G.R. No.

93117 August 1, 1995

LOPEZ SUGAR CORPORATION, petitioner,vs.HON. SECRETARY OF LABOR

AND EMPLOYMENT, NATIONAL CONGRESS OF UNIONS IN THE SUGAR
INDUSTRY OF THE PHILIPPINES (NACUSIP) and COMMERCIAL AND
AGRO-INDUSTRIAL LABOR ORGANIZATION (CAILO), respondents.

On 26 July 1989, private respondent National Congress of Unions in the Sugar Industry
of the Philippines-TUCP ("NACUSIP-TUCP") filed with the Department of Labor and
Employment ("DOLE") Regional Office No. VI, Bacolod City, a petition for direct
certification or for certification election to determine the sole and exclusive collective
bargaining representative of the supervisory employees of herein petitioner, Lopez Sugar
Corporation ("LSC"), at its sugar central in Fabrica, Sagay, Negros Occidental.

In its petition, docketed Case No. RO6-MA-021-89, NACUSIP-TUCP averred that it was
a legitimate national labor organization; that LSC was employing 55 supervisory
employees, the majority of whom were members of the union; that no other labor
organization was claiming membership over the supervisory employees; that there was
no existing collective bargaining agreement covering said employees; and that there was
no legal impediment either to a direct certification of NACUSIP-TUCP or to the holding
of a certification election.

In its comment and opposition, dated 14 August 1989, LSC contended, among other
things, that the petition was bereft of any legal or factual basis; that the petition was
nothing more than a useless scrap of paper designed to harass the company; and that its
employees above the rank-and-file category were in truth unaware of the petition.

On 18 August 1989, the Commercial and Agro-Industrial Labor Organization

("CAILO"), a registered labor organization also claiming to count substantial
membership among the LSC supervisory employees, moved to intervene. The motion
was granted.

On 22 August 1989, NACUSIP-TUCP submitted Charter Certificate No. 003-89, dated

20 July 1989, of the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter. LSC,
on its part, submitted a list of its employees above the rank-and-file status preparatory to
the inclusion/exclusion proceedings.

On 13 September 1989, one Carlos S. Gevero, asserting a right to represent the

"supervisors of LSC," filed a motion to dismiss the petition for lack of interest on the part
of the supervisory employees. 

At the hearing of 20 September 1989, both NACUSIP-TUCP and CAILO failed to

appear. Hearing was re-set for 29 September 1989 but, again, neither NACUSIP-TUCP
nor CAILO appeared. On 16 October 1989, nonetheless, Med-Arbiter Felizardo T.
Serapio issued an Order granting the petition. He ruled that under Article 257 of the
Labor Code, as amended, the Med-Arbiter was left with no option but to order the
conduct of a certification election immediately upon the filing of the petition, holding that
the subsequent disaffiliation or withdrawals of members did not adversely affect the
standing of the petition.

VIEWED IN THE LIGHT OF THE FOREGOING, the petition for certification election
among the supervisory employees of the Lopez Sugar Central, filed by the NACUSIP-
TUCP is, as it is hereby GRANTED with the following choices:

1) National Congress of Unions in the Sugar Industry of the Phils. (NACUSIP-TUCP);

2) Commercial and Agro-Industrial Labor Organization (CAILO);
3) No Union.

LSC appealed to the DOLE and asseverated that the order was a patent nullity.

In denying the appeal, the Secretary of Labor, in his Decision of 06 March 1990, has
likewise ruled that the holding by the Med-Arbiter of a certification election is mandatory
under Article 257 of the Labor Code; that the subsequent withdrawals and
disauthorization/disaffiliation of some supervisory personnel in the petition for
certification election could not bar its being granted; and that a certification election is
still the most appropriate means to finally settle the issue of representation.

Hence, this petition for certiorari.

The issue that we will focus on is whether the respondent is a legitimate labor
organization. So, I will just quickly say that it was decided that the law did not reduce the
Med-Arbiter to an automaton which can instantly be set to impulse by the mere filing of a
petition for certification election. He is still tasked to satisfy himself that all the
conditions of the law are met, and among the legal requirements is that the petitioning
union must be a legitimate labor organization in good standing.

