Case Summary (G.R. No. 81883)
Factual Background
Knitjoy and the Federation of Filipino Workers (FFW) maintained a collective bargaining agreement (CBA) that covered only regular rank-and-file employees paid on a daily or piece-rate basis and expired 15 June 1987. The FFW split into factions, one of which became the petitioner CFW, which won a certification election for daily and piece-rate employees on 10 June 1987. On 24 June 1987, KMEU filed a petition for a certification election limited to Knitjoy's regular rank-and-file monthly-paid employees, and the KMEA-CCLU and CFW intervened. Med-Arbiter Rolando S. dela Cruz dismissed that petition on 4 September 1987 and instructed the parties to work toward forming a single union.
Administrative Proceedings and Orders
KMEU moved for reconsideration of the Med-Arbiter's order, and the Bureau of Labor Relations treated the motion as an appeal. On 1 December 1987, Director Pura Ferrer-Calleja reversed the Med-Arbiter and ordered a certification election among regular rank-and-file monthly-paid employees, excluding managerial employees, with choices listed as Knitjoy Monthly Employees Union (KMEU) and No Union, and using the company's latest payroll as the voters' list. Director Ferrer-Calleja declined to accept Knitjoy's arguments that the monthly-paid employees shared the same incentives as daily-paid workers or that the existing bargaining agent would accommodate them.
BLR Director's Decision of December 1, 1987
The Director relied in part on this Court's pronouncements, notably in General Rubber and Footwear Corporation vs. Bureau of Labor Relations, to reject Knitjoy's contentions and to emphasize employees' constitutional right to self-organization. The Director concluded that monthly-paid employees had the right to choose whether to join the existing bargaining agent or to remain as a separate union and held that managerial employees among the monthly-paid were to be excluded from the election.
Motions for Reconsideration and Director's February 8, 1988 Ruling
Knitjoy and CFW separately moved for reconsideration, asserting that they had executed a new CBA that included monthly-paid rank-and-file employees and that such inclusion mooted the certification petition and contravened the one company-one union policy. In her 8 February 1988 decision, Director Ferrer-Calleja denied reconsideration, finding that a representation question had been pending when Knitjoy and CFW negotiated the CBA, that KMEU members were not privy to or participants in ratifying that agreement, and that the one company-one union policy yields to employees' constitutional right to self-organization and to exceptions recognized in the implementing rules.
Supreme Court Proceedings and Consolidation
Knitjoy and CFW filed separate petitions for certiorari and prohibition assailing the BLR Director's decisions. The Supreme Court gave due course to G.R. No. 81883 on 24 August 1988 and consolidated G.R. No. 82111 with it on 23 November 1988. The petitions raised common issues concerning the appropriateness of a separate bargaining unit for monthly-paid rank-and-file employees and the effect of the newly executed CBA on the pending certification election.
Issues Presented
The Court identified two principal issues: first, whether Knitjoy's monthly-paid regular rank-and-file employees could constitute an appropriate bargaining unit distinct from daily or piece-rate paid rank-and-file employees; and second, whether inclusion of monthly-paid rank-and-file employees in the new CBA between Knitjoy and CFW barred the holding of a certification election among those monthly-paid employees.
Petitioners' Contentions
Knitjoy argued that the new CBA bound the monthly-paid employees and that they had ratified the contract; that their inclusion in the CBA barred the certification election; and that the Director had violated the one company-one union policy and misapplied precedents such as Bulletin Publishing Corp. vs. Hon. Sanchez and General Rubber and Footwear Corp. vs. Bureau of Labor Relations. CFW argued that the Director committed grave abuse of discretion by permitting creation of a unit separate from the existing bargaining unit, by disregarding the CBA clause naming CFW as sole and exclusive bargaining agent, and by excluding CFW from the choices in the election.
Respondents' Contentions
The Director and intervening unions maintained that monthly-paid rank-and-file employees historically had been excluded from the certified bargaining unit for daily and piece-rate employees, that KMEU legitimately sought certification for the monthly-paid unit, and that the CBA subsequently presented by Knitjoy and CFW could not bar the pending representation case because the representation petition preceded and remained pending at the time the CBA was executed. The respondents also contended that the BLR should include all intervenors, including CFW and KMEA-CCLU, among the choices in the certification election.
