Associated Labor Unions vs. Ferrer-Calleja

In an organized establishment with a certified bargaining agent, a petition for certification election filed within the 60-day freedom period is sufficient basis to order a certification election; the 20% written-consent requirement under Article 257 applies only to unorganized establishments, and a CBA hastily concluded after such a petition and in defiance of a med-arbiter injunction does not bar the election.

PASAR is a Philippine corporation engaged in the manufacture and processing of copper cathodes, with a plant in Isabel, Leyte, employing more or less 850 rank-and-file employees. ALU was its incumbent certified bargaining agent under a CBA that expired on April 1, 1987, while NAFLU was a rival labor organization seeking to represent the same bargaining unit. Articles 256 and 257 of the Labor Code, as amended by Executive Order No. 111, govern representation issues in organized and unorganized establishments, respectively, including the 60-day freedom period and the 20% written-consent requirement.

PASAR is a corporation established under Philippine laws and engaged in the manufacture and processing of copper cathodes, with a plant operating in Isabel, Leyte. It employs more or less 850 rank-and-file employees in its departments. ALU had a collective bargaining agreement with PASAR which expired on April 1, 1987. Several days before the expiration of that CBA, or on March 23, 1987, NAFLU filed a petition for certification election with the Bureau of Labor Relations Regional Office in Tacloban City, docketed as MED-ARB-RO VII Case No. 3-28-87, alleging that no certification election had been held in PASAR within twelve months immediately preceding the filing of the petition. ALU moved to intervene and sought dismissal of the petition on the ground that NAFLU failed to present the necessary signatures in support of its petition.

In an order dated April 21, 1987, Med-Arbiter Bienvenido C. Elorcha dismissed the petition. However, the order of dismissal was set aside in another order dated May 8, 1987, and the case was rescheduled for hearing on May 29, 1987. The May 8, 1987 order likewise enjoined PASAR from entering into a collective bargaining agreement with any union until after the issue of representation was finally resolved. In an order dated June 1, 1987, the petition for certification was dismissed for failure of NAFLU to solicit 20% of the total number of rank-and-file employees, while ALU submitted 33 pages containing the signatures of 88.5% of the rank-and-file employees at PASAR.

NAFLU appealed the order of dismissal to the Bureau of Labor Relations. While the appeal was pending, ALU concluded negotiations with PASAR on the proposed CBA. On July 24, 1987, copies of the newly concluded CBA were posted in four conspicuous places in the company premises. The CBA was ratified by the members of the bargaining unit on July 28, 1987. Thereafter, ALU moved for dismissal of the appeal, alleging that it had just concluded a CBA with PASAR, that the CBA had been ratified by 98% of the regular rank-and-file employees, and that at least 75 of NAFLU's members renounced their membership and affirmed membership with petitioner-union in separate affidavits.

In a resolution dated September 30, 1987, public respondent gave due course to the appeal by ordering the conduct of a certification election among the rank-and-file employees of PASAR with ALU, NAFLU, and no union as choices, and denied petitioner's motion to dismiss. Both parties moved for reconsideration, but both motions were denied in the order dated April 22, 1988. The record showed that NAFLU's petition for certification election was filed on March 23, 1987, before the April 1, 1987 expiration of ALU's CBA, and that the new CBA was concluded and ratified while the representation issue remained unresolved and despite the med-arbiter's injunction.

• Certification Election in Organized Establishments: Petitioner argued that the holding of certification elections in organized establishments is mandated only where a petition is filed questioning the majority status of the incumbent union, and that only after due hearing where it is established that the union claiming majority status has considerable support should a certification election be ordered; otherwise, the petition should be summarily dismissed.
• Article 257 and 20% Support: Petitioner maintained that public respondent missed the legal intent of Article 257 of the Labor Code as amended by Executive Order No. 111, and that the requirement of the signature of at least 20% of the total number of rank-and-file employees should be applied in the case.
• Contract Bar Rule: Petitioner contended that since the new CBA had already been ratified overwhelmingly by the members of the bargaining unit, had already been consummated, and its benefits had been continuously enjoyed, no certification election may be conducted, citing Foamtex Labor Union-TUPAS vs. Noriel and Trade Unions of the Phil. and Allied Services vs. Inciong.
• Industrial Peace and National Interest: Petitioner posited that granting the petition for certification election would open the floodgates to unbridled and scrupulous petitions intended to prejudice industrial peace and stability, and that allowing a certification election would promote divisiveness and eventually cause polarization of the members of the bargaining unit at the expense of national interest.

• Bad Faith in Concluding CBA: Public respondent pointed out in its comment that the parties were in bad faith when they concluded the CBA, as their act was clearly intended to bar the petition for certification election filed by NAFLU.
• Premature Renewal Not a Bar: Public respondent maintained that a collective bargaining agreement which was prematurely renewed is not a bar to the holding of a certification election.
• Uncertified CBA: Public respondent pointed out that the new CBA entered into between ALU and PASAR had not been certified by the Bureau of Labor Relations.

