212211972 labor-cases-week-13

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325 F.2d 746
2 A.L.R.3d 868
The TIMKEN ROLLER BEARING COMPANY, Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent.
No. 15097.
United States Court of Appeals Sixth Circuit.
Dec. 21, 1963.

John G. Ketterer, Canton, Ohio (Day, Cope, Ketterer, Raley & Wright, R. M. Rybolt, Canton, Ohio, on the
brief), for petitioner.
Melvin J. Welles, Atty., N.L.R.B., Washington, D.C. (Stuart Rothman, Gen. Counsel, Dominick L. Manoli,
Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Vivian Asplund, Atty., N.L.R.B.,
Washington, D.C., on the brief), for respondent.
David E. Feller, Elliot Bredhoff, Jerry D. Anker, Michael H. Gottesman, Washington, D.C., Herschel
Kriger, Canton, Ohio, on the brief amicus curiae for United Steelworkers of America, AFL-CIO.
Before MILLER and WEICK, Circuit Judges, and WILLIAM E. MILLER, District Judge.
SHACKELFORD MILLER, Jr., Circuit Judge.
1
The petitioner, The Timken Roller Bearing Company, hereinafter referred to as the 'Company,' seeks
to set aside an order of the National Labor Relations Board issued on August 3, 1962, which held that
petitioner violated Section 8(a)(5) and (1) of the National Labor Relations Act, Section 158(a)(5) and
(1), Title 29 United States Code. The Board in its answer to the petition has requested enforcement of
its order. It is agreed by the parties that the court has jurisdiction of the proceeding.
2
This is a so-called 'wage data' case, in which the Company is charged with having illegally refused to
comply with the Union's request for information relating to the method used to establish the wages
received by its employees. The Company's refusal to comply with this request is alleged to have been
a refusal to bargain in good faith, thereby constituting an unfair labor practice, in violation of Section
8(a)(5). The violation of this section of the Act in turn results in the Company engaging in an unfair
labor practice within the meaning of Section 8(a)(1) of the Act.
3
The Company, an Ohio corporation, maintains its principal office and place of business in Canton,
Ohio, where it is engaged in the manufacture, sale and distribution of roller bearings. For many years
the Union1
has been the bargaining representative of the production and maintenance workers at the
Company's plant at Canton, Ohio. Each product and operation performed in the plant carries a fixed
wage rate, which is determined by a very complex system of detailed time studies, operation
observations, person motions recordings, and a myriad set of detailed evaluations of every separate
element and aspect of the production process. The basic and precise elemental factors considered
were all reduced to writings called time-study sheets. As the changing needs of the Company develop,
old methods are reevaluated, new products are conceived, improved and more efficient methods are
evolved, and, in consequence of successive studies and evaluations of work effort by the individual
employee operators, changed basic time studies are produced and new and different wage rates
established.
4

The Company's practice of using this complex technique for establishing the wage structure of the
employee has been recognized in bargaining contracts between the parties prior to the contract
involved in the present case, which was executed February 21, 1960. The 1960 contract provides that
the wage structure in existence at the moment the current contract is signed shall be frozen for the
duration of the agreement except as changed during its life pursuant to the contract provisions
themselves. Article V, paragraph B, provides with respect to new rates:
5
'It is recognized that the Company at its discretion may find it necessary or desirable from time to time
to establish new wage rates or to adjust existing wage rates because of any of the following
circumstances: * * *.'
6
The contract thereafter lists six 'circumstances,' such as changes or improvements made in
equipment, new or changed standards of manufacture, establishment of changed or new occupations
in the plant, and the introduction of new products and additions to the present line of products in the
plant. Under Article V, paragraph C, the Company agrees that when it deems it necessary or desirable
to establish a new wage rate, it shall develop and install the new rate in accordance with the
Company's practice in effect on the date of the agreement. Article V, paragraph C, also provides that a
grievance may be filed by any employee who is affected by such new rate. Article IX sets forth the
procedure for adjustment of grievances, which includes four successive steps, the last of which is
arbitration.
7
In the summer of 1960, among the pending grievances, there were five directly arising from newly
established wage rats, which the employees contended were a reduction of rates and improperly
established under the contract. These five pending grievances had proceeded beyond the third step of
the grievance procedure as far back as the summer of 1959 and awaited hearings before a chosen
arbitrator in each instance. They were held in abeyance as the parties met in negotiation sessions
aimed at a renewal of the 1956 contract due to expire on August 24, 1959. A new two-year contract
was signed on February 21, 1960. There is no substantial difference, in terms of wage provisions or
grievance procedures, between the two agreements.
8
On July 18, 1960, the Union wrote a letter to the Company in which it requested wage rate information
relating to the grievances involved in all five of the pending arbitration cases referred to above. This
request included the original time study sheets and other documents relative to both the prior rates
and the new rates, all other data and information which was used to determine the rate of pay for each
job, and all documents, studies and other information that were used to evaluate such job, both prior
to the change and thereafter, including full information as to the weights given to each factor used to
arrive at a final decision on the established rate and what factors were considered in making such
decision. It explained that this information was needed because 'each of these cases protest the
institution of new reduced rates in place of rates theretofore in effect and/or the adequacy, fairness

and method of establishment of new rates in their stead.' The letter further requested the Company to
supply time study manuals, instructions and procedures used in the making of time studies of jobs in
the plants. The letter stated that the information requested was necessary to the Union so that it might
intelligently evaluate the various rates of pay in the plants, especially as they may be changed from
time to time, and 'to properly administer the contract.'
9
The Company responded to the Union's request by letter of August 1, 1960, in which it stated that it
would not comply with the request. The Union repeated its demand by letter of August 29. The
Company again denied the request by letter of September 15. The Company's position was that its
obligation to bargain with the representative of its employees, once the contract had been entered
into, was to bargain on matters covered by the contract in the manner of bargaining prescribed by the
contract; that it had no obligation to agree to any modification of the terms and conditions contained in
the contract as long as it remained in effect; that the contract contained adequate provisions for the
discussion and settlement of any and all grievances arising under the contract that dealt with the
establishment of new rates; that if there was any information that the Union needed for the proper
disposition of the listed rate grievances, it was its obligation to secure this information in accordance
with the grievance provisions of the contract; and that under the contract, employees working under a
new rate might choose to either file a grievance or not to do so, and that it was only when a grievance
was filed that the Union had any responsibility with regard to the new rate, and then its interest was
confined to the newly established specific rate and not to the rate structure in general. The Company
stated that it was willing to proceed with respect to rate grievances strictly in conformity with the 1956
and 1960 agreements whichever was applicable, but it was not interested in negotiating a new
contract dealing with the subject of rate establishment. In two grievances which went to arbitration the
Company's action was consistent with this position, in that it declined to furnish requested wage
information unless the arbitrator ruled that it was required to do so. In one of these matters the
arbitrator ruled that the Company was not required to furnish the information requested. In the other
matter the arbitrator asked the Company to deliver some of the requested wage data to the Union and
the Company complied with this direction.
10
Following a charge by the Union on November 25, 1960, a complaint was issued on January 5, 1961,
by the Regional Director of the National Labor Relations Board alleging that the Company had
committed an unfair labor practice affecting commerce within the meaning of Section 8(a)(1) and (5) of
the Act. Following the filing of an answer by the Company and a hearing, the Board concurred in the
findings and rulings of the Trial Examiner and issued its order of August 3, 1962, directing the
Company to cease and desist from refusing to bargain collectively with the Union by refusing to
furnish to the Union information and data concerning time studies and methods used for establishing
wage rates, the affirmatively directing the Company to furnish such time studies, wage data and
information to the Union upon request. This is the order which is before us on review.
11

