I.

Introduction/ Overview

A. Definitions/Classification

B. 1. Justification: Social Justice-

Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and
the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number." (MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.)

Const. Art II, Section 10;

SECTION 10. The State shall promote social justice in all phases of national
development.

Article XIII, Secs. 1-3;

SECTION 1. The Congress shall give highest priority to the enactment of measures
that protect and enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities by equitably
diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.

SECTION 2. The promotion of social justice shall include the commitment to create
economic opportunities based on freedom of initiative and self-reliance.

Labor

SECTION 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining

and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial
peace.

The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and growth.
2. Foundation or basis: Police Power of the State

police power as the power to promote the general welfare and public interest;  to enact such
laws in relation to persons and property as may promote public health, public morals, public
safety and the general welfare of each inhabitant;  to preserve public order and to prevent
offenses against the state and to establish for the intercourse of citizen with citizen those rules
of good manners and good neighborhood calculated to prevent conflict of rights.

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3. Ultimate Goal: Industrial Peace- Const., Art XIII, Sec. 3, par. 3

The State shall promote the principle of shared responsibility between workers and employers
and the preferential use of voluntary modes in settling disputes, including conciliation, and
shall enforce their mutual compliance therewith to foster industrial peace.

C. 7 Cardinal Rights of Workers. Guaranteed by the Constitution – 1987 Const., Art XIII,
Sec.3, pars. 1,2

SECTION 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining

and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
D. Management Prerogative- Rule- 1987 Const., Art XIII, Sec 3., pars. 3,4

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial
peace.

The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and growth.
1. Private sector; plays an indispensable role- 1987 Const. Art II, Sec 20

University of Immaculate Conception, Inc. vs. Secretary of Labor

When the Union went on strike after two members were dismissed by the UNIVERSITY
during the cooling-off period, the Secretary of Labor issued an Order assuming jurisdiction over
the labor dispute pursuant to Article 263 (g) of the Labor Code. The individual respondents
were terminated after claiming that they could still retain their confidential positions while
being members or officers of the Union but the Secretary of Labor ordered their reinstatement
which was later modified by the acting secretary for them to be placed under payroll
reinstatement until the validity of their termination is finally resolved. The UNIVERSITY
questioned the legality of the order of the Secretary of Labor after assuming jurisdiction. The
Supreme Court upheld the legality of the order of the Secretary of Labor.

The Court stated that the exercise of management prerogatives is not absolute, but
subject to exceptions and one of which is when the Secretary of Labor assumes jurisdiction
over labor disputes involving industries indispensable to the national interest under Article
263(g) of the Labor Code.

E. Balancing of Interests- 1987 Constitution, Art XIII, Sec 3, par.4

The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and growth. (regulate to
balance)
RULE: “When the conflicting interests of labor and capital are weighed on the scales of social
justice, the heavier influence of the latter must be counterbalanced by the sympathy and
compassion; the law must accord the underprivileged woker x x x if he is to be given the
opportunity- and the right- to assert and defend his cause x x x with which he can negotiate on
an even plane.” (equal footing)

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REASON: Labor is not a mere employee of Capital but its active and equal partner.

Baron vs. EPE Transport, Inc.

The petitioners filed three separate complaints for violation of the CBA, unfair labor
practice and illegal dismissal against respondent. The Court of Appeals ruled in favor of the
respondents, setting aside the decision of NLRC and affirming the decision of the Labor Arbiter
that the petitioners went on AWOL and failed to establish the fact of their dismissal. Petitioners
asserted that they were unceremoniously dismissed after they charged respondents of violating
the CBA before the NLRC.

The Supreme Court ruled that abandonment of work does not per se sever the
employer-employee relationship but dismissal of the employee after complying with the
procedure prescribed by law. Since petitioners’ abandonment was not proven by respondents
in this case, the NLRC correctly ruled that the petitioners were illegally dismissed.

I. STATE POLICY: WORKER EMPOWERMENT- Labor Relations

A. Voluntary/Democratic Method of Dispute Settlement – 1987 Const., Art XIII,

Sec. 3, par.3; Labor Code, Art. 218 (211) A(a) and B; Art. 3

Estate of Nelson R. Dulay vs. Aboitiz Jebsen Maritime, Inc

The widow of Dulay, Merridy, filed a complaint with the NLRC against GCI for death and
medical benefits and damages when the former refused to grant the said benefits based on the
CBA. The respondents filed a petition for certiorari after the CA ruled that the jurisdiction
belongs to the voluntary arbitrator which ordered the payment of the benefits claimed by
Merridy less the benefits already received by Dulay’s brother.

The Supreme Court held that Articles 217(c) and 261 of the Labor Code are very specific
in stating that voluntary arbitrators have jurisdiction over cases arising from the interpretation
or implementation of collective bargaining agreements. In the case, Merridy’s issue in her
complaint was the interpretation of the provisions of the CBA insofar as death benefits due to
the heirs of Nelson are concerned. It is only in the absence of a collective bargaining agreement
that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration.

B. Trade Unionism- 1987 Const., Art III, Sec 8; Art. 218 (211) A (b)(c); Art.
219(212) (g); DO 40-03 Book V, Rule VI, Sec 1

Def. Trade Union Activities- Art 285 (270) (a), par 2

C. Worker Enlightenment – Art. 218 (211) A (d); Art. 250 (241) (p), Art. 292
(277) (a)

D. Adequate Machinery for Expeditious Dispute Settlement -1987 Const., Art.

III, Sec 16; Art 218 (211) A€, 219 (212) (a)(b)(c)(d)

Art. 212. Definitions.

a. “Commission” means the National Labor Relations Commission or any of its

divisions, as the case may be, as provided under this Code.
 
b. “Bureau” means the Bureau of Labor Relations and/or the Labor Relations
Divisions in the regional offices established under Presidential Decree No. 1, in
the Department of Labor.
 

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 c. “Board” means the National Conciliation and Mediation Board established
under Executive Order No. 126.
 
d. “Council” means the Tripartite Voluntary Arbitration Advisory Council
established under Executive Order No. 126, as amended.
1. National Labor Relations Commission; Labor Arbiters -Arts. 219(a), 220
(213), 224 (217)

Art. 217. Jurisdiction of the Labor Arbiters and the Commission.

a. Except as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or non-agricultural:
 
1. Unfair labor practice cases;
 
2. Termination disputes;
 
3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
 
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
 
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and
 
6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement.
 
b. The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
 
c. Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of
company personnel policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitration as may
be provided in said agreements. (As amended by Section 9, Republic Act No.
6715, March 21, 1989)

2. National Conciliation Mediation Board – Art. 219 (212) (c ); 261 (250) (c )

(d) (e)

c. If the dispute is not settled, the Board shall intervene upon request of either or
both parties or at its own initiative and immediately call the parties to
conciliation meetings. The Board shall have the power to issue subpoenas
requiring the attendance of the parties to such meetings. It shall be the duty of
the parties to participate fully and promptly in the conciliation meetings the
Board may call;
 
d. During the conciliation proceedings in the Board, the parties are prohibited
from doing any act which may disrupt or impede the early settlement of the
disputes; and
 
e. The Board shall exert all efforts to settle disputes amicably and encourage the
parties to submit their case to a voluntary arbitrator. 

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 3. Bureau of Labor Relations; Labor Relations Division- Arts. 219(212) (b),
232 (226)

Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and

the Labor Relations Divisions in the regional offices of the Department of
Labor, shall have original and exclusive authority to act, at their own
initiative or upon request of either or both parties, on all inter-union and
intra-union conflicts, and all disputes, grievances or problems arising from
or affecting labor-management relations in all workplaces, whether
agricultural or non-agricultural, except those arising from the
implementation or interpretation of collective bargaining agreements which
shall be the subject of grievance procedure and/or voluntary arbitration.

The Bureau shall have fifteen (15) working days to act on labor cases before
it, subject to extension by agreement of the parties.

