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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. Nos. L-28791-93 August 27, 1973

VALENTIN GUIJARNO, HERMINIGILDO DE JUAN, NICOLAS CASUMPANG, ELEUTERIOBOBLO, BENITO GUAVEZ, ARSENIO JEMENA, DIMAS BOCBOCILA, NICOLAS ALAMON,ISMAEL BILLONES, RAYMUNDO ALAMON, SANTIAGO BAES, SOFRONIO CONCLARA,ADRIANO BIAS, AURELIO ALAMON, SIMEON BERNIL, RESURRECION DIAZ, FELICIANOBELGIRA, FEDERICO BOSQUE, and AGOSTO PULMONES,petitioners,vs.COURT OF INDUSTRIAL RELATIONS, CENTRAL SANTOS LOPEZ CO., INC. and UNITEDSUGAR WORKERS UNION-ILO respondents.

Pedrito A. Gianzon for petitioners.

Luis H. Garganera for private respondents.

FERNANDO, J .:

The failure of respondent Court of Industrial Relations to order the reinstatement of petitioners totheir employment gave rise to this appeal by way of certiorari. The need for resort to this Court couldhave been obviated had there been no such marked inattention to the authoritative principle that a

closed-shop provision of a collective bargaining contract is not to be applied retroactively for, at thetime the decision was renderedon November 2, 1967 and its affirmance by a resolution ofrespondent Court en bancon January 22, 1968, such a doctrine was controlling and did call forapplication. So it was indicated in the leading case ofConfederated Sons of Labor v. AnakanLumber and Co., 1a 1960 decision. As a matter of law then, the stand of petitioners is well-nighimpregnable. It would follow that their appeal must be sustained and respondent Court must bereversed.

Three unfair labor practice cases for unlawful dismissal allegedly based on legitimate union activitywere filed against respondent Central Santos Lopez Co., Inc. and respondent United Sugar WorkersUnion-ILO, with eight of the present petitioners as complainants in the first, 2six of them in thesecond, 3and five, in the third. 4There was a consolidated hearing and a consolidated decision notonly for convenience, but also due to there being hardly any difference as to the nature of thealleged grievance and the defense of management. There was no question about the expulsion fromrespondent labor union of the former. In view of a closed-shop provision in the then existingcollective bargaining contract, respondent Central Santos Lopez Co., Inc. assumed it had to dismissthem. So it was noted in the decision of the then associate Judge Joaquin M. Salvador ofrespondent Court. Thus: "The respondent company, in its answer, alleged that the only reason forthe dismissal of the complainants herein is because their said dismissal was asked by the USWU-ILO of which union respondent company has a valid and existing collective bargaining contract witha closed-shop provision to the effect that those laborers who are no longer members of goodstanding in the union may be dismissed by the respondent company if their dismissal is sought by

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the union; that respondent company has never committed acts of unfair labor practice against itsemployees or workers much less against the complainants herein but that it has a solemn obligationto comply with the terms and conditions of the contract; and that a closed-shop agreement issanctioned under this jurisdiction for such kind of agreement is expressly allowed under theprovisions of Republic Act 875 known as the Industrial Peace Act and the dismissal of complainantsis merely an exercise of a right allowed by said law." 5There was no question, however, as to

petitioners having been employed by such respondent Company long before the collectivebargaining contract, the first instance noted being that of Resurrecion Diaz, who was in the serviceas far back as 1928; 6Santiago Baez, as far back as 1929; 7Dimas Bocbocila, as far back as1933; 8Simeon Bernil, as far back as 1935; 9Aurelio Alamon, as far back as 1936; 10ValentinGuijarno, as far back as 1937; 11Benito Guavez, as far back as 1938; 12Raymundo Alamon, as farback as 1939; 13Eleuterio Boblo, Nicolas Alamon, Sofronio Conclara, Adriano Bias and FedericoBosque, as far back as 1947; 14Herminigildo de Juan and Nicolas Casumpang, as far back as1948; 15Agosto Pulmones, as far back as 1949; 16and Feliciano Belgira, as far back as 1954. 17

In the decision of respondent Court, there was an acknowledgment of the prior existence of suchemployment relationship. Nonetheless, the conclusion reached, both by the trial judge and then byrespondent Court en bancwas that the dismissal was justifiable under the closed-shop provision ofthe collective bargaining agreement. Hence, this petition for review, which, as noted at the outset, isimpressed with merit.

1. The authoritative doctrine that a closed-shop provision in a collective bargaining agreement is notto be given a retroactive effect so as to preclude its being applied to employees already in theservice, is traceable, as set forth in the opening paragraph of this opinion, to the leading caseofConfederated Sons of Labor v. Anakan Lumber Co. 18decided in April of 1960. In discussing theparticular stipulation in the contract, it was made clear in the opinion of the then Justice, later ChiefJustice, Concepcion: "In order that an employer may be deemed bound, under a collectivebargaining agreement, to dismiss employees for non-union membership, the stipulation to this effectmust be so clear and unequivocal as to leave no room for doubt thereon. An undertaking of thisnature is so harsh that it must be strictly construed, and doubts must be resolved against theexistence of "closed shop"." 19Less than a year later, to be more precise, on January 28, 1961,

in Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations,20

this Court, speakingthrough Justice Gutierrez David, went further. Thus: "The closed-shop agreement authorized undersec. 4, subsec. a(4) of the Industrial Peace Act above quoted should however, apply to persons tobe hired or to employees who are not yet members of any labor organization. It is inapplicable tothose already in the service who are members of another union. To hold otherwise, i. e., that theemployees in a company who are members of a minority union may be compelled to disaffiliate fromtheir union and join the majority or contracting union, would render nugatory the right of allemployees to self-organization and to form, join or assist labor organizations of their own choosing,a right guaranteed by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as well as by theConstitution (Art. III, sec. 1[6])." 21Thereafter, in Kapisanan Ng Mga Mangagagawa Ng Alak v.Hamilton Distillery Company, 22this Court, again speaking through the former, minced no words incharacterizing a stipulation that would allow a dismissal of those already employed as "null andvoid."23In 1967, this time already elevated to his position as head of the Court, Chief Justice

