FIRST DIVISION [G.R. No. 121241. December 10, 1997.]FURUSAWA RUBBER PHILIPPINES, INC., petitioner, vs. HON. SECRETARY OF LABOR AND EMPLOYMENT and FURUSAWA EMPLOYEES UNION-INDEPENDENT (FEU-IND), respondents.

Bautista, Picazo, Buyco, Tan & Fider for petitioner.The Solicitor General for public-respondent.Napoleon Banzuela, Jr., for private respondent.

SYNOPSISPrivate-respondent union, FEU-IND, filed a petition for certification election among the rank and file employees of petitioner FURUSAWA. The latter moved to dismiss the petition on the ground that FEU-IND was not a legitimate labor organization so that it could not file a petition for certification-election. The basis of this argument is the failure of the petitioning union to submit original copy of its Certificate of Registration.The main issue presented by petitioner was whether a photocopy of its Certificate of Registration submitted by the petitioning union which is not been duly authenticated and not supported by any other documentary evidence constitutes conclusive proof that FEU-IND had acquired legitimate status and therefore entitled to pursue its petition for certification election. The Med-Arbiter ruled in the affirmative, which was affirmed by the Secretary of Labor. Hence, the petition.The petition is not meritorious. FEU-IND is a legitimate-labor organization as it has been issued a Certificate of Registration by the Regional Office of the Department of Labor and Employment. The presentation of the xerox copy of the Certificate of Registration instead of the original certificate is not a fatal defect and does not affect its legitimate status. The issuance of the Certificate of Registration shows compliance with the requirements of Art. 234 of the Labor Code.

SYLLABUS1. LABOR AND SOCIAL LEGISLATION; LABOR ORGANIZATION; LEGITIMACY PROVED BY CERTIFICATE OF REGISTRATION ISSUED BY THE DEPARTMENT OF LABOR; EFFECT. — FEU-IND is a legitimate labor organization. As such, it enjoys all the rights and privileges recognized by law. The fact that FEU-IND has been issued Certificate of Registration No. RO-400-9502-UR-003 by Regional Office No. 14 of the Department of Labor and Employment (DOLE) is sufficient proof of its legitimacy. The presentation of the xerox copy of the certificate of registration to support its claim of being a duly registered labor organization instead of the submission of the original certificate is not a fatal defect and does not in any way affect its legitimate status as a labor organization conferred by its registration with DOLE. The issuance of the certificate of registration evidently shows that FEU-IND has complied with the requirements of Art. 234 of the Labor Code. The requirements for registration being mandatory, they are complied with before any labor organization, association or group of unions or workers acquires legal personality and be entitled to the rights and privileges granted by law to legitimate labor organizations.2. ID.; ID.; ID.; RIGHT TO REPRESENT MEMBERS IN COLLECTIVE BARGAINING; PETITION FOR CERTIFICATION ELECTION, PROPER. — One of the rights of a legitimate labor organization is to represent its members in collective bargaining agreements; also, to be certified as the exclusive representative of all employees in an appropriate unit for purposes of collective bargaining. Hence the petition of FEU-IND, as a legitimate labor organization, for certification election may rightfully be granted. FEU-IND filed a petition for certification election precisely to determine the will of the employees for purposes of collective bargaining. Basically, a petition for certification election is principally the concern of the workers. The only exception is where the employer has to file a petition for certification election so that it can bargain collectively as mandated by Art. 258 of the Labor Code. Thereafter, the role of the employer in the certification process ceases. It becomes merely a by-stander. In one case this Court ruled that since the petition for certification election was filed by a legitimate labor organization under Art. 258 of the Labor Code, the employer should not have involved itself in the process. Article 257 of the Labor Code provides that in an unorganized establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon filing of a petition by a legitimate labor organization for a certification election. The certification election is the best and most appropriate means of ascertaining the will of the employees as to their choice of an exclusive bargaining representative. That there are no competing unions involved should not alter this means, the freedom of choice by the employees being the primordial consideration and the fact that the employees can still choose between FEU-IND and

NO UNION. Even on the assumption that the evidence is clearly insufficient and the number of signatories less than 30%, in this case, 20% this cannot militate against the favorable response to such petition for certification election.3. ID.;-ID.; WORKERS' RIGHT TO SELF-ORGANIZATION A FUNDAMENTAL RIGHT; ATTEMPT TO STIFLE THIS RIGHT IS UNFAIR LABOR PRACTICE. — To circumvent the law on the fundamental right of the workers to self-organization would render such constitutional provision meaningless. Section 3, Art. XIII, of the 1987 Constitution underscores the right of the workers to organize with others or to join any labor organization which he believes can assist and protect him in the successful pursuit of his daily grind. The choice is his. Any attempt on the part of management or employers to curtail or stifle this right of the workers will be deemed unconstitutional and considered as unfair labor practice on the part of management. Briefly, this right to self-organization is a fundamental right — to give the workers the freedom to form or join any labor organization voluntarily without fear of suppression or reprisal from management. PD No. 828 encourages trade unionism to supplement and strengthen the exercise of the workers' right to self-organization.4. ID.; NLRC; CERTIFICATION PROCEEDINGS; TECHNICAL RULES OF EVIDENCE, NOT APPLICABLE. — A certification proceeding is not a litigation in the sense that the term is ordinarily understood, but an investigation of a fact-finding and non adversarial character. It is not covered by the technical rules of evidence. Thus, as provided in Art. 221 of the Labor Code, proceedings before the National Labor Relations Commission are not covered by the technical rules of evidence and procedure. The court has already construed Art. 221 of the Labor Code in favor of allowing the NLRC or the labor arbiter to decide the case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular courts of justice. Indeed, the technical rules of evidence do not apply if the decision to grant the petition proceeds from an examination of its sufficiency as well as a careful look into the arguments contained in position papers and other documents. Here, the factual findings of the Med-Arbiter appear to be supported by substantial evidence, hence, we must accord them great weight and respect. Under the premises, or at the very least, when conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier influence of the latter should be balanced by sympathy and compassion which the law must accord the underprivileged worker. This is only in keeping with the constitutional mandate that the State-shall afford full protection to labor.

D E C I S I O NBELLOSILLO, J p:This petition for certiorari assails the resolution of respondent Secretary of Labor and Employment dated 28 June 1995 which affirmed the order of the Med-Arbiter dated 3 April 1995 allowing a certification election to be conducted among the regular rank and file employees of petitioner Furusawa Rubber Philippines, Inc., (FURUSAWA). The subsequent order of the Secretary of Labor dated 26 July 1995 denying petitioner's motion for reconsideration is likewise challenged herein.

On 8 March 1995 private respondent Furusawa Employees Union-Independent (FEU-IND) filed a petition for certification election among the rank and file employees of Furusawa Rubber Philippines, Inc., a domestic corporation engaged in the manufacture of rubber and other related products for export. On 3 April 1995 petitioner herein moved to dismiss the petition for certification election on the ground that respondent FEU-IND was not a legitimate labor organization not having complied with all the requisites of law.The main issue presented by petitioner was whether a photocopy of its certificate of registration submitted by the petitioning union which has not been duly authenticated and not supported by any other documentary evidence constitutes conclusive proof that FEU-IND has acquired legitimate status and therefore entitled to pursue its petition for certification election.On 3 April 1995 the Med-Arbiter ruled in the affirmative thus —It appearing from the records of the case that the petitioner union is a legitimate labor organization as evidenced by the attached xerox copy of the certificate of registration, the instant petition therefore is hereby given due course.WHEREFORE, premises considered, it is hereby ordered that a certification election be conducted among the regular rank and file employees of Furusawa Rubber Philippines Corporation. The eligible voters shall be based on the Company payroll three (3) months prior to the filing of the petition. The representation Officer of this Office is hereby directed to conduct the usual pre-election conference.

The choices in the certification election are as follows: (1) Furusawa Employees Union-Independent (FEU-IND); and, (2) No union. 1

FURUSAWA appealed to the Secretary of Labor but the latter affirmed the order of the Med-Arbiter. On 13 July 1995 FURUSAWA moved for a reconsideration but the motion was again denied. The main contention of petitioner is that FEU-IND is not a legitimate labor organization so that, under the law, it could not file a petition for certification election. The basis of this argument is the failure of the petitioning union to submit an original copy of its certificate of registration.We cannot sustain petitioner. We agree with respondent Secretary of Labor and Employment that FEU-IND is a legitimate labor organization. As such, it enjoys all the rights and privileges recognized by law. 2 The fact that FEU-IND has been issued Certificate of Registration No. RO-400-9502-UR-003 by Regional Office No. 14 of the Department of Labor and Employment (DOLE) is sufficient proof of its legitimacy. The presentation of the xerox copy of the certificate of registration to support its claim of being a duly registered labor organization instead of the submission of the original certificate is not a fatal defect and does not in any way affect its legitimate status as a labor organization conferred by its registration with DOLE. The issuance of the certificate of registration evidently shows that FEU-IND has complied with the requirements of Art. 234 of the Labor Code. The requirements for registration being mandatory, they are complied with before any labor organization, association or group of unions or workers acquires legal personality and be entitled to the rights and privileges granted by law to legitimate labor organizations.One of the rights of a legitimate labor organization is to represent its members in collective bargaining agreements; 3 also, to be certified as the exclusive representative of all employees in an appropriate unit for purposes of collective bargaining. 4 Hence the petition of FEU-IND, as a legitimate labor organization, for certification election may rightfully be granted. 5 FEU-IND filed a petition for certification election precisely to determine the will of the employees for purposes of collective bargaining. Basically, a petition for certification election is principally the concern of the workers. 6 The only exception is where the employer has to file a petition for certification election so that it can bargain collectively as mandated by Art. 258 of the Labor Code. Thereafter, the role of the employer in the certification process ceases. It becomes merely a bystander. In one case this court ruled that since the petition for certification election was filed by a legitimate labor organization under Art. 258 of the Labor Code, the employer should not have involved itself in the process. 7 To circumvent the law on the fundamental right of the workers to self-organization would render such constitutional provision meaningless. Section 31 Art. XIII, of the 1987 Constitution underscores the right of the workers to organize with others or to join any labor organization which he believes can assist and protect him in the successful pursuit of his daily grind. The choice is his. Any attempt on the part of management or employers to curtail or stifle this right of the workers will be deemed unconstitutional and considered as unfair labor practice on the part of management. Briefly, this right to self-organization is a fundamental right — to give the workers the freedom to form or join any labor organization voluntarily without fear of suppression or reprisal from management. PD No. 828 encourages trade unionism to supplement and strengthen the exercise of the workers' right to self-organization. 8 We quote with emphasis our ruling in Filipino Metal Corp. v. Ople, 9 that —. . . this Court has authoritatively laid down the controlling doctrine as to when an employer may have an interest sufficient in law enabling him to contest a certification election. There is relevance to this excerpt from Consolidated Farms, Inc. v. Noriel (No. L-47752, 31 July 1978, 84 SCRA 469 473.): 'The record of this proceeding leaves no doubt that all the while the party that offered the most obdurate resistance to the holding of a certification election is management . . . That circumstance of itself militated against the success of this petition. On a matter that should be the exclusive concern of labor, the choice of a collective bargaining representative, the employer is definitely an intruder. His participation, to say the least, deserves no encouragement. This court should be the last agency to lend support to such an attempt at interference with a purely internal affair of labor' (emphasis supplied).

