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. MARIO 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.

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-arbiters 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. 3Likewise 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. 5Petitioners 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. 7The 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. 8Hence, this Petition. 9The 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 Courts 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. 13Corollary 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. 16Petitioners 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: 17The 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. 19In 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

By Laws 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

Sec. 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. 23Unquestionably, 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

Sec. 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.

Sec. 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 24Third, 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". 26Second, 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 . . .." 29The 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.

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.

D E C I S I O N

ROMERO, J.:

This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91[1] entitled In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner. The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election.

The antecedent facts are undisputed:

On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for District Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.

On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.

On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiters error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent companys Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit.

Upon petitioner-unions motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.

On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings.

On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC[2] case. Said Order reads in part:

x x x Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining.

In this case, S3 and S4 and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above courts ruling. Consequently, they are not allowed to participate in the certification election.

WHEREFORE, the motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election.[3]

Hence this petition.

For resolution in this case are the following issues:

1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit.

On the first issue, this Court rules that said employees do not fall within the term confidential employees who may be prohibited from joining a union.

There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245[4] of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not.

Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations.[5] The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employees and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations.[6]

The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the confidential employee rule. The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests.[7] Management should not be required to handle labor relations matters through employees who are represented by the union with the company is required to deal and who in the normal performance of their duties may obtain advance information of the companys position with regard to contract negotiations, the disposition of grievances, or other labor relations matters.[8]

There have been ample precedents in this regard, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez,[9] the Court held that if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated with the presence of managerial employees in Union membership. The same rationale was applied to confidential employees in Golden Farms, Inc. v. Ferrer-Calleja[10] and in the more recent case of Philips Industrial Development, Inc. v. NLRC[11] which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them.[12]

An important element of the confidential employee rule is the employees need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key questions frequently considered is the employees necessary access to confidential labor relations information.[13]

It is the contention of respondent corporation that Supervisory employees 3 and 4 and the exempt employees come within the meaning of the term confidential employees primarily because they answered in the affirmative when asked Do you handle confidential data or documents? in the Position Questionnaires submitted by the Union.[14] In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to labor relations.[15]

Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee.[16] If access to confidential labor relations information is to be a factor in the determination of an employees confidential status, such information must relate to the employers labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not clause an employee to be excluded from the bargaining unit representing employees of the union or association.[17] Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information[18] or technical trade secrets, will not render an employee a confidential employee.[19]

Herein listed are the functions of supervisors 3 and higher:

1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.

2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products.

3. To administer efficient system of evaluation of products in the outlets.

4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant.[20]

It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employers internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board,[21] an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employers internal business operations and which is not related to the field of labor relations.

It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to all workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right bargain collectively through representatives of their choosing.[22]

In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle confidential data as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union.[23]

In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out.

It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests.

This Court finds the contention of the petitioner meritorious.

An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.[24]

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining.[25]

It is readily seen that the employees in the instant case have community or mutuality of interest, which is the standard in determining the proper constituency of a collective bargaining unit.[26] It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the Mandate of the Constitution.[27]

The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic rank and file employees of the University of the Philippines inDiliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative.

WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.

SO ORDERED.

BENGUET ELECTRIC COOPERATIVE, INC., petitioner, -versus-HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES LABOR UNION, respondents.

E.L. Gayo & Associates for petitioner.CORTES, J.:

On June 21, 1985 Beneco Worker's Labor Union-Association of Democratic Labor Organizations (hereinafter referred to as BWLU- ADLO) filed a petition for direct certification as the sole and exclusive bargaining representative of all the rank and file employees of Benguet Electric Cooperative, Inc. (hereinafter referred to as BENECO) at Alapang, La Trinidad, Benguet alleging, inter alia, that BENECO has in its employ two hundred and fourteen (214) rank and file employees; that one hundred and ninety-eight (198) or 92.5% of these employees have supported the filing of the petition; that no certification election has been conducted for the last 12 months; that there is no existing collective bargaining representative of the rank and file employees sought to represented by BWLU- ADLO; and, that there is no collective bargaining agreement in the cooperative.

An opposition to the petition was filed by the Beneco Employees Labor Union (hereinafter referred to as BELU) contending that it was certified as the sole and exclusive bargaining representative of the subject workers pursuant to an order issued by the med-arbiter on October 20,1980; that pending resolution by the National Labor Relations Commission are two cases it filed against BENECO involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases bars any representation question.

BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit electric cooperative engaged in providing electric services to its members and patron-consumers in the City of Baguio and Benguet Province; and, that the employees sought to be represented by BWLU-ADLO are not eligible to form, join or assist labor organizations of their own choosing because they are members and joint owners of the cooperative.

On September 2, 1985 the med-arbiter issued an order giving due course to the petition for certification election. However, the med-arbiter limited the election among the rank and file employees of petitioner who are non-members thereof and without any involvement in the actual ownership of the cooperative. Based on the evidence during the hearing the med-arbiter found that there are thirty-seven (37) employees who are not members and without any involvement in the actual ownership of the cooperative. The dispositive portion of the med-arbiter's order is as follows:

WHEREFORE, premises considered, a certification election should be as it is hereby ordered to be conducted at the premises of Benguet, Electric Cooperative, Inc., at Alapang, La Trinidad, Benguet within twenty (20) days from receipt hereof among all the rank and file employees (non-members/consumers and without any involvement in the actual ownership of the cooperative) with the following choices:

1. BENECO WORKERS LABOR UNION-ADLO

2. BENECO EMPLOYEES LABOR UNION

3. NO UNION

The payroll for the month of June 1985 shall be the basis in determining the qualified voters who may participate in the certification election to be conducted.

SO ORDERED. [Rollo, pp. 22-23.]

BELU and BENECO appealed from this order but the same was dismissed for lack of merit on March 25,1986. Whereupon BENECO filed with this Court a petition for certiorari with prayer for preliminary injunction and /or restraining order, docketed as G.R. No. 74209, which the Supreme Court dismissed for lack of merit in a minute resolution dated April 28, 1986.

The ordered certification election was held on October 1, 1986. Prior to the conduct thereof BENECO's counsel verbally manifested that "the cooperative is protesting that employees who are members-consumers are being allowed to vote when . . . they are not eligible to be members of any labor union for purposes of collective bargaining; much less, to vote in this certification election." [Rollo, p. 28]. Petitioner submitted a certification showing that only four (4) employees are not members of BENECO and insisted that only these employees are eligible to vote in the certification election. Canvass of the votes showed that BELU garnered forty-nine (49) of the eighty-three (83) "valid" votes cast.

Thereafter BENECO formalized its verbal manifestation by filing a Protest. Finding, among others, that the issue as to whether or not member-consumers who are employees of BENECO could form, assist or join a labor union has been answered in the affirmative by the Supreme Court in G.R. No. 74209, the med-arbiter dismissed the protest on February 17, 1987. On June 23, 1987, Bureau of Labor Relations (BLR) director Pura Ferrer-Calleja affirmed the med-arbiter's order and certified BELU as the sole and exclusive bargaining agent of all the rank and file employees of BENECO.

Alleging that the BLR director committed grave abuse of discretion amounting to lack or excess of jurisdiction BENECO filed the instant petition for certiorari. In his Comment the Solicitor General agreed with BENECO's stance and prayed that the petition be given due course. In view of this respondent director herself was required by the Court to file a Comment. On April 19, 1989 the Court gave due course to the petition and required the parties to submit their respective memoranda.

The main issue in this case is whether or not respondent director committed grave abuse of discretion in certifying respondent BELU as the sole and exclusive bargaining representtative of the rank and file employees of BENECO.

Under Article 256 of the Labor Code [Pres. Decree 442] to have a valid certification election, "at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit." Petitioner BENECO asserts that the certification election held on October 1, 1986 was null and void since members-employees of petitioner cooperative who are not eligible to form and join a labor union for purposes of collective bargaining were allowed to vote therein.

Respondent director and private respondent BELU on the other hand submit that members of a cooperative who are also rank and file employees are eligible to form, assist or join a labor union [Comment of Respondent Director, p. 4; Rollo, p. 125; Comment of BELU, pp. 9-10; Rollo pp. 99-100].

The Court finds the present petition meritorious.

The issue of whether or not employees of a cooperative are qualified to form or join a labor organization for purposes of collective bargaining has already been resolved and clarified in the case of Cooperative Rural Bank of Davao City, Inc. vs. Ferrer Calleja, et al. [G.R. No. 7795, September 26,1988] and reiterated in the cases of Batangas-Electric Cooperative Labor Union v. Young, et al. [G.R. Nos. 62386, 70880 and 74560 November 9, 1988] and San Jose City Electric Service Cooperative, Inc. v. Ministry of Labor and Employment, et al. [G.R. No. 77231, May 31, 1989] wherein the Court had stated that the right to collective bargaining is not available to an employee of a cooperative who at the same time is a member and co-owner thereof. With respect, however, to employees who are neither members nor co-owners of the cooperative they are entitled to exercise the rights to self-organization, collective bargaining and negotiation as mandated by the 1987 Constitution and applicable statutes.