Concepcion in Salunga v. Court of Industrial Relations24did stress that while "generally, a state maynot compel ordinary voluntary associations to admit thereto any given individual, becausemembership therein may be accorded or withheld as a matter of privilege, the rule is qualified inrespect of labor unions holding a monopoly in the supply of labor, either in a given locality, or asregards a particular employer with which it has a closed-shop agreement. ... ." 25He continued:"Consequently, it is well settled that such unions are notentitled to arbitrarilyexclude qualifiedapplicants for membership, and a closed-shop provision would not justify the employer indischarging, or a union in insisting upon the discharge of, an employee whom the union thus refusesto admit to membership, without any reasonable ground therefor. Needless to say, if said unions

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may be compelled to admit newmembers, who have the requisite qualifications, with more reasonmay the law and the courts exercise the coercive power when the employee involved is a longstanding union member, who, owing to provocations of union officers, was impelled to tender hisresignation, which he forthwith withdrew or revoked. Surely, he may, at least, invoke the rights ofthose who seek admission for the firsttime, and can not arbitrarily be denied re-admission." 26

Nothing can be clearer therefore than that this Court looks with disfavor on a provision of thischaracter being utilized as an excuse for the termination of employment. To complete the picture,mention should be made ofElegance, Inc. v. Court of Industrial Relations, 27where this Court,through the present Acting Chief Justice Makalintal, harked back to Freeman Shirt ManufacturingCo., Inc. v. Court of Industrial Relations28to stress the point of non-retroactivity. What should beimmediately apparent, but unfortunately respondent Court seemed to have closed its eyes to it, isthat when the decision was rendered by the trial judge on November 2, 1967 and affirmed with theCourt sitting en bancon January 22, 1968, the controlling doctrine to which deference ought to havebeen paid was that petitioners should not have been dismissed.

2. Nor is there anything unusual in this Court's adherence with remarkable consistency to such abasic doctrine. The obligation was categorically imposed on the State, under the 1935 Constitution,to "afford protection to labor, especially to working women and minors ... ." 29That is to carry out thepurpose implicit in one of the five declared principles, namely, the promotion of social justice "toinsure the well-being and economic security of all the people ... ." 30It is then the individualemployee, as a separate, finite human being, with his problems and his needs, who must beattended to. He is the beneficiary of the concern thus made manifest by the fundamental law. Thepresent Constitution is even more explicit on the matter. The principle that the State shall promotesocial justice is categorically based on the concept of insuring "the dignity, welfare, and security of allthe people." 31Insofar as the provision on the State affording protection to labor is concerned, it isfurther required to "promote full employment and equality in employment, ensure equal workopportunities regardless of sex, race, or creed, and regulate the relations between workers andemployers. The State shall assure the rights of workers to self-organization, collective bargaining,security of tenure, and just and humane conditions of work." 32Where does that leave a labor union,it may be asked. Correctly understood, it is nothing but the means of assuring that such fundamental

objectives would be achieved. It is the instrumentality through which an individual laborer who ishelpless as against a powerful employer may, through concerted effort and activity, achieve the goalof economic well-being. That is the philosophy underlying the Industrial Peace Act. 33 For, rightlyhas it been said that workers unorganized are weak; workers organized are strong. Necessarilythen, they join labor unions. To further increase the effectiveness of such organizations, a closed-shop has been allowed. 34 It could happen, though, that such a stipulation which assures furtherweight to a labor union at the bargaining table could be utilized against minority groups or individualmembers thereof. There are indications that such a deplorable situation did so manifest itself here.Respondent Court, it would appear, was not sufficiently alert to such a danger. What is worse, it paidno heed to the controlling doctrine which is merely a recognition of a basic fact in life, namely, thatpower in a collectivity could be the means of crushing opposition and stifling the voices of those whoare in dissent. The right to join others of like persuasion is indeed valuable. An individual by himselfmay feel inadequate to meet the exigencies of life or even to express his personality without the right

to association being vitalized. It could happen though that whatever group may be in control of theorganization may simply ignore his most-cherished desires and treat him as if he counts for naught.The antagonism between him and the group becomes marked. Dissatisfaction if given expressionmay be labeled disloyalty. In the labor field, the union under such circumstances may no longer be ahaven of refuge, but indeed as much of a potential foe as management itself. Precisely with the

Anakan doctrine, such an undesirable eventuality has been sought to be minimized, if not entirelyavoided. There is no justification then, both as a matter of precedent and as a matter of principle, forthe decision reached by respondent Court.

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3. Now as to the remedy to which petitioners are entitled. Clearly, they should be reinstated withback pay. InSalunga v. Court of Industrial Relations, 35reinstatement was ordered but it was thelabor union that was held liable for the back wages. That is a rule dictated by fairness becausemanagement, in this case respondent Central Santos Lopez Company, Inc., would not have takenthe action it did had it not been for the insistence of the labor union seeking to give effect to itsinterpretation of a closed-shop provision. As we decided then, so do we now. These words of the

Chief Justice in Salunga carry persuasion: "Just the same, having been denied re-admission into theUnion and having been dismissed from the service owing to an unfair labor practice on the part ofthe Union, petitioner is entitled to reinstatement as member of the Union and to his former orsubstantially equivalent position in the Company, without prejudice to his seniority and/or rights andprivileges, and with back pay, which back pay shall be borne exclusively by the Union. In theexercise of its sound judgment and discretion, the lower court may, however, take such measures asit may deem best, including the power to authorize the Company to make deductions, for petitioner'sbenefit, from the sums due to the Union, by way of check off or otherwise, with a view to executingthis decision, and, at the same time effectuating the purposes of the Industrial Peace Act." 36

WHEREFORE, the decision of respondent Court of November 2, 1967 and the resolution ofrespondent Court en bancsustaining the same of January 2, 1968 are hereby reversed. RespondentCentral Lopez Co., Inc. is hereby ordered to reinstate petitioners to the positions they occupied priorto their illegal dismissal, with back wages to be paid by respondent United Sugar Workers Union-ILO, deducting therefrom whatever wages they may have earned in the meanwhile. With costsagainst private respondents.

Makalintal, Actg. C.J., Castro, Teehankee, Makasiar, Antonio and Esguerra, JJ., concur.

