WEEK 2-3 - RIGHT TO SELF ORGANIZATION

A.​ ART 253. COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION

●​ All persons employed (public or private) in commercial, industrial and agricultural

enterprises and in religious, charitable, medical or educational institutions ​

○​ Whether operating for profit or not ​

▪ Shall have the right to self-organization and to form, join, or assist labor

organizations of their own choosing for the purposes of CB ​

●​ Ambulant, intermittent and itinerant workers, self-employed people, rural workers and

those without any definite employers may form labor organizations ​

○​ For their mutual aid and protection

NONPROFIT ORGANIZATIONS LIKE RELIGIOUS AND CHARITABLE

●​ Under Industrial Peace Act (RA 875) ​

EXCEPTION: MANAGERIAL EMPLOYEES (under Art 255)

●​ EXCEPTION: CBA allowing to share in the concessions obtained by the union ​

RIGHT TO ORGANIZE CANNOT BE BARGAINED AWAY (SPEL Case)

●​ Its provisions cannot override what is expressly provided by law that only managerial

employees are ineligible to join, assist, or form any labor organization ​

ART 3. SEC 8. 1987 PH CONSTITUTION

●​ The right of the people, including those employed in the public and private sectors, to

form unions, associations, or societies for purposes not contrary to law shall not be

abridged ​

NOTE: RIGHT TO ORGANIZE AND BARGAIN; NOT EXCLUSIVE TO EMPLOYEES

 ●​ Even workers who are not employees of a particular employer may form organization to

protect their interests ​

○​ Example: actors and actresses (many are independent individual “talents”) ​

THE LAWFUL ORGANIZATION ENJOYS PROTECTION UNDER THE BILL OF RIGHTS (ART 3

CONSTI)

THIS RIGHT CARRIES WITH IT THE RIGHT TO ENGAGE IN A GROUP ACTION (in connection

to Art 257)

●​ PROVIDED it is peaceful, to support the organization’s objective which is not necessarily

CB (Collective Bargaining), but simply to aid and protect its members ​

NOTE: DIFFERENT FROM STRIKE → work stoppage → must observe regulations

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🔍 Text Breakdown and Explanation:

🔸 “All persons employed (public or private)...”

●​ Meaning: This law applies to all employees, whether they work for public institutions

(government) or private companies. ​

●​ It covers various sectors: ​

○​ Commercial: businesses that sell goods/services for profit (e.g., malls, tech

companies) ​

○​ Industrial: manufacturing or factory-related businesses ​

 ○​ Agricultural: farming and related work ​

○​ Religious, charitable, medical, or educational institutions: includes churches, NGOs,

hospitals, and schools ​

✅ Real-life scenario:

●​ Maria works as a teacher at a private Catholic school. ​

●​ John is a nurse in a government-run hospital. ​

●​ Both Maria and John, despite working in different sectors and for different employers,

have the right to form or join a labor union. ​

🔸 “Whether operating for profit or not”

●​ Meaning: It doesn’t matter if the organization or institution is a for-profit business (like a

bank) or a non-profit (like a charity). ​

●​ Workers still have the right to self-organization. ​

✅ Real-life scenario:

●​ Ana is a social worker at a non-profit NGO that helps street children. ​

●​ Even though her employer does not make a profit, Ana can still form or join a union to

protect her rights. ​

🔸 “Shall have the right to self-organization...”

●​ Right to self-organization: The legal right of employees to: ​

 ○​ Form, join, or assist labor organizations (unions) ​

○​ Choose these organizations freely ​

○​ Do so for the purposes of CB (Collective Bargaining – explained below) ​

✅ Real-life scenario:

●​ Workers at a delivery company notice they are being overworked without overtime pay. ​

●​ They decide to form a union to negotiate with the company as a group. ​

●​ This is collective bargaining – negotiating wages, working conditions, and benefits as a

group. ​

🔸 “Ambulant, intermittent and itinerant workers...”

These are types of non-traditional workers:

1. ​ Ambulant – move from place to place (e.g., street vendors) ​

2. ​ Intermittent – work only at certain times (e.g., freelance photographers) ​

3. ​ Itinerant – travel as part of the job (e.g., door-to-door sales agents) ​

Also includes:

●​ Self-employed people – work for themselves (e.g., tricycle drivers, online sellers) ​

●​ Rural workers – people who work in farms or rural areas ​

●​ Those without definite employers – no fixed boss (e.g., day laborers) ​

✅ Real-life scenario:
 ●​ Pedro is a tricycle driver with no fixed employer. ​

●​ He joins with other drivers to form an organization to negotiate better terminal fees and

fight unjust traffic penalties. ​

●​ They can legally form such groups for their mutual aid and protection. ​

📘 Vocabulary Explained:

Term Meaning

Self-organization The process where workers form or join labor unions without needing

employer approval.

Public or private Refers to whether the employer is the government (public) or a

business/organization (private).

For profit or not Whether the organization makes money (for-profit) or is charitable

(non-profit).

Collective Bargaining A process where the union negotiates with the employer about

(CB) wages, benefits, and working conditions.

Ambulant Constantly moving from place to place to work.

Intermittent Not working regularly; irregular work schedules.

Itinerant Traveling for work; no fixed workplace.

Rural workers Those working in agriculture or in the countryside.

🎯 Summary:

This law ensures that ALL types of workers, regardless of:

●​ their industry, ​
 ●​ their employer's profit status, ​

●​ or even having a fixed employer, ​

have the right to form or join organizations that protect their rights and help them

negotiate better work conditions.

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What makes a supervisory employee different from that of a managerial employee?

-SUPERVISORY-

Power to recommend must not be merely routinary or clerical in nature but requires the use of

INDEPENDENT JUDGEMENT. ​
​
RECOMMENDATION:

1.​ DICRETIONARY OR JUDGEMENTAL ( NOT CLERICAL)

2.​ INDEPENDENT ( NOT A DICTATION OF SOMEONE ELSE) AND

3.​ EFFECTIVE ( GIVEN PARTICULAR WEIGHT IN MAKING THE MANAGEMENT

DECISION) .

NOTE: IF ONE OF THESE QUALITIES ARE LACKING ( SUCH AS THE POWER TO

RECOMMEND IS ABSENT) THEN THE PERSON IS NOT REALLY A SUPERVISOR

BUT A RANK AND FILE EMPLOYEE)

Note: Art. 255 allows supervisory employees to form, join or assist separate labor organizations of

their own , but they are not eligible for membership in a labor organization of the rank and file

employees. Neither may a rank and file join a union supervisor.

EFFECTS OF HAVING MIXED MEMBERSHIP

Cocacola Femsa Phil. vs. Central Luzon Regional States Sales Executives

G.R no. 233300 September 3 2020

Facts:

October 2015 - union sought recognition as the bargaining agent of the company’s sales

executives in Central Luzon

Company : did not recognize the union - filed a petition to cancel the union’s registration because

the union comprised managers who are ineligible to join unions. ​

Issue : Whether or not there is a ground to cancel the Union’s certificate of registration

Supreme Court Ruling : ​

Coverage -Art. 253, Sec. 2, Rule II, DO 40-03 F - 03- 08 ​
Article 253 of the Labor Code covers employees' rights to self-organization and to form
labor organizations regardless of employment sector or profit status. 2. The Constitution
also protects the right to form unions and associations for purposes not contrary to law.

Held :

DO 40-03 F - 03- 08 the inclusion as Union members of employees who are outside the
bargaining unit shall not be a ground to cancel the union registration . The ineligible employees
are automatically deemed removed from the membership list of the union.

Therefore, if there are any managerial employees who are union members , they are automatically
removed from the union and the union continues to be registered.

MANAGERIAL

Characteristics of a managerial employee

1.​ He is not subject to the rigid observance of regular office hours

2.​ His work requires the consistent exercise of discretion and judgement in its performance

3.​ The output produced or the result accomplished cannot be standardized in relation to a

given period of time

4. ​ He manages a customarily recognized department or subdivision of the establishment;

customarily and regularly directing the work of other employees there;

5. ​ He either has the authority to hire or discharge other employees or his suggestions and

recommendations as to hiring and discharging , advancement and promotion or other

change of status of other employees are given particular weight

6. ​ As a rule , he is not paid hourly wages nor subjected to maximum hours of work

RANK AND FILE EMPLOYEES

🔹 Legal Basis: Article 219(m) of the Labor Code (formerly Article 212) ​
Defines "rank-and-file" employees as all employees who are not managerial or

supervisory.
📌 Key Characteristics of Rank-and-File Employees:

Criteria Description

🧑‍🏭 No managerial Cannot hire, fire, discipline, or set company policies.

functions

🗂️ No supervisory authority Do not have the power to recommend management decisions.

🤝 Entitled to join unions Can freely form, join, or assist labor organizations of their own

choosing.

⚖️ Protected under labor Have rights to minimum wage, overtime pay, SSS, PhilHealth,

laws and union rights.

📘 Real-Life Scenarios Under the Labor Code

✅ Scenario 1: Joining a Union and Collective Bargaining

Juan, a cashier in a supermarket chain (rank-and-file position), joins a union composed of other

cashiers, baggers, and stock clerks. They negotiate with management for a wage increase and

better work hours.

🔹 Legal Application: ​
Juan is a rank-and-file employee and therefore has the right to unionize and engage in collective

bargaining under Article 255 of the Labor Code.

✅ Scenario 2: Not Eligible for Managerial Union

Ana, a janitress at a university, wants to join the union of deans and department heads.

🔹 Legal Application: ​
Not allowed — rank-and-file employees cannot join the same union as managerial employees,

per the rule on conflict of interest and union independence (Article 255 in relation to

jurisprudence).

✅ Scenario 3: Illegal Dismissal Due to Union Activity

Mark, a factory machine operator, helps organize a labor union. His employer finds out and

terminates him.

🔹 Legal Application: ​
This is illegal dismissal. As a rank-and-file worker, Mark is protected under Article 248(e), which

prohibits employers from interfering with union activities.

✅ Scenario 4: Receiving Overtime and Holiday Pay

Liza, a call center agent, works beyond 8 hours and on legal holidays.

🔹 Legal Application: ​
As a rank-and-file employee, Liza is entitled to overtime pay, night shift differential, and holiday

pay under Articles 87–94 of the Labor Code.

📝 Note: Managerial employees are exempt from these benefits.

✅ Scenario 5: Separation from Supervisory Employees

Peter, a warehouse helper, wants to join a union formed by team leaders and shift supervisors.

🔹 Legal Application: ​
Not allowed. Rank-and-file workers must form a union separate from supervisors to maintain

independence and prevent conflict of interest, per DOLE policy and jurisprudence.
🔍 Summary Table

Scenario Is Rank-and-File Protected? Legal Basis

Union membership ✅ Yes Art. 255

Collective bargaining ✅ Yes Art. 255

Joining managerial union ❌ No Art. 255 + jurisprudence

Overtime/holiday pay ✅ Yes Arts. 87–94

Dismissal due to union activity ❌ Not allowed Art. 248

📢 Final Note

Rank-and-file employees are the core of the workforce, and Philippine labor law strongly protects

their rights to:

●​ Organize and unionize ​

●​ Fair wages and benefits ​

●​ Security of tenure ​

●​ Protection against unfair labor practices (ULPs) ​

⚠️ They must be distinguished from managerial and supervisory employees, who

have limited or no union rights due to potential conflict of interest with management.
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CONFIDENTIAL EMPLOYEES ​

A MATTER OF Job Content and authority

FROM THE BOOK OF ASUZENA : Not measured by closeness to or distance from top

management but by the significance of the jobholder’s role in the pursuit of corporate

objectives and strategy.

Principle: Every managerial position is confidential but not every confidential employee is

managerial ; he may be a supervisory or even a rank and file employee.

-​ Have access to vital labor information

-​ By reason of their position required to assist or act in fiduciary manner to

managerial employees

-​ Privy to sensitive and highly confidential records

-​ Assist and act in confidential capacity or have access to confidential matters of

persons who exercise managerial functions in the field of labor relations ​

Definition of Confidential Employees

A confidential employee is one who assists or acts in a confidential capacity to persons who

formulate, determine, and effectuate management policies in the field of labor relations.

🧩 Example:

●​ The secretary of the HR manager ​

●​ The executive assistant of a company president or vice president for labor relations​

They have access to sensitive labor relations information, such as:

●​ Company strategies during collective bargaining ​

●​ Disciplinary actions ​
 ●​ Labor negotiation plans ​

●​ Wage and benefit computations

ASUZENA : 7.2 PG 260 ​

WHO ARE CONFIDENTIAL EMPLOYEES? ​
- assist and act in a confidential capacity, have access to confidential matters of, persons who

exercise managerial functions in the field of labor relations

-cannot form,join or assist rank and file unions ; cannot even be made to pay agency fees or be

subjected to union security clauses since they are not part of the bargaining unit.

IMPORTANT :

CONFIDENTIAL EMPLOYEE RULE

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.​

​ Note : the two criteria are cumulative(t ending to prove the same point) and both

must be met if an employee is to be considered a confidential employee

WHEN THE EMPLOYEE DOES NOT HAVE ACCESS TO CONFIDENTIAL LABOR

“

RELATIONS INFORMATION , THERE IS NO LEGAL PROHIBITION AGAINST

CONFIDENTIAL EMPLOYEES FROM FORMING , ASSISTING , OR JOINING A UNION

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NOTE : NEW CBA MAY INCLUDE EMPLOYEES EXCLUDED FROM OLD CBA EXPIRED

CBA MAY BE MODIFIED , NOT JUST RENEWED

Regardless of the swinging Court Rulings, the employer and the union in an enterprise may

negotiate and agree whom to cover in their CBA. And they are free to reverse their

agreement : people excluded before may be included now, or those previously included may

now be excluded.
During the FREEDOM PERIOD , the parties may not only renew existing collective

bargaining agreements but may also propose and discuss modifications or amendments

therein .

example: Employees of the College of St. Benilde ​

Excluded from the bargaining unit of the rank and file employees of De la Salle University

because the two educational institutions have their own separate juridical personality and no

sufficient evidence was shown to justify the piercing of the veil of corporation.

CONFIDENTIAL POSITION IN RELATION TO DISMISSAL

NOTE: TRUST REPOSED BY THE EMPLOYER , NOT LABOR RELATIONS NEXUS ,

WILL BE THE KEY ELEMENT OF THE DEFINITION OF A CONFIDENTIAL POSITION

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INELIGIBILITY OF CONFIDENTIAL EMPLOYEES

EXAMPLE CASE: PIER 8 ARRASTRE VS CONFESSOR AND GENERAL MARITIME AND

STEVEDORES UNION G.R NO 110854

Court observed : foremen in modern industrial plants are links in the chain of command

between management and labor ; they are supervisory employees and cannot be part of

rank and file unions.

BUT : legal secretaries though neither managers nor supervisors are confidential

employees.

EXAMPLE CASE : PHILIPS INDUSTRIAL DEV. INC. VS. NLRC GR NO 88957 June 25

1992

RULING : CONFIDENTIAL EMPLOYEES like Managers are not eligible to form , join or

assist labor organizations.

EXAMPLE CASE: THE METROLAB AND MERALCO SUMMATIONS : EXCLUSION

FROM THE BARGAINING UNIT AND CLOSED SHOP CLAUSE

“ CONFIDENTIAL EMPLOYEES SHOULD BE EXEMPTED NOT ONLY FROM THE

CLOSED SHOP PROVISION OF THE CBA BUT ALSO FROM MEMBERSHIP IN THE
RANK AND FILE BARGAINING UNIT”.
🚫 3. Reason for Exemption from Closed Shop

A Close Shop Clause requires all employees to be union members as a condition for employment. ​
However, applying this to confidential employees creates a conflict of interest and violates the

principle of loyalty and trust between employer and employee.

Here’s why:

a. Conflict of Interest

Confidential employees have access to the employer’s labor relations policies and negotiation

strategies. ​
If they belong to the union, they might disclose confidential information (even unintentionally),

giving the union an unfair advantage during collective bargaining.

b. Preservation of Employer’s Trust

Their positions require a high level of trust and confidence. ​

Requiring them to join the union could undermine this trust, since they might have to choose

between the employer’s interest (which they are duty-bound to protect) and the union’s interest

(which they are duty-bound to support).

c. Protection of Labor-Management Relations

Exempting them avoids the undue influence or information leakage that could destabilize

negotiations or create distrust between management and the union.

🧠 4. Jurisprudence

●​ San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, G.R. No.

​
➤
110399 (August 15, 1997)

The Supreme Court ruled that confidential employees who assist managerial

employees in matters related to labor relations cannot join any labor organization, to

prevent a conflict of interest. ​

●​ ​
➤
Golden Farms, Inc. v. Ferrer-Calleja, G.R. No. 78791 (June 19, 1989)

Held that employees who, by reason of their position, have access to confidential labor

relations information cannot join unions as a matter of policy. ​

Summary Table

Aspect Explanation

Who are Those who assist or act in a confidential capacity to persons

confidential handling labor relations or policy decisions.

employees?

Why be Because their inclusion would create a conflict of interest and

exempted from compromise the employer’s trust and labor relations

closed shop? confidentiality.

Legal basis Article 255, Labor Code (by analogy to managerial

employees) + Jurisprudence

Leading cases San Miguel v. Laguesma (1997); Golden Farms v.

Ferrer-Calleja (1989)

IMPORTANT :

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📘 EVOLUTION OF ARTICLE 254 (NOW ARTICLE 255)

Topic: Rights of Public Sector Workers to Organize and Bargain Collectively

🏛️ 1. Original Framework: Presidential Decree No. 442 (Labor Code of 1974)

🔹 Key Point:
When the Labor Code was first issued in 1974, it only granted the right to unionize and bargain

collectively to employees of government-owned and controlled corporations (GOCCs) that were:

●​ Created under the Corporation Code (like private corporations) ​

❌ Civil service employees (e.g., teachers, police, DOH workers) were not included.

📌 Why this mattered:

The government recognized that GOCCs operating like private companies should follow

private-sector labor rules.

🧾 2. 1987 Constitution: Expanding the Right to Organize

🔹 Key Point:

Article III, Section 8 of the 1987 Constitution states:

“The right of the people, including those employed in the public and private sectors,

to form unions, associations, or societies for purposes not contrary to law shall not be

abridged.”

🔍 Salient Implications:

●​ Recognized all workers’ right to organize — not just private sector employees. ​

●​ Included public sector employees under constitutional protection. ​

●​ Paved the way for new laws and orders implementing this principle. ​

📘 Example: Even teachers in public schools can form associations (though not full

unions for bargaining wages).

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🖋️ 3. Executive Order No. 180 (1987) — Signed by Pres. Corazon Aquino

🔹 Key Point:

E.O. 180 implemented the Constitution’s guarantee for government workers' rights to organize.

🧭 It provided:

●​ Legal basis for public sector employees to form unions/associations. ​

●​ Created the Public Sector Labor-Management Council (PSLMC) to manage public labor

relations. ​

●​ Distinguished between: ​

1. ​ GOCCs without original charters – can form unions and bargain like private

workers. ​

2. ​ Civil service employees – can only form associations, with limited rights. ​

📜 4. Republic Act No. 6715 (1989 Amendment to Labor Code)

🔹 Key Point:

RA 6715 amended the Labor Code to align it with E.O. 180 and the 1987 Constitution.

🧩 Major Effect:

●​ Codified the difference between: ​

○​ Employees of GOCCs under the Corporation Code (Labor Code applies) ​

○​ All other government employees (Civil Service rules + EO 180 applies) ​

⚖️ CLASSIFICATION OF PUBLIC SECTOR WORKERS AND THEIR RIGHTS

Let's break it down clearly:

🏢 A. Employees of GOCCs Without Original Charter

These are government corporations incorporated under the Corporation Code, like private firms.

✅ Rights:

Right Description

Right to Organize Can form unions, federations, or labor organizations.

Right to Collective Can negotiate binding CBAs (Collective Bargaining Agreements)

Bargaining with their employer.

Right to Strike Can engage in strikes, subject to legal procedures (e.g., notice,

cooling-off).

📘 Examples:

●​ Employees of: ​

○​ National Transmission Corporation (TransCo) ​

○​ LandBank Insurance Brokerage, Inc. ​

○​ Philippine Postal Corporation (without charter) ​

 ✅ TransCo workers can form a union and negotiate wage increases through a CBA.

🏛️ B. Civil Service Employees

These are government workers in agencies created by special law (original charter) or directly

under the civil service.

⚠️ Limited Rights:

Right Status

Right to Form Associations ✅ Yes, they can form employee associations (not full unions).

Right to Collective ⚠️ Limited — only for matters not fixed by law (e.g.,

Bargaining assignments, work rules).

Right to Strike ❌ No — strikes are prohibited under EO 180.

📘 Examples:

●​ Employees of: ​

○​ Department of Education (DepEd) ​

○​ Bangko Sentral ng Pilipinas (BSP) ​

○​ Social Security System (SSS) ​

○​ PhilHealth ​

○​ DOH, PNP, BIR, etc. ​

 ❌
✅
A public school teacher cannot go on strike over salary issues. ​
But can join an association like Alliance of Concerned Teachers (ACT) to raise

concerns about workload.

🧠 SALIENT POINTS SUMMARY

Aspect Description Example

Labor Code Coverage Only applies to GOCCs without Employees of TransCo, LBP

original charters Insurance

Civil Service Governed by EO 180 and CSC DepEd, SSS, DOH, etc.

Employees rules

Right to Strike ✅ Allowed in GOCCs w/o charter GOCC union may strike; DepEd

❌ Not allowed in civil service

teachers may not

Collective Bargaining ✅ Full in GOCCs w/o charter GOCC can negotiate pay; Civil

⚠️ Limited in civil service (not for

servants can't

salaries)

Constitutional Basis 1987 Constitution, Art. III, Sec. 8 Applies to all employees (public

and private)

🧾 PRACTICAL IMPORTANCE
Understanding Article 255 and its evolution is crucial for:

1. ​ Union Leaders – to know which rights they can legally assert. ​

2. ​ Government Workers – to understand their boundaries in collective action. ​

3. ​ HR/Labor Relations Officers – to comply with legal frameworks in handling employee

relations. ​

4. ​ Law Students & Labor Advocates – to properly classify public workers and apply the right

legal regime. ​

🧮 VISUAL SUMMARY

Worker Type Law Governing Can Unionize? Can Can

Bargain? Strike?

GOCC employee (no Labor Code (Art. 255) ✅ Yes ✅ Yes ✅ Yes

charter)

Civil service employee EO 180 + Civil Service ✅ Yes (association ⚠️ Limited ❌ No

Law only)

✅ FINAL TAKEAWAY

Article 255 protects the right to organize for certain public sector workers. However, the scope of

that right depends on their legal classification:

●​ Those working for GOCCs under the Corporation Code enjoy full labor rights, similar to

private workers. ​
 ●​ Those in the civil service have limited rights, and strikes are prohibited. ​

⚠️ Not all public employees are treated the same under labor law — understanding

the distinction is critical for both compliance and advocacy.

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SECURITY GUARDS MAY JOIN RANK AND FILE OR SUPERVISORS UNION

⚖️ SECURITY GUARDS AND UNION MEMBERSHIP

General Rule and Exception (as amended and under jurisprudence)

🔹 I. General Rule

Under the Labor Code and Department Order No. 150-16 (Series of 2016) of the Department of

Labor and Employment (DOLE) — which governs the employment and working conditions of

security guards and other private security personnel —

Security guards are considered employees of the security agency, not of the client

company where they are assigned.

Thus, as employees, security guards have the right to self-organization under Article 253 [formerly

246] of the Labor Code, which guarantees:

“The right of all employees to self-organization and to form, join, or assist labor

organizations for the purpose of collective bargaining.”

✅ General Rule:

Security guards may form, join, or assist either a rank-and-file union or a supervisors’

union, depending on their actual duties and functions.

This right is recognized as part of the constitutional guarantee to self-organization (Article XIII,

Section 3, 1987 Constitution) and the Labor Code.

🔹 II. Legal and Functional Basis

The classification of a security guard determines which union he or she may join:

Type of Security Guard Union Eligibility Reason

Rank-and-file guard May join a They perform ordinary protective duties and

rank-and-file do not exercise any supervisory powers.

union

Detachment commander / May join a They have the power to recommend hiring,

shift-in-charge / supervisor supervisors’ union transfer, discipline, or suspension of other

guard guards, thus exercising supervisory functions.

The test is not the job title, but the actual functions performed.

🔹 III. Supreme Court Doctrine

The leading case on this issue is:

🧾 United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma,

G.R. No. 122226, March 25, 1998

Facts: ​
Security guards assigned to Pepsi-Cola were members of a rank-and-file union. The employer

contended they were “confidential” or “supervisory” employees who could not join the

rank-and-file union.

Ruling: ​
The Supreme Court held that:

Security guards are not automatically disqualified from joining a rank-and-file union. ​
Their eligibility depends on whether they actually exercise supervisory or managerial

functions.

Thus:
 ●​ Ordinary guards → can join rank-and-file unions ​

●​ Supervisory guards or detachment commanders → can join supervisors’ unions ​

●​ But they cannot mix (no commingling) of rank-and-file and supervisory employees in one

union. ​

🔹 IV. DOLE and NLRC Interpretations

The Department Order No. 150-16 and Book III, Rule XIV of the Omnibus Rules clarify that:

A security guard’s employer is the security agency, and not the client company where

they are deployed. ​

Therefore, their right to unionize applies within the security agency, not across

different client companies.

🔹 V. Exceptions to the General Rule

Even though security guards may unionize, there are important exceptions:

1. Guards with managerial or confidential duties cannot join any union.

They are excluded from the right to self-organization under Article 255 (formerly 245) of the

Labor Code.

🧾 San Miguel Corp. Supervisors & Exempt Employees Union v. Laguesma, G.R. No. 110399

(August 15, 1997)

Confidential employees, due to their access to labor relations information, are

disqualified from union membership.

Thus, if a security officer assists management in labor relations or personnel decisions, he/she

cannot join any union.

2. Guards cannot join the union of the client company.

Since they are employees of the agency, not of the client, joining the client’s union would be

illegal commingling of employees from different employers.

🧾 Republic Planters Bank v. NLRC, G.R. No. 117460, May 29, 1997

The Court ruled that security guards hired through an independent contractor

(security agency) cannot be part of the client company’s bargaining unit because they

are not its employees.

🔹 VI. Summary Table

Rule / Explanation Legal or Jurisprudential

Exception Basis

General Security guards may join a union consistent with Art. 253, Labor Code;

Rule their employment classification (rank-and-file or UPSU v. Laguesma (1998)

supervisory).

Exception 1 Security guards with managerial/confidential Art. 255, Labor Code; San

functions cannot join any union. Miguel v. Laguesma (1997)

Exception 2 Guards cannot join the client company’s union Republic Planters Bank v.

since they are employees of the agency. NLRC (1997)

Exception 3 No commingling — rank-and-file and supervisory Art. 255, Labor Code

guards must form separate unions.

⚖️ VII. Essence in Labor Law

The rule balances:

●​ The right of guards to self-organization, and ​

●​ The employer’s right to manage, and the principle of appropriate bargaining units. ​

It ensures that security guards—though they perform a protective function—are not stripped of

labor rights merely because of the nature of their work, as long as no conflict of interest or

employer interference exists.

✅ Summary Answer (Bar or Essay Style)

As a general rule, security guards may join either a rank-and-file or supervisors’ union

depending on the actual functions they perform, pursuant to the constitutional right

to self-organization and Article 253 of the Labor Code. ​

However, exceptions arise when the guards occupy managerial or confidential

positions, or when they attempt to join the union of the client company, as these

would result in a conflict of interest or illegal commingling of employees. ​

This principle was upheld in United Pepsi-Cola Supervisory Union v. Laguesma (G.R.

No. 122226, March 25, 1998), where the Supreme Court ruled that the

determination of a security guard’s union eligibility depends on the nature of his

functions, not on his job title.

_____________________________________________________________________________

________

⚖️ CAN SECURITY GUARDS JOIN A STRIKE?

🔹 I. General Rule: NO

As a general rule, security guards are not allowed to join or participate in a strike. ​
This is because of the nature of their work and the public interest involved in maintaining peace

and order.

Even though they are employees with the right to self-organization, the right to strike is not

absolute — it is limited by law and public safety considerations.