Respondent director argues that to deny the members of petitioner cooperative the right to form, assist or join a labor union of their own choice for purposes of collective bargaining would amount to a patent violation of their right to self-organization. She points out that:

Albeit a person assumes a dual capacity as rank and file employee and as member of a certain cooperative does not militate, as in the instant case, against his/her exercise of the right to self-organization and to collective bargaining guaranteed by the Constitution and Labor Code because, while so doing, he/she is acting in his/her capacity as rank and file employee thereof. It may be added that while the employees concerned became members of petitioner cooperative, their status employment as rank and filers who are hired for fixed compensation had not changed. They still do not actually participate in the management of the cooperative as said function is entrusted to the Board of Directors and to the elected or appointed officers thereof. They are not vested with the powers and prerogatives to lay down and execute managerial policies; to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees; and/or to effectively recommend such managerial functions [Comment of Respondent Director, p. 4; Rollo, p. 125.]

Private respondent BELU concurs with the above contention of respondent director and, additionally, claims that since membership in petitioner cooperative is only nominal, the rank and file employees who are members thereof should not be deprived of their right to self-organization.

The above contentions are untenable. Contrary to respondents' claim, the fact that the members-employees of petitioner do not participate in the actual management of the cooperative does not make them eligible to form, assist or join a labor organization for the purpose of collective bargaining with petitioner. The Court's ruling in the Davao City case that members of cooperative cannot join a labor union for purposes of collective bargaining was based on the fact that as members of the cooperative they are co-owners thereof. As such, they cannot invoke the right to collective bargaining for "certainly an owner cannot bargain with himself or his co-owners." [Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, et al., supra]. It is the fact of ownership of the cooperative, and not involvement in the management thereof, which disqualifies a member from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in the actual management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective bargaining.

Respondent union further claims that if nominal ownership in a cooperative is "enough to take away the constitutional protections afforded to labor, then there would be no hindrance for employers to grant, on a scheme of generous profit sharing, stock bonuses to their employees and thereafter claim that since their employees are not stockholders [of the corporation], albeit in a minimal and involuntary manner, they are now also co-owners and thus disqualified to form unions." To allow this, BELU argues, would be "to allow the floodgates of destruction to be opened upon the rights of labor which the Constitution endeavors to protect and which welfare it promises to promote." [Comment of BELU, p. 10; Rollo, p. 100].

The above contention of respondent union is based on the erroneous presumption that membership in a cooperative is the same as ownership of stocks in ordinary corporations. While cooperatives may exercise some of the rights and privileges given to ordinary corporations provided under existing laws, such cooperatives enjoy other privileges not granted to the latter [See Sections 4, 5, 6, and 8, Pres. Decree No. 175; Cooperative Rural Bank of Davao City v. Ferrer-Calleja, supra]. Similarly, members of cooperatives have rights and obligations different from those of stockholders of ordinary corporations. It was precisely because of the special nature of cooperatives, that the Court held in the Davao City case that members-employees thereof cannot form or join a labor union for purposes of collective bargaining. The Court held that:

A cooperative ... is by its nature different from an ordinary business concern being run either by persons, partnerships, or corporations. Its owners and/or members are the ones who run and operate the business while the others are its employees. As above stated, irrespective of the number of shares owned by each member they are entitled to cast one vote each in deciding upon the affairs of the cooperative. Their share capital earn limited interest. They enjoy special privileges as-exemption from income tax and sales taxes, preferential right to supply their products to State agencies and even exemption from the minimum wage laws.

An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners.

It is important to note that, in her order dated September 2, 1985, med-arbiter Elnora V. Balleras made a specific finding that there are only thirty-seven (37) employees of petitioner who are not members of the cooperative and who are, therefore, the only employees of petitioner cooperative eligible to form or join a labor union for purposes of collective bargaining [Annex "A" of the Petition, p. 12; Rollo, p. 22]. However, the minutes of the certification election [Annex "C" of the Petition: Rollo, p. 28] show that a total of eighty-three (83) employees were allowed to vote and of these, forty-nine (49) voted for respondent union. Thus, even if We agree with respondent union's contention that the thirty seven (37) employees who were originally non-members of the cooperative can still vote in the certification election since they were only "forced and compelled to join the cooperative on pain of disciplinary action," the certification election held on October 1, 1986 is still null and void since even those who were already members of the cooperative at the time of the issuance of the med-arbiter's order, and therefore cannot claim that they were forced to join the union were allowed to vote in the election.