Barredo, J., took no part.

Zaldivar, J., is on leave.

Footnotes

1 107 Phil. 915.

2 The eight complainants in Case No. 81-ULP-Iloilo now L-28791, are the following:Valentin Guijarno, Herminigildo de Juan, Nicolas Casumpang, Eleuterio Boblo,Benito Guavez, Arsenio Jemena, Dimas Bocbocila and Nicolas Alamon.

3 The six complainants in Case No. 88-ULP-Iloilo, now L-28792, are the following:Ismael Billones, Raymundo Alamon, Santiago Baes, Sofronio Conclara, AdrianoBias and Aurelio Alamon.

4 The five complainants in Case No. 89-ULP-Iloilo, now L-28793, are the following:Simeon Bernil, Resurrecion Diaz, Feliciano Belgira, Federico Bosque and AgostoPulmones.

5 Decision, Annex A of Petition, 34.

6 Ibid, 27.

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7 Ibid, 19.

8 Ibid, 11.

9 Ibid, 20.

10 Ibid, 18.

11 Ibid, 5.

12 Ibid, 6.

13 Ibid, 15.

14 Ibid, 8, 12, 13, 17 and 24.

15 Ibid, 4 and 12.

16 Ibid, 25.

17 Ibid, 23. Petitioner Arsenio Jemena did not specify his date of employment, andpetitioner Ismael Billones was not presented as a witness, but it would appear that noquestion as to their having been in the employment at the time of the collectivebargaining contract could seriously be raised.

18 107 Phil. 915.

19 Ibid, 919.

20 L-16561, January 28, 1961, 1 SCRA 353.

21 Ibid, 356.

22 L-18112, October 30, 1962, 6 SCRA 367.

23 Ibid, 372. Cf. Findlay Millar Timber Co. v. Phil. Land-Air-Sea Labor Union, L-18217 and L-18222, September 29, 1962, 6 SCRA 227; United States Lines Co. v.

Associated Watchmen & Security Union, L-15508, June 29, 1963, 8 SCRA 326;National Brewery & Allied Industries Labor Union of the Phil. v. San Miguel Brewery,Inc., L-18170, August 31, 1963, 8 SCRA 805; Phil. Steam Navigation Co. v. Phil.Marine Officers Guild, L-20667 and L-20669, October 29, 1965, 15 SCRA 174; RizalLabor Union v. Rizal Cement Co., Inc., L-19779, July 30, 1966, 17 SCRA 858.

24 L-22456, September 27, 1967, 21 SCRA 216.

25 Ibid, 222-223.

26 Ibid, 223. Cf. Seno v. Mendoza, L-20565, November 29, 1967, 21 SCRA 1124.

27 L-24096, April 20, 1971, 38 SCRA 382.

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28 L-16561, January 28, 1961, 1 SCRA 353.

29 Art. XIV, Sec. 6.

30 Art. II, Sec. 5 of the 1935 Constitution.

31 Art. II, Sec. 6 of the revised Charter reads in full: "The State shall promote socialjustice to ensure the dignity, welfare, and security of all the people. Towards this end,the State shall regulate the acquisition, ownership, use, enjoyment, and disposition ofprivate property, and equitably diffuse property ownership and profits."

32 Art. II, Sec. 9 of the revised Constitution.

33 Republic Act No. 875 (1953).

34 A proviso in Sec. 4, par. (a)(4) reads as follows: "That nothing in this Act or in anyother Act or statute of the Republic of the Philippines shall preclude an employerfrom making an agreement with a labor organization to require as a condition of

employment membership therein, if such labor organization is the representative ofthe employees as provided in Section twelve, but such agreement shall not covermembers of any religious sects which prohibit affiliation of their members in any suchlabor organization." As amended by Republic Act No. 3350 (1961).

35 L-22456, September 27, 1967, 21 SCRA 216.

36 Ibid, 225.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 172699 July 27, 2011

ELECTROMAT MANUFACTURING and RECORDING CORPORATION, Petitioner,vs.HON. CIRIACO LAGUNZAD, in his capacity as Regional Director, National Capital Region,Department of Labor and Employment; and HON. HANS LEO J. CACDAC, in his capacity as

Director of Bureau of Labor Relations, Department of Labor and Employment, PublicRespondents.NAGKAKAISANG SAMAHAN NG MANGGAGAWA NG ELECTROMAT-WASTO, PrivateRespondent.

D E C I S I O N

BRION, J .:

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We resolve the present petition for review on certiorari1assailing the decision2and the resolution3ofthe Court of Appeals (CA) dated February 3, 2006 and May 11, 2006, respectively, rendered in CAG.R. SP No. 83847.

The Antecedents

The private respondent Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto (union), acharter affiliate of the Workers Advocates for Struggle, Transformation and Organization (WASTO),applied for registration with the Bureau of Labor Relations (BLR). Supporting the application werethe following documents: (1) copies of its ratified constitution and by-laws (CBL); (2) minutes of theCBLs adoption and ratification; (3) minutes of the organizational meetings; (4) names andaddresses of the union officers; (5) list of union members; (6) list of rank-and-file employees in thecompany; (7) certification of non-existence of a collective bargaining agreement (CBA) in thecompany; (8) resolution of affiliation with WASTO, a labor federation; (9) WASTOs resolution ofacceptance; (10) Charter Certificate; and (11) Verification under oath.

The BLR thereafter issued the union a Certification of Creation of Local Chapter (equivalent to thecertificate of registration of an independent union), pursuant to Department Order No. (D.O.) 40-03.4

On October 1, 2003, the petitioner Electromat Manufacturing and Recording Corporation (company)filed a petition for cancellation of the unions registration certificate, for the unions failure to complywith Article 234 of the Labor Code. It argued that D.O. 40-03 is an unconstitutional diminution of theLabor Codes union registration requirements under Article 234.