4. Tripartite Voluntary Arbitration Advisory Council – Arts. 219 (212) (a);

(260-262) 273-275

Art. 275. Tripartism and tripartite conferences.

a. Tripartism in labor relations is hereby declared a State policy. Towards this

end, workers and employers shall, as far as practicable, be represented in
decision and policy-making bodies of the government.
 
b. The Secretary of Labor and Employment or his duly authorized representatives
may, from time to time, call a national, regional, or industrial tripartite
conference of representatives of government, workers and employers for the
consideration and adoption of voluntary codes of principles designed to promote
industrial peace based on social justice or to align labor movement relations
with established priorities in economic and social development. In calling such
conference, the Secretary of Labor and Employment may consult with
accredited representatives of workers and employers.

5. Administrative Intervention for Dispute Avoidance (AIDA)- DOLE Circ 1-

06

A potential or ongoing dispute refers to:

a. A live and active dispute;

b. That may lead to a strike or lockout or to massive labor unrest;

and

c. Is not the subject of any complaint or notice of strike or lockout at

the time a REQUEST FOR INTERVENTION is made.

All request shall be in writing and filed with the Office of the Secretary. A REQUEST
shall state:

a. The name and address of the employer;

b. The name of the certified bargaining agent, or the employee

representative duly designated in writing by a majority of the
employees where there is no collective bargaining agent;

c. The number of employees affected by the potential or ongoing

dispute;

d. A brief description of the potential or ongoing dispute.

6. Single Entry Approach (SENA) – DOLE D.O. No. 107 (Series of 2010)

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 E. Industrial Peace- Art. 218 (211) A(f); 292 (277) (g) 1987 Const., Art XIII, Sec.
3, par 3

F. Worker participation in Decision and Policy Making Processes affecting

rights, duties, and welfare- Art. 218 A (g); Art 267 (255), par 2; Art 292 (277)
(g); 1987 Const., Art XIII, Sec 3, par2, 3rd sentence

II. RIGHT TO SELF-ORGANIZATION

1. ILO Convention No. 87 (Freedom of Association & Protection of Right to

Organize, 1948)

ILO Convention No. 98 (Application of the Principles of the Right to Organize

and Bargain Collectively, 1949)

2. U.S. Laws

a. National Labor Relations Act (Wagner Act)

b. US Labor-Management Relations Act of 1947 (Taft-Hartley Act)

3. Philippine sources

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 a. 1987 Const., Art II, Sec 18; Art III, Sec 4 and Sec 8; Art. XIII, Sec 3; Art
IX(B), Sec 2(5);

Nueva Ecija I Electric Cooperative, Inc. vs. NLRC

The employees of the NEECO I were ordered to accomplish Form 87, which were
applications for either retirement, resignation, or separation from service and then some
members of the UNION were compulsorily retired by management and received their separation
pay under protest. Petitioners instituted a complaint for illegal dismissal and damages where
the LA ruled in their favor but on appeal, the NLRC removed the awards of damages. The
petitioners questioned the NLRC’s deletion of the awards of damages.

The Supreme Court held that since the Labor Arbiter found that the dismissal of the
employees by NEECO I was attended by unfair labor practice, it was proper to impose moral
and exemplary damages. To warrant an award of moral damages, it must be shown that the
dismissal of the employee was attended to by bad faith, or constituted an act oppressive to
labor, or was done in a manner contrary to morals, good customs or public policy.

b. Labor Code – Arts. 253- 254 (Arts. 243-244)

Art. 243. Coverage and employees’ right to self-organization. All persons employed

in commercial, industrial and agricultural enterprises and in religious, charitable,
medical, or educational institutions, whether operating for profit or not, shall have the
right to self-organization and to form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection. (As amended by
Batas Pambansa Bilang 70, May 1, 1980)

Art. 244. Right of employees in the public service. Employees of government

corporations established under the Corporation Code shall have the right to organize
and to bargain collectively with their respective employers. All other employees in the
civil service shall have the right to form associations for purposes not contrary to law. 

c. Pre-Labor Code

i. Commonwealth Act No. 103

ii. Industrial Peace Act (R.A. No. 875 of 1953)

B. Extent and Scope of Right- Art 257 (Art 246)

Reyes vs. Trajano

On a certification election, the votes of the employees who were members of the Iglesia
ni Kristo were segregated and excluded from the final count by virtue of an agreement between
the competing unions, "because they are not members of any union and refused to participate
in the previous certification elections." The officer-in-charge of the Bureau of Labor Relations,
Trajano affirmed the declaration of the Med-Arbiter that the petitioners do not possess any
legal personality to institute the cause of action since they were not parties to the petition for
certification election. The petitioners assailed this decision.

The Supreme Court held that the right to form or join a labor organization, which is
guaranteed by the Labor Code, necessarily includes the right to refuse or refrain from
exercising said right. The purpose of a certification election is precisely the ascertainment of

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the wishes of the majority of the employees in the appropriate bargaining unit: to be or not to
be represented by a labor organization.

Kapatiran sa Meat and Canning Division vs. Ferrer-Calleja

NEW ULO, members of the IGLESIA NI KRISTO sect, filed a petition for a certification
election and TUPAS (the previous sole and exclusive collective bargaining representative of the
workers in the Meat and Canning Division of ROBINA) moved to dismiss the petition because
NEW ULO refused to affiliate with any labor union for the previous three years. TUPAS
assailed the resolution of the respondent dismissing its appeal of the Med-Arbiter ordering a
certification election to be conducted among the regular daily paid rank and file
employees/workers of Universal Robina Corporation-Meat and Canning Division to determine
which of the contending union shall be the bargaining unit of the daily wage rank and file
employees in the Meat and Canning Division of the company.

The Supreme Court held that the right of members of the IGLESIA NI KRISTO sect not
to join a labor union for being contrary to their religious beliefs does not bar the members of
that sect from forming their own union. The fact that TUPAS was able to negotiate a new CBA
with ROBINA within the 60-day freedom period of the existing CBA, does not foreclose the right
of the rival union, NEW ULO, to challenge TUPAS’ claim to majority status, by filing a timely
petition for certification election before TUPAS’ old CBA expired and before it signed a new CBA
with the company.

Pan American World Airways, Inc. vs. Pan American Employees Association

The President of the Philippines certified the strike of respondent union to the Court of
Industrial Relations as being an industrial dispute affecting the national interest, the parties
being called to a conference. After several conferences, Judge Bugayong issued an order
requiring petitioner to accept the five union officers pending resolution on the merits of the
dispute involved in the strike. The petitioner assailed the order of the judge.

The Supreme Court held that upon certification by the President under Section 10 of
Republic Act 875, the case comes under the operation of Commonwealth Act 103, which
enforces compulsory arbitration in cases of labor disputes in industries indispensable to the
national interest when the President certifies the case to the Court of Industrial Relations. If
the said court has the power to fix the terms and conditions of employment, it certainly can
order the return of the workers with or without backpay as a term or condition of the
employment.

- Right to self-organization: not limited to unionism; includes forming

or joining associations for mutual aid and protection and for other
legitimate purposes (Note: No provision in the Labor Code which
states that employees with definite employers may form, join, or
assist unions only and not workers’ associations)

Samahan ng Manggagawa sa Hanjin Shipyard vs. Bureau of Labor Relations

The respondent Hanjin filed a petition with DOLE for the cancellation of registration of
Samahan’s association on the ground that its members did not fall under any of the types of
workers enumerated in the second sentence of Article 243 that only ambulant, intermittent,
itinerant, rural workers, self-employed, and those without definite employers may form a
workers’ association and that one-third of the members of the association had definite
employers. The issue raised in this case was whether the right to form a workers’ association is
not exclusive to ambulant, intermittent and itinerant workers. s

The Supreme Court held in the affirmative and ruled that Workers can also form and
join a workers’ association as well as labor-management councils (LMC) as provided in Section
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3, Article XIII of the 1987 Constitution And Section 8, Article III of the 1987 Constitution. A
union refers to any labor organization in the private sector organized for collective bargaining
and for other legitimate purpose, while a workers’ association is an organization of workers
formed for the mutual aid and protection of its members or for any legitimate purpose other
than collective bargaining. While every labor union is a labor organization, not every labor
organization is a labor union.

