PROGRESSIVE DEVELOPMENT CORPORATION, PETITIONER, VS. THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER EDGARDO DELA CRUZ, AND PAMBANSANG KILUSAN NG PAGGAW…

The controversy in this case centers on the requirements before a
local or chapter of a federation may file a petition for certification election
and be certified as the sole and exclusive bargaining agent of the petitioner’s
employees.

Petitioner Progressive Development Corporation (PDC) filed this
petition for certiorari to set aside the following:

1) Resolution dated September 5, 1990, issued
by respondent Med-Arbiter Edgardo dela Cruz, directing the holding of a
certification election among the regular rank-and-file employees of PDC:

2)  Order dated October 12,
1990, issued by the respondent Secretary of Labor and Employment, denying PDC’s
appeal; and

3)  Order dated November 12,
1990, also issued by the respondent Secretary, denying the petitioner’s Motion
for Reconsideration.

On June 19, 1990, respondent Pambansang Kilusan ng Paggawa
(KILUSAN) – TUCP (hereinafter referred to as Kilusan) filed with the Department
of Labor and Employment (DOLE) a petition for certification election among the
rank-and-file employees of the petitioner alleging that it is a legitimate
labor federation and its local chapter, Progressive Development Employees
Union, was issued charter certificate No. 90-6-1-153. Kilusan claimed that there was no existing collective bargaining
agreement and that no other legitimate labor organization existed in the
bargaining unit.

Petitioner PDC filed its motion to dismiss dated July 11, 1990
contending that the local union failed to comply with Rule II, Section 3, Book
V of the Rules Implementing the Labor Code, as amended, which requires the
submission of: (a) the constitution and
by-laws; (b) names, addresses and list of officers and/or members; and (c)
books of accounts.

On July 16, 1990, respondent Kilusan submitted a rejoinder to
PDC’s motion to dismiss claiming that it had submitted the necessary
documentary requirements for registration, such as the constitution and by-laws
of the local union, and the list of officers/members with their addresses. Kilusan further averred that no books of
accounts could be submitted as the local union was only recently organized.

In its “Supplemental Position Paper” dated September 3,
1990, the petitioner insisted that upon verification with the Bureau of Labor
Relations (BLR), it found that the alleged minutes of the organizational
meeting was unauthenticated, the list of members did not bear the corresponding
signatures of the purported members, and the constitution and by-laws did not
bear the signatures of the members and was not duly subscribed. It argued that the private respondent
therefore failed to substantially comply with the registration requirements
provided by the rules. Additionally, it
prayed that Med-Arbiter Edgardo dela Cruz inhibit himself from handling the
case for the reason that he allegedly had prejudged the same.

In his September 5, 1990
resolution, Med-Arbiter dela Cruz held that there was substantial compliance
with the requirements for the formation of a chapter. He further stated that mere issuance of the charter certificate
by the federation was sufficient compliance with the rules. Considering that the establishment is
unorganized, he maintained that a certification election should be conducted to
resolve the question of representation.

Treating the motion for reconsideration filed by PDC as an appeal
to the Office of the Secretary, Undersecretary Laguesma held that the same was
merely a “reiteration of the issues already ventilated in the proceedings
before the Med-Arbiter, specifically, the matter involving the formal
organization of the chapter.” (Rollo, p. 20) PDC’s motion for
reconsideration from the aforementioned ruling was likewise denied. Hence, this petition.

In an order dated February 25, 1991, the Court resolved to issue
a temporary restraining order enjoining the public respondents from carrying
out the assailed resolution and orders or from proceeding with the
certification election. (Rollo, pp.
37-39)

It is the petitioner’s contention that a labor organization (such
as the Kilusan) may not validly invest the status of legitimacy upon a local or
chapter through the mere expedient of issuing a charter certificate and
submitting such certificate to the BLR (Rollo, p. 85) Petitioner PDC posits
that such local or chapter must at the same time comply with the requirement of
submission of duly subscribed constitution and by laws, list of
officers and books of accounts. (Rollo,
p. 35) PDC points out that the constitution and by-laws and list of officers
submitted were not duly subscribed. Likewise, the petitioner claims that the mere filing of the
aforementioned documents is insufficient; that there must be due recognition or
acknowledgment accorded to the local or chapter by the BLR through a
certificate of registration or any communication emanating from it. (Rollo, p. 86)

The Solicitor General, in behalf of the public respondents, avers
that there was substantial compliance with the requirements for the formation
of a chapter. Moreover, he invokes
Article 257 of the Labor Code which mandates the automatic conduct by the
Med-Arbiter of a certification election in any establishment where there is no
certified bargaining agent.

