LV Jo T. Escartin2009-0116542AA

LABOR CASE DIGESTS

1. ABS-CBN SUPERVISORS EMPLOYEES UNION MEMBERS v. ABS-CBN BROADCASTING CORP.

2. EDUARDO J. MARIÑO, ET. AL v. GIL Y. GAMILLA, ET. AL3. HOLY CROSS OF DAVAO COLLEGE, INC. v. VOLUNTARY ARBITRATOR JEROME JOAQUIN4. PHILIPPINE NATIONAL CONSTRUCTION CORPORATION v. DIRECTOR PURA FERRER-

CALLEJA5. PHILIPPINE ASSOCIATION OF LABOR UNIONS (PAFLU) v. SECRETARY OF LABOR6. SURIGAO CONSOLIDATED MINING COMPNAY, INC. and SURICON EMPLOYEES &

LABORERS MUTUAL ASSOCIATION (SELMA) v. PHILIPPINE LAND-AIR-SEA LABOR UNION (PLASLU) nad COURT OF INDUSTRIAL RELATIONS

7. CEBU SEAMEN’S ASSOCIATION, INC. v. HON. PURA FERRER-CALLEJA8. PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT v. HON. BIENVENIDO

LAGUESMA9. SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE

PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER) v. CHARTER CHEMICAL AND COATING CORPORATION

10. LEGEND INTERNATIONAL RESORTS, LTD. v. KILUSANG MANGGAGAWA NG LEGEND11. THE HERITAGE HOTEL MANILA v. NATIONAL UNION OF WORKERS IN THE HOTEL,

RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC)

12. TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY v. ASIA BREWERY, INC.

ABS-CBN SUPERVISORS EMPLOYEES UNION MEMBERS v. ABS-CBN BROADCASTING CORP.G.R. No. 106518, March 11, 1999

Facts:The ABS-CBN Supervisor’s Union, represented by the Union Officers and ABS-CBN

Broadcasting Corporation signed and concluded a collective bargaining agreement with a check-off of 10% of the sum total of all the salary increases and signing bonuses granted to the Supervisors. However, the Union members filed a complaint with the Bureau of Labor Relations against its Union Officers and ABS-CBN Broadcasting alleging that the check off provision is illegal because it was never submitted for consideration and approval to “all the members at a general membership meeting called for the purpose”, and prayed for its suspension. The Union Officers and ABS-CBN prayed for the dismissal of the complaint for lack of merit, arguing that the check-off provision is in accordance with the law as majority of the Union members individually executed a written authorization giving the Union officers and ABS-CBN a blanket authority to deduct subject amount.

The Med-Arbiter issued an order declaring the check-off provision illegal and ordered for the refund of an amount advance by ABS-CBN as part of the 10% sum total of CBA benefits and to stop from further making advances and deductions from the union members’ salaries. On appeal, DOLE Undersecretary Laguesma affirmed in toto the Order of the Med-Arbiter. However, after filing of a Motion for Reconsideration, Undersecretary Laguesma reversed itself and ordered that its first decision be set aside and dismissed the complaint for lack of merit.

Issue:Is the special assessment of 10% of the sum total of CBA benefits illegal?

Law Applicable:Art. 241 (g), (n) and (o), and Art. 222 (b) of the Labor Code

Art. 241. Rights and conditions of membership in a labor organization – The following are the rights and conditions of membership in a labor organization:

xxx xxx xxx(g) No officer, agent, or member of a labor organization shall collect any fees, dues or other contributions in its behalf to make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws.

xxx xxx xxx

(n) No special assessment or other extraordinary fees may be levied upon members of a labor organization unless authorized by a written resolution of a majority of all the members of a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including 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. The record shall be attested to by the president.

(o) Other than for mandatory activities under the Code, no special assessments, 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 deductions.

Art. 222. Appearances and Fees – xxx xxx xxx (b) No attorney’s fees, negotiation fees or similar charges of any kind arising from collective bargaining negotiations

or conclusion 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 union 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.

Ruling:The 10% special assessment authorized in the Collective Bargaining Agreement is valid.For an order imposing a special assessment for Union’s incidental expenses, attorney’s fees and

representation expenses to be valid, 3 requisites must be complied with namely: (1) authorization by a written resolution of the majority of all the members at the general membership meeting duly 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 employee concerned.

Based on the records of the case, these requisites have been complied with by the Union. A general meeting was held wherein the members agreed that a 10% special assessment from the total economic package due to every member would be checked-off for negotiation, other miscellaneous expenses and attorney’s fees. The minutes of the said meeting were recorded by the Union’s Secretary, Ma. Carminda Muñoz and noted by its President, Herbert Rivera and that 85 of its members executed individual authorizations for check-off.

Since all of the requisites are present, the validity of the 10% special assessment should be upheld.

Opinion:A check-off is a process of deducting a percentage from a Union member’s wages for the

payment of union dues and fees to be considered as funds of the Union. This policy is to ensure that the Union has ample amount of funds to continue its operation and to provide better services to its members. However, the law provides for its limitations and certain requisites must be complied with for the valid imposition of check offs.

These requisites are:1. Authorization by a written resolution of the majority of all the members at a general membership

meeting duly called for the purpose;2. Secretary’s record of the minutes of the meeting; and3. Individual written authorization for check-off duly signed by the employee concerned.

Failure on the part of the Union to meet these requirements would render such imposition illegal which would be tantamount to a deprivation to an employee of his basic living wage. Any deductions already made must be reimbursed back to its members.