C. Covered Employees/ Workers- 1987 Const., Art III, Sec 8; Art. XIII, Sec 3;
Book V, Rule II, Sec 2

1. Rule- Art 253 (243); Book V, Rule II, Sec 2

Art. 253. Coverage and employees’ right to self-organization. All persons

employed in commercial, industrial and agricultural enterprises and in
religious, charitable, medical, or educational institutions, whether operating
for profit or not, shall have the right to self-organization and to form, join, or
assist labor organizations of their own choosing for purposes of collective
bargaining. Ambulant, intermittent and itinerant workers, self-employed
people, rural workers and those without any definite employers may form
labor organizations for their mutual aid and protection.
FEU-Dr. Nicanor Reyes Medical Foundation, Inc. vs. Trajano

The alliance filed a petition for certification election but it was denied by the MED
arbiter and secretary of Labor on the ground that the petitioner was a non-stock, non-profit
medical institution, therefore, its employees may not form, join, or organize a union pursuant
to Article 244 of the Labor Code. Pending resolution of the aforesaid petition, Batas Pambansa
Bilang 70 was enacted amending Article 244 of the Labor Code so the new petition for
certification election was granted by the MED Arbiter. The petitioner then assailed the order of
the MED Arbiter in granting the new petition, despite the pendency of a similar petition before
the Supreme Court which involves the same parties for the same cause.

The Supreme Court held that any judgment which may be rendered in the petition for
certiorari pending before the Supreme Court will not constitute res judicata in the petition for
certification election under consideration, for while in the former, private respondent
questioned the constitutionality of Article 244 of the Labor Code before its amendment, in the
latter, private respondent invokes the same article as already amended. Under the provision,
rank and file employees of non-profit medical institutions are now permitted to form, organize
or join labor unions of their choice for purposes of collective bargaining.

2. Government Corporate employees- Art. 254 (244); Const. Art IX-B, Sec 2(1)
(5), C.S. Circular, E.O. 180; Book V, Rule II, Sec 2, par 1

Art. 244. Right of employees in the public service. Employees of government

corporations established under the Corporation Code shall have the right to organize
and to bargain collectively with their respective employers. All other employees in the
civil service shall have the right to form associations for purposes not contrary to law. 

a. Limitation on GOCCS (chartered or non-chartered) to negotiatie on

economic terms- RA 10149; EO No. 203 (Mar. 22, 2016)

GSIS Family Bank Employees Union vs. Villanueva

Royal Savings Bank was a thrift bank which later became GSIS Family Bank when
Government Service Insurance System effectively owned 99.55% of the bank’s outstanding
shares of stock. Upon demand of the GSIS Union of their Christmas bonus as stipulated in
their CBA, the Bank argued that it is not at liberty to negotiate economic terms with its
employees and cannot set its own salary or compensation scheme for being a government
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financial institution covered by the Compensation and Position Classification System. The
question in this case was the personality of the GSIS Family which the Supreme Court held to
be a government-owned or -controlled corporation since 99.55% of its outstanding capital stock
is owned and controlled by the Government Service Insurance System.

When it comes to collective bargaining agreements and collective negotiation

agreements in government-owned or -controlled corporations, Executive Order No. 203
unequivocally stated that while it recognized the right of workers to organize, bargain, and
negotiate with their employers, “the Governing Boards of all covered government-owned or -
controlled corporations, whether Chartered or Non-chartered, may not negotiate with their
officers and employees the economic terms of their collective bargaining agreement.”

Department of Public Works and Highways, Region IV-A vs. Commission on Audit

The DPWH, pursuant to Administrative Order (A.O.) No. 135, issued a memorandum
authorizing the grant of Collective Negotiation Agreement (CNA) Incentive to rank-and-file
employees in the DPWH which included the Engineering and Administrative Overhead (EAO) of
each office (Central Office and Regional and District Offices). The COA auditors issued a notice
of disallowance and explained that the CNA Incentive was disallowed because it was paid out of
the Engineering and Administrative Overhead (EAO), in violation of the Department of Budget
and Management (DBM) Budget Circular No. 2006-1. The petitioners posited that the COA
committed grave abuse of discretion amounting to lack or in excess of jurisdiction when it
disallowed the subject CNA Incentive.

However, the Supreme Court ruled that the COA correctly affirmed Notice of
Disallowance as there are factual and legal justifications therefor. Further, the COA has the
power to ascertain whether public funds were utilized for the purpose for which they had been
intended.

Development Bank of the Philippines vs. Commission on Audit

To settle the labor issue of benefits between Development Bank of the

Philippines and its employees, its Board of Directors adopted a Board Resolution
approving a one-time grant called the Governance Forum Productivity Award to DBP’s
officers and employees. DBP then assailed the notice of disallowance, sent by COA to
DBP, which held that the power of DBP’s BOD to enter into a compromise agreement
has no basis in law.

The Majority held that the grant of GFPA was indeed beyond the authority of
DBP’s BOD. While Sec. 13 of DBP’s charter, as amended, exempts it from existing laws
on compensation and position classification, it concludes by expressly stating that
DBP’s system of compensation shall nonetheless conform to the principles under the
Salary Standardization Law.

However, Justice Leonen, in his dissent, stated that the rights and duties of the
Development Bank of the Philippines’ employees are comparable with those in
government corporations under the Corporation Code who enjoy full collective
bargaining rights.

3. Supervisory employees- Art 255 (Art 245), Art 219(m); Book V, Rule I, Sec1
(xx), (hh), (nn)

Art. 245. Ineligibility of managerial employees to join any labor organization;

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

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

A petition for certification election was filed by private respondent HCCS-TELU-PIGLAS

but the same was opposed by HCCS contending that members of private respondent do not
belong to the same class; it is not only a mixture of managerial, supervisory, and rank-and-file
employees but also a combination of teaching and non-teaching personnel. Since it is not
consistent with Article 245 of the Labor Code, private respondent is an illegitimate labor
organization lacking in personality to file a petition for certification election. The CA upheld the
conduct of two separate certification of election for the teaching and non-teaching personnel,
thus, it was assailed by the HCCS.

The Supreme Court held that the teaching and non-teaching personnel of petitioner
school must form separate bargaining unit, thus, the order for the conduct of two separate
certification elections, one involving teaching personnel and the other involving non-teaching
personnel. Since the decision of the Supreme Court in the U.P. case prohibits us from
commingling teaching and non-teaching personnel in one bargaining unit, they have to be
separated into two separate bargaining units with two separate certification elections to
determine whether the employees in the respective bargaining units desired to be represented
by private respondent.

Tagaytay Highlands International Golf Club Incorporated vs. Tagaytay Highlands

Employees Union-PTGWO

Petitioners opposed the respondent’s petition for certification election on the ground
that there were names and signatures of supervisors included in the petition. The Med-Arbiter
ordered the holding of a certification election but it was dismissed by the undersecretary of
DOLE. The petitioners assailed the affirmation of the CA to the decision of the undersecretary.

The Supreme Court ruled in favor of respondents, holding that petitioners failed to
present substantial evidence that the assailed employees are actually occupying supervisory
positions. While petitioner submitted a list of its employees with their corresponding job titles
and ranks, there is nothing mentioned about the supervisors’ respective duties, powers and
prerogatives that would show that they can effectively recommend managerial actions which
require the use of independent judgment.

4. Aliens- Art 284-285 (Arts 269-270), Book V, Rule 2, Sec 2, par 1, 3 rd

sentence

Art. 269. Prohibition against aliens; exceptions. All aliens, natural or juridical, as

well as foreign organizations are strictly prohibited from engaging directly or indirectly
in all forms of trade union activities without prejudice to normal contacts between
Philippine labor unions and recognized international labor centers: Provided, however,
That aliens working in the country with valid permits issued by the Department of
Labor and Employment, may exercise the right to self-organization and join or assist
labor organizations of their own choosing for purposes of collective bargaining:
Provided, further, That said aliens are nationals of a country which grants the same or
similar rights to Filipino workers.

5. Security Guards -E.O. 111 (Dec 24, 1986)

Manila Electric Co. vs. Secretary of Labor and Employment

Page | 11
 The STEAM-PCWF filed a petition for certification election which was premised on the
exclusion/disqualification of certain MERALCO employees pursuant to Article I, Sections 2 and
3 of the existing MEWA CBA that excludes high ranking employees and those in Patrol Division
and Treasury Security Services in joining the bargaining unit. MERALCO moved for the
dismissal of the petition and one of the grounds was that security services personnel who are
prohibited from joining or assisting the rank-and-file union are sought to be presented by
STEAM. The MED Arbiter and Secretary of Labor ruled in favor of STEAM-PCWF and this order
was assailed by the petitioner.

