends suspicion to the fact that it wants to create a company union.This Courts disapprobation of management interference in certification elections is even more forceful in Consolidated Farms, Inc. v. Noriel, where we held:On a matter that should be the exclusive concern of labor, the