🔹 II. Legal Basis

Under the Omnibus Rules Implementing the Labor Code, Book V, Rule XXII, Section 3:

“Security guards and other personnel employed by security agencies are prohibited

from engaging in strikes or work stoppages which may compromise national security

or public order.”
This is consistent with Article 278(g) (formerly Article 263[g]) of the Labor Code, which

empowers the Secretary of Labor to assume jurisdiction over labor disputes in industries

indispensable to national interest — and security services fall under this category.

🔹 III. Rationale

1. ​ Public Safety and Order ​

○​ Security guards are directly tasked to protect life, property, and maintain order in

establishments. ​

○​ If they go on strike, it may endanger public safety and expose property to risk or

crime. ​

2. ​ Nature of Work ​

○​ Their function is protective and quasi-police in nature, requiring continuous service. ​

○​ Stoppage of work could disrupt law and order, hence, restrictions are justified. ​

3. ​ Alternative Remedy ​

○​ Instead of striking, security guards may file a notice of grievance, complaint, or

unfair labor practice before the DOLE or National Conciliation and Mediation

Board (NCMB). ​

🔹 IV. Supreme Court Jurisprudence

🧾 Eagle Security Agency, Inc. v. NLRC,

G.R. No. 56852, August 31, 1987 ​

Ruling:

The Supreme Court held that security guards cannot lawfully go on strike, as their

work involves the protection of life and property, and any work stoppage could
 jeopardize public safety. ​
They are subject to reasonable limitations on the exercise of the right to strike.

🧾 United Pepsi-Cola Supervisory Union v. Laguesma,

G.R. No. 122226, March 25, 1998 ​

Ruling:

While security guards have the right to self-organization, the right to strike remains

limited due to national security considerations.

🔹 V. Exception (Rare and Strictly Construed)

In theory, if the strike is peaceful and does not endanger public safety, guards may seek

permission or protection under DOLE supervision. ​

However, in practice, the DOLE and the courts strictly prohibit strikes by guards, especially those

assigned to critical establishments (banks, airports, power plants, etc.).

Instead, disputes are resolved through mediation and arbitration, not strikes.

🔹 VI. Summary Table

Rule / Exception Explanation Legal / Jurisprudential Basis

General Rule Security guards cannot join or stage Book V, Rule XXII, Omnibus Rules;

a strike. Eagle Security Agency v. NLRC

(1987)

Reason Their work involves public safety Police power; national interest

and the protection of life and doctrine

property.

Exception Only under DOLE supervision, if Art. 278(g), Labor Code

(theoretical) public safety is not compromised

(rare).

Alternative File grievance, unfair labor practice, DOLE / NCMB procedures

remedy or notice of dispute.

✅ Summary Answer (Bar or Exam Style)

As a general rule, security guards cannot join or participate in a strike, since their

work involves the protection of life and property and directly affects public safety. ​
The Omnibus Rules Implementing the Labor Code expressly prohibit them from

engaging in strikes or work stoppages that may compromise national security or

public order. ​
In Eagle Security Agency, Inc. v. NLRC (G.R. No. 56852, August 31, 1987), the

Supreme Court upheld this restriction as a valid exercise of police power. ​

Thus, while security guards enjoy the right to self-organization, their right to strike is

subject to lawful limitations in the interest of national security and public safety.

Rule Explanation

General Rule Security guards cannot join or stage a strike.

Reason Their function is to protect life and property; a strike would compromise

public safety and order.

Legal Basis Book V, Rule XXII, Omnibus Rules; Eagle Security Agency v. NLRC

(1987).

Alternative File a grievance or unfair labor practice complaint with DOLE instead of

Remedy striking.

In short:

Security guards may form or join unions, but they cannot join a strike because their

work is tied to public safety and national interest.

_____________________________________________________________________________

_________

WORKERS IN EXPORT PROCESSING ZONES

Who Are Workers in Export Processing Zones (EPZs)?

(With Comprehensive Real-Life Scenarios and Legal Context)

I. Who They Are

Workers in Export Processing Zones (EPZs) are employees of companies operating inside

government-declared special economic or industrial zones, such as those managed by the

Philippine Economic Zone Authority (PEZA).

They typically work in export-oriented industries—factories that produce goods mainly for foreign

markets—such as:

●​ Electronics manufacturing (e.g., semiconductors, circuit boards) ​

●​ Garment and textile production ​

●​ Automotive parts assembly ​

●​ Business Process Outsourcing (BPO) or IT services ​

●​ Pharmaceutical and food processing industries ​

These zones are found in places like Cavite, Mactan (Cebu), Laguna, Batangas, and Clark

Pampanga.

II. Legal Framework

Republic Act No. 7916 (The Special Economic Zone Act of 1995)

●​ Establishes ecozones/EPZs to attract investors and promote exports. ​

●​ Grants special privileges to investors (e.g., tax holidays, duty-free importation). ​

●​ Section 12: States that “the labor laws of the Philippines shall apply to all establishments

operating within the ecozone.” ​

Thus, workers in EPZs are covered by the Labor Code, meaning they enjoy:
 ●​ The right to self-organization and unionize ​

●​ The right to collective bargaining ​

●​ The right to peaceful concerted activities, including strikes ​

●​ Security of tenure and labor standards protection ​

However, their rights are regulated due to the strategic nature of these zones.

III. Real-Life Scenarios

1. Scenario 1 – Electronics Factory in Mactan Export Zone

Company: TechnoPhil Electronics, Mactan Export Processing Zone ​

Workers: 1,200 factory workers assembling circuit boards for export

Situation: ​
The workers notice that their 12-hour shifts exceed the standard 8-hour limit, and overtime pay is

not given. They also complain about unsafe conditions (chemical fumes, poor ventilation).

Action Taken: ​
The workers form a union and file a complaint with the DOLE and PEZA Labor Center. They

seek to collectively bargain for improved pay and safety measures.

Legal Application:

●​ Under Article 253, Labor Code, they have the right to self-organization and collective

bargaining. ​

●​ Under Article 161, DOLE can inspect workplaces even within the EPZ. ​

●​ PEZA cannot prohibit the formation of unions or their actions, only regulate them for

security and order. ​

Possible Outcome: ​
A conciliation conference is facilitated by the National Conciliation and Mediation Board
(NCMB) to mediate the dispute. The company is ordered to comply with labor standards and

negotiate in good faith.

2. Scenario 2 – Garment Factory in Cavite EPZ

Company: Elegant Apparel Export Corp. ​

Workers: Mostly women, employed as sewers and machine operators

Situation: ​
Management refuses to bargain with the workers’ union and dismisses some members for

participating in union activities. In response, the workers plan to go on strike inside the zone.

Legal Considerations:

●​ The right to strike is guaranteed, but must follow procedures in Articles 263–264, Labor

Code: ​

○​ Notice of strike (15 days before the strike) ​

○​ Strike vote ​

○​ Cooling-off period ​

●​ Under PEZA regulations, the strike must be coordinated with zone authorities to ensure

peace and security. ​

📚
Supreme Court Doctrine: ​
Association of Independent Unions in the Philippines vs. PEZA (G.R. No. 142800, August 20,

2003)

The Court ruled that PEZA cannot absolutely ban strikes, but it may regulate the

exercise of such right to protect the operations and security of the zone.

Possible Outcome: ​
If the union complies with procedural requirements, the strike is lawful. However, if they block

entrances or destroy property, PEZA can intervene and request police assistance.
3. Scenario 3 – BPO Firm in Clark Freeport Zone

Company: GlobalConnect Solutions, Inc. ​

Workers: 300 call center agents servicing foreign clients

Situation: ​
The company implements sudden layoffs due to “project completion,” without separation pay.

Workers attempt to stage a protest within the Freeport Zone gates.

Legal Application:

●​ Even if in a Freeport Zone, the Labor Code applies (Sec. 12, R.A. 7916). ​

●​ Workers must file a notice of strike with the NCMB before any protest. ​

●​ The right to peaceful assembly cannot be denied but must be coordinated with authorities. ​

Possible Outcome: ​
If the layoff is found to be a “constructive dismissal,” workers may be reinstated with back wages

under Article 279, Labor Code.

IV. Summary of Rights and Restrictions

Rights of EPZ Workers Explanation Limitations / Regulation

Right to Self-Organization May form or join unions Subject to PEZA security rules

Right to Collective Bargaining May negotiate for better Must comply with legal

terms procedures

Right to Strike / Peaceful May strike for unfair labor Must file notice, strike vote, and

Concerted Activity practice coordinate with PEZA

Right to Labor Standards Entitled to minimum Enforced by DOLE even inside

wage, OT pay, etc. EPZs

Right to Security of Tenure Cannot be dismissed Regular employees protected

without just cause under Labor Code

V. Key Takeaways

1. ​ Workers in EPZs are not “special workers” exempt from labor protection; they are covered

by the same laws as other employees. ​

2. ​ PEZA’s role is regulatory, not prohibitive. It can enforce peace and order, but not curtail

constitutional labor rights. ​

3. ​ The Supreme Court protects the constitutional right to self-organization, even inside

economic zones. ​

4. ​ However, strikes and protests must follow due process and respect security protocols

within the zone.

IMPORTANT :

“ WHERE GOVERNMENT OF HOST COUNTRIES OFFER SPECIAL INCENTIVES TO ATTRACT

FOREIGN INVESTMENTS , THESE INCENTIVES SHOULD NOT INCLUDE ANY LIMITATIONS

ON THE WORKERS FREEDOM OF ASSOCIATION OR THE RIGHT TO ORGANIZE AND

BARGAIN COLLECTIVELY”

EXPLANATION: ​
Comprehensive Explanation

When a host country—such as the Philippines—creates special economic or export processing

zones (EPZs) to attract foreign investors, it often grants incentives like:

●​ Tax holidays, ​

●​ Duty-free importation, ​

●​ Simplified customs procedures, and ​

●​ Relaxed regulatory requirements. ​

These incentives are meant to encourage business and create jobs. However, international labor

standards—particularly those set by the International Labour Organization (ILO)—stress that such

economic privileges must not be used to weaken or restrict workers’ rights.

Key Principle

Workers’ rights to:

1. ​ Freedom of Association — the right to form, join, or assist labor unions of their own

choosing; and ​

2. ​ Collective Bargaining — the right to negotiate with employers regarding wages, benefits,

and working conditions ​

are basic human rights protected by:

●​ Article XIII, Section 3 of the 1987 Philippine Constitution; ​

●​ Articles 253–255 of the Labor Code; and ​

●​ ILO Conventions Nos. 87 and 98, both ratified by the Philippines. ​

Legal and Policy Context

Some investors prefer locations where labor is cheap and “union-free.” To attract them, certain

governments might be tempted to limit the right to unionize or strike in export zones—claiming

it promotes stability and efficiency.

However, this violates both domestic and international law, because:

●​ Economic growth cannot justify the denial of basic labor rights. ​

●​ A balance must be maintained between investor confidence and social justice. ​

●​ Labor peace is achieved through dialogue and fair negotiation, not through suppression of

unions. ​
Example (Philippine Context)

In the Association of Independent Unions in the Philippines v. PEZA (G.R. No. 142800, August

20, 2003), the Supreme Court ruled that:

PEZA cannot prohibit workers within export zones from forming unions or holding

strikes, because such actions are protected constitutional rights. ​

While PEZA may regulate labor actions for security and order, it cannot impose a

total ban in the name of investor attraction.

Thus, foreign investment incentives cannot override constitutional labor rights.

Summary

Concept Explanation

Freedom of Association Workers may freely join or form unions without interference.

Collective Bargaining Workers can negotiate employment terms collectively.

Government Incentives Should encourage investment but not weaken labor rights.

ILO & Philippine Law Both affirm that labor rights are inviolable, even in special economic

zones.

_____________________________________________________________________________

_________

ARTICLE 257 NON ABRIDGEMENT OF RIGHT TO SELF ORGANIZATION

Article 257 — Non-Abridgement of Right to Self-Organization

(Labor Code of the Philippines, as renumbered)

I. Legal Provision

Article 257 [formerly Article 248(c)] — Non-Abridgement of Right to Self-Organization

“It shall be unlawful for any person to restrain, coerce, discriminate against, or

interfere with employees or workers in the exercise of their right to

self-organization.”

This article ensures that workers’ right to form, join, or assist labor organizations is fully protected

and that employers, government agencies, or any person cannot interfere or discourage employees

from exercising this right.

2 RIGHTS EMPHASIZED:

1. ​ RIGHT TO

F ORM

J OIN

A SSIST LABOR ORGANIZATIONS

2. ​ RIGHT TO - ENGAGE IN LAWFUL CONCERTED ACTIVITIES

_____________________________________________________________________________

_________IMPORTANT DOCTRINE TACKLED

INTERBORO DOCTRINE

- ​ Individuals ' assertion of a right grounded in a collective bargaining agreement is

recognized as concerted activity and therefore accorded the protection of Section 7 of the

National Labor Relations Act.

TWO JUSTIFICATIONS:

1. ​ The assertion of a right contained in a collective bargaining agreement is an extension of

the concerted action that produced the agreement

2. ​ The assertion of such a right affects the rights of all employees covered by the collective.
II. Meaning and Purpose

The article embodies the constitutional guarantee found in Article XIII, Section 3 of the 1987

Constitution, which states:

“The State shall guarantee the rights of all workers to self-organization, collective

bargaining and negotiations, and peaceful concerted activities…”

This means:

●​ Workers are free to form or join any union of their own choosing; ​

●​ Employers must remain neutral and cannot interfere or control the formation of such

unions; ​

●​ Any act that restrains or discriminates against employees for joining a union is unlawful

and punishable under the Labor Code. ​

III. Examples of Prohibited Acts (Violations of Art. 257)

The following are acts that abridge the right to self-organization:

1. ​ Interference or Coercion ​

○​ Threatening employees with dismissal or demotion if they join a union. ​

○​ Spying on union meetings or creating a company-dominated union. ​

○​ Offering benefits to employees in exchange for leaving or rejecting a union. ​

2. ​ Discrimination ​

○​ Favoring non-union members in promotion, pay, or assignments. ​

○​ Dismissing or transferring employees because of union activity.​

3. ​ Company Domination ​
 ○​ Employers forming or financing a union to control employees (a “company union”). ​

4. ​ Retaliation ​

○​ Dismissing workers who sign a petition for union recognition or certification

election. ​

IV. Legal Effect and Remedies

If a violation occurs:

●​ It is considered an Unfair Labor Practice (ULP) under Article 258 (formerly 248). ​

●​ The case may be filed before the National Labor Relations Commission (NLRC). ​

●​ Remedies include reinstatement, payment of back wages, and damages. ​

V. Supreme Court Doctrines

1. General Milling Corp. vs. Casio, G.R. No. 149552, October 30, 2006

The Court held that the right to self-organization is a fundamental right that must be

respected by the employer. Any act of discrimination or intimidation against workers

forming a union constitutes unfair labor practice.

2. Philippine Blooming Mills Employees Organization (PBMEO) vs. Philippine Blooming Mills

Co., Inc., G.R. No. L-31195, June 5, 1973

The Court emphasized that the right to organize is not merely statutory but

constitutional, and its exercise should not be impeded by the employer’s anti-union

stance.

3. Associated Labor Unions vs. Ferrer-Calleja, G.R. No. 77282, January 27, 1989
 Even in export processing zones, workers retain their right to self-organization; any

act by management or government to curtail this right violates the Constitution and

labor laws.

VI. Real-Life Scenario

A factory in Laguna employs 800 workers. A group of employees begins organizing a union to

negotiate better working conditions. The employer learns of this and starts threatening to close

the plant if unionization continues. Some employees are suddenly reassigned or dismissed.

Legal Analysis: ​
The employer’s actions violate Article 257, as they coerce and discriminate against employees for

exercising their right to self-organization. ​

The dismissed workers can file a complaint for unfair labor practice and seek reinstatement with

back wages.

VII. Key Takeaways

Aspect Explanation

Purpose Protects the workers’ freedom to form and join labor organizations.

Who Is Bound Employers, managers, and even government agencies.

Acts Prohibited Coercion, discrimination, interference, or retaliation against union

activities.

Legal Consequence Constitutes Unfair Labor Practice (ULP) under Article 258.
 Constitutional Basis Article XIII, Section 3, 1987 Constitution.

VIII. Essence of the Law

Article 257 reinforces that the right to self-organization is a sacred labor right. ​
Economic goals, managerial prerogatives, or company policies can never justify any act that

weakens or suppresses workers’ freedom to unite and speak collectively.

_____________________________________________________________________________

_________

⚖️ Employees of GOCCs Without Original Charters vs. GOCCs With Special Charters

I. Legal Basis

1. ​ Article IX-B, Section 2(1), 1987 Constitution ​

​
​
“The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of

the Government, including government-owned or controlled corporations with original

charters.” ​
​

2. ​ Article 254, Labor Code (Right to Self-Organization) ​

​
​
Public sector employees, including those in GOCCs without original charters, have the

right to self-organization, subject to Executive Order No. 180. ​

​

3. ​ Executive Order No. 180 (1987) ​

○​ Covers employees in the public sector, including GOCCs without original charters.​
 ○​ GOCCs with original charters fall under the Civil Service Commission (CSC)

jurisdiction. ​

○​ GOCCs without original charters fall under the Department of Labor and

Employment (DOLE) jurisdiction. ​

II. Core Difference

Aspect GOCCs WITH Original GOCCs WITHOUT Original Charters

Charters

Created by A special law (e.g., PD, RA, Incorporated under the Corporation Code

EO)

Jurisdiction Civil Service Commission Department of Labor and Employment

(CSC) (DOLE)

Labor Relations E.O. 180 (Public Sector) Labor Code (Private Sector)

Law Applicable

Right to Strike ❌ Not allowed (public ✅ Allowed (subject to Labor Code

employees cannot strike) procedures)

Type of Agreement Collective Negotiation Collective Bargaining Agreement (CBA)

Agreement (CNA)
Examples SSS, GSIS, PAGCOR, PNOC-Exploration Corp., LBP Leasing

PhilHealth, LTO, Corp., Duty Free Philippines, Philippine

NAPOCOR, BSP Airlines (before privatization)

III. Rationale Behind the Distinction

The Supreme Court distinguishes between GOCCs with and without original charters because:

●​ Those with original charters are creations of law and thus part of the Civil Service, directly

performing government functions. ​

●​ Those without original charters are created under the Corporation Code, and thus function

like private corporations, even if government-owned. ​

Hence, the nature of employment relations differs:

●​ In GOCCs with original charters, employees are civil servants. ​

●​ In GOCCs without original charters, employees are regular employees under the Labor

Code. ​

IV. Supreme Court Doctrines

1. National Housing Corporation v. Juco

(G.R. No. 64313, January 17, 1985)

●​ Ruling: Employees of GOCCs without original charters are governed by the Labor Code,

not by the Civil Service Law. ​

●​ Reason: NHC was incorporated under the Corporation Code, not by a special law;

therefore, its employees are not civil servants. ​

2. Trade Union of the Philippines and Allied Services (TUPAS) v. National Housing Corporation

(G.R. No. 71437, March 29, 1988)

●​ Ruling: GOCCs organized under the Corporation Code are subject to Labor Code

provisions on collective bargaining and strikes. ​

3. Boy Scouts of the Philippines v. COA

(G.R. No. 177131, June 7, 2011)

●​ Ruling: BSP, though performing public functions, is not a GOCC with an original charter,

but a private corporation under the Corporation Code. ​

●​ Therefore, its employees fall under DOLE, not CSC. ​

V. Real-Life Scenarios

Scenario 1: GOCC With Original Charter

Maria works at PhilHealth, which was created under Republic Act No. 7875 — a special law.

●​ Therefore, Maria is a civil service employee. ​

●​ Her union may negotiate a CNA, but cannot strike. ​

●​ Any dispute is handled by the CSC and PSLMC, not the DOLE. ​

Scenario 2: GOCC Without Original Charter

Juan works for PNOC-Exploration Corporation, which is a subsidiary incorporated under the

Corporation Code.

●​ Therefore, Juan is covered by the Labor Code. ​

 ●​ His union may file for certification election, bargain collectively, and legally go on strike

following Labor Code procedures. ​

●​ The DOLE and NLRC have jurisdiction. ​

VI. Summary Table

Category GOCC with Original Charter GOCC without Original Charter

Legal Basis Created by Special Law Created under Corporation Code

Jurisdiction Civil Service Commission Department of Labor and

Employment

Law Governing Labor E.O. 180 Labor Code

Relations

Right to Strike ❌ None ✅ Allowed

Type of Agreement CNA CBA

Examples SSS, GSIS, PAGCOR, PNOC-EC, LBP Leasing, Duty

NAPOCOR Free PH

VII. Key Takeaway

The distinction between GOCCs with and without original charters determines which labor law

applies and which rights workers may exercise.

●​ If created by special law, workers are civil servants under E.O. 180. ​

●​ If created under the Corporation Code, workers are employees under the Labor Code —

with the right to self-organization, collective bargaining, and strike.

_____________________________________________________________________________

_________

⚖️ 1. GOCCs WITH ORIGINAL CHARTERS

These are government-owned or controlled corporations created by a special law passed by

➡️
Congress. ​
Their employees are covered by the Civil Service Commission (CSC) and Executive Order No.

➡️
180, not by the Labor Code. ​
They cannot strike and may only enter into Collective Negotiation Agreements (CNA).

✅ Examples:

GOCC Charter / Law Notes

Social Security System (SSS) Republic Act No. 1161 (as Provides social security

amended by R.A. 8282) protection for private

employees.

Government Service Insurance Commonwealth Act No. 186 Provides insurance and

System (GSIS) benefits for public

employees.

Philippine Amusement and Presidential Decree No. Regulates and operates

Gaming Corporation (PAGCOR) 1869 games of chance.

Philippine National Oil Company Presidential Decree No. 334 Engaged in energy

(PNOC) exploration and

development.

Land Bank of the Philippines Republic Act No. 3844 A government financial

(LBP) institution for agrarian

reform.

National Power Corporation Commonwealth Act No. 120 Provides electricity

(NAPOCOR) generation and transmission.

Bangko Sentral ng Pilipinas Republic Act No. 7653 (as Central monetary authority

(BSP) amended by R.A. 11211) of the country.

Philippine Health Insurance Republic Act No. 7875 Implements the National

Corporation (PhilHealth) Health Insurance Program.

Development Bank of the Executive Order No. 81 Government development

Philippines (DBP) financing institution.

National Irrigation Republic Act No. 3601 Develops and manages

Administration (NIA) irrigation systems.

Philippine Ports Authority (PPA) Presidential Decree No. 857 Regulates and manages port

operations.

⚙️ 2. GOCCs WITHOUT ORIGINAL CHARTERS

These are corporations organized under the Corporation Code (now Revised Corporation Code),

➡️
even if owned or controlled by the government. ​
Their employees are covered by the Labor Code and Department of Labor and Employment

➡️
(DOLE) jurisdiction. ​
They may form labor unions, bargain collectively, and go on strike subject to legal

requirements.

✅ Examples:

GOCC / Subsidiary Nature / Parent GOCC Notes

PNOC-Exploration Subsidiary of PNOC Incorporated under the

Corporation (PNOC-EC) Corporation Code — covered

by the Labor Code.

LBP Leasing and Finance Subsidiary of Land Bank Governed by Labor Code;

Corporation employees may form unions.

Duty Free Philippines Subsidiary of Tourism Operates duty-free stores;

Corporation (DFPC) Infrastructure and Enterprise subject to Labor Code.

Zone Authority (TIEZA)

Philippine National Formerly CDCP, incorporated Labor Code applies.

Construction Corporation under the Corporation Code

(PNCC)

Bases Conversion and e.g., Clark Development Created under Corporation

Development Authority Corporation, John Hay Code; DOLE jurisdiction.

(BCDA) subsidiaries Management Corporation

National Development e.g., NDC Phil. Infrastructure Private corporate entity;

Company (NDC) subsidiaries Corp. governed by Labor Code.

Petron Corporation Formerly a PNOC subsidiary; Now a private corporation;

later privatized Labor Code applies.

Mactan-Cebu International Incorporated under the Employees under Labor

Airport Authority subsidiaries Corporation Code Code.

(if any)

⚖️ III. Key Distinction Summary

Basis GOCC with Original Charter GOCC without Original Charter

Created by Special Law (RA, PD, EO) Corporation Code (Private

incorporation)

Jurisdiction Civil Service Commission (CSC) Department of Labor and Employment

(DOLE)

Governing Law E.O. 180 (Public Sector) Labor Code (Private Sector)

Employee CNA (No strike) CBA (Strike allowed)

Rights
Examples SSS, GSIS, PAGCOR, PNOC-EC, Duty Free Philippines,

NAPOCOR, PhilHealth PNCC, LBP Leasing

💡 In short:

●​ If created by law → CSC → E.O. 180 → No strike (public sector). ​

●​ If created under the Corporation Code → DOLE → Labor Code → May strike (private

sector).

_____________________________________________________________________________

_________

A motion for reconsideration is a formal legal request for a judge to review and
potentially change a prior ruling, based on specific grounds like clear errors in
law or fact, or the discovery of new evidence that wasn't available at the time of
the original decision. It must be filed within a strict deadline, usually 14-30 days,
and is intended to correct mistakes,not to simply re-argue the case or express
dissatisfaction with the outcome.​
______________________________________________________________________
_____

CASE 1

🧾 Case Digest: SSSEA v. Court of Appeals

G.R. No. 85279, July 28, 1989​
Ponente: Justice Cortes

🧩 Facts
●​ The Social Security System Employees Association (SSSEA), composed of
employees of the Social Security System (SSS), went on strike on June 9,
1987.​
 ●​ The strike arose after the SSS allegedly failed to implement provisions in
their old collective bargaining agreement (CBA) — such as the payment of
overtime, night differential, and holiday pay, as well as the regularization of
temporary employees.​

●​ During the strike, union members blockaded the entrances to the SSS
building, preventing others from working or transacting business.​

👉 Because of this, the SSS filed a complaint before the Regional Trial Court
(RTC) of Quezon City, seeking:

●​ Damages,​

●​ A temporary restraining order (TRO) and​

●​ A writ of injunction to stop the strike and compel employees to return to

work.​

The RTC:

●​ Denied the union’s motion to dismiss (which claimed the case should be
under the NLRC, not the RTC).​

●​ Converted the TRO into a permanent injunction after finding the strike
illegal.​

The union appealed to the Court of Appeals, which upheld the RTC’s ruling.​
They then elevated the case to the Supreme Court, arguing:

1.​ The RTC had no jurisdiction (only the DOLE/NLRC should handle labor
disputes).​

2.​ The employees had the right to strike as part of their right to
self-organization.​

⚖️ Issues
 1.​ Do SSS employees have the right to strike?​

2.​ Did the RTC have jurisdiction to enjoin the strike?​

💡 Ruling
1. No, SSS employees do not have the right to strike.

The Supreme Court ruled that employees of the SSS, being part of a
government-owned and controlled corporation (GOCC) with an original charter
(R.A. No. 1161), are government employees covered by the Civil Service Law.

🧠 Explanation:​
Under the 1987 Constitution, while government employees have the right to
self-organization, they do not have the right to strike.​
This limitation was clarified during the Constitutional Commission debates — the
right to organize does not include the right to strike.

Supporting rules include:

●​ Civil Service Commission Memorandum Circular No. 6 (1987) – prohibits all

government employees from joining strikes, walkouts, or mass actions that
disrupt public service.​

●​ Executive Order No. 180 – provides that the Civil Service rules on
concerted activities and strikes shall be observed.​

📘 In simpler terms (scenario):​

Imagine SSS employees stop working to demand higher pay and block the
entrances. Because the SSS provides a public service, their strike disrupts the
government’s ability to deliver social security benefits to citizens.​
The law therefore bans such strikes to ensure that essential public functions
continue.

2. Yes, the RTC had jurisdiction to issue an injunction.

Since SSS employees are under the Civil Service, the Labor Code and the
National Labor Relations Commission (NLRC) do not apply to them.

Instead, labor disputes in the public sector fall under the Public Sector
Labor-Management Council (PSLMC) — created by E.O. 180 — but that Council
has no power to issue injunctions.

Therefore, when SSS filed a complaint for damages and injunction, the RTC
validly exercised jurisdiction under its general jurisdiction (B.P. Blg. 129).

📘 Scenario example:​
If public school teachers under DepEd go on strike and block students from
entering, the NLRC cannot handle the case since teachers are civil service
employees.​
The DepEd may seek relief from the RTC, which can issue an injunction to stop
the strike while referring labor issues to the PSLMC.