The Court has repeatedly stressed that the holding of a
certification election is based on a statutory policy that cannot be
circumvented. (Airtime Specialists,
Inc. v. Ferrer-Calleja, 180 SCRA 749 [1989]; Belyca Corporation v. Ferrer-Calleja,
168 SCRA 184 [1988]; George and Peter Lines, Inc. v. Associated Labor Unions,
134 SCRA 82 [1986]). The workers must
be allowed to freely express their choice in a determination where everything
is open to their sound judgment and the possibility of fraud and
misrepresentation is eliminated.

But while Article 257 cited by the Solicitor General directs the
automatic conduct of a certification election in an unorganized establishment,
it also requires that the petition for certification election must be filed by
a legitimate labor organization. Article 242 enumerates the exclusive rights of a legitimate labor
organization among which is the right to be certified as the exclusive
representative of all the employees in an appropriate collective bargaining
unit for purposes of collective bargaining.

Meanwhile, Article 212(h) defines a legitimate labor organization
as “any labor organization duly registered with the DOLE and includes
any branch or local thereof.”
(Underlining supplied) Rule I, Section 1(j), Book V of the Implementing Rules
likewise defines a legitimate labor organization as “any labor
organization duly registered with the DOLE and includes any branch,
local or affiliate thereof.” (Underlining supplied)

The question that now arises is: when does a branch, local or affiliate of a federation become a
legitimate labor organization?

Ordinarily, a labor organization acquires legitimacy only upon
registration with the BLR. Under
Article 234 (Requirements of Registration):

“Any applicant labor organization, association or group of
unions or workers shall acquire legal personality and shall be entitled to the
rights and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following
requirements:

(a)  Fifty-pesos
(P50.00) registration fee;

(b)  The names of its officers, their addresses,
the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such
meetings;

(c)  The names of all its members comprising at
least twenty 20% percent of all the employees in the bargaining unit where it
seeks to operate;

(d)  If
the applicant has been in existence for one or more years, copies of its annual
financial reports; and

(e)  Four copies of the constitution and by-laws of
the applicant union, the minutes of its adoption or ratification and the list
of the members who participated in it.”

And under Article 235 (Action on
Application):

“The Bureau shall act on all applications for registration
within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by
the secretary or the treasurer of the organization, as the case may be, and
attested to by its president.”

Moreover, section 4 of Rule II, Book V of the Implementing Rules
requires that the application should be signed by at least twenty percent (20%)
of the employees in the appropriate bargaining unit and be accompanied by a
sworn statement of the applicant union that there is no certified bargaining
agent or, where there is an existing collective bargaining agreement duly
submitted to the DOLE, that the application is filed during the last sixty (60)
days of the agreement.

The respondent Kilusan questions the requirements as too
stringent in their application but the purpose of the law in prescribing these
requisites must be underscored. Thus,
in Philippine Association of Free Labor Unions v. Secretary of Labor, 27 SCRA
40 (1969), the Court declared:

“The theory to the effect that Section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association guaranteed in the Bill
of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of said section is not a
limitation to the right of assembly or association, which may be exercised with
or without said registration. The
latter is merely a condition sine qua non for the acquisition of legal
personality by labor organizations, associations or unions and the possession
of the “rights and privileges granted by law to legitimate labor
organizations.” The Constitution does not guarantee these rights and
privileges, much less said personality, which are mere statutory creations, for
the possession and exercise of which registration is required
to protect both labor and the public
against abuses, fraud, or impostors who
pose as organizers, although not truly
accredited agents of the union they purport
to represent. Such
requirement is a valid exercise of the police power, because the activities in which
labor organizations, associations and unions of workers are engaged affect
public interest, which should be protected. Furthermore, the obligation to submit financial statements, as a
condition for the non-cancellation of a certificate of registration, is a
reasonable regulation for the benefit of the members of the organization,
considering that the same generally solicits funds or membership, as well as
oftentimes collects, on behalf of its members, huge amounts of money due to
them or to the organization.” (Underlining supplied)

But when an unregistered union becomes a branch, local or chapter
of a federation, some of the aforementioned requirements for registration are
no longer required. The provisions
governing union affiliation are found in Rule II, Section 3, Book V of the
Implementing Rules, the relevant portions of which are cited below:

“SEC. 3. Union
affiliation; direct membership with national union. – An affiliate of a labor
federation or national union may be a local or chapter thereof or an
independently registered union.

