Mercury Drug Corporation (Distribution Center) Employees Union-FFW vs. Mercury Drug Corporation

A dismissed employee is eligible to vote in a certification election only if the legality of the dismissal was contested before a forum of appropriate jurisdiction—namely, the Labor Arbiter—at the time of the issuance of the order for the conduct of the certification election; a Notice of Strike filed with the NCMB does not satisfy this requirement. Additionally, blank or unfilled ballots, treated as abstentions under DOLE Department Order No. 40-I-15, form part of the valid votes cast and must be included in computing the majority of valid votes required for certification under the double majority rule.

The petitioner is Mercury Drug Corporation (Distribution Center) Employees Union-FFW, a labor union seeking certification as the sole and exclusive bargaining agent of approximately 109 regular rank-and-file employees of Mercury Drug Corporation (MDC) at its Libis, Quezon City establishment. The respondent is Mercury Drug Corporation, the employer. The dispute is governed by the Labor Code of the Philippines, particularly Article 224 (jurisdiction of Labor Arbiters), Article 267 (exclusive representation), and Article 268 (certification election requirements), as well as DOLE Department Order No. 40-03, as amended by DOLE Department Order No. 40-I-15, which prescribes the rules on certification elections, including voter eligibility and the treatment of ballots.

On March 5, 2018, Mercury Drug Corporation (Distribution Center) Employees Union-FFW (Union) filed a request for certification as the Sole and Exclusive Bargaining Agent (SEBA) of approximately 109 regular rank-and-file employees of Mercury Drug Corporation (MDC) at its establishment in Libis, Quezon City. Due to the Union's failure to complete its requirements during the verification conference on April 6, 2018, the request was forwarded to the Election Officer for the conduct of a certification election.

The certification election was held on June 11, 2018, where the employees of MDC were to choose between the Union and "No Union." The results showed 45 votes for the Union, 44 for "No Union," 4 spoiled, and 1 segregated ballot, out of 99 total voters. The single segregated ballot belonged to Bernabe S. Valencia Jr. (Valencia), the Union President, whose vote was segregated because he had been dismissed from employment on June 2, 2018 for alleged violation of company rules and regulations—specifically, for allegedly disclosing confidential data without authorization. Five days after his dismissal, on June 7, 2018, Valencia filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB). It was only much later, on February 7, 2019, that he filed before the NLRC Arbitration Branch a complaint for illegal dismissal and unfair labor practice (ULP).

After the election, MDC filed a Protest and Supplemental Protest, contesting (a) the treatment of certain ballots and (b) the appropriateness of the bargaining unit. The Union countered that the protests were not recorded in the minutes and were therefore deemed waived, and argued that the spoiled ballots were improperly included as valid votes and that Valencia's segregated vote should be opened because he had supposedly contested his dismissal by filing the Notice of Strike. On July 26, 2018, Mediator-Arbiter Jema Sharae J. Macaraya issued an Order declaring that the Union failed to secure the required majority—46 out of 89 valid votes—and held that Valencia's segregated ballot could not be opened because he had not contested his dismissal before a forum of proper jurisdiction.

The Union appealed to the Secretary of Labor, who in a Resolution dated January 21, 2019 reversed the Mediator-Arbiter's Order as to results and remanded the case for the opening and canvassing of Valencia's vote. The Secretary of Labor ruled that two of the four ballots initially declared "spoiled" were actually "blank" or "unfilled" and should properly be regarded as "abstentions," and sustained the Union's position that the Notice of Strike sufficiently constituted a contest of Valencia's dismissal. MDC's Motion for Reconsideration was denied on September 30, 2019, prompting MDC to elevate the matter to the CA through a petition for certiorari docketed as CA-G.R. SP No. 162934.

While the proceedings in CA-G.R. SP No. 162934 were still pending, Mediator-Arbiter Amado C. Gasmin implemented the Secretary of Labor's directive to canvass Valencia's segregated ballot. In a Notice of Conference, Mediator-Arbiter Gasmin informed the parties that the envelope containing the segregated ballot was missing and required Valencia to cast his vote anew "to comply with the Resolution of the Secretary of Labor." This implementation proceeded despite MDC's Manifestation that the Secretary of Labor's Resolutions had been nullified by the CA, and despite MDC's protest against holding an election solely to enable Valencia to vote again. Mediator-Arbiter Gasmin conducted the election on March 3, 2020. The combined results of the June 11, 2018 and March 3, 2020 elections showed 46 votes for the Union, 44 for "No Union," 4 spoiled, out of 99 total voters. On March 11, 2020, Mediator-Arbiter Gasmin issued an Order declaring that the Union garnered the majority of the 90 valid votes (94 less 4 spoiled) and certified it as SEBA, treating the two abstentions as spoiled ballots. MDC appealed, but the Secretary of Labor denied the appeal and affirmed the Order as to results in a Resolution dated April 6, 2021; MDC's Motion for Reconsideration was denied on May 4, 2022. MDC then filed another Petition for Certiorari before the CA, docketed as CA-G.R. SP No. 173993.