It appears to be well settled that an employer is guilty of an unfair labor practice in refusing to bargain
collectively as required by Sections 8(a)(5) and 8(d) of the Act, by refusing to furnish relevant wage
information and data requested by a union as the certified representative of the employees in
connection with negotiations for a collective bargaining agreement. N.L.R.B. v. J. H. Allison & Co., 165
F.2d 766, 3 A.L.R.2d 990, C.A.6th, cert. denied, 335 U.S. 814, 69 S.Ct. 31, 93 L.Ed. 369; N.L.R.B. v.
Hekman Furniture Co., 207 F.2d 561, C.A.6th; N.L.R.B. v. John S. Swift Co., 277 F.2d 641, 645,
C.A.7th; N.L.R.B. v. Leland-Gifford Co., 200 F.2d 620, 624, C.A.1st; N.L.R.B. v. Yawman & Erbe Mfg.
Co., 187 F.2d 947, C.A.2nd. See also: N.L.R.B. v. Truitt Mfg. Co., 351 U.S. 149, 76 S.Ct. 753, 100
L.Ed. 1027.
12
The cases also hold that this right to relevant wage information and data is not limited to the period
during which the employer and the union are engaged in negotiations for a collective bargaining
agreement, but includes the processing of a grievance under the bargaining agreement and the
union's bona fide actions in administering the bargaining agreement during the period of its existenc e.
J. I. Case Company v. N.L.R.B., 253 F.2d 149, 155, C.A.7th; N.L.R.B. v. F. W. Woolworth Co., 352
U.S. 938, 77 S.Ct. 261, 1 L.Ed.2d 235, reversing N.L.R.B. v. F. W. Woolworth co., 235 F.2d 319,
C.A.9th; N.L.R.B. v. Otis Elevator Co., 208 F.2d 176, C.A.2nd; N.L.R.B. v. Whiting Machine
Works, 217 F.2d 593, 594, C.A.4th, cert. denied, 349 U.S. 905, 75 S.Ct. 583, 99 L.Ed. 1242; N.L.R.B.
v. Item Company, 220 F.2d 956, 958, C.A.5th, cert. denied, 350 U.S. 836, 76 S.Ct. 73, 100 L.Ed. 746,
rehearing denied, 350 U.S. 905, 76 S.Ct. 177, 100 L.Ed. 795; Boston Herald-Trav. Corp. v.
N.L.R.B., 223 F.2d 58, 63, C.A.1st.
13
The Company contends that although the Union may have the right to such wage information, such
right can be waived, and, in fact, was waived by the Union in the negotiations leading up to the
execution of the collective bargaining agreement on February 21, 1960.
14
In the negotiations preceding the execution of that agreement the Union submitted a proposal which
required the Company to furnish the kind of information now sought by it. This proposal was rejected
by the Company. The Union, however, continued unsuccessfully to press this proposal. It was not
included in the bargaining agreement as finally executed. The Company contends that this constituted
a waiver of the right of the Union to demand and obtain such data. N.L.R.B. v. Jacobs Mfg. Co., 196
F.2d 680, C.A.2nd; N.L.R.B. v. Nash-Finch Co., 211 F.2d 622, 626, 45 A.L.R.2d 683, C.A.8th;
International News Service Div. of the Hearst Corp., 113 N.L.R.B. 1067.
15
This reasoning would probably be applicable if the right or benefit sought by the Union was a right or
benefit which could only be acquired by virtue of the bargaining agreement. Under such
circumstances a failure to include it in the agreement necessarily results in a failure to acquire it.
United States Steel Corp. v. Nichols, 229 F.2d 396, 399-400, 56 A.L.R.2d 980, C.A.6th, cert. denied,
351 U.S. 950, 76 S.Ct. 846, 100 L.Ed. 1474.
16
However, in this case we agree with the Board that the Union's right to wage information it needed to
administer the bargaining agreement was a right which it had under Section 8(d) of the National Labor

Relations Act, Section 158(d), Title 29 United States Code, and the existence of this right was not
dependent upon it being included in the bargaining agreement. It was not a right obtained by contract,
such as would be the case in increased wages, longer vacations, pension rights, and certain so-called
fringe benefits. The failure to have the right recognized by the Company in the bargaining agreement,
which would probably eliminate the necessity of possible litigation over it later, does not mean that it
does not exist by virtue of the statute.
17
The Company challenges the characterization of this right as a statutory right in that no statute
expressly so provides. Although Section 8(d) of the Labor Relations Act does not expressly so
provide, it has been construed by the cases hereinabove referred to as providing such a right, and we
find no error in characterizing it as a statutory right. It was so characterized in N.L.R.B. v. Yawman &
Erbe Mfg. Co., supra, 187 F.2d 947, 949, C.A.2nd. See also: California Portland Cement Co., 101
N.L.R.B. 1436.
18
Even so, we recognize that the Union could have relinquished this right under the provisions of the
bargaining agreement if it, as a part of the bargaining process, elected to do so. But such a
relinquishment must be in 'clear and unmistakable' language. Tide Water Associated Oil Company, 85
N.L.R.B. 1096; N.L.R.B. v. Item Company, supra, 220 F.2d 956, 958-959, C.A.5th, cert. denied, 350
U.S. 836, 76 S.Ct. 73, 100 L.Ed. 746, rehearing denied, 350 U.S. 905, 76 S.Ct. 177, 100 L.Ed. 795.
Silence in the bargaining agreement on such an issue does not meet this test. This Court said in
N.L.R.B. v. J. H. Allison & Co., supra, 165 F.2d 766, 768, 3 A.L.R.2d 990, C.A.6th, cert denied, 335
U.S. 814, 69 S.Ct. 31, 93 L.Ed. 369, 'Nor do we see logical justification in the view that an entering
into a collective bargaining agreement for a new year, even though the contract was silent upon a
controverted matter, the union should be held to have waived any rights secured under the Act,
including its right to have a say-so as to so-called merit increases.' We are of the opinion that the
execution of the 1960 bargaining agreement, which was silent on this controversial question did not
constitute a relinquishment of the Union's statutory right to the wage information which it now seeks.
N.L.R.B. v. Hekman Furniture Co., supra, 207 F.2d 561, C.A.6th; N.L.R.B. v. Otis Elevator Co.,
supra, 208 F.2d 176, 179, C.A.2nd; N.L.R.B. v. Yawman & Erbe Mfg. Co., supra, 187 F.2d 917, 949,
C.A.2nd.
19
The Company further contends that although the Union may have the right to certain relevant and
material wage information, it does not have an unlimited right to information generally from the
Company's books, and in the event the Company refuses to honor the Union's demand, the
enforcement of the claimed right must be through the grievance procedure provided by the bargaining
agreement, which terminates with arbitration. In other words, it is for the arbitrator to decide whether
the Company's refusal to furnish the information is justified under the particular circumstances
involved, and that neither the Board nor the Court has the authority to decide this issue. It is argued
that the demand by the Union, the refusal of the Company to comply with the demand, and the
Union's attempt to enforce its claimed right is a 'complaint,' which under the provisions of the
bargaining agreement must be channeled through Article IX of the bargaining agreement, which
provides the procedure for the adjustment of 'complaints or grievances.' United Steelworkers of

America v. American Manufacturing Co., 363 U.S. 564,80 S.Ct. 1343, 4 L.Ed.2d 1403; United
Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d
1424; United Steelworkers of America v. Warrier & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347,
4 L.Ed.2d 1409, frequently referred to as the trilogy of cases. In this connection it is pointed out that
although the Company contends the Union is not entitled to the information, it is willing to submit the
matter to arbitration under Section IX of the bargaining agreement and to comply with the arbitrator's
ruling. It takes the position that it is an intrinsic contradiction for the Court to say that although the
employer is required by his contract to arbitrate complaints and grievances, his 'willingness to abide
by, and faithfully carry out, the terms of his contract becomes itself a failure to bargain.' Sinclair
Refining Co. v. N.L.R.B.,306 F.2d 569, 575, C.A.5th. As the Court said in N.L.R.B. v. Nash-Finch Co.,
supra, 211 F.2d 622, 627, C.A.8th, 'The respondent, we think, may not be convicted of an unfair labor
practice for doing no more and no less for its union employees than its collective bargaining
agreement with them called for.'
20
The soundness of this reasoning, of course, depends upon whether the demand by the Union and the
Company's refusal to honor it constitutes a complaint or grievance within the provisions of Section IX
of the bargaining agreement. If it is not within the provisions of Section IX, arbitration of the issue is
not required and the Company's insistence upon arbitration is unjustified. Atkinson v. Sinclair Refining
Co., 370 U.S. 238, 241-243, 82 S.Ct. 1318, 8 L.Ed.2d 462.
21
Article IX of the bargaining agreement deals with 'Adjustment of Grievances.' Paragraph E thereof
states:
22
'The parties agree that the provisions of this Article IX provide adequate means, if followed, for the
adjustment and disposition, of any complaints or grievances.'
It then provides:
23
'Any employee wh has a complaint concerning wages, hours and working conditions that directly
affect him at the time of such complaint, may discuss the alleged complaint with his immediate
supervisor in an attempt to adjust it and if such complaint is not adjusted to his satisfaction shall be
entitled to file and process a grievance as provided in this Artaicle, 'Adjustment of Grievances'.'
24
The grievance procedure consists of three successive steps, followed by a fourth step consisting of
arbitration if the grievance is not adjusted in the prior proceedings. Each of these steps refers to a
'grievance' of an 'employee.' It is provided in Step 3 of the Agreement, 'Only grievances involving the
interpretation or application of this agreement or disciplinary action are eligible for appeal to
arbitration. * * *'
25

The Company's contention that the request of the Union for wage information and the refusal of the
Company to supply it is the absence of an order to do so constitutes a complaint or a grievance which
is subject to arbitration under the terms of the collective bargaining agreement is, in our opinion,
unsound for the following reasons.
26
First, Article IX provides that only grievances involing the interpreation or application of the agreement
(or disciplinary action, which is not applicable here) is eligible for appeal to arbitration. As hereinabove
pointed out, the right of the Union to wage information was not acquired through the bargaining
agreement. Whether the demand of the Union should be honored, accordingly, does not involve the
interpretation or application of the agreement, which is necessary in order to be eligible for arbitration,
but, on the contrary, involves the interpretation and application of the National Labor Relations Act.
27
Secondly, Step 1 of the grievance procedure provided by Section IX is expressly limited to 'An
employee who has not been able to adjust his grievance with his immediate supervisor.' Thereafter,
Steps 2, 3 and 4 (arbitration) deal with this same employee grievance. We do not construe the claim
of the Union in the present case as being such an employee grievance. Local Union No. 998, Intern.
Union, United Auto, Aircraft and Agr. Implement Workers of America, A.F.L.-C.I.O. v. B. & T. Metals
Co., 315 F.2d 432, 437, C.A.6th. It was not limited to the settlement of pending grievances. It was also
for the purpose of enabling it to 'intelligently evaluate the various rates of pay in the plants' and 'to
properly administer the contract.' Without this information it would be difficult, if not impossible, as a
practical matter to evaluate a new rate, to check on the fairness of the Company's determination, and
to determine whether an employee had a valid grievance which should be asserted. With such
information the Union is in a better position to advise an employee about his rights, to reject those
employee claims which are not supported by the facts, and to protect the rights of employees
generally in properly administering the contract. Sinclair Refining Co. v. N.L.R.B., supra, 306 F.2d 569,
571, C.A.5th. As stated in Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80, the
bargaining representative's duty does not come to an abrupt end with the making of an agreement
between the union and the employer, but collective bargaining is a continuous process involving both
matters not covered by the existing agreement and the protection of employee rights already secured
by contract.
28
The Company, in support of its contention, relies strongly upon Timken Roller Bearing Co. v. N.L.R.B.,
161 F.2d 949, C.A.6th, and Sinclair Refining Co. v. N.L.R.B., supra, 306 F.2d 569, C.A.5th.
29
In the Timken Roller Bearing Co. case it was held that the company had not refused to bargain in
insisting that the dispute over its right to subcontract, which it claimed was a function of management
over which the union had no jurisdiction, be handled through the grievance procedure provided by the
contract. This ruling was based upon the fact that the bargaining agreement contained a provision that
should 'differences arise between the Company and the Union as to the meaning and application of
the provisions of this agreement' such 'differences' should be settled within the grievance procedure. It
was held in that case that the dispute over the company's right to subcontract was such a 'difference'