📜 Doctrine / Principle
Government employees, including those of GOCCs with original
charters, have the right to organize but not to strike.

Labor disputes involving them fall under the jurisdiction of the Public
Sector Labor-Management Council, but the Regional Trial Court may
issue injunctions to prevent disruption of public service.

🧠 Key Legal Concepts Explained

Term Meaning Scenario Example

Injunction A court order commanding a The RTC orders SSSEA to

person to do or stop doing stop blocking the SSS office
something. entrances.
Temporary A short-term order to stop an TRO stops the strike
Restraining act until the court hears more temporarily for a few days.
Order (TRO) evidence.

Certiorari A legal remedy used to review The SSSEA went to the

whether a lower court acted Supreme Court via certiorari,
without or beyond claiming the RTC had no
jurisdiction. authority.

Prohibition Prevents a court or tribunal SSSEA wanted to prohibit

from continuing an act the RTC from proceeding
outside its authority. with the case.

⚖️ Final Ruling
●​ Petition denied.​

●​ The Court of Appeals’ decision was affirmed.​

●​ The strike was illegal.​

●​ The RTC properly issued an injunction to stop the strike.​

●​ SSS employees must settle grievances through the Public Sector

Labor-Management Council, not through strikes.​

🧭 Summary Table
Issue Rulin Reasoning
g
Do SSS employees have ❌ No They are government employees under Civil
the right to strike? Service; strikes disrupt public service.

Did the RTC have ✅ NLRC has no jurisdiction over civil

jurisdiction to issue Yes servants; RTC can issue injunctions to
injunction? prevent disruption.

🏛️ Takeaway Principle
Public service cannot be paralyzed by strikes.​
While private workers may use strikes as leverage in bargaining,
government workers must use negotiation, grievance mechanisms, or
petition Congress — not work stoppages — to assert their rights.

______________________________________________________________________
_______CASE 2

🧾 GSIS Family Bank Employees Union v. Villanueva, et al.​

G.R. No. 210773, January 23, 2019​
Ponente: Leonen, J.

PRINCIPLE / DOCTRINE:

1.​ Officers and employees of government-owned or controlled corporations

(GOCCs) without original charters are covered by the Labor Code, not the
Civil Service Law.​

2.​ However, even non-chartered GOCCs are limited by law in negotiating

economic terms with their employees, because the Compensation and
Position Classification System (CPCS) established under R.A. 10149
(GOCC Governance Act of 2011) applies to all GOCCs, chartered or not.​

3.​ The Governance Commission for GOCCs (GCG) is an oversight body, not a
quasi-judicial one. Hence, a petition for certiorari under Rule 65 cannot lie
 against it.​

4.​ When a GOCC is closed and placed under receivership, any petition
compelling its management to negotiate with employees becomes moot.​

FACTS:

●​ Royal Savings Bank was incorporated in 1969 as a private thrift bank under
the Corporation Code.​

●​ After financial troubles, it was rehabilitated by the Government Service

Insurance System (GSIS) through its subsidiary, Commercial Bank of
Manila, and later renamed Comsavings Bank, then GSIS Family Bank (GFB)
in 2001.​

●​ GSIS owned 99.55% of GFB’s shares, effectively controlling it.​

Later, the Bangko Sentral ng Pilipinas (BSP) opined that GSIS Family Bank was
not a government bank, since it was created under the Corporation Code for
private purposes — unlike banks created by law such as LandBank or DBP.

In 2011, Republic Act No. 10149 (GOCC Governance Act) was enacted, creating
the GCG, which supervises all GOCCs and government financial institutions
(GFIs), whether chartered or not.

●​ GCG classified GSIS Family Bank as a government financial institution

(GFI) covered by R.A. 10149.​

●​ The GCG then issued advisories prohibiting GOCCs and GFIs from
negotiating collective bargaining agreements (CBAs) on economic terms
(such as salaries and benefits), because these must follow the
Compensation and Position Classification System (CPCS) approved by the
President.​

The GSIS Family Bank Employees Union disagreed, claiming that:

 ●​ GFB was still a private corporation, since it was incorporated under the
Corporation Code, not by special law;​

●​ Thus, it should remain under the Labor Code, and its employees should
still enjoy the right to collective bargaining and to strike.​

The Union filed a Petition for Certiorari, Prohibition, and Mandamus before the
Supreme Court to:

1.​ Declare GFB outside the coverage of R.A. 10149, and​

2.​ Compel GFB’s management to negotiate a new CBA and pay bonuses
under the existing one.​

However, during the proceedings, GFB was ordered closed by the BSP Monetary
Board in 2016 and placed under receivership by the Philippine Deposit Insurance
Corporation (PDIC).

ISSUES:

1.​ Whether a petition for certiorari under Rule 65 is the proper remedy against
the GCG.​

2.​ Whether the case was rendered moot by the closure of GSIS Family Bank.​

3.​ Whether GSIS Family Bank, as a non-chartered GOCC, may negotiate a

collective bargaining agreement (CBA) with its employees.​

RULING:

1. On the Remedy: Petition for Certiorari — NOT PROPER.

The Supreme Court dismissed the petition.

 ●​ The GCG is not a quasi-judicial body; it has no judicial authority to decide
disputes or enforce rights.​

●​ It only provides advisory opinions and oversight over GOCCs.​

●​ Thus, it cannot be the subject of a petition for certiorari, which only applies
to acts of tribunals or officers exercising judicial or quasi-judicial
functions.​

✅ In short: The GCG’s letters were mere legal advisories, not binding orders.​
👉 Example: If the GCG says “you can’t raise salaries,” it’s like an advisory
memo, not a judgment — so you can’t file certiorari against it.

2. On Mootness: YES, THE CASE IS MOOT.

When GSIS Family Bank was closed by BSP and placed under receivership by
PDIC, there was no more management to compel to negotiate with the union.

●​ The main relief sought (to compel negotiation and payment of benefits)
could no longer be enforced.​

●​ Therefore, the case no longer presents an actual controversy.​

3. On the Substantive Issue: Can GSIS Family Bank Negotiate a CBA?

The Court clarified (even if moot) that:

●​ Yes, as a non-chartered GOCC, its employees are under the Labor Code,
not the Civil Service Law.​

●​ However, under R.A. 10149, even non-chartered GOCCs must follow the
CPCS set by GCG and the President.​

●​ This means economic provisions (salary, bonuses, benefits) cannot be

freely negotiated in a CBA.​
 ●​ Only non-economic terms (like working conditions or grievance
procedures) may be bargained.​

✅ Illustration:​
Imagine a GOCC-owned bank where employees want to increase their Christmas
bonus. They can propose it, but management cannot agree unless the President
or GCG’s compensation system authorizes it. So while employees can form a
union and bargain, their economic terms are limited by law.

DISPOSITION:

Petition DISMISSED for being the wrong remedy and for being moot due to the
bank’s closure.

KEY TAKEAWAYS / NOTES FOR LAW STUDENTS:

1.​ Chartered vs. Non-Chartered GOCCs​

○​ Chartered GOCC: Created by special law (e.g., LandBank, DBP) →

Covered by Civil Service Law.​

○​ Non-Chartered GOCC: Incorporated under Corporation Code →

Covered by Labor Code.​

2.​ But both are covered by R.A. 10149, which limits economic negotiations
through the CPCS.​

3.​ Certiorari only applies to quasi-judicial acts.​

○​ GCG is an administrative and advisory body → Not subject to

certiorari.​

4.​ Mootness Doctrine:​

○​ A case is moot when there’s no longer a live controversy or when a

supervening event (like the closure of the bank) makes the relief
 impossible.​

IN SIMPLE TERMS:

Even though GSIS Family Bank was a private corporation by origin, once the
government owned almost all of it, it became a GOCC, and its salaries and
benefits had to follow government rules under R.A. 10149.​
Its employees could still unionize and bargain, but not about pay, unless
approved by the President or the GCG.​
When the bank later closed, there was no longer anything to negotiate — making
the case moot.

______________________________________________________________________
______

⚖️ Scenario Explanation: Certiorari, Prohibition, and Mandamus

💼 Background Story
Let’s imagine this situation:

The Union of ABC Factory Workers went on strike because the management
suspended their collective bargaining negotiations. Management then went to
court and got a Temporary Restraining Order (TRO) to stop the strike, claiming it
was illegal.

Later, the court converted the TRO into a writ of injunction, permanently
prohibiting the strike.​
The union strongly believed this was unfair and beyond the court’s authority. So,
they decided to go to the Court of Appeals or Supreme Court to challenge it.

🚨 1️⃣ Petition for Certiorari

🧠 Definition:
A petition for certiorari (Rule 65, Rules of Court) is filed when a lower court or
tribunal acts without jurisdiction, in excess of jurisdiction, or with grave abuse of
discretion.
✅ In short: It corrects errors of jurisdiction — not errors of judgment.
📍Scenario Example:
The Regional Trial Court (RTC) issued a writ of injunction stopping the strike.​
But under Article 218(e) of the Labor Code, only the National Labor Relations
Commission (NLRC) or the Secretary of Labor can issue an injunction in labor
disputes — not the RTC.

➡️ Thus, the union can file a Petition for Certiorari with the Supreme Court,
saying:

“The trial court acted without jurisdiction when it stopped the strike,
because only the NLRC or the Secretary of Labor may do so.”

👉 Certiorari = “You acted beyond your authority. Stop and correct that.”

⚖️ 2️⃣ Petition for Prohibition

🧠 Definition:
A petition for prohibition is filed to prevent a lower court, tribunal, or officer from
continuing to act without or in excess of jurisdiction.

✅ In short: It’s preventive — it stops an act that should not be done.

📍Scenario Example:
Suppose after issuing the injunction, the trial court plans to cite union leaders for
contempt if they continue the strike.

The union fears this would worsen the abuse of power, since the court had no
authority to stop the strike in the first place.

➡️ They now include a Petition for Prohibition to stop the judge from continuing
his unlawful acts.
 “Your Honor, please prohibit the court from enforcing or expanding the
injunction, since you had no jurisdiction to issue it.”

👉 Prohibition = “Stop acting beyond your power.”

⚖️ 3️⃣ Petition for Mandamus

🧠 Definition:
A petition for mandamus is filed to compel a public official, tribunal, or body to
perform a ministerial duty (something the law clearly requires them to do).

✅ In short: It forces an authority to do what it is legally obliged to do.

📍Scenario Example:
The union asked the DOLE Secretary to assume jurisdiction over the labor
dispute (as required by law), but the Secretary refused to act.

➡️ The union can file a Petition for Mandamus asking the court to compel the
Secretary of Labor to assume jurisdiction and resolve the case.

“The Secretary has a legal duty under Article 278(g) of the Labor Code
to assume jurisdiction over strikes in industries indispensable to the
national interest.”

👉 Mandamus = “Do your job — the law requires it.”

Type of Purpose Nature Scenario

Petition

Certiorari To correct an act done without or Corrective RTC issued

in excess of jurisdiction, or with injunction even
grave abuse of discretion
 though it had no
authority

Prohibition To stop an ongoing act that’s Preventiv Prevent judge from

without or beyond authority e enforcing the illegal
injunction

Mandamus To compel performance of a Compellin Force DOLE

ministerial duty required by law g Secretary to act on
labor dispute

🧩 Easy Illustration:
Imagine a game referee (the judge) suddenly tells players,

“You can’t score anymore — I’m changing the rules!”

The team captain (the union) could respond by going to a higher referee (the
Supreme Court) and filing:

1.​ Certiorari: “Referee, you went beyond your role.”​

2.​ Prohibition: “Please stop him from continuing to change the rules.”​

3.​ Mandamus: “Force the real referee (DOLE Secretary) to do his duty and
decide properly.”

______________________________________________________________________
_______

⚖️ WHY employees of GOCCs can unionize and bargain, but not about pay
unless approved by the President or GCG:

🧩 1️⃣ Constitutional and Legal Basis

Under the 1987 Constitution, Article IX-B, Section 3:
 “The Civil Service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters.”

This means GOCC employees — whether under Civil Service or Labor Code —
are ultimately funded by the government.

Because their salaries come from public funds, the government must regulate
how much they earn to maintain uniformity and fiscal discipline across all
GOCCs.

🏛️ 2️⃣ R.A. 10149 – GOCC Governance Act of 2011

This law created the Governance Commission for GOCCs (GCG), which manages
all GOCCs, both chartered and non-chartered.

Section 8 and Section 9 of R.A. 10149 establish the Compensation and Position
Classification System (CPCS), which:

●​ Standardizes and regulates compensation for all GOCC

employees,​

●​ Requires Presidential approval before implementation.​

✅ In short:​
The GCG ensures that no GOCC can unilaterally increase salaries or benefits
because all compensation must fit within the government-wide salary framework.

📉 3️⃣ Purpose: To Prevent Salary Inequality and Misuse of Public Funds

Before R.A. 10149, some GOCCs (like banks and utilities) granted excessive
salaries and bonuses that were much higher than those in other government
agencies — leading to public outrage and inefficiency.

Example:

●​ A manager in one GOCC earned ₱250,000/month,​

 ●​ While another manager in a different GOCC, doing similar work, earned
only ₱60,000/month.​

To fix this disparity, R.A. 10149 centralized compensation control under the GCG
and President.

Aspect Allowed to Why

Bargain?

Salaries, bonuses, ❌ No Must comply with CPCS approved by

allowances, benefits President and GCG; public funds are
involved

Working conditions, ✅ Yes These are non-economic matters

hours, grievances, leave that do not affect government funds
policies directly

🧠 5️⃣ Scenario to Understand

Imagine the GSIS Family Bank Employees Union negotiating a new Collective
Bargaining Agreement (CBA).​
They propose a ₱5,000 increase in monthly salary and a ₱30,000 Christmas
bonus.

However, the GCG has issued a Compensation Order setting the maximum
allowable salary for their position at ₱35,000.

➡️ Even if the management agrees to the union’s proposal, they cannot legally
implement the increase unless approved by the President or GCG, because:

●​ The bank’s funds are government-controlled;​

●​ Any increase affects public spending;​

 ●​ And uniform pay standards must apply to all GOCCs.​

✅ What they can negotiate instead: working hours, rest days, grievance
procedures, union representation, or safety measures.

🏛️ 6️⃣ Supreme Court Ruling: GSIS Family Bank Employees Union v. Villanueva
(G.R. No. 210773, Jan. 23, 2019)

The Court explained that:

“Even if the employees of GSIS Family Bank are covered by the Labor
Code, they are still bound by the Compensation and Position
Classification System under R.A. 10149.”

Thus:

●​ They retain the right to self-organization and collective bargaining;​

●​ But economic terms (like salary, bonuses, and benefits) must conform to
the CPCS and Presidential approval.​

💬 In Simple Terms
●​ 🗣️ “Yes, you can form a union.”​

●​ 🤝 “Yes, you can bargain — but only about rules and work conditions.”​

●​ 💰 “No, you can’t demand pay increases unless approved by the President
or GCG, because that’s taxpayers’ money.”​

______________________________________________________________________
_______

CASE 3
Remedios T. Blaquera, et al. v. Angel C. Alcala, et al.​
G.R. No. 109406, September 11, 1998 (En Banc)​
Source: ChanRobles Virtual Law Library

Principle / Doctrine

The doctrine of due process and equal protection requires that public officers
exercising governmental functions must act within the limits of their authority
and in accordance with law.

👉 Suspension or removal of government employees without notice and hearing

is void.

Moreover, undue or excessive delay in administrative proceedings constitutes a

violation of the right to due process and speedy disposition of cases under
Article III, Section 1 and Section 16 of the 1987 Constitution.

Legal Basis

1.​ 1987 Constitution​

○​ Article III, Section 1: No person shall be deprived of life, liberty, or

property without due process of law.​

○​ Article III, Section 16: All persons shall have the right to a speedy
disposition of their cases before all judicial, quasi-judicial, or
administrative bodies.​

○​ Article IX-B, Section 2(1): The Civil Service embraces all branches
and instrumentalities, including government-owned or controlled
corporations with original charters.​

2.​ Civil Service Law (P.D. No. 807; now incorporated in the Administrative
Code of 1987)​

○​ Provides that teachers and other civil servants may only be

disciplined or removed for cause and after due process.​
 3.​ Education Act of 1982 (B.P. Blg. 232)​

○​ Teachers are under the Department of Education (DepEd) and Civil

Service Commission (CSC) supervision — not under local
government officials.​

Facts

●​ Petitioners: Public school teachers (Blaquera group) assigned to remote

towns in Palawan.​

●​ Respondent: Then Governor Angel C. Alcala, who ordered their suspension

or removal due to alleged misconduct and administrative complaints.​

●​ The teachers were not given formal charges, notices, or hearings.​

●​ The governor claimed authority under local autonomy and supervisory

powers over public employees assigned to provincial schools.​

The teachers contended that:

●​ Their suspension was arbitrary and politically motivated;​

●​ Due process was denied;​

●​ The delay in adjudication and reinstatement was unreasonable and violated

their constitutional rights.​

Issues

1.​ Whether the Governor of Palawan had the authority to suspend or remove
public school teachers.​
 2.​ Whether the suspension/removal was valid under due process and equal
protection principles.​

3.​ Whether excessive delay in the resolution of the administrative case

constituted denial of due process.​

Ruling / Decision

The Supreme Court ruled in favor of the petitioners (teachers) and nullified the
suspension orders.

🧾 On Authority:
●​ The Governor had no legal authority to suspend or remove teachers.​

●​ Teachers are national employees under the Department of Education, not

employees of the local government.​

●​ The Civil Service Commission (CSC) has exclusive jurisdiction over

disciplinary matters involving teachers.​

⚖️ On Due Process:
●​ Suspension or removal without notice, hearing, and formal charges
violates due process of law.​

●​ The right to due process applies even in administrative proceedings — not

just in criminal cases.​

⏱ On Delay:

●​ The Court emphasized that inordinate delay in administrative adjudication

violates the constitutional right to speedy disposition of cases.​

●​ Justice delayed is justice denied — prolonged inaction or bureaucratic

neglect is equivalent to injustice.​
🧩 Result:
●​ The Court reversed the suspensions, reinstated the teachers, and ordered
compliance with procedural due process in any future actions.​

Application / Simplified Scenario

Scenario:​
Teacher Rosa, a public school teacher assigned in a remote barangay, was
accused of insubordination. The governor immediately issued a suspension
order without giving her any written charge or hearing. For over a year, her case
remained unresolved.

Applying the Blaquera doctrine, the suspension is invalid because:

●​ The governor has no power to suspend teachers under DepEd;​

●​ Due process (notice and hearing) was denied;​

●​ The delay violates Rosa’s right to speedy disposition of her case.​

Thus, the order must be nullified, and Rosa is entitled to reinstatement with due
process.

Explanation of Key Terms

Term Explanation Example / Analogy

Due Process The legal requirement that the Before suspending a

government must respect all teacher, formal charges
rights owed to a person, and a hearing must
including notice and hearing occur.
before action.
Equal Protection The law must treat all similarly All teachers must
situated individuals equally. receive the same
disciplinary process
regardless of location.

Excessive Delay Unreasonable and unjustified A 5-year unresolved

delay that prejudices one’s administrative case
rights. violates due process.

Removal/Suspensio The authority to discipline or Governors cannot

n Power dismiss an employee. remove national
employees like
teachers.

Nullify To render an act void and The Supreme Court

without legal effect. nullified the Governor’s
suspension order.

Key Takeaway / Doctrine

Public school teachers are national government employees.​

Their suspension or removal must follow the Civil Service Law, not the
discretion of local officials.​
Due process, equal protection, and the right to speedy disposition are
fundamental constitutional guarantees that apply even in
administrative cases.

______________________________________________________________________
_______

CASE 4

Clark Development Corporation (CDC) and Governance Commission for GOCCs

(GCG)​
vs. Association of CDC Supervisory Personnel (ACSP)​
G.R. No. 207853, March 20, 2022​
Ponente: Lopez, J.

Doctrine / Principle

🧠 Doctrine: GOCC Employees’ Right to Collective Bargaining is Limited.

The right of government employees to collective bargaining does not extend to
economic provisions (salaries, bonuses, incentives, allowances) unless
specifically authorized by the President or the GCG under Executive Order No. 7
(2010) and Republic Act No. 10149 (GOCC Governance Act of 2011).

🧩 Mnemonic: “BAG–E”​
→ Only Basic rights, Administration issues, and General working conditions are
negotiable —​
but Economic benefits require presidential approval.

Facts

●​ Clark Development Corporation (CDC) — a GOCC without original charter,

managing the Clark Special Economic Zone.​

●​ Association of CDC Supervisory Personnel (ACSP) — the union of CDC’s

supervisory employees.​

📅 March 20, 2012: CDC and ACSP signed a renegotiated CBA providing salary
increases, bonuses, union leaves, service vehicle use, and allowances.

🧾 However, the Governance Commission for GOCCs (GCG) said the CBA
violated EO No. 7 (2010), which placed a moratorium on increases in salaries and
benefits unless approved by the President.

⚖️ Dispute:​
ACSP filed a complaint before the National Conciliation and Mediation Board
(NCMB) when CDC failed to implement the CBA.

🗂️ Rulings below:
 ●​ Voluntary Arbitrator (AVA) ruled in favor of ACSP, presuming that the
President approved the CBA “in favor of labor.”​

●​ Court of Appeals affirmed, saying EO No. 7 does not apply to GOCCs

without original charter like CDC.​

🧑‍⚖️ CDC & GCG appealed to the Supreme Court.

Issues

1.​ Whether EO No. 7 and RA No. 10149 apply to GOCCs without original
charters such as CDC.​

2.​ Whether CDC and ACSP could legally negotiate economic terms in their
CBA without presidential or GCG approval.​

3.​ Whether the presidential approval can be presumed under the

“construction in favor of labor” rule.​

Ruling / Decision

✅ The Petition was GRANTED.​

The Supreme Court reversed the CA and dismissed the union’s complaint.

Ratio / Legal Basis

🧱 1. Applicability of EO No. 7 and RA No. 10149

●​ EO No. 7 applies to all GOCCs — whether with or without original charters
— because the law makes no distinction.​

○​ Legal maxim: Ubi lex non distinguit, nec nos distinguere debemus
(“When the law does not distinguish, we must not distinguish”).​
 ●​ Therefore, CDC is covered by the moratorium on salary and benefit
increases.​

⚖️ 2. Requirement of Presidential or GCG Approval

●​ Under Section 9, EO No. 7 (2010):​
​
​
“A moratorium on increases in the rates of salaries, allowances, incentives
and other benefits… is hereby imposed until specifically authorized by the
President.”​
​

●​ Under RA No. 10149 (GOCC Governance Act):​

​
​
The President, through the GCG, fixes compensation frameworks for all
GOCCs.​
​

●​ Hence, any economic provision in a CBA needs presidential approval.​

📜 3. Presidential approval cannot be presumed

●​ The rule of liberal construction in favor of labor (Art. 4, Labor Code) applies
only to ambiguities in the Labor Code —​
not to clear executive orders like EO No. 7.​

●​ Since EO No. 7 clearly prohibited increases “until specifically authorized by

the President,”​
there is no basis to presume approval.​

💼 4. Right to Collective Bargaining is Limited in the Public Sector

●​ Public sector employees (including those in GOCCs) may unionize and
negotiate,​
but only regarding non-economic terms like working conditions, not
salaries or benefits.​
Held

The economic provisions in the CBA — such as salary increases, allowances,

and bonuses — are void, because they were renegotiated without presidential or
GCG approval.​
CDC acted lawfully in not implementing them.

Legal Bases

📘 Executive Order No. 7 (2010)

●​ Sec. 9: Moratorium on increases in salaries and benefits “until specifically
authorized by the President.”​

📗 Republic Act No. 10149 (GOCC Governance Act of 2011)

●​ Sec. 8–10: GCG authorized to develop and recommend compensation
system for GOCCs for Presidential approval.​

📙 Executive Order No. 203 (2016)

●​ Confirms that GOCCs cannot negotiate economic terms of CBAs.​

📕 Article IX-B, Sec. 8, 1987 Constitution

●​ Public officers and employees shall not receive additional or double
compensation unless authorized by law.​

Application / Simplified Scenario

👩‍💼 Scenario:​
The Clark Development Corporation (CDC) and its supervisory union sign a new
CBA granting an 8% salary hike and ₱25,000 signing bonus.
However, under EO No. 7 (2010) and RA No. 10149, such economic benefits
cannot be implemented without the President’s explicit approval through the
GCG.

🛑 If CDC still implements it without such approval, Commission on Audit (COA)

could disallow the payments, and officials may be held liable for illegal
disbursement of public funds.

💬 Analogy:​
Think of the GOCC as a branch office of the government — it can discuss
working conditions with employees, but cannot decide on its own to give pay
raises. Only the “head office” (the President) can authorize that.

Mnemonic Summary – “P.A.I.D.”

✅
To remember the key points, use P.A.I.D.​

✅
P – Presidential approval required for salary/benefit changes​

✅
A – Applies to all GOCCs (with or without charters)​

✅
I – Invalid if CBA grants unauthorized economic benefits​
D – Doctrine: Collective bargaining in GOCCs limited to non-economic terms

Term Meaning Example / Analogy

GOCC with Created by a special law (e.g., Congress passes a law

Original Charter SSS, GSIS, PhilHealth) specifically creating it

GOCC without Incorporated under the Registered like a private

Original Charter Corporation Code (e.g., Clark corporation but
Development Corp.) government-owned
Moratorium Temporary suspension of an EO No. 7 “froze” new
activity salary increases until
allowed by the President

GCG Oversight body for GOCCs Like “HR and Finance” of

that recommends all GOCCs
compensation and monitors
compliance

CBA (Collective Contract between management Union and employer

Bargaining and employees on agree on benefits,
Agreement) employment terms schedules, etc.

Economic Monetary benefits like pay, 8% salary increase,

Provisions bonuses, allowances ₱25,000 signing bonus

Summary / Takeaway

🔹 Government employees’ right to bargain is not absolute — only non-monetary

🔹 Presidential or GCG approval is a mandatory prerequisite for economic
terms can be negotiated.​

🔹 CDC’s refusal to implement the CBA’s salary increases was lawful, because
benefits.​

🔹 The Supreme Court emphasized the need for fiscal discipline and central
the CBA contravened EO No. 7 and RA No. 10149.​

oversight in GOCC compensation.

______________________________________________________________________
______

⚖️ Article 255 (now Article 267) – Managerial Employees

📚 Legal Basis:
Article 255 [now 267], Labor Code of the Philippines — “The right to
self-organization shall not be exercised by managerial employees, but
 supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist, or
form separate labor organizations of their own.”

🧭 A. Meaning and Essence

Managerial employees are excluded from the right to join, assist, or form any
labor organization.​
Why? Because they represent the management and act as the employer’s alter
ego.

Think of them as the “brain and hands” of the employer — their loyalty must
remain undivided. Allowing them to unionize may create conflict of interest.

👩‍💼 B. Definition of Managerial Employees

Managerial employees are those vested with powers or prerogatives to:

1.​ Lay down and execute management policies, and/or​

2.​ Hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline

employees.​

➡️ They have independent judgment in carrying out these powers.

📖 Reference:
●​ National Association of Trade Unions (NATU) v. Minister of Labor, G.R. No.
67110, March 17, 1989.​
The Court held that managerial employees cannot join unions because
they act in the interest of the employer.​

⚙️ C. Types of Employees (Mnemonic: “M–S–R”)

Type Meaning Right to Unionize? Legal
Reference

M – Formulates and executes ❌ No Art. 255

Managerial policies

S – Recommends managerial ✅ Yes, but in Art. 255

Supervisory actions using independent separate union
judgment

R – Performs routine or clerical ✅ Yes, may Art. 255

Rank-and-file tasks form/join
rank-and-file union

🧠 Mnemonic: “M–S–R = Managerial Supervisory Rank-and-file”​

→ Only S and R can unionize, but in Separate groups.