On November 27, 2003, Acting Director Ciriaco A. Lagunzad of the Department of Labor andEmployment (DOLE)-National Capital Region dismissed the petition.5

In the appeal by the company, BLR Director Hans Leo J. Cacdac affirmed the dismissal .6Thecompany thereafter sought relief from the CA through a petition for certiorari, contending that theBLR committed grave abuse of discretion in affirming the unions registration despite its non -compliance with the requirements for registration under Article 234 of the Labor Code. It assailed thevalidity of D.O. 40-03 which amended the rules of Book V (Labor Relations) of the Labor Code. Itposited that the BLR should have strictly adhered to the union registration requirements under theLabor Code, instead of relying on D.O. 40-03 which it considered as an invalid amendment of thelaw since it reduced the requirements under Article 234 of the Labor Code. It maintained that theBLR should not have granted the unions registration through the issuance of a Certification ofCreation of Local Chapter since the union submitted only the Charter Certificate issued to it byWASTO.

The CA Decision

In its decision rendered on February 3, 2006,7the CA Tenth Division dismissed the petition andaffirmed the assailed BLR ruling. It brushed aside the companys objection to D.O. 40-03, and its

submission that D.O. 40-03 removed the safety measures against the commission of fraud in theregistration of unions. It noted that "there are sufficient safeguards found in other provisions of theLabor Code to prevent the same."8In any event, it pointed out that D.O. 40-03 was issued by theDOLE pursuant to its rule-making power under the law.9

The company moved for reconsideration, arguing that the unions registration certificate was invalidas there was no showing that WASTO, the labor federation to which the union is affiliated, had atleast ten (10) locals or chapters as required by D.O. 40-03. The CA denied the motion,10holding thatno such requirement is found under the rules. Hence, the present petition.

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The Case for the Petitioner

The company seeks a reversal of the CA rulings, through its submissions (the petition11and thememorandum12), on the ground that the CA seriously erred and gravely abused its discretion inaffirming the registration of the union in accordance with D.O. 40-03. Specifically, it assails asunconstitutional Section 2(E), Rule III of D.O. 40-03 which provides:

The report of creation of a chartered local shall be accompanied by a charter certificate issued bythe federation or national union indicating the creation or establishment of the chartered local.

The company points out that D.O. 40-03 delisted some of the requirements under Article 234 of theLabor Code for the registration of a local chapter. Article 234 states:

ART. 234. Requirements of Registration.13Any applicant labor organization, association or group ofunions or workers shall acquire legal personality and shall be entitled to the rights and privilegesgranted by law to legitimate labor organizations upon issuance of the certificate of registration basedon 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 insuch meetings;

(c) The names of all its members comprising at least twenty percent (20%) of all theemployees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annualfinancial reports; and

(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of itsadoption or ratification, and the list of the members who participated in it.

The company contends that the enumeration of the requirements for union registration under the lawis exclusive and should not be diminished, and that the same requirements should apply to all laborunions whether they be independent labor organizations, federations or local chapters. It adds that inmaking a different rule for local chapters, D.O. 40-03 expanded or amended Article 234 of the LaborCode, resulting in an invalid exercise by the DOLE of its delegated rule-making power. It thus positsthat the unions certificate of registration which was issued "in violation of the letters of Article 234 ofthe Labor Code"14is void and of no effect, and that the CA committed grave abuse of discretionwhen it affirmed the unions existence.

The Case for the Union

In a Resolution dated January 16, 2008,15the Court directed union board member Alex Espejo, inlieu of union President Roberto Beltran whose present address could not be verified, to furnish theCourt a copy of the union comment/opposition to the companys motion for reconsideration datedFebruary 22, 2006 in CA G.R. SP No. 83847, which the union adopted as its comment on thepresent petition.16

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Through this comment/opposition,17the union submits that the company failed to show that the CAcommitted reversible error in upholding the registration certificate issued to it by the BLR. CitingCastillo v. National Labor Relations Commission,18it stressed that the issuance of the certificate bythe DOLE agencies was supported by substantial evidence, which should be entitled to greatrespect and even finality.

The Courts Ruling

We resolve the core issue of whether D.O. 40-03 is a valid exercise of the rule-making power of theDOLE.

We rule in the affirmative. Earlier in Progressive Development Corporation v. Secretary, Departmentof Labor and Employment,19the Court encountered a similar question on the validity of the oldSection 3, Rule II, Book V of the Rules Implementing the Labor Code20which stated:

Union affiliation; direct membership with a national union. - The affiliate of a labor federation ornational union may be a local or chapter thereof or an independently registered union.

a) The labor federation or national union concerned shall issue a charter certificate indicating thecreation or establishment of a local or chapter, copy of which shall be submitted to the Bureau ofLabor Relations within thirty (30) days from issuance of such charter certificate.

x x x x

e) The local or chapter of a labor federation or national union shall have and maintain a constitutionand by-laws, set of officers and books of accounts. For reporting purposes, the procedure governingthe reporting of independently registered unions, federations or national unions shall be observed.

Interpreting these provisions of the old rules, the Court said that by force of law,21the local or chapterof a labor federation or national union becomes a legitimate labor organization upon compliance with

Section 3, Rule II, Book V of the Rules Implementing the Labor Code, the only requirement being thesubmission of the charter certificate to the BLR. Further, the Court noted that Section 3 omittedseveral requirements which are otherwise required for union registration, as follows:

1) The requirement that the application for registration must be signed by at least 20% of theemployees in the appropriate bargaining unit;

2) The submission of officers addresses, principal address of the labor organization, theminutes of organization meetings and the list of the workers who participated in suchmeetings;

3) The submission of the minutes of the adoption or ratification of the constitution and by-

laws and the list of the members who participated in it.

22

Notwithstanding these omissions, the Court upheld the governments implementing policy expressedin the old rules when it declared in Progressive Development

Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local ofa registered federation or national union is to encourage the affiliation of a local union with afederation or national union in orderto increase the local unions bargaining powers respecting termsand conditions of labor.23

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It was this same Section 3 of the old rules that D.O. 40-03 fine-tuned when the DOLE amended therules on Book V of the Labor Code, thereby modifying the governments implementing policy on theregistration of locals or chapters of labor federations or national unions. The company now assailsthis particular amendment as an invalid exercise of the DOLEs rule-making power.

