SAN JOSE CITY ELECTRIC SERVICE COOPERATIVE, INC. (SAJELCO), PETITIONER, VS. MINISTRY OF LABOR AND EMPLOYMENT AND MAGKAISA-ADLO, RESPONDENTS.

This is a petition for Certiorari under Rule 65 of the
Rules of Court.  Petitioner San Jose City
Electric Service Cooperative, Inc. (SAJELCO, for brevity) seeks the reversal of
the Order (pp. 38-40, Rollo) of Pura Ferrer-Calleja, Director of
Bureau of Labor Relations in BLR Case No. A-10-259-86 which
affirmed the Order of Med-Arbiter Antonio R. Cortez to conduct certification
election among the rank-and-file employees
of SAJELCO.

The antecedent facts of the instant case are as follows:

On July 29, 1986, private respondent
Manggagawang Nagkakaisa ng SAJELCO – Association of Democratic Labor Organization (MAGKAISA-ADLO) filed a petition
(pp. 16-18, Rollo) for direct certification
election with the Regional Office No.111 of the Department of Labor and
Employment in San Fernando, Pampanga.  The petition alleged that MAGKAISA-ADLO is a
legitimate labor organization duly registered with the Ministry of Labor and
Employment; that there are more or less fifty-four (54) rank and file employees
in SAJELCO; that almost 62% of the employees sought to be represented have
supported the filing of the petition; that there has been no valid
certification election held in SAJELCO during the twelve (12) month period
prior to the filing of the petition and that there is no other union in the
bargaining unit.

In its answer (pp. 19-21,
Rollo), SAJELCO opposed the petition for
direct certification election contending, inter alia, that the employees who sought
to be represented by private respondent are members-consumers of the
Cooperative itself and at the same time composed the General Assembly which,
pursuant to the By-laws is also the final arbiter of any dispute arising in the
Cooperative.  Thus:

“x x x

“5.  That some, if not
most, of the employees who sought to be represented by the petitioner, are
member-consumers, and as such are members of the General or Special Assembly
which is the final arbiter on any dispute which a member and/or the Board, or
the Cooperative may have, and that such “some” of said alleged
supporters, in their capacity as member-consumers, enjoy two personalities in
that as employees and/or members of the
General Assembly, and therefore cannot fairly and prudently represent such
opposing personalities that merge into one juridical or natural person, and
these special and unique status or personalities
of the supposed supporters cannot qualify to be represented by the petitioner,
without doing injustice, in equity and unfair status or advantage to those member-consumers who have not that destiny or status of
becoming employees;

“6.  No valid and lawful
representation can be obtained by petitioner in behalf of the supposed
supporters, who are also member-consumers, that are bound by the Articles of
Incorporation, By-laws of the respondent Cooperative and pertinent Decrees and
laws, to support and defend the basic policies of the government on Electric
Cooperatives;

“7.  There is no
possible legal way by which to dismantle the personalities of some of the
supporters of the petitioner, as employees, from their status as
consumer-members, who, are, under the By-laws, part and parcels of the General
or Special Assembly that finally decides any dispute, and no reasonable or
valid scale of justice could be invoked to divide a person who, in conscience,
is also the other fellow against whom a remedy is sought for in allowing this
to happen is tantamount to slaughtering a man to his own ends;

“x x x.”

On September
5, 1986, the
Med-Arbiter who was assigned to the
case issued an Order (pp. 24-26, Rollo)
granting the petition for direct certification election on the basis of
the pleadings filed.  The Order said that
while some of the members of petitioner union are members of the cooperative,
it cannot be denied that they are also employees within the contemplation of
the Labor Code and are therefore entitled to enjoy all the benefits of employees,
including the right to self-organization (p. 25, Rollo).  This
Order was appealed by SAJELCO to the Bureau of Labor Relations.

In its appeal, (pp.
27-36, Rollo) SAJELCO reiterated its position
that:

“x x x
upon the principle that in electric cooperative – as in the case of respondent
– there is a merger of the consumer-members that composed of the assembly and that of the rank-and-file
members of the petitioners – into one person or juridical status thus
rendering the proposed collective bargaining agent ineffective and/or uncalled
for – considering that a grievance machinery for employees and/or
member-consumers of the cooperative – has been provided for by the By-laws as a
built-in over-all arbiter involving disputes affecting said
cooperative;”

Respondent Director of
the Bureau of Labor Relations dismissed the appeal and sustained the ruling of
the Med-Arbiter in an order dated January 5, 1987.

On February
19, 1987, SAJELCO
filed the instant petition for certiorari praying that the order of
respondent Director be set aside and another one rendered denying the holding or conduct of a certification
election among the rank and file employees
of SAJELCO.

In a letter dated June
20, 1987, Atty. Ricardo Soto,
Jr., counsel for private respondent union, manifested that a direct
certification election was conducted in SAJELCO, there being no restraining order from this Court enjoining the holding thereof.  Likewise, Atty. Soto was of the opinion that
in view of the direct certification election conducted, the petition
brought before this Court by SAJELCO has
become moot and academic (p. 48, Rollo).  Attached to his letter is a copy of the
minutes of the certification election held on April 13, 1987 showing that of forty three (43) employees
who voted, thirty (30) voted for respondent union and thirteen (13) voted for “no union”.