Article 256 of the Labor Code provides, among others, that:

To have a valid, election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit . . . [Italics supplied.]

In this case it cannot be determined whether or not respondent union was duly elected by the eligible voters of the bargaining unit since even employees who are ineligible to join a labor union within the cooperative because of their membership therein were allowed to vote in the certification election. Considering the foregoing, the Court finds that respondent director committed grave abuse of discretion in certifying respondent union as the sole and exclusive bargaining representative of the rank and file employees of petitioner cooperative.

WHEREFORE, the petition is hereby GRANTED and the assailed resolution of respondent director is ANNULLED. The certification election conducted on October 1, 1986, is SET ASIDE. The Regional Office No. 1 of San Fernando, La Union is hereby directed to immediately conduct new certification election proceedings among the rank and file employees of the petitioner who are not members of the cooperative.

SO ORDERED.

G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner vsHON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.

G.R. No. 89331 September 28, 1990

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE, petitioner, vsSECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE, INC., respondents.

Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.

Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.

Jimenez & Associates for IRRI.

Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:

Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of Philippine labor laws.I

Facts and Issues

A. G.R. No. 85750 the International Catholic Migration Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist rule confronted the international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine Government and the United Nations High Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for eventual resettlement to other countries was to be established in Bataan (Annex "A", Rollo, pp. 22-32).

ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in international humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. As an international organization rendering voluntary and humanitarian services in the Philippines, its activities are parallel to those of the International Committee for Migration (ICM) and the International Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].

On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a Petition for Certification Election among the rank and file members employed by ICMC The latter opposed the petition on the ground that it is an international organization registered with the United Nations and, hence, enjoys diplomatic immunity.

On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction.

On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's Decision and ordered the immediate conduct of a certification election. At that time, ICMC's request for recognition as a specialized agency was still pending with the Department of Foreign Affairs (DEFORAF).

Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.

ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity expressly granted but the same was denied by respondent BLR Director who, again, ordered the immediate conduct of a pre-election conference. ICMC's two Motions for Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October 1988 that said BLR Order violated ICMC's diplomatic immunity.

Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction assailing the BLR Order.

On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the certification election.

On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court of Appeals, filed a Motion for Intervention alleging that, as the highest executive department with the competence and authority to act on matters involving diplomatic immunity and privileges, and tasked with the conduct of Philippine diplomatic and consular relations with foreign governments and UN organizations, it has a legal interest in the outcome of this case.

Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.

On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of memoranda by the parties, which has been complied with.

As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to ICMC extends to immunity from the application of Philippine labor laws.

ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine Government giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which declares that the Philippines adopts the generally accepted principles of international law as part of the law of the land.

Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the DEFORAF determination that the BLR Order for a certification election among the ICMC employees is violative of the diplomatic immunity of said organization.

Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy and Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of the 1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, ibid. In addition, she contends that a certification election is not a litigation but a mere investigation of a non-adversary, fact-finding character. It is not a suit against ICMC its property, funds or assets, but is the sole concern of the workers themselves.

B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case).

Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989, resolved to consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case pending with the Second Division, upon manifestation by the Solicitor General that both cases involve similar issues.

The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller Foundations signed a Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at Los Baos, Laguna. It was intended to be an autonomous, philanthropic, tax-free, non-profit, non-stock organization designed to carry out the principal objective of conducting "basic research on the rice plant, on all phases of rice production, management, distribution and utilization with a view to attaining nutritive and economic advantage or benefit for the people of Asia and other major rice-growing areas through improvement in quality and quantity of rice."

Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted the status, prerogatives, privileges and immunities of an international organization.

The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.

On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of the Department of Labor and Employment (DOLE).

IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international organization and granting it immunity from all civil, criminal and administrative proceedings under Philippine laws.

On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620 and dismissed the Petition for Direct Certification.

On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's Order and authorized the calling of a certification election among the rank-and-file employees of IRRI. Said Director relied on Article 243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws." Reconsideration sought by IRRI was denied.

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order, dismissed the Petition for Certification Election, and held that the grant of specialized agency status by the Philippine Government to the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI Said Resolution reads in part as follows:

Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges and immunities of an international organization is clear and explicit. It provides in categorical terms that:

Art. 3 The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except insofar as immunity has been expressly waived by the Director-General of the Institution or his authorized representative.