Legal Analysis: One Company-One Union Policy and Exceptions
The Court observed that the one company-one union policy is not absolute and recognized statutory and regulatory exceptions. The Court cited Article 245 of the Labor Code as permitting supervisory employees who do not perform managerial functions to form separate unions, and quoted Section 2(c), Rule V, Book V, Rules Implementing the Labor Code, which provides that the bargaining unit shall be the employer unit "unless circumstances otherwise require." The Court explained that the constitutional right to self-organization under Section 8, Article III and Section 3, Article XIII, 1987 Constitution demands that the policy yield where bargaining history or the factual situation justifies a separate unit.
Legal Analysis: Effect of Subsequent Collective Bargaining Agreement
The Court held that the timing and circumstances of the alleged execution of the new CBA rendered Knitjoy and CFW's claim ineffective to defeat the pending representation case. The Court found substantial evidence that the parties could not have executed the CBA on 27 November 1987 and that they acted in bad faith when they included monthly-paid employees in the CBA while a certification petition concerning those same employees was already pending since 24 June 1987. The Court relied on Section 4, Rule V, Book
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Case Syllabus (G.R. No. 81883)
Parties and Posture
- Knitjoy Manufacturing, Inc. was petitioner in G.R. No. 81883 who assailed the December 1, 1987 Decision of Pura Ferrer‑Calleja, Director of the Bureau of Labor Relations (BLR).
- Confederation of Filipino Workers (CFW) was petitioner in G.R. No. 82111 and intervenor in related administrative proceedings.
- Knitjoy Monthly Employees Union (KMEU) was the private respondent that sought certification as exclusive bargaining agent for monthly‑paid rank‑and‑file employees.
- The cases were consolidated on November 23, 1988 for joint resolution by the Court.
- The instant petitions challenged (a) the Med‑Arbiter Rolando S. de la Cruz order of September 4, 1987 that dismissed KMEU's petition, and (b) the BLR Director's reversal and order of a certification election dated December 1, 1987.
- The Decision was authored by Justice Davide, Jr., with Justices Bidin, Romero, and Melo concurring and Chairman Gutierrez, Jr., on official leave.
Factual Background
- Knitjoy had a collective bargaining agreement (CBA) with the Federation of Filipino Workers (FFW) that covered regular rank‑and‑file employees paid on a daily or piece‑rate basis and expired on June 15, 1987.
- The FFW split before expiry into factions, one of which became CFW, which later won a certification election held June 10, 1987 among daily and piece‑rate employees.
- On June 24, 1987, KMEU filed a petition for certification election among Knitjoy's regular rank‑and‑file monthly‑paid employees, and KMEA‑CCLU and CFW intervened.
- Med‑Arbiter de la Cruz dismissed KMEU's petition on September 4, 1987 and instructed the parties to work toward a single union.
- KMEU moved for reconsideration which was treated as an appeal to the BLR, and Director Ferrer‑Calleja reversed the Med‑Arbiter on December 1, 1987, ordering a certification election among monthly‑paid rank‑and‑file employees except managerial employees.
- Knitjoy and CFW claimed a new CBA had been executed to include monthly‑paid employees and filed motions for reconsideration, which the Director denied on February 8, 1988.
- The new CBA adopted by Knitjoy and CFW defined the bargaining unit to include daily/piece‑rate employees and regular rank‑and‑file monthly paid office employees while excluding managerial, supervisory, casual, temporary, probationary employees, and security guards.
Issues Presented
- Whether Knitjoy's monthly‑paid regular rank‑and‑file employees may constitute an appropriate bargaining unit separate and distinct from the existing unit of daily or piece‑rate paid rank‑and‑file employees.
- Whether the inclusion of the monthly‑paid rank‑and‑file employees in the new CBA between Knitjoy and CFW bars the holding of a certification election among those monthly‑paid employees.
Petitioners' Contentions
- Knitjoy contended that the BLR Director erred in ruling that the scope of the new CBA did not bind KMEU because KMEU was not a party to the agreement.
- Knitjoy argued that the alleged acceptance by monthly‑paid employees of CBA benefits did not amount to ratification.
- Knitjoy and CFW maintained that the CBA was executed on November 27, 1987 or December 12, 1987, and therefore rendered the representation issue moot.
- Knitjoy and CFW asserted that the Director contravened the one company‑on