Petitioner FURUSAWA further argues that the Med-Arbiter ignored the fact that FEU-IND does not represent at least 20% of the employees in the bargaining unit which it seeks to represent. Public respondent however has found the petition to be sufficient in form and substance, there being compliance with the required 20% support signatures. Article 257 of the Labor Code provides that in

an unorganized establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon filing of a petition by a legitimate labor organization for a certification election. 10

The alleged termination of the union members who are signatories to the petition for certification election was not substantiated by hard evidence. It in fact further indicated the need to hold such certification election which is the best and most appropriate means of ascertaining the will of the employees as to their choice of an exclusive bargaining representative. That there are no competing unions involved should not alter this means, the freedom of choice by the employees being the primordial consideration and the fact that the employees can still choose between FEU-IND and NO UNION. 11 Moreover, even on the assumption that the evidence is clearly insufficient and the number of signatories less than 30%, in this case, 20% this cannot militate against the favorable response to such petition for certification election. We find no merit in the petition. The issue on the legitimacy of the petitioning union should be settled in its favor. The submission of a xerox copy of the union's certificate of registration to prove its legitimacy is sufficient, hence, the Med-Arbiter correctly granted the petition for certification election. As it has been held in a long line of cases, a certification proceeding is not a litigation in the sense that the term is ordinarily understood, but an investigation of a fact-finding and non-adversarial character. It is not covered by the technical rules of evidence. Thus, as provided in Art. 221 of the Labor Code, proceedings before the National Labor Relations Commission are not covered by the technical rules of evidence and procedure. The court has already construed Art. 221 of the Labor Code in favor of allowing the NLRC or the labor arbiter to decide the case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular courts of justice. 12 Indeed, the technical rules of evidence do not apply if the decision to grant the petition proceeds from an examination of its sufficiency as well as a careful look into the arguments contained in position papers and other documents. In this regard, the factual findings of the Med-Arbiter appear to be supported by substantial evidence, hence, we must accord them great weight and respect. Under the premises, or at the very least, when conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier influence of the latter should be balanced by sympathy and compassion which the law must accord the underprivileged worker. This is only in keeping with the constitutional mandate that the State shall afford full protection to labor. 13 WHEREFORE, the instant petition is DISMISSED. The assailed resolution and order dated 28 June 1995 and 26 July 1995, respectively, of respondent Secretary of Labor and Employment are AFFIRMED.SO ORDERED.Davide, Jr., Vitug and Kapunan, JJ ., concur.

THIRD DIVISION [G.R. No. 96425. February 4, 1992.]PROGRESSIVE DEVELOPMENT CORPORATION, petitioner, vs. THE HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER EDGARDO DELA CRUZ, AND PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)-TUCP, respondents.

Beltran, Bacungan & Candoy for petitioner.Jimenez & Associates co-counsel for petitioner.

SYLLABUS1. LABOR LAW; CERTIFICATION ELECTION; HOLDING THEREOF BASED ON STATUTORY POLICY. — 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.2. ID.; ID.; PETITION THEREOF MUST BE FILED BY LEGITIMATE LABOR ORGANIZATION. — 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.3. ID.; LEGITIMATE LABOR ORGANIZATION; DEFINED; LEGITIMACY ACQUIRED ONLY UPON REGISTRATION WITH THE BLR. — Article 212(h) defines a legitimate labor organization as "any labor organization duly registered with the DOLE and includes any branch or local thereof ." 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 ." Ordinarily, a labor organization acquires legitimacy only upon registration with the BLR.4. ID.; ID.; APPLICATION FOR REGISTRATION; MUST BE SIGNED BY AT LEAST 20% OF EMPLOYEES IN A BARGAINING UNIT. — 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 agreement duly submitted to the DOLE, that the application is filed during the last sixty (60) days of the agreement.5. ID.; ID.; PURPOSE OF THE LAW IN REQUIRING REGISTRATION. — The purpose of the law in prescribing the requisites under Art. 234 of the Code 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."6. ID.; ID.; LOCAL OR CHAPTER OF A FEDERATION; NEED NOT BE REGISTERED INDEPENDENTLY; REQUIREMENTS OTHERWISE REQUIRED FOR UNION REGISTRATION, OMITTED; REASON; THEREFOR. — When an unregistered union becomes a branch, local or chapter of a federation, some of the aforementioned requirements for registration are no longer required. 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, Rule II of Book V of the Implementing Rules. 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.7. ID.; ID.; ID.; MANDATORY REQUIREMENTS FOR SUBMISSION TO THE BLR; EFFECT OF NON-COMPLIANCE THEREWITH. — 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.8. ID.; ID.; ID.; RELATIONSHIP WITH THE MOTHER UNION; LOCAL UNION MUST FIRST COMPLY WITH STATUTORY REQUIREMENTS BEFORE BEING CERTIFIED AS BARGAINING AGENT. — 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.9. ID.; UNION REGISTRATION; RATIONALE FOR CERTIFICATION AND ATTESTATION REQUIREMENTS. — 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.10. ID.; UNION AFFILIATION WITH FEDERATION; DOCUMENTARY REQUIREMENTS MUST BE COMPLIED WITH BY LOCAL OR CHAPTER. — 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. 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.

D E C I S I O NGUTIERREZ, JR., J p: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; and3) 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 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 xxxe) 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, and2) 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 PDEU-KILUSAN (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.

SECOND DIVISION [G.R. No. 131248. December 11, 1998.]DUNLOP SLAZENGER (PHILS.), INC., petitioner, vs. HON. SECRETARY OF LABOR AND EMPLOYMENT and DUNLOP SLAZENGER STAFF ASSOCIATION-APSOTEU, respondents.

Bautista Picazo Buyco Tan & Fider for petitioner.Seno Mendoza & Associates Law Offices for private respondent.

SYNOPSISRespondent union filed a Petition for Certification Election among the supervisory, office and technical employees of the petitioner company before the Department of Labor and Employment. Petitioner company filed its answer with motion to dismiss on the following grounds that respondent union is comprised of supervisory and rank-and-file employees and cannot act as bargaining agent for the proposed unit; that a single certification election cannot be conducted jointly among supervisory and rank-and-file employees; and that the union lacks legal standing since it failed to submit its books of accounts. Respondent union, on the other hand, alleged that its members are supervisors and not rank-and-file employees. The Mediator Arbiter granted the certification election, which was affirmed by the Secretary of Labor. Hence, this petition. Supervisors can be an appropriate bargaining unit. The resolution of the issue of whether or not the respondent union can file a petition for certification election to represent the supervisory employees of the petitioner company depends on whether the respondent union is composed solely of supervisory employees or of both supervisory and rank-and-file employees. Art. 245 of the Labor Code clearly provides that supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees. Here, respondent union has no legal right to file a certification election to represent a bargaining unit composed of supervisors for so long as it counts office and technical employees who are rank-and-file employees among its members.

SYLLABUS1. LABOR AND SOCIAL LEGISLATION; LABOR UNION; SUPERVISORS CAN BE APPROPRIATE BARGAINING UNIT; ELUCIDATED. — Supervisors can be an appropriate bargaining unit. "[A]n appropriate bargaining unit is a group of employees of a given employer, composed of all or less than the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of law. Otherwise stated, it is a legal collectivity for collective bargaining purposes whose members have substantially mutual bargaining interests in terms and conditions of employment as will assure to all employees their collective bargaining rights. A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining." 2. ID.; ID.; ID.; CAPACITY TO FILE PETITION FOR CERTIFICATION ELECTION. — Whether or not the respondent union can file a petition for certification election to represent the supervisory employees of the petitioner company, this issue depends on whether the respondent union is composed solely of supervisory employees or of both supervisory and rank-and-file employees. Article 245 of the Labor Code clearly provides that "supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees . . .."3. ID.; SUPERVISORY EMPLOYEES; HOW DETERMINED. — To determine who are supervisory and rank-and-file employees reference has to be made to Article 212 (m) of the Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the Omnibus Rules Implementing the Labor Code. The test of supervisory status is whether an employee possesses authority to act in the interest of his employer, which authority should not be merely routinary or clerical in nature but requires the use of independent judgment. Corollarily, what determines the nature of employment is not the employee's title, but his job description.

D E C I S I O NPUNO, J p:In this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner seeks the annulment of the Resolution and Order, dated July 19, 1997 and October 16, 1997, 1 of the public respondent Secretary of Labor and Employment calling for a certification election in its company.

It appears that on September 15, 1995, the respondent union filed a Petition for Certification Election among the supervisory, office and technical employees of the petitioner company before the Department of Labor and Employment, Regional Office No. III, San Fernando, Pampanga. It alleged that it is a legitimate labor organization, a duly chartered local of the Associated Professional, Supervisory, Office & Technical Employees Union (APSOTEU); that petitioner is a domestic corporation engaged in the manufacture of tennis balls and other allied products; that petitioner is an unorganized establishment and there is no certified bargaining agreement that will bar the filing of its petition for certification election; and that no certification election has been conducted within one (1) year prior to the filing of its petition for certification election. On October 9, 1995, the petitioner company filed its Answer with Motion to Dismiss based on three (3) grounds, namely: (1) that the respondent union is comprised of supervisory and rank-and-file employees and cannot act as bargaining agent for the proposed unit; (2) that a single certification election cannot be conducted jointly among supervisory and rank-and-file employees; and (3) that the respondent union lacks legal standing since it failed to submit its books of accounts. 2

In its Reply filed on December 5, 1995, the respondent union alleged that its members are supervisors and not rank-and-file employees. It averred that all its members are paid monthly by the petitioner company. It alleged that the bargaining unit it seeks to represent is made up of the monthly paid supervisory employees and other personnel who cannot be classified as belonging to the rank-and-file. It further contended that it has no obligation to attach its books of accounts since it is a legitimate labor organization. It urged that the certification election proceeding cannot be used to question the legal personality of a labor organization. 3 On March 4, 1996, however, respondent union submitted its new books of accounts consisting of the Cash Receipts Journal, Cash Disbursements Journal and two (2) ledgers. 4