The Court held that upon the issuance of E.O No. 111 which eliminated the provision
on the disqualification of security guard in Article 245, security guards were thus free to join a
rank and file organization.

D. Excluded Employees/Workers

1. Managerial Employees- 255(245), See: RA 9481 (May 25, 2007); 82; 219(m);
Book V, Rule II, Sec. 2; Rule I (hh), (xx), (nn)

Paper Industries Corporation of the Philippines vs. Laguesma

The Union PBSTSE, instituted a Petition for Certification Election to determine the sole and
exclusive bargaining agent of the supervisory and technical staff employees of PICOP for
collective bargaining agreement (CBA) purposes. When the MED Arbiter issued an order for the
holding of the certification election, PICOP questioned and objected to the inclusion of some
section heads and supervisors in the list of voters whose positions were reclassified as
managerial employees in the light of the reorganization effected by it.

The Supreme Court, upon dissecting the job description of the concerned supervisory
employees and section heads, ruled that they are not actually managerial but only supervisory
employees since they do not lay down company policies. Designation should be reconciled with
the actual job description of the employee, for it is the job description that determines the
nature of employment.

A. D. Gothong Manufacturing Corporation Employees Union-ALU vs. Confesor

The Union filed a petition for certification election in its bid to represent the unorganized
regular rank-and-file employees of respondent company excluding its office staff and personnel,
which was opposed by the Company. The Certification election yielded the result having YES
as the majority with the votes of Plaza and Yap challenged on the ground that they are
supervisory employees. The Union assailed the affirmation of the Secretary of Labor to the
findings of the MED Arbiter that Plaza and Yap are rank-and-file employees.

The Supreme Court ruled in favor of respondents since the petitioner Union failed to
present concrete and substantial evidence to establish the fact that challenged voters are either
managerial or supervising employees. Following established precedents, it is inappropriate to
review the factual findings of the MED Arbiter regarding the issue whether Romulo Plaza and
Paul Michael Yap are or are not rank-and-file employees considering that these are matters
within their technical expertise.

2. Confidential Employees: Doctrine of Necessary Implication- what is implied in a

statute is as much part thereof as that which is expressed.

Page | 12
Tunay na Pagkakisa ng Manggagawa sa Asia Brewery vs. Asia Brewery, Inc.

ABI renegotiated its CBA with the Union which provides that it shall not represent or
accept for membership employees outside the scope of the bargaining unit including
Confidential and Executive Secretaries and Purchasing Quality Control Staff. A dispute arose
when ABI’s management stopped deducting union dues from some employees, believing that
their membership in BLMA-INDEPENDENT violated the CBA because they were part of the
Quality Control Staff and secretaries/clerks. The nature of the job of the employees was in
question.

The Supreme Court ruled that ABI failed to indicate who among these numerous
secretaries/clerks have access to confidential data relating to management policies that could
give rise to potential conflict of interest with their Union membership. Confidential employees
are defined as those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations and
thus, ineligible to join, form and assist any labor organization.

Pepsi-Cola Products Philippines, Inc. vs. Secretary of Labor

PEPSI assailed the Order of the Med-Arbiter and the Decision and Order of the
Secretary of Labor and Employment ordering the conduct of a Certification Election to be
participated by and among the supervisory workers of the respondent company. The
Supervisory workers were identified as managers of different departments and chief checker.
The nature of the job of the said employees was in question.

The Supreme Court found merit in the submission of the OSG that Route Managers,
Chief Checkers and Warehouse Operations Managers are supervisors while Credit & Collection
Managers and Accounting Managers are highly confidential employees. Designation should be
reconciled with the actual job description of subject employees so the mere fact that an
employee is designated manager does not necessarily make him one.

Standard Chartered Bank Employees Union (SCBEU-NUBE) vs. Standard Chartered Bank

During the renegotiation of the parties, petitioner sought, in their proposal, the
exclusion of only the following employees from the appropriate bargaining unit—all managers
who are vested with the right to hire and fire employees, confidential employees, those with
access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex
Department and one Human Resources (HR) staff. The Secretary, however, maintained the
exclusions in the previous CBA because petitioner failed to show that the employees sought to
be removed from the list qualify for exclusion. The issue raised was whether or not the Bank’s
Chief Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are
confidential employees.

The Supreme Court ruled that bank cashiers, radio and telegraph operators and
personnel staff, in which human resources staff may be qualified, are confidential employees as
previously held by the Supreme Court. Petitioner failed to show that the employees sought to
be removed from the list of exclusions are actually rank and file employees who are not
managerial or confidential in status and should be included in the appropriate bargaining unit.

3. Workers-Members of a Cooperative

Central Negros Electric Cooperative, Inc. vs. Sec. of DOLE

Prior to the submission of the proposal for CBA renegotiation, CURE members, in a
general assembly, agreed that “all union members shall withdraw, aw, retract, or
recall the union members’ membership from CENECO because of settled
jurisprudence that employees who at the same time are members of an electric
Page | 13
cooperative are not entitled to form or join a union. CENECO denied the withdrawal of
the membership but CURE filed a petition for direct recognition or for certification
election. The issue raised was whether or not the employees of CENECO who withdrew
their membership from the cooperative are entitled to form or join CURE for purposes
of the negotiations for a collective bargaining agreement proposed by the latter.

The Supreme Court held that membership in the cooperative is on a voluntary

basis, hence, withdrawal therefrom cannot be restricted unnecessarily. The policy of
the State to afford full protection to labor and to promote the primacy of free collective
bargaining mandates that the employees’ right to form and join unions for purposes of
collective bargaining be accorded the highest consideration.

4. Employees of International Organizations

International Catholic Migration Commission vs. Calleja

This is a consolidated case of International Catholic Migration Commission (ICMI) which

was one of those accredited by the Philippine Government to operate the refugee processing
center in Bataan for processing Indo-Chinese refugees for eventual resettlement to other
countries and International Rice Research Institute (IRRI) which was intended to be an
autonomous, philanthropic, tax-free, non-profit, non-stock organization designed to carry out
the principal objective of conducting "basic research on the rice plant. Both opposed the
petition filed by their respective local unions on the ground that they enjoy diplomatic
immunity being international organizations. The scope of the immunity was in question if it
extends to the certification election.

The Supreme Court held that a certification election is not beyond the scope of that
immunity as it could trigger off a series of events in the collective bargaining process together
with related incidents and/or concerted activities, which could inevitably involve the
international organizations in the legal process. The grant of immunity from local jurisdiction
to ICMC and IRRI is clearly necessitated by their international character and respective
purposes to avoid the danger of partiality and interference by the host country in their internal
workings.

5. Non-employees- 253 (243) (last sentence); Book V, Rule II, Sec 2, par 3

Ambulant, intermittent and itinerant workers, self-employed people, rural workers and
those without any definite employers may form labor organizations for their mutual
aid and protection
Singer Sewing Machine Company vs. Drilon

The respondent union filed a petition for direct certification as the sole and exclusive
bargaining agent of all collectors of the Singer Sewing Machine Company—Baguio but the
Company opposed the petition mainly on the ground that the union members are actually not
employees but are independent contractors as evidenced by the collection agency agreement
which they signed. The existence of an employer-employee relationship was in question for the
determination of the approval of the petition for certification election.

The Supreme Court ruled that using the four-fold test, it was found that there was no
employer-employee relationship, hence, no right to organize for purposes of bargaining, nor to
be certified as such bargaining agent can ever be recognized. The Court agreed with the
petitioner’s argument that Article 280 is not the yardstick for determining the existence of an
employment relationship.

E. Party Protected

Mactan Workers Union vs. Aboitiz

Page | 14
 The profit-sharing bonus of petitioner MWU was deposited with the Labor Administrator
when the members of MWU failed to receive their share from their rival union, ALU, the
exclusive bargaining representative of the company. For the recovery of this amount this case
was filed with the lower court which ordered the company to deliver the amount to ALU for
distribution to the members of MWU but this order was appealed by the ALU. Petitioner’s claim
in the collective bargaining agreement was in question.