a)   The labor federation or national union
concerned shall issue a charter certificate indicating the creation or
establishment of a local or chapter, copy of which shall be submitted to the
Bureau of Labor Relations within thirty (30) days from issuance of such charter
certificate.

b)   An independently registered union shall be
considered an affiliate of a labor federation or national union after
submission to the Bureau of the contract or agreement of affiliation within
thirty (30) days after its execution.

xxx                                                                xxx                                                       xxx

e)   The local or chapter of a labor federation or
national union shall have and maintain a constitution and by-laws, set of
officers and books of accounts. For
reporting purposes, the procedure governing the reporting of independently
registered unions, federations or national unions shall be observed.”

Paragraph (a) refers to a local or chapter of a federation which
did not undergo the rudiments of registration while paragraph (b) refers to an
independently registered union which affiliated with a federation. Implicit in the foregoing differentiation is
the fact that a local or chapter need not be independently registered. By force of law (in this case, Article
212[h]), such local or chapter becomes a legitimate labor organization upon
compliance with the aforementioned provisions of Section 3.

Thus, several requirements that are otherwise required for union
registration are omitted, to wit:

1) The requirement that the application for registration must be
signed by at least 20% of the employees in the appropriate bargaining unit;

2) The submission of officers’ addresses, principal address of the
labor organization, the minutes of organizational meetings and the list of the
workers who participated in such meetings;

3) The submission of the minutes of the adoption or ratification
of the constitution and by laws and the list of the members who participated in
it.

Undoubtedly, the intent of the law in imposing lesser
requirements in the case of a branch or local of a registered federation or
national union is to encourage the affiliation of a local union with a
federation or national union in order to increase the local union’s bargaining
powers respecting terms and conditions of labor.

The petitioner maintains that the documentary requirements
prescribed in Section 3(c), namely: the
constitution and by-laws, set of officers and books of accounts, must follow
the requirements of law. Petitioner PDC
calls for the similar application of the requirement for registration in
Article 235 that all requisite documents and papers be certified under oath by
the secretary or the treasurer of the organization and attested to by the
president.

In the case at bar, the constitution and by-laws and list of
officers submitted to the BLR, while attested to by the chapter’s president,
were not certified under oath by the secretary. Does such defect warrant the withholding of
the status of legitimacy to the local or chapter?

In the case of union registration, the rationale for requiring
that the submitted documents and papers be certified under oath by the
secretary or treasurer, as the case may be, and attested to by the president is
apparent. The submission of the
required documents (and payment of P50.00 registration fee) becomes the
Bureau’s basis for approval of the application for registration. Upon approval, the labor union acquires
legal personality and is entitled to all the rights and privileges granted by
the law to a legitimate labor organization. The employer naturally needs assurance that the union it is dealing with
is a bona-fide organization, one which has not submitted false statements or
misrepresentations to the Bureau. The
inclusion of the certification and attestation requirements will in a marked
degree allay these apprehensions of management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration (see Article 239
(a), (c) and (d)); it is also a ground for a criminal charge of perjury.

The certification and attestation requirements are preventive
measures against the commission of fraud. They likewise afford a measure of protection to unsuspecting employees
who may be lured into joining unscrupulous or fly-by-night unions whose sole
purpose is to control union funds or to use the union for dubious ends.

In the case of union affiliation with a federation, the
documentary requirements are found in Rule II, Section 3(e), Book V of the
Implementing Rules, which we again quote as follows:

“(c) The local
or chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and books of accounts. For reporting purposes,
the procedure governing the reporting of
independently registered unions, federations or
national unions shall be observed.”
(Underlining supplied)

Since the “procedure governing the reporting of
independently registered unions” refers to the certification and
attestation requirements contained in Article 235, paragraph 2, it follows that
the constitution and by-laws, set of officers and books of accounts submitted
by the local and chapter must likewise comply with these requirements. The same rationale for requiring the
submission of duly subscribed documents upon union registration exists in the
case of union affiliation. Moreover,
there is greater reason to exact compliance with the certification and
attestation requirements because, as previously mentioned, several requirements
applicable to independent union registration are no longer required in the case
of the formation of a local or chapter. The policy of the law in conferring greater bargaining power upon labor
unions must be balanced with the policy of providing preventive measures
against the commission of fraud.

A local or chapter therefore becomes a legitimate labor
organization only upon submission of the following to the BLR:

1)  A charter certificate,
within 30 days from its issuance by the labor federation or national union, and

2) The constitution and by-laws, a
statement on the set of officers, and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case may be, of such
local or chapter, and attested to by its president.

