Case Summary (G.R. No. 77951)
Factual Background
Cooperative Rural Bank of Davao City, Inc. operated as a cooperative banking corporation in Davao City, partially government-owned, with approximately sixteen rank-and-file employees, many of whom were members and co-owners of the cooperative. There was no collective bargaining agreement in force as of August, 1986. The Federation of Free Workers sought to represent the petitioner’s rank-and-file employees and filed a verified petition for a certification election with the Davao City Regional Office of the Ministry of Labor and Employment on August 27, 1986.
Administrative Proceedings
The Med-Arbiter granted the petition for certification election on September 18, 1986. The petitioner filed an Appeal Memorandum on October 3, 1986, contending that cooperative employees who are member-owners are not covered by the certification election rules and that two signatories were managerial employees and therefore disqualified. The Bureau of Labor Relations Director, Pura Ferrer-Calleja, issued a Resolution dated February 11, 1987 affirming the Med-Arbiter’s Order and dismissing the appeal, reasoning that the cooperative fell within the purview of Article 212, paragraph C of the Labor Code and that the constitutional and statutory right of workers to organize applied irrespective of profit orientation. The Director found no evidence that the signatories were managerial employees. The petitioner’s motion for reconsideration was denied on March 26, 1987.
Petition for Certiorari and Interlocutory Relief
The petitioner invoked Rule 65 and filed the instant Petition for certiorari with this Court on April 9, 1987, alleging lack or excess of jurisdiction and grave abuse of discretion on the part of the public respondents in allowing the certification election to proceed. This Court issued a temporary restraining order on April 15, 1987 enjoining the Bureau of Labor Relations from proceeding with the certification election scheduled for April 23, 1987; the election nonetheless took place because the restraining order was not seasonably transmitted to Davao City. The Office of the Solicitor General maintained that the case was moot and academic because the election had already been conducted and that no jurisdictional error occurred.
Issues Presented
The primary legal question was whether employees of a cooperative who are also members and co-owners may organize and engage in collective bargaining with the cooperative. Ancillary issues were whether the public respondents acted without jurisdiction or with grave abuse of discretion in scheduling and permitting the certification election, and whether two of the signatories were managerial employees disqualified under the law from joining or forming labor organizations.
Governing Law and the Nature of Cooperatives
The Court examined Article 243 of the Labor Code, which broadly grants the right of self-organization to employees in commercial, industrial, and other enterprises whether operating for profit or not, and Article 245, which disqualifies managerial employees from joining labor organizations. The Court analyzed P.D. No. 175, which defines a cooperative as an organization composed primarily of producers and consumers who voluntarily join to form business enterprises that they themselves own, control, and patronize, and which sets forth principles of open membership, democratic control, limited interest on capital, and patronage refund. The Court noted the special privileges and regulatory framework accorded to cooperatives, including tax exemptions, preferential rights, potential exemption from minimum wage laws in appropriate cases, supervision by the Bureau of Cooperative Development, regulation of electric cooperatives by the National Electrification Administration, and exclusive banking oversight by the Monetary Board for cooperative banks.
Court’s Analysis on the Right to Organize for Member-Owners
The Court held that the distinctive ownership and governance features of cooperatives precluded employee-members who are co-owners from invoking the statutory right to collective bargaining against the cooperative. The Court reasoned that an owner cannot bargain with himself or with his co-owners, thereby rendering collective bargaining inapplicable to employee-members acting in their capacity as owners. The Court observed that the Solicitor General’s August 14, 1981 opinion concluding that employees who are members/co-owners of a cooperative cannot form or join labor organizations for purposes of collective bargaining correctly reflected this principle. The Court qual
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Case Syllabus (G.R. No. 77951)
Parties and Procedural Posture
- Cooperative Rural Bank of Davao City, Inc. was the petitioner challenging a certification election among its rank-and-file employees.
- Pura Ferrer-Calleja, Director, Bureau of Labor Relations and Felizardo T. Serapio, Med-Arbiter Designate were the public respondents who authorized and affirmed the certification election.
- Federation of Free Workers was the private respondent that filed the petition for certification election.
- The private respondent filed a verified petition for certification election with the Davao City Regional Office of the then Ministry of Labor and Employment, docketed as Case No. R-325 ROXI MED-UR-73-86.
- The Med-Arbiter issued an order granting the petition on September 18, 1986, which the petitioner appealed to the Bureau of Labor Relations.
- The Bureau Director issued a Resolution of February 11, 1987 affirming the Med-Arbiter and dismissing the appeal, and denied reconsideration on March 26, 1987.
- The petitioner filed a Petition for certiorari under Rule 65, Rules of Court with the Supreme Court on April 9, 1987 and obtained a temporary restraining order on April 15, 1987.
- The certification election proceeded on April 23, 1987 because the TRO was not seasonably transmitted to Davao City, and the case was deemed submitted to the Court on January 6, 1988.
Key Factual Allegations
- The petitioner was a cooperative banking corporation operating in Davao City with government participation and with employees who were also members and co-owners.
- The petitioner had approximately sixteen rank-and-file employees and no existing collective bargaining agreement as of August 1986.
- The private respondent sought to represent the petitioner's rank-and-file employees for purposes of collective bargaining.
- The petitioner alleged that a cooperative is not covered by the certification election rules because it is not an institution operating for profit.
- The petitioner also asserted that two of the signatories were managerial employees disqualified by law from joining labor organizations.
Statutory Framework
- Article 243, Labor Code enumerates that all persons employed in commercial, industrial, and agricultural enterprises and in religious, charitable, medical or educational institutions whether operating for profit or not have the right to self-organization for purposes of collective bargaining.
- Article 245, Labor Code provides that managerial employees are not eligible to join, assist or form any labor organization.
- P.D. No. 175 defines a cooperative as organizations composed primarily of small producers and consumers who voluntarily join together to form business enterprises which they themselves own, control, and patronize.
- P.D. No. 175 declares the policy to increase income and purchasing power of the low-income sector and sets forth cooperative principles of open membership, democratic control, limited interest on capital, and patronage refund.
- P.D. No. 501 placed electric cooperatives under the regulation and supervision of the National Electrification Administration.
- P.D. No. 1283 assigned exclusive responsibility over banking functions of cooperative banks to the Monetary Board of the Central Bank.
- The Bureau of Cooperative Development under the Department of Local Government and Community Development was vested with authority to promote, register, regulate and supervise cooperatives.
Issues Presented
- Whether empl