EDUARDO J. MARIÑO, ET AL. v. GIL Y. GAMILLA, ET AL.GR 149763, July 7, 2009

Facts:Petitioners were among the executive officers and directors (Mariño Group) of the University of

Sto. Tomas Faculty Union (USTFU), a labor union duly organized and registered under the laws of the Republic of the Philippines and the bargaining representative of the faculty members of the University of Santo Tomas (UST). On the other hand, respondents were UST professors and USTFU members. The 1986 Collective Bargaining Agreement (CBA) between UST and USTFU expired on 31 May 1988. Thereafter, bargaining negotiations ensued between UST and the Mariño Group, which represented USTFU. As the parties were not able to reach an agreement despite their earnest efforts, a bargaining deadlock was declared and USTFU filed a notice of strike. Subsequently, then Secretary of the Department of Labor and Employment (DOLE) Franklin Drilon assumed jurisdiction over the dispute. The DOLE Secretary issued an Order laying the terms and conditions for a new CBA between the UST and USTFU. In accordance with said Order, the UST and USTFU entered into a CBA in 1991, which was to be effective for the period of 1 June 1988 to 31 May 1993 (hereinafter 1988-1993 CBA). In keeping with Article 253-A of the Labor Code, as amended, the economic provisions of the 1988-1993 CBA were subject to renegotiation for the fourth and fifth years.

Accordingly, on 10 September 1992, UST and USTFU executed a Memorandum of Agreement (MOA), whereby UST faculty members belonging to the collective bargaining unit were granted additional economic benefits for the fourth and fifth years of the 1988-1993 CBA. The MOA grants additional benefits to faculty members belonging to the collective bargaining unit in the amount of P42 million. It likewise provides that the union shall have the right to a pro-rata lump sum check-off of all sums of money due and payable to it from the package of said economic benefits granted. Majority of the USTFU members signed the individual instruments of ratification with purportedly signified their consent to the MOA. The ratification provides that a check-off of 10% thereof covering union dues, and special assessment for Labor Education Fund and attorney’s fees from USTFU members is authorized to be made in lump sum.

USTFU, through its President, Atty. Marino wrote a letter to the UST Treasurer requesting the release to the union of the sum of P4.2 million which was 10% of the P42M economic benefits belonging to the collective bargaining unit. The P4.2 million was sought by USTFU in consideration of its efforts in obtaining the said P42 million economic benefits package. UST remitted the sum of P4.2 million to USTFU. After deducting from the P42 million economic benefits package the P4.2 million check-off to USTFU, the amounts owed to UST, and the salary increases and bonuses of the covered faculty members, a net amount of P6,389,145.04 remained. The remaining amount was distributed to the faculty members.

Several complaints were filed by the respondents against the petitioners on the ground for violating the rights and conditions of membership in USTFU with respect to the approval of the attorney’s/agency fees worth P4.2 million in the form of check-off. Then the DOLE Department Order No. 9 took effect, amending the Rules Implementing Book V of the Labor Code, as amended. Thereunder, jurisdiction over the complaints for any violation of the union constitution and by-laws and the conditions of union membership was vested in the Regional Director of the DOLE. Pursuant to said Department Order, all four Petitions/Complaints filed by respondents against the Mariño Group were consolidated and indorsed to the Office of the Regional Director of the DOLE-NCR. The DOLE-NCR Regional Director rendered a Decision in the consolidated cases in respondents’ favor.

Petitioners interposed an appeal before the BLR. BLR rendered a decision to the effect that USTFU officers are hereby ordered to return to the general membership the amount of P4.2 million they have collected by way of attorney’s fees and that the election shall be held under the control and supervision of the Regional Office. The BLR, however, agreed in the finding of the DOLE-NCR Regional Director that the P42 million economic benefits package was sourced from the faculty members’ share in

the tuition fee increases under Republic Act No. 6728. Under said law, 70% of tuition fee increases shall go to the payment of salaries, wages, allowances, and other benefits of teaching and non-teaching personnel. The BLR further reasoned that the P4.2 M collected by the Marino Group was in the nature of attorney’s fees and therefore, fell under the general prohibition against such fees in Article 222(b) of the Labor Code. Also, the exception to charging against union funds was not applicable because the P42 million economic benefits package under the 10 September 1992 MOA was not union fund, as the same was intended not for the union coffers, but for the members of the entire bargaining unit. The fact that the P4.2 million check-off was approved by the majority of USTFU members was immaterial in view of the clear command of Article 222(b) that any contract, agreement, or arrangement of any sort, contrary to the prohibition contained therein, shall be null and void.

Issues: 1. What is the nature of the P42 million economic benefits package granted by UST to USTFU?2. Is the 10% check-off collected by the Mariño Group from the P42 million economic benefits

package legal?

Laws Applicable: Republic Act No. 6728, otherwise known as the “Government Assistance to Students and Teachers in Private Education Act."

Republic Act No. 6728 was enacted in view of the declared policy of the State, in conformity with the mandate of the Constitution, to promote and make quality education accessible to all Filipino citizens, as well as the recognition of the State of the complementary roles of public and private educational institutions in the educational system and the invaluable contribution that the private schools have made and will make to education.

Articles 222(b) and 241(n) and (o) of the Labor Code, as amended.

Art. 241. Rights and conditions of membership in a labor organization – The following are the rights and conditions of membership in a labor organization:

xxx xxx xxx(g) No officer, agent, or member of a labor organization shall collect any fees, dues or other contributions in its behalf to make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws.

xxx xxx xxx(n) No special assessment or other extraordinary fees may be levied upon members of a labor organization unless authorized by a written resolution of a majority of all the members of a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including 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. The record shall be attested to by the president.(o) Other than for mandatory activities under the Code, no special assessments, 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 deductions.

Art. 222. Appearances and Fees – xxx xxx xxx (b) No attorney’s fees, negotiation fees or similar charges of any kind arising from collective bargaining negotiations or conclusion 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 union 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.

Ruling:1. The parties themselves stipulated in Section 7 of the MOA they signed that it is understood and agreed upon that the aggregate sum of P42 million is chargeable against the share of the faculty members in the incremental proceeds of tuition fees collected and still to be collected, which incremental proceeds are, by law and pertinent Department of Education Culture and Sports (DECS) regulations, required to be allotted for the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel for the University. The “law” in the aforequoted Section 7 of the MOA can only refer to Republic Act No. 6728, otherwise known as the “Government Assistance to Students and Teachers in Private Education Act." The said statute primarily grants various forms of financial aid to private educational institutions such as tuition fee supplements, assistance funds, and scholarship grants. A private educational institution under Republic Act No. 6728 still has the discretion on the disposition of 70% of the tuition fee increase. It enjoys the privilege of determining how much increase in salaries to grant and the kind and amount of allowances and other benefits to give. The only precondition is that 70% percent of the incremental tuition fee increase goes to the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel.

