G.R. No. 162355 - Sta. Lucia Commercial Corp. vs. Secretary of Labor and Employment

Case Summary (G.R. No. 162355)

Petitioner

Sta. Lucia East Commercial Corporation (SLECC) — sought review of the Court of Appeals’ denial of its petition for certiorari attacking the Secretary of Labor and Employment’s reversal of a med‑arbiter’s order dismissing a petition for direct certification.

Respondents

Secretary of Labor and Employment (respondent to SLECC’s petition for certiorari) and Sta. Lucia East Commercial Corporation Workers Association (CLUP‑SLECCWA), the petitioner for certification election.

Key Dates and Procedural History

27 February 2001: CLUP (on behalf of its chartered local) filed a petition for certification election covering SLECC and affiliates.
21 August 2001: Med‑Arbiter Bactin dismissed that petition for inappropriateness of the bargaining unit.
14 September 2001: Appeal to the regional office filed; withdrawn on 20 November 2001 and dismissal affirmed 31 January 2002.
10 October 2001: Reorganization and re‑registration as CLUP‑SLECCWA limited to rank‑and‑file employees of SLECC; Certificate of Creation issued. CLUP‑SLECCWA filed the instant petition the same date.
20 July 2001: SLECC voluntarily recognized SMSLEC as exclusive bargaining agent.
29 November 2001: CBA between SMSLEC and SLECC ratified; registered 9 January 2002.
29 July 2002: Med‑Arbiter dismissed CLUP‑SLECCWA’s petition on contract‑bar grounds.
27 December 2002: Secretary reversed the med‑arbiter and ordered certification election.
14 August 2003: Court of Appeals affirmed the Secretary.
Supreme Court denied SLECC’s petition.

(Constitutional basis: 1987 Philippine Constitution, as applicable to the decision.)

Applicable Law and Legal Standards

Article 212(g) of the Labor Code (definition of labor organization).
Article 234 and Rule VI, Section 3, Implementing Rules of Book V of the Labor Code (requirements and effect of registration of labor organizations).
Rule XI, pars. (c) and (d), Book V Omnibus Rules (one‑year and negotiation bar rules).
Rules governing voluntary recognition (Section 1, Rule X, Implementing Rules) and procedures for cancellation of registration (Rule VIII).
Jurisprudence cited: San Miguel Corporation v. Laguesma (definition and factors for bargaining unit), Diatagon Labor Federation v. Ople (separate corporations cannot be treated as same bargaining unit), Tagaytay Highlands International Golf Club Inc. v. Tagaytay Highlands Employees Union (grounds for cancellation of registration), and Samma‑Likha v. Samma Corporation (employer’s limited role in certification petitions).

Facts Relevant to the Dispute

CLUP‑SLECC (later re‑registered as CLUP‑SLECCWA limited to SLECC’s rank‑and‑file) filed a petition for direct certification claiming sufficient membership and lack of recent election. SLECC had voluntarily recognized SMSLEC on 20 July 2001 and began collective bargaining, culminating in a ratified and registered CBA. CLUP‑SLECCWA alleged that the voluntary recognition and negotiations were tainted by malice, collusion and conspiracy, and that CLUP‑SLECC had been a legitimately registered labor organization covering the same employees at the time of SMSLEC’s recognition.

Med‑Arbiter’s Order

Med‑Arbiter Bactin dismissed CLUP‑SLECCWA’s petition on contract‑bar grounds, reasoning that the prior voluntary recognition of SMSLEC and the registered CBA between SLECC and SMSLEC barred a certification petition. The med‑arbiter treated the recording of voluntary recognition and the registered CBA as creating exclusive representation rights for SMSLEC that precluded the election.

Secretary of Labor’s Decision

The Secretary reversed the med‑arbiter. The Secretary concluded that CLUP‑SLECC (the predecessor organization) was a legitimately registered labor organization at the time SLECC purportedly voluntarily recognized SMSLEC. Because a legitimate labor organization already existed covering the same workers, SMSLEC’s voluntary recognition was void and the subsequent negotiations and registered CBA could not bar CLUP‑SLECCWA’s petition. The Secretary ordered remand for the immediate conduct of a certification election among SLECC rank‑and‑file employees with choices CLUP‑SLECCWA, SMSLEC, or No Union, and directed cancellation of the recording of voluntary recognition in favor of SMSLEC and appropriate annotation of CLUP’s re‑registration.