Verily, unless and until the Institute expressly waives its immunity, no summons, subpoena, orders, decisions or proceedings ordered by any court or administrative or quasi-judicial agency are enforceable as against the Institute. In the case at bar there was no such waiver made by the Director-General of the Institute. Indeed, the Institute, at the very first opportunity already vehemently questioned the jurisdiction of this Department by filing an ex-parte motion to dismiss the case.

Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary of Labor in upholding IRRI's diplomatic immunity.

The Third Division, to which the case was originally assigned, required the respondents to comment on the petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not adopting as his own" the decision of the BLR Director in the ICMC Case as well as the Comment of the Solicitor General sustaining said Director. The last pleading was filed by IRRI on 14 August 1990.

Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be excused from filing a comment "it appearing that in the earlier case of International Catholic Migration Commission v. Hon. Pura Calleja, G.R. No. 85750. the Office of the Solicitor General had sustained the stand of Director Calleja on the very same issue now before it, which position has been superseded by respondent Secretary of Labor in G.R. No. 89331," the present case. The Court acceded to the Solicitor General's prayer.

The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in dismissing the Petition for Certification Election filed by Kapisanan.

Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges, prerogatives and immunities of an international organization, invoked by the Secretary of Labor, is unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional right to form trade unions for the purpose of collective bargaining as enshrined in the 1987 Constitution.

A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of a certification election. Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become final and unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal.

On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No. 6715, which took effect on 21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to the Office of the Secretary of Labor and Employment instead of to the Director of the Bureau of Labor Relations in cases involving certification election orders.

III

Findings in Both Cases.

There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.

Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC shall have a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of the Convention on the Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly provides:

Art. III, Section 4. The specialized agencies, their property and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of legal process except insofar as in any particular case they have expressly waived their immunity. It is, however, understood that no waiver of immunity shall extend to any measure of execution.

Sec. 5. The premises of the specialized agencies shall be inviolable. The property and assets of the specialized agencies, wherever located and by whomsoever held shall be immune from search, requisition, confiscation, expropriation and any other form of interference, whether by executive, administrative, judicial or legislative action. (Emphasis supplied).

IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:

Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except insofar as that immunity has been expressly waived by the Director-General of the Institute or his authorized representatives.

Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity when in a Memorandum, dated 17 October 1988, it expressed the view that "the Order of the Director of the Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification Election within ICMC violates the diplomatic immunity of the organization." Similarly, in respect of IRRI, the DEFORAF speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in this particular instance."

The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC and IRRI enjoy immunities accorded to international organizations, which determination has been held to be a political question conclusive upon the Courts in order not to embarrass a political department of Government.

It is a recognized principle of international law and under our system of separation of powers that diplomatic immunity is essentially a political question and courts should refuse to look beyond a determination by the executive branch of the government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the government as in the case at bar, it is then the duty of the courts to accept the claim of immunity upon appropriate suggestion by the principal law officer of the government . . . or other officer acting under his direction. Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction . . . as to embarrass the executive arm of the government in conducting foreign relations, it is accepted doctrine that in such cases the judicial department of (this) government follows the action of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction. 3A brief look into the nature of international organizations and specialized agencies is in order. The term "international organization" is generally used to describe an organization set up by agreement between two or more states. 4 Under contemporary international law, such organizations are endowed with some degree of international legal personality 5 such that they are capable of exercising specific rights, duties and powers. 6 They are organized mainly as a means for conducting general international business in which the member states have an interest. 7 The United Nations, for instance, is an international organization dedicated to the propagation of world peace.

"Specialized agencies" are international organizations having functions in particular fields. The term appears in Articles 57 8 and 63 9 of the Charter of the United Nations:

The Charter, while it invests the United Nations with the general task of promoting progress and international cooperation in economic, social, health, cultural, educational and related matters, contemplates that these tasks will be mainly fulfilled not by organs of the United Nations itself but by autonomous international organizations established by inter-governmental agreements outside the United Nations. There are now many such international agencies having functions in many different fields, e.g. in posts, telecommunications, railways, canals, rivers, sea transport, civil aviation, meteorology, atomic energy, finance, trade, education and culture, health and refugees. Some are virtually world-wide in their membership, some are regional or otherwise limited in their membership. The Charter provides that those agencies which have "wide international responsibilities" are to be brought into relationship with the United Nations by agreements entered into between them and the Economic and Social Council, are then to be known as "specialized agencies." 10The rapid growth of international organizations under contemporary international law has paved the way for the development of the concept of international immunities.