The Supreme Court held that it is a well-settled doctrine that the benefits of a collective
bargaining agreement extend to the laborers and employees in the collective bargaining unit,
including those who do not belong to the chosen bargaining labor organization. The labor
union that gets the majority vote as the exclusive bargaining representative does not act for its
members alone but it represents all the employees in such a bargaining unit.

F. Sanctions for Violation of Right- 257 (246); 259 (248) (opening clause, 1 st par, 2nd
par); 260 (249) (opening clause 1st and 2nd par); 303-304 (288-289) (in rel. to 264(272);
Book V, Rule XXII, Sec 15

III. LABOR ORGANIZATION

A. Policy- 218 A(b) (c) (g); 218B; Book V Rule VI, Sec 1

B. Definition: Labor Organizations/Unions- 218 A(b) (c)(g); 219(g); 219(h); 219(i);

219(j); Book V, Rule I, Sec 1 (cc) (ee, (ff), (zz) (ccc); (t); (i); DO 40-B. 03

1. Labor Organization- 219 (g); Book V, Rule I, Sec 1 (cc)

“Labor organization” means 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.
 
 Union- Book V, Rule I, Sec 1 (zz)

“Union” refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purposes.

 Workers Association – Book V, Rule I, Sec

“Workers Association” refers to an association of workers organized for the mutual aid
and protection of its members or for any legitimate purpose other than collective
bargaining.

2. Legitimate labor organization – 219 (h); Book V, Rule I, Sec 1 (ee)

“Legitimate labor organization” means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.

Legitimate workers’ associaton- Book V, Rule I, Sec 1 (ff)

“Legitimate Workers’ Association” refers to an association of workers organized for the

mutual aid and protection of its members or for any legitimate purpose other than
collective bargaining registered with the Department iin Accordance with Rule III,
Section 2-C and 2-D of these Rules.

3. Company Union – 219 (i); 259 (248) (d)

Page | 15
“Company union” means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by this
Code.
 
4. Exclusive bargaining representative- 219 (j); Book V, Rule I, Sec 1 (t)

“Bargaining representative” means a legitimate labor organization whether or not

employed by the employer.

5. Local Chapter – 241 (234-A) Note: Formerly referred to as chartered local

Book V, Rule I, Sec 1 (i); now Local Chapter per Art. 241 (234A)

Refers to a labor organization in the private sector operating at the enterprise level
that acquired legal personality through registration with the RO in accordance with
Rule III, Section 2-E of these Rules.

C. Union Rationale

Valentin Guijarno plus 18 others v CIR & Central Santos Lopez Co., Inc. &
USW Union – ILO, 52 S 307 (73)

"In order that an employer may be deemed bound, under a collective bargaining
agreement, to dismiss employees for non-union membership, the stipulation to this
effect must be so clear and unequivocal as to leave no room for doubt thereon. An
undertaking of this nature is so harsh that it must be strictly construed, and doubts
must be resolved against the existence of 'closed shop'." (Confederated Sons of Labor
v. Anakan Lumber Co.)

The authoritative doctrine that a closed-shop provision in a collective

bargaining agreement is not to be given a retroactive effect so as to preclude its being
applied to employees already in the service.

The closed-shop agreement should however, apply to persons to be hired or to

employees who are not yet members of any labor organization. It is inapplicable to
those already in the service who are members of another union.

For, rightly has it been said that workers unorganized are weak; workers
organized are strong. Necessarily then, they join labor unions. To further
increase the effectiveness of such organizations, a closed-shop has been allowed.
(MEANING OF CLOSED-SHOP)

D. Government Regulation: Implementing the Policy on Trade Unionism Const., Art

III,Sec 16; Art 218 A(b)(c); Book V, Rule II, Sec 1; Rule VI, Sec 1

Electromat Manufacturing & Recording Corp. v Hon. Lagunzad,

Nagkakaisang Samahan ng Manggagawa ng Electromat- WASTO, GR
172699, 27 July 2011

D.O. 40-03 represents an expression of the government’s implementing policy on trade

unionism. It builds upon the old rules by further simplifying the requirements for the
establishment of locals or chapters.

There is nothing contrary to the law or the Constitution in the adoption by the
Secretary of Labor and Employment of D.O. 40-03 as this department order is
consistent with the intent of the government to encourage the affiliation of a local
union with a federation or national union to enhance the local’s bargaining power.

The changes recognize the distinctions made in the law itself between federations and
their local chapters, and independent unions; local chapters seemingly have lesser
requirements because they and their members are deemed to be direct members

Page | 16
of the federation to which they are affiliated, which federations are the ones
subject to the strict registration requirements of the law.

1. Union Registration: Procedure

a. Requirements- 240 (234), (as amended by RA 9481, May 25, 2007;

241(234-A); 244(237); 242(235) [219(b)]; See: Book V, Rule III, Sec 2

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; (As amended by Executive Order No. 111, December
24, 1986)
 
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.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the
organization, as the case may be, and attested to by its president.

Art. 236. Denial of registration; appeal. The decision of the Labor Relations Division in the regional
office denying registration may be appealed by the applicant union to the Bureau within ten (10) days
from receipt of notice thereof.

Art. 237. Additional requirements for federations or national unions. Subject to Article 238, if the
applicant for registration is a federation or a national union, it shall, in addition to the requirements of
the preceding Articles, submit the following:

a. Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly
recognized collective bargaining agent in the establishment or industry in which it operates,
supporting the registration of such applicant federation or national union; and
 
b. The names and addresses of the companies where the locals or chapters operate and the list of all
the members in each company involved.

i. 20% Membership requirement- 240 (234) ©

Takata (Phil) Corp. v BLR & SALAMAT, GR 196276, June 4,

2014

Under Article 234(c) the 20% minimum requirement pertains to the

employees’ membership in the union and not to the list of workers who
participated in the organizational meeting.

See: Mariwasa Siam Ceramics, Inc. v Secretary of Labor, GR

183317, Dec 21, 2009

Page | 17
 While it is true that the withdrawal of support may be considered as a
resignation from the union, the fact remains that at the time of the union’s application
for registration, the affiants were members of respondent and they comprised more
than the required 20% membership for purposes of registration as a labor union.

Article 234 of the Labor Code merely requires a 20% minimum membership
during the application for union registration. It does not mandate that a union
must maintain the 20% minimum membership requirement all throughout its
existence.

2. Registration Proceeding- Book V, Rule I, Sec 1(qq)

1st mode: issuance of union registration- 240 (234); 241 (234A), Book V,
Rule III, Sec 2(A)

2nd mode: Union Affiliation- 241 (234A), Book V, Rule I, Sec 1(a); Rule III,
Sec2€ as amended

Note: Incorporated in the Labor code as Art 240A(234) (now 241) by RA 9481

a. Effect of affiliation with a National Union – 241(234A); RA 9481, Sec 8

(Art 255/245), Sec 9 (Art 256/245A)

Ergonomic Systems Phil. Inc. v Emerito Enaje plus 90 others, GR

No. 195163, Dec 13, 2017

Only the local union may invoke the union security clause in the CBA.

“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.”

Before an employer terminates an employee pursuant to the union security

clause, it needs to determine and prove that:

(1) the union security clause is applicable;

(2) the union is requesting the enforcement of the union security provision in
the CBA; and

Page | 18
(3) there is sufficient evidence to support the decision of the union to expel the
employee from the union.

Under the Labor Code, a chartered local union acquires legal personality through the
charter certificate issued by a duly registered federation or national union and
reported to the Regional Office.It does not owe its existence to the federation with
which it is affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members.It only gives rise to a contract of agency, where the
former acts in representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their agent.

The CBA shows that the local union, not the Federation, was recognized as the sole
and exclusive collective bargaining agent for all its workers and employees in all
matters concerning wages, hours of work, and other terms and conditions of
employment.

Therefore, only the union may invoke the union security clause in case any of its
members commits a violation thereof. Even if the union was disloyal to the Federation,
it did not give the Federation the prerogative to demand the union officers’ dismissal
pursuant to the union security clause.

Note: “…as separate and voluntary associations, local unions do not owe
their creating and existence to the national federation to which they are
affiliated but to the will of their members. The sole essence of affiliation
is to increase, by collective action, the common bargaining power of local
unions for the effective enhancement and protection of their interests…”
citing Phil. Skylanders, Inc. v NLRC, 426 Phil 35(2002)

b. Action on Application/ BLR duty : not merely ministerial- 242 (235).

