De Ocampo Memorial Schools, Inc. vs. Bigkis Manggagawa sa De Ocampo Memorial School, Inc.

A union’s certificate of registration may be cancelled only on the grounds expressly enumerated in Article 247 of the Labor Code; lack of mutuality or commonality of interest among members is not one of them, and fraud or misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members.

De Ocampo Memorial Schools, Inc. is a domestic corporation with two main divisions: De Ocampo Memorial Medical Center, its hospital entity, and De Ocampo Memorial Colleges, its school entity. Bigkis Manggagawa sa De Ocampo Memorial School, Inc. is a labor union registered as a local chapter. The Labor Code, specifically Article 247, formerly Article 239, limits cancellation of union registration to enumerated grounds.

De Ocampo Memorial Schools, Inc. is a domestic corporation with two main divisions: De Ocampo Memorial Medical Center (DOMMC), its hospital entity, and De Ocampo Memorial Colleges (DOMC), its school entity. On September 26, 2003, Union Registration No. NCR-UR-9-3858-2002 was issued in favor of Bigkis Manggagawa sa De Ocampo Memorial Medical Center-LAKAS (BMDOMMC). On December 5, 2003, Bigkis Manggagawa sa De Ocampo Memorial School, Inc. (BMDOMSI) was issued Union Registration/Certificate of Creation of Local Chapter No. NCR-12-CC-002-2003 and declared a legitimate labor organization. On March 4, 2004, De Ocampo filed a Petition for Cancellation of Certificate of Registration with the DOLE-NCR, seeking to cancel BMDOMSI’s Certificate of Registration on the grounds of (a) misrepresentation, false statement and fraud in connection with its creation and registration as it shared the same set of officers and members with BMDOMMC; (b) mixed membership of rank-and-file and managerial/supervisory employees; and (c) inappropriate bargaining unit. On April 13, 2004, De Ocampo filed a Supplemental Petition informing the DOLE-NCR of the cancellation of BMDOMMC’s Certificate of Registration in Case No. NCR-OD-0307-009-LRD, attaching the DOLE-NCR Decision dated March 3, 2004, which cancelled and struck off Union Registration No. NCR-UR-9-3858-2002 from the registry of legitimate labor organizations for being an inappropriate bargaining unit. On May 18, 2004, BMDOMSI filed its Comment-Opposition denying De Ocampo’s allegations and claiming that De Ocampo only wanted to impede the formation of the union.

Acting Regional Director Ciriaco A. Lagunzad III of the DOLE-NCR found that BMDOMSI committed misrepresentation by making it appear that the bargaining unit is composed of faculty and technical employees, when in fact all the union officers and most of the members are from the General Services Division. The members of the union do not share commonality of interest, as it is composed of academic and non-academic personnel. The nature of work of the employees of the General Services Division, while falling within the category of non-academic personnel, differs from that of the other non-academic employees composed of clerks, messengers, etc., since they also serve the hospital component of De Ocampo. BMDOMSI appealed to the BLR, alleging that the union members are all employees of De Ocampo and that the bargaining unit it seeks to represent is appropriate.

The BLR found no misrepresentation, false statement or fraud in BMDOMSI’s application for registration. According to the BLR, De Ocampo failed to adduce proof to support its allegation of mixed membership within respondent union. Records showed that BMDOMSI stated in its application that its members are composed of rank-and-file employees falling under either faculty or technical occupational classifications. The BLR also held that the existence of an inappropriate bargaining unit would not necessarily result in the cancellation of union registration, and the inclusion of a disqualified employee in a union is not a ground for cancellation. Even if BMDOMSI shared the same set of officers and members of BMDOMMC, the latter had already been delisted on March 3, 2004 and there is no prohibition against organizing another union.

The CA found no misrepresentation, false statement or fraud in the application for registration. The record showed that, as BMDOMSI had indicated, the bargaining unit as described is composed of rank-and-file employees with occupational classifications under technical and faculty. The CA found that there could be no misrepresentation as the members appearing in the minutes of the general membership meeting, and the list of members who attended the meeting and ratified the union constitution and by-laws, are in truth employees of the school, though some service the hospital. The CA also ruled that, other than De Ocampo’s bare allegations, there was no proof of intent to defraud or mislead on the part of BMDOMSI. However, the CA observed that the members of the union, who are from academic, non-academic, and general services, do not perform work of the same nature, receive the same wages and compensation, nor share a common stake in concerted activities. De Ocampo filed a motion for reconsideration, which was denied. Hence, this petition.

