Title
Cooperative Rural Bank of Davao City, Inc. vs. Ferrer-Calleja
Case
G.R. No. 77951
Decision Date
Sep 26, 1988
Cooperative bank employees, also co-owners, challenged a certification election, arguing they cannot bargain with themselves; SC ruled non-member employees retain union rights.

Case Digest (G.R. No. 77951)
Expanded Legal Reasoning Model

Facts:

  • Parties Involved
    • Petitioner: Cooperative Rural Bank of Davao City, Inc.
      • A cooperative banking corporation partially owned by the government.
      • Its employees are not only rank-and-file workers but also members and co-owners of the cooperative.
    • Private Respondent: Federation of Free Workers
      • A labor organization registered with the Department of Labor and Employment.
      • Seeks to represent the bank’s rank-and-file employees for purposes of collective bargaining.
    • Public Respondents:
      • Pura Ferrer-Calleja, Director, Bureau of Labor Relations (and associated regional offices).
      • Med-Arbiter Designate for Regional Office No. XI, Davao City.
  • Chronology and Procedural Background
    • Preceding Events
      • As of August 1986, no collective bargaining agreement existed between the cooperative and its rank-and-file employees.
      • The Federation filed a verified petition for a certification election on August 27, 1986 with the Davao City Regional Office of the then Ministry of Labor and Employment.
    • Orders and Appeals
      • September 18, 1986 – The Med-Arbiter issued an order granting the petition for certification election.
      • October 3, 1986 – The petitioner filed an Appeal Memorandum challenging the Med-Arbiter’s order.
        • Arguments included that a cooperative, being a non-profit institution with a unique ownership structure, is not covered by the rules governing certification elections.
ii. It also contended that certain employees were managerial and disqualified from joining labor unions.
  • October 8, 1986 – The Federation filed a “Motion to Dismiss the Appeal.”
  • October 15, 1986 – The petitioner opposed the motion.
  • Resolutions and Reconsiderations
    • February 11, 1987 – Bureau of Labor Relations Director Pura Ferrer-Calleja issued a Resolution affirming the Med-Arbiter’s order, noting:
      • The cooperative falls under Article 212, paragraph C of the Labor Code, being an employer albeit with a cooperative structure.
ii. The fundamental right of every worker to organize for collective bargaining is protected regardless of the profit status of the establishment. iii. Membership in a cooperative does not automatically preclude an employee from joining a labor union unless disqualification under law (such as managerial status) is proven.
  • March 2, 1987 – The petitioner sought reconsideration of the Resolution, reiterating that cooperative employees who are members/co-owners lack the right to organize for collective bargaining.
    • The petitioner relied on an August 14, 1981 Opinion of the then Solicitor General which stated that employees of cooperatives who are also co-owners have no right to form or join labor organizations for collective bargaining.
  • March 26, 1987 – The reconsideration was denied by Director Calleja.
  • Certification Election and Subsequent Action
    • April 23, 1987 – The certification election was scheduled to be held despite the petitioner’s challenges.
      • On April 15, 1987, a temporary restraining order was issued by the Court, enjoining the certification election.
ii. Due to transmission issues, the restraining order did not reach Davao City in time, and the election proceeded as scheduled.
  • April 9, 1987 – The petitioner filed the instant Petition for certiorari directly with the Court, alleging jurisdictional errors and grave abuse of discretion by the public respondents for allowing the certification election.
  • Subsequent Pleadings and Submissions
    • The Office of the Solicitor General represented the public respondents, maintaining that the petition was moot and that no jurisdictional error occurred.
ii. The case was deemed submitted for decision on January 6, 1988.
  • Legal Framework and Background
    • Relevant Statutory Provisions
      • Labor Code, Article 243 – Extends the right to self-organization and collective bargaining to all persons employed in various types of enterprises irrespective of profit orientation.
      • Labor Code, Article 245 – Excludes managerial employees from forming or joining labor organizations.
    • Cooperative Regulation and Definition
      • Under Section 2 of P.D. No. 175, a cooperative is defined as an organization composed primarily of small producers and consumers who voluntarily join together as owners.
      • Key cooperative principles include open membership, democratic control (one vote per member regardless of share capital), limited interest on shares, and patronage refunds.
    • Special Privileges and Operational Distinctions
      • Cooperatives enjoy exemptions from certain taxes, preferential supply rights for commodities, and in some cases, exemption from the minimum wage law.
      • Their formation and operation involve additional layers of regulation by various government agencies (e.g., Bureau of Cooperative Development, Monetary Board for cooperative banks).

Issues:

  • Eligibility of Cooperative Employees for Collective Bargaining
    • Whether rank-and-file employees of a cooperative, who are also members and co-owners, have the right to organize for collective bargaining under existing labor laws.
    • The impact of the cooperative ownership structure on the application of Article 243 of the Labor Code.
  • Applicability of the 1981 Solicitor General’s Opinion
    • Whether the opinion stating that cooperative employees who are co-owners cannot form or join labor organizations for collective bargaining is binding and applicable in the present case.
  • Disqualification of Managerial Employees
    • Whether two of the signatories alleged to be managerial employees can be disqualified from union activities based on the evidence in the record.
  • Jurisdictional and Procedural Ground
    • Whether the actions of the Med-Arbiter and the Bureau of Labor Relations Director, in allowing the certification election to proceed, constitute jurisdictional errors or grave abuse of discretion justifying the nullification of the election.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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