243(236); Book V, Rule IV, Secs 4-7

Progressive Dev. Corp- Pizza Hut v Hon. Laguesma & NLM-

Katipunan, 271 SCRA 593 (97)

After a labor organization has filed the necessary papers and documents for
registration, it becomes mandatory for the Bureau of Labor Relations to check if the
requirements under Article 234 have been sedulously 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.

And if a certificate of recognition has been issued, the propriety of the labor
organization’s registration could be assailed directly through cancellation of
registration proceedings in accordance with Articles 238 and 239 of the Labor Code, or
indirectly, by challenging its petition for the issuance of an order for certification
election

Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period
of thirty (30) days within which to review all applications for registration under
Article 235.

c. Effect of Registration – Book V, Rule IV, Sec 8

Page | 19
 Acquisition of Legal Personality/ Statutory Paradigm- 240 (234),
241(234A), Book V, Rule III, Sec 2E as amended by DO-F-03 (October 30,
2008)

SMC Mandaue Packaging Products v Mandaue Packing Products; San

Miguel Monthlies RAF Union- FFW, GR 152356,, Aug 16, 2005

On the Acquisition of Legal Personality by Respondent

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

acquires legal personality.

Section 3. Acquisition of legal personality by local chapter.—A local/chapter

constituted in accordance with Section 1 of this Rule shall acquire legal personality
from the date of filing of the complete documents enumerated therein. Upon
compliance with all the documentary requirements, the Regional Office or Bureau
shall issue in favor of the local/chapter a certificate indicating that it is included in
the roster of legitimate labor organizations.

On the other hand, a labor organization is deemed to have acquired legal personality
only on the date of issuance of its certificate of registration, which takes place only
after the Bureau of Labor Relations or its Regional Offices has undertaken an
evaluation process lasting up until thirty (30) days, within which period it approves or
denies the application.

Parenthetically, under the present Implementing Rules as amended by Department

Order No. 40, it appears that the local/chapter (or now, “chartered local”) acquires
legal personality upon the issuance of the charter certificate by the duly
registered federation or national union. However, Department Order No. 40 also
requires that the federation or national union report the creation of the chartered
local to the Regional Office.

d. Rights of Legitimate Labor Organization – 251 (242)

San Miguel Foods, Inc. – Cebu B-Meg Feed Plant v Hon. Laguesma &
IBM, 263 S 90 (96)

Article 212(h) of the Labor Code defines a legitimate labor organization as “any labor
organization duly registered with the Department of Labor and Employment, and
includes any branch or local thereof.”

It is important to determine whether or not a particular labor organization is legitimate

since legitimate labor organizations have exclusive rights under the law which cannot
be exercised by non-legitimate unions, one of which is the right to be certified as the
exclusive representative of all the employees in an appropriate collective bargaining
unit for purposes of collective bargaining. (FOUND IN Article 251)

Ordinarily, a labor organization attains the status of legitimacy only upon the issuance
in its name of a Certificate of Registration by the Bureau of Labor Relations pursuant
to Articles 234 and 235 of the Labor Code. When an unregistered union becomes a
branch, local or chapter of a federation, some of the aforementioned
requirements for registration are no longer required. A local or chapter need not be
independently registered. By force of law (in this case, Article 212 [h]), such local or
chapter becomes a legitimate labor organization upon compliance with the provisions
without having to be issued a Certificate of Registration in its favor by the BLR.

Jerry Acedera, et al., v International Container Terminal Services,

Inc. GR 146073, January 13, 2003

In addition to the rule on intervention, the rule on representation,

Page | 20
Sec. 3. Representatives as parties.—Where the action is allowed to be prosecuted or
defended by a representative or someone acting in a fiduciary capacity, the beneficiary
shall be included in the title of the case and shall be deemed to be the real party in
interest. A representative may be a trustee of an express trust, a guardian, an
executor or administrator, or a party authorized by law or these Rules

A labor union is one such party authorized to represent its members under Article
242(a) of the Labor Code which provides that a union may act as the representative of
its members for the purpose of collective bargaining. It includes the power to represent
its members for the purpose of enforcing the provisions of the CBA.

e. Rights of Workers & Employers Organizations

Minette Baptista, plus others v Rosario Villanueva and 15 other

union members, GR 194709, July 31, 2013

It is well-settled that workers’ and employers’ organizations shall have the right to
draw up their constitutions and rules to elect their representatives in full freedom, to
organize their administration and activities and to formulate their programs.

In this case, RPNEU’s Constitution and By-Laws expressly mandate that before a
party is allowed to seek the intervention of the court, it is a pre-condition that he
should have availed of all the internal remedies within the organization.

Petitioners were found to have violated the provisions of the union’s Constitution and
By-Laws when they filed petitions for impeachment against their union officers and for
audit before the DOLE without first exhausting all internal remedies available within
their organization.

f. Effect of Non-Registration – Book V, Rule IV, Sec 8

Eden Gladys Abaria, et al., v NLRC, Metro Cebu Comm. Hospital, the
UCCP et al., GR 154113 (Dec 7, 2011)

A local union which is not independently registered cannot, upon disaffiliation from
the federation, exercise the rights and privileges granted by law to legitimate labor
organizations; thus, it cannot file a petition for certification election.

Hence, MCCHI’s refusal to bargain then with NAMA-MCCH-NFL cannot be considered

an unfair labor practice to justify the staging of the strike. Strike and picketing
activities conducted by union officers and members were illegal since they were not a
legitimate labor organization

Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal
strike to the participating workers

- an ordinary striking worker cannot be terminated for mere participation in an

illegal strike. There must be proof that he or she committed illegal acts during a
strike
- A union officer, on the other hand, may be terminated from work when he
knowingly participates in an illegal strike, and like other workers, when he
commits an illegal act during a strike.

Page | 21
 3. CANCELLATION OF UNION CERTIFICATE OF REGISTRATION – 245 (238),
246 (238A), 237 (239), Art 248 (239A), 250 (241)(j) last 2 par,; 256 (245A)
(See RA 9481, May 25, 2007)

a. Effect of a petition for cancellation of union registration – 246 (238A)

Heritage Hotel Manila v Pinag-isang Galing at Lakas ng mga

Manggagawa sa Heritage Manila (PIGLAS-Heritage), GR 177024,
Oct 30, 2009

Certain rank and file employees of Petitioner Company formed another union
called PIGLAS. PIGLAS applied for registration which was granted. Two months after,
the members of the first union adopted a resolution for its dissolution and then
filed a petition for cancellation of its union registration. The new union’s officers
and members were also those who comprised the old union.

Discrepancies as to the number of union members involved as these appeared on the

documents that supported the union’s application for registration

The Labor Code and its implementing rules do not require that the number of
members appearing on the documents in question should completely dovetail.
For as long as the documents and signatures are shown to be genuine and
regular and the constitution and by-laws democratically ratified, the union is
deemed to have complied with registration requirements.

The fact that some of respondent PIGLAS union’s members were also members of the
old rank and file union, the HHE union, is not a ground for canceling the new union’s
registration. The right of any person to join an organization also includes the right to
leave that organization and join another one. Besides, HHE union is dead. It had
ceased to exist and its certificate of registration had already been cancelled.

Heritage Hotel Manila v NUHWRAIN-HHMSC, GR 178296, January

12, 2011

Articles 238 and 239 of the Labor Code give the Regional Director 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.

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.

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

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.

b. Grounds for cancellation of union registration – 247- 248 (239, 239A)

De Ocampo Memorial School, Inc. v Bigkis Manggagawa, GR

192648, March 15, 2017

Page | 22
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 bylaws 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.

For fraud and misrepresentation to constitute grounds for cancellation of union

registration under the Labor Code, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the consent of a majority of union
members.

See: Asian Institute of Management v AIM Faculty Assoc., GR No.

207971

January 23, 2017

In Holy Child Catholic School v. Hon. Sto. Tomas, this Court declared that “[i]n case
of alleged inclusion of disqualified employees in a union, the proper procedure for an
employer like petitioner is to directly file a petition for cancellation of the union’s
certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as amended.”