In this case, UST and USTFU stipulated in their MOA that the P42 million economic benefits package granted by UST to the members of the collective bargaining unit represented by USTFU, was chargeable against the 70% allotment from the proceeds of the tuition fee increases collected and still to be collected by UST.

Given the lack of evidence to the contrary, it can be conclusively presumed that the entire P42 million economic benefits package extended to USTFU came from the 70% allotment from tuition fee increases of UST. Preceding from this presumption, any deduction from the P42 million economic benefits package, such as the P4.2 million claimed by the Mariño Group as attorney’s/agency fees, should not be allowed, because it would ultimately result in the reduction of the statutorily mandated 70% allotment from the tuition fee increases of UST. 2. The P4.2 M check-off is illegal. Article 222(b) of the Labor Code, as amended, prohibits the payment of attorney's fees only when it is effected through forced contributions from the employees from their own funds as distinguished from union funds. Hence, the general rule is that attorney’s fees, negotiation fees, and other similar charges may only be collected from union funds, not from the amounts that pertain to individual union members. As an exception to the general rule, special assessments or other extraordinary fees may be levied upon or checked off from any amount due an employee for as long as there is proper authorization by the employee.

A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from the employees, deducts union dues or agency fees from the latter's wages and remits them directly to the Union. The Union is assured thereby of continuous funding. 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.

A reading of the terms of the MOA reveals that after the satisfaction of the outstanding obligations of UST under the 1986 CBA, the balance of the P42 million was to be distributed to the covered faculty members of the collective bargaining unit in the form of salary increases, returns on paycheck deductions; and increases in hospitalization, educational, and retirement benefits, and other economic benefits. The deduction of the P4.2 million, as alleged attorney’s/agency fees, from the P42 million economic benefits

package effectively decreased the share from said package accruing to each member of the collective bargaining unit.

The Court further determines that the requisites for a valid levy and check-off of special assessments, laid down by Article 241(n) and (o), respectively, of the Labor Code, as amended, have not been complied with in the case at bar. To recall, these requisites are: (1) an authorization by a written resolution of the majority of all the union members at the general membership meeting duly 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 employee concerned.

The inclusion of the authorization for a check-off of union dues and special assessments for the Labor Education Fund and attorney’s fees, in the same document for the ratification of the MOA granting the P42 million economic benefits package, necessarily vitiated the consent of USTFU members. There was no way for any individual union member to separate his or her consent to the ratification of the MOA from his or her authorization of the check-off of union dues and special assessments. Also, the failure of the Mariño Group to strictly comply with the requirements set forth by the Labor Code, as amended, and the USTFU Constitution and By-Laws, invalidates the questioned special assessment. Substantial compliance is not enough in view of the fact that the special assessment will diminish the compensation of the union members. Their express consent is required, and this consent must be obtained in accordance with the steps outlined by law, which must be followed to the letter. Opinion:

It is worth emphasizing that the Constitution promotes and makes quality education accessible to all Filipino citizens, as well as the recognition of the State of the complementary roles of public and private educational institutions in the educational system. Education should be really within reach by every person who is willing to learn.

The system of check-off is primarily for the benefit of the Union and, only indirectly, for the individual employees. It provides for constant fund for the union. However, the law provides for its limitations and certain requisites must be complied with for the valid imposition of check offs.

These requisites are:1. Authorization by a written resolution of the majority of all the members at a general membership

meeting duly called for the purpose;2. Secretary’s record of the minutes of the meeting; and3. Individual written authorization for check-off duly signed by the employee concerned.

Therefore, the compliance with the requirements set by law in order for the employer to avail for the check-off must be strictly observed so as not to prejudice the member of the union.

HOLY CROSS OF DAVAO COLLEGE, INC. v. JOAQUING.R. No. 11007, October 18, 1996

Facts:

A CBA was entered into between petitioner Holy Cross of Davao College, Inc. and the affiliate labor organization representing its employees, respondent Holy Cross of Davao College Union-KAMAPI (hereafter KAMAPI).  Shortly before the expiration of the CBA, KAMAPI President Jose Lagahit, wrote Holy Cross expressing his union’s desire to renew the agreement, withal seeking its extension for two months, on the ground that the teachers were still on summer vacation and union activities necessary or incident to the negotiation of a new agreement could not yet be conducted. Holy Cross President Emilio P. Palma-Gil replied that he had no objection to the extension sought, it being allowable under the collective bargaining agreement.

Thus, Jose Lagahit convoked a meeting of the KAMAPI membership for the purpose of electing a new set of union officers, at which Rodolfo Gallera won election as president.  To the surprise of many, and with resultant dissension among the membership, Galera forthwith initiated discussions for the union’s disaffiliation from the KAMAPI Federation. Gallera’s group subsequently formed a separate organization known as the Holy Cross of Davao College Teachers Union, and elected its own officers.  For its part, the existing union, KAMAPI, sent to the School its proposals for a new collective bargaining contract; this it did on July 31, 1989, the expiry date of the two-month extension it had sought. Holy Cross thereafter stopped deducting from the salaries and wages of its teachers and employees the corresponding union dues and special assessment (payable by union members), and agency fees (payable by non-members), in accordance with the check-off clause of the CBA, prompting KAMAPI, on September 1, 1989, to demand an explanation.