On July 15, 1996, Mediator Arbiter Ma. Carmen A. Espinosa granted the petition for certification election. Respondent Secretary of Labor and Employment affirmed the Arbiter's decision ruling as follows:"xxx xxx xxx'The order of the Med-Arbiter directing the conduct of a certification elections is well and proper."A perusal of the records shows that the bargaining unit that the petitioner seeks to represent has been properly defined and this is composed of all the supervisory employees of the respondent company. We wish to emphasize that the right of supervisory employees to form their own labor organization separate from that of the rank-and-file union has been recognized by law. This is quite clear from the provisions of Article 245 of the Labor Code, as amended, which states: ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees-managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank and file employees but may join, assist or form separate labor organizations of their own.'"As to the contention of the respondent that the petitioning union is composed of both supervisory and rank and file employees, suffice it to stress that the same is not a sufficient reason that would warrant the dismissal of the present petition. The same can be taken care (sic) of during the pre-election conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank and file positions will be excluded from the list of eligible voters. "Anent the issue on the legitimacy of the petitioner, we agree with the findings of the Med-Arbiter that the petitioner has acquired the requisite legal personality to file the present petition for certification elections. This is shown by the fact that the petitioner has sufficiently complied with the mandatory reportorial requirements provided for under Section 3, Rule II, Book V of the Rules and Regulations Implementing the Labor Code, as amended and as enunciated by the Supreme Court in the cases of Progressive Development Corporation vs. Secretary of Labor, et al., 205 SCRA 802 and Protection Technology Inc. vs. Secretary of Labor, G.R. 11711, March 1, 1995." 5

Respondent Secretary of Labor denied petitioner's motion for reconsideration; hence, this petition.It is petitioner's submission that:"I."Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or excess of jurisdiction in holding that the respondent union is composed of all the supervisory employees of the [petitioner] company. "II. "Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or excess of jurisdiction in finding that even if the respondent union is composed of both supervisory and

rank-and-file employees such can be taken cared of during the pre-election conference thru the exclusion-inclusion proceedings."III. "Respondent Secretary acted contrary to law and with grave abuse of discretion amounting to lack or excess of jurisdiction in upholding the findings of the Med-Arbiter that the respondent union has complied with all the requirements for it to attain the legal personality to file the petition for certification election." 6

The petition is meritorious.We agree with the public respondent that supervisors can be an appropriate bargaining unit. This is in accord with our repeated ruling that "[a]n appropriate bargaining unit is a group of employees of a given employer, composed of all or less than the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of law. Otherwise stated, it is a legal collectivity for collective bargaining purposes whose members have substantially mutual bargaining interests in terms and conditions of employment as will assure to all employees their collective bargaining rights. A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining." 7 The critical issue, however, is whether or not the respondent union can file a petition for certification election to represent the supervisory employees of the petitioner company. The resolution of this issue depends on whether the respondent union is composed solely of supervisory employees or of both supervisory and rank-and-file employees. Article 245 of the Labor Code clearly provides that "supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees . . ."To determine who are supervisory and rank-and-file employees reference has to be made to Article 212 (m) of the Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the Omnibus Rules Implementing the Labor Code, as amended, viz:"'Managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book [these Rules].'"

Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law. The test of supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the interest of his employer, which authority should not be merely routinary or clerical in nature but requires the use of independent judgment. Corollarily, what determines the nature of employment is not the employee's title, but his job description. 8 In the instant case, the list of monthly paid employees submitted by the petitioner company contains the names of about twenty seven (27) supervisory employees, six (6) managerial employees, one (1) confidential employee and twenty six (26) office and technical employees holding various positions. The list reveals that the positions occupied by the twenty six (26) office and technical employees are in fact rank-and-file positions, i.e., A/C mechanic, draftsmen, storemen, motorpool mechanic, secretaries, accounts clerk, company nurses, industrial mechanic, boiler men, laboratory technicians, payroll clerk, welder, purchasing clerk, company drivers and electricians. It is fairly obvious that these positions cannot be considered as supervisory positions for they do not carry the authority to act in the interest of the employer or to recommend managerial actions. It is not decisive that these employees are monthly paid employees. Their mode of compensation is usually a matter of convenience and does not necessarily determine the nature and character of their job.We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." Public respondent gravely misappreciates the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. Due to the irreconcilability of their interests we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union, 9 viz:"xxx xxx xxx

"Clearly, based on this provision [Article 245, Labor Code], a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code."

Needless to stress, the respondent union has no legal right to file a certification election to represent a bargaining unit composed of supervisors for so long as it counts rank-and-file employees among its members.IN VIEW WHEREOF, the Resolution and Order dated July 19, 1997 and October 16, 1997, in OS-A-10-171-96 of the public respondent are annulled and set aside. No costs.SO ORDERED.Bellosillo, Mendoza and Martinez, JJ ., concur.

FIRST DIVISION[G.R. No. 115077. April 18, 1997.]PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT, petitioner, vs. HON. BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor, and NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN, respondents.

Jimenez & Associates for petitioner.Joel G. Martinez for respondents.

SYLLABUS1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR ORGANIZATION; REGISTRATION; RECOGNITION BY THE BUREAU OF LABOR RELATIONS NOT MINISTERIAL; ART. 234, ELUCIDATED. — The real controversy in this case centers on the question of whether or not, after the necessary papers and documents have been filed by a labor organization, recognition by the Bureau of Labor Relations merely becomes a ministerial function. We do not agree. A more than cursory reading of Art. 234 of the Labor Code on Requirements for Registration clearly indicates that the requirements embodied therein are intended as preventive measures against the commission of fraud. After a labor organization has filed the necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor Relations to check if the requirements under Article 234 have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially, those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the propriety of the labor organization's registration could be assailed directly through cancellation of registration proceedings in accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election. These measures are necessary — and may be undertaken simultaneously — if the spirit behind the Labor Code's requirements for registration are to be given flesh and blood. Registration requirements specifically 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 use the labor organization for illegitimate ends. Such requirements are a valid exercise of the police power, because the activities in which labor organizations, associations and unions of workers are engaged directly affect the public interest and should be protected. Furthermore, the Labor Code under Art. 235 grants the Bureau of Labor Relations a period of thirty (30) days within which to review all applications for registration. This thirty-day period ensures that any action taken by the Bureau of Labor Relations is made in consonance with the mandate of the Labor Code.2. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; GRAVE ABUSE OF DISCRETION; COMMITTED BY PUBLIC RESPONDENT IN AFFIRMING MED-ARBITER'S ORDER IN SPITE OF THE FACT THAT THE UNION'S LEGITIMACY WAS PUT IN ISSUE AND THE ALLEGATIONS OF FRAUD SUPPORTED BY EVIDENCE. — The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization. In the case before us, the Med-Arbiter summarily disregarded the petitioner's prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that "for all intents and purposes. Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate labor organization." The grounds invoked by petitioner for the cancellation of respondent Union's registration fall under paragraph (a) and (c) of Article 239 of the Labor Code. These grounds constitute a grave challenge to the right of respondent Union to ask for certification election. The Med-Arbiter should have looked into the merits of the petition for cancellation before issuing an order calling for certification election. Registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights, particularly the right to ask for certification election in a bargaining unit. As we laid emphasis in Progressive Development Corporation Labor, "[t]he employer needs the 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." Clearly, fraud, falsification and misrepresentation in obtaining recognition as a legitimate labor organization are contrary to the Med-Arbiter's conclusion not merely collateral issues. The invalidity of respondent Union's registration would negate its legal personality to

participate in certification election. Once a labor organization attains the status of a legitimate labor organization it begins to possess all of the rights and privileges granted by law to such organizations. As such rights and privileges ultimately affect areas which are constitutionally protected, the activities in which labor organizations, associations and unions are engaged directly affect the public interest and should be zealously protected. A strict enforcement of the Labor Code's requirements for the acquisition of the status of a legitimate labor organization is in order. Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have been more prudent for the Med-Arbiter and public respondent to have granted petitioner's request for the suspension of proceedings in the certification election case, until the issue of the legality of the Union's registration shall have been resolved. Failure of the Med-Arbiter and public respondent to heed the request constituted a grave abuse of discretion.

D E C I S I O NKAPUNAN, J p:On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent Union) filed a petition for certification election with the Department of Labor (National Capital Region) in behalf of the rank and file employees of the Progressive Development Corporation (Pizza Hut) docketed as NCR Case No. NCR-OD-M-9307-020. 1

Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud, falsification and misrepresentation in the respondent Union's registration making it void and invalid. The motion specifically alleged that: a) respondent Union's registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in the ratification of the respondent Union's constitution and by-laws and in the election of its officers that there were two sets of supposed attendees to the alleged organizational meeting that was alleged to have taken place on June 26, 1993; that the alleged chapter is claimed to have been supported by 318 members when in fact the persons who actually signed their names were much less; and b) while the application for registration of the charter was supposed to have been approved in the organizational meeting held on June 27, 1993, the charter certification issued by the federation KATIPUNAN was dated June 26, 1993 or one (1) day prior to the formation of the chapter, thus, there were serious falsities in the dates of the issuance of the charter certification and the organization meeting of the alleged chapter. Citing other instances of misrepresentation and fraud, petitioner, on August 29, 1993, filed a Supplement to its Motion to Dismiss, 2 claiming that:1) Respondent Union alleged that the election of its officers was held on June 27, 1993; however, it appears from the documents submitted by respondent union to the BLR-DOLE that the Union's constitution and by-laws were adopted only on July 7, 1993, hence, there was no bases for the supposed election of officers on June 27, 1993 because as of this date, there existed no positions to which the officers could be validly elected;2) Voting was not conducted by secret ballot in violation of Article 241, section (c) of the Labor Code;3) The Constitution and by Laws submitted in support of its petition were not properly acknowledged and notarized. 3

On August 30, 1993, petitioner filed a Petition 4 seeking the cancellation of the Union's registration on the grounds of fraud and falsification, docketed as BLR Case No. 8-21-83. 5 Motion was likewise filed by petitioner with the Med-Arbiter requesting suspension of proceedings in the certification election case until after the prejudicial question of the Union's legal personality is determined in the proceedings for cancellation of registration.However, in an Order dated September 29, 1993, 6 Med-Arbiter Rasidali C. Abdullah directed the holding of a certification election among petitioner's rank and file employees. The Order explained:. . . Sumasaklaw sa Manggagawa ng Pizza Hut is a legitimate labor organization in contemplation of law and shall remain as such until its very charter certificate is canceled or otherwise revoked by competent authority. The alleged misrepresentation, fraud and false statement in connection with the issuance of the charter certificate are collateral issues which could be properly ventilated in the cancellation proceedings. 7 On appeal to the office of the Secretary of Labor, Labor Undersecretary Bienvenido E. Laguesma in a Resolution dated December 29, 1993 8 denied the same.