and that the company, accordingly, had the right to insist on that procedure being followed. In the
present case, although the dispute between the Company and the Union over the right to wage
information and data is a 'difference,' it is not a difference or a grievance 'involving the interpretation
and application of the provisions of' the bargaining agreement, and, accordingly, the Company did not
have the right to insist on use of the grievance procedure. We find no conflict between the cases.
30
In the Sinclair Refining Co. case the employer demoted two employees 'because of lack of work,'
which, under the bargaining agreement, was not subject to arbitration. The union filed a grievance
which claimed that the alleged 'lack of work' was the result of contracturally wrongful assignment or
allocation of work. The employer conceded that since a dispute existed between it and the union, it
was subject to arbitration under the provisions of the bargaining agreement, but insisted that on the
merits the union had no right to challenge or question its action in any way. While the grievance was in
the first two steps the union demanded certain wage information and data. The employer refused to
furnish this data on the ground that since the demotion was exclusively a management function not
subject to challenge by the union, the data sought, even if otherwise relevant, was wholly immaterial.
This resulted in the institution of an unfair labor practice proceeding. The Labor Board ruled that the
employer had failed to bargain in good faith in refusing to furnish the information demanded. However,
the Court of Appeals denied enforcement of its cease-and-desist order. The Court held that the Board
proceeding could not be used to secure data for use in a grievance proceeding where determination of
relevance and pertinency required determination of the critical substantive issue of the grievance
itself, which issue was under the bargaining agreement for the arbitrator not the Board or the Court.
This is but another example of the now established law that where a dispute or 'difference' is subject
to grievance procedure and arbitration by reason of the provisions of the bargaining agreement, that
procedure is exclusive and will be enforced. In the present case, as we have pointed out, the dispute
or 'difference' is not subject to the grievance procedure and arbitration provided by the bargaining
agreement. This distinction was recognized and applied by the same court and the same opinion
writer in Local Union No. 787, Intern. Union of Elec. Radio and Mach. Workers A.F.L.-C.I.O. v. Collins
Radio Co., 317 F.2d 214, 219-220, C.A.5th. The opinion in the Collins Radio Co. case also answers
the company's contention that the Supreme Court's recent trilogy opinions, hereinabove referred to,
require a different ruling from what we have reached.
31
It is for the Court, not the arbitrator, to decide whether a claim is an arbitrable one under the
bargaining agreement. Atkinson v. Sinclair Refining Co., supra, 370 U.S. 238, 241, 82 S.Ct. 1318, 8
L.Ed.2d 462; Local Union No. 998, Intern. Union, United Auto, Aircraft and Agr. Implement Workers of
American, A.F.L.-C.I.O. v. B. & T. Metals Co., supra, 315 F.2d 432, 436, C.A.6th. We are of the
opinion that the claim of the Union for wage information and data was not an arbitrable one and that
the Company was not justified in refusing to give the Union wage information on that ground.
32
We are also of the opinion that the good faith belief of the Company that it was not required to bargain
with the Union is no defense to a refusal to bargain. N.L.R.B. v. Wooster Div. of Borg-Warner
Corp., 356 U.S. 342, 349, 78 S.Ct. 718, 2 L.Ed.2d 823; International Ladies' Garment Workers' Union,

A.F.L.-C.I.O. v. N.L.R.B., 366 U.S. 731, 739, 81 S.Ct. 1603, 6 L.Ed.2d 762; Old King Cole, Inc. v.
N.L.R.B., 260 F.2d 530, 532, C.A.6th.
33
The petition to set aside the order of the Board is denied and enforcement of said order is decreed.
G.R. No. 96490 February 3, 1992
INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO, petitioner,
vs.
VOLUNTARY ARBITRATOR TEODORICO P. CALICA and INDOPHIL TEXTILE MILLS,
INC., respondents.
Romeo C. Lagman for petitioner.
Borreta, Gutierrez & Leogardo for respondent Indophil Textile Mills, Inc.
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the award issued by the respondent
Voluntary Arbitrator Teodorico P. Calica dated December 8, 1990 finding that Section 1 (c), Article I
of the Collective Bargaining Agreement between Indophil Textile Mills, Inc. and Indophil Textile Mill
Workers Union-PTGWO does not extend to the employees of Indophil Acrylic Manufacturing
Corporation as an extension or expansion of Indophil Textile Mills, Incorporated.
The antecedent facts are as follows:
Petitioner Indophil Textile Mill Workers Union-PTGWO is a legitimate labor organization duly
registered with the Department of Labor and Employment and the exclusive bargaining agent of all
the rank-and-file employees of Indophil Textile Mills, Incorporated. Respondent Teodorico P. Calica
is impleaded in his official capacity as the Voluntary Arbitrator of the National Conciliation and
Mediation Board of the Department of Labor and Employment, while private respondent Indophil
Textile Mills, Inc. is a corporation engaged in the manufacture, sale and export of yarns of various
counts and kinds and of materials of kindred character and has its plants at Barrio Lambakin.
Marilao, Bulacan.
In April, 1987, petitioner Indophil Textile Mill Workers Union-PTGWO and private respondent
Indophil Textile Mills, Inc. executed a collective bargaining agreement effective from April 1, 1987 to
March 31, 1990.
On November 3, 1967 Indophil Acrylic Manufacturing Corporation was formed and registered with
the Securities and Exchange Commission. Subsequently, Acrylic applied for registration with the
Board of Investments for incentives under the 1987 Omnibus Investments Code. The application
was approved on a preferred non-pioneer status.
In 1988, Acrylic became operational and hired workers according to its own criteria and standards.
Sometime in July, 1989, the workers of Acrylic unionized and a duly certified collective bargaining
agreement was executed.

In 1990 or a year after the workers of Acrylic have been unionized and a CBA executed, the
petitioner union claimed that the plant facilities built and set up by Acrylic should be considered as
an extension or expansion of the facilities of private respondent Company pursuant to Section 1(c),
Article I of the CBA, to wit,.
c) This Agreement shall apply to the Company's plant facilities and
installations and to any extension and expansion thereat. (Rollo, p.4)
In other words, it is the petitioner's contention that Acrylic is part of the Indophil bargaining
unit.
The petitioner's contention was opposed by private respondent which submits that it is a juridical
entity separate and distinct from Acrylic.
The existing impasse led the petitioner and private respondent to enter into a submission agreement
on September 6, 1990. The parties jointly requested the public respondent to act as voluntary
arbitrator in the resolution of the pending labor dispute pertaining to the proper interpretatio n of the
CBA provision.
After the parties submitted their respective position papers and replies, the public respondent
Voluntary Arbitrator rendered its award on December 8, 1990, the dispositive portion of which
provides as follows:
PREMISES CONSIDERED, it would be a strained interpretation and application of
the questioned CBA provision if we would extend to the employees of Acrylic the
coverage clause of Indophil Textile Mills CBA. Wherefore, an award is made to the
effect that the proper interpretation and application of Sec. l, (c), Art. I, of the 1987
CBA do (sic) not extend to the employees of Acrylic as an extension or expansion of
Indophil Textile Mills, Inc. (Rollo, p.21)
Hence, this petition raising four (4) issues, to wit:
1. WHETHER OR NOT THE RESPONDENT ARBITRATOR ERRED
IN INTERPRETING SECTION 1(c), ART I OF THE CBA BETWEEN
PETITIONER UNION AND RESPONDENT COMPANY.
2. WHETHER OR NOT INDOPHIL ACRYLIC IS A SEPARATE AND
DISTINCT ENTITY FROM RESPONDENT COMPANY FOR
PURPOSES OF UNION REPRESENTATION.
3. WHETHER OR NOT THE RESPONDENT ARBITRATOR
GRAVELY ABUSED HIS DISCRETION AMOUNTING TO LACK OR
IN EXCESS OF HIS JURISDICTION.
4. WHETHER OR NOT THE RESPONDENT ARBITRATOR
VIOLATED PETITIONER UNION'S CARDINAL PRIMARY RIGHT TO
DUE PROCESS. (Rollo, pp. 6-7)
The central issue submitted for arbitration is whether or not the operations in Indophil Acrylic
Corporation are an extension or expansion of private respondent Company. Corollary to the