In a separate illegal dismissal and ULP case, the Labor Arbiter ruled that Valencia had been illegally dismissed and ordered his reinstatement with backwages, while dismissing the claims for ULP and damages. On appeal, the NLRC found that MDC acted in good faith and deleted the award of backwages. Upon motion for reconsideration, Valencia was awarded separation pay in lieu of reinstatement. Both MDC and Valencia filed Petitions for Certiorari with the CA, docketed as CA-G.R. SP Nos. 169663 and 169709, respectively; both petitions were dismissed in a Resolution dated March 31, 2023.

In the present petition, the Union raised the following arguments: (1) the CA committed grave abuse of discretion in concluding that there were 91 valid votes instead of 90; (2) the CA erred in ruling that Valencia was not an eligible voter on the ground that he failed to properly contest his dismissal; and (3) the CA gravely misapplied the governing law and jurisprudence. MDC countered that the petition should be dismissed for violating the rule on certification against forum shopping; that Valencia lacked authority to file the petition because he was no longer an MDC employee and the union officers authorizing him had become supervisory employees; and that the CA properly determined that the Union did not secure the requisite majority of valid votes. MDC subsequently filed a Manifestation dated September 11, 2024, informing the Court that its counsel received on September 6, 2024 the Decision dated August 7, 2024 of the CA in CA-G.R. SP No. 173993, wherein the CA granted MDC's petition and held that Valencia was not an eligible voter and that the two abstentions should have been counted in determining the majority of the valid votes cast, and that even assuming the inclusion of Valencia's ballot, the Union would still fall short of the 47 votes required to be certified as the SEBA.

• Validity of Vote Count: The Union argued that the CA committed grave abuse of discretion in concluding that there were 91 valid votes instead of 90.
• Valencia's Eligibility: The Union argued that the CA erred in ruling that Valencia was not an eligible voter on the ground that he failed to properly contest his dismissal, since the Notice of Strike filed with the NCMB sufficiently constituted a contest of his dismissal.
• Misapplication of Law: The Union argued that the CA gravely misapplied the governing law and jurisprudence.
• Liberal Application of Rules: The Union urged the Court to relax the application of procedural rules and to accord liberality in the interest of the rights of the employees of MDC, in response to MDC's challenges regarding the Certification Against Forum Shopping and the Verification.

• Forum Shopping: MDC argued that the petition should be dismissed for violating the rule on certification against forum shopping, since CA-G.R. SP No. 173993 was already pending before the CA and should have been disclosed in the Certification Against Forum Shopping.
• Valencia's Authority: MDC argued that Valencia lacked authority to file the petition because he was no longer an MDC employee, and the union officers authorizing him had become supervisory employees and were thus no longer qualified to act on behalf of the rank-and-file bargaining unit.
• Majority Not Secured: MDC argued that the CA properly determined that the Union did not secure the requisite majority of valid votes, regardless of whether the count of valid votes is 91 or 92.

• Forum Shopping: Whether the Union's failure to disclose the pendency of CA-G.R. SP No. 173993 in its Certification Against Forum Shopping warrants the dismissal of the petition.
• Valencia's Eligibility to Vote: Whether Valencia, a dismissed employee who filed only a Notice of Strike with the NCMB prior to the certification election, was eligible to vote in the June 11, 2018 certification election under Section 5, Rule IX of DOLE Department Order No. 40-03.
• Treatment of Blank or Unfilled Ballots: Whether blank or unfilled ballots, treated as abstentions under DOLE Department Order No. 40-I-15, should be included in computing the majority of valid votes cast for purposes of the double majority rule.

• Forum Shopping: No. While the omission of CA-G.R. SP No. 173993 in the Certification Against Forum Shopping was a violation of the mandatory requirement, the Court found sufficient reason to proceed and resolve the petition on the merits to settle the legal issues and prevent further uncertainty in the certification process affecting the employees of MDC, noting that the omission did not appear to be willful.
• Valencia's Eligibility to Vote: No. Valencia was not eligible to vote in the June 11, 2018 certification election. Under Section 5, Rule IX of DOLE Department Order No. 40-03, a dismissed employee may vote only if the legality of the dismissal was contested before a forum of appropriate jurisdiction—namely, the Labor Arbiter—at the time of the issuance of the order for the conduct of the certification election. A Notice of Strike filed with the NCMB does not satisfy this requirement.
• Treatment of Blank or Unfilled Ballots: Yes. Blank or unfilled ballots, treated as abstentions under DOLE Department Order No. 40-I-15, form part of the valid votes cast and must be included in computing the majority of valid votes required for certification under the double majority rule.