[[[[[The Solicitor General agrees with public respondent in arguing that the tenor of
Article 257 (supra) of the Labor Code is one of command. He cites paragraph 2, Section
6, Rule V, Book V, of the Implementing Rules and Regulations of the Labor Code, to the
effect that once "a petition (is) filed by a legitimate organization involving an
unorganized establishment, the Med-Arbiter shall immediately order the conduct of a
certification election," which is designed, he continues, to give substance to the workers'
right to self- organization. Petitioner promptly retorts that it has no quarrel with public
respondent on the objectives of the law but it points out that the application of Article 257
clearly must first be occasioned by a genuine petition from a legitimate labor
organization.
Not too long ago, the Court already had an opportunity to pass upon this very issue
in Progressive Development Corporation vs. Secretary, Department of Labor and
Employment,  where we said:

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."
(Emphasis 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." (Emphasis supplied)

Indeed, the law did not reduce the Med-Arbiter to an automaton which can instantly be
set to impulse by the mere filing of a petition for certification election. He is still tasked
to satisfy himself that all the conditions of the law are met, and among the legal
requirements is that the petitioning union must be a legitimate labor organization in good
standing.]]]]]

The petition for certification election, in the case at bench, was filed by the NACUSIP-
TUCP, a national labor organization duly registered with the DOLE render Registration
Certificate No. FED-402-6390-IP. The legitimate status of NACUSIP-TUCP might be
conceded; being merely, however, an agent for the local organization (the NACUSIP-
TUCP Lopez Sugar Central Supervisory Chapter), the federation's bona fide status alone
would not suffice. The local chapter, as its principal, should also be a legitimate labor
organization in good standing.

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.

The only document extant on record to establish the legitimacy of the NACUSIP-TUCP
Lopez Sugar Central Supervisory Chapter is a charter certificate and nothing else. The
instant petition, at least for now, must thus be GRANTED.

WHEREFORE, the assailed Decision of the Secretary of Labor, dated 06 March 1990,
affirming that of the Med-Arbiter, is ANNULLED and SET ASIDE. The petition for
certification election is dismissed. No costs.

NOTES:

“Federation” is any labor organization with at least 10 locals/chapters each of which must be a
duly certified or recognized collective bargaining agent.

Local chapter, how created?

The report of creation of a chartered local shall be accompanied by a charter certificate issued
by the federation or national union indicating the creation or establishment of the chartered
local.

A duly registered federation or national union directly creating a chartered local, is required to
submit to the Regional Office two copies of the following:

a. A charter certificate issued by the federation or national union

indicating the creation or establishment of the local/charter.
b. The names of the local chapter’s officers, their addresses, and
the principal office of the local/chapter; and
c. The local/chapter’s constitution and by-laws, provided that
where the local/chapter’s constitution and by-laws is the same as that of the federation or
national union, this fact shall be indicated accordingly.

What if they failed to submit documents, can they exercise rights?

No. The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the documents. However, it acquires tentative legal
personality to file a PCE upon the issuance of a charter certificate.

------------

On July 26, 1989, private respondent National Congress of Unions in the Sugar Industry
of the Philippines-TUCP ("NACUSIP-TUCP") filed with the DOLE Regional Office No.
VI, Bacolod City, a petition for direct certification or for certification election to
determine the sole and exclusive collective bargaining representative of the supervisory
employees of petitioner Lopez Sugar Corporation ("LSC"), at its sugar central located in
Fabrica, Sagay, Negros Occidental.

In its petition, NACUSIP-TUCP claimed that it was a legitimate national labor

organization; that LSC was employing 55 supervisory employees, the majority of whom
were members of the union; that no other labor organization was claiming membership
over the supervisory employees; that there was no existing collective bargaining
agreement covering said employees; and that there was no legal impediment either to a
direct certification of NACUSIP-TUCP or to the holding of a certification election.
 
On August 14, 1989, in its comment and opposition, LSC contended, among other things,
that the petition was devoid of any legal or factual basis; [that the petition was nothing
more than a useless scrap of paper designed to harass the company; and that its
employees above the rank-and-file category were in truth unaware of the petition.]
 