In the resolution of this
court (First Division) dated September 29, 1987, respondents were required to comment on the
petition.  The Solicitor General filed
its comment dated October 30, 1987 wherein it took a stand contrary to that of
respondent Director.  To support its
stand, the Solicitor General argued firstly, that the union-members who seek to
be represented by the union are the very members of the cooperative, thereby
resulting in a fusion of two personalities. 
Thus, it will be inconsistent for the union-members to bargain with
themselves.  Secondly, he said that
article 243 of the Labor Code requires that before one can form, join or assist
a labor union, he must first be employed and to be an employee one must
be under hire and must have no involvement in the ownership of the firm.  A labor union is formed for purposes of
collective bargaining.  The duty to
bargain exists only between employer and employees and not between an employer
and his co-owners.  Thirdly, he also said
that under the National Electrification Decree (P.D. No. 269, August 6, 1973)
members of an electric cooperative such as petitioner, besides contributing
financially to its establishments and maintenance, participate in its
management.  In the latter aspect, they
possess the powers and prerogatives of managerial employees who are not
eligible to join, assist or form any labor organization (pp. 4-6 of Comment;
pp. 43-45, Rollo).

On November
25, 1987, We required Atty. Soto, Jr. to comment on the comment of the
Solicitor General (p. 47, Rollo).  However, the notices sent to him were
returned and stamped “moved to an unknown address.” But respondent
Director of the Bureau of Labor Relations filed a comment on the aforesaid
comment of the Solicitor General reiterating his stand that members of private
respondent union fall under the general provision of Article 244 of the Code on
who are qualified to form, join or assist in the formation of unions as they
are neither managerial employees nor persons belonging to subversive
organizations.  Thus, on May 25,
1988, We gave due course to the petition (p. 79, Rollo).

The only issue presented
for resolution in this petition is whether or not the employees-members of an
electric cooperative can organize themselves for purposes of collective
bargaining.

This Court had the
occasion to rule on this issue in the consolidated cases of Batangas
I – Electric Cooperative Labor Union vs. Romeo Young, et al., G.R. No. 62386, Bulacan II Electric Cooperative, Inc., vs. Hon. Eliseo A. Penaflor, et al., G.R.
No. 70880 and Albay Electric Cooperative vs. Crescencio B. Trajano, et al.,
G.R. No. 74560 (November 9, 1988), citing the case of Cooperative Rural Bank of
Davao City, Inc. vs. Pura Ferrer-Calleja, G.R. No. 77951, September 26, 1988, where
it was held that:

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

“An employee therefore of such a cooperative who is a member
and co-owner thereof cannot invoke the right to collective bargaining for
certainly an owner cannot bargain with
himself or his co-owners.  In the opinion of August 14, 1981 of the Solicitor General he correctly opined
that employees of cooperatives who are themselves members of the cooperative
have no right to form or join labor organizations for purposes of
collective bargaining for being themselves co-owners of the cooperative.

“However, in so far as it involves cooperatives with employees
who are not members or co-owners thereof, certainly such employees are entitled
to exercise the rights of all
workers to organization, collective bargaining, negotiations and others as are
enshrined in the Constitution and existing laws of the country.”

In this petition, San Jose City Electric Service Cooperative,
Inc. (SAJELCO) claims that its employees are also members of the
cooperative.  It cited Section 17(18) of its
By-laws which declares that:

“The Board shall also create positions for subordinate
employees and fix their duties and
remunerations.  Only member-consumers
or members of their immediate family
shall be employed by the cooperative”
(Underscoring supplied).

The above-cited
provision, however, mentions two types of employees, namely:  the members-consumers and the members of
their immediate families.  As regards
employees of SAJELCO who are members-consumers, the rule is settled that they
are not qualified to form, join or assist labor organizations for purposes of
collective bargaining.  The reason for
withholding from employees of a cooperative who are members-co-owners the right
to collective bargaining is clear:  an
owner cannot bargain with himself.  However,
employees who are not members-consumers may form, join or assist labor
organizations for purposes of collective bargaining notwithstanding the fact
that employees of SAJELCO who are not members-consumers were employed ONLY
because they are members of the immediate family of members-consumers.  The fact remains that they are not themselves
members-consumers, and as such, they are entitled to exercise the rights of all
workers to organization, collective bargaining, negotiations and others as are
enshrined in Section 8, Article III and Section 3, Article XIII of the 1987
Constitution, Labor Code of the Philippines and other related laws (Cooperative
Rural Bank of Davao City, Inc., supra, p. 10).

ACCORDINGLY, the petition is GRANTED.  The assailed Order of respondent Pura Ferrer-Calleja, Director of the
Bureau of Labor Relations is hereby MODIFIED to the effect that only the rank
and file employees of petitioner who are not its members-consumers are entitled
to self-organization, collective bargaining, and negotiations, while other
employees who are members-consumers thereof cannot enjoy such right.  The direct
certification election conducted on April 13, 1987 is hereby set aside.  The Regional Office III of the Department of
Labor and Employment in San Fernando, Pampanga
is hereby directed:  (a) to determine the number of rank and file employees
of SAJELCO who are not themselves members-consumers; (b) to resolve whether or not there is
compliance with the requirements set forth in Article 257 of the Labor Code;
and (c) in the affirmative, to immediately conduct a direct certification
election among the rank and file employees of SAJELCO who are not
members-consumers.

SO ORDERED.

Narvasa,
(Chairman), Cruz, Gancayco, and Grino-Aquino, JJ., concur.