• Forum Shopping: The Court reiterated the doctrine in Heirs of Barraquio vs. Almeda, Inc. that forum shopping exists when there is identity of parties, rights or causes of action and relief sought, such that any judgment rendered in the pending case would amount to res judicata in the other. The Court noted that CA-G.R. SP No. 173993 arose from the same certification election and implicated overlapping factual circumstances and administrative rulings, and that the need for disclosure was heightened by the fact that the CA had already resolved that case, squarely addressing the same core issues: Valencia's eligibility to vote and the proper treatment of abstentions. However, the Court found that the omission did not appear to be willful, as the existence of CA-G.R. SP No. 173993 was first brought to the Court's attention through MDC's Comment, after which the Union expressly acknowledged its pendency in its Reply. The Court also found no irregularity in the Verification executed by Valencia, as there was no showing that the NLRC ruling awarding him separation pay in lieu of reinstatement had become final and executory, or that he had accepted and been paid separation pay—only then is the employment relationship severed. The Court cited Ingles vs. Estrada for the guidelines differentiating defective verification from defective certification against forum shopping, and concluded that while the requirement remains mandatory, sufficient reason existed to proceed on the merits.

• Valencia's Eligibility to Vote: The Court affirmed the CA's ruling, applying Section 5, Rule IX of DOLE Department Order No. 40-03, which requires that a dismissed employee must have contested the legality of the dismissal "in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election." The Court examined Article 224 of the Labor Code, which grants Labor Arbiters original and exclusive jurisdiction over termination disputes. Since Valencia's dismissal stemmed from alleged violations of company rules and regulations, any challenge to its legality must necessarily be brought before the Labor Arbiter. The Court held that a Notice of Strike, by its nature and purpose, cannot encompass a termination dispute. Citing Allied Banking Corporation vs. Court of Appeals, the Court emphasized that an act complained of as ULP must bear a proximate and causal connection to the exercise of the right to self-organization, the right to collective bargaining, or the observance of an existing CBA; absent such connection, the conduct alleged cannot fall within the technical concept of ULP. The Court concluded that a notice of strike alleging dismissal cannot be deemed a contest of Valencia's dismissal for purposes of voter eligibility, and that the CA committed no error in finding grave abuse of discretion on the part of the Secretary of Labor.

• Treatment of Blank or Unfilled Ballots: The Court applied the double majority rule, which requires: first, a majority of all eligible voters must cast their ballots; and second, a majority of the valid votes cast must favor one of the choices. The Court noted that under DOLE Department Order No. 40-I-15, blank or unfilled ballots are now considered "abstentions"—valid ballots cast by eligible voters—and are not considered negative votes, but shall be considered in the counting for purposes of determining a valid election. The Court rejected the Union's argument that abstentions should count only for determining the first majority but not the second, holding that once a ballot is counted for purposes of determining whether a majority of eligible voters participated, it must likewise be included in computing the majority of valid votes cast; otherwise, the integrity of the double majority rule would be undermined. The Court reproduced and affirmed the CA's computation: of the 91 remaining ballots (excluding Valencia's segregated ballot and the two spoiled ballots), 45 were for the Union and 44 for "no union," with the two blank ballots treated as abstentions, making the total valid ballots 91 and the required majority either 46 or 47. Since the Union had only 45 votes, it failed to secure the required majority. Even assuming Valencia's ballot were opened and counted in the Union's favor, the valid ballots would number 92, requiring 47 votes for certification, and the Union would still fall short with only 46 votes.

• Double Majority Rule — For a valid certification election, two majorities must be attained: first, a majority of all eligible voters must cast their ballots; and second, a majority of the valid votes cast must favor one of the choices. The Court applied this rule to determine that the Union failed to secure the required majority of valid votes, whether the valid votes numbered 91 or 92.

• Voter Eligibility of Dismissed Employees — Under Section 5, Rule IX of DOLE Department Order No. 40-03, an employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless the dismissal was declared valid in a final judgment at the time of the conduct of the certification election. The Court held that the "forum of appropriate jurisdiction" for termination disputes is the Labor Arbiter, pursuant to Article 224 of the Labor Code, and that a Notice of Strike filed with the NCMB does not constitute such a contest.

• Treatment of Abstentions — Under DOLE Department Order No. 40-I-15, an "abstention" refers to a blank or unfilled ballot validly cast by an eligible voter; it is not considered a negative vote, but it shall be considered in the counting for purposes of determining a valid election. The Court held that abstentions form part of the valid votes cast and must be included in computing the majority of valid votes required for certification.