A motion for reconsideration of the public respondent's resolution was denied in his Order 9 dated January 27, 1994, hence, this special civil action for certiorari under Rule 65 of the Revised Rules of Court where the principal issue raised is whether or not the public respondent committed grave abuse of discretion in affirming the Med-Arbiter's order to conduct a certification election among petitioner's rank and file employees, considering that: (1) respondent Union's legal personality was squarely put in issue; (2) allegations of fraud and falsification, supported by documentary evidence were made; and (3) a petition to cancel respondent Union's registration is pending with the regional office of the Department of Labor and Employment. 10

We grant the petition.In the public respondent's assailed Resolution dated December 29, 1993, the suggestion is made that once a labor organization has filed the necessary documents and papers and the same have been certified under oath and attested to, said organization necessarily becomes clothed with the character of a legitimate labor organization. The resolution declares:Records show that at the time of the filing of the subject petition on 9 July 1993 by the petitioner NLM-KATIPUNAN, for and in behalf of its local affiliate Sumasaklaw sa Manggagawa ng Pizza Hut, the latter has been clothed with the status and/or character of a legitimate labor organization. This is so, because on 8 July 1993, petitioner submitted to the Bureau of Labor Relations (BLR), this Department, the following documents: Charter Certificate, Minutes of the Organizational Meeting, List of Officers, and their respective addresses, financial statement, Constitution and By-Laws (CBL, and the minutes of the ratification of the CBL). Said documents (except the charter certificate) are certified under oath and attested to by the local union's Secretary/Treasurer and President, respectively.

As to the contention that the certification election proceedings should be suspended in view of the pending case for the cancellation of the petitioner's certificate of registration, let it be stressed that the pendency of a cancellation case is not a ground for the dismissal or suspension of a representation proceedings considering that a registered labor organization continues to be a legitimate one entitled to all the rights appurtenant thereto until a final valid order is issued canceling such registration. 11

In essence, therefore, the real controversy in this case centers on the question of whether or not, after the necessary papers and documents have been filed by a labor organization, recognition by the Bureau of Labor Relations merely becomes a ministerial function.We do not agree.In the first place, the public respondent's views as expressed in his December 29, 1993 Resolution miss the entire point behind the nature and purpose of proceedings leading to the recognition of unions as legitimate labor organizations. Article 234 of the Labor Code provides:Art. 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 percent (20%) of all the employees in the bargaining unit where it seeks to operate;(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and(e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it.

A more than cursory reading of the aforecited provisions clearly indicates that the requirements embodied therein are intended as preventive measures against the commission of fraud. After a labor organization has filed the necessary papers and documents for registration, it becomes mandatory for the Bureau of Labor Relations to check if the requirements under Article 234 have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the propriety of the labor organization's registration could be assailed directly through cancellation of registration proceedings in accordance with Articles 238 and 239 of

the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election.These measures are necessary — and may be undertaken simultaneously — if the spirit behind the Labor Code's requirements for registration are to be given flesh and blood. Registration requirements specifically 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 use the labor organization for illegitimate ends. 12 Such requirements are a valid exercise of the police power, because the activities in which labor organizations, associations and unions of workers are engaged directly affect the public interest and should be protected. 13

Thus, in Progressive Development Corporation vs. Secretary of Labor and Employment, 14 we held: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.xxx xxx xxxBut 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 . . .xxx xxx xxx. . . 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 or 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.xxx xxx xxx. . . 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.xxx xxx xxxThe 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.

Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30) days within which to review all applications for registration. Article 235 provides:"Art. 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."

The thirty-day period in the aforecited provision ensures that any action taken by the Bureau of Labor Relations is made in consonance with the mandate of the Labor Code, which, it bears emphasis, specifically requires that the basis for the issuance of a certificate of registration should be compliance with the requirements for recognition under Article 234. Since, obviously, recognition of a labor union or labor organization is not merely a ministerial function, the question now arises as to whether or not the public respondent committed grave abuse of discretion in affirming the Med-Arbiter's order in spite of the fact that the question of the Union's legitimacy was squarely put in issue and that the allegations of fraud and falsification were adequately supported by documentary evidence.

The Labor Code requires that in organized and unorganized 15 establishments, a petition for certification election must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization.In the case before us, the Med-Arbiter summarily disregarded the petitioner's prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that "for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate labor organization." 16 Glossing over the transcendental issue of fraud and misrepresentation raised by herein petitioner, Med-Arbiter Rasidali Abdullah held that:The alleged misrepresentation, fraud and false statement in connection with the issuance of the charter certificate are collateral issues which could be ventilated in the cancellation proceedings. 17

It cannot be denied that the grounds invoked by petitioner for the cancellation of respondent Union's registration fall under paragraph (a) and (c) of Article 239 of the Labor Code, to wit:(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, the list of members who took part in the ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, the list of members who took part in the ratification;xxx xxx xxx(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses within thirty (30) days from election.xxx xxx xxx

The grounds ventilated in cancellation proceedings in accordance with Article 239 of the Labor Code constitute a grave challenge to the right of respondent Union to ask for certification election. The Med-Arbiter should have looked into the merits of the petition for cancellation before issuing an order calling for certification election. Registration based on false and fraudulent statements and documents confer no legitimacy upon a labor organization irregularly recognized, which, at best, holds on to a mere scrap of paper. Under such circumstances, the labor organization, not being a legitimate labor organization, acquires no rights, particularly the right to ask for certification election in a bargaining unit.As we laid emphasis in Progressive Development Corporation Labor,18 "[t]he employer needs the 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." Clearly, fraud, falsification and misrepresentation in obtaining recognition as a legitimate labor organization are contrary to the Med-Arbiter's conclusion not merely collateral issues. The invalidity of respondent Union's registration would negate its legal personality to participate in certification election.Once a labor organization attains the status of a legitimate labor organization it begins to possess all of the rights and privileges granted by law to such organizations. As such rights and privileges ultimately affect areas which are constitutionally protected, the activities in which labor organizations, associations and unions are engaged directly affect the public interest and should be zealously protected. A strict enforcement of the Labor Code's requirements for the acquisition of the status of a legitimate labor organization is in order.Inasmuch as the legal personality of respondent Union had been seriously challenged, it would have been more prudent for the Med-Arbiter and public respondent to have granted petitioner's request for the suspension of proceedings in the certification election case, until the issue of the legality of the Union's registration shall have been resolved. Failure of the Med-Arbiter and public respondent to heed the request constituted a grave abuse of discretion.WHEREFORE, PREMISES CONSIDERED, the instant petition is GRANTED and the Resolution and Order of the public respondent dated December 29, 1993 and January 24, 1994, respectively, are hereby SET ASIDE.The case is REMANDED to the Med-Arbiter to resolve with reasonable dispatch petitioner's petition for cancellation of respondent Union's registrationSO ORDERED.Padilla, Bellosillo and Vitug, JJ ., concur.

Hermosisima, Jr., J ., is on leave.

THIRD DIVISION [G.R. No. 113907. April 20, 2001.]MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), …, petitioners, vs. HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO IBANEZ, AND RODRIGO AGUILING, respondents.

Potenciano A. Flores, Jr. for petitioners.The Solicitor General for public respondent.Gonzales Batiller Bilog & Associates for private respondents.

SYNOPSISThe present case is the resolution of petitioners' motion for partial reconsideration of the Court's decision dated February 28, 2000, whereby the Court ordered the immediate reinstatement of petitioners to their respective positions and should reinstatement be not feasible, respondent company shall pay separation pay of one month salary for every year of service. In their motion, petitioners alleged that the Court committed patent and palpable error in holding that "the respondent company officials cannot be held personally liable for damages on account of employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents. Petitioners further contended that while the case was pending before the public respondents, the respondent company, in the early part of February 1990, began removing its machineries and equipment from its plant located at Merville Park, Parañaque and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches; that the respondent company officials are also the officers and incorporators of these satellite companies as shown in their articles of incorporation and the general information sheet. Petitioners also prayed for the inclusion of the names of employees listed in Annex "D" of the petition which they inadvertently omitted in the caption of the case. The Supreme Court partially granted the motion only with respect to the inclusion of the names of employees listed in Annex "D" which petitioners allegedly inadvertently omitted in the caption of the previous petition. On the issue of damages, the Court ruled that a corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general from the people comprising it and the rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities. However, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as when the directors and trustees or, in appropriate cases, the officers of a corporation act in bad faith or with gross negligence in directing the corporate affairs. The Court found nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners to warrant personal liability. The Court also ruled that even assuming that the officials of respondent company are also the officers and incorporators of the other satellite companies, such substantial identity of the incorporators between the two companies does not necessarily imply fraud. The Court considered the documents attached to petitioners' motion for reconsideration showing that the satellite companies were established prior to the filing of petitioners' complaint against private respondents with the Department of Labor and Employment on September 6, 1989 and that the other corporations have different sets of incorporators aside from the respondent officers and are holding their principal offices at different locations.

SYLLABUS1. MERCANTILE LAW; CORPORATION CODE; THE DIRECTORS AND OFFICERS OF A CORPORATION ARE LIABLE FOR DAMAGES IF THE TERMINATION OF EMPLOYMENT OF CORPORATE EMPLOYEES IS DONE WITH MALICE OR BAD FAITH; NOTHING SUBSTANTIAL ON RECORD TO SHOW THAT RESPONDENT CORPORATE OFFICERS ACTED IN BAD FAITH OR WERE GUILTY OF GROSS NEGLIGENCE IN TERMINATING THE SERVICES OF PETITIONERS SO AS TO WARRANT PERSONAL LIABILITY. — In labor cases, particularly, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith. Bad faith or negligence is a question of fact and is evidentiary. It has been held that bad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will;

it partakes of the nature of fraud. In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. 2. ID.; ID.; SUBSTANTIAL IDENTITY OF INCORPORATORS BETWEEN RESPONDENT COMPANY AND ITS SATELLITE COMPANIES DOES NOT NECESSARILY IMPLY FRAUD. — Petitioners' claim that the jobs intended for the respondent company's regular employees were diverted to its satellite companies where the respondent company officers are holding key positions is not substantiated and was raised for the first time in consideration. Even assuming that the respondent company officials are also officers and incorporators of the satellite companies, such circumstance does not in itself amount to fraud. The documents attached to petitioners' motion for reconsideration show that these satellite companies were established prior to the filing of petitioners' complaint against private respondents with the Department of Labor and Employment on September 6, 1989 and that these corporations have different sets of incorporators aside from the respondent officers and are holding their principal offices at different locations. Substantial identity of incorporators between respondent company and these satellite companies does not necessarily imply fraud. In such a case, respondent company's corporate personality remains inviolable. 3. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; CANNOT BIND PERSONS WHO ARE NOT PARTIES TO THE ACTION. — Petitioners' prayer for the inclusion of employees listed in Annex "D" whose names were admittedly inadvertently excluded in the caption of the case and for the correction of typographical errors of the employees' names appearing in the caption, is well taken and is hereby granted. However, petitioners' prayer for the inclusion of other employees allegedly similarly situated but whose names were not included either in Annex "D" or in the caption of the case must be denied. A judgment cannot bind persons who are not parties to the action. It is elementary that strangers to a case are not bound by the judgment rendered by the court and such judgment is not available as an adjudication either against or in favor of such other person. Petitioners failed to explain why these employees allegedly similarly situated were not included in the submitted list filed before us. Such inclusion would be tantamount to a substantial amendment which cannot be allowed at this late stage of the proceedings as it will definitely work to the prejudice and disadvantage of the private respondents.