Absent compliance with these mandatory requirements, the local or
chapter does not become a legitimate labor organization.

In the case at bar, the failure of the secretary of PDEU-Kilusan
to certify the required documents under oath is fatal to its
acquisition of a legitimate status.

We observe that, as borne out by the facts in this case, the
formation of a local or chapter becomes a handy tool for the circumvention of
union registration requirements. Absent
the institution of safeguards, it becomes a convenient device for a small group
of employees to foist a not-so-desirable federation or union on unsuspecting
co-workers and pare the need for wholehearted voluntariness which is basic to
free unionism. The records show that on
June 16, 1990, Kilusan met with several employees of the petitioner. Excerpts of the “Minutes of the
Organizational/General Membership Meeting of Progressive Development Employees
Union (PDEU) – Kilusan”, are quoted below:

“The meeting was formally called to order by Bro. Jose V.
Parungao, KILUSAN secretary for organization by explaining to the general
membership the importance of joining a union. He explained to the membership why they should join a union, and briefly
explained the ideology of the Pambansang Kilusan ng Paggawa ­TUCP as a democratically
based organization and then read the proposed Constitution and By-Laws, after
which said Constitution and By-Laws was duly and unanimously ratified after
some clarification.

Bro. Jose Parungao was also unanimously voted by the group to act as
the chairman of the COMELEC in holding the organizational election of officers
of the Union.

Bro. Parungao, officially opened the table for the nomination of
candidates after which the election of officers followed by secret balloting
and the following were the duly elected officers.” (Original Record, p.
25)

The foregoing shows that Kilusan took the initiative and
encouraged the formation of a union which automatically became its
chapter. On June 18, 1990, Kilusan
issued a charter certificate in favor of PDEU­KILUSAN (Records, page 1). It can be seen that Kilusan was moving very
fast.

On June 19, 1990, or just three days after the organizational
meeting, Kilusan filed a petition for certification election (Records, pages 2
and 3) accompanied by a copy each of the charter certificate, constitution and
by-laws and minutes of the organizational meeting. Had the local union filed an application for registration, the
petition for certification election could not have been immediately filed. The applicant union must first comply with
the “20% signature” requirement and all the other requisites
enumerated in Article 234. Moreover,
since under Article 235 the BLR shall act on any application for registration within
thirty (30) days from its filing, the likelihood is remote that, assuming the
union complied with all the requirements, the application would be approved on
the same day it was filed.

We are not saying that the scheme used by the respondents is per
se illegal for precisely, the law allows such strategy. It is not this Court’s function to augment
the requirements prescribed by law in order to make them wiser or to allow
greater protection to the workers and even their employer. Our only recourse is, as earlier discussed,
to exact strict compliance with what the law provides as requisites for local
or chapter formation.

It may likewise be argued that it was Kilusan (the mother union)
and not the local union which filed the petition for certification election
and, being a legitimate labor organization, Kilusan has the personality to file
such petition.

At this juncture, it is important to clarify the relationship
between the mother union and the local union. In the case of Liberty Cotton Mills Workers Union v. Liberty Cotton
Mills, Inc., 66 SCRA 512 [1975]), the Court held that the mother union, acting
for and in behalf of its affiliate, had the status of an agent while the
local union remained the basic unit of the association, free to serve the
common interest of all its members subject only to the restraints imposed by
the constitution and by-laws of the association. Thus, where as in this case the petition for certification
election was filed by the federation which is merely an agent, the petition is
deemed to be filed by the chapter, the principal, which must be a legitimate
labor organization. The chapter cannot
merely rely on the legitimate status of the mother union.

The Court’s conclusion should not be misconstrued as impairing
the local union’s right to be certified as the employees’ bargaining agent in
the petitioner’s establishment. We are
merely saying that the local union must first comply with the statutory
requirements in order to exercise this right. Big federations and national unions of workers should take the lead in
requiring their locals and chapters to faithfully comply with the law and the
rules instead of merely snapping union after union into their folds in a
furious bid with rival federations to get the most number of members.

WHEREFORE, the petition is GRANTED. The assailed resolution and orders of
respondents Med-Arbiter and Secretary of Labor and Employment, respectively,
are hereby SET ASIDE. The temporary
restraining order dated February 25, 1991 is made permanent.

SO ORDERED.

Feliciano, Bidin,
Davide, Jr., and Romero, JJ., concur.