We disagree. As in the case of D.O. 9 (which introduced the above-cited Section 3 of the old rules)

in Progressive Development, D.O. 40-03 represents an expression of the governmentsimplementing policy on trade unionism. It builds upon the old rules by further simplifying therequirements for the establishment of locals or chapters. As in D.O. 9, we see nothing contrary to thelaw or the Constitution in the adoption by the Secretary of Labor and Employment of D.O. 40-03 asthis department order is consistent with the intent of the government to encourage the affiliation of alocal union with a federation or national union to enhance the locals bargaining power. If changeswere made at all, these were those made to recognize the distinctions made in the law itselfbetween federations and their local chapters, and independent unions; local chapters seeminglyhave lesser requirements because they and their members are deemed to be direct members of thefederation to which they are affiliated, which federations are the ones subject to the strict registrationrequirements of the law.1avvphi1

In any case, the local union in the present case has more than satisfied the requirements thepetitioner complains about; specifically, the union has submitted: (1) copies of the ratified CBL; (2)the minutes of the CBLs adoption and ratification; (3) the minutes of the organizational meetings; (4)the names and addresses of the union officers; (5) the list of union members; (6) the list of rank-and-file employees in the company; (7) a certification of non-existence of a CBA in the company; (8) theresolution of affiliation with WASTO and the latters acceptance; and (9) their Charter Certificate.These submissions were properly verified as required by the rules. In sum, the petitioner has nofactual basis for questioning the unions registration, as even the requirements for registration as anindependent local have been substantially complied with.

We, thus, find no compelling justification to nullify D.O. 40-03. Significantly, the Court declared inanother case:24

Pagpalain cannot also allege that Department Order No. 9 is violative of public policy. x x x [T]hesole function of our courts is to apply or interpret the laws. It does not formulate public policy, whichis the province of the legislative and executive branches of government. It cannot, thus, be said thatthe principles laid down by the Court in Progressive and Protection Technology constitute publicpolicy on the matter. They do, however, constitute the Courts interpretation of public policy, asformulated by the executive department through its promulgation of rules implementing the LaborCode. However, this public policy has itself been changed by the executive department, through theamendments introduced in Book V of the Omnibus Rules by Department Order No. 9. It is not for usto question this change in policy, it being a well-established principle beyond question that it is notwithin the province of the courts to pass judgments upon the policy of legislative or executive action.

This statement is as true then as it is now.

In light of the foregoing, we find no merit in the appeal.

WHEREFORE, premises considered, we DENY the petition for lack of merit. The assailed decisionand resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner ElectromatManufacturing and Recording Corporation.

SO ORDERED.

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ARTURO D. BRIONAssociate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate JusticeChairperson

TERESITA J. LEONARDO-DE CASTRO*Associate Justice

DIOSDADO M. PERALTA**Associate Justice

JOSE PORTUGAL PEREZAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the casewas assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIOAssociate JusticeChairperson, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, itis hereby certified that the conclusions in the above Decision had been reached in consultationbefore the case was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONAChief Justice

Footnotes

* Designated as Acting Member of the Second Division per Special Order No. 1006 datedJune 10, 2011.

**

Designated as Acting Member in lieu of Associate Justice Maria Lourdes P. A. Sereno perSpecial Order No. 1040 dated July 6, 2011.

1Rollo, pp. 22-59; filed pursuant to Rule 45 of the Rules of Court.

2Id. at 12-19; penned by Associate Justice Rosmari D. Carandang, and concurred in byAssociate Justices Andres B. Reyes, Jr. and Monina Arevalo-Zearosa.

3Id. at 9-10.

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4Series of 2003, Amending the Implementing Rules of Book V of the Labor Code.

5Rollo, p. 142.

6Id. at 175-180; Decision dated March 8, 2004.

7Supra note 2.

8Id. at 17, last paragraph.

9LABOR CODE, Article 5.

10Supra note 3.

11Supra note 1.

12Rollo, pp. 336-364.

13Before its amendment by Republic Act No. 9481 which lapsed into law on May 25, 2007.

14Rollo, p. 348; Memorandum, p. 13, par. 2.

15Id. at 279.

16Id. at 281-A; Resolution dated August 4, 2008.

17Id. at 285-286.

18367 Phil. 605 (1999).

19G.R. No. 96425, February 4, 1992, 205 SCRA 802.

20As amended by D.O. 9, Series of 1997.

21LABOR CODE, Article 212(h); definition of "legitimate labor organization."

22Progressive Development Corporation v. Secretary, Department of Labor andEmployment, supra note 19, at 811.

23Ibid.

24Pagpalain Haulers, Inc. v. Trajano, 369 Phil. 617, 628 (1999).

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

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THIRD DIVISION

G.R. No. 183317 December 21, 2009

MARIWASA SIAM CERAMICS, INC., Petitioner,vs.

THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, CHIEF OF THEBUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONALDIRECTOR OF DOLE REGIONAL OFFICE NUMBER IV-A & SAMAHAN NG MGAMANGGAGAWA SA MARIWASA SIAM CERAMICS, INC. (SMMSC-INDEPENDENT), Respondents.

D E C I S I O N

NACHURA, J .:

This is a petition for review on certiorari1under Rule 45 of the Rules of Court, seeking to annul theDecision2dated December 20, 2007 and the Resolution3dated June 6, 2008 of the Court of Appeals

in CA-G.R. SP No. 98332.

The antecedent facts are as follows

On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc.(SMMSC-Independent) was issued a Certificate of Registration4as a legitimate labor organization bythe Department of Labor and Employment (DOLE), Region IV-A.

On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of UnionRegistration against respondent, claiming that the latter violated Article 2345of the Labor Code fornot complying with the 20% requirement, and that it committed massive fraud and misrepresentationin violation of Article 2396of the same code. The case was docketed as Case No. RO400-0506-AU-

004.

On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition,revoking the registration of respondent, and delisting it from the roster of active labor unions.

Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR).

In a Decision7dated June 14, 2006, the BLR granted respondents appeal and disposed as follows

WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa Mariwasa SiamCeramics, Inc. (SMMSC-Independent) is hereby GRANTED, and the Decision dated 26 August 2005by DOLE-Region-IV-A Director Maximo B. Lim is hereby REVERSED and SET ASIDE. Samahan ng

Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent), under RegistrationCertificate No. RO400-200505-UR-002, remains in the roster of legitimate labor organizations.