R E S O L U T I O NGONZAGA-REYES, J p:Before us is petitioners' motion for partial reconsideration of our decision dated February 28, 2000, 1 the dispositive portion of which reads: 2 "WHEREFORE, the petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to immediately reinstate the petitioners to their respective positions. Should reinstatement be not feasible, respondent company shall pay separation pay of one month salary for every year of service. Since petitioners were terminated without the requisite written notice at least 30 days prior to their termination, following the recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann Department Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from the time the herein petitioner employees and union officers were dismissed until their actual reinstatement. Should reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated until the finality of this decision. Costs against the respondent company. SO ORDERED."

Petitioners allege that this Court committed patent and palpable error in holding that "the respondent company officials cannot be held personally liable for damages on account of employees' dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents" whereas the records clearly established that respondent company officers Saul Tawil, Carlos T. Javelosa and Renato C. Puangco have caused the hasty, arbitrary and unlawful dismissal of petitioners from work; that as top officials of the respondent company who handed down the decision dismissing the petitioners, they are responsible for acts of unfair labor practice; that these respondent corporate officers should not be considered as mere agents of the company but the wrongdoers. Petitioners further contend that while the case was pending before the public

respondents, the respondent company, in the early part of February 1990, began removing its machineries and equipment from its plant located at Merville Park, Parañaque and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches; 3 that the respondent company officials are also the officers and incorporators of these satellite companies as shown in their articles of incorporation and the general information sheet. They added that during their ocular inspection of the plant site of the respondent company, they found that the same is being used by other unnamed business entities also engaged in the manufacture of garments. Petitioners further claim that the respondent company no longer operates its plant site as M. Greenfield thus it will be very difficult for them to fully enforce and implement the court's decision. In their subsequent motion filed on the same day, petitioners also pray for the (A) inclusion of the names of employees listed in Annex "D" of the petition which they inadvertently omitted in the caption of the case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3) Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Añonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte, Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29) Rosario, Margie del (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; (B) correction of their own typographical errors of the names of employees appearing in the caption, which should be as follows: Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palaca, Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson,4 Anita Ahillon, Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez,5 Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco;6 (C) inclusion of other employees similarly situated whose names were not included in Annex "D" or in the caption of the case, to wit: (1) Dionisa Aban, (2) Alicia Aragon, (3) Vicky Francia, (4) Nelita F. Gelongos, (5) Erlinda San Juan, (6) Erlinda Baby Patungan Manalo, (7) Jenette Patungan,7 (8) Blandina Simbahan,8 (9) Asuncion Varona,9 (10) Josefina Andres, (11) Teresita Arales, (12) Alice Artikulo, (13) Esther Cometa, (14) Eliza Cabiting, (15) Erlinda Dalut, (16) Edna Fernandez, (17) Emily Inocencio, (18) Esperanza Jalocon, (19) Imelda Jarabe, (20) Mercedes Pabadora, (21) Venerado Pastoral, (22) Cristina Perlas, (23) Margie del Rosario. 10

In their Comment, the Solicitor General interposes no objection to petitioners' prayer for the inclusion of omitted and similarly situated employees and the correction of employees' names in the caption of the case.On the other hand, private respondent company officials Carlos Javelosa and Remedios Caoleng, in their Comment, state that considering that petitioners admitted having knowledge of the fact that private respondent officers are also holding key positions in the alleged satellite companies, they should have presented the pertinent evidence with the public respondents; thus it is too late for petitioners to require this Court to admit and evaluate evidence not presented during the trial; that the supposed proof of satellite companies hardly constitute newly discovered evidence. Respondent officials interpose no objection to the inclusion of employees inadvertently excluded in the caption of the case but object to the inclusion of employees who were allegedly similarly situated for the reason that these employees had not been parties to the case, hence should not be granted any relief from the court. Respondent company failed to file its comment. 11 Petitioners' contention that respondent company officials should be made personally liable for damages on account of petitioners' dismissal is not impressed with merit. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general from the people comprising it. 12 The rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities. 13 True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases: 14

1. When directors and trustees or, in appropriate cases, the officers of a corporation — (a) Vote for or assent to patently unlawful acts of the corporation;(b) act in bad faith or with gross negligence in directing the corporate affairs;(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons. 15

(2) When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto. 16 (3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation. 17

(4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action. 18

In labor cases, particularly, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith. 19 Bad faith or negligence is a question of fact and is evidentiary. 20 It has been held that bad faith does not connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will; it partakes of the nature of fraud. 21

In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. As held in Sunio vs. NLRC, 22 "We now come to the personal liability of petitioner, Sunio, who was made jointly and severally responsible with petitioner company and CIPI for the payment of the backwages of private respondents. This is reversible error. The Assistant Regional Director's Decision failed to disclose the reason why he was made personally liable. Respondents, however, alleged as grounds thereof, his being the owner of one half (1/2) interest of said corporation, and his alleged arbitrary dismissal of private respondents.Petitioner Sunio was impleaded in the Complaint in his capacity as General Manager of petitioner corporation. There appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of private respondents. His act, therefore, was within the scope of his authority and was a corporate act.It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personality. Petitioner Sunio, therefore, should nor have been made personally answerable for the payment of private respondents' back salaries."

Petitioners' claim that the jobs intended for the respondent company's regular employees were diverted to its satellite companies where the respondent company officers are holding key positions is not substantiated and was raised for the first time in consideration. Even assuming that the respondent company officials are also officers and incorporators of the satellite companies, such circumstance does not in itself amount to fraud. The documents attached to petitioners' motion for reconsideration show that these satellite companies 23 were established prior to the filing of petitioners' complaint against private respondents with the Department of Labor and Employment on September 6, 1989 and that these corporations have different sets of incorporators aside from the respondent officers and are holding their principal offices at different locations. Substantial identity of incorporators between respondent company and these satellite companies does not necessarily imply fraud. 24 In such a case, respondent company's corporate personality remains inviolable. 25 Although there were earlier decisions of this Court in labor cases where corporate officers were held to be personally liable for the payment of wages and other money claims to its employees, we find those rulings inapplicable to this case. In La Campana Coffee Factory, Inc. vs. Kaisahan ng Manggagawa sa La Campana (KKM), 26 La Campana Coffee Factory, Inc. and La Campana Gaugau Packing were substantially owned by the same person. They had one office, one management, and a single payroll for both businesses. The laborers of the gaugau factory and the coffee factory were also interchangeable, i.e., the workers in one factory worked also in the other factory. In Claparols vs. Court of Industrial Relations, 27 the Claparol Steel and Nail Plant which was ordered to pay its workers backwages, ceased operations on June 30, 1957 and was succeeded on the next day,

July 1, 1957 by the Claparols Steel Corporation. Both corporations were substantially owned and controlled by the same person and there was no break or cessation in operations. Moreover, all the assets of the steel and nail plant were transferred to the new corporation.Notably, in the above-mentioned cases, a new corporation was created, owned by the same family, engaged in the same business and operating in the same compound, a situation which is not obtaining in the instant case.In AC Ransom Labor Union-CCLU vs. NLRC, 28 the Court ruled that under the Minimum Wage Law, the responsible officer of an employer corporation can be held personally liable for non-payment of backwages for "if the policy of the law were otherwise, the corporation employer would have devious ways for evading of back wages." This Court said:"In the instant case, it would appear that RANSOM, in 1969, foreseeing the possibility or probability of payment of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19, 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM."

Clearly, the situation in AC Ransom does not obtain in this case, where the alleged satellite companies were established even prior to the filing of petitioners' complaint with the Department of Labor.Petitioners' prayer for the inclusion of employees listed in Annex "D" whose names were admittedly inadvertently excluded in the caption of the case and for the correction of typographical errors of the employees' names appearing in the caption, is well taken and is hereby granted. However, petitioners' prayer for the inclusion of other employees allegedly similarly situated but whose names were not included either in Annex "D" or in the caption of the case must be denied. A judgment cannot bind persons who are not parties to the action. 29 It is elementary that strangers to a case are not bound by the judgment rendered by the court and such judgment is not available as an adjudication either against or in favor of such other person. 30 Petitioners failed to explain why these employees allegedly similarly situated were not included in the submitted list filed before us. Such inclusion would be tantamount to a substantial amendment which cannot be allowed at this late stage of the proceedings as it will definitely work to the prejudice and disadvantage of the private respondents. 31 WHEREFORE, petitioners' motion for reconsideration is partially granted so as to include the names of employees listed in Annex "D" which petitioners inadvertently omitted in the caption of this case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3)Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Añonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte, Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29) Rosario, Margie deL (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; and to correct the typographical errors of the names of employees appearing in the caption, as follows: Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palacaz Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson, Anita Ahillon. Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez, Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco. SO ORDERED.Melo and Sandoval-Gutierrez, JJ., concur.Vitug and Panganiban, J., reiterate their separate opinion in Serrano v. NLRC, GR 117040, January, 2000.

SECOND DIVISION[G.R. No. 102084. August 12, 1998.]DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE, petitioner, vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment; ROLANDO S. DE LA CRUZ, Med-Arbiter Regional Office No. IV, DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE SUPERVISORY UNION-FEDERATION OF FREE WORKERS, respondents.

De La Rosa, Tejero & Nograles for petitioner.FFW Legal Center for private respondent.

SYNOPSISPrivate respondent Federation of Free Workers-De La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC) is a labor organization composed of the supervisory employees of petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM). On April 17, 1991, the Federation of Free Workers (FFW), a federation of labor unions, filed on behalf of private respondent a petition for certification election among the supervisory employees of petitioner. The petition was opposed by petitioner on the ground that several employees who signed the petition were managerial employees and that the FFW-DLSUMCCSUC was composed of both supervisory and rank-and-file employees of the company in violation of Article 245 of the Labor Code. The Med-Arbiter of the Department of Labor and Employment (DOLE) Regional Office granted the petition. Petitioner appealed to the Secretary of Labor and Employment. However, the appeal was dismissed. The DOLE found the evidence presented by the petitioner concerning the alleged managerial status of several employees to be insufficient. Petitioner moved for reconsideration, but its motion was denied. Hence, the present petition for certiorari. The Supreme Court dismissed the petition. The Court ruled that although private respondent and another union composed of rank-and-file employees of petitioner are indeed affiliated with the same national federation, the FFW, petitioner has not presented any evidence showing that the rank-and-file employees composing the other union are directly under the authority of the supervisory employees. The Court reiterated the ruling in Adamson and Adamson, Inc. vs. CIR, that the fact that two groups of workers are employed by the same company and the fact that they are affiliated with a common national federation are not sufficient to justify the conclusion that the organizations are actually just one. Their immediate professional relationship must be established. In the case at bar, there is no proof that the supervisors who compose the local union have direct authority over the rank-and-file employees composing the other local union which is also affiliated with the FFW.