aforementioned issue is the question of whether or not the rank-and-file employees working at
Indophil Acrylic should be recognized as part of, and/or within the scope of the bargaining unit.
Petitioner maintains that public respondent Arbitrator gravely erred in interpreting Section l(c), Article
I of the CBA in its literal meaning without taking cognizance of the facts adduced that the creation of
the aforesaid Indophil Acrylic is but a devise of respondent Company to evade the application of the
CBA between petitioner Union and respondent Company.
Petitioner stresses that the articles of incorporation of the two corporations establish that the two
entities are engaged in the same kind of business, which is the manufacture and sale of yarns of
various counts and kinds and of other materials of kindred character or nature.
Contrary to petitioner's assertion, the public respondent through the Solicitor General argues that the
Indophil Acrylic Manufacturing Corporation is not an alter ego or an adjunct or business conduit of
private respondent because it has a separate legitimate business purpose. In addition, the Solicitor
General alleges that the primary purpose of private respondent is to engage in the business of
manufacturing yarns of various counts and kinds and textiles. On the other hand, the primary
purpose of Indophil Acrylic is to manufacture, buy, sell at wholesale basis, barter, import, export and
otherwise deal in yarns of various counts and kinds. Hence, unlike private respondent, Indophil
Acrylic cannot manufacture textiles while private respondent cannot buy or import yarns.
Furthermore, petitioner emphasizes that the two corporations have practically the same
incorporators, directors and officers. In fact, of the total stock subscription of Indophil Acrylic,
P1,749,970.00 which represents seventy percent (70%) of the total subscription of P2,500,000.00
was subscribed to by respondent Company.
On this point, private respondent cited the case of Diatagon Labor Federation v. Ople, G.R. No. L-
44493-94, December 3, 1980, 10l SCRA 534, which ruled that two corporations cannot be treated as
a single bargaining unit even if their businesses are related. It submits that the fact that there are as
many bargaining units as there are companies in a conglomeration of companies is a positive proof
that a corporation is endowed with a legal personality distinctly its own, independent and separate
from other corporations (see Rollo, pp. 160-161).
Petitioner notes that the foregoing evidence sufficiently establish that Acrylic is but an extension or
expansion of private respondent, to wit:
(a) the two corporations have their physical plants, offices and
facilities situated in the same compound, at Barrio Lambakin, Marilao,
Bulacan;
(b) many of private respondent's own machineries, such as dyeing
machines, reeling, boiler, Kamitsus among others, were transferred to
and are now installed and being used in the Acrylic plant;
(c) the services of a number of units, departments or sections of
private respondent are provided to Acrylic; and
(d) the employees of private respondent are the same persons
manning and servicing the units of Acrylic. (see Rollo, pp. 12-13)

Private respondent insists that the existence of a bonafide business relationship between Acrylic and
private respondent is not a proof of being a single corporate entity because the services which are
supposedly provided by it to Acrylic are auxiliary services or activities which are not really essential
in the actual production of Acrylic. It also pointed out that the essential services are discharged
exclusively by Acrylic personnel under the control and supervision of Acrylic managers and
supervisors.
In sum, petitioner insists that the public respondent committed grave abuse of discretion amounting
to lack or in excess of jurisdiction in erroneously interpreting the CBA provision and in failing to
disregard the corporate entity of Acrylic.
We find the petition devoid of merit.
Time and again, We stress that the decisions of voluntary arbitrators are to be given the highest
respect and a certain measure of finality, but this is not a hard and fast rule, it does not preclude
judicial review thereof where want of jurisdiction, grave abuse of discretion, violation of due process,
denial of substantial justice, or erroneous interpretation of the law were brought to our attention.
(see Ocampo, et al. v. National Labor Relations Commission, G.R. No. 81677, 25 July 1990, First
Division Minute Resolution citing Oceanic Bic Division (FFW) v. Romero, G.R. No. L-43890, July 16,
1984, 130 SCRA 392)
It should be emphasized that in rendering the subject arbitral award, the voluntary arbitrator
Teodorico Calica, a professor of the U.P. Asian Labor Education Center, now the Institute for
Industrial Relations, found that the existing law and jurisprudence on the matter, supported the
private respondent's contentions. Contrary to petitioner's assertion, public respondent cited facts and
the law upon which he based the award. Hence, public respondent did not abuse his discretion.
Under the doctrine of piercing the veil of corporate entity, when valid grounds therefore exist, the
legal fiction that a corporation is an entity with a juridical personality separate and distinct from its
members or stockholders may be disregarded. In such cases, the corporation will be considered as
a mere association of persons. The members or stockholders of the corporation will be considered
as the corporation, that is liability will attach directly to the officers and stockholders. The doctrine
applies when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud,
or defend crime, or when it is made as a shield to confuse the legitimate issues, or where a
corporation is the mere alter ego or business conduit of a person, or where the corporation is so
organized and controlled and its affairs are so conducted as to make it merely an instrumentality,
agency, conduit or adjunct of another corporation. (Umali et al. v. Court of Appeals, G.R. No. 89561,
September 13, 1990, 189 SCRA 529, 542)
In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging that the
creation of the corporation is a devise to evade the application of the CBA between petitioner Union
and private respondent Company. While we do not discount the possibility of the similarities of the
businesses of private respondent and Acrylic, neither are we inclined to apply the doctrine invoked
by petitioner in granting the relief sought. The fact that the businesses of private respondent and
Acrylic are related, that some of the employees of the private respondent are the same persons
manning and providing for auxilliary services to the units of Acrylic, and that the physical plants,
offices and facilities are situated in the same compound, it is our considered opinion that these facts
are not sufficient to justify the piercing of the corporate veil of Acrylic.
In the same case of Umali, et al. v. Court of Appeals (supra), We already emphasized that "the legal
corporate entity is disregarded only if it is sought to hold the officers and stockholders directly liable

for a corporate debt or obligation." In the instant case, petitioner does not seek to impose a claim
against the members of the Acrylic.
Furthermore, We already ruled in the case of Diatagon Labor Federation Local 110 of the ULGWP
v. Ople (supra) that it is grave abuse of discretion to treat two companies as a single bargaining unit
when these companies are indubitably distinct entities with separate juridical personalities.
Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-file
employees working at Acrylic should not be recognized as part of, and/or within the scope of the
petitioner, as the bargaining representative of private respondent.
All premises considered, the Court is convinced that the public respondent Voluntary Arbitrator did
not commit grave abuse of discretion in its interpretation of Section l(c), Article I of the CBA that the
Acrylic is not an extension or expansion of private respondent.
ACCORDINGLY, the petition is DENIED and the award of the respondent Voluntary Arbitrator are
hereby AFFIRMED.
SO ORDERED.
2. G.R. No. 85985 August 13, 1993
PHILIPPINE AIRLINES, INC. (PAL), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA
and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.
Solon Garcia for petitioner.
Adolpho M. Guerzon for respondent PALEA.
MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation
of a Code of Discipline among employees is a shared responsibility of the employer and the
employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of
Discipline. The Code was circulated among the employees and was immediately implemented, and
some employees were forthwith subjected to the disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint
before the National Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-
2051-85) with the following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline
without notice and prior discussion with Union by Management" (Rollo, p. 41). In its position paper,
PALEA contended that PAL, by its unilateral implementation of the Code, was guilty of unfair labor
practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code. PALEA
alleged that copies of the Code had been circulated in limited numbers; that being penal in nature
the Code must conform with the requirements of sufficient publication, and that the Code was

arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that implementation of
the Code be held in abeyance; that PAL should discuss the substance of the Code with PALEA; that
employees dismissed under the Code be reinstated and their cases subjected to further hearing; and
that PAL be declared guilty of unfair labor practice and be ordered to pay damages (pp. 7-14,
Record.)
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe
rules and regulations regarding employess' conduct in carrying out their duties and functions, and
alleging that by implementing the Code, it had not violated the collective bargaining agreement
(CBA) or any provision of the Labor Code. Assailing the complaint as unsupported by evidence, PAL
maintained that Article 253 of the Labor Code cited by PALEA reffered to the requirements for
negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was
violated when PAL unilaterally implemented the Code, and cited provisions of Articles IV and I of
Chapter II of the Code as defective for, respectively, running counter to the construction of penal
laws and making punishable any offense within PAL's contemplation. These provisions are the
following:
Sec. 2. Non-exclusivity. — This Code does not contain the entirety of the rules and
regulations of the company. Every employee is bound to comply with all applicable
rules, regulations, policies, procedures and standards, including standards of quality,
productivity and behaviour, as issued and promulgated by the company through its
duly authorized officials. Any violations thereof shall be punishable with a penalty to
be determined by the gravity and/or frequency of the offense.
Sec. 7. Cumulative Record. — An employee's record of offenses shall be cumulative.
The penalty for an offense shall be determined on the basis of his past record of
offenses of any nature or the absence thereof. The more habitual an offender has
been, the greater shall be the penalty for the latest offense. Thus, an employee may
be dismissed if the number of his past offenses warrants such penalty in the
judgment of management even if each offense considered separately may not
warrant dismissal. Habitual offenders or recidivists have no place in PAL. On the
other hand, due regard shall be given to the length of time between commission of
individual offenses to determine whether the employee's conduct may indicate
occasional lapses (which may nevertheless require sterner disciplinary action) or a
pattern of incorrigibility.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed
to appear at the scheduled date. Interpreting such failure as a waiver of the parties' right to present
evidence, the labor arbiter considered the case submitted for decision. On November 7, 1986, a
decision was rendered finding no bad faith on the part of PAL in adopting the Code and ruling that
no unfair labor practice had been committed. However, the arbiter held that PAL was "not totally fault
free" considering that while the issuance of rules and regulations governing the conduct of
employees is a "legitimate management prerogative" such rules and regulations must meet the test
of "reasonableness, propriety and fairness." She found Section 1 of the Code aforequoted as "an all
embracing and all encompassing provision that makes punishable any offense one can think of in
the company"; while Section 7, likewise quoted above, is "objectionable for it violates the rule against
double jeopardy thereby ushering in two or more punishment for the same misdemeanor." (pp. 38-
39, Rollo.)

