Title
Kimberly Independent Labor Union for Solidarity vs. Drilon
Case
G.R. No. 77629
Decision Date
May 9, 1990
KIMBERLY employees contested union representation; 64 casual workers’ votes were challenged. SC ruled them regular employees entitled to vote, ordering benefits and reopening election. Service contract for janitorial work upheld.
labor dispute
regularization
certification election

Case Summary (G.R. No. 77629)

Employment, Bargaining, and the Formation of Competing Unions

KIMBERLY executed a three-year collective bargaining agreement (CBA) with UKCEU-PTGWO, which expired on June 30, 1986. Within the 60-day freedom period before expiration and while negotiations for renewal were pending, some members of the bargaining unit formed another union, KILUSAN-OLALIA. On April 21, 1986, KILUSAN-OLALIA filed a petition for certification election in Regional Office No. IV, MOLE, docketed as Case No. RO4-OD-M-4-15-86.

The Certification Election and the Inclusion of “Contractual Workers”

KIMBERLY and UKCEU-PTGWO did not oppose the holding of a certification election but objected to the inclusion of “contractual workers” whose services were allegedly coursed through an independent contractor, Rank Manpower Company (RANK). While the certification petition remained pending before the med-arbiter, KILUSAN-OLALIA filed a notice of strike on May 7, 1986, docketed as BLR Case No. NS-5-164-86, charging unfair labor practices. After conciliation proved futile, KILUSAN-OLALIA declared a strike at KIMBERLY’s premises on May 23, 1986.

The Assumption Order and the Suspension of Strike Activities

On May 26, 1986, KIMBERLY petitioned MOLE to assume jurisdiction over the labor dispute. On May 30, 1986, the Minister Augusto S. Sanchez issued an assumption order because the labor dispute would adversely affect the national interest. The order enjoined KILUSAN-OLALIA and its members to lift the picket, remove obstacles to ingress and egress, and return to work, including the 28 contractual workers dismissed. It also directed the company to resume operations and accept employees back under prior terms and conditions. The assumption order expressly assumed all issues in the notice of strike as amended, except the representation issue pending in Region IV, in which the med-arbiter was enjoined to decide “the same the soonest possible time.”

In compliance, KILUSAN-OLALIA terminated strike and picketing activities effective June 1, 1986 under a compliance agreement with KIMBERLY.

Eligibility Rules for Voters and the Results of the Election

On June 2, 1986, the med-arbiter handling the certification election issued an order declaring the following eligible to vote: regular rank-and-file employees as of May 14, 1986; casuals who had rendered at least six months’ work as shown in the payroll months prior to April 21, 1986; and contractual employees allegedly in the employ of an independent contractor who likewise had worked for at least six months as shown in the payroll month prior to April 21, 1986.

During the pre-election conference, KIMBERLY and UKCEU-PTGWO challenged 64 casual workers on the ground that they were not employees of KIMBERLY but of RANK. The parties agreed that the 64 voters would be allowed to cast votes, but their ballots would be segregated and treated as challenged.

The certification election was conducted on July 1, 1986. KILUSAN-OLALIA received 266 votes, UKCEU-PTGWO 246 votes, one vote was for “NO UNION,” four votes were spoiled, and 64 votes were challenged. The total number of votes was 581.

Protest of the Challenged Ballots and the Med-arbiter’s Refusal to Resolve Representation-Linked Status

On July 2, 1986, KILUSAN-OLALIA filed with the med-arbiter a “Protest and Motion to Open and Count Challenged Votes,” arguing that the 64 challenged workers were employees of KIMBERLY within the meaning of Article 212(e) of the Labor Code. KIMBERLY opposed, asserting that no employer-employee relationship existed between KIMBERLY and the challenged workers and that the med-arbiter had no jurisdiction to rule because the matter was covered by the assumption order.

The med-arbiter opted not to act on the protest, holding that the protest issue properly belonged to the jurisdiction of the labor minister in the assumed dispute, and was thus linked to the then minister’s authority.

The November 13, 1986 Labor Ministerial Decision

On November 13, 1986, then Minister Sanchez rendered a decision in BLR Case No. NS-5-164-86. The decision declared the service contract between KIMBERLY and RANK for janitorial and yard maintenance services legal. For other casual employees not performing janitorial and yard maintenance services, it treated them as “labor-only contractuals” and held them to have attained regular status, with regularization effective as of the date of the decision. It certified UKCEU-PTGWO as the exclusive bargaining representative since it obtained more votes after applying the regularization ruling to the voter eligibility. It ordered the reinstatement of 28 dismissed union members, reinstated Roque Jimenez without backwages, declared the voluntary arbitration order regarding Ermilo Fuentes final, and ordered payment of an appreciation bonus for 1982 and 1983.