Court of Appeals’ Ruling

The Court of Appeals affirmed the Secretary, agreeing that CLUP‑SLECCWA’s re‑registration showed that a legitimate labor organization existed covering the same bargaining unit at the time of SMSLEC’s voluntary recognition. Therefore the voluntary recognition, the resulting negotiations, and the CBA were void and could not bar the certification petition.

Issue Presented to the Supreme Court

Whether the Court of Appeals erred in affirming the Secretary’s finding that SLECC’s voluntary recognition of SMSLEC was invalid because a legitimate labor organization (CLUP‑SLECC) existed covering the bargaining unit at the time of recognition.

Supreme Court’s Legal Analysis — Legitimate Labor Organization

The Court reiterated statutory definitions: a labor organization exists for purposes of collective bargaining (Art. 212(g)) and acquires legal personality and rights upon issuance of a certificate of registration (Art. 234 and Implementing Rules). Registration confers a presumption of legitimacy that cannot be collaterally attacked; the proper remedy for challenging a registration is a petition for cancellation under the prescribed grounds (fraud, misrepresentation, etc.), not collateral proceedings such as voluntary recognition.

Supreme Court’s Analysis — Bargaining Unit

The Court recalled the legal factors for determining an appropriate bargaining unit (the will of the employees, affinity and unity of interest, prior collective bargaining history, similarity of employment status), citing San Miguel Corporation v. Laguesma, and reiterated that employees in separate corporations generally cannot be treated as a single bargaining unit (Diatagon). The existence of a prior collective bargaining history is not determinative.

Supreme Court’s Analysis — Registered Organization Representing an Inappropriate Bargaining Unit

Although CLUP‑SLECC initially represented an inappropriate multi‑corporate unit and was dismissed in the prior petition, it nevertheless possessed a valid certificate of registration at the time SLECC recognized SMSLEC. The Court emphasized that SLECC and SMSLEC could not, by unilateral action, determine the propriety of CLUP‑SLECC’s registration. Inclusion of disqualified employees is not a ground

Case Syllabus (G.R. No. 162355)

The Case

Nature of the action: Petition for review under Rule 45 of the 1997 Rules of Civil Procedure challenging the Decision (14 August 2003) and the Resolution (24 February 2004) of the Court of Appeals in CA-G.R. SP No. 77015.
Relief sought by petitioner (Sta. Lucia East Commercial Corporation, SLECC): overturn appellate court denial of certiorari with prayer for writ of preliminary injunction and temporary restraining order; challenge the Secretary of Labor and Employment’s ruling that subsequent negotiations and registration of a collective bargaining agreement (CBA) between SLECC and Samahang Manggagawa sa Sta. Lucia East Commercial (SMSLEC) could not bar the petition for direct certification filed by Sta. Lucia East Commercial Corporation Workers Association (CLUP-SLECCWA).
Lower court posture: Court of Appeals affirmed the Secretary’s decision and denied SLECC’s petition for certiorari; appellate court opinion penned by Associate Justice Eugenio S. Labitoria with Associate Justices Elvi John S. Asuncion and Lucas P. Bersamin concurring; resolution also at issue.