• Forum Shopping — Forum shopping exists when in two or more pending cases there is identity of parties, rights or causes of action and relief sought, such that any judgment rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case. The Court applied this doctrine to the Union's failure to disclose CA-G.R. SP No. 173993 in its Certification Against Forum Shopping, but proceeded on the merits due to the absence of willful concealment and the need to settle the legal issues.

• "An employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless his/her dismissal was declared valid in a final judgment at the time of the conduct of the certification election." — This is the controlling provision of Section 5, Rule IX of DOLE Department Order No. 40-03, which the Court applied to determine Valencia's ineligibility to vote.

• "No act undertaken before any other office or tribunal, including the filing of a Notice of Strike with the NCMB, can substitute for the jurisdictional requirement that termination disputes be directly contested before the LA." — This states the Court's ratio decidendi on Valencia's eligibility, emphasizing the exclusive jurisdiction of Labor Arbiters over termination disputes.

• "It is clear under the above-quoted definition that abstentions form part of the valid votes cast. Once a ballot is counted for purposes of determining whether a majority of eligible voters participated in the certification election, logic and fairness dictate that it must likewise be included in computing the majority of valid votes cast; otherwise, the integrity of the double majority rule would be undermined by arbitrarily excluding ballots that were already recognized as valid expressions of voter participation." — This articulates the Court's reasoning on the treatment of abstentions in computing the majority of valid votes.

• "It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to serve as basis for computing the required majority, and not just to determine which union won the elections." — The Court quoted this from NUWHRAIN-MPHC v. Secretary of Labor and Employment to emphasize that the computation of valid votes is material to determining the required majority for certification.

• Heirs of Barraquio vs. Almeda, Inc., 933 Phil. 442 (2023) — Cited as controlling authority on the definition of forum shopping, specifically the requirements of identity of parties, rights or causes of action and relief sought.

• Land Bank of the Phils. vs. Honeycomb Farms Corporation, 698 Phil. 298 (2012) — Cited for the underlying principle behind the prohibition on forum shopping, that a party should not be allowed to pursue simultaneous remedies in two different courts.

• Ingles vs. Estrada, 708 Phil. 271 (2013) — Cited as instructive authority distinguishing the effects of defective verification from those of a defective certification against forum shopping, providing the guidelines the Court applied.

• Allied Banking Corporation vs. Court of Appeals, 461 Phil. 517 (2003) — Cited for the principle that an act complained of as ULP must bear a proximate and causal connection to the exercise of the right to self-organization, the right to collective bargaining, or the observance of an existing CBA.

• NUWHRAIN-MPHC vs. Secretary of Labor and Employment, 612 Phil. 291 (2009) — Cited for the double majority rule and the importance of ascertaining the number of valid votes cast as the basis for computing the required majority.

• Quiambao vs. Sumbilla, 935 Phil. 1 (2023) — Cited in relation to the consequences of failure to disclose a related proceeding in the Certification Against Forum Shopping.

• Section 5, Rule IX, DOLE Department Order No. 40-03 — The provision governing the qualification of voters in certification elections, requiring that a dismissed employee must have contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of the certification election. The Court applied this to hold Valencia ineligible to vote.

• Article 224, Labor Code of the Philippines — The provision granting Labor Arbiters original and exclusive jurisdiction over termination disputes and unfair labor practice cases. The Court applied this to determine that Valencia's dismissal constituted a termination dispute that must be contested before the Labor Arbiter.

• Article 259, Labor Code of the Philippines — The provision enumerating the unfair labor practices that may be committed by an employer. The Court noted that none of these grounds include the dismissal of an employee based on alleged violations of company rules and regulations.

• Article 267, Labor Code of the Philippines — The provision stating that the labor organization designated or selected by the majority of employees in an appropriate bargaining unit shall serve as the exclusive representative of such employees for purposes of collective bargaining.

• Article 268, Labor Code of the Philippines — The provision governing certification elections, requiring that a certification election is valid only if at least a majority of all eligible voters in the bargaining unit cast their ballots, and that only the labor union that receives the majority of the valid votes cast may be certified as the exclusive bargaining agent.

• Section 1(a), Rule 136, DOLE Department Order No. 40-I-15 — The provision defining "abstention" as a blank or unfilled ballot validly cast by an eligible voter, which is not considered a negative vote but shall be considered in the counting for purposes of determining a valid election. The Court applied this to hold that abstentions form part of the valid votes cast.

• Rule 7, Section 5, Rules of Court — The provision requiring the plaintiff or principal party to certify under oath that no similar action exists, or if one exists, to disclose its status. The Court applied this to the Union's failure to disclose CA-G.R. SP No. 173993 in its Certification Against Forum Shopping.

Caguioa, Acting C.J. (Chairperson), Inting, Dimaampao, and Singh, JJ., concurred.