SYLLABUS1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS; RIGHT OF SUPERVISORY EMPLOYEES TO SELF-ORGANIZATION. — Supervisory employees have the right to self-organization as do other classes of employees save only managerial ones. The Constitution states that "the right of the people, including those employed in the public and private sectors, to form unions, associations or societies for purposes not contrary to law, shall not be abridged." As we recently held in United Pepsi-Cola Supervisory Union vs. Laguesma, the framers of the Constitution intended, by this provision, to restore the right of supervisory employees to self-organization which had been withdrawn from them during the period of martial law. Conformably with the constitutional mandate. Art. 245 of the Labor Code now provides for the right of supervisory employees to self-organization, subject to the limitation that they cannot join an organization of rank-and-file employees: Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organization of their own. 2. ID.; ID.; ID.; THE RIGHT OF SUPERVISORY EMPLOYEES TO SELF-ORGANIZATION IS SUBJECT TO THE LIMITATION THAT THEY CANNOT JOIN AN ORGANIZATION OF RANK-AND-FILE EMPLOYEES; REASON. — The reason for the segregation of supervisory and rank-and-file employees of a company with respect to the exercise of the right to-self- organization is the difference in their interests. Supervisory employees are more closely identified with the employer than with the rank-and-file employees. If supervisory and rank-and-file employees in a company are allowed to form a single union, the conflicting interests of these groups impair their relationship and adversely affect discipline, collective bargaining, and strikes. These consequences can obtain not only in cases where supervisory and rank-and-file employees in the same company belong to a single union but also where unions formed independently by supervisory and rank-and-file employees of a company are allowed to

affiliate with the same national federation. Consequently, this Court has held in Atlas Lithographic Services Inc. vs. Laguesma that — To avoid a situation where supervisors would merge with the rank-and-file or where the supervisors labor organization would represent conflicting interests, Then a local supervisors' union should not be allowed to affiliate with a national federation of unions of rank-and-file employees where that federation actively participates in union activities in the company. As we explained in that case, however, such a situation would obtain only where two conditions concur: First, the rank-and-file employees are directly under the authority of supervisory employees. Second, the national federation is actively involved in union activities in the company. Indeed, it is the presence of these two conditions which distinguished Atlas Lithographic Services, Inc. vs. Laguesma from Adamson & Adamsons Inc. vs. CIR where a different conclusion was reached. The affiliation of two local unions in a company with the same national federation is not by itself a negation of their independence since in relation to the employer, the local unions are considered as the principals, while the federation is deemed to be merely their agent. This conclusion is in accord with the policy that any limitation on the exercise by employees of the right to self-organization guaranteed in the Constitution must be construed strictly. Workers should be allowed the practice of this freedom to the extent recognized in the fundamental law.3. ID.; ID.; ID.; ID.; THE FACT THAT THE RANK AND FILE EMPLOYEE'S UNION AND THE SUPERVISORY EMPLOYEES UNION ARE AFFILIATED WITH A COMMON NATIONAL FEDERATION IS NOT SUFFICIENT TO JUSTIFY THE CONCLUSION THAT THEIR ORGANIZATIONS ARE ACTUALLY JUST ONE; THERE MUST BE PROOF THAT THE SUPERVISORS WHO COMPOSED THE LOCAL UNION HAVE DIRECT AUTHORITY OVER THE RANK-AND-FILE EMPLOYEES COMPOSING THE OTHER LOCAL UNION WHICH IS ALSO AFFILIATED WITH THE NATIONAL FEDERATION. — Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees composing the other union are directly under the authority of the supervisory employees. As held in Adamson & Adamson, Inc. vs. CIR, the fact that the two groups of workers are employed by the same company and the fact that they are affiliated with a common national federation are not sufficient to justify the conclusion that their organizations are actually just one. Their immediate professional relationship must be established. To borrow the language of Adamson & Adamson, Inc. vs. CIR: We find without merit the contention of petitioner that if affiliation will be allowed, only one union will in fact represent both supervisors and rank-and-file employees of the petitioner: that there would be an indirect affiliation of supervisors and rank-and-file employees with one labor organization: that there would be a merging of the two bargaining units; and that the respondent union will lose its independence because it becomes an alter ego of the federation. Mention has already been made of the fact that the petition for certification election in this case was filed by the FFW on behalf of the local union. This circumstance, while showing active involvement by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation of Art. 245 since there is no proof that the supervisors who compose the local union have direct authority over the rank-and-file employees composing the other local union which is also affiliated with the FFW. This fact differentiates the case from Atlas Lithographic Services, Inc. vs. Laguesma, in which, in addition to the fact that the petition for certification election had been filed by the national federation, it was shown that the rank-and-file employees were directly under the supervisors organized by the same federation.

D E C I S I O NMENDOZA, J p:Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and medical school at Dasmariñas, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the other hand, is a labor organization composed of the supervisory employees of petitioner DLSUMCCM.

On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions, issued a certificate to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification election among the supervisory employees of petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees who signed the petition for certification election

were managerial employees and that the FFW-DLSUMCCMSUC was composed of both supervisory and rank-and-file employees in the company. 1 In its reply dated May 22, 1991, private respondent FFW-DLSUMCCMSUC denied petitioner's allegations. It contended that —2. Herein petition seeks for the holding of a certification election among the supervisory employees of herein respondent. It does not intend to include managerial employees.xxx xxx xxx6. It is not true that supervisory employees are joining the rank-and-file employees' union. While it is true that both regular rank-and-file employees and supervisory employees of herein respondent have affiliated with FFW, yet there are two separate unions organized by FFW. The supervisory employees have a separate charter certificate issued by FFW. 2

On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of the Department of Labor and Employment Regional Office No. IV, issued an order granting respondent union's petition for certification election. He said:. . . [petitioner] . . . claims that based on the job descriptions which will be presented at the hearing, the covered employees who are considered managers occupy the positions of purchasing officers, personnel officers, property officers, cashiers, heads of various sections and the like.

[Petitioner] also argues that assuming that some of the employees concerned are not managerial but mere supervisory employees, the Federation of Free Workers (FFW) cannot extend a charter certificate to this group of employees without violating the express provision of Article 245 which provides that "supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own" because the FFW had similarly issued a charter certificate to its rank-and-file employees.xxx xxx xxxIn its position paper, [petitioner] stated that most, if not all, of the employees listed in . . . the petition are considered managerial employees, thereby admitting that it has supervisory employees who are undoubtedly qualified to join or form a labor organization of their own. The record likewise shows that [petitioner] promised to present the job descriptions of the concerned employees during the hearing but failed to do so. Thus, this office has no basis in determining at this point in time who among them are considered managerial or supervisory employees. At any rate, there is now no question that [petitioner] has in its employ supervisory employees who are qualified to join or form a labor union. Consequently, this office is left with no alternative but to order the holding of certification election pursuant to Article 257 of the Labor Code, as amended, which mandates the holding of certification election if a petition is filed by a legitimate labor organization involving an unorganized establishment, as in the case of herein respondent.As to the allegation of [petitioner] that the act of the supervisory employees in affiliating with FFW to whom the rank-and-file employees are also affiliated is violative of Article 245 of the Labor Code, suffice it to state that the two groups are considered separate bargaining units and local chapters of FFW. They are, for all intents and purposes, separate with each other and their affiliation with FFW would not make them members of the same labor union. This must be the case because it is settled that the locals are considered the basic unit or principal with the labor federation assuming the role of an agent. The mere fact, therefore, that they are represented by or under the same agent is of no moment. They are still considered separate with each other. 3

On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary of Labor and Employment, citing substantially the same arguments it had raised before the med-arbiter. However, its appeal was dismissed. In his resolution, dated August 30, 1991, respondent Undersecretary of Labor and Employment Bienvenido E. Laguesma found the evidence presented by petitioner DLSUMCCM concerning the alleged managerial status of several employees to be insufficient, He also held that, following the ruling of this Court in Adamson & Adamson, Inc. v. CIR, 4 unions formed independently by supervisory and rank-and-file employees of a company may legally affiliate with the same national federation.Petitioner moved for a reconsideration but its motion was denied. In his order dated September 19, 1991, respondent Laguesma stated:We reviewed the records once more, and find that the issues and arguments adduced by movant have been squarely passed upon in the Resolution sought to be reconsidered. Accordingly, we find no legal

justification to alter, much less set aside, the aforesaid resolution. Perforce, the motion for reconsideration must fail.WHEREFORE, the instant motion for reconsideration is hereby denied for lack of merit and the resolution of this office dated 30 August 1991 STANDS.No further motions of a similar nature shall hereinafter be entertained. 5

Hence, this petition for certiorari.Petitioner DLSUMCCM contends that respondent Laguesma gravely abused his discretion. While it does not anymore insist that several of those who joined the petition for certification election are holding managerial positions in the company, petitioner nonetheless pursues the question whether unions formed independently by supervisory and rank-and-file employees of a company may validly affiliate with the same national federation. With respect to this question, it argues: THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED THE PETITIONER'S APPEAL AND ORDERED THE HOLDING OF A CERTIFICATION ELECTION AMONG THE MEMBERS OF THE SUPERVISORY UNION EMPLOYED IN PETITIONER'S COMPANY DESPITE THE FACT THAT SAID SUPERVISORY UNION WAS AFFILIATED WITH THE FEDERATION OF FREE WORKERS TO WHICH THE RANK-AND-FILE EMPLOYEES OF THE SAME COMPANY ARE LIKEWISE AFFILIATED, CONTRARY TO THE EXPRESS PROVISIONS OF ARTICLE 245 OF THE LABOR CODE, AS AMENDED. 6

The contention has no merit.Supervisory employees have the right to self-organization as do other classes of employees save only managerial ones. The Constitution states that "the right of the people, including those employed in the public and private sectors, to form unions, associations or societies for purposes not contrary to law, shall not be abridged." 7 As we recently held in United Pepsi-Cola Supervisory Union v. Laguesma, 8 the framers of the Constitution intended, by this provision, to restore the right of supervisory employees to self-organization which had been withdrawn from them during the period of martial law. Thus:Commissioner Lerum sought to amend the draft of what was later to become Art. III, § 8 of the present Constitution:xxx xxx xxxMR. LERUM . . . Also, we have unions of supervisory employees and of security guards. But what is tragic about this is that after the 1973 Constitution was approved and in spite of an express recognition of the right to organize in P.D. No. 442, known as the Labor Code, the right of government workers, supervisory employees and security guards to form unions was abolished.xxx xxx xxxWe are afraid that without any corresponding provision covering the private sector, the security guards, the supervisory employees . . . will still be excluded and that is the purpose of this amendment.xxx xxx xxx