🧩 D. Rationale / Reasoning
1.​ Avoid Conflict of Interest​
A managerial employee represents management in decision-making. If
they join a union, it’s like the employer negotiating with itself — a conflict
of loyalty.​

2.​ Preserve Collective Bargaining Integrity​

The CBA (Collective Bargaining Agreement) is between the employer and
employees — managerial employees are on the employer side, so they
cannot be part of labor negotiations.​

3.​ Public Policy​

Management prerogatives (e.g., hiring, firing, discipline) must be exercised
freely and objectively, not influenced by union interests.​
🧮 E. Scenario Example
📍Scenario:
Suppose Clark Development Corporation (CDC) appoints Maria, the HR Director,
to decide on promotions and employee discipline.

Maria creates policies, approves salary increases, and decides who gets
terminated.

The employees’ union invites her to join, saying:

“Maria, we’re forming a union to demand better benefits. Join us!”

❌ She cannot.
Under Article 255, Maria is a managerial employee — her role involves executive
decision-making and policy formulation.​
If she joins, there will be conflict of interest, since she represents the employer in
labor matters.

✅ However, her subordinates (e.g., team leaders who only recommend actions
but don’t decide finally) may unionize as supervisory employees.

🧱 F. Key Doctrines
1.​ Union of Supervisors v. Laguesma, G.R. No. 111662, March 3, 1997​

○​ Supervisors can unionize separately, but managerial employees

cannot.​

○​ Rationale: Supervisors still have interests different from

management.​

2.​ San Miguel Corp. Supervisors & Exempt Employees Union v. Laguesma,
G.R. No. 110399, August 15, 1997​

○​ Even if an employee does not have final authority, if his

recommendations are customarily approved, he is still supervisory,
 not managerial.​

3.​ United Pepsi-Cola Supervisory Union v. Laguesma, G.R. No. 122226, March
25, 1998​

○​ A managerial employee exercises independent judgment in

formulating and implementing management policies.

Lette Meaning Description

r

P Policy-making They create or implement management

policies.

H Hiring/Firing Power They decide on employment status,

discipline, or dismissal.

D Decision-making with They act autonomously, not merely clerical.

independent judgment

So remember: Managerial = PHD → Policy, Hiring, Decision

📘 Summary
Aspect Explanation

Legal Basis Art. 255, Labor Code

 Who are Those who lay down/execute management policies or make
they? key personnel decisions

Union Rights ❌ Cannot form/join any labor union

Why To prevent conflict of interest
excluded?

Mnemonic PHD = Policy, Hiring, Decision

Case NATU v. Minister of Labor (1989)

Example

______________________________________________________________________
_______

CASE 5

United Pepsi-Cola Supervisory Union v. Secretary Laguesma​

G.R. No. 122226, March 25, 1998

Principle / Doctrine

●​ Supervisory employees may join, assist, or form a union separate from the
rank-and-file union.​

●​ But managerial employees are excluded from the right to self-organization

under Article 255 (now 267) of the Labor Code.​

●​ The test is functional: whether an employee customarily exercises

independent judgment in formulating or executing management policies
(i.e., managerial) or only assists management (i.e., supervisory).​
Facts

●​ The United Pepsi-Cola Supervisory Union (union of supervisory personnel

in Pepsi) sought recognition and sought to be included in collective
bargaining with rank-and-file employees.​

●​ The Secretary of Labor (Laguesma) questioned whether the supervisory

employees should be placed under rank-and-file union or be excluded.​

●​ The issue was whether these supervisory persons are managerial

(excluded from union rights) or supervisory (can unionize separately).​

Issues

1.​ Are the supervisory employees of Pepsi managerial employees (thus

excluded from union membership)?​

2.​ If they are not managerial, do they have the right to form a supervisory
union separate from rank-and-file employees?​

Ruling / Decision

●​ The Supreme Court held that the supervisory employees of Pepsi were not
managerial, but rather supervisory.​

●​ As such, they have the right to unionize, but must have a separate union
(cannot be in the same union as rank-and-file).​

●​ The Court emphasized that to be managerial, one must have final authority
and independent judgment in matters of management policy.​

●​ Here, the supervisory employees only recommend or assist, but do not

make final, binding decisions — so they cannot be considered managerial.​
Analysis / Reasoning

1.​ Managerial vs Supervisory distinction​

○​ Managerial: formulates and executes management policies; has final

authority.​

○​ Supervisory: assists in implementation or recommends actions, but

lacks final authority.​

2.​ Application to Pepsi case​

○​ The supervisory employees did not have the authority to make

binding decisions on matters such as hiring, firing, or setting policy.​

○​ Their recommendations were subject to approval by management.​

○​ Thus, they are supervisory not managerial.​

3.​ Right to unionize separately​

○​ Because they are not rank-and-file, they cannot be in the

rank-and-file union.​

○​ They must form a separate supervisory union, but their union rights
are recognized.​

Application / Scenario

Imagine in Pepsi’s manufacturing plant, Mr. Reyes is a shift supervisor. He has

the power to assign workers, monitor performance, and recommend promotions,
but cannot approve final disciplinary actions or hire/fire; those decisions rest
with general management.

●​ Under the Pepsi case, Mr. Reyes is supervisory, not managerial.​

 ●​ He may join or form a supervisory union, but cannot join the rank-and-file
union of line workers.​

●​ If he tried to join the rank-and-file union, the company or government could

invalidate that membership, insisting on separation.​

Mnemonics / Memory Aid

Use “S – A – N – D” to remember the test for Supervisory vs Managerial:

●​ S: Suggests — the person suggests or recommends, not decides​

●​ A: Assists — assists implementation of policy​

●​ N: No final authority — lacks the power to finalize policies or decisions​

●​ D: Dependent — decisions depend on management approval​

If an employee meets SAND, he’s supervisory (unionizable, separate). If not — if

he is final, independent — then managerial (excluded).

______________________________________________________________________
_______

CASE 6 - EXCEPTION TO DISQUALIFICATION

Title:

Societe Internationale de Telecommunications Aeronautiques (SITA), SITA

Information Networking Computing B.V., Equant Services, Inc., and Lee Chee Wee
v. Theodore L. Huliganga​
G.R. No. 215504, March 11, 2019​
Ponente: Peralta, J.

Facts:
 ●​ Respondent Theodore L. Huliganga was hired by SITA on April 16, 1980 as
Technical Assistant and rose through the ranks to become Country
Operating Officer, the highest managerial position of SITA in the
Philippines.​

●​ He retired on December 31, 2008 and received ₱7,495,102.84 as retirement

and other benefits, computed at 1.5 months of basic pay for each year of
service.​

●​ Huliganga filed a complaint before the NLRC against SITA, SITA Information
Networking Computing B.V., and Equant Services, Inc. for:​

1.​ underpayment of retirement benefits,​

2.​ underpayment of salaries and leave credits, and​

3.​ moral and exemplary damages, among others.​

●​ He claimed that based on the 2005–2010 Collective Bargaining Agreement

(CBA), the retirement coefficient should be 2 months per year of service for
those with at least 25 years of service, which he argued was already a
company practice extended even to managerial employees.​

●​ SITA countered that:​

1.​ Huliganga already received full benefits;​

2.​ there was no employer-employee relationship with SITA, INC. and

Equant;​

3.​ the CBA applied only to rank-and-file employees, not to managerial

employees like Huliganga.​

Procedural History:

1.​ Labor Arbiter (Sept. 29, 2009): Dismissed Huliganga’s complaint for lack of
merit.​
 2.​ NLRC (July 21, 2010): Affirmed the Labor Arbiter’s ruling.​

3.​ Court of Appeals (Mar. 21, 2014): Reversed the NLRC, ruling that Huliganga
was entitled to an additional ₱2,645,175.87 in retirement benefits, holding
that extending CBA benefits to managerial employees had become
company practice.​

4.​ Supreme Court: SITA elevated the case via Petition for Review under Rule
45.​

Issues:

1.​ Whether managerial employees may claim CBA benefits intended for
rank-and-file employees.​

2.​ Whether the extension of CBA benefits to managerial employees has

ripened into a company practice.​

Ruling:

1. NO. Managerial employees are not entitled to CBA benefits intended for
rank-and-file employees.​
2. NO. Huliganga failed to prove that extending CBA benefits to managerial
employees was a long-standing and deliberate company practice.

Ratio / Reasoning:

●​ Under Article 245 (now Article 255) of the Labor Code, managerial
employees are not eligible to join, assist, or form any labor organization.​

●​ Hence, they cannot be beneficiaries of a CBA, which is the product of

collective negotiation between the employer and the rank-and-file union.​
 ●​ The exception is when the employer voluntarily extends the CBA benefits
to managerial employees as a matter of policy or established practice.​

●​ For a benefit to be considered company practice, it must be:​

○​ Practiced over a long period of time, and​

○​ Consistent and deliberate.​

●​ The affidavit presented by former administrative assistant Delia Beaniza

was given little weight:​

○​ She retired in 1997, 12 years before Huliganga retired.​

○​ She lacked personal knowledge of company policy after her

retirement.​

○​ She did not identify any other managerial employee who received
similar CBA-based benefits.​

●​ The CA erred in disregarding the uniform factual findings of the Labor

Arbiter and NLRC, which were based on substantial evidence and are
entitled to great respect and finality.​

Doctrine / Legal Principle:

Managerial employees are excluded from the benefits of a CBA unless

the employer has consistently and deliberately extended such benefits
over a long period of time, establishing a company practice.

The extension of benefits to managerial employees cannot be

presumed and must be clearly and convincingly proven.

Disposition:

●​ Petition GRANTED.​
 ●​ The CA Decision (March 21, 2014) and Resolution (October 8, 2014) are
REVERSED and SET ASIDE.​

●​ The NLRC Decision (July 21, 2010) dismissing Huliganga’s complaint is

REINSTATED.​

Application / Scenario Example:

If a company’s CBA grants rank-and-file employees a 2-month retirement benefit

per year of service, managerial employees cannot automatically claim the same.​
They must prove that the company has consistently applied such benefit to
managerial staff for years.​
Without such proof, the court will uphold the rule that CBAs apply only to the
bargaining unit (rank-and-file).

Mnemonic for remembering the case:

“SITA – Supervisors Ineligible To Acquire CBA.”

●​ SITA case reminds: Managerial employees (like Huliganga) cannot claim

CBA benefits without proof of established company practice.

______________________________________________________________________
______

CASE 7

🧾 EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES OUTSIDE THE

BARGAINING UNIT

(Commingling / Mixed Membership Rule)

🔹 Legal Basis:
Article 255 (formerly Article 245), Labor Code (as amended by RA 9481):
 “Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist, or
form separate labor organizations of their own.

The inclusion as union members of employees outside the bargaining

unit shall not be a ground for cancellation of union registration, but
said employees shall automatically be deemed removed from the
membership of the union upon the filing of the petition for certification
election.”

🔹 General Rule:
If a union admits employees who do not belong to its appropriate bargaining unit
(e.g., managerial or supervisory employees join a rank-and-file union), this
“commingling” or mixed membership does not automatically cancel the union’s
registration.

👉 Effect:​
Those employees outside the bargaining unit are automatically deemed removed
from the union’s membership upon the filing of a petition for certification election
(PCE).

The union itself remains legitimate and may still represent the appropriate
bargaining unit.

🔹 Purpose of the Rule:

To protect legitimate unions from being disqualified or dissolved just because of
minor membership errors and to promote unionism consistent with the
constitutional right to self-organization.

🔹 Exceptions / When Commingling Becomes Fatal:

1.​ 🧨 If the union is composed predominantly of ineligible members, such
that its true character is no longer that of a legitimate bargaining unit, its
registration may be cancelled.​
 ○​ Example: A “rank-and-file union” that is actually 80% supervisory
and managerial employees.​

○​ Legal principle: The union ceases to represent a “community of

interest.”​

2.​ 🧨 If there is deliberate and fraudulent commingling to gain advantage or

manipulate certification elections, it may be a ground for cancellation or
disqualification.​

🔹 Key Jurisprudence:
1.​ Union of Filipino Employees v. Secretary of Labor, G.R. No. 79155 (April 15,
1991)​

○​ Doctrine: Commingling of supervisory and rank-and-file employees

destroys mutuality of interest, making the organization no longer a
proper bargaining unit.​

2.​ Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. NLRC, G.R.
No. 158786 (October 19, 2007)​

○​ Ruling: Inclusion of ineligible employees (supervisors, confidential

employees) does not automatically cancel a union’s registration.​

○​ The law now provides that such employees are merely deemed
removed from membership.​

○​ Ratio: This amendment (RA 9481) ensures that union registration is

not easily nullified by technical defects.​

3.​ Samahang Manggagawa sa Charter Chemical v. Charter Chemical and

Coating Corp., G.R. No. 169717 (March 7, 2012)​

○​ Doctrine: What is prohibited is co-mingling between supervisory and

rank-and-file employees in one union, not the mere temporary
inclusion of a few ineligible employees.​
🔹 Simplified Scenario:
Example 1:​
At ABC Manufacturing, a rank-and-file union accidentally includes two

🧾
supervisors as members when it files its registration.​
Effect: Union registration remains valid. The two supervisors are simply
deemed removed as members once a petition for certification election is filed.

Example 2:​
If the same union is composed mostly of supervisors and managerial employees

🧾
and only a few rank-and-file employees, it is no longer a proper bargaining unit.​
Effect: Its registration may be cancelled for lack of mutuality of interest and
misrepresentation.

______________________________________________________________________
_______

Concept Legal Effect Basis

Minor commingling (few Not fatal; those members Art. 255, Labor Code
members outside the automatically removed
unit)

Substantial or fraudulent May lead to cancellation of Union of Filipino

commingling registration Employees v. Sec. of
Labor

Protection of right to Law favors validity of union; Toyota case

self-organization avoids technical
disqualification
______________________________________________________________________
______

🔹 Mnemonic:
“C-MIXED” Rule

●​ C — Commingling not fatal​

●​ M — Members outside unit removed automatically​

●​ I — Inclusion not ground for cancellation​

●​ X — Exception: majority of members are ineligible​

●​ E — Election triggers removal​

●​ D — Due process still required for cancellation

______________________________________________________________________
_______

🧭 I. Article 256 of the Labor Code – Overview

Text of the Law (prior to renumbering)

Article 256 (now renumbered as Article 268) provides that:

“Any legitimate labor organization may file a petition for certification

election with the Regional Office of the Department of Labor and
Employment (DOLE). Upon the filing of such petition, the Med-Arbiter
shall automatically order the conduct of a certification election after
due hearing.”

This article codifies the procedures and principles governing the conduct of
certification elections — the process through which workers choose their sole
and exclusive bargaining agent (SEBA).

⚖️ II. Legislative Theory (Philosophy or Rationale Behind Article 256)

The legislative theory refers to the underlying policy intent or reason of the
legislature for enacting the law — in this case, why Article 256 exists and how it
evolved.

The theory underlying Article 256 can be understood through several lenses:

1. Protection of Workers’ Freedom of Association (Constitutional Basis)

Article 256 operationalizes the constitutional right to self-organization under

Article XIII, Section 3 of the 1987 Constitution:

“The State shall guarantee the rights of all workers to self-organization,

collective bargaining and negotiations...”

Hence, the legislative theory is to:

●​ Ensure that the choice of bargaining representative lies exclusively with

the employees, free from employer interference.​

●​ Make the certification election the mechanism of democracy in the labor

sector.​

🟩 Supporting Doctrine:
In Republic v. Kawashima Textile Manufacturing, Philippines, Inc. (G.R.
No. 160352, August 31, 2005), the Court emphasized that the
certification election is a purely internal affair of the employees,
grounded on the principle of self-organization and collective freedom.

2. “Hands-Off” or “Bystander” Policy for Employers

The legislative intent of Article 256 is to exclude employer participation in the

determination of the employees’ bargaining representative.

This was reaffirmed in Holy Child Catholic School v. Sto. Tomas (2013), where the
Supreme Court held:

“A certification election is the sole concern of the workers... The

employer has no right to interfere at all therein. Any uncalled-for
 concern may give rise to the suspicion that it is batting for a company
union.”

Thus, the legislative theory is that industrial democracy must be preserved by

keeping the employer as a bystander during representation disputes. This
promotes the independence and voluntariness of union choice.

3. Promotion of Industrial Peace through Collective Bargaining

Article 256 assumes that the most legitimate basis of industrial peace is a freely
chosen representative.

Without a proper certification process, any CBA could be tainted with doubt or
coercion, resulting in labor unrest. Hence, the legislative theory supports:

●​ Procedural safeguards (notice, hearing, inclusion-exclusion proceedings)​

●​ Due process in determining the proper bargaining unit.​

🟩 Supporting Case:
Holy Child Catholic School v. Sto. Tomas — the Court emphasized that
the DOLE Secretary properly ordered two separate certification
elections to reflect community of interest among employees while still
respecting their right to representation.

4. Institutionalization of Employee Democracy

The legislative theory also views the certification election as a democratic

exercise — the “ballot” being the ultimate expression of worker will.

As the Court held in In Re: Globe Machine and Stamping Co. (3 NLRB 294 [1937],
cited in Holy Child case):

“The determination of the appropriate bargaining unit must give due

regard to the will of the employees, for it is their right to
self-organization that is being protected.”

This theory reflects that the State’s role is merely facilitative, not interventionist.
🧩 III. Application in Holy Child Catholic School v. Sto. Tomas (2013)
In this case, the Supreme Court upheld the DOLE Secretary’s decision to allow
the conduct of two separate certification elections (for teaching and non-teaching
personnel).

Key Doctrines Linked to Legislative Theory:

1.​ Bystander Rule:​

The employer (Holy Child Catholic School) had no standing to question the
certification election.​
➤ This supports the legislative theory that Article 256 intends to protect
employee autonomy and exclude employer influence.​

2.​ Community of Interest Doctrine:​

The law allows DOLE to define appropriate bargaining units, ensuring
employees with common interests bargain together.​
➤ This furthers the legislative intent to balance collective strength with
functional unity in the workplace.​

3.​ Respect for Employee Will:​

The Court held that even though teaching and non-teaching staff differ in
work conditions, both had the right to choose representation through
separate certification elections, consistent with industrial democracy.​

🧠 IV. Summary Table – Legislative Theory of Article 256

Aspect Legislative Theory / Intent Supporting Case

Employee To uphold workers’ constitutional Republic v.

Self-Determination right to self-organization Kawashima Textile
Employer To maintain purity of the Holy Child Catholic
Non-Interference certification process and avoid School v. Sto. Tomas
company domination

Industrial Peace To ensure labor stability through UP v. Ferrer-Calleja

democratically chosen
representatives

Procedural To establish clear, due Pagpalain Haulers v.

Fairness process-based mechanisms for Trajano
certification elections

Community of To define appropriate bargaining Dunlop Slazenger v.

Interest units ensuring effective collective DOLE
bargaining

🏛️ V. Conclusion
The legislative theory of Article 256 reflects the State’s commitment to industrial
democracy and labor autonomy. It envisions a labor system where:

●​ Employees freely choose their representatives;​

●​ Employers remain neutral (“bystanders”);​

●​ The State ensures order and fairness but does not dictate outcomes.​

In Holy Child Catholic School v. Sto. Tomas, this theory was reaffirmed — the
Court struck a balance between the community of interest rule and the workers’
freedom to organize, embodying the true spirit of Article 256.
Would you like me to make a mnemonic or acronym to help you easily remember
the five key legislative theories of Article 256 for oral recitation?

You said:

YES AND ALSO INCLUDE THE COMPREHENSIVE CASE DIGEST OF THIS CASE
[Link]

ChatGPT said:

Here you go — first, a mnemonic to remember the key legislative theories of

Article 256, and then a comprehensive case digest of Holy Child Catholic School
v. Sto. Tomas (G.R. No. 179146, July 23, 2013) with explanations and scenario.

🧠 Mnemonic for Legislative Theory of Article 256

Let’s use “C.A.R.E.” to remember four major purposes behind Article 256
(certification election):

Lette Purpose / Theory Explanation

r

C Collective Employees choose their own bargaining agent

autonomy without interference

A Avoid employer The employer is a bystander, preventing

influence company-dominated unions

R Right-protected Ensures procedural fairness (notice, hearing,

process inclusion-exclusion)

E Effective Helps ensure the bargaining unit reflects

representation community or mutuality of interest
So: C.A.R.E. = Choice by employees, Abstain employer, Rules for fairness,
Equitable unit formation.

📚 Case Digest: Holy Child Catholic School v. Sto. Tomas

Title & Citation

Holy Child Catholic School, Petitioner, vs. Patricia Sto. Tomas, in her official
capacity as DOLE Secretary, and Pinag-Isang Tinig at Lakas ng Anakpawis –
HCCS-TELU-PIGLAS, Respondents​
G.R. No. 179146, July 23, 2013 E-Library+[Link]+2

Principle / Doctrine

●​ Inclusion of supervisory or managerial employees in a union’s membership

does not automatically invalidate its legitimacy to file a certification
election.​

●​ The employer is a bystander in certification election processes — it cannot

oppose or block them.​

●​ The proper test for a bargaining unit is the community or mutuality of

interest among employees; when groups (e.g. teaching vs non-teaching)
differ substantially, separate certification elections may be ordered.​

Facts

●​ On May 31, 2002, the labor union HCCS-TELU-PIGLAS filed a petition for
certification election to represent all employees (teaching and
non-teaching) of Holy Child Catholic School (HCCS).​

●​ The union attached its registration documents and certification as a

legitimate labor organization.​
 ●​ HCCS asserted objections, raising that among the employees who signed
the petition:​

1.​ Some had resigned,​

2.​ Some signed twice,​

3.​ The union included a mix of managerial, supervisory, and

rank-and-file personnel (vice-principals, department heads,
coordinators),​

4.​ The union also combined teaching and non-teaching staff, which
HCCS argued had divergent interests.​

●​ The Med-Arbiter denied the petition for certification election, stating the
proposed unit was inappropriate under the mutuality test (teaching and
non-teaching staff differ).​

●​ On appeal, the Secretariat of DOLE (SOLE) reversed, ordering two separate

certification elections — one among teaching personnel, another among
non-teaching personnel.​

●​ The Court of Appeals affirmed the SOLE decision, rejecting HCCS’s claim
that supervisory commingling invalidated the union.​

●​ HCCS elevated the case to the Supreme Court via Rule 45 petition.​

Issues

1.​ Whether the alleged commingling of supervisory/managerial and

rank-and-file employees in the union invalidates its legitimacy to file
Certification Election.​

2.​ Whether the combined membership of teaching and non-teaching

employees in one union invalidates the petition or should cause its
dismissal.​
 3.​ Whether the employer has standing to oppose or interfere with the
certification election (i.e. is the employer a party in interest).​

Ruling / Decision

The Supreme Court denied the petition. It affirmed the CA’s Decision and
Resolution.

●​ The Court held that commingling does not automatically kill the union’s
legitimacy to file a certification election.​

●​ The employer is merely a bystander in certification election proceedings

and cannot collaterally attack or oppose the election.​

●​ Because of differences in nature, interests, and working conditions

between teaching and non-teaching personnel, DOLE correctly ordered two
separate certification elections for each group.​

Ratio / Legal Basis & Analysis

1.​ Commingling not fatal​

○​ The Court noted that Toyota and Dunlop precedents, which held
unions combining supervisory and rank-and-file employees lacked
legitimacy, are no longer strictly controlling under the rules in place
(specifically, under DOLE Department Order No. 9, 1997).​

○​ The Rules no longer require that petitions affirm non-mingling;

rather, questions of membership eligibility are to be resolved later
via inclusion-exclusion proceedings.​

○​ A union’s certificate of registration confers juridical personality;

once registered, its legitimacy cannot be attacked collaterally in a
certification election.​
 ○​ The proper remedy against misrepresentation or fraudulent inclusion
is a petition for cancellation under Article 239 of the Labor Code.​

2.​ Employer’s role = Bystander​

○​ The Court reaffirmed that certification elections are the exclusive

concern of employees.​

○​ Allowing employer interference can lead to suspicion of company

unions and skew fairness.​

○​ HCCS lacks standing to dismiss the union or block the election.​

3.​ Appropriate bargaining unit – mutuality / community of interest​

○​ The Court affirmed that teaching and non-teaching personnel differ

sufficiently in work conditions, compensation, hours, and functions
to justify separate units.​

○​ This aligns with University of the Philippines v. Ferrer-Calleja

precedent.​

○​ Even though they may be in one union, they must be represented in

distinct bargaining units, each with its own certification election.​

Application / Scenario

Scenario:​
A private school (Acme Academy) has a staff of 100: 70 teachers and 30
maintenance/clerical staff. A union is formed claiming to represent both groups,
and includes some coordinators who supervise teachers. The school objects:

●​ It claims commingling of supervisory employees invalidates the union.​

●​ It also argues that teachers and non-teachers should not be in the same
bargaining unit since their interests differ.​
 ●​ The school tries to oppose the certification election.​

Under the Holy Child decision:

●​ The commingling claim does not automatically invalidate the union. Those
supervisory members can be excluded later in inclusion-exclusion.​

●​ The school cannot block the certification election; its role is limited
(bystander).​

●​ DOLE may order separate elections for teachers and non-teachers because
of differing interests.​

Mnemonic to Remember This Case

Use “S.A.F.E.”

●​ S = Supers/commingling not fatal​

●​ A = Automatic bystander role of employer​

●​ F = Finish via inclusion-exclusion, not upfront dismissal​

●​ E = Elections separate for distinct groups (teaching / non-teaching)

______________________________________________________________________
_______

⚖️ DOLE D.O. No. 40-03

Rule II – Registration of Labor Organizations and Workers' Associations

Section 1 – Who May File an Application

📜 Text Summary:​
The following may file for registration with the DOLE (Bureau of Labor Relations
or Regional Office):
1️⃣ Independent Labor Organization (ILO) – a union not affiliated with a federation
or national union.​
2️⃣ Federation or National Union (FNU) – composed of local chapters, unions, or
affiliates.​
3️⃣ Trade Union Center (TUC) – an umbrella organization of federations/national
unions.​
4️⃣ Workers’ Association (WA) – organized for mutual aid and protection but not
necessarily for collective bargaining.

🧠 Mnemonic: “I F.T.W.” – Who can register under Rule II, Sec. 1?

●​ I – Independent Labor Organization​

●​ F – Federation / National Union​

●​ T – Trade Union Center​

●​ W – Workers’ Association​

💬 Think: “I Fight To Win” (I F.T.W.) — a battle cry for labor rights!

Section 2 – Requirements for Registration

📜 Summary (per type):

A. For an Independent Labor Organization (ILO):

1️⃣ Name and principal address of the applicant.​

2️⃣ Names and addresses of officers.​
3️⃣ Minutes of the organizational meeting and list of members who participated.​
4️⃣ Financial report (if already existing for one year).​
5️⃣ Constitution and By-Laws (CBL) signed by members, plus minutes of its
ratification.​
6️⃣ List of employees who are members (at least 20% of employees in the
bargaining unit).

🧠 Mnemonic: “N-M-M-F-C-L” → Now My Members Form Clear Labor!

 ●​ N – Name/address​

●​ M – Members’ list (20%)​

●​ M – Minutes of meeting​

●​ F – Financial report​

●​ C – Constitution & By-laws​

●​ L – List of officers​

B. For a Federation or National Union (FNU):

1️⃣ Names and addresses of officers.​

2️⃣ Constitution and By-Laws, and minutes of adoption and ratification.​
3️⃣ Resolution of affiliation of at least 10 legitimate labor organizations (locals or
chapters).​
4️⃣ Each affiliated local must have at least 10 members.​
5️⃣ Proof of existence of at least 10 affiliates.

🧠 Mnemonic: “O-C-A-A-P” → Our Confederation Affirms Affiliates’ Presence

●​ O – Officers’ list​

●​ C – Constitution & By-laws​

●​ A – Affiliation resolution (10 locals)​

●​ A – At least 10 members per affiliate​

●​ P – Proof of existence​

C. For a Trade Union Center (TUC):

Must submit:​
1️⃣ Names and addresses of officers.​
2️⃣ Constitution and By-Laws.​
3️⃣ Resolution of affiliation of at least two federations/national unions.

🧠 Mnemonic: “O-C-R” → Officers Connect Ranks

D. For a Workers’ Association (WA):

1️⃣ Names and addresses of officers.​

2️⃣ Constitution and By-Laws.​
3️⃣ Minutes of an organizational meeting.​
4️⃣ List of members.

🧠 Mnemonic: “O-C-M-L” → Our Collective Members Lead

📘 Scenario for Easy Understanding
🧩 Scenario 1: Independent Union
At ABC Manufacturing, 100 employees want to form a union. Twenty-five of them
meet, adopt a constitution and by-laws, elect officers, and ratify everything. They

✅
gather documents and register with DOLE.​
Since they meet the 20% membership rule, they qualify as an Independent
Labor Organization (ILO) under Sec. 1–2.

