PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), PETITIONER, VS. THE BUREAU OF LABOR RELATIONS AND THE PHILIPPINE FEDERATION OF LABOR (PTUC), RESPONDENTS.

Philippine Association of Free Labor Unions versus Bureau of Labor Relations

The Case

This is a petition brought by the Philippine Association of Free Labor Unions, which I will call PAFLU, against the Bureau of Labor Relations and the Philippine Federation of Labor, which I will call the PTUC. PAFLU asks the Supreme Court to strike down as arbitrary, and therefore violative of due process, an order of the Bureau calling a certification election among the rank and file employees of the Atlantic Gulf and Pacific Company of Manila, even though PAFLU held a collective bargaining agreement supposed to run until the end of December 1977. PAFLU invokes the contract bar rule, the doctrine that a valid existing collective bargaining agreement bars a certification election during its life. The case matters because it fixes the limits of that doctrine, teaches that the contract bar rule is not absolute, and reminds every lawyer that a petition filed before the Supreme Court must disclose all the prior actuations of the tribunal below.

Procedural History

The matter began before a Med-Arbiter of the Bureau of Labor Relations. On the seventh of March 1975 the Med-Arbiter issued an order directing a certification election. PAFLU appealed that order to the Director of the Bureau. On the fourteenth of April 1975 the Director, Carmelo C. Noriel, denied the appeal and affirmed the order, naming the contending unions and fixing the qualified voters. PAFLU moved for reconsideration, and on the seventeenth of December 1975 the Director denied the motion, noting that no further motion would be entertained and that the motion raised no new issues. PAFLU then came to the Supreme Court on a petition for certiorari, filed on the eighteenth of December 1975, imputing grave abuse of discretion and denial of due process. The Court issued a restraining order and set the case for hearing on the second of January 1976, at which the petitioner, the private respondent, and the National Federation of Labor, which was allowed to intervene, all appeared and argued. The petition was then resolved on the merits.

Facts

On the seventeenth of December 1974 the National Labor Union filed a petition for a certification election among the rank and file employees of the Atlantic Gulf and Pacific Company. On the thirtieth of January 1975 a Med-Arbiter dismissed that petition for failure to comply with the thirty percent jurisdictional requirement, and the National Labor Union appealed.

While that appeal was pending, PAFLU concluded a collective bargaining agreement with the company. The Bureau certified the agreement on the fifth of February 1975, to run from the fifteenth of January 1975 to the thirty-first of December 1977. The certification, however, carried a proviso: that there be no pending petition for certification election with the Bureau and no pending request for union recognition by any other union upon the issuance of the certificate. Two days later, on the seventh of February 1975, the Philippine Federation of Labor filed its own petition for a certification election. Other unions intervened, among them the National Federation of Labor Unions and the Samahan ng mga Manggagawa at Kawani.

PAFLU moved to dismiss on the ground of the contract bar rule. The Med-Arbiter nonetheless ordered a certification election, and the Director of the Bureau affirmed, reasoning that the earlier petition of the National Labor Union was still pending on appeal when the agreement was certified, so that the proviso was satisfied, and that with several unions contending for representation, an election was the fairest way to settle the true choice of the employees. PAFLU's motion for reconsideration was denied, and PAFLU came to the Court. At the hearing it emerged that PAFLU's petition had omitted the very decision it sought to have reconsidered, and counsel explained that pressure of time had prevented its inclusion.

Issues

• Whether or not the order of the Bureau calling a certification election, despite the existence of a collective bargaining agreement, amounted to arbitrariness and a denial of due process.
• Whether or not the contract bar rule barred the holding of the certification election.
• Whether or not the Bureau acted with grave abuse of discretion in ordering the election to determine the exclusive bargaining representative.
• Whether or not the thirty percent written consent requirement for a petition for certification election had to be satisfied before the Bureau could order the election.

Applicable Provisions

Article 257 of Presidential Decree Number 442, the Labor Code, provides:

Any petition for certification election filed by any legitimate labor organization shall be supported by the written consent of at least 30% of all the employees in the bargaining unit. Upon receipt and verification of such petition, it shall be mandatory for the Bureau to conduct a certification election for the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive collective bargaining representative of all the employees in the unit.