SO DECIDED.8

Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution9dated February 2,2007.

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Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but theCA denied the petition for lack of merit.

Petitioners motion for reconsideration of the CA Decision was likewise denied, hence, this petitionbased on the following grounds

Review of the Factual Findings of the Bureau of Labor Relations, adopted and confirmed by theHonorable Court of Appeals is warranted[;]

The Honorable Court of Appeals seriously erred in ruling that the affidavits of recantation cannot begiven credence[;]

The Honorable Court of Appeals seriously erred in ruling that private respondent union complied withthe 20% membership requirement[; and]

The Honorable Court of Appeals seriously erred when it ruled that private respondent union did notcommit misrepresentation, fraud or false statement.10

The petition should be denied.

The petitioner insists that respondent failed to comply with the 20% union membership requirementfor its registration as a legitimate labor organization because of the disaffiliation from the totalnumber of union members of 102 employees who executed affidavits recanting their unionmembership.

It is, thus, imperative that we peruse the affidavits appearing to have been executed by theseaffiants.

The affidavits uniformly state

Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang Rank & File saMariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas, Batangas, matapos na makapanumpang naaayon sa batas ay malaya at kusang loob na nagsasaad ng mga sumusunod:

1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa saMariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking pag-aalinlangan[;]

2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handaako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa kadahilanan nahindi angkop sa aking pananaw ang mga mungkahi o adhikain ng samahan.

SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan ngayong ika-____ ng ______,2005 dito sa Lalawigan ng Batangas, Bayan ng Sto. Tomas.

____________________Nagsasalaysay

Evidently, these affidavits were written and prepared in advance, and the pro forma affidavits wereready to be filled out with the employees names and signatures.

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The first common allegation in the affidavits is a declaration that, in spite of his hesitation, the affiantwas forced and deceived into joining the respondent union. It is worthy to note, however, that theaffidavit does not mention the identity of the people who allegedly forced and deceived the affiantinto joining the union, much less the circumstances that constituted such force and deceit. Indeed,not only was this allegation couched in very general terms and sweeping in nature, but moreimportantly, it was not supported by any evidence whatsoever.

The second allegation ostensibly bares the affiants regret for joining respondent union andexpresses the desire to abandon or renege from whatever agreement he may have signed regardinghis membership with respondent.

Simply put, through these affidavits, it is made to appear that the affiants recanted their support ofrespondents application for registration.

In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and CigaretteFactory v. Director of the Bureau of Labor Relations11is enlightening, viz.

On the second issuewhether or not the withdrawal of 31 union members from NATU affected the

petition for certification election insofar as the 30% requirement is concerned, We reserve the Orderof the respondent Director of the Bureau of Labor Relations, it appearing undisputably that the 31union members had withdrawn their support to the petition before the filing of said petition. It wouldbe otherwise if the withdrawal was made after the filing of the petition for it would then be presumedthat the withdrawal was not free and voluntary. The presumption would arise that the withdrawal wasprocured through duress, coercion or for valuable consideration. In other words, the distinction mustbe that withdrawals made before the filing of the petition are presumed voluntary unless there isconvincing proof to the contrary, whereas withdrawals made after the filing of the petition aredeemed involuntary.

The reason for such distinction is that if the withdrawal or retraction is made before the filing of thepetition, the names of employees supporting the petition are supposed to be held secret to theopposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence of

proof to the contrary. Moreover, it becomes apparent that such employees had not given consent tothe filing of the petition, hence the subscription requirement has not been met.

When the withdrawal or retraction is made after the petition is filed, the employees who aresupporting the petition become known to the opposite party since their names are attached to thepetition at the time of filing. Therefore, it would not be unexpected that the opposite party would usefoul means for the subject employees to withdraw their support.12

In the instant case, the affidavits of recantation were executed after the identities of the unionmembers became public, i.e., after the union filed a petition for certification election on May 23,2005, since the names of the members were attached to the petition. The purported withdrawal ofsupport for the registration of the union was made after the documents were submitted to the DOLE,

Region IV-A. The logical conclusion, therefore, following jurisprudence, is that the employees werenot totally free from the employers pressure, and so the voluntariness of the employees executionof the affidavits becomes suspect.

It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits wereexecuted by the individual affiants on different dates from May 26, 2005 until June 3, 2005, but theywere all sworn before a notary public on June 8, 2005.

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There was also a second set of standardized affidavits executed on different dates from May 26,2005 until July 6, 2005. While these 77 affidavits were notarized on different dates, 56 of these werenotarized on June 8, 2005, the very same date when the first set of 25 was notarized.

Considering that the first set of 25 affidavits was submitted to the DOLE on June 14, 2005, it issurprising why petitioner was able to submit the second set of affidavits only on July 12, 2005.

Accordingly, we cannot give full credence to these affidavits, which were executed under suspiciouscircumstances, and which contain allegations unsupported by evidence. At best, these affidavits areself-serving. They possess no probative value.

A retraction does not necessarily negate an earlier declaration. For this reason, retractions arelooked upon with disfavor and do not automatically exclude the original statement or declarationbased solely on the recantation. It is imperative that a determination be first made as to whichbetween the original and the new statements should be given weight or accorded belief, applying thegeneral rules on evidence. In this case, inasmuch as they remain bare allegations, the purportedrecantations should not be upheld.13

Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy ofrespondent as a labor organization must be affirmed. While it is true that the withdrawal of supportmay be considered as a resignation from the union, the fact remains that at t he time of the unionsapplication for registration, the affiants were members of respondent and they comprised more thanthe required 20% membership for purposes of registration as a labor union. Article 234 of the LaborCode merely requires a 20% minimum membership during the application for union registration. Itdoes not mandate that a union must maintain the 20% minimum membership requirement allthroughout its existence.141avvphi1

Respondent asserts that it had a total of 173 union members at the time it applied for registration.Two names were repeated in respondents list and had to be deducted, but the total would still be171 union members. Further, out of the four names alleged to be no longer connected withpetitioner, only two names should be deleted from the list since Diana Motilla and T.W. Amutan

resigned from petitioner only on May 10, 2005 and May 17, 2005, respectively, or after respondentsregistration had already been granted. Thus, the total union membership at the time of registrationwas 169. Since the total number of rank-and-file employees at that time was 528, 169 employeeswould be equivalent to 32% of the total rank-and-file workers complement, still very much above theminimum required by law.