The dispute was then brought to voluntary arbitration. Voluntary Arbitrator Jerome C. Joaquin found in favor of KAMAPI. Respecting the matter of the automatic renewal of the bargaining agreement, the Voluntary Arbitrator ruled that the request for extension filed by KAMAPI  constituted seasonable notice of its intention to renew, modify or amend the agreement, which it could not however pursue because of the absence of the teachers who were then on summer vacation. He rejected the contention of Holy Cross that KAMAPI had unreasonably delayed (until July 31, 1989) the submission of bargaining proposals, opining that the delay was partly attributable to the School’s prolonged inaction on KAMAPI’s request for extension of the CBA.  He also ruled that Holy Cross was estopped from claiming automatic renewal of the CBA because it ceased to implement the check-off provision embodied in the CBA, declaring said School’s argument -- that a  "definitive ruling" by the DOLE on the correct interpretation of the automatic-extension clause of the old CBA was a condition precedent to negotiation for a new CBA --to be a mere afterthought set up to justify its refusal to bargain with KAMAPI after the latter had proven that it was the legally-empowered bargaining agent of the school employees.  In the dispositive portion of his award, the Voluntary Arbitrator ordered Holy Cross to sit down, negotiate and conclude (an agreement) with the Holy Cross of Davao College Faculty Union-KAMAPI, which, by Resolution of the Supreme Court, remains the collective bargaining agent of the permanent and regular teachers of said educational institution and to pay to the Union the amount equivalent to the uncollected union dues from August 1989 up to the time respondent shall have concluded a new CBA with the Union, it appearing that respondent stopped complying with the CBA’s check-off provisions as of said date.

Issue: Is the employer liable to pay to the union of its employees, the amounts it failed to deduct from

their salaries -- as union dues (with respect to union members) or agency fees (as regards those not union members) -- in accordance with the check-off provisions of the collective bargaining contract (CBA) which it claims to have been automatically extended.

Law Applicable: Article 248 (e) of the Labor Code:

Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the following unfair labor practices:

xxx xxx xxx(e) To discriminate in regard to wages, hours of work, and other terms

and conditions of employment in order to encourage or discourage membership in any labor organization.

xxx xxx xxxRuling:

NO. No provision of law makes the employer directly liable for the payment to the labor organization of union dues and assessments that the former fails to deduct from its employees’ salaries and wages pursuant to a check-off stipulation.  The employer’s failure to make the requisite deductions may constitute a violation of a contractual commitment for which it may incur liability for unfair labor practice But it does not by that omission, incur liability to the union for the aggregate of dues or assessments uncollected from the union members, or agency fees for non-union employees.

Check-offs in truth impose as extra burden on the employer in the form of additional administrative and bookkeeping costs.  It is a burden assumed by management at the instance of the union and for its benefit, in order to facilitate the collection of dues necessary for the latter’s life and sustenance.  But the obligation to pay union dues and agency fees obviously devolves not upon the employer, but the individual employee.  It is a personal obligation not demandable from the employer upon default or refusal of the employer to consent to a check-off.  The only obligation of the employer under a check-off is to effect the deductions and remit the collections to the union.  The principle of unjust enrichment necessarily precludes recovery of union dues -- or agency fees -- from the employer, these being, to repeat, obligations pertaining to the individual worker in favor of the bargaining union.  Where the employer fails or refuses to implement a check-off agreement, logic and prudence dictate that the union itself undertake the collection of union dues and assessments from its members (and agency fees from non-union employees); this, of course, without prejudice to suing the employer for unfair labor practice.

There was thus no basis for the Voluntary Arbitrator to require Holy Cross to assume liability for the union dues and assessments, and agency fees that it had failed to deduct from its employees’ salaries on the proffered plea that contrary to established practice, KAMAPI had failed to submit to the college comptroller every 8th day of the month, a list of employees from whose pay union dues and the corresponding agency fees were to be deducted.

Opinion: Failure to collect the union fees and dues would not make the employer liable for such failure.

There is no provision of law, which makes the employer directly liable for the payment to the labor organization of union dues and assessments that the former fails to deduct from its employees’ salaries and wages pursuant to a check-off stipulation.  The employer’s failure to make the requisite deductions may constitute a violation of a contractual commitment for which it may incur liability for unfair labor practice. Nevertheless, such omission would not make the employee incur liability to the union for the aggregate of dues or assessments uncollected from the union members, or agency fees for non-union employees. However, there seems to be no sanction provided for in case of failure to collect. At most, such failure would only be treated as a ground for unfair labor practice. There should at least be a penalty for such failure and even the delay in collection so as to ensure the continuous operation of the union and to prevent shortage of funds. The check off being essential for the continuance of the union, the collection should be prompt. The law only granted the authority to employers to impose check-offs and collect them,

but failed to provide for sanctions in case such employer fails to collect them. It should have also provided for remedies that workers may resort to in case of such failure and to indicate the liabilities, if any, that may be incurred by the employer. The employer may think that since there is no sanctions that could be given to him if he would not collect union dues and fees, he may abuse such leeway given to him to the detriment of the union and its members.

PHILIPPINE ASSOCIATION OF LABOR UNIONS (PAFLU) v. THE SECRETARY OF LABORG.R. No. L-2222, February 27, 1969

Facts:The Registrar of Labor Relations rendered a decision cancelling the SSSEA’s Registration

Certificate due to its failure to submit reports of finances, names, postal addresses and non-subversive affidavits of its officers despite postponements and extensions of the period to appear and submit the aforementioned documents. Petitioners now assails the proceedings conducted and the decision of the Registrar alleging that Section 23 of Republic Act No. 875 violates their freedom of assembly and association; that respondents have acted without or in excess of jurisdiction and with grave abuse of discretion in promulgating beyond the 30-day period provided in Section 23(c) of Republic Act No. 875.

Issues:1. Does Section 23 of Republic Act No. 875 violate their freedom of assembly and association by

requiring the submission of certain documents?2. Did the Registrar act without or in excess of jurisdiction and with grave abuse of discretion in

promulgating beyond the 30-day period provided in Section 23(c) of Republic Act No. 875?

Laws Applicable:Section 23(b) of Republic Act No. 875:

Any labor organization, association or union of workers duly organized for the material, intellectual and moral wellbeing of its members shall acquire legal personality and be entitled to all the rights and privileges granted by law to legitimate labor organizations within thirty days of filing with the office of the Secretary of Labor notice of its due organization and existence and the following documents, together with the amount of five pesos as registration fee, except as provided in paragraph “d” of this section: 1. A copy of the constitution and by-laws of the organization together with a list

of all officers of the association, their addresses and the address of the principal office of the organization;

2. A sworn statement of all officers of the said organization, association or union to the effect that they are not members of the Communist Party and that they are not members of any organizations which teaches the overthrow of the Government by force or by any illegal or unconstitutional method; and

3. If the applicant organization has been in existence for one or more years, a copy of its last annual financial report.