🧩 Scenario 2: Federation
Ten local unions from different companies unite to form FREEDOM Federation.
Each local passes a resolution to affiliate, signs their CBL, and submits the list of

✅
officers.​
This fulfills Rule II Sec. 2(B) requirements for a Federation/National Union.

🧩 Scenario 3: Workers’ Association

Tricycle drivers in Cebu form an association to advocate for better terminal
policies. They don’t bargain for wages, but for mutual protection. They register as
a Workers’ Association — simpler requirements under Sec. 2(D).

⚖️ Legal Purpose / Theory Behind D.O. 40-03 Rule II

To standardize and safeguard the legitimacy of labor organizations by requiring
proper documentation, membership representation, and transparency.​
It ensures that only genuine and democratic unions gain legal personality,
preventing “company-dominated” or “fake” unions from misusing labor rights.

📚 Key Legal Bases

●​ Article 234 to 238, Labor Code (as amended by R.A. 9481) – requirements
and effects of registration.​

●​ Art. 255, Labor Code – right of employees to self-organization.​

●​ Art. 256 – registration and cancellation procedures.​

●​ DOLE D.O. No. 40-03 – Implementing rules for Book V of the Labor Code
(Labor Relations).​
B. DOCTRINE OF NECESSARY IMPLICATION

1.​ PRINCIPLES IN DETERMINING WHO ARE CONFIDENTIAL EMPLOYEES

I.​ SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION V.
LAGUESMA , GR. NO 110399 AUGUST 1997

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

2 CRITERIA

(1) assist or act in a confidential capacity,

(2) to persons who formulate, determine, and effectuate management policies in the field of
labor relations.

NOTE:

The two criteria are cumulative, and both must be met if an employee is to be considered a
confidential employee

-​ RATIONALE BEHIND THIS RULE -

The rationale behind this rule is that employees should not be placed in a
position involving a potential conflict of interests.

IMPORTANT :

An important element of the "confidential employee rule" is the employee's need

to use labor relations information. Thus, in determining the confidentiality of
certain employees, a key question frequently considered is the employee's
necessary access to confidential labor relations information.

______________________________________________________________________________
_______

🏛 San Miguel Corporation Supervisors and Exempt Union and Ernesto L. Ponce v. Hon.
Bienvenido E. Laguesma, Hon. Danilo L. Reynante, and San Miguel Corporation​
G.R. No. 110399, August 15, 1997​
Ponente: Justice Romero

⚖️ PRINCIPLE / DOCTRINE
1.​ Confidential employees are only those who (1) act in a confidential capacity to
persons who formulate, determine, and effectuate management policies in the field
of labor relations. Both conditions must exist — they are cumulative, not separate.​

2.​ Access to business secrets (e.g., product formulas, trade data, or financial reports)
does not automatically make one a “confidential employee.” The confidential
information must relate to labor relations, such as negotiation strategies or
grievance settlements.​

3.​ Supervisory employees who are not managerial or confidential may form their own
bargaining unit under Article 245 [now 255] of the Labor Code.​

4.​ “Community or mutuality of interest” is the key test in determining an appropriate

bargaining unit — not necessarily geographic proximity.​

📖 FACTS
●​ The San Miguel Corporation Supervisors and Exempt Union filed a petition for a
certification election among supervisory and exempt employees of the Magnolia
Poultry Plants in Cabuyao, San Fernando, and Otis.​

●​ The Med-Arbiter initially ordered an election for all three plants as one bargaining
unit.​
 ●​ SMC appealed, claiming:​

1.​ The plants are separate and cannot form a single unit; and​

2.​ Supervisory level 3 and 4 (S3, S4) and “exempt employees” are confidential
employees, hence ineligible to join a union.​

●​ DOLE Undersecretary Laguesma later excluded S3, S4, and exempt employees,
citing Philips Industrial Development v. NLRC, which barred confidential employees
from unionizing.​

●​ The Union petitioned the Supreme Court, arguing that these employees handle
technical, not labor-related, information and should not be considered
“confidential.”​

❓ ISSUES
1.​ Whether S3, S4, and exempt employees are “confidential employees” barred from
joining a union.​

2.​ Whether employees from the three plants (Cabuyao, San Fernando, and Otis) can
validly constitute one bargaining unit.​

🧠 RULING
✅ 1. S3, S4, and Exempt Employees Are Not Confidential Employees.
🧩 (a) The employee acts in a confidential capacity; and​
●​ To be a confidential employee, two (2) requirements must concur:​

🧩 (b) The employee’s superior handles labor relations (e.g., bargaining, discipline,
or grievance handling).​

📌 Mnemonic: “C+L = CE”​

👉 Confidential capacity + Labor relations = Confidential Employee.​
If one is missing — ❌ they’re not “confidential.”
 ●​ Supervisory Levels 3 & 4 only deal with production quality, sanitation, and product
control, not labor negotiations.​

🐔
●​ The “confidential” data they handle (like product standards or chicken processing
methods ) are business-related, not labor relations-related.​

●​ Thus, they cannot be disqualified from forming or joining a union.​

💬 Scenario Example:​
Imagine Maria, an S3 supervisor in SMC’s poultry line, checks chicken quality and
reports to her plant manager. She has no say in who gets hired or fired, and she doesn’t
join management meetings about salary negotiations. Even if she sees production reports
marked “confidential,” they have nothing to do with labor relations — so under this case,
Maria can unionize.

✅ 2. One Bargaining Unit for All Three Plants Is Valid.

●​ The Court ruled that SMC employees in Cabuyao, San Fernando, and Otis share a
“community of interest” — same employer, same division (Magnolia Poultry), same
duties, same pay structure, and same work conditions.​

●​ Physical distance alone does not destroy mutuality of interest.​

●​ Having separate units would weaken bargaining power and fragment the
workforce, contrary to the constitutional policy to strengthen labor unions.​

📌 Mnemonic: “COWS” – Commonality of Work Situation

●​ C – Common employer (SMC)​

●​ O – One division (Magnolia Poultry)​

●​ W – Work similarity (same tasks, same pay)​

●​ S – Shared interest in collective bargaining​

💬 Scenario Example:​
🌳
Even if one plant is in Laguna and another in Manila, workers doing the same tasks under
one company are like branches of one tree distance doesn’t change their shared roots.
They should negotiate as one for fairness and leverage.

⚖️ HELD:
●​ The Order of Undersecretary Laguesma (March 11, 1993) excluding S3, S4, and
exempt employees was SET ASIDE.​

●​ The Med-Arbiter’s December 19, 1990 Order to hold a certification election for
supervisory levels 1–4 and exempt employees of the three plants as one bargaining
unit was REINSTATED.​

📚 KEY LEGAL BASES

●​ Article 245 [now 255], Labor Code – Managerial employees cannot join any union;
supervisory employees may form their own.​

●​ Article 255 [now 267], Labor Code – Right of employees to self-organization.​

●​ Section 3, Article XIII, 1987 Constitution – The State guarantees to all workers the
right to self-organization.​

●​ Philips Industrial Development v. NLRC, G.R. No. 88957 (1991) – Defined the scope
of confidential employees.​

●​ Westinghouse Electric Corp. v. NLRB – Access to business information ≠ labor

relations information.​

🧩 SUMMARY (Memory Aids)

Concept Meaning Mnemonic Example

Confidential Only those handling labor C+L=CE HR Secretary handling

Employee Rule relations secrets are excluded bargaining notes =
from unions Confidential

Community of Workers with similar duties, COWS Poultry plants = one

Interest Rule conditions, and pay form one division, one bargaining
unit unit

Supervisory Supervisors Art. 245 SMC Supervisors Union

Rights (non-managerial) can form (LC)
their own union

🧠 In Simple Terms:
The Supreme Court protected the right to unionize by preventing employers from abusing
the “confidential employee” label.​
Not every “confidential” task makes an employee confidential — only if it relates to labor
relations.​
Also, unity is strength: different branches but one heart — workers with shared duties
belong to one bargaining unit.

______________________________________________________________________________
________

II. SUGBUANON RURAL BANK INC. V LAGUESMA GR NO 116194 FEBRUARY 2

2000

Sugbuanon Rural Bank, Inc. v. Laguesma, et al.​

G.R. No. 116194, February 2, 2000​
Ponente: Justice Quisumbing
PRINCIPLE / DOCTRINE

1.​ Supervisory employees are allowed to form, join, or assist labor organizations of
their own class (Art. 245, Labor Code).​

2.​ Managerial employees, however, cannot join or form unions, because their functions
involve the execution of management policies and decisions.​

3.​ Confidential employees may only be disqualified if they assist or act in a confidential
capacity with respect to persons who handle labor relations matters.​

4.​ Certification election shall automatically be conducted upon filing by a legitimate

labor organization (Art. 257, Labor Code), unless the union’s legitimacy has been
finally cancelled.​

5.​ Separation of unions doctrine: rank-and-file and supervisory employees cannot

belong to the same union, to prevent conflict of interest.​

💡
Mnemonic:​
“MACS” – Managerial, Affiliation, Confidential, Supervisory

●​ M – Managerial = cannot join unions.​

●​ A – Affiliation (Local unions remain separate from national federations).​

●​ C – Confidential = disqualified only if tied to labor relations info.​

●​ S – Supervisory = can form/join their own union.​

FACTS

●​ Petitioner: Sugbuanon Rural Bank, Inc. (SRBI), a banking institution based in

Cebu City.​

●​ Respondent Union: SRBI Association of Professional, Supervisory, Office, and

Technical Employees Union (APSOTEU), affiliated with TUCP.​
🗓 Timeline:
1.​ Oct. 1993 – APSOTEU-TUCP registered with DOLE and filed a petition for
certification election among SRBI’s supervisory employees.​

2.​ SRBI opposed, arguing that the members were managerial or confidential
employees, hence disqualified from unionizing.​

3.​ SRBI also claimed violation of the separation of unions doctrine because APSOTEU
was affiliated with ALU-TUCP, which also represented the rank-and-file.​

4.​ The Med-Arbiter denied SRBI’s motion to dismiss and ordered certification
election.​

5.​ SRBI appealed to the DOLE Undersecretary (Bienvenido Laguesma), who affirmed
the Med-Arbiter’s decision.​

6.​ SRBI filed a petition for certiorari and prohibition before the Supreme Court.​

ISSUES

1.​ Whether the members of APSOTEU-TUCP were managerial or confidential

employees, hence disqualified from joining a union.​

2.​ Whether the Med-Arbiter could order a certification election while an appeal
questioning the union’s legitimacy was still pending.​

RULING / DECISION

✅ RULING: Petition Dismissed.​

The Supreme Court upheld DOLE’s order allowing the certification election.

1️⃣ On Managerial vs. Supervisory Employees

 ●​ The Court ruled that the Cashiers, Accountants, and Acting Chief of the Loans
Department of SRBI were not managerial employees.​

●​ They had no power to hire, fire, discipline, or lay down management policies — only
recommendatory functions, subject to management approval.​

●​ Hence, they were supervisory employees, not managerial.​

Legal Basis:​
Art. 212(m), Labor Code — defines managerial and supervisory employees.

🧠 Mnemonic for Managerial Functions:​

“H-T-S-L-D-A-D” → Hire, Transfer, Suspend, Lay-off, Discharge, Assign, Discipline.​
If an employee cannot do these independently, they are not managerial.

Scenario:​
Ana is a bank cashier who can check deposits and approve withdrawals, but she cannot
hire or fire employees, nor decide company policies. Under the law, Ana is a supervisory,
not managerial, employee — so she can join a union.

2️⃣ On Confidential Employees

●​ Confidential employees are disqualified only if they:​

1.​ Assist or act in a confidential capacity to a person who handles labor

relations; and​

2.​ Have access to labor relations information.​

●​ SRBI failed to prove that its employees had access to labor relations policies (e.g.,
negotiation strategies, strike decisions).​

●​ Hence, they were not confidential employees within the context of labor law.​

Scenario:​
Liza, the bank accountant, sees financial data but never handles labor relations issues. She
can still join a union, since access to financial data ≠ labor relations secrets.
3️⃣ On Certification Election

●​ Under Art. 257, Labor Code, a certification election must automatically proceed
once filed by a legitimate labor organization.​

●​ Pending appeal of union registration does not suspend the election.​

●​ Unless the union’s registration is cancelled by final order, it retains its rights and
privileges, including the right to represent employees.​

Scenario:​
If APSOTEU is already registered with DOLE, it can push through with the certification
election. Even if SRBI questions its legitimacy, the process continues unless DOLE officially
cancels its registration.

4️⃣ On Separation of Unions Doctrine

●​ APSOTEU-TUCP (supervisory union) is separate from ALU-TUCP (rank-and-file

union), even if both are affiliated with TUCP.​

●​ Affiliation does not merge identities; local unions remain autonomous.​

Scenario:​
Think of it like two branches of the same tree — they share roots (TUCP), but each branch
(supervisory vs. rank-and-file union) grows independently.

LEGAL BASES

●​ Article 245, Labor Code: Supervisory employees may form unions; managerial
employees may not.​

●​ Article 212(m), Labor Code: Defines managerial and supervisory employees.​

 ●​ Article 257, Labor Code: Mandates automatic certification election upon filing by a
legitimate union.​

●​ Article 242(b), Labor Code: Right of legitimate labor organizations to be certified as

exclusive bargaining agents.​

●​ Rule II, DOLE Department Order No. 40-03: Outlines rights and legitimacy
requirements of labor organizations.​

●​ Philips Industrial Development Corp. v. NLRC – Managerial/confidential employees

disqualified from unionizing.​

●​ Atlas Lithographic Services, Inc. v. Laguesma – Doctrine of separation of unions.​

●​ Tabacalera Insurance Co. v. NLRC – Definition and classification of managerial

employees.​

CONCLUSION

The Supreme Court emphasized that not all high-ranking or trusted employees are
managerial or confidential.​
Only those directly involved in labor relations or who exercise independent managerial
authority fall under the prohibition.

Therefore, APSOTEU-TUCP, composed of supervisory employees, was entitled to unionize

and request a certification election.

SUMMARY SCENARIO (FOR MEMORY)

👩‍💼 Ana, Carlo, and Liza cashiers and accountants at SRBI formed a union.​
🏦 The bank objected: “You’re managerial!”​
⚖️ DOLE and SC said: “No you can recommend, but not decide. You’re supervisors. You
📜 Their union remained valid, and certification election proceeded.
may unionize.”​

______________________________________________________________________________
________
Title: San Miguel Foods, Incorporated v. San Miguel Corporation Supervisors and Exempt
Union​
G.R. No.: 146206​
Date: August 1, 2011​
Ponente: Justice Diosdado M. Peralta

DOCTRINE / PRINCIPLE:

1.​ Community of Interest Test:​

Employees who share similar working conditions, functions, and benefits—even
across different plants or divisions—may form one bargaining unit if their tasks are
interrelated and they have mutual interests in collective bargaining.​

2.​ Definition of Confidential Employees:​

Confidential employees are those who:​
(1) Assist or act in a confidential capacity to persons who formulate, determine, and
effectuate management policies; and​
(2) The confidential relationship must relate to labor relations (e.g., CBA
negotiations, grievance handling).​
➤ Both elements must concur.​

3.​ Payroll Masters are not confidential employees if their access to data is technical or
administrative and not labor relations-related.​

4.​ Res Judicata in Certification Elections:​

When a certification election issue has already been settled by a final judgment, it
cannot be relitigated in later proceedings.​

5.​ Employer’s Hands-Off Policy:​

Certification elections are the sole concern of employees. Employers have no
standing to challenge or interfere, except when filing a petition for certification
under Article 258, Labor Code.​

FACTS:

●​ Following the Supreme Court’s earlier decision in G.R. No. 110399 (SMC
Supervisors and Exempt Union v. Laguesma, 1997), the Department of Labor and
 Employment (DOLE-NCR) conducted pre-election conferences to hold a
certification election among supervisors and exempt employees of San Miguel
Foods, Inc. (SMFI) — formerly San Miguel Corporation Magnolia Poultry Division.​

●​ A discrepancy arose between the lists of eligible voters submitted by the company
and the union. Despite objections, the Med-Arbiter ordered the election to proceed.​

●​ During the September 30, 1998 election, SMFI filed Omnibus Objections claiming
that certain employees should not vote because they were:​

1.​ Confidential employees;​

2.​ From live chicken operations (not covered by bargaining unit);​

3.​ Performing managerial work;​

4.​ From a different plant; or​

5.​ Members of other unions.​

●​ After resolving the objections, the final vote tally showed 97% YES votes for union
representation.​

●​ The DOLE Undersecretary and later the Court of Appeals (CA) both affirmed the
certification election results, excluding only Human Resource Assistants and
Personnel Assistants as confidential employees.​

●​ SMFI elevated the case to the Supreme Court, arguing that the CA expanded the
scope of the bargaining unit and misclassified the Payroll Master as a
non-confidential employee.​

ISSUES:

1.​ Whether the Court of Appeals expanded the scope of the bargaining unit defined in
G.R. No. 110399.​
 2.​ Whether the Payroll Master should be considered a confidential employee excluded
from the union.​

3.​ Whether the petition was merely a rehash of previously settled issues.​

RULING:

1. NO. The CA did not expand the scope of the bargaining unit; it correctly applied the
“community of interest” rule.​
2. NO. The Payroll Master is not a confidential employee under the law.​
3. YES. The petition merely rehashed settled issues already decided with finality.

RATIO / REASONING:

A. On the Bargaining Unit

●​ The Court reaffirmed its earlier ruling (G.R. No. 110399) that employees of the
Cabuyao, San Fernando, and Otis Plants—both “live” and “dressed” chicken
operations—constitute one bargaining unit.​

●​ Though the divisions have distinct functions, their work is interrelated (production
chain from live chickens to processed products).​

●​ They share similar work conditions, wages, and benefits.​

🧠 Mnemonic for Community of Interest: “FWWMC”

Functions — interrelated duties​
Working conditions — same environment​
Wages — similar compensation​
Mode of compensation — same structure​
Common concerns — shared goals in bargaining

Scenario:​
Imagine Plant A breeds chickens (live ops), and Plant B dresses and packages them
(processing). Though they differ in daily tasks, their operations depend on one
another—both aim to deliver chicken products under one employer. Hence, they have
“community of interest” and may form one union.

B. On Confidential Employees

●​ Legal Basis: Article 255 (formerly 245) of the Labor Code limits union membership
of managerial employees, extended by jurisprudence to confidential employees.​

●​ Test: (1) Acts in a confidential capacity and (2) relation pertains to labor relations.
(San Miguel Corp. Supervisors v. Laguesma, G.R. 110399).​

The Payroll Master only handles salary computation and financial data — not collective
bargaining or grievance matters. Thus, not a confidential employee.

However, Human Resource Assistants and Personnel Assistants were excluded since their
work involves:

●​ Access to personnel records;​

●​ Assistance during CBA talks and grievance meetings;​

●​ Coordination with company lawyers in labor cases.​

Hence, they are privy to labor relations information and barred from joining the union.

C. On Res Judicata and Employer Participation

●​ The case was barred by res judicata, as the issue of who could be part of the
bargaining unit was already settled in G.R. No. 110399.​

●​ Employers cannot interfere in certification elections since this is purely a matter

between workers and the State.​

Legal Basis:
 ●​ Article 258, Labor Code: Employers may only petition for certification when a
request to bargain collectively is made.​

●​ Policy: To prevent company-dominated unions and preserve employees’ freedom of

association.​

Scenario:​
If SMFI questions which employees voted or tries to influence the election, it violates the
“hands-off” rule. Only employees can raise such issues, as certification elections are for
them alone.

HELD / DISPOSITIVE PORTION:

The petition is DENIED.​

The Decision (April 28, 2000) and Resolution (November 28, 2000) of the Court
of Appeals in CA-G.R. SP No. 55510 are AFFIRMED.​
San Miguel Corporation Supervisors and Exempt Union remains the exclusive
bargaining agent for the supervisors and exempt employees of San Miguel
Foods, Inc., Magnolia Poultry Products Plants.

KEY TAKEAWAYS / MEMORY AID:

🧩 “SMC = ONE UNION, MANY PLANTS”

●​ Same employer,​

●​ Mutual interests,​

●​ Community of work → one bargaining unit.​

🧩 “CPR Test for Confidential Employees”

Confidential Capacity​
Pertains to Labor Relations​
Real relationship with management decision-makers

If the employee doesn’t deal with labor relations, they can join the union.
🧩 “HOP OUT” Rule (Who Can’t Join):
HR Assistant​
Operations Personnel handling CBA or grievance data​
Personnel Assistant​
→ Excluded for labor relations confidentiality

SIGNIFICANCE:

This case clarifies that the determination of bargaining units should focus on mutuality of
interest, not geography or job labels. It also narrows the scope of who qualifies as a
confidential employee, ensuring that companies cannot easily label employees as
“confidential” to suppress union rights.

______________________________________________________________________________
________

CONFIDENTIAL EMPLOYEES IN CASE LAW

I.​ ACCOUNTING PERSONNEL, RADIO TELEGRAPH OPERATORS

FACTS:

Golden Farms, Inc. was a corporation engaged in banana production for export. The
National Federation of Labor (NFL) was the duly recognized bargaining agent of the
rank-and-file employees of the company, with a valid Collective Bargaining Agreement
(CBA) in effect.

Later, the same union (NFL) filed a petition for certification election or recognition — this
time, in behalf of employees holding positions such as foremen, cashiers, purchasers,
personnel officers, and other confidential employees.

Golden Farms opposed the petition, asserting that these employees held managerial or
confidential positions and were excluded under the existing CBA.

Despite this, the Med-Arbiter ordered the employer and union to negotiate for a
supplementary CBA or to include the monthly paid rank-and-file employees in the existing
agreement.
Golden Farms appealed to the Director of the Bureau of Labor Relations (Pura
Ferrer-Calleja), who affirmed the Med-Arbiter’s order. The employer then filed a petition
for certiorari before the Supreme Court.

ISSUES:

1.​ Whether the Med-Arbiter had the power to direct the employer to enter into a
supplementary CBA with the union.​

2.​ Whether supervisors, cashiers, foremen, and employees holding confidential or

managerial functions can compel management to enter into a collective bargaining
agreement.​

HELD:

1. NO. The Med-Arbiter exceeded his authority.

A Med-Arbiter’s authority is limited to determining the propriety of conducting a

certification election. He has no power to compel management to negotiate or execute a
collective bargaining agreement.​
This directive violated the existing CBA, which is binding between the parties under the
principle that contracts have the force of law between them (Civil Code, Art. 1159).

2. NO. Managerial and confidential employees are excluded from the right to
unionize.

The Supreme Court ruled that employees holding positions such as supervisors, cashiers,
foremen, accounting staff, and other confidential employees are disqualified from joining a
rank-and-file union or forming a separate bargaining unit.

The Court cited Article 255 [now Article 245] of the Labor Code, which provides that:

“Managerial employees are not eligible to join, assist, or form any labor
organization. Supervisory employees shall not join the labor organization of the
rank-and-file employees but may join, assist or form separate labor
organizations of their own.”
It also reaffirmed the ruling in Bulletin Publishing Co. v. Sanchez (G.R. No. L-74426, 144
SCRA 628), which explained the rationale behind excluding managerial and confidential
employees from union membership.

RATIO DECIDENDI:

A. Managerial Employees​
Under Article 212(k) [now 219(m)] of the Labor Code, a managerial employee is one who:

“is vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or
discipline employees, or to effectively recommend such managerial actions.”

Such employees represent the management’s interest and therefore cannot join any union
because of a clear conflict of interest. Their participation may lead to a company-dominated
union, contrary to the policy of free and independent labor organizations.

B. Confidential Employees​
Confidential employees, such as accounting personnel, radio operators, and personnel officers,
have access to sensitive and confidential information regarding management and labor relations.​
Their inclusion in the union could compromise the employer’s labor relations strategy or give
undue advantage to either party.

​
Thus, they are similarly barred from joining unions, even though not explicitly mentioned in the
law a rule developed by jurisprudence for industrial peace.

C. Existing Collective Bargaining Agreement (CBA)​

The CBA between Golden Farms and the NFL explicitly excluded managerial, supervisory, and
confidential employees from coverage.​
Since this CBA was still in effect, it must be respected as the law between the parties.​
Hence, the Med-Arbiter’s directive to negotiate a supplemental CBA violated this binding
agreement.

DOCTRINE:
 1.​ Managerial and confidential employees are disqualified from joining, assisting, or
forming any labor organization.​
Legal Basis: Article 245 [now 255] and Article 212(k) [now 219(m)] of the Labor
Code.​

2.​ A Med-Arbiter cannot compel an employer to negotiate a new or supplemental

CBA, as this is beyond his quasi-judicial authority under the Labor Code and
DOLE D.O. No. 40-03.​

3.​ The terms of a valid and existing CBA must be respected as the law between the
parties for its duration. (Civil Code, Art. 1159)​

APPLICATION / SCENARIO EXAMPLE (Mnemonic: “MCC–CBA”)

M – Managerial​
Maria, a supervisor who can hire or fire employees, cannot join a union because she
represents management policy.

C – Confidential​
Carlos, a payroll officer who handles employee compensation data, is excluded from union
membership since he has access to confidential labor relations information.

C – Contract binding​
Their company already has a valid CBA with a union of rank-and-file workers. The CBA
explicitly excludes them from coverage.

CBA – Contract as Law​

The Med-Arbiter cannot compel the company to make another CBA covering Maria and
Carlos because the current CBA remains in effect and is binding between the parties.

DISPOSITIVE PORTION:

The Supreme Court declared the directive of the Med-Arbiter and the affirmation by the
BLR Director without force and effect for being in complete disregard of the existing CBA.

KEY TAKEAWAYS / MEMORY AID (Mnemonic: “MAC”)

 ●​ M – Managerial employees cannot unionize (Art. 255, Labor Code).​

●​ A – Arbiter has no authority to compel negotiation or amend CBA.​

●​ C – CBA is binding and must be respected as law between the parties.

________________________________________________________________________
________

🧾 CASE DIGEST
Case Title:​
Philips Industrial Development, Inc. (PIDI) v. National Labor Relations Commission and
Philips Employees Organization (FFW)​
G.R. No. 88957, June 25, 1992

Ponente:​
Justice Hilario G. Davide, Jr.

FACTS:

Philips Industrial Development, Inc. (PIDI) is a domestic corporation engaged in

manufacturing and marketing electronic products. Since 1971, PIDI had entered into six
(6) Collective Bargaining Agreements (CBAs) with the Philips Employees Organization –
Federation of Free Workers (PEO-FFW), the certified bargaining agent of its rank-and-file
employees.

In the first five CBAs, certain employees — sales representatives, service engineers,
confidential employees, and heads of small units — were consistently excluded from the
bargaining unit due to the sensitive and fiduciary nature of their work.

In the sixth CBA (1987–1989), the parties agreed to submit the question of whether service
engineers, sales representatives, and confidential employees should be included or excluded
from the bargaining unit to arbitration.

Since they failed to agree on a voluntary arbitrator, the case was endorsed to the Executive
Labor Arbiter (Case No. NLRC-NCR-00-11-03936-87).

RULINGS OF THE LOWER LABOR TRIBUNALS:

Executive Labor Arbiter (Amansec):

●​ Ordered a referendum to determine whether service engineers and sales

representatives wanted to be part of the bargaining unit.​

●​ Declared that confidential employees (division secretaries, general management

staff, personnel and IR staff, audit and EDP secretaries, etc.) are excluded from the
bargaining unit.​

NLRC:

●​ Reversed the Labor Arbiter’s ruling.​

●​ Held that all workers except managerial employees and security personnel are
qualified to join or be part of the bargaining unit.​

●​ Declared service engineers, sales force, and confidential employees as included

within the rank-and-file bargaining unit.​

PIDI elevated the case to the Supreme Court via a Petition for Certiorari and Prohibition
under Rule 65, alleging grave abuse of discretion on the part of the NLRC.