• Contract Bar Rule: Whether the contract bar rule is applicable where a collective bargaining agreement was hastily concluded in defiance of the order of the med-arbiter enjoining the parties from entering into a CBA until the issue on representation is finally resolved.
• Applicability of Article 257: Whether Article 257 of the Labor Code, requiring the written consent of at least 20% of all employees in the bargaining unit, applies to an organized establishment with a certified bargaining agent.
• Freedom Period: Whether NAFLU's petition for certification election was filed within the 60-day freedom period.
• Effect of New CBA: Whether the new CBA, overwhelmingly ratified and already being enjoyed by the bargaining unit, bars the holding of a certification election.
• Industrial Peace and National Interest: Whether holding a certification election would promote divisiveness, polarization, or prejudice national interest.

• Contract Bar Rule: No. A CBA hastily concluded after a certification petition filed within the freedom period and in defiance of a med-arbiter injunction does not bar a certification election; it was not yet in existence when the petition was filed and was not certified.
• Applicability of Article 257: No. Article 257 applies only to unorganized establishments; in organized establishments, Article 256 requires only that the petition be filed within the 60-day freedom period.
• Freedom Period: Yes. The previous CBA expired on April 1, 1987, and NAFLU filed its petition on March 23, 1987, well within the freedom period.
• Effect of New CBA: No. Overwhelming ratification and enjoyment of benefits do not bar the election; the renewed CBA was not certified and was prematurely renewed.
• Industrial Peace and National Interest: No. The claim is bereft of merit; certification election is a statutory policy and the most effective way to determine the workers' bargaining representative.

• Contract Bar Rule: The contract bar rule is applicable only where the petition for certification election was filed either before or after the freedom period. Here, NAFLU filed its petition on March 23, 1987, within the freedom period before the April 1, 1987 expiration of ALU's CBA. The renewed CBA could not bar the petition because it was not yet in existence when the petition was filed. It was also not certified by the Bureau of Labor Relations; only a certified CBA serves as a bar to a certification election. The CBA was concluded with indecent haste despite the med-arbiter's injunction, indicating bad faith and an intent to bar the election. A prematurely renewed CBA is not a bar; such haste frustrates the constitutional right of the employees to self-organization and is not conducive to industrial peace. Foamtex supports this because only a certified CBA bars an election; TUPAS is distinguishable because there the petition was filed 19 days after the CBA was signed, beyond the freedom period.
• Applicability of Article 257: Article 257, by its terms, governs petitions in unorganized establishments and requires the written consent of at least 20% of all employees in the bargaining unit. It does not apply to PASAR, an organized establishment with a certified bargaining agent, ALU, which had previously entered into a CBA with management. Article 256 governs organized establishments and requires only that a petition questioning the majority status of the incumbent bargaining agent be filed within the 60-day freedom period; the Med-Arbiter shall then automatically order an election by secret ballot. The Court also noted that certification proceedings are non-adversarial and fact-finding, not covered by technical rules of evidence under Article 221 of the Labor Code.
• Freedom Period: The previous CBA between ALU and PASAR was due to expire on April 1, 1987. NAFLU filed its petition on March 23, 1987, which was within the 60-day period before expiration. The mere filing of the petition within the freedom period is sufficient basis for the respondent Director to order the holding of a certification election.
• Effect of New CBA: Even assuming ALU had majority support and some NAFLU members renounced membership, TUPAS cannot apply because the petition there was filed 19 days after the CBA was signed, beyond the freedom period. Here, the petition was filed within the freedom period, and the CBA was hastily concluded despite the injunction. The new CBA was not certified. The employees' freedom to choose their bargaining representative is of paramount importance; the existence of an incumbent bargaining representative is of no moment as long as the petition was filed within the freedom period. Certification election is the most effective way of determining which labor organization can truly represent the working force.
• Industrial Peace and National Interest: Petitioner failed to establish that calling a certification election would prejudice the employees concerned or national interest. The fear perceived by petitioner is more imaginary than real. If ALU truly had the support of more than the majority, the conduct of a certification election would likely strengthen its hold and erase doubts, avoiding fragmentation of the bargaining unit. No work stoppage or strike occurred, and the workers were at peace. Ordering otherwise would be repugnant to the well-entrenched right of the workers to unionism.

