ASSOCIATED LABOR UNIONS (ALU) AND PASAR EMPLOYEES ASSOCIATION (PEA-ALU), PETITIONERS, VS. SECRETARY LEONARDO A. QUISUMBING, NATIONAL FEDERATION OF LABOR UNION (NAFLU), AND PHILI…

Associated Labor Unions and PASAR Employees Association versus Secretary Quisumbing

The Case

This is a petition for certiorari under Rule 65 of the Revised Rules of Court, brought by the Associated Labor Unions and the PASAR Employees Association against the Secretary of Labor and Employment, the National Federation of Labor Unions, and the Philippine Associated Smelting and Refining Corporation. The petitioners ask the Supreme Court to annul two resolutions of the Secretary of Labor and Employment which set aside a med-arbiter's dismissal of a petition for certification election and ordered that a certification election proceed among the rank and file employees of the company. The case matters because it gathers in one decision three rules every labor law candidate must carry into the examination room: the retroactive effect of a union's belated registration, the bar of estoppel against a party who agreed to the election, and the finality of an unappealed order granting a certification election.

Procedural History

The petition for certification election was filed by the National Federation of Labor Unions with the Med-Arbitration Unit of the Department of Labor and Employment. Med-Arbiter Milado granted the petition in an order dated November 29, 1995, upon the agreement of the parties. The PASAR Employees Association moved to dismiss, and in an order dated January 26, 1996 the med-arbiter granted the motion, vacated his earlier order, and dismissed the petition. The federation appealed to the Secretary of Labor and Employment, who in a resolution dated August 26, 1996 granted the appeal, set aside the January 26 order, and reinstated the November 29 order directing a certification election. The union's motion for reconsideration was denied in a resolution dated January 3, 1997, and its second motion for reconsideration met the same fate. The union then came to the Supreme Court by petition for certiorari, and the Court issued a temporary restraining order on March 7, 1997, enjoining the certification election scheduled on March 10, 1997.

Facts

The Philippine Associated Smelting and Refining Corporation and the PASAR Employees Association entered into a collective bargaining agreement on November 21, 1990, with a term ending on November 21, 1995. On November 7, 1995, within the sixty-day freedom period before the agreement's expiry, the National Federation of Labor Unions filed a petition for certification election with the Department of Labor and Employment.

On November 29, 1995, Med-Arbiter Milado granted the petition upon the agreement of the parties, conditioned on the petitioner furnishing the compulsory intervenor its constitution and by-laws and other supporting papers upon issuance of a certificate of registration. On December 1, 1995, the federation's local affiliate, the Concerned Organization of PASAR Progressive Employees for Reform, submitted the required documents to the regional office, and on December 7, 1995 it was issued a certificate of registration as an independent labor organization. The federation then furnished the union copies of the affiliate's constitution and by-laws.

On December 7, 1995, the PASAR Employees Association moved to dismiss the petition on the ground that the federation had not acquired, for its local affiliate, the legal personality of a legitimate labor organization. The med-arbiter granted the motion on January 26, 1996 and dismissed the petition. The Secretary of Labor reversed, holding that the affiliate had attained the status of a legitimate labor organization, and that its registration retroacted to the date of the filing of the petition. The union's motions for reconsideration were denied, bringing the matter to the Supreme Court.

Issues

• Whether or not the Secretary of Labor and Employment acted with grave abuse of discretion in holding that the petition for certification election was duly filed.
• Whether or not the Secretary of Labor and Employment acted with grave abuse of discretion in applying the doctrine of estoppel against the petitioners.
• Whether or not the Secretary of Labor and Employment acted with grave abuse of discretion in invoking the nunc pro tunc ruling, which the petitioners say was raised for the first time in the resolution on the motion for reconsideration.

Applicable Provisions

Article 259 of the Labor Code provides:

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

This is the appeal route the petitioners failed to take from the order granting the certification election, which thereby became final.

Section 9, Rule V, Book V of the Omnibus Rules Implementing the Labor Code provides:

The appeal shall be filed within ten (10) calendar days from receipt of the order by the appellant. Any opposition thereto may be filed within ten (10) calendar days from receipt of the appeal. The Regional Director shall within five (5) calendar days forward the entire records of the case to the Office of the Secretary.

This fixes the ten-day period that the petitioners let lapse, forfeiting their right of appeal.

Article 1187 of the New Civil Code provides:

The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. xxx In obligation to do and not to do, the court shall determine in each case, the retroactive effect of the condition that has been complied with.

This is the civil law root of the retroactive effect the Court gives to the affiliate's compliance with the condition in the parties' agreement.

Ruling

On the first issue, the Court held that the petition for certification election was duly filed and properly granted during the freedom period. The affiliate's submission of the required documents on December 1, 1995 and its registration on December 7, 1995 retroacted to the date of the filing of the petition, so that by fiction of law the affiliate was already a duly registered labor organization when the petition was filed, and could act as principal of the federation. The Court quoted with approval the Secretary's reliance on the ruling that compliance may be deemed effective, nunc pro tunc, as of the time the petition was filed.

On the second issue, the Court held that the petitioners were estopped from contesting the order granting the election, because the holding of the election was by agreement of the parties, and a party is estopped to challenge the personality of a corporation after having acknowledged the same by entering into a contract with it. The Court rejected the argument that the agreement carried a suspensive condition that was never fulfilled, since the federation submitted the required documents, and such compliance retroacted to the day the agreement was signed and cured whatever defects the petition initially had.

On the third issue, the Court held that the order of the med-arbiter granting the petition had become final because the petitioners failed to appeal within ten calendar days from receipt, as required by the Omnibus Rules, and instead filed a motion to dismiss. Not having seasonably appealed, they could no longer question an order that had already become final. The Court found no error in the Secretary's resolutions and dismissed the petition.

Doctrine

First, a union that submits the required registration documents after filing a petition for certification election attains legitimate status retroactively, by fiction of law, as of the date of the filing of the petition. Second, a party who agrees to the holding of a certification election is estopped from later challenging the personality of the union it dealt with, and compliance with a suspensive condition retroacts to the day the agreement was signed. Third, an order granting a petition for certification election becomes final if not appealed within ten calendar days from receipt under the Omnibus Rules, and the losing party cannot resurrect the objection by a motion to dismiss or by a later petition.

Disposition

The petition was dismissed and the resolutions of the Secretary of Labor and Employment were affirmed, so the certification election stood.

Remember This

Memorize the line that registration retroacts to the filing of the petition, so the union is deemed registered from the start. Examiners use this case on the freedom period, estoppel by agreement to hold a certification election, and the finality of an unappealed med-arbiter order.