On August 18, 1989, the Commercial and Agro-Industrial Labor Organization
("CAILO"), a registered labor organization also claiming to count substantial
membership among the LSC supervisory employees, moved to intervene. The motion
was granted.

On August 22 1989, NACUSIP-TUCP submitted Charter Certificate No. 003-89, [dated

20 July 1989,] of the NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter. LSC,
on its part, submitted a list of its employees above the rank-and-file status preparatory to
the inclusion/exclusion proceedings.
 
On September 13, 1989, one Carlos S. Gevero, asserting a right to represent the
"supervisors of LSC," filed a motion to dismiss the petition for lack of interest on the part
of the supervisory employees. 
 
[At the hearing of September 20, 1989, both NACUSIP-TUCP and CAILO failed to
appear. Hearing was re-set for September 29, 1989 but, again, neither NACUSIP-TUCP
nor CAILO appeared.]

On October 16, 1989, despite the failure of the two alleged labor organizations to appear
during both the initial hearing and the rescheduled one, Med-Arbiter Felizardo T. Serapio
issued an Order granting the petition.

He ruled that under Article 257 of the Labor Code, as amended, the Med-Arbiter was left
with no option but to order the conduct of a certification election immediately upon the
filing of the petition, [holding that the subsequent disaffiliation or withdrawals of
members did not adversely affect the standing of the petition.]
 
VIEWED IN THE LIGHT OF THE FOREGOING, the petition for certification election
among the supervisory employees of the Lopez Sugar Central, filed by the NACUSIP-
TUCP is, as it is hereby GRANTED with the following choices:
 
1) National Congress of Unions in the Sugar Industry of the Phils. (NACUSIP-TUCP);
2) Commercial and Agro-Industrial Labor Organization (CAILO);
3) No Union.
 
LSC appealed to the DOLE stating that the order to grant the petition for certification
election was a patent nullity.
 
In denying the appeal, the Secretary of Labor, in his Decision of 06 March 1990, has
likewise ruled that the holding by the Med-Arbiter of a certification election is mandatory
under Article 257 of the Labor Code; [that the subsequent withdrawals and
disauthorization/disaffiliation of some supervisory personnel in the petition for
certification election could not bar its being granted; and that a certification election is
still the most appropriate means to finally settle the issue of representation.]
 
Hence, this petition for certiorari.
 
The issue that we will focus on is whether the respondent is a legitimate labor
organization. So, before delving into that, I will just quickly say that it was decided that
the law did not reduce the Med-Arbiter to an automaton which can instantly be set to
impulse by the mere filing of a petition for certification election. He is still tasked to
satisfy himself that all the conditions of the law are met, and among the legal
requirements is that the petitioning union must be a legitimate labor organization in good
standing.
 
So, now, is the private respondent National Congress of Unions in the Sugar Industry of
the Philippines-TUCP a legitimate labor organization?

The answer is no. But first, what is a labor organization? And what is a legitimate labor
organization?

Art. 219 of the Labor Code provides that:

(g) “Labor organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.

(h) ”Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.
The petition for certification election, in this case, was filed by the NACUSIP-TUCP, a
national labor organization duly registered with the DOLE render Registration Certificate
No. FED-402-6390-IP. The legitimate status of NACUSIP-TUCP might be
acknowledged; however, being merely an agent for the local organization (the
NACUSIP-TUCP Lopez Sugar Central Supervisory Chapter), the federation's bona
fide status alone would not suffice. The local chapter, as its principal, should also be a
legitimate labor organization in good standing.
 
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.
 
The only document existing on record to establish the legitimacy of the NACUSIP-TUCP
Lopez Sugar Central Supervisory Chapter is a charter certificate and nothing else. So, the
instant petition filed by LSC, at least for that time being, was granted due to the failure of
the respondent to produce the other required documents since a chapter shall be entitled
to all other rights and privileges of a legitimate labor organization only upon the
submission of the aforementioned documents.

The assailed Decision of the Secretary of Labor affirming that of the Med-Arbiter, is
ANNULLED and SET ASIDE. The petition for certification election filed by the private
respondent was dismissed. No costs.