ISSUES:

1.​ Whether service engineers, sales representatives, and confidential employees of PIDI
may be included in the existing rank-and-file bargaining unit.​

2.​ Whether the NLRC committed grave abuse of discretion by disregarding the Globe
Doctrine and existing CBAs.​

HELD:

✅ YES – Petition Granted.​

The NLRC committed grave abuse of discretion.​
The Executive Labor Arbiter’s decision was reinstated with certain modifications.
RATIO DECIDENDI / DISCUSSION:

🧩 1. On Confidential Employees
Confidential employees (division secretaries, staff of general management, audit, EDP,
personnel, and industrial relations) are excluded from the bargaining unit.

🧩 EXAMPLES AND SCENARIOS

Example 1: Division Secretary

Anna works as a division secretary to the company’s HR Director.​

She types memos about salary adjustments, employee suspensions, and labor negotiation
strategies.

➡️ Since she has access to confidential labor relations data, she cannot join the
rank-and-file union.​
Otherwise, she might unintentionally leak management’s bargaining position to the union.

Example 2: Staff of Audit Department

Ben works as a staff auditor.​

He checks company expenses, payroll, and internal irregularities involving employee
bonuses.

➡️ Since Ben’s work deals with sensitive financial information that could affect labor
negotiations, he is a confidential employee.​
He cannot be part of the bargaining unit, as his duties require trust and discretion.

Example 3: EDP (Electronic Data Processing) Personnel

Carla handles the company’s EDP system, encoding data about salaries and personnel
performance.

➡️ She has access to confidential employee records and compensation details.​

She is excluded from the bargaining unit due to her access to information that could
influence labor disputes.
Example 4: Industrial Relations Staff

David is assigned to the Industrial Relations Office, which coordinates with both
management and unions on CBA matters.

➡️ Because David is directly involved in labor-management coordination, joining the union

would create a clear conflict of interest.​
He must remain outside the bargaining unit.

🧠 Mnemonic for Remembering Excluded Confidential Employees:

“SHAPE”

●​ S – Secretaries to management​

●​ H – HR and Industrial Relations staff​

●​ A – Audit personnel​

●​ P – Payroll and EDP staff​

●​ E – Executive/General management aides​

➡️ All these positions have access to confidential information affecting labor relations and
thus are excluded.

Reason:​
They assist or act in a confidential capacity to persons who exercise managerial functions,
particularly in labor relations. They have access to sensitive information such as personnel
decisions, salary structures, or bargaining strategies.

Allowing them to join a union may result in conflict of interest or company-dominated

unions.

📚 Legal Bases:
 ●​ Article 255 [now 255, renumbered as 245], Labor Code — Managerial employees
cannot form or join labor organizations; supervisory employees can form separate
unions.​

●​ Golden Farms, Inc. v. Ferrer-Calleja (G.R. No. 78755, 1989) – The rationale for the
exclusion of managerial employees also applies to confidential employees.​

●​ Bulletin Publishing Co. v. Sanchez (G.R. No. L-74426, 1986) – Union membership of
managerial/confidential employees risks conflict of interest and company
domination.​

📖 Scenario Example (Mnemonic: “MICA”)​

M – Maria, a secretary to the HR Director, handles employee evaluations.​
I – Information she accesses is confidential about promotions and discipline.​
C – Company’s labor position could be compromised if she joins a union.​
A – As a confidential employee, she is excluded from the bargaining unit.

⚙️ 2. On Service Engineers and Sales Representatives

Service engineers and sales representatives can form or join a union, as they are not
confidential nor managerial employees, but they cannot be forced to be part of the existing
rank-and-file bargaining unit without their consent.

The Labor Arbiter was correct in directing a referendum — allowing them to decide for
themselves whether to join or form a separate union.

This is consistent with the “Globe Doctrine” (from In Re: Globe Machine & Stamping Co., 3
NLRB 294), which upholds the principle of employee self-determination in choosing an
appropriate bargaining unit.

📚 Legal Bases:
●​ Article 3, Labor Code – Guarantees workers’ right to self-organization.​

●​ Article 255, Labor Code – Recognizes the employees’ right to form, join, or assist
labor organizations of their own choosing.​
 ●​ Victoriano v. Elizalde Rope Workers Union (59 SCRA 54) – The right to join a
union also includes the right to abstain from joining any.​

📖 Scenario Example (Mnemonic: “REF-SELF”)

●​ The company’s service engineers (field employees) have different schedules,
commissions, and benefits than regular workers.​

●​ REF – The Labor Arbiter ordered a Referendum to determine their will.​

●​ SELF – The Supreme Court emphasized Self-determination, stating they cannot be

compelled to join a union not representing their interests.​

⚖️ 3. On the NLRC’s Error

The NLRC misapplied the law by:

●​ Using an obsolete provision that still excluded security guards from union
membership, even though E.O. 111 (1986) had already repealed this.​

●​ Misconstruing that all employees except managerial and security personnel may
join the rank-and-file union, disregarding the confidential employee doctrine and
the CBA history between the parties.​

DOCTRINES:

1.​ Confidential employees are excluded from union membership because their duties
give them access to confidential labor relations information.​
→ Golden Farms, Inc. v. Calleja (1989); Bulletin Publishing v. Sanchez (1986)​

2.​ The right to self-organization includes the right to abstain from joining any union.​
→ Victoriano v. Elizalde Rope Workers Union (1974)​

3.​ The “Globe Doctrine” applies — employees must be given the chance to decide by
referendum whether they wish to belong to a certain bargaining unit.​
 → In Re: Globe Machine & Stamping Co. (NLRB, 1937)​

LEGAL BASIS SUMMARY (Mnemonic: “MAC-RIGHT”)

●​ M – Managerial employees (Art. 255, Labor Code) → cannot unionize.​

●​ A – Arbiter may order referendum (Art. 228, Labor Code).​

●​ C – Confidential employees → excluded (Golden Farms doctrine).​

●​ RIGHT – Employees’ right to self-organization includes the right not to join

(Victoriano case).​

DISPOSITIVE PORTION:

✅ Petition Granted.​
The Supreme Court SET ASIDE the NLRC’s Decision (Jan. 16, 1989) and REINSTATED
the Executive Labor Arbiter’s Decision (Mar. 17, 1988), subject to modifications.

Confidential employees are excluded, while service engineers and sales representatives may
decide via referendum whether to join or form a separate union.

KEY TAKEAWAYS (Mnemonic: “CURE”)

●​ C – Confidential employees: excluded due to access to labor-sensitive info.​

●​ U – Union freedom: workers may choose or refuse membership.​

●​ R – Referendum: proper way to determine employee inclusion.​

●​ E – Existing CBA: prior agreements respected; no automatic inclusion.

________________________________________________________________________
________
Philips Industrial Development, Inc. (PIDI) v. National Labor Relations Commission
(NLRC) and Philips Employees Organization (FFW)​
G.R. No. 88957 | June 25, 1992 | Justice Davide, Jr.

FACTS:

●​ Philips Industrial Development, Inc. (PIDI) is a company engaged in the manufacture and
marketing of electronic products.​

●​ Since 1971, it had entered into six (6) Collective Bargaining Agreements (CBAs) with
the Philips Employees Organization (FFW), the certified bargaining agent of
rank-and-file employees.​

●​ In the first five CBAs (1971–1986), confidential employees, sales representatives, and
service engineers were consistently excluded from the bargaining unit.​

●​ In the sixth CBA (1987–1989), both parties agreed to submit the issue of
inclusion/exclusion of these employees for arbitration.​

The union filed a petition before the Bureau of Labor Relations (BLR), which referred the
case to Executive Labor Arbiter (ELA) Arthur Amansec for compulsory arbitration.

The ELA ruled:

●​ To conduct a referendum among service engineers and sales

representatives to determine if they want to join the bargaining unit.​

●​ To exclude division secretaries, staff of general management, and

personnel/industrial relations departments as confidential employees.​

However, upon appeal, the NLRC reversed the ELA’s ruling, holding that:

●​ All employees except managerial and security personnel can join the
bargaining unit, including confidential employees.​

PIDI filed a petition for certiorari and prohibition before the Supreme Court, alleging
grave abuse of discretion by the NLRC.
 ISSUES:

1.​ Whether confidential employees, service engineers, and sales representatives may be
included in the existing rank-and-file bargaining unit.​

2.​ Whether the NLRC committed grave abuse of discretion in reversing the ELA’s
ruling.​

RULING:

✅ Petition GRANTED.​
The Supreme Court set aside the NLRC’s decision and reinstated the ELA’s ruling.

HELD / DOCTRINES:

1. Confidential Employees are EXCLUDED from the Bargaining Unit.

●​ Confidential employees are those who assist or act in a confidential capacity to

persons who exercise managerial functions in labor relations.​

●​ Their inclusion would cause conflict of interest and may compromise management’s
negotiation strategies.​

Legal Basis:

●​ Article 245 (now Article 255), Labor Code — Managerial employees (and by
analogy, confidential employees) are not eligible to join or assist any labor
organization.​

●​ Golden Farms, Inc. v. Ferrer-Calleja (G.R. No. 78755, 1989) – The same rationale
excluding managerial employees from union membership applies to confidential
employees.​
 ●​ Bulletin Publishing Co. v. Sanchez (G.R. No. L-74426, 1986) – Confidential
employees must not join unions due to loyalty conflicts.​

📘 Doctrine Applied:
“The rationale for excluding managerial employees from labor unions applies
equally to confidential employees who assist management in labor relations or
have access to confidential labor data.”

Example Scenario:​
A secretary to the HR director knows the company’s CBA negotiation strategies and
disciplinary plans.​
➡ If she joins the union, she could inadvertently disclose management secrets.​
Hence, she’s a confidential employee, excluded from the bargaining unit.

2. Service Engineers and Sales Representatives have the Right to Self-Organization

but cannot be forced into an Existing Bargaining Unit.

●​ These employees may form or join a union, but they cannot be compelled to be part
of the existing bargaining unit.​

●​ Their interests differ from those of rank-and-file employees (e.g., pay scale, mobility,
commissions).​

Legal Basis:

●​ Article 245, Labor Code (as amended by R.A. 6715):​

​
​
“Supervisory employees shall not be eligible for membership in a labor
organization of rank-and-file employees but may join or form separate
organizations of their own.”​
​

●​ Victoriano v. Elizalde Rope Workers’ Union (G.R. No. L-25246, 1974):​

​
​
The right to join includes the right not to join a union.​
 ​

Practical Scenario:​
Service engineers receive car loans, night shift allowances, and sales commissions —
benefits not shared by factory technicians.​
➡ Their inclusion in the same union violates the principle of mutuality of interest.

3. The Proper Remedy is a Referendum (Globe Doctrine).

●​ Under the Globe Doctrine (In re: Globe Machine and Stamping Co.), employees must
be allowed to determine for themselves through a referendum whether to join or
form a separate bargaining unit.​

●​ The ELA’s order for a referendum was correct and consistent with this principle.​

Scenario Example:​
If service engineers are unsure whether to join the existing union, a referendum allows
them to express their collective will.​
➡ This ensures their freedom of association and avoids forced unionization.

RATIO DECIDENDI:

●​ The NLRC gravely abused its discretion by forcing inclusion of confidential

employees, service engineers, and sales representatives into the existing bargaining
unit.​

●​ Such inclusion violates their constitutional right to self-organization and

compromises confidentiality in management operations.​

KEY LEGAL BASES:

1.​ Article 245 (now 255), Labor Code – Ineligibility of managerial employees (and
confidential employees by analogy).​
 2.​ E.O. No. 111 – Security personnel no longer disqualified from union membership.​

3.​ R.A. 6715 – Amended Article 245; supervisory employees may form separate
unions.​

4.​ Globe Doctrine – Employees’ will determines bargaining unit inclusion.​

SIGNIFICANCE OF THE CASE:

This case established the modern rule on exclusion of confidential employees and the
autonomy of specialized employee groups (like service engineers and sales staff) to form
their own bargaining units, ensuring balance between management trust and employee
rights to self-organization.

SUMMARY IN SIMPLE TERMS (Mnemonic: “CURE”)

●​ C – Confidential employees excluded due to trust issues.​

●​ U – Union membership must respect freedom of association.​

●​ R – Referendum for service engineers & sales reps to decide inclusion.​

●​ E – Existing bargaining unit limited to true rank-and-file workers.

________________________________________________________________________
________

Metrolab Industries, Inc. v. Hon. Ma. Nieves Roldan-Confesor, Secretary of the Department of
Labor and Employment, and Metro Drug Corporation Employees Association–Federation of
Free Workers​
G.R. No. 108855, February 28, 1996​
Ponente: Kapunan, J.

Facts:
●​ Metrolab Industries, Inc. (MII) and Metro Drug Corporation Employees
Association–FFW had a CBA that expired on December 31, 1990.​

●​ Negotiations for a new CBA ended in a deadlock, prompting the Union to file a
notice of strike.​

●​ To prevent escalation, the Secretary of Labor assumed jurisdiction under Article

263(g) of the Labor Code, enjoining any strike, lockout, or acts that could
“exacerbate the dispute.”​

●​ While the dispute was pending, Metrolab laid off 94 rank-and-file employees on
January 27, 1992, citing:​

1.​ Loss of contracts in its Toll and Contract Manufacturing Department, and​

2.​ Automation reducing manpower needs.​

●​ The Union sought a cease and desist order, claiming this violated the assumption
order’s prohibition against acts worsening the dispute.​

●​ Acting Labor Secretary Confesor declared the layoff illegal, ordering reinstatement
with backwages, ruling that it exacerbated the labor dispute and failed to comply
with the 30-day notice requirement under Article 283.​

●​ Metrolab later laid off 73 more employees, which the Secretary again restrained.​

●​ The company then filed a petition for certiorari, arguing grave abuse of discretion
and claiming:​

1.​ The layoff was a legitimate management prerogative.​

2.​ Executive secretaries should be excluded from the bargaining unit as

confidential employees.​

Issues:
 1.​ Whether the Secretary of Labor committed grave abuse of discretion in declaring
the layoff of 94 employees illegal.​

2.​ Whether executive secretaries should be excluded from the bargaining unit of
rank-and-file employees.​

Ruling:

1. NO. The layoff was illegal.

●​ While management prerogative allows a company to lay off employees, this right is
not absolute and is subject to limitations imposed by law, CBA, and principles of
fairness.​

●​ When the Secretary of Labor assumes jurisdiction over a dispute under Art. 263(g),
both employer and union are enjoined from acts that may aggravate the conflict.​

●​ Metrolab’s layoff, done during the pendency of the dispute, violated the assumption
order and delayed CBA resolution, thereby exacerbating the dispute.​

●​ The act itself, not its aftermath, determines exacerbation. Violent reactions are not
necessary to show that the dispute worsened.​

●​ The layoff also failed to comply with the 30-day notice requirement under Article
283 (now Art. 298) of the Labor Code.​

●​ Metrolab’s claim that the layoff was “temporary” was unsupported, as its notice
implied permanent severance, not rotation or reduced hours.​

Hence, the layoff was illegal, and reinstatement with full backwages was proper.

2. YES. Executive secretaries should be excluded from the bargaining unit.

●​ Under Article 245 of the Labor Code, managerial employees cannot join, form, or
assist labor unions.​
 ●​ Jurisprudence extends this ineligibility to confidential employees, i.e., those who
assist or act in a fiduciary capacity to managerial staff and are privy to sensitive
labor relations information.​

●​ Following Philips Industrial Development v. NLRC and Golden Farms v.

Ferrer-Calleja, inclusion of confidential employees in a rank-and-file union risks
divided loyalties and company domination.​

Thus, executive secretaries of Metrolab’s management committee (General Manager,

Quality Assurance Manager, etc.) are confidential employees and must be excluded from
the bargaining unit.

Doctrine:

1.​ Management prerogative is not absolute—it is subject to law, CBA, and fairness,
especially during assumption of jurisdiction by the Secretary of Labor.​

2.​ Under Article 263(g), when the Secretary of Labor assumes jurisdiction over a labor
dispute, both parties are prohibited from acts that may exacerbate the dispute.​

3.​ Confidential employees—those who assist managerial staff or have access to labor
relations information—cannot join rank-and-file unions due to conflict of interest.​

Legal Basis:

●​ Art. 263(g), Labor Code: Assumption of jurisdiction by Secretary of Labor.​

●​ Art. 283 [now Art. 298], Labor Code: Notice requirement in termination due to
retrenchment/redundancy.​

●​ Art. 245 [now Art. 255], Labor Code: Ineligibility of managerial employees to join
unions.​
 Key Takeaways / Mnemonics:

“263G–EXACERBATE, NOT TERMINATE”​

→ Under Article 263(g), once jurisdiction is assumed, no act (like layoffs) should
exacerbate the dispute.

“CONFIDENTIAL = CAN’T UNIONIZE”​

→ Employees assisting managerial staff in labor relations (e.g., executive secretaries)
cannot join rank-and-file unions.

________________________________________________________________________
________

Bank Cashiers - National Association of Trade Unions ( NATU) - Republic Planters

🧠 Mnemonic for easy recall:

“BANKS CAN’T MANAGE”

●​ B – Branch Managers​

●​ A – Assistant Managers​

●​ N – NATU Petition for Certification Election​

●​ K – Key powers (hire, fire, lay down policies) define managerial​

●​ S – Supervisory, not managerial​

●​ C – Confidential employees are excluded​

●​ A – Art. 212(m) Labor Code definition applied​

●​ N – Not all ineligible—only confidential ones​

●​ T – Torres’ ruling modified by SC​

●​ MANAGE – Managers vs. Supervisors clarified​

 🏛 Principles Involved
1.​ Definition under Article 212(m) of the Labor Code (now Article 219[m]):​

○​ Managerial employees are those vested with authority to lay down and
execute management policies and/or to hire, transfer, suspend, lay off, recall,
discharge, assign, or discipline employees.​

○​ Supervisory employees merely recommend such managerial actions,

provided the recommendation requires independent judgment.​

○​ All others are rank-and-file employees.​

2.​ Right to Self-Organization (Article 245 [now Article 255])​

○​ Managerial employees cannot join, assist, or form any labor organization.​

○​ Supervisory and rank-and-file employees may form separate unions.​

○​ By necessary implication, confidential employees are also ineligible to

unionize (as established in Bulletin Publishing Corp. v. Sanchez, Golden
Farms v. Ferrer-Calleja, Philips Industrial Development, Inc. v. NLRC).​

3.​ Doctrine of Necessary Implication​

○​ What is implied in a statute is as much a part as what is expressed. Thus,

even if confidential employees are not explicitly mentioned in Art. 245, they
are deemed covered because their access to sensitive information creates
conflict of interest.​

📜 Facts
●​ The National Association of Trade Unions (NATU) filed a petition for certification
election to represent supervisory employees of Republic Planters Bank (RPB).​
 ●​ The bank opposed, claiming the supposed supervisors were actually
managerial/confidential employees, ineligible to unionize under the Labor Code.​

●​ The Med-Arbiter (Manases Cruz) granted the petition, ordering a certification

election among supervisory employees.​

●​ The Bank appealed to the Secretary of Labor, asserting that Department Managers,
Assistant Managers, Branch Managers, Cashiers, and Controllers were
managerial/confidential employees.​

●​ The Secretary of Labor (Ruben Torres) partially granted the appeal, declaring these
positions managerial and ineligible for union membership.​

●​ NATU moved for reconsideration, which was denied, then filed a petition for
certiorari before the Supreme Court, alleging grave abuse of discretion by the
Secretary.​

⚖️ Issues
1.​ Whether the Department Managers, Assistant Managers, Branch Managers/OICs,
Cashiers, and Controllers are managerial and/or confidential employees under the
Labor Code, thereby ineligible to form or join a union.​

2.​ Whether the Secretary of Labor committed grave abuse of discretion in classifying
the above positions as managerial.​

🧩 Ruling
🔹 1. Classification of Employees
The Supreme Court held that:

●​ Branch Managers, Cashiers, and Controllers are not managerial, but rather
supervisory employees.​
 ●​ However, they are confidential employees and thus still ineligible to unionize.​

●​ Department Managers and Assistant Managers are supervisory employees, not

managerial nor confidential, and may therefore join a union of supervisors.​

🔹 2. Grave Abuse of Discretion by the Secretary of Labor

Yes. The Secretary of Labor erred in classifying the employees as managerial based solely
on their job titles and banking structure rather than the nature of their functions.​
The Supreme Court emphasized that job designation does not determine managerial
status; rather, it is the actual duties performed.

📚 Legal Bases and Reasoning

🧾 A. Article 212(m) of the Labor Code
●​ The positions did not have authority to lay down policies or hire/fire employees.​

●​ Their duties were executional, not policy-making.​

○​ Branch Managers: Implement policies from head office; do not create them.​

○​ Cashiers: Supervise cash division and ensure compliance with existing rules.​

○​ Controllers: Supervise accounting and compliance, not policy creation.​

○​ Department Managers/Assistant Managers: Merely recommend

improvements; they do not issue or enforce new policies.​

Hence, they are supervisory, not managerial.

🧾 B. Confidential Employees
 ●​ Despite being non-managerial, Branch Managers, Cashiers, and Controllers have
access to sensitive financial information, vault combinations, cash codes, and deposit
records.​

●​ Under the Doctrine of Necessary Implication, they are disqualified from unionizing
due to the conflict of interest that may arise in collective bargaining.​

🧩 Legal precedent cited:

●​ Bulletin Publishing Corp. v. Sanchez – managerial employees cannot join unions to
prevent conflict of interest.​

●​ Golden Farms, Inc. v. Ferrer-Calleja and Philips Industrial Development, Inc. v.

NLRC – confidential employees are similarly barred.​

●​ Chua v. Civil Service Commission – doctrine of necessary implication applied.​

🧾 C. Evidence Considered
●​ The bank’s memoranda show that branch officers’ powers were limited and subject
to head office approval, contradicting the claim of managerial authority.​

●​ Instances of hiring/suspension were done “upon instruction from head office,”

showing no independent discretion.​

●​ Duties involved execution, recommendation, and compliance, not policy formation.

Term Meaning

Certification Election A process supervised by the DOLE to determine which labor

union shall represent employees for collective bargaining.
Med-Arbiter A DOLE officer who decides disputes regarding union
registration and certification elections.

Confidential Employee One who handles or has access to sensitive information

affecting labor-management relations (e.g., payroll, financial
records).

Managerial Employee An employee who has the power to lay down and execute
management policies or make key personnel decisions.

Supervisory Employee One who oversees or recommends managerial actions but does
not have the final authority.

Doctrine of Necessary A principle in statutory construction meaning what is implied

Implication in a law is as binding as what is expressly stated.

Category Classification Union Eligibility

Branch Managers / OICs Confidential ❌ Not allowed

Supervisory

Cashiers Confidential ❌ Not allowed

Supervisory

Controllers Confidential ❌ Not allowed

Supervisory
 Department Managers Supervisory ✅ Allowed
Assistant Managers Supervisory ✅ Allowed
💡 Mnemonic for Classification:
“3C-BAD”

●​ 3C = Controllers, Cashiers, and (Branch) Managers → Confidential, not allowed​

●​ B = Bank’s​

●​ A = Assistant Managers​

●​ D = Department Managers → Allowed (supervisory)​

🏁 Final Ruling
The petition was partially granted.​
The Supreme Court modified the Secretary of Labor’s decision:

●​ Only Branch Managers/OICs, Cashiers, and Controllers are ineligible to unionize

because they are confidential employees.​

●​ Department Managers and Assistant Managers are supervisory employees and may
join or form a union.​

⚖️ Concurring and Dissenting Opinion (Padilla, J.)

●​ Concurs: Branch Managers, Cashiers, Controllers are confidential and ineligible.​
 ●​ Dissents: Department Managers and Assistant Managers should also be
disqualified, as they hold confidential and high-ranking posts (often Vice
Presidents).​

●​ Argues it is dangerous for such officers to belong to unions, given their access to
sensitive company information.​

______________________________________________________________________________
________

Additional Exclusions from Coverage :

1.​ Security Guards - DO 150-15 series of 2016 - Revised Guidelines Governing the
Employment and Working conditions of security Guards and other Private
Security Personnel in the Private Security Industry

______________________________________________________________________________
________

🧠 Mnemonic for remembering DO 150-16

“SECURE GUARD VOWS”

●​ S – Security Industry Coverage​

●​ E – Employment Status & Employer-Employee Relationship​

●​ C – Contracting arrangements & Client/Principal involvement​

●​ U – Uniform employment conditions (wages, benefits, shifts)​

●​ R – Regularization & Probationary rules​

●​ E – Employer obligations (equipment, service agreement)​

●​ G – Guarantees of tenure & standards (safety, health, rights)​

●​ UARD – Use “Guard” to remember it’s for guards + other private security
personnel​
 ●​ V – “Vested rights” (security of tenure, statutory benefits)​

●​ OWS – Obligations, Working hours/shifts, Solidary liability​

When you think “SECURE GUARD VOWS”, you can recall the major headings of DO
150-16.

✅ Purpose & Legal Basis

Purpose:​
This Department Order aims to ensure compliance with mandated employment benefits
and working conditions for security guards and other private security personnel in the
private security industry. Digest PH+[Link]+2

Legal Basis:

●​ Enacts guidelines under the authority of Labor Code of the Philippines (formerly
PD 442, as amended).​

●​ Applies to contracting and subcontracting framework (Articles 106-109 of the

Labor Code) whenever a principal farms out security work. RESPICIO & CO.+1​

●​ Also depends on standard labor‐standards laws (e.g., security of tenure,

probationary limits, benefits).​

📋 Key Sections & Their Explanation (with real‐life scenarios)

1. Coverage

What it covers:​
DO 150-16 applies to all private security, detective, investigative agencies or operators,
their principals or clients, and all companies employing security guards and other private
security personnel. Digest PH+1​
Scenario:​
If you own a mall and hire a security agency to post guards, both the security agency and
you (as principal/client) are covered by these guidelines.
2. Definitions of Important Terms

Some key definitions:

●​ Security Service Contractor (SSC) / Private Security Agency (PSA): The company
that recruits, trains, and posts the guards. Labor Law PH+1​

●​ Principal / Client: The business or organization that hires the SSC/PSA. Scribd+1​

●​ Duty Detail Order: The written assignment schedule for a guard. Scribd+1​

●​ Trilateral Relationship: A situation involving three parties: the principal, the

SSC/PSA, and the security personnel. Scribd​

Scenario:​
A security guard is assigned via a Duty Detail Order to patrol a hospital during the night
shift. The hospital is the principal, the security agency is the SSC/PSA, and the guard is the
worker — that’s the trilateral relationship.

3. Employment Status / Employer‐Employee Relationship

Key rules:

●​ The SSC/PSA is the employer of its security guards, even when they are posted at the
premises of a principal. Labor Law PH+1​

●​ Probationary employment must not exceed six (6) months. After that, or in absence
of valid probationary contract, the guard becomes a regular employee. Labor Law
PH+1​

●​ Guards repeatedly hired–fired–rehired for short periods whose aggregate duration

is at least six months shall be considered regular.​

Scenario:​
A guard is hired by Agency A and assigned to a bank. He has a six-month probation. After
six months he’s still working; he is now a regular employee and must be given all rights
that regular employees have.

4. Rights & Working Conditions of Guards

What guards are entitled to:

●​ Safe and healthful working conditions.​

●​ All labor standards: e.g., overtime pay, night shift differential, 13th month pay,
holiday pay, service incentive leave. Labor Law PH​

●​ Minimum wage not less than that prescribed for non-agricultural sector in that
region. Labor Law PH+1​

●​ Transfer of assignment must not reduce wage; if transferred to higher-wage region,

higher wage applies. Labor Law PH​

Scenario:​
A guard in Metro Manila (wage region with higher rate) is transferred to a branch in a
province with lower rate. Under DO 150-16, the guard must keep the higher Metro Manila
rate (most favourable) — the wage cannot be reduced.

5. Contracting / Service Agreements & Solidary Liability

What this means:

●​ When a principal contracts a security agency, the service agreement between them
must stipulate terms like scope of service, equipment, cost break‐down (including
wages). Scribd+1​

●​ Solidary liability means that if SSC/PSA fails to pay wages, the principal/client can
be held jointly liable for those wage obligations. Labor Law PH+1​

Scenario:​
Mall ABC hires Security Agency XYZ to provide 50 guards. If Agency XYZ fails to pay
the guard wages, Mall ABC may also be held liable for payment of those wages because
they contracted the service under DO 150-16.