Section 23(c) of Republic Act No. 875:If in the opinion of the Department of Labor the applicant organization does not appear to meet the requirements of this Act for registration, the Department shall, after ten days’ notice to the applicant organization, association or union, and within thirty days of receipt of the abovementioned documents, hold a public hearing in the province in which the principal office of the applicant is located at which the applicant organization shall have the right to be represented by attorney and to cross-examine witnesses; and such hearing shall be concluded and a decision announced by the Department within thirty days after the announcement of said hearing; and if after due hearing the Department rules against registration of the applicant, it shall be required that the Department of Labor state specifically what data the applicant has failed to submit as a prerequisite of registration. If the applicant is still denied, it thereafter shall have

the right within sixty days of formal denial of registration to appeal to the Court of Appeals, which shall render a decision within thirty days, or to the Supreme Court.

Ruling:The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of

assembly and association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of said section is not a limitation to the right of assembly or association, which may be exercised with or without said registration.  The latter is merely a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the possession of the "rights and privileges granted by law to legitimate labor organizations". The Constitution does not guarantee these rights and privileges, much less said personality, which are mere statutory creations, for the possession and exercise of which registration is required to protect both labor and the public against abuses, fraud, or impostors who pose as organizers, although not truly accredited agents of the union they purport to represent.  Again, the 30-day period invoked by the petitioners is inapplicable to the decision complained of. Said period is prescribed in paragraph (c)  of Section 23, which refers to the proceedings for the "registration" of labor organizations, associations or unions not to the "cancellation" of said registration, which is governed by the above quoted paragraph (d) of the same section.

Opinion:The enumeration of requirements provided in Section 23 of RA 875 is for the labor organization to

acquire legal personality and be recognized as the legitimate labor organization of a certain business or company. It is a valid exercise of the police power because the activities in which labor organizations, associations and union of workers are engaged affect public interest, which should be protected.  Furthermore, the obligation to submit financial statements, as a condition for the non-cancellation of a certificate of registration, is a reasonable regulation for the benefit of the members of the organization, considering that the same generally solicits funds or membership, as well as oftentimes collects, on behalf of its members, huge amounts of money due to them or to the organization. 

SURIGAO CONSOLIDATED MINING COMPANY, INC. and SURICON EMPLOYEES & LABORERS MUTUAL ASSOCIATION (SELMA) v. PHILIPPINE LAND-AIR-SEA LABOR UNION (PLASLU) and

COURT OF INDUSTRIAL RELATIONS

G.R. No. L-22970, June 9, 1969

Facts:

A set of demands, among others, for the increase of the salaries and wages of the employees and laborers of SURICON by 100% over and above their salaries and wages at that time; for the observance by SURICON of the Eight-Hour Labor Law; for the payment to the employees and laborers of SURICON who had rendered overtime work and those who had worked on Sundays and holidays, 50% over and above their respective regular rate, etc. In due time SURICON answered the allegation interposing that over 90% of its employees and laborers were members of SELMA with whom on November 16, 1949 it had entered into a collective bargaining contract which at the time of the filing of the petition, was still in force; that, this being so, SURICON was not in a position to consider or entertain the demands of PLASLU; that SURICON had been paying to all its employees and laborers the standard salaries and wages for employees and laborers in the mining industry in the locality and which were equal to, if not higher, than the salaries and wages fixed by the CIR for the employees and laborers of the Mindanao Mother Lode Mines, Inc.; that the economic conditions did not warrant further increases in the salaries and wages of its employees and laborers; that SURICON had not dismissed any one of its employees or laborers for membership in PLASLU.

SELMA, with previous leave of the CIR, filed a petition in intervention alleging, among other things, that nearly all the employees and laborers of SURICON, eligible for membership in a labor organization, were and had been its members; that it had an existing collective bargaining contract with SURICON since November 16, 1949. As a consequence it prayed for the dismissal of the petition of PLASLU and for the continued enforcement of its collective bargaining contract with SURICON. SURICON filed a motion to dismiss the main case upon the ground that PLASLU was not a legitimate labor union and, therefore, had no capacity to sue, and also upon the further ground that PLASLU had failed to prosecute its case for an unreasonable period of time. And then, PLASLU filed a motion praying that the court order its Examiner to proceed to SURICON's establishment to examine its books of accounts, vouchers, payrolls and all other pertinent company records to determine the money value of the awards granted in the aforesaid order, and to determine further the money value of all rights, benefits and privileges granted thereby in accordance with the statement made by SURICON's counsel. PLASLU filed another motion praying that the court order its Chief Examiner or one of his assistants to continue with and terminate the examination of the records of SURICON and thereafter render a complete report.   The partial report of examiner shows that the employees and laborers of the Surigao Consolidated Mining Company, Inc., have not been actually and fully enjoying all the rights, benefits, and privileges contained in the order of the Court dated March 11, 1954.

An Appeal was interposed by petitioner SURICON, and SELMA, intervenor, from an order of the Court of Industrial Relations approving the reports of the Court's examiner. Having failed to secure the reversal, respondent appealed by certiorari to the Supreme Court, and again it was dismissed for lack of merit. The order, empowering the examining division to render a report on the equivalent money value of all their claims, except those demands withdrawn and those within the scope of bargaining negotiations, was final.

As far as the appeal of SELMA is concerned on whether it is PLASLU or SELMA who should be recognized as the appropriate bargaining representative of the employees and laborers of SURICON since April 23, 1951 and should represent them in the case, SELMA filed a petition for certification election. By order of the CIR, the Department of Labor conducted the corresponding election, the result

being that SELMA won overwhelmingly. As a consequence, the CIR certified SELMA as the sole and exclusive representative of all the employees and workers of SURICON. This must be deemed final as to the issue between these two parties.

Issue: The only issue left for the respondent is to determine the correctness of the examiner’s report. Is

the reported money value correct?

Law Applicable: In this case, no law was applied since the issue involved has something to do with the

correctness of the examiner’s report on the basis of a court order.