Procedural History

27 February 2001: Confederated Labor Union of the Philippines (CLUP), on behalf of its chartered local, filed a petition for certification election among the regular rank-and-file employees of SLECC and its affiliates (Case No. RO400-0202-RU-007).
21 August 2001: Med-Arbiter Bactin ordered dismissal of that petition for inappropriateness of the bargaining unit.
14 September 2001: CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union appealed the dismissal to the Office of the Secretary.
20 November 2001: CLUP-Sta. Lucia East Commercial Corporation and its Affiliates Workers Union moved to withdraw the appeal.
31 January 2002: The Office of the Secretary granted the motion to withdraw and affirmed the dismissal.
10 October 2001: The union reorganized and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (CLUP-SLECCWA), limiting membership to rank-and-file employees of SLECC; issued Certificate of Creation of a Local Chapter No. RO400-0110-CC-004; on the same date CLUP-SLECCWA filed the instant petition for direct certification.
22 November 2001: SLECC filed a motion to dismiss the CLUP-SLECCWA petition asserting voluntary recognition of SMSLEC (20 July 2001) and invoking one-year and negotiation bar rules (pars. (c) and (d), Section 11, Rule XI, Book V, Omnibus Rules Implementing the Labor Code).
29 November 2001: A CBA between SMSLEC and SLECC was ratified by rank-and-file employees.
9 January 2002: The CBA was registered with DOLE-Regional Office No. IV.
19 December 2001: CLUP-SLECCWA filed Opposition and Comment to SLECC’s motion to dismiss, alleging malice, collusion and conspiracy in the voluntary recognition and approval process and contending that CLUP-SLECCWA’s re-registration existed and was not cancelled.
29 July 2002: Med-Arbiter Bactin issued an Order dismissing CLUP-SLECCWA’s petition on contract bar grounds.
CLUP-SLECCWA appealed the Med-Arbiter’s Order to the Secretary.
27 December 2002: Secretary of Labor and Employment promulgated a Decision granting the appeal, reversing and setting aside the Med-Arbiter’s Order, and directing a certification election among the rank-and-file employees of SLECC with specified choices; directed cancellation of the recording of voluntary recognition in favor of SMSLEC and annotation of re-registration of CLUP-SLECCWA.
27 March 2003: Secretary denied SLECC’s motion for reconsideration for lack of merit.
SLECC filed certiorari before the Court of Appeals; Court of Appeals affirmed the Secretary’s Decision on 14 August 2003 and the appellate court’s Resolution dated 24 February 2004 is part of the challenged rulings.
Present appeal: Petition for review to the Supreme Court; Court issued decision on 14 August 2009 denying the petition and affirming the rulings below.

Facts as Found by the Secretary

Parties and employee population: SLECC allegedly employed about 115 employees; more than 20% of rank-and-file employees were members of CLUP-SLECCWA, satisfying the registration requirement.
Existence of other labor organization: SMSLEC was another union registered with DOLE-Regional Office No. IV on 22 June 2001 covering the same employees; SMSLEC had not been recognized as exclusive bargaining agent prior to the events contested.
Chronology relevant to recognition and registration:
- CLUP first filed a certification petition on 27 February 2001 covering SLECC and affiliates; that petition was dismissed for an inappropriate bargaining unit on 21 August 2001.
- CLUP reorganized and re-registered as CLUP-SLECCWA on 10 October 2001 limiting membership to SLECC rank-and-file and filed a new petition the same date.
- SLECC voluntarily recognized SMSLEC on 20 July 2001 and commenced negotiations leading to a ratified CBA on 29 November 2001 which was later registered on 9 January 2002.
Allegations of impropriety: CLUP-SLECCWA alleged malice, collusion and conspiracy involving officials of the Regional Office and Med-Arbiter Bactin in approving the voluntary recognition and dismissing the petition for certification election (allegations relate to timing and knowledge of pending petitions).

Med-Arbiter Anastacio L. Bactin’s Order (29 July 2002)

Disposition: Dismissed CLUP-SLECCWA’s petition for direct certification.
Grounds: Contract bar rule — prior voluntary recognition of SMSLEC and the CBA between SLECC and SMSLEC bars the filing of CLUP-SLECCWA’s petition for direct certification.
Legal premise cited: SMSLEC is entitled to rights, privileges, and obligations of an exclusive bargaining representative from the time of the recording of voluntary recognition; a duly registered CBA bars filing of a petition for direct certification.
Procedural aftermath: CLUP-SLECCWA appealed the Med-Arbiter’s Order to the Secretary.

Secretary of Labor and Employment’s Decision (27 December 2002)

Holding: The appeal was granted; Med-Arbiter’s Order dated 29 July 2002 was reversed and set aside.
Reasoning:
- CLUP-SLECCWA (as reorganized from CLUP-SLECC and its Affiliates Workers Union) constituted a registered labor organization at the time SLECC voluntarily recognized SMSLEC.
- The subsequent negotiations and registration of a CBA executed by SLECC and SMSLEC could not bar CLUP-SLECCWA’s