This is the provision PAFLU invoked to argue that the election could not proceed without the thirty percent consent, and which the Court construed to distinguish the union's right to compel an election from the Bureau's own power to order one.

The certification issued by the Bureau on the fifth of February 1975 contained this proviso:

Provided that there is no pending petition for Certification Election with the Bureau of Labor Relations and there is no pending request for union recognition by any other union with the management upon the issuance of this Certificate.

This proviso is decisive, because the Court held that the pendency of a certification election petition at the time of certification bars the operation of the contract bar rule.

Ruling

On the first issue, the Court held that due process, whether viewed from its procedural or its substantive significance, frowns on arbitrariness or caprice, and that the test is one of fairness and of justice. That criterion was more than fully met by the decision of the Bureau, which faced the problem of ascertaining, under changed circumstances, which labor organization should represent the entire labor force. The Court asked what better way there is than to hold a certification election, and answered that to conjure a due process objection is to indulge in a futile gesture.

On the second issue, the Court held that the contract bar rule did not apply. The certification itself carried the proviso on the pendency of a petition for certification election, and that proviso in itself would bar the operation of the contract bar rule. The earlier petition of the National Labor Union, though dismissed, was still on appeal and could not be considered terminated, so the requirement of the proviso was duly satisfied. The Court added that the contract bar rule is not to be applied with rigidity, and that the element of flexibility in its operation cannot be ignored; all relevant factors are to be considered, and what is essential is that the basic policy of the labor statute be implemented and its beneficent purpose achieved.

On the third issue, the Court held that a certification election is the fairest and most effective way of determining which labor organization can truly represent the working force, and that the will of the majority, honestly expressed, is controlling. It stressed that a collective bargaining agreement is the law of the plant, and that the very notion of industrial self-rule negates the assumption that what is good for either party should be left to the will of the other. Labor can be trusted to promote its welfare through the bargaining process, and to it must be left the choice of its agent for that purpose.

On the fourth issue, the Court held that the thirty percent requirement did not change the outcome. The objection was a mere afterthought, raised long after the determination to call an election, while PAFLU had taken part in pre-election conferences, filed a manifestation on the coverage of the election, entered into a written agreement defining the bargaining unit, and joined the inclusion and exclusion proceedings. More importantly, PAFLU failed to distinguish between the right of a labor organization to persuade thirty percent of the labor force to petition for an election, in which case the Bureau has no choice but to order it, and the power of the Bureau, entrusted with implementing the collective bargaining process, to order an election precisely to ascertain which of several unions shall be the exclusive representative.

Doctrine

First, due process, whether procedural or substantive, frowns on arbitrariness or caprice, and the test is fairness and justice; an order calling a certification election to settle a genuine dispute over representation does not offend that standard.

Second, the contract bar rule is not absolute. It yields to the proviso in the certificate that no petition for certification election be pending upon issuance, and it is applied with flexibility, all relevant factors considered, so that the policy of the labor statute may be achieved.

Third, a certification election is the fairest and most effective device for determining the true bargaining representative, and the honestly expressed will of the majority is controlling.

Fourth, the thirty percent written consent under Article 257 is the union's key to compel an election; it does not strip the Bureau of its own power to order an election among competing unions to ascertain the exclusive bargaining representative.

Disposition

The petition was dismissed for lack of merit, the Bureau was left free to set a new date for the certification election, costs were taxed against PAFLU, and Attorney Wilfrido Y. Guevara was admonished to be more careful in the preparation of pleadings submitted to the Court.

Remember This

The one line to memorize: the contract bar rule is not to be applied with rigidity, and a certification election is the fairest and most effective way of determining which labor organization can truly represent the working force. Examiners use this case to test the flexibility of the contract bar rule, the distinction between the union's thirty percent right and the Bureau's power to order an election, and the duty of counsel to disclose all prior actuations of the tribunal below.