The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated."
Noting that PAL's assertion that it had furnished all its employees copies of the Code is unsupported
by documentary evidence, she stated that such "failure" on the part of PAL resulted in the imposition
of penalties on employees who thought all the while that the 1966 Code was still being followed.
Thus, the arbiter concluded that "(t)he phrase ignorance of the law excuses no one from compliance
. . . finds application only after it has been conclusively shown that the law was circulated to all the
parties concerned and efforts to disseminate information regarding the new law have been exerted.
(p. 39, Rollo.) She thereupon disposed:
WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties under the New Code of
Discipline and remand the same for further hearing; and
3. Discuss with PALEA the objectionable provisions specifically tackled in the body of
the decision.
All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.
SO ORDERED. (p. 40, Rollo.)
PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion,
with Presiding Commissioner Bonto-Perez and Commissioner Maglaya concurring, found no
evidence of unfair labor practice committed by PAL and affirmed the dismissal of PALEA's charge.
Nonetheless, the NLRC made the following observations:
Indeed, failure of management to discuss the provisions of a contemplated code of
discipline which shall govern the conduct of its employees would result in the erosion
and deterioration of an otherwise harmonious and smooth relationship between them
as did happen in the instant case. There is no dispute that adoption of rules of
conduct or discipline is a prerogative of management and is imperative and essential
if an industry, has to survive in a competitive world. But labor climate has
progressed, too. In the Philippine scene, at no time in our contemporary history is the
need for a cooperative, supportive and smooth relationship between labor and
management more keenly felt if we are to survive economically. Management can no
longer exclude labor in the deliberation and adoption of rules and regulations that will
affect them.
The complainant union in this case has the right to feel isolated in the adoption of the
New Code of Discipline. The Code of Discipline involves security of tenure and loss
of employment — a property right! It is time that management realizes that to attain
effectiveness in its conduct rules, there should be candidness and openness by
Management and participation by the union, representing its members. In fact, our
Constitution has recognized the principle of "shared responsibility" between
employers and workers and has likewise recognized the right of workers to
participate in "policy and decision-making process affecting their rights . . ." The latter
provision was interpreted by the Constitutional Commissioners to mean participation
in "management"' (Record of the Constitutional Commission, Vol. II).

In a sense, participation by the union in the adoption of the code if conduct could
have accelerated and enhanced their feelings of belonging and would have resulted
in cooperation rather than resistance to the Code. In fact, labor-management
cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.)
Respondent Commission thereupon disposed:
WHEREFORE, premises considered, we modify the appealed decision in the sense
that the New Code of Discipline should be reviewed and discussed with complainant
union, particularly the disputed provisions [.] (T)hereafter, respondent is directed to
furnish each employee with a copy of the appealed Code of Discipline. The pending
cases adverted to in the appealed decision if still in the arbitral level, should be
reconsidered by the respondent Philippine Air Lines. Other dispositions of the Labor
Arbiter are sustained.
SO ORDERED. (p. 5, NLRC Decision.)
PAL then filed the instant petition for certiorari charging public respondents with grave abuse of
discretion in: (a) directing PAL "to share its management prerogative of formulating a Code of
Discipline"; (b) engaging in quasi-judicial legislation in ordering PAL to share said prerogative with
the union; (c) deciding beyond the issue of unfair labor practice, and (d) requiring PAL to reconsider
pending cases still in the arbitral level (p. 7, Petition; p. 8,Rollo.)
As stated above, the Principal issue submitted for resolution in the instant petition is whether
management may be compelled to share with the union or its employees its prerogative of
formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the
sharing of responsibility therefor between employer and employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article
211 of the Labor Code, that the law explicitly considered it a State policy "(t)o ensure the
participation of workers in decision and policy-making processes affecting the rights, duties and
welfare." However, even in the absence of said clear provision of law, the exercise of management
prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it
was held that management's prerogatives must be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the
company's right to implement a new system of distributing its products, but gave the following
caveat:
So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold them.
(at p. 28.)
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is
circumscribed by limitations found in law, a collective bargaining agreement, or the general
principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
Moreover, as enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly
established that the prerogative being invoked is clearly a managerial one.

A close scrutiny of the objectionable provisions of the Code reveals that they are not purely
business-oriented nor do they concern the management aspect of the business of the company as in
the San Miguel case. The provisions of the Code clearly have repercusions on the employee's right
to security of tenure. The implementation of the provisions may result in the deprivation of an
employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right
(Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case
which border on infringement of constitutional rights, we must uphold the constitutional requirements
for the protection of labor and the promotion of social justice, for these factors, according to Justice
Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker" (Employees
Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991]
635).
Verily, a line must be drawn between management prerogatives regarding business operations per
se and those which affect the rights of the employees. In treating the latter, management should see
to it that its employees are at least properly informed of its decisions or modes action. PAL asserts
that all its employees have been furnished copies of the Code. Public respondents found to the
contrary, which finding, to say the least is entitled to great respect.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27,
1990, PALEA in effect, recognized PAL's "exclusive right to make and enforce company rules and
regulations to carry out the functions of management without having to discuss the same with
PALEA and much less, obtain the latter'sconformity thereto" (pp. 11-12, Petitioner's Memorandum;
pp 180-181, Rollo.) Petitioner's view is based on the following provision of the agreement:
The Association recognizes the right of the Company to determine matters of
management it policy and Company operations and to direct its manpower.
Management of the Company includes the right to organize, plan, direct and control
operations, to hire, assign employees to work, transfer employees from one
department, to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to
introduce new or improved methods or facilities or to change existing methods or
facilities and the right to make and enforce Company rules and regulations to carry
out the functions of management.
The exercise by management of its prerogative shall be done in a just reasonable,
humane and/or lawful manner.
Such provision in the collective bargaining agreement may not be interpreted as cession of
employees' rights to participate in the deliberation of matters which may affect their rights and the
formulation of policies relative thereto. And one such mater is the formulation of a code of discipline.
Indeed, industrial peace cannot be achieved if the employees are denied their just participation in
the discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D.
442) was amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To
promote the enlightenment of workers concerning their rights and obligations . . . as employees."
This was, of course, amplified by Republic Act No 6715 when it decreed the "participation of workers
in decision and policy making processes affecting their rights, duties and welfare." PAL's position
that it cannot be saddled with the "obligation" of sharing management prerogatives as during the
formulation of the Code, Republic Act No. 6715 had not yet been enacted (Petitioner's
Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation" was not yet
founded in law when the Code was formulated, the attainment of a harmonious labor-management
relationship and the then already existing state policy of enlightening workers concerning their rights

as employees demand no less than the observance of transparency in managerial moves affecting
employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the
nature of its business cannot be overemphasized. In fact, its being a local monopoly in the business
demands the most stringent of measures to attain safe travel for its patrons. Nonetheless, whatever
disciplinary measures are adopted cannot be properly implemented in the absence of full
cooperation of the employees. Such cooperation cannot be attained if the employees are restive on
account, of their being left out in the determination of cardinal and fundamental matters affecting
their employment.
WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special
pronouncement is made as to costs.
SO ORDERED.
[G.R. No. 131235. November 16, 1999]
UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI,
NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN,
REMEDIOS GARCIA, RENE ARNEJO,EDITHA OCAMPO, CESAR
REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES
MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA,
NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA
ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO,
BENEDICTA ALAVA and LEONCIO CASAL, petitioners vs. Dir.
BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor
Relations, Med-Arbiter TOMAS F. FALCONITIN of The National
Capital Region, Department of Labor and Employment (DOLE),
EDUARDO J. MARIÑO JR., MA. MELVYN ALAMIS, NORMA
COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION,
ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO,
MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA,
NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE
ALCANTARA, respondents.
D E C I S I O N
PANGANIBAN, J.:
There is a right way to do the right thing at the right time for the right
reasons,[1] and in the present case, in the right forum by the right parties. While

grievances against union leaders constitute legitimate complaints deserving
appropriate redress, action thereon should be made in the proper forum at the proper
time and after observance of proper procedures. Similarly, the election of union
officers should be conducted in accordance with the provisions of the union’s
constitution and bylaws, as well as the Philippine Constitution and the Labor
Code. Specifically, while all legitimate faculty members of the University of Santo
Tomas (UST) belonging to a collective bargaining unit may take part in a duly
convened certification election, only bona fide members of the UST Faculty Union
(USTFU) may participate and vote in a legally called election for union officers. Mob
hysteria, however well-intentioned, is not a substitute for the rule of law.
The Case
The Petition for Certiorari before us assails the August 15, 1997 Resolution[2] of
Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in
BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-
Arbiter Tomas F. Falconitin. The med-arbiter’s Decision disposed as follows:
“WHEREFORE, premises considered, judgment is hereby rendered declaring the
election of USTFU officers conducted on October 4, 1996 and its election results as
null and void ab initio.
“Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist
from acting and performing the duties and functions of the legitimate officers of [the]
University of Santo Tomas Faculty Union (USTFU) pursuant to [the] union’s
constitution and by-laws (CBL).
“The Temporary Restraining Order (TRO ) issued by this Office on December 11,
1996 in connection with the instant petition, is hereby made and declared
permanent.”[3]
Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio,
which denied petitioners’ Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized in the assailed Resolution as
follows:

“Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly
elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-
year Collective Bargaining Agreement with its employer, the University of Santo
Tomas (UST). The CBA was registered with the Industrial Relations Division,
DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998.
“On 21 September 1996, appellee Collantes, in her capacity as Secretary General of
USTFU, posted a notice addressed to all USTFU members announcing a general
assembly to be held on 05 October 1996. Among others, the general assembly was
called to elect USTFU’s next set of officers. Through the notice, the members were
also informed of the constitution of a Committee on Elections (COMELEC) to
oversee the elections. (Annex “B”, petition)
“On 01 October 1996, some of herein appellants filed a separate petition with the
Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the
COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that
the COMELEC was not constituted in accordance with USTFU’s constitution and by-
laws (CBL) and that no rules had been issued to govern the conduct of the 05 October
1996 election.
“On 02 October 1996, the secretary general of UST, upon the request of the various
UST faculty club presidents (See paragraph VI, Respondents’ Comment and Motion
to Dismiss), issued notices allowing all faculty members to hold a convocation on 04
October 1996 (See Annex ‘C’ Petition; Annexes ‘4’ to ‘10’, Appeal). Denominated
as [a] general faculty assembly, the convocation was supposed to discuss the ‘state of
the unratified UST-USTFU CBA’ and ‘status and election of USTFU officers’
(Annex ‘11’, Appeal)
“On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a
temporary restraining order against herein appellees enjoining them from conducting
the election scheduled on 05 October 1996.
“Also on 04 October 1996, and as earlier announced by the UST secretary general, the
general faculty assembly was held as scheduled. The general assembly was attended
by members of the USTFU and, as admitted by the appellants, also by 'non-USTFU
members [who] are members in good standing of the UST Academic Community
Collective Bargaining Unit' (See paragraph XI, Respondents’ Comment and Motion to
Dismiss). On this occasion, appellants were elected as USTFU’s new set of officers
by acclamation and clapping of hands (See paragraphs 40 to 50, Annex '12', Appeal).
“The election of the appellants came about upon a motion of one Atty. Lopez,
admittedly not a member of USTFU, that the USTFU CBL and 'the rules of the

election be suspended and that the election be held [on] that day' (See --paragraph 39,
Idem.)
“On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and
the nullification of the results of the 04 October 1996 election. Appellees alleged that
the holding of the same violated the temporary restraining order issued in Case No.
NCR-OD-M-9610-001. Accusing appellants of usurpation, appellees characterized
the election as spurious for being violative of USTFU’s CBL, specifically because the
general assembly resulting in the election of appellants was not called by the Board of
Officers of the USTFU; there was no compliance with the ten-day notice rule required
by Section 1, Article VIII of the CBL; the supposed elections were conducted without
a COMELEC being constituted by the Board of Officers in accordance with Section 1,
Article IX of the CBL; the elections were not by secret balloting as required by
Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly
was convened by faculty members some of whom were not members of USTFU, so
much so that non-USTFU members were allowed to vote in violation of Section 1,
Article V of the CBL.
“On 24 October 1996, appellees filed another urgent ex-parte motion for a temporary
restraining order, this time alleging that appellants had served the former a notice to
vacate the union office. For their part, appellants moved to dismiss the original
petition and the subsequent motion on jurisdictional grounds. Both the petition and
the motion were captioned to be for “Prohibition, Injunction with Prayer for
Preliminary Injunction and Temporary Restraining Order.” According to the
appellants, the med-arbiter has no jurisdiction over petitions for prohibition, 'including
the ancillary remedies of restraining order and/or preliminary injunction, which are
merely incidental to the main petition for PROHIBITION' (Paragraph XVIII3,
Respondents’ Comment and Motion to Dismiss). Appellants also averred that they
now constituted the new set of union officers having been elected in accordance with
law after the term of office of appellees had expired. They further maintained that
appellees’ scheduling of the 5 October 1996 elections was illegal because no rules and
regulations governing the elections were promulgated as required by USTFU’s CBL
and that one of the members of the COMELEC was not a registered member of
USTFU. Appellants likewise noted that the elections called by the appellees should
have been postponed to allow the promulgation of rules and regulations and to 'insure
a free, clean, honest and orderly elections and to afford at the same time the greater
majority of the general membership to participate' (See paragraph V, Idem). Finally,
appellants contended that the holding of the general faculty assembly on 04 October
1996 was under the control of the Council of College/Faculty Club Presidents in
cooperation with the USTFU Reformist Alliance and that they received the

Temporary Restraining Order issued in Case No. NCR-OD-M-9610-001 only on 07
October 1996 and were not aware of the same on 04 October 1996.
“On 03 December 1996, appellants and UST allegedly entered into another CBA
covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants’
Rejoinder to the Reply and Opposition).
“Consequently, appellees again moved for the issuance of a temporary restraining
order to prevent appellants from making further representations that [they] had
entered into a new agreement with UST. Appellees also reiterated their earlier stand
that appellants were usurping the former’s duties and functions and should be stopped
from continuing such acts.
“On 11 December 1996, over appellants’ insistence that the issue of jurisdiction
should first be resolved, the med-arbiter issued a temporary restraining order directing
the respondents to cease and desist from performing any and all acts pertaining to the
duties and functions of the officers and directors of USTFU.
“In the meantime, appellants claimed that the new CBA was purportedly ratified by an
overwhelming majority of UST’s academic community on 12 December 1996
(Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what
it denominated as appellees’ petition for prohibition on the ground that this had
become moot and academic.”[5]
Petitioners appealed the med-arbiter’s Decision to the labor secretary,[6] who
transmitted the records of the case to the Bureau of Labor Relations which, under
Department Order No. 9, was authorized to resolve appeals of intra-union cases,
consistent with the last paragraph of Article 241 of the Labor Code.[7]
The Assailed Ruling
Agreeing with the med-arbiter that the USTFU officers’ purported election held
on October 4, 1994 was void for having been conducted in violation of the union’s
Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners’
contention that it was a legitimate exercise of their right to self-organization. He ruled
that the CBL, which constituted the covenant between the union and its members,
could not be suspended during the October 4, 1996 general assembly of all faculty
members, since that assembly had not been convened or authorized by the USTFU.
Director Bitonio likewise held that the October 4, 1996 election could not be
legitimized by the recognition of the newly “elected” set of officers by UST or by the

alleged ratification of the new CBA by the general membership of the USTFU. Ruled
Respondent Bitonio:
"This submission is flawed. The issue at hand is not collective bargaining
representation but union leadership, a matter that should concern only the members of
USTFU. As pointed out by the appellees, the privilege of determining who the union
officers will be belongs exclusively to the members of the union. Said privilege is
exercised in an election proceeding in accordance with the union's CBL and
applicable law.
“To accept appellants' claim to legitimacy on the foregoing grounds is to invest in
appellants the position, duties, responsibilities, rights and privileges of USTFU
officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL
and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit
the employer from interfering with the employees in the latter' exercise of their right
to self-organization. To allow appellants to become USTFU officers on the strength
of management's recognition of them is to concede to the employer the power of
determining who should be USTFU's leaders. This is a clear case of interference in
the exercise by USTFU members of their right to self-organization.”[8]
Hence, this Petition.[9]
The Issues
The main issue in this case is whether the public respondent committed grave
abuse of discretion in refusing to recognize the officers “elected” during the October
4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the
Court to resolve the following questions:[10]
“(1) Whether the Collective Bargaining Unit of all the faculty members in that
General Faculty Assembly had the right in that General Faculty Assembly to suspend
the provisions of the Constitution and By-Laws of the USTFU regarding the elections
of officers of the union[.]
“(2) Whether the suspension of the provisions of the Constitution and By-Laws of the
USTFU in that General Faculty Assembly is valid pursuant to the constitutional right
of the Collective Bargaining Unit to engage in “peaceful concerted activities” for the
purpose of ousting the corrupt regime of the private respondents[.]
“(3) Whether the overwhelming ratification of the Collective Bargaining Agreement
executed by the petitioners in behalf of the USTFU with the University of Santo

Tomas has rendered moot and academic the issue as to the validity of the suspension
of the Constitution and By-Laws and the elections of October 4, 1996 in the General
Faculty Assembly[.]”
The Court’s Ruling
The petition is not meritorious. Petitioners fail to convince this Court that
Director Bitonio gravely abused his discretion in affirming the med-arbiter and in
refusing to recognize the binding effect of the October 4, 1996 general assembly
called by the UST administration.
First Issue: Right to Self-Organization and Union Membership
At the outset, the Court stresses that National Federation of Labor (NFL) v.
Laguesma[11] has held that challenges against rulings of the labor secretary and those
acting on his behalf, like the director of labor relations, shall be acted upon by the
Court of Appeals, which has concurrent jurisdiction with this Court over petitions
for certiorari. However, inasmuch as the memoranda in the instant case have been
filed prior to the promulgation and finality of our Decision in NFL, we deem it proper
to resolve the present controversy directly, instead of remanding it to the Court of
Appeals. Having disposed of the foregoing procedural matter, we now tackle the
issues in the present case seriatim.
Self-organization is a fundamental right guaranteed by the Philippine Constitution
and the Labor Code. Employees have the right to form, join or assist labor
organizations for the purpose of collective bargaining or for their mutual aid and
protection.[12] Whether employed for a definite period or not, any employee shall be
considered as such, beginning on his first day of service, for purposes of membership
in a labor union.[13]
Corollary to this right is the prerogative not to join, affiliate with or assist a labor
union.[14] Therefore, to become a union member, an employee must, as a rule, not only
signify the intent to become one, but also take some positive steps to realize that
intent. The procedure for union membership is usually embodied in the union’s
constitution and bylaws.[15] An employee who becomes a union member acquires the
rights and the concomitant obligations that go with this new status and becomes
bound by the union’s rules and regulations.
“When a man joins a labor union (or almost any other democratically controlled
group), necessarily a portion of his individual freedom is surrendered for the benefit