6. Equipment & Operational Requirements

●​ The service agreement must specify basic equipment: e.g., for every two guards at
least one handgun (if required) and one handheld radio. Scribd​
 ●​ Guards must pass physical, neuro-psychiatric exam and drug test (expenses borne
by guard). Labor Law PH​

Scenario:​
An airport security agency posts guards for a certain zone. The agreement must say how
many radios or firearms (if required) will be provided. The guard must pass required tests
before deployment.

7. Security of Tenure & Termination

Key points:

●​ Guards have security of tenure: They cannot be terminated without just or

authorized cause and due process. Labor Law PH+1​

●​ Being assigned as reliever, week-ender, floating guard, etc., does not waive rights —
employment is still covered by the rule.​

Scenario:​
A guard is rotated between clients every few months, but after the 6-month probation he
becomes regular. Even if duties vary, his employment cannot be terminated without valid
cause and due process.

8. Deductions from Salary

●​ Only certain deductions allowed: SSS, Pag-IBIG, PhilHealth, withholding tax, union
dues (if authorized), agency fees (if within law), or other deductions authorized in
writing by guard and no benefit to employer. Labor Law PH​

●​ If the agency asks for a bond (for firearm or equipment), the bond must not exceed
5% of value of firearm, refundable within 15 calendar days after employment ends
(minus damage cost). Labor Law PH​

Scenario:​
A guard is required to post a bond for a firearm. The bond is P2,000, less than 5% of
firearm value. When the guard resigns, the agency must refund the bond within 15 days
(unless the guard caused damage).

9. Floating Status / Transfer of Assignment

 ●​ Guards may be rotated among posts, but wage rights must be maintained. Transfer
to higher-wage region means higher rate applies; to lower region cannot reduce
wage. Labor Law PH​

●​ The concept of “floating” guards (moving from one client to another) is addressed in
the industry. RESPICIO & CO.+1​

Scenario:​
Security Agency rotates Guard A from Client 1 (Metro Manila) to Client 2 (in same
region). Guard keeps Metro Manila wage rate. Later the guard is moved to Region III
(lower rate); he must keep his Metro Manila rate.

🔍 Important Terms Explained for Non-Lawyers

●​ Regular Employee – Someone who, after the probation period (6 months max here),
is considered fully hired with all rights of employment.​

●​ Probationary Employment – A trial period for the first part of employment (in this
industry max 6 months under DO 150-16).​

●​ Security of Tenure – The right not to be fired without just cause and due process;
protection against arbitrary termination.​

●​ Solidary Liability – Where more than one party (both the agency and the
client/principal) are liable for a worker’s wages etc.​

●​ Principal / Client – The business entity that purchases the security service from an
agency.​

●​ Trilateral Relationship – A three-party relationship: client → security agency →

guard.​

●​ Duty Detail Order – The specific written assignment schedule telling a guard where,
when, and for what duty he is to render service.​

●​ Minimum Wage Region – The wage floor set by law/regulation for workers in a
given geographic region or industry.​
 ●​ Transfer of Assignment – Moving a guard from one post/client/region to
another—important because wage rights follow the guard.

Topic Key Rule Real-Life Application

Employer Security agency (SSC/PSA) Guard answers to agency, not client

is employer

Probation ≤ 6 months After 6 months guard becomes regular

Wage floor At least region’s Guard in Metro Manila: pay Metro rate
non‐agricultural minimum

Transfer Guard keeps most Moving from high-wage to low-wage

favourable wage rate region – wage doesn’t drop

Deductions Only lawful ones allowed Agency cannot deduct “equipment fee”
unless lawful

Termination Requires just cause + due Guard cannot be fired without notice &
process hearing

Contracting Service agreement must Client, agency, and guard all tied in
exist trilateral link

Solidary Client + agency accountable Guard unpaid → client may be held liable
liability if agency fails
Equipment Specified gear in agreement Agency must supply required
radios/firearms if needed

Floating Move across posts but rights Guard rotated to different clients still
guards stay retains rights

🎯 Why This Matters

For someone outside of law—say a security guard, a business client, or even a member of
the public—DO 150-16 matters because:

●​ It protects security guards from being exploited (no wage cut if moved, rights to
regular employment, etc.).​

●​ It holds business clients responsible if agencies don’t pay wages (solidary liability).​

●​ It standardizes the conditions in a high-risk industry (guards face safety, shift, and
equipment issues).​

●​ It promotes fairness and accountability in contracting arrangements.​

📌 Summary in Plain English

If you’re a security guard or work for one:

●​ Your agency is your legal employer—even when you’re posted to a client’s site.​

●​ If you’ve worked more than 6 months (probation is max 6), you’re a regular
employee and have full rights.​

●​ If you’re moved around (floating) or transferred to a different region, your pay

cannot go down.​
 ●​ You have the right to safe working conditions, overtime pay, night shift pay—just
like other workers.​

●​ If your agency fails to pay you, the business that hired the agency can also be held
responsible.​

●​ You can’t be dumped without a reason and hearing just because you’re a guard.​

●​ Any deductions from your pay must be legitimate and informed.​

If you’re a business hiring a security agency:

●​ Make sure the contract (service agreement) with the agency covers all terms (scope,
pay, benefits, equipment).​

●​ Know you may be liable if the agency doesn’t fulfil its wage/benefit obligations.​

●​ Ensure the agency gives the guards proper equipment, passes required exams, and
honours their rights.​

●​ Avoid treating guards as “floating” with lower pay just because they shift
posts—must still respect wage rules.​

📖 Key Legal References

●​ Articles 106-109 of the Labor Code: contracting/subcontracting. RESPICIO &
CO.+1​

●​ Articles 294, 295 (formerly 279, 280): security of tenure for probationary/regular
employment. Labor Law PH​

●​ DOLE Department Order No. 150-16 (2016) – full text. [Link]+1​

🧮 Extra Mnemonic Bits to Remember

 ●​ “6-6 Rule” → Probation ≤ 6 months; if duration aggregates to ≥6 months you’re
regular.​

●​ “Most Favourable Pay Stick” → When transferred, you keep the best wage you had.​

●​ “Two Hats, One Liability” → Agency (hat 1) + client (hat 2) → both may be liable
for wages.​

●​ “Guard’s Gear = Contract Clear” → The service agreement must state what
equipment you’ll get.​

●​ “Floating ≠ Waving Away Rights” → Even if you’re floated from site to site, your
rights stand

______________________________________________________________________________
________

🏛 COMPREHENSIVE NOTES ON EXECUTIVE ORDER NO. 180

Implementing Rules and Regulations (IRR)

Issued: June 1, 1987​

Title: Rules Governing the Exercise of the Right to Organize of Government Employees

📘 I. PURPOSE AND COVERAGE

🔹 Purpose:
EO 180 implements Article XIII, Section 3 of the 1987 Constitution, which guarantees
government employees the right to self-organization — meaning they can form, join, or
assist employees’ organizations to protect their rights and welfare.

🔹 Coverage:
All employees of government, whether national or local, including those in
government-owned or controlled corporations (GOCCs) without original charters.

🧠 Mnemonic: “GOV ALL”

G – Government employees​
O – Owned corporations (without charter)​
V – Various offices (local & national)​
ALL – All levels covered except AFP, PNP, fire, and jail guards (special rules apply)

🚫 II. EXCEPTIONS: WHO CANNOT FORM UNIONS?

⚖️ Section 1, Rule II of IRR
The following are NOT allowed to join or form unions:

1.​ Members of the Armed Forces of the Philippines (AFP)​

2.​ Police officers (PNP)​

3.​ Firefighters​

4.​ Jailguards / Correction officers​

⚔️ WHY?
Because their functions are related to national security and public safety, and union activity
may conflict with discipline, loyalty, and command structure essential to their work.

📘 Legal Basis:
●​ 1987 Constitution, Art. IX-B, Sec. 2(5): Civil Service employees have the right to
self-organization.​

●​ EO 180, Sec. 2: Recognizes the right of all government employees except those in the
military and other uniformed services.​

💡 Real-Life Scenario:
If Police Officer Santos and his colleagues at a police station want to form a “Union of City
Policemen,” they cannot.​
However, they can create a professional association (not a labor union) — for example, an
“Association of Law Enforcement Officers for Community Outreach.”​
Such a group can discuss welfare and benefits but cannot bargain collectively or declare
strikes.

👥 III. TYPES OF EMPLOYEES’ ORGANIZATIONS

EO 180 recognizes two types of public-sector organizations:

Type Description Rights

Supervisory Employees’ Employees who supervise others Can form unions

Organization but are not policy-makers separately from
rank-and-file

Rank-and-File Regular employees without Can form unions or

Employees’ Organization supervisory power federations

🧠 Mnemonic: “S.R.” = Separate Representation

Supervisors and Rank-and-File must form separate organizations — they cannot be in the
same union.

🏢 IV. RIGHTS OF GOVERNMENT EMPLOYEES’ ORGANIZATIONS

Under Rule IV of the IRR:

1.​ To register with the Civil Service Commission (CSC) and the Department of Labor
and Employment (DOLE).​
 2.​ To represent their members in discussions with management.​

3.​ To be consulted on policies affecting their rights and welfare.​

4.​ To receive information on personnel policies, salary standards, and working

conditions.​

🧠 Mnemonic: “R-R-C-I”
R – Register​
R – Represent​
C – Consult​
I – Information access

💡 Example:
A union of teachers in a public high school may meet with the principal to negotiate for
better classroom ventilation or transparent criteria for performance evaluation.​
However, they cannot negotiate wage increases — salaries are determined by law (Salary
Standardization Law).

💬 V. MANAGEMENT PARTICIPATION
Under EO 180, agencies must recognize and respect registered employees’ organizations.​
Management is encouraged to:

●​ Engage in regular consultation​

●​ Allow reasonable use of facilities for union meetings​

●​ Provide access to relevant information​

🧠 Mnemonic: “C-F-I”
C – Consultation​
F – Facilities use​
I – Information sharing

🛑 VI. PROHIBITED ACTS

Government employees and unions CANNOT:

1.​ Go on strike or stop work.​

○​ Public service must be continuous; strikes can disrupt essential government

functions.​

2.​ Use coercion or threats to force membership or participation.​

3.​ Collect illegal fees or donations for union recognition.​

💡 Example:
If a group of BIR employees stages a strike demanding salary increases, this is illegal
because the law prohibits strikes in government service.

⚖️ Legal Basis:
●​ EO 180, Sec. 14​

●​ Civil Service Rules on conduct and discipline​

🏗 VII. COLLECTIVE NEGOTIATION AGREEMENTS (CNAs)

While public employees cannot bargain collectively like in the private sector, they may
enter into a Collective Negotiation Agreement (CNA).
CNA covers:

●​ Non-wage benefits (e.g., working hours, uniforms, health programs)​

●​ Improvement of office facilities​

●​ Incentive systems​

🧠 Mnemonic: “WUH” – What Unions Handle

W – Working conditions​
U – Uniforms & utilities​
H – Health & hygiene benefits

💡 Example:
A union of social workers in DSWD can negotiate for:

●​ Air-conditioned offices​

●​ Flexible working hours for fieldwork​

●​ Access to counseling programs​

But cannot demand a salary increase, as pay rates are set by law.

🧾 VIII. REGISTRATION REQUIREMENTS (CSC and DOLE)

To register, an organization must submit:

1.​ List of officers and members​

2.​ Constitution and by-laws​

 3.​ Minutes of organizational meetings​

4.​ Resolution adopting constitution/by-laws​

Once approved, it receives a Certificate of Registration, granting it legal personality.

🧠 Mnemonic: “L-C-M-R”
L – List of officers​
C – Constitution/by-laws​
M – Minutes of meeting​
R – Resolution adopted

🔔 IX. SETTLEMENT OF DISPUTES

●​ Administrative mechanisms first — through the Grievance Machinery or the Public
Sector Labor-Management Council (PSLMC).​

●​ If unresolved, the Civil Service Commission (CSC) or Office of the President may
step in.​

🧠 Mnemonic: “GPS” for dispute settlement

G – Grievance machinery​
P – PSLMC​
S – Submit to CSC or OP if unresolved

💡 Example:
If public nurses feel that promotions are being delayed unfairly, they should first raise the
issue to their agency grievance committee, not the courts.
🪖 X. SPECIAL NOTE: UNIFORMED PERSONNEL (AFP, PNP, FIRE, JAIL)
EO 180 explicitly excludes:

Group Reason Rights Allowed

AFP (Soldiers) National defense & discipline chain of May form associations, not
command unions

PNP (Police Public safety duties May form associations, not

officers) unions

Firemen (BFP) Emergency response & safety May form associations, not
unions

Jailguards Custody of inmates May form associations, not

(BJMP) unions

💡 Scenario:
Fire Officer Dela Cruz may join the “Firefighters’ Welfare Association” — a group
advocating for safety equipment and health benefits — but cannot form or join a labor
union or go on strike.

🧠 Mnemonic: “AFP-PFJ = NO UNION”

A – Armed Forces​
P – Police​
F – Fire​

➡️
J – Jail​
They may form associations, but no unions and no strikes.
📜 XI. ENFORCEMENT AND SANCTIONS
Violations (e.g., illegal strikes, coercion, or non-registration) may result in:

●​ Disciplinary action under Civil Service Law​

●​ Cancellation of registration​

●​ Administrative or criminal liability, depending on gravity​

✅ XII. KEY TAKEAWAYS

Principle Rule

Government employees Have right to organize under EO

180

AFP, PNP, BFP, BJMP May form associations, not unions

No right to strike Public service continuity is

priority

CNAs allowed Only for non-wage matters

CSC & DOLE registration Needed for recognition

Grievance machinery first Before higher authorities

🧠 FINAL MNEMONIC: “O.S.C.A.R.”
To summarize EO 180:

●​ O – Organize (Right to self-organization)​

●​ S – Separate (Supervisors vs. rank-and-file)​

●​ C – Consult (CNA for non-wage issues)​

●​ A – Associations (for AFP, PNP, Fire, Jail)​

●​ R – Respect (by management)

______________________________________________________________________________
________

CASE EXAMPLE :

COOPERATIVE MEMBERS EMPLOYEES- BENGUET ELECTRIC COOPERATIVE

INC V FERRER CALLEJA GR NO 79025 DEC 1989

Benguet Electric Cooperative, Inc. (BENECO) v. Calleja, et al.

G.R. No. 79025 | December 29, 1989 | Third Division | J. Cortes

🧭 Doctrine / Core Principle

Members of a cooperative who are also employees of that cooperative cannot
form or join a labor union for purposes of collective bargaining.​
The reason: they are co-owners, and “an owner cannot bargain with himself or
his co-owners.”

📜 Legal Basis
 ●​ Article XIII, Section 3, 1987 Constitution – Workers’ right to self-organization​

●​ Articles 255–257, Labor Code (P.D. 442) – Right to self-organization and

certification elections​

●​ Presidential Decree No. 175 – Governs the formation and operation of cooperatives​

●​ Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja (G.R. No. 77951, Sept.
26, 1988) – controlling precedent​

⚙️ Facts
●​ BENECO (Benguet Electric Cooperative) is a non-stock, non-profit cooperative
providing electric services in Baguio and Benguet.​

●​ BWLU-ADLO, a labor union, filed a petition for certification election to represent

rank-and-file employees.​

●​ BENECO objected, claiming:​

○​ Its employees are members and co-owners of the cooperative.​

○​ Thus, they cannot form or join a labor union for collective bargaining.​

●​ BELU, another labor union, opposed and said they were already the recognized
representative.​

🗳️ The Med-Arbiter allowed a certification election, but only among non-member

employees (found to be 37 individuals).​
However, 83 employees voted, including those who were members of the cooperative, and
BELU won.

🧑‍⚖️ Issue
Whether members of a cooperative who are also employees may form or join a
labor union for purposes of collective bargaining with the cooperative.
⚖️ Ruling
✅ NO.​
Members of a cooperative cannot form or join a labor union for collective bargaining
because they are co-owners of the cooperative.

“Certainly, an owner cannot bargain with himself or with his co-owners.”

Therefore:

●​ The certification election was invalid, since ineligible member-employees voted.​

●​ The BLR Director’s certification of BELU as the bargaining agent was annulled.​

●​ The Court ordered a new certification election — only among non-member

employees.​

💡 Explanation in Simple Terms

In cooperatives, every member is also a co-owner.​
When a person is both an employee and co-owner, he cannot bargain against the
cooperative because that would mean negotiating against himself.

Even if these employees do not directly manage the cooperative (e.g., not in the board), they
still share ownership rights — such as voting on cooperative matters and profit-sharing —
which makes them employers in part.

🧠 Mnemonic: “OWNERS CAN’T BARGAIN”

O – Ownership = Co-ownership with employer​
W – Workers = Members of the same cooperative​
N – Negotiation = Impossible with oneself​
E – Employees who are not members → can unionize​
R – Right to self-organization limited by ownership​
S – Separate election for non-member employees
🧩 Reasoning
1.​ Ownership, not management, is the test.​

○​ Even if member-employees do not manage the cooperative, the fact that they
own shares makes them co-owners.​

○​ Hence, the employer-employee relationship is blurred.​

2.​ Dual relationship is incompatible.​

○​ As owners, they are part of the employer.​

○​ As employees, they would be bargaining with themselves.​

3.​ Precedent applied:​

○​ Cooperative Rural Bank of Davao City v. Ferrer-Calleja (1988)​

○​ Batangas Electric Cooperative Labor Union v. Young (1988)​

○​ San Jose City Electric Service Cooperative v. MOLE (1989)​

4.​ Constitutional right to self-organization still exists —​

○​ But not for collective bargaining in cooperatives where employees are also
members.​

○​ They can form associations, but not labor unions.​

🏢 Practical Example
Imagine a cooperative named “Cebu Power Coop.”

●​ Its 200 workers are also cooperative members who pay share capital and receive
patronage refunds.​
 ●​ Because they’re co-owners, they cannot form a union to negotiate with the coop —
that’s like bargaining with themselves.​

However, 20 non-member technicians hired by the cooperative (who are not co-owners) can
form a union because they are purely employees.

⚖️ Effect of the Ruling

Category May Form Reason
Union?

Cooperative Members (also ❌ No Co-owners, can’t bargain with

employees) themselves

Non-Member Employees ✅ Yes Pure employees, not co-owners

Dual capacity (member + ❌ No Ownership overrides employment for

employee) bargaining purposes

📘 Related Cases (Mnemonic: D-B-S)

D – Davao City Cooperative Rural Bank v. Calleja (1988)​
B – Batangas Electric Cooperative v. Young (1988)​
S – San Jose City Electric Cooperative v. MOLE (1989)

👉 All affirm the same doctrine: No collective bargaining for cooperative members.
⚙️ Key Takeaways
Concept Rule Legal Basis

Right to organize (public/private) Constitutional, but may Art. XIII, Sec. 3, 1987
be limited Const.

Cooperative employees (who are Cannot unionize for CBA BENECO v. Calleja;
members) Davao case

Non-member employees Can unionize Labor Code, Art. 255

Certification elections Only among eligible Art. 256, Labor Code

voters

🧠 Reviewer Shortcut: “COOP = NO CBA”

●​ C – Cooperative members = Co-owners​

●​ O – Ownership = Disqualifies from labor union​

●​ O – Only non-members can unionize​

●​ P – Participation in management not required for disqualification​

💬 Quote from the Court

“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.”
🧾 Disposition
✅ Petition GRANTED​
🚫 Certification election of October 1, 1986 SET ASIDE​
📜 Regional Office directed to conduct a new certification election among non-member
employees only

⚖️ Significance in Labor Law

This case clarifies the distinction between cooperatives and corporations in labor relations:

●​ Cooperative members are owners, not mere employees.​

●​ Thus, the traditional employer-employee dynamic required for collective bargaining

does not exist.​

It reinforces the principle of mutuality of interest — you cannot claim to be both employer
and employee in the same entity.

______________________________________________________________________________
________

⚖️ CASE: Benguet Electric Cooperative, Inc. (BENECO) v. Ferrer-Calleja, G.R. No. 79025
(Dec. 29, 1989)

🧩 CENTRAL ISSUE:
Can employees who are also members/co-owners of a cooperative form or join
a labor union for purposes of collective bargaining?

🏛️ I. LEGAL BASES AND EXPLANATIONS

1. Article 256 (Now Article 268) of the Labor Code

“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.”
💡 Explanation:
●​ Certification election determines which union will represent the employees in
collective bargaining.​

●​ Only eligible employees—those who can lawfully form or join a union—can vote.​

🧠 Mnemonic: C.E.L.L.
●​ C — Certification Election​

●​ E — Eligible voters only​

●​ L — Labor union majority wins​

●​ L — Legal recognition follows​

🧍‍♀️ Real-life Example:

If 100 employees work for an electric cooperative, but 80 are also member-owners, only the
remaining 20 non-member employees can vote in the union election. This is because
members are co-owners, not mere employees.

2. Constitutional Right to Self-Organization

Article XIII, Section 3 of the 1987 Constitution:​

“The State shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities…”

💡 Explanation:
●​ The right to self-organization applies to workers, not owners.​

●​ In a cooperative, members are both workers and co-owners—thus, they cannot

bargain with themselves.​

🧠 Mnemonic: S.O.W.
 ●​ S — Self-organization​

●​ O — Owners cannot organize against themselves​

●​ W — Workers’ right depends on their employment status​

🧍‍♂️ Real-life Example:

If a janitor works in a cooperative but is also a paying member-owner, he’s technically both
an employee and owner. Hence, he cannot demand a wage increase from himself and his
co-owners through collective bargaining.

3. Doctrine: "An Owner Cannot Bargain with Himself"

Quoted from Cooperative Rural Bank of Davao City v. Ferrer-Calleja (G.R. No.
77951, Sept. 26, 1988):​
“An employee of a cooperative who is also 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.”

💡 Explanation:
●​ This doctrine emphasizes the dual status problem in cooperatives.​

●​ The ownership element negates the employer-employee dichotomy required for

collective bargaining.​

🧠 Mnemonic: O.W.N.
●​ O — Ownership destroys​

●​ W — Worker status for collective bargaining​

●​ N — No bargaining with oneself​

🧍‍♀️ Real-life Example:

In a cooperative grocery store, the cashier who owns one share cannot unionize against the
board since she’s also a part-owner. However, a security guard hired from outside
(non-member) can form or join a union.

4. Related Cases as Legal Precedents

The Court relied on previous rulings that shaped the doctrine:

Case Citation Ruling Summary

Cooperative Rural Bank of G.R. No. 77951 (Sept. Members of a cooperative cannot
Davao City v. Ferrer-Calleja 26, 1988) join a labor union for collective
bargaining.

Batangas Electric G.R. Nos. 62386, Same doctrine affirmed.

Cooperative Labor Union v. 70880, 74560 (Nov. 9,
Young 1988)

San Jose City Electric G.R. No. 77231 (May Employees who are members
Service Cooperative v. 31, 1989) cannot form a union;
MOLE non-members may.

💡 Explanation:
●​ These cases clarify that only non-member employees may exercise the right to
self-organization within cooperatives.​

●​ Membership = ownership = disqualification from unionizing.​

🧠 Mnemonic: D.B.S. Rule

●​ D — Davao City Case​
 ●​ B — Batangas Electric Case​

●​ S — San Jose City Case​

→ All affirm no union for member-owners.​

🧾 II. APPLICATION TO THE BENECO CASE

📍Facts Recap:
●​ BENECO: A non-profit electric cooperative.​

●​ Two unions: BELU and BWLU-ADLO wanted to represent employees.​

●​ Many employees were members of the cooperative (thus, co-owners).​

●​ Certification election included ineligible member-employees.​

⚖️ Court’s Ruling:
●​ The election was invalid because member-employees (co-owners) voted.​

●​ Only non-member employees could lawfully form/join a union and vote.​

●​ The previous BLR certification was set aside and a new election ordered.​

🧩 III. DOCTRINAL RULE (Key Takeaway)

Members of a cooperative who are also employees are disqualified from joining
or forming a labor union within the same cooperative for purposes of collective
bargaining.

However—

Non-member employees of the cooperative retain their full labor rights under
the Constitution and the Labor Code.
🏛️ IV. LEGAL PHILOSOPHY BEHIND THE RULE
●​ Cooperatives are collective ownership entities, not traditional employer-employee
structures.​

●​ Each member is a co-owner, beneficiary, and participant in profits and losses.​

●​ The State’s policy to promote cooperativism coexists with its duty to protect labor,
but ownership cancels bargaining rights.​

🧩 V. QUICK MEMORY AID SUMMARY

Mnemonic Meaning Reminder

C.E.L.L. Certification Election, Eligible voters, Labor Only eligible employees

union majority, Legal recognition may vote

S.O.W. Self-organization, Owners excluded, Workers Right limited by

protected ownership

O.W.N. Ownership, Worker status lost, No bargaining Ownership negates

with self unionization

D.B.S. Davao, Batangas, San Jose All affirm the same

Rule doctrine

💡 PRACTICAL IMPLICATIONS:
 ●​ For Cooperatives: Must clearly define who are “members” vs. “employees.”​

●​ For DOLE: Certification elections must exclude member-employees.​

●​ For Workers: Joining a cooperative as a member means giving up the right to

unionize within it.​

●​ For Law Students: The case demonstrates how ownership structure affects labor
rights.

______________________________________________________________________________
_______

Employees of International Organizations - International Catholic Immigration

Commission vs. Calleja Gr no 85750 Sept. 28 1990

🏛️ CASE DIGEST
Case Title:​
International Catholic Migration Commission (ICMC) v. Calleja and​
Kapisanan ng Manggagawa sa IRRI v. Secretary of Labor and Employment​
G.R. Nos. 85750 & 89331 | September 28, 1990 | Supreme Court, Second Division​
Ponente: Justice Ameurfina Melencio-Herrera

💡 DOCTRINE / PRINCIPLE
Diplomatic Immunity of International Organizations – International
organizations such as the International Catholic Migration Commission
(ICMC) and the International Rice Research Institute (IRRI) enjoy immunity
from legal processes, including the application of Philippine labor laws, unless
such immunity is expressly waived. This immunity stems from international
agreements, domestic laws, and recognition by the Department of Foreign
Affairs (DFA), whose determination is a political question conclusive upon the
courts.

👉
Mnemonic:​
"IMMUNE"
 ●​ I – International character recognized by DFA​

●​ M – Memorandum of Agreement with Government​

●​ M – Mandated immunity from “legal process”​

●​ U – Under UN Conventions ratified by PH​

●​ N – Non-waiver means no jurisdiction​

●​ E – Executive determination is conclusive​

📘 FACTS
🕊️ A. G.R. No. 85750 – ICMC Case
●​ Background:​
After the Vietnam War, thousands of refugees fled to Southeast Asia. To process
them for resettlement, the Philippine Government and the UN High Commissioner
for Refugees (UNHCR) established a refugee processing center in Bataan.​
ICMC, a non-profit humanitarian organization registered in New York at the
request of the Holy See, was accredited by the Philippine government to operate in
the center.​

●​ Event:​
The labor union Trade Unions of the Philippines and Allied Services (TUPAS) filed
a petition for certification election among ICMC employees.​
ICMC opposed, claiming diplomatic immunity as an international organization.​

●​ Labor Bureau’s Action:​

The Med-Arbiter dismissed the petition for lack of jurisdiction.​
On appeal, BLR Director Pura Calleja reversed and ordered the certification
election.​
While the case was pending, the Department of Foreign Affairs (DFA) granted
ICMC the status of a specialized agency with diplomatic privileges and immunities
(under a Memorandum of Agreement dated July 15, 1988).​
 ●​ ICMC’s move:​
Filed a Petition for Certiorari with the Supreme Court, claiming that the BLR’s
order violated its diplomatic immunity.​

🌾 B. G.R. No. 89331 – IRRI Case

●​ Background:​
The International Rice Research Institute (IRRI) was created by a 1959
Memorandum of Understanding between the Philippine Government and the Ford
and Rockefeller Foundations.​
It was established as an autonomous, non-profit, tax-free, non-stock organization to
conduct scientific research on rice.​

●​ Legal Basis:​
By Presidential Decree No. 1620 (1979), IRRI was granted status, privileges, and
immunities of an international organization, including immunity from any penal,
civil, or administrative proceedings, unless expressly waived.​

●​ Event:​
The local union Kapisanan ng Manggagawa sa IRRI (OLALIA) filed a petition for
certification election before the DOLE.​
IRRI opposed it, invoking its immunity under P.D. No. 1620.​
The Med-Arbiter dismissed the petition; the BLR Director reversed and ordered
the election.​
Upon appeal, the Secretary of Labor reinstated the Med-Arbiter’s decision,
dismissing the petition due to IRRI’s immunity.​

●​ Union’s move:​
The Kapisanan filed a Petition for Certiorari with the Supreme Court, claiming
grave abuse of discretion by the Secretary of Labor and arguing that P.D. 1620
violated workers’ constitutional rights to self-organization.​

⚖️ ISSUES
 1.​ Whether ICMC and IRRI are immune from the application of Philippine labor laws
(particularly certification elections).​

2.​ Whether the Secretary of Labor committed grave abuse of discretion in dismissing
the IRRI petition for certification election.​

3.​ (Procedural) – Whether the BLR Director’s order had become final and
unappealable before the Secretary acted on it.​

🧭 SUPREME COURT RULING

🥇 On ICMC (G.R. No. 85750)
HELD: ✅ ICMC enjoys diplomatic immunity.