In sum, Lerum's proposal to amend Art. III, § 8 of the draft Constitution by including labor unions in the guarantee of organizational right should be taken in the context of statements that his aim was the removal of the statutory ban against security guards and supervisory employees joining labor organizations. The approval by the Constitutional Commission of his proposal can only mean, therefore, that the Commission intended the absolute right to organize of government workers, supervisory employees, and security guards to be constitutionally guaranteed. 9 Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right of supervisory employees to self-organization, subject to the limitation that they cannot join an organization of rank-and-file employees:Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

The reason for the segregation of supervisory and rank-and-file employees of a company with respect to the exercise of the right to self-organization is the difference in their interests. Supervisory employees are more closely identified with the employer than with the rank-and-file employees. If supervisory and rank-and-file employees in a company are allowed to form a single union, the

conflicting interests of these groups impair their relationship and adversely affect discipline, collective bargaining, and strikes. 10 These consequences can obtain not only in cases where supervisory and rank-and-file employees in the same company belong to a single union but also where unions formed independently by supervisory and rank-and-file employees of a company are allowed to affiliate with the same national federation. Consequently, this Court has held in Atlas Lithographic Services Inc. v. Laguesma 11 that—To avoid a situation where supervisors would merge with the rank-and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with a national federation of unions of rank-and-file employees where that federation actively participates in union activities in the company.As we explained in that case, however, such a situation would obtain only where two conditions concur: First, the rank-and-file employees are directly under the authority of supervisory employees. 12

Second, the national federation is actively involved in union activities in the company. 13 Indeed, it is the presence of these two conditions which distinguished Atlas Lithographic Services, Inc. v. Laguesma from Adamson & Adamson, Inc. v. CIR 14 where a different conclusion was reached.The affiliation of two local unions in a company with the same national federation is not by itself a negation of their independence since in relation to the employer, the local unions are considered as the principals, while the federation is deemed to be merely their agent. This conclusion is in accord with the policy that any limitation on the exercise by employees of the right to self-organization guaranteed in the Constitution must be construed strictly. Workers should be allowed the practice of this freedom to the extent recognized in the fundamental law. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.: 15 The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of locals into the national union . . . was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, . . . and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it to existence. 16

The questions in this case, therefore, are whether the rank-and-file employees of petitioner DLSUMCCM who compose a labor union are directly under the supervisory employees whose own union is affiliated with the same national federation (Federation of Free Workers) and whether such national federation is actively involved in union activities in the company so as to make the two unions in the same company, in reality, just one union. Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees composing the other union are directly under the authority of the supervisory employees. As held in Adamson & Adamson, Inc. v. CIR, 17 the fact that the two groups of workers are employed by the same company and the fact that they are affiliated with a common national federation are not sufficient to justify the conclusion that their organizations are actually just one. Their immediate professional relationship must be established. To borrow the language of Adamson & Adamson, Inc. v. CIR: 18

We find without merit the contention of petitioner that if affiliation will be allowed, only one union will in fact represent both supervisors and rank-and-file employees of the petitioner; that there would be an indirect affiliation of supervisors and rank-and-file employees with one labor organization; that there would be a merging of the two bargaining units; and that the respondent union will lose its independence because it becomes an alter ego of the federation. 19

Mention has already been made of the fact that the petition for certification election in this case was filed by the FFW on behalf of the local union. This circumstance, while showing active involvement by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation of Art. 245 since there is no proof that the supervisors who compose the local union have direct authority over the rank-and-file employees composing the other local union which is also affiliated with the FFW. This fact differentiates the case from Atlas Lithographic Services, Inc. v. Laguesma,20 in which, in

addition to the fact that the petition for certification election had been filed by the national federation, it was shown that the rank-and-file employees were directly under the supervisors organized by the same federation.It follows that respondent labor officials did not gravely abuse their discretion. WHEREFORE, the petition is DISMISSED.SO ORDERED.Regalado, Melo and Martinez, JJ ., concur.Puno, J ., took no part, due to relationship to a party.

THIRD DIVISION [G.R. No. 108625. March 11, 1996.]ALLIANCE OF DEMOCRATIC FREE LABOR ORGANIZATION (ADFLO), petitioner, vs. UNDERSECRETARY OF LABOR BIENVENIDO LAGUESMA and CONFEDERATION OF LABOR AND ALLIED SOCIAL SERVICES (CLASS), respondents.

Eulogio R. Lerum for petitioner.The Solicitor General for public respondent.Quintin R. Aseron, Jr. for private respondent.

SYLLABUS1. ADMINISTRATIVE LAW; ADMINISTRATIVE DUE PROCESS; ADMINISTRATIVE AGENCIES, BOUND THEREBY. — While, in general, administrative agencies exercising quasi-judicial powers, like the Department of Labor and Employment, are free from the rigidity of certain procedural requirements, they are nonetheless bound by law and practice to observe the fundamental and essential requirements of due process in justiciable cases presented before them.2. ID.; ID.; ESSENTIAL REQUIREMENTS. — These essential requirements of due process were laid down in the landmark case of Ang Tibay vs. Court of Industrial Relations, et al., as follows: The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. 'While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity." (Edwards vs. McCoy) . . . Not only must there be some evidence to support a finding or conclusion. The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it." The most basic tenet of due process is the right to be heard, and as applied in administrative proceedings, an opportunity to explain one's side. Such opportunity was denied petitioner in this case.3. ID.; ID.; ID.; GROSS VIOLATION MANIFEST IN CASE AT BAR. — The public respondent and his subaltern, the Director of the Bureau of Labor Relations, should have learned their lessons when the latter's resolution dated November 16, 1989 cancelling petitioner's registration due precisely to absence of due process was reversed by the then Secretary of Labor whose decision was, in effect, affirmed by this Court. However, instead of taking a lesson in due process, said director — this time abetted by public respondent — violated again the same fundamental principle. After petitioner submitted its objections to the administration of the documentary evidence of CLASS, the BLR director should have first ruled on their admissibility. However, without ruling on said offer and without setting the case for reception of petitioner's evidence, the said official proceeded to render judgment affirming its earlier (but already ruled as improper) decision to cancel the registration of ADFLO. This is a gross violation of petitioner's right to due process. The cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses — as a rule — its rights under the Labor Code. Under the circumstances, petitioner was indisputably entitled to be heard before a judgment could be rendered cancelling its certificate of registration. In David vs. Aguilizan, it was held that a decision rendered without any hearing is null and void.4. ID.; ID.; ID.; ABSENCE OF EVIDENCE TO SUPPORT DECISION. — There is yet another reason why this petition should be granted. It will be noted that the Director of the Bureau of Labor Relations never made any ruling on whether the exhibits submitted by CLASS were admissible in evidence. That being so, the said exhibits cannot be made use of in deciding the case. And, in the absence of this evidence, there is nothing in the record to support the assailed decision. Therefore, the latter must necessarily fall for lack of substantial basis. "A decision with absolutely nothing to support it is a nullity." So too, the assailed Decision of Undersecretary Laguesma requiring the existing affiliates of ADFLO "to register either independently in accordance with Article 234, Title IV, Book V of the Labor Code or affiliate with other existing duly-registered federations or national union" within 30 days from

receipt of said Decision is totally unwarranted inasmuch as said affiliates are not parties in the instant case.

D E C I S I O NPANGANIBAN, J p:In the instant case, this Court upholds petitioner's right to due process, the most basic tenet of which is the right to be heard.

This is a petition for certiorari and prohibition under Rule 65 of the Rules of Court to review and set aside the Decision 1 of Respondent Undersecretary of Labor Bienvenido Laguesma, dated October 16, 1992, in Case No. OS-A-12-289-89 cancelling the registration of the Alliance of Democratic Free Labor organization (ADFLO) as a legitimate labor federation; and the Order 2 dated November 18, 1992 denying the motion for reconsideration.By a Resolution dated October 25, 1995, the First Division of this Court transferred the above case, along with several others, to the Third. Deliberating on the Petition, and the Comments by the Solicitor General 3 and the private respondent, this Court, on February 12, 1996, gave due course to the Petition and considered the case submitted for resolution without requiring the parties to submit memoranda. Thereafter, after due consultation and discussing, the case was assigned to undersigned ponente for the writing of this Decision.The FactsThe facts of this case, as set out in the Comment of the Solicitor General filed on June 4, 1993, are not disputed by the private respondent in its own Comment filed on July 29, 1993. They are substantially the same as those stated in the Petition. Narrates the Solicitor General: 4 "1. The factual antecedents of this controversy are as follows:'On 02 March 1988, the Alliance of Democratic Free Labor Organization (ADFLO) filed an application for registration as a national federation alleging, among others that it has twelve (12) affiliates, namely:A. Affiliate independent unions:1. Tolly's Employees Association, 220 Brgy. Mapulang Lupa, Valenzuela, Metro Manila2. Healthknit Garments Workers Association, 2110 Bolinao St., Sta. Cruz, Manila3. Malayang Manggagawa sa United Asia Weaving and Trimming Manufacturing Corporation, Macopa Road, Malabon, Metro Manila4. Fireprint Inc. Employees Association, 187 General Mascardo St., Bagong Barrio, Caloocan City.5. Batangas Lumber Labor Union, Calicantio, Batangas City6. Clover Manufacturing Corporation, 23-3 Pilaran Cpd., Quezon City7. Pacific Mills Workers Free labor Union, 108 Balintawak, Quezon City8. Ronimart Employees Labor Union, Balibago, Sta. Rosa, Laguna9. Kapisanan ng mga Manggagawa sa Place Canteen, UST Cpd., UST, Espana, Manila10. Samahan ng mga Kawani at Manggagawa sa A.V. Tantuco, Bagong Ilog, Pasig, Metro ManilaB. Direct Affiliates1. VICMAR Theater, Inc., ADFLO Chapter, Batangas City2. Ricman Enterprises, ADFLO Chapter, Batangas City

After proper evaluation of its application and finding ADFLO to have complied with the requirements for registration pursuant to Articles 234 and 237 of the Labor Code, the Bureau (of Labor Relations) issued on 22 March 1988 a Certificate of Registration No. 11399-FED-LC to the federation.