Ruling: Yes. SURICON, through employees duly designated, actively cooperated with the CIR and its

Chief Examiner in the examination of its own books and in the computation of the money value of the questioned awards. As a matter of fact, its only objection against the reports themselves was that they were not correctly based, meaning that instead of the examination and computation being based on the testimony of SURICON's general superintendent, they were based on the statement made in open court by SURICON's counsel subsequent to the giving of such testimony. At the very least, therefore, it seems clear that SURICON must be deemed barred from now saying that the court had not acquired jurisdiction over the demands of PLASLU. The Court ruled that neither the CIR nor its Chief Examiner nor the latter's assistant committed any error in relation to this particular issue under consideration.

Opinion:

The dispute between the union and the management should have first been subjected to the remedies provided for in the Constitution which promotes the preferential use of voluntary modes of settling dispute instead of going directly to the courts. If they have availed first of various modes of voluntary settlement, they would have avoided the gruesome and long process of litigation. The case involved several issues but when it reached the Supreme Court, the only issue left was the correctness of the reported money value which they could have determined earlier if they resorted to an amicable settlement to meet the demands of each other.

CEBU SEAMEN’S ASSOCIATION, INC. v. HON. PURA FERRER-CALLEJAG.R. No. 83190 August 4, 1992

Facts:On October 23, 1950, a group of deck officers and marine engineers on board vessels plying

Cebu and other ports of the Philippines organized themselves into an association and registered it as a non-stock corporation known as Cebu Seamen’s Association, Inc. (CSAI) with the Securities and Exchange Commission (SEC). Later, the same group registered its association with the Bureau of Labor Relations as a labor union known as the Seamen’s Association of the Philippines, Incorporated (SAPI).

SAPI had an existing collective bargaining agreement with Aboitiz Shipping Corporation and had been remitting checked-off union dues to said union until a group of union members headed by Manuel Gabayoyo, introducing themselves as the new set of officers elected under the supervision of the SEC, claimed that they are entitled to the remittance and custody of such union dues. Subsequently, another group headed by Dominica Nacua, claiming as the duly elected set of officers of the union, filed a complaint, for and in behalf of the union, against CSAI to restrain them from acting on behalf of the union and directing Aboitiz to remit the checked-off union dues.

CSAI filed its answer alleging that the union and the former are one and the same and that Nacua has already been expelled as member/officer of the union through two resolutions its Board of Directors.

The Med-Arbiter issued an order holding that the set of officers of SAPI headed by Nacua, was the lawful set of officers entitled to the release and custody of the union dues as well as agency fees of the said association. On appeal, the Bureau of Labor Relations affirmed the decision of the Med-Arbiter and after the Secretary of Labor denied CSAI’s appeal/motion for reconsideration for lack of merit, filed a petition with the Supreme Court.

Issue:

Who is entitled to the collection and custody of the union dues?

Law applicable:

Art. 242-A (b) of the Labor CodeArt.242-A. Reportorial Requirement – the following are documents to be

submitted to the Bureau by the legitimate labor organization concerned:xxx xxx xxx

(b) Its list of officers, minutes of the election of officers and list of voters within 30 days from election.

xxx xxx xxxFailure to comply with the above requirements shall not be a ground for

cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty.

Ruling:It is the set of officers headed by Dominica Nacua that is the lawful set of officers of SAPI and is,

therefore, entitled to the release and custody of the union dues as well as the as the agency fees. As stated in the findings of fact, CSAI, a non-stock corporation was registered with the SEC. The

same group was registered with the BLR as SAPI. It is the registration of the organization with the BLR and not with the SEC which made it a legitimate labor organization with rights and privileges granted under the Labor Code.

The Supreme Court also stated that BLR correctly ruled on the basis of the evidence presented by the parties that SAPI, the legitimate labor union, registered with its office, is not the same association as CSAI, the corporation, insofar as their rights under the Labor Code are concerned.

A record check with the BLR shows that SAPI has submitted to it for files the list of this new set of officers, in compliance with second paragraph of Art 242 (c) of the Labor Code [now Art. 242-A (b)]. This list sufficiently sustains the view that said officers were lawfully elected, in the absence of clear and convincing proof to the contrary.

Opinion:The rights and privileges that may be granted to organizations differ depending on what

government agency they are created and registered. A group of persons having the same skills or profession registered as a corporation cannot be considered as a representative of a labor group or union without having been registered with the appropriate government agency, even though they would still be one to compose such labor group or union.

The Bureau of Labor Relations has correctly decided on the issue as to who among the two organizations is the legitimate labor organization capable of representing the workers and is entitled to certain rights and privileges. The CSAI cannot be considered as the legitimate labor organization as it was created and registered with the SEC. Thus, it is to be labelled as a corporation. On the other hand, the same group that created the CSAI, which registered the same to the Bureau of Labor Relations, as SAPI has now created a labor organization that is separate and distinct from the one created with the SEC. For one, the governing law between them is different; CSAI is governed by the Corporation Code and the Securities and Regulations Code, while the SAPI is that of the Labor Code. Since the dispute is one concerning the labor union dues and agency fees, the one that would govern would be the Labor Code, and SAPI being registered with the LRB is considered to be the one having been granted such right and privileges.

PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT v. HON. BIENVENIDO LAGUESMAG.R. No. 115077, April 19, 1997

Facts:Nagkakaisang Lakas ng Manggagawa-Katipunan filed a petition for certification election with the

DOLE in behalf of the rank and file employees of the progressive dev. corp (pizza hut).Petitioners filed a motion to dismiss alleging fraud, falsification and misrepresentation in the respondent. The motion specifically alleged that a.) respondent union registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in the ratification of the respondent union's constitution and by-laws and in the election of its officers that there were 2 sets of supposed attendees to the alleged organizational meeting that was alleged to have taken place on june26,1993. b.) while the application for registration of the charter was supposed to have been approved in the organizational meeting held on much less, c.) application for registration of the charter was supposed to have been approved in the organizational meeting held on 1993, the charter cert issued by the federation KATIPUNAN was dated 1993 or 1 day prior to the formation of the chapter, thus, there were serious falsities in the dates of the issuance of the charter cert and the organization meeting of the alleged chapter. d.) voting was not conducted by secret ballot in violation of art. 241,sec(c) of the labor code (e) the constitution & by laws submitted.

