Sta. Lucia East Commercial Corp. v. Sec. of Labor

169. STA. LUCIA EAST COMMERCIAL CORPORATION, peti tioner, vs. HON.
SECRETARY OF LABOR AND EMPLOY MENT and STA. LUCIA EAST COMMERCIAL
CORPORA TION WORKERS ASSOCIATION (CLUP LOCAL CHAPTER), respondents.
G.R. No. 162355. August 14, 2009.*

FACTS:

On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of
its chartered local, instituted a petition for certification election among the regular rank-
and-file employees of Sta. Lucia East Commercial Corporation (SLECC) and its
Affiliates. The affiliate companies included in the petition were SLE Commercial, SLE
Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys,
Home Gallery and Essentials.
On 10 October 2001, CLUP-Sta. Lucia East Commercial Corporation and its Affiliates
Workers Union [CLUP-SLECC and its Affiliates Workers Union] reorganized itself and
re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association
(herein appellant CLUP-SLECCWA), limiting its membership to the rank-and-file
employees of Sta. Lucia East Commercial Corporation. It was issued Certificate of
Creation of a Local Chapter No. RO400-0110-CC-004.
On the same date, [CLUP-SLECCWA] filed the instant petition for direct certification. It
alleged that [SLECC] employs about 115 employees and that more than 20% of
employees belonging to the rank-and-file category are its members.
On 22 November 2001, SLECC filed a motion to dismiss the petition. It averred that it
has voluntarily recognized [SMSLEC] on 20 July 2001 as the exclusive bargaining agent
of its regular rank-and-file employees, and that collective bargaining negotiations already
commenced between them. SLECC argued that the petition should be dismissed for
violating the one year and negotiation bar rules under pars. (c) and (d), Section 11, Rule
XI, Book V of the Omnibus Rules Implementing the Labor Code.
On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its
rank-and-file employees and registered with DOLE-Regional Office No. IV on 9 January
2002.
In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its Opposition and
Comment to [SLECCS] Motion to Dismiss.
In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed CLUP-
SLECCWAs petition for direct certification on the ground of contract bar rule. The prior
voluntary recognition of SMSLEC and the CBA between SLECC and SMSLEC bars the
filing of CLUP-SLECCWAs petition for direct certification. This was reversed by the
Secretary of Labor. The Secretary held that the subsequent negotiations and registration
of a CBA executed by SLECC with SMSLEC could not bar CLUP-SLECCWAs
petition. CLUP-SLECC and its Affiliates Workers Union constituted a registered labor
organization at the time of SLECCs voluntary recognition of SMSLEC.
On appeal to the Court of Appeals (CA), the appellate court further ruled that the
Secretary of Labor and Employment (Secretary) was correct when she held that the
subsequent negotiations and registration of a collective bargaining agreement (CBA)
executed by SLECC with Samahang Manggagawa sa Sta. Lucia East Commercial
(SMSLEC) could not bar Sta. Lucia East Commercial Corporation Workers
Associations (SLECCWA) petition for direct certification.

Issue:
Can the subsequent negotiations and registration of a CBA executed by SLECC with SMSLEC
could not bar CLUP-SLECCWAs petition?

Ruling:
NEGATIVE. CLUP-SLECC and its Affiliates Workers Union constituted a registered labor
organization at the time of SLECCs voluntary recognition of SMSLEC. It may be recalled that
CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a
legitimate labor organization representing a non-appropriate bargaining unit. However, CLUP-
SLECC and its Affiliates Workers Union subsequently re-registered as CLUP-SLECCWA,
limiting its members to the rank-and-file of SLECC. SLECC cannot ignore that CLUP-SLECC
and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs
voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether
CLUP-SLECC and its Affiliates Workers Union represented an appropriate bargaining unit.

The employer may voluntarily recognize the representation status of a union in unorganized
establishments. SLECC was not an unorganized establishment when it voluntarily recognized
SMSLEC as its exclusive bargaining representative on 20 July 2001. CLUP-SLECC and its
Affiliates Workers Union filed a petition for certification election on 27 February 2001 and this
petition remained pending as of 20 July 2001. Thus, SLECCs voluntary recognition of
SMSLEC on 20 July 2001, the subsequent negotiations and resulting registration of a CBA
executed by SLECC and SMSLEC are void and cannot bar CLUP-SLECCWAs present petition
for certification election.

We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-
SLECCWAs petition for certification election. In petitions for certification election, the
employer is a mere bystander and cannot oppose the petition or appeal the Med-Arbiters
decision. The exception to this rule, which happens when the employer is requested to bargain
collectively, is not present in the case before us
NOTES:
Legitimate Labor Organization - Article 212(g) of the Labor Code defines a labor organization
as any union or association of employees which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers concerning terms and conditions of
employment. Upon compliance with all the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is
included in the roster of legitimate labor organizations.[6] Any applicant labor organization 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.[7]

Bargaining Unit - is a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, consistent with equity to the employer, indicated
to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.

Fundamental factors in determining the appropriate collective bargaining unit are:
(1) the will of the employees (Globe Doctrine);
(2) affinity and unity of the employees interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule);
(3) prior collective bargaining history; and
(4) similarity of employment status.

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169. STA. LUCIA EAST COMMERCIAL CORPORATION, peti tioner, vs. HON.

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