On 15 February 1989, the Confederation of Labor and Allied Social Services (CLASS) filed a petition for the cancellation of the Registration Certificate issued to ADFLO.Finding the petition to be in order, the Bureau furnished ADFLO a copy of said petition and directed the latter to file an answer/comment thereon. The Bureau also directed CLASS-TUCP to substantiate its allegations in the petition.On 11 April 1989, instead of filing an answer, ADFLO moved to dismiss the petition. It alleged that the petition contains merely general allegations that are vague; that petitioner has no cause of action because if failed to substantiate its accusations; that the petition was filed by CLASS-TUCP for the purpose of harassing the respondent in connection with the certification election case pending at Allen Arthur, Inc., wherein CLASS is the incumbent bargaining representative and ADFLO is one of the

contending parties; that ADFLO's financial statement will only become due at the end of April, 1989; and, that the report on the compliance with the requirements on labor education will likewise become due only on (sic) April, 1989.Petitioner CLASS-TUCP, in its Memorandum dated 26 July 1989, alleged that the documents submitted by ADFLO were simulated. Among the documents are: the minutes of the organizational meetings, list of delegates to the meeting, list of locals/affiliates, the Constitution and By-laws, collective bargaining and the resolution of affiliation of the local unions. In this respect, it pointed out that a visit to the places of operation of the enumerated establishments whose workers are alleged members of unions affiliated with ADFLO with an interview of their respective local officers revealed that the said local officers have never attended nor participated in the ADFLO's organization meeting held on 6 December 1987 at Sampaloc, Manila; that said officers have never participated in the discussion and ratification of ADFLO's Constitution and By-laws and in the election of its national officers.Petitioner CLASS-TUCP, further averred that the nine (9) resolutions of affiliation all dated 6 December 1987 do not bear the signatures of the members of the Board of Directors and have not been ratified by the general membership of each of the nine (9) unions as required by Article IV, Section 3 of the Constitution and By-laws of ADFLO.On 07 August 1989, ADFLO was summoned to a conference by the Bureau. In said conference, the Bureau disclosed the seriousness of the charges against ADFLO that may warrant the cancellation of its certificate of registration.On 15 August 1989, a hearing was conducted and both parties were duly represented. ADFLO manifested that it would move to inhibit the Director of Labor Relations from taking further action over the present petition. It further manifested that it would file its comment to the earlier memorandum filed by CLASS. CLASS, for its part, requested that it be given five (5) days within which to file its objection against the motion to inhibit the Bureau Director.On 25 August 1989, ADFLO filed its answer, averring that it had complied with all the legal requirements for registration including the affiliation of more than 10 local unions; that it did not commit any fraud or misrepresentation in its application for registration; that it conducted itself as a legitimate labor organization and that the cancellation of its registration certificate which was secured in good faith will violate the Constitutional right of the workers to organize and will deprive the membership of their rights granted by law.On even date, ADFLO filed a Motion to Inhibit the Bureau Director from hearing and deciding the case on the ground that the Director prejudged the instant petition when she verbally declared that the federation obtained its certificate of registration through fraud and misrepresentation; that the recommendation to hold in abeyance the election at Allen Arthur, Inc., was based only on her unilateral finding of a prima facie case; that she has shown personal interest in this petition when made personal calls to all locals and affiliates without notice to the respondent, ADFLO' (Resolution of Secretary of Labor Ruben Torres, dated 21 February; Records, Vol. I, pp. 431-435).2. On November 16, 1990, the Bureau of Labor Relations (BLR), through Director Pura Ferrer-Calleja, rendered a Decision cancelling the registration of ADFLO (Id., pp. 383-394). ADFLO appealed the Decision to the Secretary of Labor Ruben Torres, who, on February 21, 1990, issued a Resolution, the decretal portion of which reads:'WHEREFORE, premises considered, the appeal is hereby granted and the Decision of the Director, Bureau of Labor Relations, set aside. Conformably, a new order is entered remanding the case to the Bureau for further proceedings.Let, therefore, the entire records of the case be immediately forwarded to the Bureau of Labor Relations for implementation of this Order.SO ORDERED' (Ibid., p. 431; Emphasis supplied).

3. Private respondent Confederation of Labor and Allied Social Services (CLASS-TUCP) moved for a reconsideration thereof, which was denied for lack of merit in the Order dated May 23, 1990 (Id., p. 524).4. CLASS then filed a Petition for Certiorari with the Supreme Court, which, on November 5, 1990, was dismissed for lack of merit (Id., p. 563).5. The first hearing conducted by the BLR after the case was remanded to it for further proceedings was held on October 7, 1991. However, since CLASS was not yet ready with its evidence, the hearing was postponed and CLASS was given a period of ten (10) days to submit its exhibits while ADFLO was given a period of ten (10) days from receipt of copies of the evidence presented within which to comment thereon (Id., p. 566).

6. On October 16, 1991, CLASS filed its Formal Offer of evidence consisting of Exhibits "A" — "R", in support of its allegation that ADFLO committed frauds, misrepresentation and forgeries in the submission of the requirements relative to its registration as a legitimate federation (Id., pp. 625-630).7. On November 27, 1991, ADFLO filed an Objection to Admission of Exhibits based on the grounds that the exhibits were not marked nor identified by any witness during the hearing of the case where ADFLO had been properly notified (Id., pp. 658-659).8. In the meantime, at the hearing of the case scheduled on November 27, 1991, CLASS failed to appear and only ADFLO's President Antonio Cedilla appeared. Unaware that an objection had already been filed by ADFLO's counsel, Cedilla manifested that ADFLO will file its answer to CLASS' offer of evidence within thirty (30) days or up to December 27, 1991 (Id., p. 658).9. Subsequently, however, counsel for CLASS was permitted to write on the minutes of the aforesaid hearing its objection to the "request for extension," invoking its right to a speedy trial of the case and praying that the case be deemed submitted for resolution on the basis of its evidence (Id., p. 647).10. On February 12, 1992, BLR Director Pura Ferrer-Calleja, without first ruling on the admissibility of the exhibits of CLASS and without any further hearing, rendered an order, the dispositive portion of which reads as follows:'WHEREFORE, premises considered, judgment is hereby rendered affirming the decision of this Bureau, entered on 16 November 1989 cancelling the registration of Federation Alliance of Democratic Free Labor organization (ADFLO).SO ORDERED' (Id., p. 657).

11. On February 27, 1992, ADFLO filed its Motion for reconsideration of said Decision dated February 12, 1992 (Id., pp. 670-671) which was treated as an appeal, hence, the records of the case were sent to the Secretary of Labor. On October 16, 1992, public respondent Undersecretary of Labor Bienvenido E. Laguesma rendered the assailed Decision, adjudicating the case in this wise:'WHEREFORE, respondent's appeal is hereby DENIED for lack of merit and the questioned order dated February 12, 1992 is hereby affirmed, subject to the correction aforestated and the requirements set forth in the ultimate paragraph of this Decision.All existing affiliates of respondents (sic) ADFLO shall be notified of this Decision, through the Bureau of Labor Relations.SO DECIDED' (Id., p. 358).

12. On November 6, 1992, ADFLO moved to reconsider such decision on the ground that ADFLO was denied the right to a hearing in violation of its right to due process of law, and that the Order dated November 16, 1989 of the BLR could no longer be 'reinstated' because it was annulled and set aside by virtue of the Resolution of the Secretary of Labor dated February 21, 1990, which ruling had been affirmed by the Supreme Court (Petition, p. 6).13. On November 18, 1992, Undersecretary Laguesma issued an Order denying ADFLO's Motion for Reconsideration (Id., pp. 364-365).14. Hence, ADFLO appealed to the Secretary of Labor. However, instead of forwarding the records to the Secretary, public respondent Undersecretary Laguesma endorsed the records to the Officer-in-Charge of the BLR 'for (your) information and guidance' (Id., Vol. III, p. 111).15. On December 14, 1992, ADFLO filed a Motion to Resolve the case but since more than thirty (30) days had passed since then, and the Secretary of Labor failed to act on its appeal, it was constrained to resort to the filing of the instant Petition for Certiorari and Prohibition before this Honorable Court."The IssuesThe main issues presented by petitioner 5 are the following:(1) Was the decision cancelling the registration of petitioner rendered in violation of the due process clause? and(2) Is the decision supported by substantial evidence?

The First Issue: Due ProcessAs prayed for by the Solicitor General, we grant the Petition.

While, in general, administrative agencies exercising quasi-judicial powers, like the Department of Labor and Employment, are free from the rigidity of certain procedural requirements, they are

nonetheless bound by law and practice to observe the fundamental and essential requirements of due process in justiciable cases presented before them. 6 These essential requirements of due process were laid down in the landmark case of Ang Tibay vs. Court of Industrial Relations, et al., 7 as follows:"The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are cardinal primary rights which must be respected even in proceedings of this character:(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Justice Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, 'the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play.'(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. . . . In the language of this Court in Edwards vs. McCoy, 22 Phil., 598, 'the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration.'(3) 'While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) . . .(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O.G. 1335), but the evidence must be 'substantial.' . . . 'Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.' . . . But this assurance of a desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. . . . Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them.(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision.(7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it."

The most basic tenet of due process is the right to be heard, and as applied in administrative proceedings, an opportunity to explain one's side. 8 Such opportunity was denied petitioner in this case.The public respondent and his subaltern, the Director of the Bureau of Labor Relations, should have learned their lessons when the latter's resolution dated November 16, 1989 cancelling petitioner's registration due precisely to absence of due process was reversed by the then Secretary of Labor whose decision was, in effect, affirmed by this Court. However, instead of taking a lesson in due process, said director — this time abetted by public respondent — violated again the same fundamental principle.After petitioner submitted its objections to the admission of the documentary evidence of CLASS, the BLR director should have first ruled on their admissibility. However, without ruling on said offer and without setting the case for reception of petitioner's evidence, the said official proceeded to render judgment affirming its earlier (but already ruled as improper) decision to cancel the registration of ADFLO. This is a gross violation of petitioner's right to due process.

Under Section 1, Article II of our Constitution, "(n)o person shall be deprived of life, liberty or property without due process of law . . ." and under Article 238 of the Labor Code, "(t)he certificate of registration of any legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements herein prescribed." (emphasis supplied)The cancellation of a certificate of registration is the equivalent of snuffing out the life of a labor organization. For without such registration, it loses — as a rule — its rights under the Labor Code. Under the circumstances, petitioner was indisputably entitled to be heard before a judgment could be rendered cancelling its certificate of registration. In David vs. Aguilizan, 9 it was held that a decision rendered without any hearing is null and void.The Second Issue: Substantial BasisThere is yet another reason why this petition should be granted. It will be noted that the Director of the Bureau of Labor Relations never made any ruling on whether the exhibits submitted by CLASS were admissible in evidence. That being so, the said exhibits cannot be made use of in deciding the case. And, in the absence of this evidence, there is nothing in the record to support the assailed decision. Therefore, the latter must necessarily fall for lack of substantial basis. "A decision with absolutely nothing to support it is a nullity." 10

So too, the assailed Decision of Undersecretary Laguesma requiring the existing affiliates of ADFLO "to register either independently in accordance with Article 234, Title IV, Book V of the Labor Code or affiliate with other existing duly-registered federations or national union" within 30 days from receipt of said Decision is totally unwarranted inasmuch as said affiliates are not parties in the instant case.

WHEREFORE, the Petition is GRANTED; the Decision dated October 16, 1992 and Order dated November 18, 1992 of public respondent are SET ASIDE and REVERSED. The present case is hereby REMANDED to the Bureau of Labor Relations for further proceedings with the specific caveat to observe due process as mandated by the Constitution and the Labor Code.SO ORDERED.Narvasa, C.J., Davide, Jr., Melo, and Francisco, JJ., concur.