• Misrepresentation and Fraud: Petitioner maintained that BMDOMSI committed misrepresentation and fraud in connection with its application, creation, and registration as a labor union.
• Suppression of BMDOMMC’s Existence: Petitioner argued that BMDOMSI intentionally suppressed the fact that at the time of its application, there was another union known as BMDOMMC, with whom it shared the same set of officers and members, and made it appear that BMDOMMC represented a separate bargaining unit whose personality, affairs, and composition were unknown to BMDOMSI.
• Lack of Mutuality or Commonality of Interest: Petitioner asserted that BMDOMSI suppressed the fact that its members have no mutuality or commonality of interest because they belong to different work classifications, nature, and designations.

• Denial of Misrepresentation: Respondent denied De Ocampo’s allegations and claimed that De Ocampo only wanted to impede the formation of the union.
• Appropriateness of Bargaining Unit: Respondent maintained on appeal to the BLR that the union members are all employees of De Ocampo and that the bargaining unit it seeks to represent is appropriate.

• Fraud and Misrepresentation in Union Registration: Whether BMDOMSI committed misrepresentation, false statement, or fraud in connection with its application, creation, and registration as a labor union by allegedly suppressing the existence of BMDOMMC and the fact that they shared the same set of officers and members.
• Lack of Mutuality or Commonality of Interest: Whether the alleged lack of mutuality or commonality of interest among BMDOMSI’s members, or the alleged mixed membership and inappropriate bargaining unit, constitutes a ground for cancellation of its union registration under Article 247 of the Labor Code.
• Findings of the BLR and CA: Whether the BLR and CA correctly found that BMDOMSI did not commit fraud or misrepresentation and that its members are rank-and-file employees.

• Fraud and Misrepresentation in Union Registration: No. BMDOMSI did not commit fraud or misrepresentation; the Report of Creation of Local Chapter did not require disclosure of another union or its officers, and no grave and compelling fraud vitiating majority consent was shown.
• Lack of Mutuality or Commonality of Interest: No. Lack of mutuality or commonality of interest is not among the exclusive grounds for cancellation under Article 247; inclusion of disqualified employees is not a ground unless due to misrepresentation, false statement, or fraud.
• Findings of the BLR and CA: Yes. The BLR and CA findings are supported by substantial evidence and are binding on the Court; De Ocampo cited no evidence beyond bare allegations.

• Fraud and Misrepresentation in Union Registration: Article 247, previously Article 239 of the Labor Code, provides the grounds for cancellation of union registration. For fraud and misrepresentation to constitute grounds for cancellation, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members. In the form “Report of Creation of Local Chapter” filed by BMDOMSI, the applicant indicated in the portion “Description of the Bargaining Unit” that it is composed of “Rank and File” and under the “Occupational Classification,” it marked “Technical” and “Faculty.” The members appearing in the Minutes of the General Membership and the List of Workers or Members who attended the organizational meeting and adopted or ratified the Constitution and By-Laws are, as represented, employees of the school and the General Services Division, though some of the latter employees service the hospital. Moreover, there is nothing in the form “Report of Creation of Local Chapter” that requires the applicant to disclose the existence of another union, much less the names of the officers of such other union. Thus, BMDOMSI did not make the alleged misrepresentation or false statements in its application.
• Lack of Mutuality or Commonality of Interest: Even if the CA ruled that there is no mutuality or commonality of interests among the members of BMDOMSI, this is not enough reason to cancel its registration. The only grounds on which the cancellation of a union’s registration may be sought are those found in Article 247 of the Labor Code. In Tagaytay Highlands International Golf Club Incorporated vs. Tagaytay Highlands Employees Union-PTGWO, the Court ruled that the inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Article 247 of the Labor Code. Thus, for purposes 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 paragraphs (a) and (b) of Article 247, it must be shown that there was misrepresentation, false statement or fraud in connection with: (1) the adoption or ratification of the constitution and by-laws or amendments thereto; (2) the minutes of ratification; (3) the election of officers; (4) the minutes of the election of officers; and (5) the list of voters. Failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses to the BLR may also constitute grounds for cancellation, but lack of mutuality of interests is not among said grounds.
• Findings of the BLR and CA: The BLR and the CA’s finding that the members of BMDOMSI are rank-and-file employees is supported by substantial evidence and is binding on the Court. Other than the allegation that BMDOMSI has the same set of officers with BMDOMMC and the allegation of mixed membership of rank-and-file and managerial or supervisory employees, De Ocampo cited no other evidence of the alleged fraud and misrepresentation. A direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny; allegations thereof should be compounded with supporting circumstances and evidence. The records are devoid of such evidence. Furthermore, the Court is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.