It is now usual for the constitutions of international organizations to contain provisions conferring certain immunities on the organizations themselves, representatives of their member states and persons acting on behalf of the organizations. A series of conventions, agreements and protocols defining the immunities of various international organizations in relation to their members generally are now widely in force; . . . 11There are basically three propositions underlying the grant of international immunities to international organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international institutions should have a status which protects them against control or interference by any one government in the performance of functions for the effective discharge of which they are responsible to democratically constituted international bodies in which all the nations concerned are represented; 2) no country should derive any national financial advantage by levying fiscal charges on common international funds; and 3) the international organization should, as a collectivity of States members, be accorded the facilities for the conduct of its official business customarily extended to each other by its individual member States. 12 The theory behind all three propositions is said to be essentially institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but with the elements of functional independence necessary to free international institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their functions by the agencies concerned.

The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member States of the organization, and to ensure the unhampered performance of their functions.

ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which are guaranteed by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by Kapisanan.

For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to which the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to withdraw the privileges and immunities accorded. Thus:

Art. IV. Cooperation with Government Authorities. 1. The Commission shall cooperate at all times with the appropriate authorities of the Government to ensure the observance of Philippine laws, rules and regulations, facilitate the proper administration of justice and prevent the occurrences of any abuse of the privileges and immunities granted its officials and alien employees in Article III of this Agreement to the Commission.

2. In the event that the Government determines that there has been an abuse of the privileges and immunities granted under this Agreement, consultations shall be held between the Government and the Commission to determine whether any such abuse has occurred and, if so, the Government shall withdraw the privileges and immunities granted the Commission and its officials.

Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been organized a forum for better management-employee relationship as evidenced by the formation of the Council of IRRI Employees and Management (CIEM) wherein "both management and employees were and still are represented for purposes of maintaining mutual and beneficial cooperation between IRRI and its employees." The existence of this Union factually and tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges and immunities of an international organization, deprives its employees of the right to self-organization.

The immunity granted being "from every form of legal process except in so far as in any particular case they have expressly waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification election cannot be viewed as an independent or isolated process. It could tugger off a series of events in the collective bargaining process together with related incidents and/or concerted activities, which could inevitably involve ICMC in the "legal process," which includes "any penal, civil and administrative proceedings." The eventuality of Court litigation is neither remote and from which international organizations are precisely shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions of international Organizations. "The immunity covers the organization concerned, its property and its assets. It is equally applicable to proceedings in personam and proceedings in rem." 18We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS calls attention to the case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January 1989, 169 SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of payment of salary for the unexpired portion of a six-month probationary employment), the Court is now estopped from passing upon the question of DOLE jurisdiction petition over ICMC.

We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because ICMC in that case did not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was tacitly recognized as enjoying such immunity.

Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated 15 February 1989, had not become final because of a Motion for Reconsideration filed by IRRI Said Motion was acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides for direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in certification election cases either from the order or the results of the election itself, was already in effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of that law provides:

Art. 259. Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal shall be decided within 15 calendar days (Emphasis supplied).

En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments of the executive branch of government have been rectified and the resultant embarrassment to the Philippine Government in the eyes of the international community now, hopefully, effaced.

WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor Relations for certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made PERMANENT.

In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been committed by the Secretary of Labor and Employment in dismissing the Petition for Certification Election.

No pronouncement as to costs.

G.R. No. 107610 November 25, 1994

CRUZVALE, INC., petitioner, vs.HON. BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER ANGELI M. TUYAY AND UNION OF FILIPINO WORKERS (UFW), respondents.

Soo, Gutierrez, Leogardo & Lee for petitioner.

QUIASON, J.:This is a petition for certiorari under Rule 65 of the Revised Rules of Court, with prayer for a writ of preliminary injunction or temporary restraining order, to reverse and set aside the Decision dated September 25, 1992 of respondent Undersecretary of Labor and Employment and his Order dated October 13, 1992 in OS-MA-A-11-334-91.

I

On July 23, 1991, private respondent, a labor union, filed with the Department of Labor and Employment (DOLE), Regional Office No. IV, a petition for certification election among the regular rank-and-file workers of petitioner, docketed as Case No. RO-400-9107-RU-0107.

On August 27, 1991, petitioner filed its comment to the petition for certification election. It sought the denial of the petition on the following gr