For the purpose of de-certifying a union such as respondent, it must be shown that there wasmisrepresentation, false statement or fraud in connection with the adoption or ratification of theconstitution and by-laws or amendments thereto; the minutes of ratification; or, in connection withthe election of officers, the minutes of the election of officers, the list of voters, or failure to submitthese documents together with the list of the newly elected-appointed officers and their postaladdresses to the BLR.15

The bare fact that two signatures appeared twice on the list of those who participated in theorganizational meeting would not, to our mind, provide a valid reason to cancel respondentscertificate of registration. The cancellation of a unions registration doubtless has an impairingdimension on the right of labor to self-organization. For fraud and misrepresentation to be groundsfor cancellation of union registration under the Labor Code, the nature of the fraud andmisrepresentation must be grave and compelling enough to vitiate the consent of a majority of unionmembers.

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In this case, we agree with the BLR and the CA that respondent could not have possibly committedmisrepresentation, fraud, or false statements. The alleged failure of respondent to indicate withmathematical precision the total number of employees in the bargaining unit is of no moment,especially as it was able to comply with the 20% minimum membership requirement. Even if the totalnumber of rank-and-file employees of petitioner is 528, while respondent declared that it should onlybe 455, it still cannot be denied that the latter would have more than complied with the registration

requirement.

WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision and the June 6,2008 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

WE CONCUR:

RENATO C. CORONAAssociate Justice

Chairperson

PRESBITERO J. VELASCO, JR.Associate Justice

DIOSDADO M. PERALTAAssociate Justice

MARIANO C. DEL CASTILLO*Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case wasassigned to the writer of the opinion of the Courts Division.

RENATO C. CORONAAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, Icertify that the conclusions in the above Decision had been reached in consultation before the casewas assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNOChief Justice

Footnotes

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* Additional member per Special Order No. 805 dated December 4, 2009.

1Rollo, pp. 14-34.

2Penned by Associate Justice Celia C. Librea-Leagogo, with Associate Justices Regalado E.Maambong and Sixto C. Marella, Jr., concurring; id. at 354-374.

3Id. at 388-389.

4Rollo, p. 110.

5ART. 234. REQUIREMENTS OF REGISTRATION

Any applicant labor organization, association or group of unions or workers shallacquire legal personality and shall be entitled to the rights and privileges granted bylaw to legitimate labor organizations upon issuance of the certificate of registrationbased on the following requirements:

x x x x

(c) The names of all its members comprising at least twenty percent (20%) of all theemployees in the bargaining unit where it seeks to operate. (Emphasis supplied.)

6ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION

The following shall constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption orratification of the constitution and by-laws or amendments thereto, the minutes ofratification, and the list of members who took part in the ratification;

x x x x

(c) Misrepresentation, false statements or fraud in connection with the election ofofficers, minutes of the election of officers, the list of voters, or failure to submit thesedocuments together with the list of the newly-elected/appointed officers and theirpostal addresses within thirty (30) days from election. (Emphasis supplied.)

7Rollo, pp. 70-77.

8Id. at 77.

9Id. at 67-68.

10Id. at 22, 26, 29, and 31.

11G.R. No. L-55674, July 25, 1983, 123 SCRA 679.

12Id. at 707-708.

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13Philippine Long Distance Company v. The Late Romeo F. Bolso, G.R. No. 159701, August17, 2007, 530 SCRA 550.

14However, this does not prevent another union within the same company from challengingthe status of the union as the legitimate labor organization authorized to represent theinterests of the employees with the management.

15Air Philippines Corporation v. Bureau of Labor Relations, G.R. No. 155395, June 22, 2006,492 SCRA 243.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 157117 November 20, 2006

COASTAL SUBIC BAY TERMINAL, INC., Petitioner,vs.DEPARTMENT OF LABOR and EMPLOYMENT OFFICE OF THE SECRETARY, COASTALSUBIC BAY TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAYTERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP, Respondents.

D E C I S I O N

QUISUMBING,J .

:

For review on certiorariis the Court of Appeals Decision1dated August 31, 2001, in CA-G.R. SP No.54128 and the Resolution2dated February 5, 2003, denying petitioners motion for reconsideration.The Court of Appeals had affirmed the Decision3dated March 15, 1999 of the Secretary of theDepartment of Labor and Employment (DOLE) reversing the Mediator Arbiters dismissal of privaterespondents petitions for certification election.

The facts are as follows:

On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitionsfor certification election before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a legitimate labor organization having been issued a charter certificateby the Associated Labor Union (ALU), and the supervisory union by the Associated Professional,Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents also allegedthat the establishment in which they sought to operate was unorganized.

Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification electionalleging that the rank-and-file union and supervisory union were not legitimate labor organizations,and that the proposed bargaining units were not particularly described.

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Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, withoutprejudice to refiling, both petitions which had been consolidated. The Med-Arbiter held that the ALUand APSOTEU are one and the same federation having a common set of officers. Thus, thesupervisory and the rank-and-file unions were in effect affiliated with only one federation.4

The Med-Arbiter ruled as follows:

Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitionsto be invalid and unwarranted. Consequently, this Office has no recourse but to dismiss bothpetitions without prejudice to the refiling of either.

WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are herebyDISMISSED.

SO ORDERED.5

Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of theMed-Arbiter. The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU

have separate legal personalities to file their separate petitions for certification election. TheSecretary held that APSOTEU is a legitimate labor organization because it was properly registeredpursuant to the 1989 Revised Rules and Regulations implementing Republic Act No. 6715, the ruleapplicable at the time of its registration. It further ruled that ALU and APSOTEU are separate anddistinct labor unions having separate certificates of registration from the DOLE. They also havedifferent sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labororganizations having been chartered respectively by ALU and APSOTEU after submitting all therequirements with the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered theholding of separate certification election, viz:

WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Letseparate certification elections be conducted immediately among the appropriate employees ofCSBTI, after the usual pre-election conference, with the following choices:

I. For all rank and file employees of CSBTI:

1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP;and

2. NO UNION.

II. For all supervisory employees of CSBTI:

1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-

APSOTEU; and

2. NO UNION.

The latest payroll of the employer, including its payrolls for the last three months immediatelypreceding the issuance of this decision, shall be the basis for determining the qualified list of voters.