Issue:Is the issuance of a certificate of registration by the Bureau of Labor Relations a ministerial

function upon the submission of the necessary papers and documents by a labor organization?

Laws Applicable:Art. 234, 235 and 239 of the Labor Code

Art. 234. Requirements of registration. — Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:(a) Fifty pesos (P50.00) registration fee;(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;(c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it.

Art. 235. Action on application. — The Bureau shall act on all applications for registration within thirty (30) days from filing.

Article 239. Grounds for cancellation of union registration.- The following may constitute grounds for cancellation of union registration:(a)     Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;

(b)     Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters;(c)     Voluntary dissolution by the members. (As amended by Section 5, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Ruling:No, it is not merely a ministerial function of the Bureau of Labor Relations. The court held that to

determine the validity of labor unions art.234 requirements of registration must be complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a legitimate labor organization.

Further, inasmuch as the legal personality of respondent union had been seriously challenge, it would have been more prudent to have granted petitioners request for the suspension of proceedings in the cert election case, until the issue of the legality of the unions registration shall have been resolved. Failure of the med-arbiter and public respondent to heed the request constituted a grave abuse of discretion.

Opinion:

It is not a ministerial duty of the Bureau of Labor Relations to issue certificates of registration to all organizations wishing to be established as the legitimate labor organization of a particular industry or business. Registration requirements specifically afford a measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends. The Bureau of Labor Relations needs to exercise discretion in the scrutiny and examination of submitted requirements. Such requirements are a valid exercise of the police power, because the activities in which labor organizations, associations and unions of workers are engaged directly affect the public interest and should be protected. 

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER) v. CHARTER CHEMICAL AND

COATING CORPORATIONG.R. No. 169717, March 16, 2011

Facts: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for

Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region. Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union.

Issue: Is the alleged failure to certify under oath the local charter certificate issued by its mother

federation and list of the union membership attending the organizational meeting as well as the inclusion of supervisory employees grounds for the cancellation of petitioner [union's] legal personality as a labor organization and for the dismissal of the petition for certification election?

Laws Applicable:Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997

Section 1. Chartering and creation of a local chapter -- A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: (a)  A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;(b)  The names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c)  The local/chapter's constitution and by-laws provided that where the local/chapter's constitution and by-laws [are] the same as [those] of the federation or national union, this fact shall be indicated accordingly.

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

R.A. No. 6715

Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions):

"Sec. 1. Who may join unions. – xxx xxx xxx Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; Provided, that those supervisory employees who are included in an existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)

Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:

Sec. 1. Where to file. - A petition for certification election may be filed with the

Regional Office which has jurisdiction over the principal office of the employer. The petition shall be in writing and under oath.

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

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

xxx xxx xxx

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

Ruling:As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga

Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW), which was decided under the auspices of D.O. No. 9, Series of 1997, we ruled:

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapter's officers x x x certify or attest to a document which they had no hand in the preparation of.

In accordance with this ruling, petitioner union's charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution and by-laws - the last two requirements having been executed under oath by the proper union officials as borne out by the records.

With respect to co-mingling of supervisory employees, under Article 245 of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union (hereinafter Toyota).

Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in evidence the job descriptions of the aforesaid employees. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling within the definition of supervisory employees under Article 212(m) of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by the appellate court, that petitioner

union consisted of both rank-and-file and supervisory employees.Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not

divest it of its status as a legitimate labor organization. The appellate court's reliance on Toyota is misplaced in view of this Court's subsequent ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc. (hereinafter Kawashima).  In Kawashima, we explained at length how and why the Toyota doctrine no longer holds sway under the altered state of the law and rules applicable to this case, viz:

R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization.

It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions):

"Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; Provided, that those supervisory employees who are included in an existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)

And Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:"Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. The petition shall be in writing and under oath.Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition.

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

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

By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election.

Additionally, the applicable law and rules in the instant case are the same as those in Kawashima because the present petition for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees; it had the right to file the subject petition for certification election.

Opinion:The status of being a legitimate labor organization can be acquired upon the submission of:

1. The Charter Certificate;2. Names of the officers, their addresses and the principal office of the labor organization; and3. The Constitution and By-laws.

Of these requirements, (2) and (3) would be the operative fact with which such status would be acquired as these are executed under oath by the person concerned. This is the product of the liberalization of the registration requirements of unions. However, the agencies must exercise discretion in accepting the applications for registration and must still put diligent efforts in ascertaining whether such documents submitted are genuine and duly executed and not merely fabricated. This is to protect the interests of the members as well as the employers and to prevent the proliferation of fly-by-night unions.

LEGEND INTERNATIONAL RESORTS, LTD. VS. KILUSANG MANGGAGAWA NG LEGENDGR 169754. February 23, 2011

Facts: During the pendency of the Petition for Certification Election filed by Kilusang Manggagawa ng

Legend (KML), Legend International Resorts (Legend) filed a Petition for Cancellation of Union Registration of KML alleging the same grounds as its motion to dismiss in KML’s Petition for Certification Election, which are: (a) KML’s membership is a mixture of rank and file and supervisory employees and (b) there was fraud in the acquisition of its certificate of registration. KML’s Petition was denied, while Legend’s Petition was granted. On appeal, the DOLE Secretary rendered for KML. CA affirmed.

Issue: Does the finality of the decision cancelling the certificate registration pending the Petition for

Certificate Election remove the legal personality of union to be granted such petition?

Law Applicable: Section 5, Rule V of the Implementing Rules of Book V (Department Order No. 9)

SEC. 5. Effect of registration. - The labor organization or worker's 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.

Ruling: NO. The cancellation of KML’s certificate of registration should not retroact to the time of its

issuance, hence divesting KML of the legal personality to be granted a Certification Election. Moreover, the pendency of a petition for cancellation of union registration does not also preclude collective bargaining. For the fact is that at the time the union filed its petition for certification, it still had the legal personality to perform such act absent an order directing its cancellation.

Petition to cancel/revoke registration is not a prejudicial question to the petition for certification election because it is well-settled rule that `a certification proceedings is not a litigation in the sense that the term is ordinarily understood, but an investigation of a non-adversarial and fact finding character.  Thus, the technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the sufficiency of the petition as well as a careful look into the arguments contained in the position papers and other documents.