●​ The DFA recognized ICMC as a specialized agency with corresponding privileges

and immunities under the Convention on the Privileges and Immunities of
Specialized Agencies (UN, 1947).​

●​ Under Art. III, Sec. 4 of said Convention, specialized agencies enjoy immunity from
every form of legal process unless expressly waived.​

●​ The DFA’s determination of ICMC’s immunity is a political question — conclusive

upon the courts.​

●​ A certification election, though not adversarial per se, may trigger legal processes
(like bargaining and strikes), hence within the scope of immunity.​

🪙 Effect:​
The BLR’s order for certification election was set aside, and the Temporary Restraining
Order (TRO) was made permanent.

🥈 On IRRI (G.R. No. 89331)

HELD: ❌ The Secretary of Labor committed no grave abuse of discretion.
 ●​ IRRI’s immunity is expressly granted under P.D. No. 1620, Art. 3:​
​
​
“The Institute shall enjoy immunity from any penal, civil, and administrative
proceedings except insofar as such immunity has been expressly waived.”​
​

●​ This includes labor proceedings like certification elections.​

●​ The DFA had confirmed IRRI’s immunity.​

●​ Courts cannot override DFA’s recognition without breaching the separation of

powers and international comity.​

●​ The workers’ right to self-organization is not absolutely taken away — they can
organize internally (e.g., Council of IRRI Employees and Management), and
disputes may be settled internally or through international arbitration mechanisms
(per Sec. 31 of the UN Convention).​

●​ On procedure, the appeal to the Secretary was proper under R.A. No. 6715, effective
March 21, 1989, allowing direct appeals from Med-Arbiters to the Secretary in
certification election cases.​

🪙 Effect:​
The Petition was dismissed, affirming IRRI’s diplomatic immunity.

⚖️ LEGAL BASES
🧾 Constitutional Provisions
●​ Art. II, Sec. 2 – The Philippines adopts generally accepted principles of
international law as part of the law of the land.​

●​ Art. II, Sec. 18 – The State affirms labor as a primary social economic force.​

●​ Art. III, Sec. 8 – Right of workers to self-organization.​

 ●​ Art. XIII, Sec. 3 – The State shall afford full protection to labor and guarantee
collective bargaining rights.​

🏛️ Statutory Provisions
●​ P.D. No. 1620 – Granting IRRI the status, privileges, and immunities of an
international organization.​

●​ UN Convention on Privileges and Immunities of Specialized Agencies (1947) – Art.

III, Secs. 4 & 5 (immunity from legal process).​

●​ Labor Code, Arts. 243 & 246 – Rights of employees to self-organization.​

⚖️ Jurisprudential Principle
●​ Recognition of immunity by DFA is a political determination binding on courts (U.S.
v. Guinto, International Catholic Migration Commission v. NLRC [1989]).​

●​ Waiver of immunity must be express, not implied.​

📚 UNFAMILIAR TERMS
Term Meaning

Certification Election A DOLE-supervised election to determine the employees’

exclusive bargaining representative.

Med-Arbiter A DOLE official authorized to hear and decide certification

and inter/intra-union disputes.
 BLR (Bureau of Labor An agency under DOLE responsible for labor relations, union
Relations) registration, and collective bargaining oversight.

Diplomatic Immunity Legal immunity given to international organizations and their

agents to protect them from legal action in the host state.

Specialized Agency A body linked to the UN with specific technical or

humanitarian functions (e.g., WHO, ILO, IRRI, ICMC).

Political Question An issue constitutionally committed to another branch (here,

DFA’s determination of immunity).

Waiver of Immunity The express renunciation of immunity privileges by the

international organization.

🧠 MEMORY AID MNEMONIC (For Entire Case)

"I-CARE"

●​ I – International Organization Status (recognized by DFA)​

●​ C – Convention on Privileges and Immunities (UN 1947)​

●​ A – Article III, Sec. 4: Immunity from legal process​

●​ R – Recognition by DFA = Political Question​

●​ E – Election (certification) not allowed under immunity​

 Case Party Ruling Legal Basis

G.R. No. ICMC Petition GRANTED – BLR order UN Convention, DFA

85750 SET ASIDE; TRO MADE Recognition, 1987 Constitution
PERMANENT Art. II Sec. 2

G.R. No. IRRI Petition DISMISSED – No grave P.D. 1620, R.A. 6715, DFA
89331 abuse by Secretary Recognition

______________________________________________________________________________
_______

Employees covered by the Union Security Clause

⚖️ CASE DIGEST
SLORD Development Corporation v. Noya

G.R. No. 232687 | February 4, 2019 | Perlas-Bernabe, J.

🧾 FACTS
●​ Respondent: Benerando Noya, a welder at Slord Development Corporation, covered
by a Collective Bargaining Agreement (CBA) between the company and
NLM-Katipunan, the certified bargaining agent.​

●​ CBA Provision: Included a Union Security Clause (Closed Shop) that required all
employees to remain members in good standing of NLM-Katipunan as a condition
for continued employment.​

Under the CBA, an employee could be dismissed for:

●​ Non-payment of union dues,​

 ●​ Joining or organizing another union,​

●​ Violation of union rules, etc.​

●​ Incident: In December 2013, Noya allegedly solicited signatures from coworkers to

form a new union. He later registered a rival union, Bantay Manggagawa sa
SLORD Development Corporation (BMSDC), on February 20, 2014 — outside the
60-day freedom period preceding CBA expiration (April 14, 2014).​

●​ Action by NLM-Katipunan: The union expelled Noya for disloyalty and demanded
his dismissal from the company pursuant to the closed shop clause.​

●​ Employer’s Action: The company terminated Noya’s employment on March 19,

2014 after showing him the union’s expulsion notice.​

●​ Noya’s Claim: He filed a complaint for illegal dismissal, arguing that:​

○​ He validly organized a new union during the “freedom period.”​

○​ He was not afforded due process.​

○​ His act did not amount to disloyalty.​

⚖️ RULINGS BELOW
1.​ Labor Arbiter (LA):​

○​ Dismissal valid under the closed shop clause.​

○​ No unfair labor practice.​

2.​ NLRC:​

○​ Affirmed LA, but found procedural due process lacking.​

○​ Awarded ₱10,000 nominal damages.​

 3.​ Court of Appeals (CA):​

○​ Reversed NLRC — declared dismissal illegal.​

○​ Ruled that soliciting signatures was not disloyalty; reinstated Noya with
backwages.​

4.​ Supreme Court (SC):​

○​ Reversed the CA.​

○​ Upheld dismissal under the union security clause.​

○​ Increased nominal damages to ₱30,000 for lack of procedural due process.​

⚖️ ISSUE
Whether Noya was illegally dismissed despite being expelled from the union under a valid
closed shop clause.

💡 HELD
➡️ NO. The dismissal was valid under the CBA’s closed shop provision.​
➡️ However, procedural due process was violated, so the company must pay ₱30,000
nominal damages.

🧠 RATIONALE
1️⃣ Union Security Clause as a Valid Ground for Dismissal

Although not expressly stated in the Labor Code, violation of a union security clause is
recognized as a just cause for termination.

Under Article 259(e) (formerly Art. 248[e]) of the Labor Code:

 “Nothing in this Code shall stop the parties from requiring membership in a
recognized collective bargaining agent as a condition for employment…”

Thus, a union security clause (closed shop, union shop, or maintenance of membership) is a
lawful mechanism to:

●​ Strengthen the union,​

●​ Prevent “free riders,” and​

●​ Promote industrial peace.​

2️⃣ Requisites for a Valid Dismissal under a Union Security Clause:

The Court reaffirmed the three requisites (from earlier jurisprudence such as PICOP
Resources, Inc. v. Tañeca):

1.​ There is a valid union security clause in the CBA;​

2.​ The union requests in writing the enforcement of that clause; and​

3.​ There is sufficient evidence that the employee violated the clause.​

✅ All requisites were met in this case:

●​ The CBA contained a closed shop clause;​

●​ The union demanded Noya’s dismissal in writing;​

●​ The union presented evidence of disloyalty — multiple sworn statements from

employees and officers confirming that Noya solicited support and actually formed
a rival union outside the freedom period.​

3️⃣ Act of Disloyalty

Forming a rival union outside the 60-day freedom period is an act of disloyalty.
The Court cited Tanduay Distillery Labor Union v. NLRC, where it held:

Organizing a rival union outside the freedom period, without first resigning
from the current union, constitutes disloyalty and is a valid ground for
expulsion.

By organizing BMSDC while still a member of NLM-Katipunan and before the freedom
period, Noya violated the union’s constitution and the CBA.

4️⃣ Procedural Due Process Requirement

Even if dismissal is substantively valid, procedural due process must be observed:

●​ Two written notices must be given:​

1.​ Notice of charge (specific acts complained of);​

2.​ Notice of termination (final decision).​

●​ The employee must be given a chance to explain or be heard.​

👉 In this case, SLORD failed to give written notices and did not conduct a formal hearing.
Therefore, the dismissal was valid in substance but defective in form, entitling Noya to
₱30,000 nominal damages.

📚 DOCTRINE
“Violation of a valid union security clause constitutes a just cause for
termination, provided that (1) the clause applies, (2) the union requests
enforcement, and (3) there is sufficient evidence supporting the employee’s
expulsion. However, the employer must still comply with procedural due
process.”

💬 REAL-LIFE ANALOGY
Imagine you work at a factory that has a CBA requiring all employees to remain members
of the union “Solidarity Workers.”

If you secretly organize a new union called “Workers for Change” while still a member of
“Solidarity Workers” and outside the freedom period (the 60 days before CBA expiration),
the original union can expel you for disloyalty and ask your employer to terminate you
under the closed shop clause.

However, before dismissing you, your employer must give you notice and a chance to
explain.​
If the employer fires you without this process, the dismissal is valid, but you are entitled to
₱30,000 nominal damages for the violation of your right to due process.

🧾 Case Digest: Inguillo v. First Philippine Scales, Inc.

G.R. No. 165407 | June 5, 2009 | Carpio Morales, J.

Facts:

Spouses Romeo and Susan Inguillo were long-time employees of First Philippine Scales,
Inc. (FPSI) and active members of its employees’ union. After a collective bargaining
agreement (CBA) was executed, a Union Security Clause (USC) was included, which
required that all employees must maintain union membership as a condition for continued
employment.

Later, the spouses resigned from the union during a period of internal conflict. The union
president requested their termination based on the union security clause, and FPSI
complied, dismissing both employees from service.

The Inguillos filed a complaint for illegal dismissal, claiming they were terminated without
due process and without just cause.

Issues:

1.​ Was the dismissal of the Inguillos valid under the Union Security Clause of the
CBA?​
 2.​ Were the Inguillos entitled to nominal damages?​

Ruling:

1. The dismissal was valid.

The Supreme Court held that a union security clause is a valid provision in a collective
bargaining agreement. It authorizes the employer, upon written request of the union, to
dismiss employees who resign or are expelled from union membership, provided that:

●​ The union request is made in good faith,​

●​ The union member’s expulsion is valid and based on reasonable ground, and​

●​ The employee is afforded due process prior to dismissal.​

In this case, the Inguillos voluntarily resigned from the union in violation of the union
security clause. Their separation was therefore in accordance with the CBA, and FPSI
acted within its rights when it enforced the clause.

However, the Court emphasized that while FPSI could validly dismiss the Inguillos, it failed
to observe procedural due process—specifically, the twin notice requirement (notice of the
charge and notice of termination).

2. The Inguillos were awarded ₱30,000 nominal damages each.

Although the termination was substantively valid, the lack of procedural due process
warranted the payment of nominal damages in accordance with Agabon v. NLRC (G.R. No.
158693, November 17, 2004).

The Court increased the award from ₱10,000 (as given by the CA) to ₱30,000 each, to
vindicate their right to due process.

Doctrine:
 ●​ Union Security Clause: A lawful stipulation in a CBA that may require union
membership as a condition for employment. Its enforcement is valid if:​
(1) the clause is applicable,​
(2) the union request for dismissal is made in good faith, and​
(3) due process is observed.​

●​ Due Process in Dismissal: Even if the dismissal is substantively valid,

non-compliance with procedural due process (failure to give notices) entitles the
employee to nominal damages.​

Legal Basis:

●​ Article 259(e) [formerly Art. 248(e)], Labor Code – It is not an unfair labor practice
for an employer to dismiss an employee upon the union’s written request under a
valid union security clause.​

●​ Agabon v. NLRC (2004) – Established the rule that violation of procedural due
process in valid dismissals warrants nominal damages of ₱30,000.​

Application to Real-Life Scenario:

Imagine a private manufacturing firm where all regular employees are union members
under a CBA. An employee, frustrated with internal politics, resigns from the union but
continues reporting to work. The union then requests management to terminate the
employee based on the Union Security Clause.

If the employer dismisses the employee after verifying the union’s good faith and validity of
the resignation, the dismissal is valid. However, if the employer fails to notify the employee
properly (no written notice or hearing), the dismissal remains legal, but the company
becomes liable for ₱30,000 nominal damages for procedural lapses—exactly as in Inguillo
v. FPSI.

Disposition:
 ●​ Dismissal of the Inguillos: Valid​

●​ FPSI liable for: ₱30,000 nominal damages each

______________________________________________________________________________
________

📚 CASE DIGEST
PICOP Resources, Inc. (PRI) v. Anacleto L. Tañeca et al.

G.R. No. 160828, August 9, 2010​

Ponente: Justice Diosdado M. Peralta

🔹 PRINCIPLE / DOCTRINE
Signing a petition for certification election within the 60-day freedom period
before CBA expiration is not an act of disloyalty.​
Such act is an exercise of the constitutional right to self-organization, not a
violation of a union security clause.

The representational provisions of a CBA (like a union security clause) expire with the
CBA itself, while its economic provisions (like wages and benefits) continue during the
status quo period under Article 253 [now 265] of the Labor Code.

Dismissal of employees on the ground of disloyalty after CBA expiration but within the
freedom period has no legal basis.

🔹 FACTS (Summarized and Explained)

1.​ Parties:​

○​ Petitioner: PICOP Resources, Inc. (PRI) — an employer corporation in

Mindanao.​
 ○​ Respondents: Anacleto Tañeca and several employees — regular rank-and-file
employees.​

○​ Union: Nagkahiusang Mamumuo sa PICOP Resources, Inc. – Southern

Philippines Federation of Labor (NAMAPRI-SPFL) — the certified
bargaining agent.​

2.​ CBA and Union Security Clause:​

○​ A Collective Bargaining Agreement (CBA) between PRI and

NAMAPRI-SPFL was effective from May 22, 1995 to May 22, 2000.​

○​ The CBA had a Union Security Clause — a stipulation requiring employees

to maintain union membership in good standing as a condition for continued
employment.​

3.​ 🔹 Unfamiliar term:​

Union Security Clause – a provision in a CBA that allows the dismissal of an
employee if they lose their good standing with the union (e.g., resign, join another
union, or fail to pay dues).​
Types include closed shop, union shop, and maintenance of membership.​

4.​ Events before CBA expiration:​

○​ Before the CBA expired, the Federation of Free Workers (FFW) — a rival
union — filed a petition for certification election to challenge NAMAPRI’s
representation.​

○​ Some PICOP employees signed an authorization letter supporting the

petition for certification election.​

5.​ 🔹 Unfamiliar term:​

Certification Election – a process supervised by the DOLE where employees vote to
choose which union shall be their exclusive bargaining agent.​
Freedom Period – the 60-day window before the CBA expires when employees are
free to change or disaffiliate from their union (Art. 256, Labor Code).​

6.​ Union and Employer Action:​

 ○​ NAMAPRI treated the act of signing the petition as disloyalty and requested
PRI to terminate the employees under the CBA’s union security clause.​

○​ PRI complied and dismissed 31 employees for “acts of disloyalty.”​

7.​ Complaint:​

○​ The dismissed employees filed a complaint for illegal dismissal and unfair
labor practice, arguing:​

■​ They did not resign from NAMAPRI;​

■​ They did not join FFW;​

■​ Signing a petition during the freedom period was a legal exercise of

their rights, not disloyalty.​

8.​ Procedural History:​

○​ Labor Arbiter: Ruled in favor of the employees; ordered reinstatement with

backwages.​

○​ NLRC: Reversed, siding with the company.​

○​ Court of Appeals: Reversed NLRC, reinstated the Labor Arbiter’s decision.​

○​ Supreme Court: Affirmed the CA — dismissal was illegal.​

🔹 ISSUE
1.​ Whether the employees’ act of signing an authorization for a petition for
certification election constituted “disloyalty” justifying dismissal under the union
security clause.​

2.​ Whether the union security clause continued to be enforceable after the expiration
of the CBA.​
🔹 SUPREME COURT RULING
✅ 1. No disloyalty; dismissal illegal.
●​ The Supreme Court held that signing a petition for certification election during the
freedom period is not an act of disloyalty, but a valid exercise of the right to
self-organization.​

●​ The Union Security Clause cannot be invoked to punish employees for exercising
this right.​

●​ Legal Basis:​

○​ Article 256 (now 268), Labor Code – recognizes the freedom period to allow
workers to choose their bargaining agent.​

○​ Article 3 & 13, 1987 Constitution – guarantee workers’ right to

self-organization and to form unions of their choice.​

🔹 Explanation:​
The Court emphasized that “disloyalty” under a union security clause must involve clear
and willful acts of betraying the union, such as joining a rival union outside the freedom
period or committing acts to destroy the existing union.​
Here, the employees merely supported a democratic process permitted by law.

✅ 2. CBA’s union security clause not enforceable after CBA expiration.

●​ The Union Security Clause is part of the representational aspect of the CBA — it
governs who represents employees.​

●​ Under Article 253 (now 265) of the Labor Code, economic provisions of an expired
CBA remain effective until a new one is signed, but representational provisions (like
union security clauses) do not.​
 ●​ Therefore, once the CBA expired and the freedom period began, the union security
clause ceased to have binding effect.​

🔹 Unfamiliar term:​
Representational Aspect – provisions dealing with union representation and membership
(who the bargaining agent is, union rights).​
Economic Aspect – provisions about wages, benefits, hours of work, and other economic
conditions.

✅ 3. Application of the Three Requisites for a Valid Enforcement of a Union

Security Clause

The Court reiterated the three requisites (from Liberty Cotton Mills v. NLRC, G.R. No.
72227, 1988):

1.​ Union security clause exists in the CBA.​

2.​ The union requests enforcement (demand for dismissal).​

3.​ There is sufficient evidence to justify the expulsion.​

📌 In this case:
●​ Requisites (1) and (2) were present,​

●​ But (3) — substantial evidence — was absent.​

There was no proof of disloyalty, only signatures on a lawful petition.​

🔹 CONCLUSION / HOLDING
The Supreme Court affirmed the CA and declared the dismissal illegal.​
Employees must be reinstated with full backwages and benefits.​
The petition of the employer (PICOP) was DENIED.
🔹 LEGAL BASES CITED & APPLICATION
Legal Basis Application in the Case at Bar

Article 253 [now 265], Labor Only economic provisions of the CBA continue after
Code expiration; union security clause, being
representational, does not.

Article 256 [now 268], Labor Provides the 60-day “freedom period” for filing
Code certification election petitions.

Article 3, 13, Constitution Employees’ right to self-organization is protected;

cannot be penalized for exercising it.

Liberty Cotton Mills v. Established the three requisites for enforcing a union
NLRC (1988) security clause — applied and found incomplete in this
case.

General Milling Corp. v. CA Reiterated that the right to self-organization cannot be

(G.R. No. 146728, 2005) curtailed by a union security clause.

🔹 MNEMONICS FOR MEMORY AID

“FREEDOM = LEGAL”

F – Freedom period (60 days before CBA expiry)​

R – Right to self-organization protected​
E – Expiration ends representational clauses​
E – Evidence of disloyalty required (must be substantial)​
D – Dismissal invalid if no such evidence​
O – Only economic provisions continue after expiry​
M – Membership clause cannot be enforced beyond CBA

→ If FREEDOM applies, dismissal is ILLEGAL.

🔹 REAL-LIFE APPLICATION
In a real workplace, this case reminds HR officers, unions, and employees that:

●​ Supporting a certification election is part of labor democracy.​

●​ The union security clause cannot be abused to silence dissent or maintain power.​

●​ Employers must verify evidence and observe due process before dismissing
employees upon union request.​

🏁 Final Summary
The Supreme Court in PICOP Resources, Inc. v. Tañeca ruled that employees
who signed a petition for certification election during the freedom period were
illegally dismissed.​
The act was not disloyalty but a lawful exercise of their constitutional right to
self-organization.​
The CBA’s union security clause, being part of the representational provisions,
ceased to have effect after the CBA’s expiration.​
Thus, the dismissal had no legal basis under the Labor Code.

____________________________________________________________________
________

⚖️ DOCTRINE / PRINCIPLE
The right to self-organization is guaranteed to all workers regardless of
religious affiliation.​
 The fact that a new union is composed mostly of members of a religious sect
(e.g., Iglesia ni Kristo) does not invalidate its existence.

A petition for certification election filed within the 60-day “freedom period”
preceding the expiration of a CBA must be granted, even if the existing union
subsequently negotiates and signs a new CBA before the certification election is
held.

A certification election is the proper mechanism to determine the employees’

true bargaining representative.

📜 FACTS
1. Parties

●​ Petitioner: Kapatiran sa Meat and Canning Division (TUPAS Local Chapter No. 1027)
— the incumbent and exclusive bargaining agent of the regular daily-paid
rank-and-file workers of Universal Robina Corporation – Meat and Canning
Division.​

●​ Respondents:​

○​ Pura Ferrer-Calleja, Director of the Bureau of Labor Relations (BLR)​

○​ Universal Robina Corporation (URC)​

○​ Meat and Canning Division New Employees and Workers United Labor
Organization (NEW ULO) — composed mostly of members of the Iglesia ni
Kristo sect.​

2. Antecedent Facts (What Happened)

●​ From 1984 to 1987, TUPAS was the exclusive bargaining agent of URC’s Meat and
Canning Division employees, under a Collective Bargaining Agreement (CBA)
effective until November 15, 1987.​
●​ Within the freedom period (the last 60 days before the CBA’s expiration), TUPAS
filed an amended notice of strike on September 28, 1987, to pressure URC to renew
or extend the CBA.​

●​ On October 8, 1987, a new union, NEW ULO, composed mainly of Iglesia ni Kristo
members, was registered as a legitimate labor organization.​

●​ On October 12, 1987, TUPAS staged a strike, but the company secured an
injunction, resulting in a return-to-work agreement and renewed negotiations.​

●​ On October 13, 1987, NEW ULO filed a petition for certification election with the
Bureau of Labor Relations (BLR), claiming to have the support of the majority of
rank-and-file employees.​

●​ TUPAS opposed the petition, alleging:​

1.​ The petition was defective in form.​

2.​ Members of NEW ULO were Iglesia ni Kristo members who had previously
refused to join any union.​

3.​ The company (URC) was allegedly behind NEW ULO to weaken TUPAS.​

●​ Despite these objections, Med-Arbiter Rasidali Abdullah ordered a certification

election within 20 days (Order dated November 17, 1987).​

●​ While the case was pending before the BLR, TUPAS and URC signed a new CBA on
December 3, 1987 (to expire November 15, 1990).​
TUPAS claimed that this new CBA made the certification election unnecessary.​

●​ January 27, 1988: BLR Director Pura Ferrer-Calleja dismissed TUPAS’s appeal,
affirming the Med-Arbiter’s order.​
March 17, 1988: Motion for reconsideration denied.​

●​ TUPAS then filed a petition for certiorari before the Supreme Court, claiming that
the BLR acted with grave abuse of discretion.​
⚖️ ISSUE
Whether the Bureau of Labor Relations (BLR) committed grave abuse of discretion in
ordering a certification election despite the existence of a newly signed CBA between
TUPAS and URC.

🧩 SUPREME COURT RULING

Ruling: ❌ Petition denied.​
No grave abuse of discretion was committed by the BLR Director.

1. Freedom of Religion vs. Right to Self-Organization

TUPAS argued that members of the Iglesia ni Kristo sect could not lawfully form a union
because their religious beliefs oppose union membership.

The Supreme Court rejected this claim, citing Victoriano v. Elizalde Rope Workers’ Union
(59 SCRA 54), where the Court recognized the right of Iglesia ni Kristo members not to be
compelled to join a union, but did not prohibit them from forming their own union.

👉 Explanation:​
Freedom of religion includes both the freedom not to join and the freedom to organize if
consistent with one’s beliefs.​
Thus, NEW ULO’s formation was a valid exercise of the constitutional right to
self-organization (Article XIII, Section 3, 1987 Constitution).

2. Validity of the Petition for Certification Election

Under Article 256 (now Article 268) of the Labor Code,

“A petition for certification election may be filed by any legitimate labor

organization within sixty (60) days prior to the expiration of the existing
collective bargaining agreement.”

✅ NEW ULO filed its petition on October 13, 1987, which was within the 60-day freedom
period before the CBA’s expiration on November 15, 1987.
❌ The signing of a new CBA on December 3, 1987 did not defeat the petition filed earlier
during the valid period.

Thus, BLR properly gave due course to NEW ULO’s petition.

3. Certification Election as the Proper Mechanism

The Supreme Court emphasized that a certification election is the best method to ascertain
the true will of the workers in choosing their bargaining representative.​
Citing Associated Trade Unions (ATU) v. Noriel (88 SCRA 96), the Court reiterated that:

“A certification election is the best forum in ascertaining the majority status of

contending unions wherein the workers themselves can freely choose their
bargaining representative through secret ballot.”

The Court found no unfairness or irregularity in the Med-Arbiter’s order; hence, it would
not intervene.

4. No Grave Abuse of Discretion by the BLR

The BLR Director properly exercised her authority in dismissing TUPAS’s appeal.​
The order was supported by law and jurisprudence and was consistent with the
constitutional policy of encouraging free and voluntary organization of workers.

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Legal Basis Description Application in Case

Article XIII, Section 3, Workers have the right to Used to uphold NEW
1987 Constitution self-organization, collective ULO’s right to form a
bargaining, and negotiations. union regardless of
religion.
Article 256 (now 268), Allows petitions for certification NEW ULO filed within
Labor Code election within the 60-day freedom this period, so petition was
period before the expiration of the valid.
CBA.

Victoriano v. Elizalde Protects the religious freedom of Clarified that this freedom
Rope Workers’ Union Iglesia ni Kristo members not to does not prevent them
(59 SCRA 54) join unions. from organizing their own
union.

Associated Trade Certification election is the best Applied to justify the

Unions (ATU) v. Noriel means to determine majority BLR’s order for
(88 SCRA 96) representation. certification election.

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Term Meaning Context

Certification A government-supervised secret NEW ULO sought a

Election ballot election to determine which certification election to
labor union shall represent replace TUPAS as bargaining
employees in collective bargaining. representative.

Freedom Period The 60-day window before the NEW ULO filed within this
expiration of a CBA when a petition period; hence, valid.
for certification election may be
filed.
Med-Arbiter A DOLE officer authorized to decide Med-Arbiter Abdullah
petitions for certification election ordered the certification
and inter-union disputes. election.

Grave Abuse of When a government official acts The Court found that the
Discretion arbitrarily, capriciously, or without BLR Director did not
legal basis. commit this.

Collective A contract between a union and an The TUPAS–URC CBA

Bargaining employer governing terms and expired; the new CBA did
Agreement (CBA) conditions of employment. not nullify the pending
petition.

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