SO DECIDED.6

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The motion for reconsideration was also denied.7

On appeal, the Court of Appeals affirmed the decision of the Secretary.8It held that there was nograve abuse of discretion on the part of the Secretary; its findings are supported by evidence onrecord; and thus should be accorded with respect and finality.9

The motion for reconsideration was likewise denied.10Hence, the instant petition by the companyanchored on the following grounds:

I

THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISEDRULES AND REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZEPRIVATE RESPONDENT APSOTEUS REGISTRATION BY THE DOLE REGIONALDIRECTOR.

II

THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLICRESPONDENTS APPLICATION OF THE PRINCIPLE OFSTARE DECISIS TO HASTILYDISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU.

III

THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW ANDJURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OFTHE "UNION AUTONOMY" THEORY.

IV

IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE RESPONDENTS ARE"SEPARATE FEDERATIONS," THE HONORABLE COURT OF APPEALS:

(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF AMED-ARBITERS FACTUAL FINDINGS; AND

(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING."11

Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions forcertification election?; (2) Was the Secretarys decision based onstare decisis correct?; and (3)Were private respondents engaged in commingling?

The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, itsmother federation.

Petitioner argues that APSOTEU improperly secured its registration from the DOLE RegionalDirector and not from the BLR; that it is the BLR that is authorized to process applications and issuecertificates of registration in accordance with our ruling in Phil. Association of Free Labor Unions v.Secretary of Labor;12that the certificates of registration issued by the DOLE Regional Directorpursuant to the rules are questionable, and possibly even void ab initio for being ultra vires; and that

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the Court of Appeals erred when it ruled that the law applicable at the time of APSOTEUsregistration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715.

Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannotattain the status of a legitimate labor organization to file a petition for certification election. It relieson Villar v. Inciong,13where we held therein that Amigo Employees Union was not a duly registered

independent union absent any record of its registration with the Bureau.

Pertinent is Article 23514of the Labor Code which provides that applications for registration shall beacted upon by the Bureau. "Bureau" as defined under the Labor Code means the BLR and/ortheLabor Relations Division in the Regional Offices of the Department of Labor.15Further, Section 2,Rule II, Book V of the 1989 Revised Implementing Rules of the Labor Code (Implementing Rules)provides that:

Section 2. Where to file application; procedure Any national labor organization or labor federationor local union may file an application for registration with the Bureau or the Regional Office wherethe applicants principal offices is located. The Bureau or the Regional Office shall imm ediatelyprocess and approve or deny the application. In case of approval, the Bureau or the Regional Office

shall issue the registration certificate within thirty (30) calendar days from receipt of the application,together with all the requirements for registration as hereinafter provided.16

The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department OrderNo. 9, thus:

SECTION 1. Where to file applications. The application for registration of any federation,national or industry union or trade union center shall be filed with the Bureau. Where the applicationis filed with the Regional Office, the same shall be immediately forwarded to the Bureau within forty-eight (48) hours from filing thereof, together with all the documents supporting the registration.

The applications for registration of an independent union shall be filed with and acted upon by theRegional Office where the applicants principal office is located .

x x x x

The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, furtheramending Book V of the above implementing rules. The new implementing rules explicitly providethat applications for registration of labor organizations shall be filed either with the Regional Office orwith the BLR.17

Even after the amendments, the rules did not divest the Regional Office and the BLR of theirjurisdiction over applications for registration by labor organizations. The amendments to theimplementing rules merely specified that when the application was filed with the Regional Office, theapplication would be acted upon by the BLR.

The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, thelaw applicable at that time was Section 2, Rule II, Book V of the Implementing Rules, and notDepartment Order No. 9 which took effect only on June 21, 1997. Thus, considering further that

APSOTEUs principal office is located in Diliman, Quezon City, and its registration was filed with theNCR Regional Office, the certificate of registration is valid.

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The petitioner misapplied Villar v. Inciong.18In said case, there was no record in the BLR that AmigoEmployees Union was registered.19

Did the Court of Appeals err in its application ofstare decisiswhen it upheld the Secretarys rulingthat APSOTEU is a legitimate labor organization and its personality cannot be assailed unless in anindependent action for cancellation of registration certificate?20

We think not.

Section 5, Rule V, Book V of the Implementing Rules states:

Section 5. Effect of registration The labor organization or workers association shall be deemedregistered and vested with legal personality on the date of issuance of its certificate of registration.Such legal personality cannot thereafter be subject to collateral attack, but maybe questioned only inan independent petition for cancellation in accordance with these Rules.21

Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to itsaffiliates.22It may issue a local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is

legitimate.

Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because ofthe commonalities between them? Are they commingled?

The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction,APSOTEU and ALU are the same federation. Private respondents disagree.

First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, itcontinues as such until its certificate of registration is cancelled or revoked in an independent actionfor cancellation.23In addition, the legal personality of a labor organization cannot be collaterallyattacked.24Thus, when the personality of the labor organization is questioned in the same manner

the veil of corporate fiction is pierced, the action partakes the nature of a collateral attack. Hence, inthe absence of any independent action for cancellation of registration against either APSOTEU or

ALU, and unless and until their registrations are cancelled, each continues to possess a separatelegal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separatefederations, despite the commonalities of APSOTEU and ALU.

Under the rules implementing the Labor Code, a chartered local union acquires legal personalitythrough the charter certificate issued by a duly registered federation or national union, and reportedto the Regional Office in accordance with the rules implementing the Labor Code.25A local uniondoes not owe its existence to the federation with which it is affiliated. It is a separate and distinctvoluntary association owing its creation to the will of its members. Mere affiliation does not divest thelocal union of its own personality, neither does it give the mother federation the license to actindependently of the local union. It only gives rise to a contract of agency, where the former acts in

representation of the latter.26Hence, local unions are cons