• Exclusive Grounds for Cancellation of Union Registration — Under Article 247 of the Labor Code, formerly Article 239, cancellation may be sought only on: (a) 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; (b) misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters; and (c) voluntary dissolution by the members. The Court applied this by rejecting cancellation based on lack of mutuality or commonality of interest and alleged inappropriate bargaining unit.
• Grave and Compelling Fraud or Misrepresentation — For fraud and misrepresentation to constitute grounds for cancellation of union registration, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members. The Court found no such fraud or misrepresentation because BMDOMSI’s application did not conceal any matter required by the Report of Creation of Local Chapter.
• Inclusion of Disqualified Employees — The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Article 247. The Court applied this to reject De Ocampo’s mixed-membership and bargaining-unit objections absent proof of qualifying misrepresentation.
• Finality of Administrative Findings — Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality. The Court applied this by upholding the BLR and CA finding that BMDOMSI’s members are rank-and-file employees, supported by substantial evidence.
• Serious Allegation of Fraud in Union Registration — A direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny; allegations must be compounded with supporting circumstances and evidence. The Court applied this by noting that De Ocampo relied on bare allegations and cited no other evidence.

• "For fraud and misrepresentation to constitute grounds for cancellation of union registration under the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members." — This states the threshold for fraud or misrepresentation as a ground for cancellation of union registration.
• "The only grounds on which the cancellation of a union's registration may be sought are those found in Article 247 of the Labor Code." — This establishes the exclusivity of the statutory grounds for cancellation and supports the rejection of lack of mutuality or commonality of interest as a ground.
• "[t]he inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article [247] x x x of the Labor Code." — This defines the limited effect of including disqualified employees in a union and was applied to De Ocampo’s mixed-membership claim.
• "Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality." — This supports the Court’s deference to the BLR and CA findings that BMDOMSI’s members are rank-and-file employees.

• Tagaytay Highlands International Golf Club Incorporated vs. Tagaytay Highlands Employees Union-PTGWO, G.R. No. 142000, January 22, 2003, 395 SCRA 699 — Cited for the rule that the inclusion in a union of disqualified employees is not a ground for cancellation unless such inclusion is due to misrepresentation, false statement, or fraud under Article 247 of the Labor Code.
• Mariwasa Siam Ceramics, Inc. vs. Secretary of the Department of Labor and Employment, G.R. No. 183317, December 21, 2009, 608 SCRA 706, 716 — Cited for the requirement that fraud and misrepresentation, to justify cancellation of union registration, must be grave and compelling enough to vitiate the consent of a majority of union members.
• Air Philippines Corporation vs. Bureau of Labor Relations, G.R. No. 155395, June 22, 2006, 492 SCRA 243, 249-250 — Cited in support of the rule that failure to submit certain documents may constitute a ground for cancellation, while lack of mutuality of interests is not among the grounds.
• Cosmos Bottling Corporation vs. Nagrama, Jr., G.R. No. 164403, March 4, 2008, 547 SCRA 571, 584-587 — Cited to support the binding effect of the BLR and CA finding that the union members are rank-and-file employees, based on substantial evidence.
• San Miguel Corporation Employees Union-Phil. Transport and General Workers Org vs. San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino, G.R. No. 171153, September 12, 2007, 533 SCRA 125, 144 — Cited for the principle that a direct challenge to a union’s legitimacy based on fraud and misrepresentation is a serious allegation requiring supporting circumstances and evidence, and for the finality of administrative findings.

• Article 247, Labor Code (formerly Article 239) — Enumerates the grounds for cancellation of union registration: (a) 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; (b) misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters; and (c) voluntary dissolution by the members. The Court applied it by holding that lack of mutuality or commonality of interest and inclusion of disqualified employees are not grounds for cancellation unless attended by the misrepresentation, false statement, or fraud specified therein.
• DOLE Department Advisory No. 01, Series of 2015 — Cited for the renumbering of the Labor Code, under which Article 239 became Article 247. The Court referenced Article 247 as the governing provision on cancellation of union registration.

Presbitero J. Velasco, Jr. (Chairperson), Lucas P. Bersamin, Bienvenido L. Reyes, and Noel G. Tijam.