However, the issue of whether respondent’s members are managerial employees is still
pending. The resolution of this issue cannot be preempted; until it is determined with
finality, the petition for cancellation of respondent’s certificate of registration on the
grounds alleged by petitioner cannot be resolved.

See again: Takata Corp (Phil) v BLR & Salamat

Petitioner’s charge respondent on having misrepresented on the 20% requirement of

the law as to its membership.

HOWEVER, It does not appear in Article 234(b) of the Labor Code that the attendees in
the organizational meeting must comprise 20% of the employees in the bargaining
unit. It is only under Article 234(c) that requires 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.

There is no basis for petitioner to contend that grounds exist for the cancellation of
respondent’s union registration. For fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239 of the Labor Code, the nature of
the fraud and misrepresentation must be grave and compelling enough to vitiate the
consent of a majority of union members.

E. International Acitvities of Union – Prohibition and Regulation – 284-286 (269-

271)

F. Union – Member Relations – 250 (241); 260 (249)(a)

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 UST Faculty Union Gil Gamilla (plus 21 others) v Hon. Bitonio & Edgardo
Mariño plus 14 other respondents, GR 131235, Nov. 16, 1999

Article 3 of the ILO Convention No. 87 provides that

workers’ organizations shall have the right to draw up their constitution and
rules and to elect their representatives in full freedom, free from any
interference from public authorities. The freedom conferred by the provision is
expansive; the responsibility imposed on union members to respect the
constitution and rules they themselves draw up equally so. The point to be
stressed is that the union’s CBL is the fundamental law that governs the
relationship between and among the members of the union

Union Election vs. Certification Election

A union election a certification election

held pursuant to the union’s constitution and by-laws, and the process of determining, through secret ballot, the sole
the right to vote in it is enjoyed only by union members. and exclusive bargaining agent of the employees in the
appropriate bargaining unit, for purposes of collective
bargaining.
an employee belonging to the appropriate bargaining unit
but who is not a member of the union cannot vote in the
union election, unless otherwise authorized by the the purpose of a certification election is to ascertain whether
constitution and bylaws of the union. or not a majority of the employees wish to be represented by
a labor organization and, in the affirmative case, by which
particular labor organization.

all employees belonging to the appropriate bargaining

unit can vote.

In both elections, there are procedures to be followed.

Second Issue: USTFU’s Constitution and By-Laws Violated

a union’s constitution and by-laws embody a covenant between a union and its
members and constitute the fundamental law governing the members’ rights and
obligations.

UST v Samahang Manggagawa ng UST, GR 169940, Sept 18, 2009

1. Admission and Discipline of Members – 260 (a) (249); Art 250 (241) (a)(e);
292 (277)(a) (c)

See: RA 7637, September 22, 1992, which repealed RA 1700, the Anti-
Subversion Act

Dolores Villar plus 8 others v Hon. Inciong, 121 S 444 (83)

the Company and the Amigo Employees Union-PAFLU entered into a Collective
Bargaining Agreement with a union security clause provided for in Article XII thereof
which is a reiteration of the same clause in the old CBA. The quoted stipulation for
closed-shop is clear and unequivocal and it leaves no room for doubt that the
employer is bound, under the collective bargaining agreement, to dismiss the
employees, herein petitioners, for non-union membership. Petitioners became non-
union members upon their expulsion from the general membership of the Amigo
Employees Union-PAFLU.

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PAFLU had the authority to investigate petitioners on the charges filed by their co-
employees in the local union and after finding them guilty as charged, to expel them
from the roll of membership of the Amigo Employees Union-PAFLU is clear under the
constitution of the PAFLU to which the local union was affiliated.

the union security clause provided in the new CBA merely reproduced the union
security clause provided in the old CBA about to expire. During the interregnum,
the CBA clause was already applicable to their case.

See: Francisco Salunga v CIR, San Miguel Brewery Inc., & NABAILUP-
PAFLU, 21 S 216 (67)

A closed-shop provision would not justify the employer in discharging, or a union in

insisting upon the discharge of, an employee whom the union thus refuses to admit to
membership, without any reasonable ground therefor.

If union can admit new members, who have the requisite qualifications, with more
reason may the law and the courts exercise the coercive power when the employee
involved is a long standing union member, who, owing to provocations of union
officers, was impelled to tender his resignation, which he forthwith withdrew or
revoked.

a. Due Process

Paulino Bugay v Kapisanan ng mga Manggagawa sa MRR , 4 S 287

(62)

The fact remains that the two courts have found that his expulsion was illegal because
of the irregularities committed in his investigation. In effect, it was found that not only
has he not been given an opportunity to defend himself but his expulsion was not
submitted to the different chapters of the union as required by its constitution and by-
laws. Because of his expulsion he was subjected to humiliation and mental anguish
with the consequent lose of his good name and reputation.

b. Distinguish between ground/s for disqualification from membership and

ground/s for removal from the union.

United Polyuresius, Inc. Ernesto Uy Soon v Marcelino Pinuela GR

209555, July 31, 2017

Respondent’s expulsion from PORFA is grounded on the union’s Constitution,

However, these provisions refer to impeachment and recall of union officers, and not
expulsion from union membership. Any officer found guilty of violating these
provisions shall simply be removed, impeached or recalled, from office, but not
expelled or stripped of union membership.

A review of the PORFA’s Constitution itself reveals that the only provision authorizing
removal from the union is, on the ground of failure to pay union dues, special
assessments, fines, and other mandatory charges.

On the other hand, grounds for disqualification from membership: a. Subversive or

persons who profess subversive ideas. b. Persons who have been convicted of crime
involving moral turpitude. c. Persons who are not employees of the company.

Page | 25
However, even if respondent was charged with estafa, a crime involving moral
turpitude, still, he has not been convicted of the crime. For this reason, he may not be
disqualified as union member.

2. Election of Officers – 250 (241) (c)(f)(k); Book V, Rule XII

a. Qualifications/Disqualification- 250 (c)(f)

Atty. Allan S. Montano v Atty. Ernesto C. Verceles, GR No. 168583,

July 26, 2010

The petition to annul Atty. Montaño’s election as VP was not prematurely filed.

Under the rules, any protest left unresolved shall be resolved by the committee within
five days after the close of the election proceedings. A day or two after the election,
respondent made his written/formal protest He exhausted the remedies under the
constitution and by-laws to have his protest acted upon by the proper forum and even
asked for a formal hearing on the matter. Still, the FFW COMELEC failed to timely act
thereon. He had no other recourse but to take the next available remedy so he
properly sought redress from the BLR so that the right to due process will not be
violated.

Atty. Montaño is not qualified to run as FFW National Vice-President in view of the
prohibition established in FFW Constitution and By-Laws

the FFW COMELEC disqualified Atty. Montaño. FFW COMELEC is vested with
authority and power, under the FFW Constitution and By-Laws, to screen candidates
and determine their qualifications and eligibility to run in the election and to adopt
and promulgate rules concerning the conduct of elections.

The Committee is also regarded as the final arbiter of all election protests. From the
foregoing, FFW COMELEC, undeniably, has sufficient authority to adopt its own
interpretation of the explicit provisions of the federation’s constitution and by-laws
and unless it is shown to have committed grave abuse of discretion, its decision and
ruling will not be interfered with.

The Court held that petitioner is disqualified to run for the position of National Vice-
President in view of the proscription in the FFW Constitution and By-Laws on
federation employees from sitting in its Governing Board. Accordingly, the election of
Atty. Montaño as FFW VicePresident is null and void. 

b. Manner of Election- 250 (c)

i. Direct election

ii. Secret ballot

c. Tenure – 250 (c)

d. Compensation – 250 (k)

e. Who may vote – 250 (c)

Eduardo Tancinco plus 7 others v Hon. Calleja, Edwin Lacanilao plus

5 others, 157 S 203 (88)

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It is true that under Article 242(c) of the Labor Code, as amended, only members of
the union can participate in the election of union officers. The question however of
eligibility to vote may be determined through the use of the applicable payroll period
and employee’s status during the applicable payroll period.

In the case before Us, considering that none of the parties insisted on the use of the
payroll period-list as voting list and considering further that the 51 remaining
employees were correctly ruled to be qualified for membership, their act of joining the
election by casting their votes on May 26, 1986 after the May 10, 1986 agreement is a
clear manifestation of their intention to join the union. They must therefore be
considered ipso facto members thereof.