Further, such legal personality may not be subject to a collateral attack but only through a separate action instituted particularly for the purpose of assailing it. Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for the dismissal of a petition for certification election based on the lack of legal personality of a labor organization only in the following instances: (1) appellant is not listed by the Regional Office or the BLR in its registry of LLO; or (2) appellant's legal personality has been revoked or cancelled with finality.  Since KML is listed in the registry of LLO, and its legitimacy has not been revoked or cancelled with finality, the granting of its petition for certification election is proper.

Opinion: . Once a legal personality to file a petition for certification election is granted to a union and the

same cannot be subject to a collateral attack. A separate action must be instituted directly assailing the validity of the petition for certification election. Moreover, even if such separate action is filed pending the

petition for certificate election, such separate action cannot operate as a prejudicial question. Ruling otherwise will place the right of union on the manipulative hands of the employer, such that, the employer will always have the unbridled discretion to hamper, through the mere filing of a petition for cancellation of union registration, the exercise of employees guaranteed to them under the Constitution, i.e., legitimation of a union (right to self-organization) and exercise of collective bargaining.

THE HERITAGE HOTEL MANILA vs. NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER

(NUWHRAIN-HHMSC) GR 178296, January 12, 2011

  Facts:

The National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC) was issued an order for certification election. Subsequently, when Heritage Hotel Manila (Heritage) discovered that NUWHRAIN-HHMSC had failed to submit to the BLR its annual financial report for several years and the list of its members since the time it filed its registration papers, Heritage filed a Petition for Cancellation of Registration of NUWHRAIN-HHMSC and requested the suspension of the certification election proceedings. Nevertheless, the certification election pushed through and NUWHRAIN-HHMSC emerged as the winner.

Thereafter, Heritage filed a Protest with Motion to Defer Certification of Election Results and Winner contending that the petition for cancellation should be first resolved before the proclamation of the winner in the certification election. The Med-Arbiter held that the pendency of a petition for cancellation of registration is not a bar to the holding of a certification election. The DOLE Secretary likewise dismissed the appeal and the subsequent MR.

In the meantime, the Regional Director of DOLE-NCR finally resolved the petition for cancellation of registration. While finding that respondent had indeed failed to file financial reports and the list of its members for several years, he, nonetheless, denied the petition, because the freedom of association and the employees’ right to self-organization are more substantive considerations. The DOLE Secretary Sto. Tomas dismissed the subsequent appeal, holding that the constitutionally guaranteed freedom of association and right of workers to self-organization outweighed respondent’s noncompliance with the statutory requirements to maintain its status as a legitimate labor organization. MR was denied. CA affirmed the decision of the DOLE Secretary.

Issue: Is the cancellation of union registration a ministerial duty of the Regional Director upon the

existence of any of the grounds enumerated under Article 239 of the Labor Code?

Laws Applicable: Articles 238 and 239 of the Labor Code:

Art. 238. Cancellation of registration; appeal – The certificate of registration of any legitimate labor organization, whether national or local, shall be canceled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements herein prescribed. (emphasis supplied).             Art. 239. Grounds for cancellation of union registration – The following shall constitute grounds for cancellation of union registration:

xxx xxx xxx                       (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;

xxx xxx xxx           Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau. (emphasis supplied).

Republic Act (R.A.) No. 9481, An Act Strengthening the Workers’ Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines, which became effective on June 14, 2007, sought to strengthen the workers’ right to self-organization and enhance the Philippines’ compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers’ organizations by administrative authority. Thus, R.A. No. 9481 amended Article 239 to read: 

                   ART. 239. Grounds for Cancellation of Union Registration.—The following may constitute grounds for cancellation of union registration:             (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;             (b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters;             (c) Voluntary dissolution by the members. 

R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides: 

          ART. 242-A. Reportorial Requirements.—The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned:             (a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto;  (b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;           (c) Its annual financial report within thirty (30) days after the close of every fiscal year; and

(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. (emphasis supplied).

Ruling:No. The use of the word “shall” in Article 238 does not make the cancellation of registration a

mere ministerial duty, once it is determined that a ground enumerated in Article 239 of the Labor Code is present. use of the word “shall.” This is because, the same provision of the Article 238 “if it has reason to believe”, which thereby indicates an ample discretion in dealing with a petition for cancellation of a union’s registration, particularly, determining whether the union still meets the requirements prescribed by law. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the requirements of the law. After all, the law requires the labor organization to submit the annual financial report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-

night unions. With the submission of the required documents by NUWHRAIN-HHMSC, the purpose of the law has been achieved, though belatedly.

The union members and, in fact, all the employees belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the union officers who were responsible for the submission of the documents to the BLR.

Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union registration, lest they be accused of interfering with union activities. In resolving the petition, consideration must be taken of the fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities. Labor authorities should bear in mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges granted by law to a legitimate labor organization, particularly the right to participate in or ask for certification election in a bargaining unit. Thus, the cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses - as a rule - its rights under the Labor Code.

Moreso, it is worth mentioning that the amendment introduced by RA 9481 to the Labor Code’s provisions on cancellation of union registration and on reportorial requirements further strengthened the Constitutionally guaranteed right of the worker to self-organization because the said new law enhanced the Philippine’s compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers’ organizations by administrative authority. Thus, R.A. No. 9481 amended the Labor Code making the failure to file an annual financial report within thirty (30) days after the close of every fiscal year as herein assailed not a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. Opinion:

It is an established principle that substantial rights prevail over the deficiency of procedural matters. The Constitutional rights guaranteed to the workers could not be hampered by the non-compliance with procedural matters.

Considering that it is through the mere negligence of the officers of the union that the procedural matters are not complied with, the right of other innocent workers to self-organization should not be prejudiced. The right to self-organization is not meant to make the members of the union suffer collectively for a mere mistake of a single member of it. The purpose of the right is to protect labor and not to penalize labor for joining such organization.

Therefore, the right to self-organization was properly upheld contra the non-compliance with the procedural requirements of the law.