< All Topics

A. Right to self-organization

1. Concept

Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection. Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union. (UST Faculty Union (USTFU) v. Bitonio, 1999, G.R. No. 131235, 16 November 1999)

The right to form a union or association or to self-organization comprehends two notions, to wit: (a) the liberty or freedom, that is, the absence of restraint which guarantees that the employee may act for himself without being prevented by law; and (b) the power, by virtue of which an employee may, as he pleases, join or refrain from joining an association. (Samahan ng Manggagawa Sa Hanjin Shipyard v. BLR, Hanjin Heavy Industries and Construction Co., Ltd., G.R. No. 211145, 14 October 2015)

a. Includes right to refuse

Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. Therefore, to become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union’s constitution and bylaws. An employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the union’s rules and regulations. (UST Faculty Union (USTFU) v. Bitonio, supra.)

The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights. (Ibid.)

b. Covers unions and associations

The right to self-organization is not limited to unionism. Workers may also form or join an association for mutual aid and protection and for other legitimate purposes. (Samahan ng Manggagawa Sa Hanjin Shipyard v. BLR, Hanjin Heavy Industries and Construction Co., Ltd., G.R. No. 211145, 14 October 2015)

2. Union security

“Union security” is a generic term which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. (Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, 10 August 2010)

There is union shop when all new regular employees are required to join the union within a certain period for their continued employment. (Ibid.)

There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. (Ibid.)

A closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. (Ibid.)

a. Enforced membership

1) General rule: Valid

When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of Union Security Clauses, this condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism. This Court, on occasion, has even held that a union security clause in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution. (Ibid.)

It is the policy of the State to promote unionism to enable the workers to negotiate with management on the same level and with more persuasiveness than if they were to individually and independently bargain for the improvement of their respective conditions. To this end, the Constitution guarantees to them the rights “to self-organization, collective bargaining and negotiations and peaceful concerted actions including the right to strike in accordance with law.” There is no question that these purposes could be thwarted if every worker were to choose to go his own separate way instead of joining his co-employees in planning collective action and presenting a united front when they sit down to bargain with their employers. It is for this reason that the law has sanctioned stipulations for the union shop and the closed shop as a means of encouraging the workers to join and support the labor union of their own choice as their representative in the negotiation of their demands and the protection of their interest vis-à-vis the employer. (Liberty Flour Mills Employees v. Liberty Flour Mills, Inc., G.R. Nos. 58768-70, 29 December 1989)

In other words, the purpose of a union shop or other union security arrangement is to guarantee the continued existence of the union through enforced membership for the benefit of the workers. (Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, supra.)

2) Exceptions: when refusal is valid

All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds; employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect; confidential employees who are excluded from the rank and file bargaining unit; and employees excluded from the union shop by express terms of the agreement. (Ibid.)

b. Absorbed employees in case of merger of Corporations

In law, there is no special class of employees called “absorbed employees.” In order for the Court to apply or not apply the Union Shop Clause, the Court can only classify the former employees (of the absorbed company) as either “old” or “new.” If they are not “old” employees, they are necessarily “new” employees. If they are new employees, the Union Shop Clause did not distinguish between new employees who are non-regular at their hiring but who subsequently become regular and new employees who are “absorbed” as regular and permanent from the beginning of their employment. The Union Shop Clause did not so distinguish, and so neither must we. (BPI v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, En Banc, G.R. No. 164301, 10 August 201)

1. Who may or may not exercise the right

a. Coverage

All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. (Article 253, Labor Code)

1) Who cannot form unions

All employees are allowed to form unions – except:

1) Government employees

2) Managerial employees

3) Confidential employees

a) Government employees

Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to form associations for purposes not contrary to law. (Article 254, Ibid.)

Government employees have the right to self-organization. It is not, however, regarded as existing or available for purposes of collective bargaining, but simply for the furtherance and protection of their interests. (Samahan ng Manggagawa Sa Hanjin Shipyard v. BLR, Hanjin Heavy Industries and Construction Co., Ltd., G.R. No. 211145, 14 October 2015)

b) Managerial employees

Managerial employees are not eligible to join, assist or form any labor organization. (Article 255, Labor Code)

The right to self-organization, however, is subject to certain limitations as provided by law. For instance, the Labor Code specifically disallows managerial employees from joining, assisting or forming any labor union. Meanwhile, supervisory employees, while eligible for membership in labor organizations, are proscribed from joining the collective bargaining unit of the rank and file employees. (Ibid.)

c) Confidential employees

Art. 255 [245] of the Labor Code does not directly prohibit confidential employees from engaging in union activities. However, under the doctrine of necessary implication, the disqualification of managerial employees equally applies to confidential employees. The confidential-employee rule justifies exclusion of confidential employees because in the normal course of their duties they become aware of management policies relating to labor relations. It must be stressed, however, that when the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees from forming, assisting, or joining a union. (Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No. 116194, 02 February 2000)

(1) Concept

Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee – that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the “confidential employee rule.” (San Miguel Foods, Incorporated v. San Miguel Corporation Supervisors, G.R. No. 146206, 01 August 2011)

A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and protection of the employer’s property. Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage. (Ibid.)

Corollarily, although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and, hence, are likewise privy to sensitive and highly confidential records. (Ibid.)

Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees, because if allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of interests and the union can also become company-denominated with the presence of managerial employees in the union membership. Having access to confidential information, confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement. (Ibid.)

b. Supervisory employees

Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (Article 255, Labor Code)

a. Doctrine of necessary implication

1) Concept

No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication. The doctrine states that what is implied in a statute is as much a part thereof as that which is expressed. Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis. And every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege. This is so because the greater includes the lesser, expressed in the Maxim, in eo plus sit, simper inest et minus. (Chua v. Civil Service Commission, G.R. No. 88979, 07 February 1992)

A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property. While Art. 255 [245] of the Labor Code singles out managerial employee as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed. (Pepsi-Cola Products, Philippines, Inc. v. Secretary of Labor, G.R. Nos. 96663, 103300, 10 August 1999)

2. Commingling or mixture of membership

a. Concept

The mixed membership does not result in the illegitimacy of the registered labor union unless the same was done through misrepresentation, false statement or fraud according to Article 239 of the Labor Code. (The Heritage Hotel Manila v. Secretary of Labor and Employment, G.R. No. 172132, 23 July 2014)

After a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. (Holy Child Catholic School v. Sto. Tomas, G.R. No. 179146, 23 July 2013)

Since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. (Ibid.)

The alleged inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. (Ibid.)

In case of alleged inclusion of disqualified employees in a union, the proper procedure for an employer like petitioner is to directly file a petition for cancellation of the union’s certificate of registration due to misrepresentation, false statement or fraud under the circumstances enumerated in Article 239 of the Labor Code, as amended. To reiterate, private respondent, having been validly issued a certificate of registration, should be considered as having acquired juridical personality which may not be attacked collaterally. (Ibid.)

Clearly, then, for the purpose of de-certifying a union, it is not enough to establish that the rank-and-file union includes ineligible employees in its membership. Pursuant to Article 239 (a) and (c) of the Labor Code, it must be shown that there was misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, or in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses to the BLR. (In Re: Petition for Cancellation of the Union Registration of Air Philippines Flight Attendants Association, Air Philippines Corporation v. Bureau of Labor Relations, G.R. No. 155395, 22 June 2006)

3. Rights and conditions of membership

a. Rights and Conditions of Membership in a Labor Organization

1) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;

2) The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;

3) The members shall directly elect their officers in the local union, as well as their national officers in the national union or federation to which they or their local union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirement for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization;

4) The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision in behalf of the general membership;

5) No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity;

6) No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;

7) No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;

8) Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

9) The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

10) Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.

Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, That failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization;

11) The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;

12) The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:

a) At least once a year within thirty (30) days after the close of its fiscal year;

b) At such other times as may be required by a resolution of the majority of the members of the organization; and

c) Upon vacating his office.

The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor.

13) The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours;

14) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president.

15) Other than for mandatory activities under the Code, no special assessments, from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; and

16) It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws. (Article 250, [241], Labor Code)

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities. Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty. (Paragraph 2, Article 250, [241], Labor Code)

Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts. (Paragraph 3, Article 250, [241], Ibid.)

a. Nature of relationship

i. Member-Labor union

1) Requirements of Registration

A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

1) Fifty pesos (P50.00) registration fee;

2) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

3) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

4) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

5) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. (Article 240, Ibid.)

2) Chartering and Creation of a Local Chapter

A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate:

1) The names of the chapter’s officers, their addresses, and the principal office of the chapter; and

2) The chapter’s constitution and by-laws: Provided, That where the chapter’s constitution and by-laws are the same as that of the federation or the national union, this fact shall be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president. (Article 241, Ibid.)

ii. Labor union federation

1) Additional Requirements for Federations or National Unions

Subject to Article 238, if the applicant for registration is a federation or a national union, it shall, in addition to the requirements of the preceding Articles, submit the following:

1) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and

2) The names and addresses of the companies where the locals or chapters operate and the list of all the members in each company involved. (Article 244, Ibid.)

2) Effect of a Petition for Cancellation of Registration

A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election.

In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts. (Article 246, Ibid.)

3) Grounds for Cancellation of Union Registration

The following may constitute grounds for cancellation of union registration:

1) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;

2) Misrepresentation, false statements or fraud in connection with the electionof officers, minutes of the election of officers, and the list of voters;

3) Voluntary dissolution by the members. (Article 247, Ibid.)

4) Voluntary Cancellation of Registration

The registration of a legitimate labor organization may be cancelled by the organization itself: Provided, That at least two-thirds of its general membership votes, in a meeting duly called for that purpose to dissolve the organization: Provided, further, That an application to cancel registration is thereafter submitted by the board of the organization, attested to by the president thereof. (Article 248, Ibid.)

5) Equity of the Incumbent

All existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates. (Article 249, Ibid.)

6) Rank-and-file union and supervisors’ union in same federation

The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (Article 245, Ibid.)

(a) Disaffiliation

(i) General rule: allowed

The right of the local union to exercise the right to disaffiliate from its mother union is well settled in this jurisdiction.  (National Union of Bank Employees [NUBE] v. Philnabank Employees Association [PEMA], G.R. No. 174287, 12 August 2013)

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate and voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its autonomy from the federation which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association. (Malayang Samahan ng mga Manggagawa sa M. Greenfield [MSMG-UWP] v. Ramos, G.R. No. 113907, 28 February 2000)

(ii) Exception: prohibition

The right of the local members to withdraw from the federation and to form a new local union depends upon the provisions of the union’s constitution, by-laws and charter and, in the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent. (Ibid.)

The purpose of affiliation by a local union with a mother union or a federation is to increase by collective action the bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence. (Ibid.)

Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federation’s constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its parent union. (Ibid.)

(b) Substitutionary doctrine

The “substitutionary” doctrine only provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. And it is in the light of this that the phrase “said new agent would have to respect said contract” must be understood. It only means that the employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to negotiate with management for the shortening thereof. (Benguet Consolidated, Inc. v. BCI Employees and Workers Union-PAFLU, G.R. No. L-24711, 30 April 1968)

In formulating the “substitutionary” doctrine, the only consideration involved was the employees’ interest in the existing bargaining agreement. The agent’s interest never entered the picture. (Ibid.)

Next B. Bargaining unit
Table of Contents