• Contract Bar Rule — A CBA may bar a certification election only in the circumstances recognized by law; the Court stated it is applicable only where the petition for certification election was filed either before or after the freedom period. A CBA that is prematurely renewed, not certified, and concluded after a petition filed within the freedom period does not bar a certification election. Applied here: NAFLU's petition was filed within the freedom period; the new CBA was not yet in existence when the petition was filed and was not certified; hence it could not bar the election.
• Freedom Period — In organized establishments, a petition questioning the majority status of the incumbent bargaining agent must be filed within the 60-day period before the expiration of the CBA. The mere filing of such a petition within the freedom period is sufficient basis for the Med-Arbiter to order a certification election. Applied: the CBA expired on April 1, 1987, and the petition was filed on March 23, 1987.
• 20% Written Consent Requirement Under Article 257 — The requirement that a petition for certification election be supported by the written consent of at least 20% of all employees in the bargaining unit applies only to unorganized establishments. It does not apply to organized establishments with a certified bargaining agent. Applied: PASAR was organized and ALU was the certified bargaining agent; Article 257 did not apply.
• Certification Proceedings as Non-Adversarial and Fact-Finding — Certification proceedings are not ordinary litigation but investigations of a non-adversarial and fact-finding character, not covered by technical rules of evidence; Article 221 of the Labor Code allows labor tribunals to decide on position papers and other documents. Applied: the Court rejected petitioner's insistence on the 20% signature requirement as a condition for the election.
• Right to Self-Organization and Certification Election as Statutory Policy — Employees' freedom to choose their bargaining representative is of paramount importance, and the holding of a certification election is a statutory policy that should not be circumvented. A CBA concluded with indecent haste to frustrate that right is not countenanced. Applied: the Court upheld the certification election despite the new CBA and claims of majority support.
• Premature Renewal of CBA — A collective bargaining agreement prematurely renewed is not a bar to the holding of a certification election. Applied: ALU and PASAR hastily concluded a CBA despite the med-arbiter's injunction, intended to bar NAFLU's petition; the Court held it could not bar the election.

• "The contract bar rule is applicable only where the petition for certification election was filed either before or after the freedom period." — States the Court's controlling formulation of the contract bar rule; because NAFLU's petition was filed within the freedom period, the rule did not bar the election.
• "Article 257 is applicable only to unorganized labor organizations and not to establishments like PASAR where there exists a certified bargaining agent, petitioner ALU, which as the record shows had previously entered into a CBA with the management." — Defines the scope of Article 257 and rejects petitioner's argument that the 20% written-consent requirement applied to PASAR.
• "A collective bargaining agreement which was prematurely renewed is not a bar to the holding of a certification election." — States the ratio for rejecting the newly concluded CBA as a bar, especially because it was hastily renewed despite the med-arbiter's injunction.
• "The holding of a certification election is a statutory policy that should not be circumvented." — Articulates the policy basis for allowing the election despite the existing and newly ratified CBA.

• Foamtex Labor Union-TUPAS vs. Noriel, 72 SCRA 371 (1976) — Cited by petitioner but held to weaken its position; only a certified CBA would serve as a bar to a certification election, and the new CBA had not been certified.
• Trade Unions of the Phil. and Allied Services vs. Inciong, 115 SCRA 847 (1982) — Distinguished; there the petition for certification election was filed 19 days after the CBA was signed, beyond the freedom period, unlike the present petition filed within the freedom period.
• General Textiles Allied Workers Association vs. The Director of the Bureau of Labor Relations, 84 SCRA 430 (1978) — Cited for the rule that a CBA prematurely renewed is not a bar to the holding of a certification election.
• Antipolo Highway Lines, Inc. vs. Inciong, 64 SCRA 441 (1975) — Cited for the principle that indecent haste in renewing a CBA to frustrate the employees' constitutional right to self-organization is not countenanced.
• Associated Labor Unions vs. Hon. Pura Ferrer-Calleja, G.R. No. 82260, July 19, 1989 — Cited for the rule that a renewed CBA cannot bar a certification election because it was not yet in existence when the petition was filed.
• Tanduay Distillery Labor Union vs. NLRC, 149 SCRA 470 (1987) — Cited for the characterization of certification proceedings as non-adversarial and fact-finding, not covered by technical rules of evidence.
• Manila Doctors Hospital vs. NLRC, 135 SCRA 262 (1985) — Cited for the application of Article 221 of the Labor Code, allowing labor tribunals to decide on position papers and other documents without technical rules of evidence.
• Plum Federation of Industrial and Agrarian Workers vs. Noriel, 119 SCRA 299 (1982) — Cited for the rule that the most effective way of determining which labor organization can truly represent the working force is by certification election.
• Confederation of Citizens Labor Unions (CCLU) vs. National Labor Relations Commission, 60 SCRA 450, 467 (1974) — Cited for the employees' right to choose their bargaining representative and the need to give all employees a democratic space.
• George & Peter Lines, Inc. vs. Associated Labor Union, 134 SCRA 82 (1985) — Cited for the rule that the holding of a certification election is a statutory policy that should not be circumvented.

• Article 257, Labor Code, as amended by Executive Order No. 111 — Governs petitions in unorganized establishments and requires the written consent of at least 20% of all employees in the bargaining unit. The Court held it inapplicable because PASAR was an organized establishment with a certified bargaining agent.
• Article 256, Labor Code, as amended by Executive Order No. 111 — Governs representation issues in organized establishments; a petition questioning the majority status of the incumbent bargaining agent filed within the 60-day freedom period requires the Med-Arbiter to automatically order a certification election by secret ballot. The Court applied it to uphold the election order.
• Article 221, Labor Code — Provides that proceedings before the NLRC are not covered by technical rules of procedure and evidence. The Court used it to characterize certification proceedings as non-adversarial and fact-finding.
• Article 232, Labor Code — Cited in the discussion of Foamtex for the rule that only a certified CBA serves as a bar to a certification election.

Narvasa, Cruz, Griño-Aquino, and Medialdea, JJ.