KIMBERLY later filed a motion for reconsideration, and KILUSAN-OLALIA filed its own motion for reconsideration questioning the authority of the Minister of Labor to assume jurisdiction over the representation issue. On January 9, 1987, former Labor Minister Franklin Drilon denied both motions.

Procedural Move to the Supreme Court and the Temporary Restraining Order

On March 16, 1987, KILUSAN-OLALIA filed G.R. No. 77629, seeking to set aside the November 13, 1986 decision and the January 9, 1987 order. The Supreme Court issued a temporary restraining order on March 25, 1987 enjoining enforcement of portions recognizing UKCEU-PTGWO as exclusive bargaining representative of all regular rank-and-file employees; enforcing and implementing a CBA alleged to be detrimental; and stopping monthly check-off deductions and remittance of dues to UKCEU-PTGWO.

Events During the Pendency: New CBA and Compliance Actions

In its comment, KIMBERLY reported that after the representation dispute commenced, it and UKCEU-PTGWO concluded and ratified a new CBA by a majority of the bargaining unit and that the company complied with benefits and check-off provisions under that CBA. It also asserted that it implemented the November 13, 1986 decision insofar as regularization of contractual employees with more than one year of service (excluding those engaged in janitorial and yard maintenance work) was concerned and that RANK had reassigned or replaced workers assigned to janitorial and yard maintenance or with less than one year of service. It further alleged reinstatement of Roque Jimenez as of January 11, 1987.

The Second Notice of Strike, NLRC Injunction Proceedings, and the Filing of G.R. No. 78791

In G.R. No. 78791, KILUSAN-OLALIA filed a new notice of strike on May 4, 1987 for unfair labor practices. The BLR dismissed it on May 8, 1987 on the ground that a representation issue was already pending before the Supreme Court in G.R. No. 77629. Before any reconsideration could be acted upon, KILUSAN-OLALIA declared another strike and established a picket on May 17, 1987.

On May 18, 1987, KIMBERLY sought an injunction with the NLRC in Injunction Case No. 1442. After an ocular inspection, witness testimonies, and pictures of the barricade, the NLRC en banc issued a temporary restraining order on May 26, 1987. KILUSAN-OLALIA moved to dissolve the TRO for lack of jurisdiction. After the first TRO expired on June 9, 1987, the striking employees returned and reestablished barricades. On June 19, 1987, the NLRC issued a second TRO. On July 14, 1987, the NLRC issued a writ of preliminary injunction, requiring KIMBERLY to post a bond of P20,000.00.

KILUSAN-OLALIA then filed G.R. No. 78791 on June 25, 1987, seeking certiorari and prohibition to nullify the NLRC’s TROs. It later filed urgent motions for further TRO relief. In its pleadings dated December 28, 1989 and February 28, 1990, KILUSAN-OLALIA alleged that it had terminated the strike and that its striking employees unconditionally offered to return to work but were refused admission. The Court treated G.R. No. 78791 as moot and academic in light of that supervening development.

Issues Raised in G.R. No. 77629

KILUSAN-OLALIA claimed that the former Secretary of Labor and/or the former Minister of Labor acted with grave abuse of discretion and without jurisdiction in: ruling on bargaining representation and declaring UKCEU-PTGWO the bargaining representative; holding that KILUSAN-OLALIA members were not entitled to vote in the certification election; making the regularization effective only on the date of the disputed decision; treating workers assigned to janitorial and yard maintenance as employees of RANK and not entitled to regularization; not awarding differential pay arising from the allegedly illegal work scheme; and ordering only the reinstatement of Jimenez.

The Parties’ Positions on Assumption Jurisdiction and Finality

KILUSAN-OLALIA argued that once the labor minister found that the 64 challenged workers were regular employees, the minister should have remanded the representation matter to the med-arbiter and should not have declared UKCEU-PTGWO as the winner based on a vote count that excluded the 64 challenged ballots. It thus framed the challenge as jurisdictional and as a denial of a constitutionally protected right to vote.

Respondents argued that regularization and representation were closely interrelated and that it was necessary for the labor minister to resolve the regularization issue to determine representation. They also invoked finality: no timely reconsideration or appeal had been taken from the November 13, 1986 decision, which had therefore become final and executory. They further contended that KILUSAN-OLALIA impliedly accepted the decision by demanding compliance, and that it was therefore estopped from questioning it.

Authority to Assume and Resolve Regularization

The Court upheld the former Minister Sanchez’s authority to assume jurisdiction over the regularization issue involving the 64 challenged workers. This fact, the Court noted, was not disputed by KILUSAN-OLALIA itself, as it had requested interim resolution of the regul

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