of all members. He accepts the will of the majority of the members in order that he
may derive the advantages to be gained from the concerted action of all. Just as the
enactments of the legislature bind all of us, to the constitution and by-laws of the
union (unless contrary to good morals or public policy, or otherwise illegal), which
are duly enacted through democratic processes, bind all of the members. If a member
of a union dislikes the provisions of the by-laws, he may seek to have them amended
or may withdraw from the union; otherwise, he must abide by them. It is not the
function of courts to decide the wisdom or propriety of legitimate by-laws of a trade
union.
“On joining a labor union, the constitution and by-laws become a part of the
member’s contract of membership under which he agrees to become bound by the
constitution and governing rules of the union so far as it is not inconsistent with
controlling principles of law. The constitution and by-laws of an unincorporated trade
union express the terms of a contract, which define the privileges and rights secured
to, and duties assumed by, those who have become members. The agreement of a
member on joining a union to abide by its laws and comply with the will of the
lawfully constituted majority does not require a member to submit to the
determination of the union any question involving his personal rights.”[16]
Petitioners claim that the numerous anomalies allegedly committed by the private
respondents during the latter’s incumbency impelled the October 4, 1996 election of
the new set of USTFU officers. They assert that such exercise was pursuant to their
right to self-organization.
Petitioners’ frustration over the performance of private respondents, as well as
their fears of a “fraudulent” election to be held under the latter’s supervision, could
not justify the method they chose to impose their will on the union. Director Bitonio
aptly elucidated:[17]
“The constitutional right to self-organization is better understood in the context of
ILO Convention No. 87 (Freedom of Association and Protection of Right to
Organize), to which the Philippines is signatory. Article 3 of the Convention 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. It is where the rights, duties and obligations, powers, functions and authority
of the officers as well as the members are defined. It is the organic law that
determines the validity of acts done by any officer or member of the union. Without

respect for the CBL, a union as a democratic institution degenerates into nothing more
than a group of individuals governed by mob rule.”
Union Election vs. Certification Election
A union election is held pursuant to the union’s constitution and bylaws, and the
right to vote in it is enjoyed only by union members. A union election should be
distinguished from a certification election, which is the process of determining,
through secret ballot, the sole and exclusive bargaining agent of the employees in the
appropriate bargaining unit, for purposes of collective bargaining.[18] Specifically, the
purpose of a certification election is to ascertain whether 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.[19]
In a certification election, all employees belonging to the appropriate bargaining
unit can vote.[20] Therefore, a union member who likewise belongs to the appropriate
bargaining unit is entitled to vote in said election. However, the reverse is not always
true; 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 constitution and bylaws of the union. Verily, union affairs and elections cannot be
decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996
election cannot properly be called a union election, because the procedure laid down
in the USTFU’s CBL for the election of officers was not followed. It could not have
been a certification election either, because representation was not the issue, and the
proper procedure for such election was not followed. The participation of non-union
members in the election aggravated its irregularity.
Second Issue: USTFU’s Constitution and ByLaws Violated
The importance of a union’s constitution and bylaws cannot be
overemphasized. They embody a covenant between a union and its members and
constitute the fundamental law governing the members’ rights and obligations.[21] As
such, the union’s constitution and bylaws should be upheld, as long as they are not
contrary to law, good morals or public policy.
We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the
October 4, 1996 election was tainted with irregularities because of the following
reasons.

First, the October 4, 1996 assembly was not called by the USTFU. It was merely
a convocation of faculty clubs, as indicated in the memorandum sent to all faculty
members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo
Tomas.[22] It was not convened in accordance with the provision on general
membership meetings as found in the USTFU’s CBL, which reads:
“ARTICLE VIII-MEETINGS OF THE UNION
“Section 1. The Union shall hold regular general membership meetings at least once
every three (3) months. Notices of the meeting shall be sent out by the Secretary-
General at least ten (10) days prior to such meetings by posting in conspicuous places,
preferably inside Company premises, said notices. The date, time and place for the
meetings shall be determined by the Board of Officers.”[23]
Unquestionably, the assembly was not a union meeting. It was in fact a gathering
that was called and participated in by management and non-union members. By no
legal fiat was such assembly transformed into a union activity by the participation of
some union members.
Second, there was no commission on elections to oversee the election, as
mandated by Sections 1 and 2 of Article IX of the USTFU’s CBL, which provide:
“ARTICLE IX - UNION ELECTION
Section 1. There shall be a Committee on Election (COMELEC) to be created by the
Board of Officers at least thirty (30) days before any regular or special election. The
functions of the COMELEC include the following:
a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and
orderly election, whether regular or special;
b) Pass upon qualifications of candidates;
c) Rule on any question or protest regarding the conduct of the election subject to the
procedure that may be promulgated by the Board of Officers; and
d) Proclaim duly elected officers.
Section 2. The COMELEC shall be composed of a chairman and two members
all of whom shall be appointed by the Board of Officers.
“xxx xxx xxx”[24]
Third, the purported election was not done by secret balloting, in violation of
Section 6, Article IX of the USTFU’s CBL, as well as Article 241 (c) of the Labor
Code.

The foregoing infirmities considered, we cannot attribute grave abuse of
discretion to Director Bitonio’s finding and conclusion. In Rodriguez v. Director,
Bureau of Labor Relations,[25] we invalidated the local union elections held at the
wrong date without prior notice to members and conducted without regard for duly
prescribed ground rules. We held that the proceedings were rendered void by the lack
of due process -- undue haste, lack of adequate safeguards to ensure integrity of the
voting, and the absence of the notice of the dates of balloting.
Third Issue: Suspension of USTFU’s CBL
Petitioners contend that the October 4, 1996 assembly “suspended” the union’s
CBL. They aver that the suspension and the election that followed were in
accordance with their “constituent and residual powers as members of the collective
bargaining unit to choose their representatives for purposes of collective bargaining.”
Again they cite the numerous anomalies allegedly committed by the private
respondents as USTFU officers. This argument does not persuade.
First, as has been discussed, the general faculty assembly was not the proper
forum to conduct the election of USTFU officers. Not all who attended the assembly
were members of the union; some, apparently, were even disqualified from becoming
union members, since they represented management. Thus, Director Bitonio correctly
observed:
“Further, appellants cannot be heard to say that the CBL was effectively suspended
during the 04 October 1996 general assembly. A union CBL is a covenant between
the union and its members and among members (Johnson and Johnson Labor Union-
FFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO Convention
No. 87 speaks of a union’s full freedom to draw up its constitution and rules, it
includes freedom from interference by persons who are not members of the
union. The democratic principle that governance is a matter for the governed to
decide upon applies to the labor movement which, by law and constitutional mandate,
must be assiduously insulated against intrusions coming from both the employer and
complete strangers if the 'protection to labor clause' of the constitution is to be
guaranteed. By appellant’s own evidence, the general faculty assembly of 04 October
1996 was not a meeting of USTFU. It was attended by members and non-members
alike, and therefore was not a forum appropriate for transacting union matters. The
person who moved for the suspension of USTFU’s CBL was not a member of
USTFU. Allowing a non-union member to initiate the suspension of a union’s CBL,
and non-union members to participate in a union election on the premise that the
union’s CBL had been suspended in the meantime, is incompatible with the freedom
of association and protection of the right to organize.

“If there are members of the so-called ‘academic community collective bargaining
unit’ who are not USTFU members but who would nevertheless want to have a hand
in USTFU’s affairs, the appropriate procedure would have been for them to become
members of USTFU first. The procedure for membership is very clearly spelled out
in Article IV of USTFU’s CBL. Having become members, they could then draw
guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil.
669. Therein the Supreme Court held that ‘if a member of the union dislikes the
provisions of the by-laws he may seek to have them amended or may withdraw from
the union; otherwise he must abide by them.’ Under Article XVII of USTFU’s CBL,
there is also a specific provision for constitutional amendments. What is clear
therefore is that USTFU’s CBL provides for orderly procedures and remedies which
appellants could have easily availed [themselves] of instead of resorting to an exercise
of their so-called ‘residual power'.”[26]
Second, the grievances of the petitioners could have been brought up and resolved
in accordance with the procedure laid down by the union’s CBL[27]and by the Labor
Code.[28] They contend that their sense of desperation and helplessness led to the
October 4, 1996 election. However, we cannot agree with the method they used to
rectify years of inaction on their part and thereby ease bottled-up frustrations, as such
method was in total disregard of the USTFU’s CBL and of due process. The end
never justifies the means.
We agree with the solicitor general’s observation that “the act of suspending the
constitution when the questioned election was held is an implied admission that the
election held on that date [October 4, 1996] could not be considered valid under the
existing USTFU constitution xxx.”[29]
The ratification of the new CBA executed between the petitioners and the
University of Santo Tomas management did not validate the void October 4, 1996
election. Ratified were the terms of the new CBA, not the issue of union leadership --
a matter that should be decided only by union members in the proper forum at the
proper time and after observance of proper procedures.
Epilogue
In dismissing this Petition, we are not passing upon the merits of the
mismanagement allegations imputed by the petitioners to the private respondents;
these are not at issue in the present case. Petitioners can bring their grievances and
resolve their differences with private respondents in timely and appropriate
proceedings. Courts will not tolerate the unfair treatment of union members by their