Ricardo Manalad v Hon Trajano, Pablo Babula, 174 S 322 (89)

It is pointless and unrealistic to insist on annulling an election of officers whose terms

had already expired. We would have thereby a judgment on a matter which cannot
have any practical legal effect upon a controversy, even if existing, and which, in the
nature of things, cannot be enforced. We must consequently abide by our consistent
ruling that where certain events or circumstances have taken place during the
pendency of the case which would render the case moot and academic, the petition
should be dismissed.

See: Kapisanan v Hon Trajano, Catalino Silvestre 134 S 236 (85)

By and large, the holding of the referendum in question has become moot and
academic. This is in line with Our ruling in Pascual vs. Provincial Board of Nueva
Ecija,

“The Court should never remove a public officer for acts done prior to his
present term of office. To do otherwise would be to deprive the people of their
right to elect their officers. When the people have elected a man to office, it
must be assumed that they did this with knowledge of his life and character,
and that they disregarded or forgave his faults or misconduct, if he had been
guilty of any. It is not for the court, by reason of such faults or misconduct to
practically overrule the will of the people

f. Shop Steward

Teodorico Miranda, Jr v Asian Terminals, Inc. GR 174316; June 23,

2009

Union Shop Steward: A position within the union

A shop steward is appointed by the union in a shop, department, or plant and serves
as representative of the union, charged with negotiating and adjustment of grievances
of employees with the supervisor of the employer.

He is the representative of the union members in a building or other workplace. His

duties include collection of dues, recruitment of new members and initial negotiations
for the settlement of grievances. They occupy positions of trust and laden with
awesome responsibilities.

Since the Shop Steward is a union position, the controversy surrounding his recall
from his position as Shop Steward becomes a dispute within the union.

An “Internal Union Dispute” or intra-union conflict refers to a conflict within or inside

a labor union.

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Article 226 of the Labor Code of the Philippines vests on the Bureau of Labor
Relations and the Labor Relations Division jurisdiction to act on all inter-union or
intra-union conflicts.

NOTE: The petitioner could not be reinstated to the position of Shop Steward because
his eventual separation from respondent ATI made reinstatement unfeasible. The
petitioner cannot also be reinstated to the position of Checker I, since he was already
retrenched by the respondent from such position and he released the company from
any and all claims with respect to his retrenchment.The events which have taken
place during the pendency of the case have rendered the present petition moot and
academic.

See: Sta Rosa Coca-Cola Plant Employees Union v CCBP, GR 164302-

03, January 24, 2007

A worker merely participating in an illegal strike may not be terminated from

employment. It is only when he commits illegal acts during a strike that he may be
declared to have lost employment status. For knowingly participating in an illegal
strike or participates in the commission of illegal acts during a strike, the law provides
that a union officer may be terminated from employment. The employer possesses
the right and prerogative to terminate the union officers from service.

In this case, instead of playing the role of “peacemakers” and grievance solvers, the
petitioners-shop stewards participated in the strike. Thus, like the officers and
directors of petitioner Union who joined the strike, petitioners-shop stewards also
deserve the penalty of dismissal from their employment.

3. Major Policy Matter- 250 (241) (d)

Fortunato Halili v CIR, Halili Bus Drivers & Conductors Union, 136 S
112 (85)
When Atty. Pineda rejoined the Espinas firm in 1968, he did not reveal to his partners (he was
made the most senior partner) that he had a retainer’s contract entered into on January 1,
1967 which allegedly took effect in 1966. He stayed with the law firm until 1974 and still did
not divulge the 1967 retainer’s contract. Only the officers of the Union knew of the contract.

The alleged retainer’s contract between Atty. Pineda and the Union appears anomalous and
even illegal as well as unethical considering that—

1. The contract was executed only between Atty. Pineda and the officers of the
Union chosen by about 125 members only. It was not a contract with the
general membership. Only 14% of the total membership of 897 was
represented. This violates Article 242 (d) of the Labor Code which provides:
“The members shall determine by secret ballot, after due deliberation,
any question of major policy affecting the entire membership of the
organization, unless the nature of the organization or force majeure
renders such secret ballot impractical, in which case the board of
directors of the organization may make the decision in behalf of the
general membership” (emphasis supplied).

The amount of P101,856.00 which Atty. Pineda donated to the Union and which
actually corresponds to 5% of the total 35% attorney’s fees taken from the proceeds (p.
263, L-24864, rec.) appears improper since it amounts to a rebate or commission. This
amount was subsequently treated as union miscellaneous operating expenses without
the consent of the general membership.

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 See again: Eden Gladys Abaria, et al., v NLRC, Metro Cebu Comm. Hospital,
GR 154113, Dec 7, 2011

See: National Union of Bank Employees (NUBE) v Philnabank Employees

Association (PEMA) and PNB, GR 17487, Aug 12, 2013

Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for
non-observance of the procedure that union members should make such
determination through secret ballot and after due deliberation, conformably with
Article 241 (d) of the Labor Code, as amended.

Art. 241. Rights and conditions of membership in a labor organization.

d. The members shall determine by secret ballot, after due deliberation, any
question of major policy affecting the entire membership of the organization,
unless the nature of the organization or force majeure renders such secret
ballot impractical, in which case, the board of directors of the organization
may make the decision in behalf of the general membership;

Granting, for argument’s sake, that Article 241 (d) is applicable, still, We uphold
PEMA’s disaffiliation from NUBE.

First, noncompliance with the procedure on disaffiliation, being premised on

purely technical grounds cannot rise above the employees’ fundamental right to
selforganization and to form and join labor organizations of their own choosing
for the purpose of collective bargaining.

Second, the Article nonetheless provides that when the nature of the
organization renders such secret ballot impractical, the union officers may
make the decision in behalf of the general membership.

“PNB employees, from where [PEMA] [derives] its membership, are scattered
from Aparri to Jolo, manning more than 300 branches in various towns and
cities of the country, “[to] gather the general membership of the union in a
general membership to vote through secret balloting is virtually impossible.”

Third, and most importantly, NUBE did not dispute the existence of the persons
or their due execution of the document showing their unequivocal support for
the disaffiliation of PEMA from NUBE.

4. Union Funds- 250 (241) (a,b,c,g,h,I,j,k,l,m,n,o); 280(265); Book V, Rule XIII

a. Payment of Attorneys Fees- Art 288(222)(b) , Art 250 (241) (g,h,m,no)

Pacific Banking Corporation v Hon. Clave & Juanito Saavedra, 128 S

112 (84)

the case is covered squarely by the mandatory and explicit prescription of article 222
which is another guarantee intended to protect the employee against unwarranted
practices that would diminish his compensation without his knowledge and consent.

“ART. 242. Rights and conditions of membership in a labor organization.—The

following are the rights and conditions of membership in a labor organization:
“x x x  x x x  x x x “(n) No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless authorized by a written

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 resolution of a majority of all the members at a general membership meeting
duly called for the purpose.

(o) Other than for mandatory activities under the Code, no special assessment,
attorney’s fees, xxx

There is no doubt that lawyer Saavedra is entitled to the payment of his fees but
article 222 ordains that union funds should be used for that purpose. The amount of
P345,000 does not constitute union funds. It is money of the employees. The union,
not the employees, is obligated to Saavedra

See: Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-

East Zone Union & Eduardo Borela v Manila Water Co. Inc., GR
174179, Nov 16, 2011

“Art. 111. Attorney’s fees.—(a) In cases of unlawful withholding of wages, the culpable
party may be assessed attorney’s fees equivalent to ten percent of the amount of wages
recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or
administrative proceedings for the recovery of wages, attorney’s fees which exceed ten
percent of the amount of wages recovered.”

ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer

by his client for the legal services the former renders; compensation is paid for the cost
and/or results of legal services per agreement or as may be assessed.

extraordinary concept, attorney’s fees are deemed indemnity for damages ordered by
the court to be paid by the losing party to the winning party.

The instances when these may be awarded are enumerated in Article 2208 of the Civil Code,
specifically in its paragraph 7 on actions for recovery of wages, and is payable not to the
lawyer but to the client, unless the client and his lawyer have agreed that the award shall
accrue to the lawyer as additional or part of compensation.

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