own leaders. When the latter abuse and violate the rights of the former, they shall be
dealt with accordingly in the proper forum after the observance of due process.
WHEREFORE, the Petition is hereby DISMISSED and the assailed
Resolutions AFFIRMED. Costs against petitioners.
SO ORDERED.
G.R. No. 75810 September 9, 1991
KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner,
vs.
HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations,
and VIRON GARMENTS MFG., CO., INC., respondents.
Esteban M. Mendoza for petitioner.
R E S O LU T I O N
NARVASA, J.:p
The propriety of holding a certification election is the issue in the special civil action of certiorari at
bar.
By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National
Federation of Labor Unions (NAFLU) was declared the exclusive bargaining representative of all
rank-and-file employees of Viron Garments Manufacturing Co., Inc. (VIRON).
More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng
Manggagawang Pilipino KAMPIL Katipunan filed with the Bureau of Labor Relations a petition for
certification election among the employees of VIRON. The petition allegedly counted with the
support of more than thirty percent (30%) of the workers at VIRON.
NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14,
1985, that a certification election be held at VIRON as prayed for, after ascertaining that KAMPIL
had complied with all the requirements of law and that since the certification of NAFLU as sole
bargaining representative in 1981, no collective bargaining agreement had been executed between it
and VIRON.
NAFLU appealed. It contended that at the time the petition for certification election was filed on April
11, 1985, it was in process of collective bargaining with VIRON; that there was in fact a deadlock in
the negotiations which had prompted it to file a notice of strike; and that these circumstances
constituted a bar to the petition for election in accordance with Section 3, Rule V, Book V of the
Omnibus Rules Implementing the Labor Code, 1
reading as follows:

SEC. 3. When to file. — In the absence of a collective bargaining agreement
submitted in accordance with Article 231 of the Code, a petition for certification
election may be filed at any time. However, no certification election may be held
within one year from the date of issuance of declaration of a final certification election
result. Neither may a representation question be entertained if, before the filing of a
petition for certification election, a bargaining deadlock to which an incumbent or
certified bargaining agent is a party had been submitted to conciliation or arbitration
or had become the subject of a valid notice of strike or lockout.
If a collective bargaining agreement has been duly registered in accordance with
Article 231 of the Code, a petition for certification election or a motion for intervention
can only be entertained within sixty (60) days prior to the expiry date of such
agreement.
Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April
30, 1986 setting aside the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition
for certification election. This disposition is justified in the Resolution as follows:
... While it may be true that the one-year period (mentioned in Section 3 above
quoted) has long run its course since intervenor NAFLU was certified on February
27, 1981, it could not be said, however, that NAFLU slept on its right to bargain
collectively with the employer. If a closer look was made on the history of labor
management relations in the company, it could be readily seen that the delay in the
negotiations for and conclusion of a collective agreement — the object of the one-
year period — could be attributed first, on the exhaustion of all legal remedies in the
representation question twice initiated in the company before the filing of the present
petition and second, to management who had been resisting the representations of
NAFLU in collective bargaining.
The one-year period therefore, should not be applied literally to the present dispute,
especially considering that intervenor had to undergo a strike to bring management
to the negotiation table. ...
KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the
present certiorari action.
It is evident that the prohibition imposed by law on the holding of a certification election "within one
year from the date of issuance of declaration of a final certification election result' — in this case,
from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining
representative of rank-and-file workers of VIRON — can have no application to the case at bar. That
one-year period-known as the "certification year" during which the certified union is required to
negotiate with the employer, and certification election is prohibited 2
— has long since expired.
Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred
because,before its filing, a bargaining deadlock between VIRON and NAFLU as the incumbent
bargaining agent, had been submitted to conciliation or arbitration or had become the subject of a
valid notice of strike or lockout, in accordance with Section 3, Rule V, Book V of the Omnibus Rules
above quoted.
Again it seems fairly certain that prior to the filing of the petition for election in this case, there was
no such "bargaining deadlock ... (which) had been submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or lockout." To be sure, there are in the record

assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been
unsuccessful because of the latter's recalcitrance and unfulfilled promises to bargain
collectively; 3
but there is no proof that it had taken any action to legally coerce VIRON to comply with its
statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did
not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and
compel it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain
collectively had been delayed by continuing challenges to the resolution pronouncing it the sole
bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in
fact prevent initiation of the bargaining process between it and VIRON.
The stark, incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the
exclusive bargaining representative of all VIRON employees — to April 11, 1985 — when KAMPIL
filed its petition for certification election or a period of more than four (4) years, no collective
bargaining agreement was ever executed, and no deadlock ever arose from negotiations between
NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike notice.
The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to
bargain and for violation of terms and conditions of employment, which was settled by the parties'
agreement, and to another strike staged on December 6, 1986 in connection with a claim of violation
of said agreement, a dispute which has since been certified for compulsory arbitration by the
Secretary of Labor & Employment. 4
Obviously, however, these activities took place after the initiation of
the certification election case by KAMPIL, and it was grave abuse of discretion to have regarded them as
precluding the holding of the certification election thus prayed for.
WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the
law exists in the case at bar, and it was in the premises grave abuse of discretion to have ruled
otherwise, the contested Resolution of the respondent Director of the Bureau of Labor Relations
dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE-04-004-85) is NULLIFIED AND SET
ASIDE. Costs against private respondent.
SO ORDERED.
G.R. No. 89609 January 27, 1992
NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES
(NACUSIP)-TUCP,petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor Relations;
and the NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGT-KMU, respondents.
Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for petitioner.
Manlapao, Drilon, Ymballa and Chavez for private respondent.
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the resolution issued by the respondent
Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside the
order of the Med-Arbiter dated February 8, 1989 denying the motion to dismiss the petition and

directing the conduct of a certification election among the rank and file employees or workers of the
Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan, Negros Occidental.
The antecedent facts giving rise to the controversy at bar are as follows:
Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP-TUCP) is
a legitimate national labor organization duly registered with the Department of Labor and
Employment. Respondent Honorable Pura Ferrer-Calleja is impleaded in her official capacity as the
Director of the Bureau of Labor Relations of the Department of Labor and Employment, while private
respondent National Federation of Sugar Workers (NFSW-FGT-KMU) is a labor organization duly
registered with the Department of Labor and Employment.
Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros
Occidental employs about five hundred (500) workers during milling season and about three
hundred (300) on off-milling season.
On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon entered
into a collective bargaining agreement (CBA) for a term of three (3) years, which was to expire on
November 14, 1987.
When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for its
renewal. The CBA was extended for another three (3) years with reservation to negotiate for its
amendment, particularly on wage increases, hours of work, and other terms and conditions of
employment.
However, a deadlock in negotiation ensued on the matter of wage increases and optional retirement.
In order to obviate friction and tension, the parties agreed on a suspension to provide a cooling -off
period to give them time to evaluate and further study their positions. Hence, a Labor Management
Council was set up and convened, with a representative of the Department of Labor and
Employment, acting as chairman, to resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or
certification election among the rank and file workers of Dacongcogon.
On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the
following grounds, to wit:
I
The Petition was filed out of time;
II
There is a deadlocked (sic) of CBA negotiation between forced intervenor and
respondent-central. (Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by private
respondent NFSW-FGT-KMU and directed the conduct of certification election among the rank and
file workers of Dacongcogon, the dispositive portion of which provides as follows:

WHEREFORE, premises considered, the Motion to Dismiss the present petition is,
as it is hereby DENIED. Let therefore a certification election among the rank and file
employees/workers of the Dacongcogon Sugar and Rice Milling Co., situated at
Kabankalan, Neg. Occ., be conducted with the following choices:
(1) National Congress of Unions in the Sugar Industry of the
Philippines (NACUSIP-TUCP);
(2) National Federation of Sugar Workers (NFSW);
(3) No Union.
The designated Representation Officer is hereby directed to call the parties for a pre-
election conference to thresh out the mechanics of the election and to conduct and
supervise the same within twenty (20) days from receipt by the parties of this Order.
The latest payroll shall be used to determine the list of qualified voters.
SO ORDERED. (Rollo, p. 34)
On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal alleging
that the Honorable Med-Arbiter misapprehended the facts and the law applicable amounting to gross
incompetence. Hence, private respondent prayed that the order of the Med-Arbiter be set aside and
the motion to dismiss be reconsidered.
On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying that the
motion for reconsideration and/or appeal be denied for lack of merit.
On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution
reversing the order of the Med-Arbiter, to wit:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8 February
1989 is hereby set aside and vacated, and a new one issued dismissing the above-
entitled petition for being filed out of time.
SO ORDERED. (Rollo, p. 46)
Hence, this petition raising four (4) issues, to wit:
I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS
DIRECTOR OF THE BUREAU OF LABOR RELATIONS, COMMITTED GRAVE
ABUSE OF DISCRETION IN RENDERING HER RESOLUTION DATED 26 JUNE
1989 REVERSING THE ORDER DATED FEBRUARY 8, 1989 OF MED-ARBITER
FELIZARDO SERAPIO.
II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF
RESPONDENT PURA FERRER-CALLEJA IS CONTRARY TO LAW AND
JURISPRUDENCE.
III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF
RESPONDENT DIRECTOR PURA FERRER-CALLEJA DENIES THE RANK AND
FILE EMPLOYEES OF THE DACONGCOGON SUGAR & RICE MILLING

212211972 labor-cases-week-13

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