Montaño vs. Verceles

A federation employee is disqualified from sitting on the federation's Governing Board when the federation's constitution and by-laws expressly prohibit such dual status, and the union election committee's ruling disqualifying a candidate pursuant to that provision is binding absent grave abuse of discretion.

The Federation of Free Workers (FFW) is a labor federation with affiliate unions across the country, operating in more than one administrative region. Its 1998 Constitution and By-Laws govern the relationship between and among its members and contain provisions on the qualifications and eligibility of candidates for national office. Atty. Montaño was employed as a legal assistant at the FFW Legal Center and later became president of the FFW Staff Association, the rank-and-file union of FFW employees. Atty. Verceles was a delegate to the FFW National Convention and president of the University of the East Employees' Association (UEEA-FFW), an affiliate union of FFW.

Atty. Allan S. Montaño was hired as a legal assistant at the FFW Legal Center on October 1, 1994. He subsequently joined the FFW Staff Association, the union of rank-and-file employees of FFW, and became its president in July 1997. In November 1998, he was also designated officer-in-charge of the FFW Legal Center. During the 21st National Convention and Election of National Officers of FFW, held on May 26–27, 2001 at the Subic International Hotel in Olongapo City, Atty. Montaño was nominated for the position of National Vice-President.

Before the election, however, the FFW Commission on Election (FFW COMELEC), in a letter dated May 25, 2001, informed Atty. Montaño that he was not qualified for the position because his candidacy violated the 1998 FFW Constitution and By-Laws, specifically Section 76 of Article XIX, which prohibits members of the Governing Board from simultaneously being employees in the staff of the federation, and Section 25(a) of Article VIII. Atty. Montaño filed an urgent motion for reconsideration with the FFW COMELEC, praying that his name be included in the official list of candidates. Despite the pending motion and the strong opposition of Atty. Ernesto C. Verceles — a convention delegate and president of UEEA-FFW, an FFW affiliate union — the convention delegates allowed Atty. Montaño's candidacy. The election proceeded, and Atty. Montaño was proclaimed National Vice-President.

On May 28, 2001, Atty. Verceles wrote to the FFW COMELEC Chairman reiterating his protest, which he had manifested during the plenary session before the election. On June 18, 2001, he sent a follow-up letter to the FFW National President requesting immediate action. The FFW COMELEC, in a letter dated July 16, 2001, reiterated its firm position that Atty. Montaño's candidacy contravened the FFW Constitution, stating that the convention body was not acting as a constitutional convention body empowered to amend the constitution on the spot and therefore could not reverse the COMELEC's final decision disqualifying him.

On July 13, 2001, Atty. Verceles, as president of UEEA-FFW and officer of the FFW Governing Board, filed a petition before the Bureau of Labor Relations (BLR) seeking nullification of Atty. Montaño's election, alleging that Section 76 of Article XIX of the FFW Constitution prohibits federation employees from sitting in its Governing Board. Atty. Montaño moved to dismiss on grounds of lack of jurisdiction (claiming the DOLE Regional Director had authority), prematurity due to the pending FFW COMELEC protest, and lack of legal standing on Verceles' part. The BLR denied the motion to dismiss and, on May 8, 2002, dismissed the petition on the merits, holding that the applicable provision was Section 26 of Article VIII rather than Section 76 of Article XIX, and that the convention delegates had unanimously decided Montaño was qualified. Atty. Verceles elevated the matter to the CA via certiorari, arguing that the Convention had no authority to overrule the FFW COMELEC's disqualification decision. The CA set aside the BLR ruling and nullified Montaño's election, but on the different ground that he failed to meet the qualification under Section 26(d) of Article VIII, which requires candidates for National Vice-President to be or have been an officer or member of a legitimate labor organization, because the CA deemed the FFW Staff Association not a legitimate labor organization since Montaño, as a confidential employee, was ineligible to join it.

• Jurisdiction: Petitioner argued that under Section 6 of Rule XV in relation to Section 1 of Rule XIV of Book V of the Omnibus Rules Implementing the Labor Code, the DOLE Regional Director — not the BLR — has jurisdiction over election protests and petitions for annulment of election results.
• Prematurity: Petitioner maintained that the petition before the BLR was prematurely filed because Atty. Verceles' protest before the FFW COMELEC was still pending and unresolved at the time, depriving Verceles of a cause of action.
• Certification Against Forum Shopping: Petitioner argued that Atty. Verceles violated Section 5, Rule 7 of the 1997 Rules of Civil Procedure and Supreme Court Circular No. 04-94 by failing to submit a certification against forum shopping with his petition before the BLR.
• Mootness: Petitioner contended that the case was rendered moot and academic by Atty. Verceles' appointment as NLRC Commissioner, which divested him of any interest in matters relating to his affiliation with FFW, making him no longer a real party in interest.
• Collateral Attack: Petitioner asserted that the CA's declaration that the FFW Staff Association is not a legitimate labor organization amounted to a collateral attack upon its legal personality, which is proscribed by law, and that the legitimacy of the union was never raised as an issue by the parties.

• Authority of the Convention: Respondent argued that the National Convention had no authority under the FFW Constitution and By-Laws to overrule and set aside the FFW COMELEC's decision rendered pursuant to the latter's power to screen candidates and determine their qualifications.
• Disqualification Under the Constitution: Respondent maintained that Atty. Montaño was not qualified to run for National Vice-President because Section 76 of Article XIX of the FFW Constitution and By-Laws prohibits federation employees from sitting in its Governing Board, as already ruled by the FFW COMELEC.

• Jurisdiction: Whether the BLR, rather than the DOLE Regional Director, had jurisdiction over the intra-union dispute involving the nullification of Montaño's election as FFW National Vice-President.
• Prematurity: Whether the petition before the BLR was prematurely filed due to the pending protest before the FFW COMELEC.
• Certification Against Forum Shopping: Whether the petition should have been dismissed for failure to submit a certification against forum shopping.
• Mootness: Whether the case was rendered moot and academic by Atty. Verceles' appointment as NLRC Commissioner and the expiration of Montaño's challenged term of office.
• Qualification to Run: Whether Atty. Montaño was qualified to run as FFW National Vice-President under the FFW Constitution and By-Laws.

• Jurisdiction: Yes. The BLR had jurisdiction over the intra-union dispute, Article 226 of the Labor Code granting the BLR and DOLE Regional Directors concurrent jurisdiction over inter-union and intra-union disputes, including the conduct or nullification of election of union officers.
• Prematurity: No. The petition was not prematurely filed, because Atty. Verceles had exhausted internal remedies by protesting before the FFW COMELEC during the plenary session and in writing, and the FFW COMELEC failed to timely act on the protest.
• Certification Against Forum Shopping: No. The issue was belatedly raised for the first time in the motion for reconsideration before the CA, and new issues cannot be raised for the first time on appeal or on motion for reconsideration.
• Mootness: No. Although supervening events rendered the case moot, the Court resolved the issues under the "capable of repetition, yet evading review" exception, as the same question of Montaño's qualification could recur in future elections.
• Qualification to Run: No. Atty. Montaño was not qualified to run as FFW National Vice-President because Section 76, Article XIX of the FFW Constitution and By-Laws prohibits members of the Governing Board from simultaneously being employees in the staff of the federation, and Montaño remained a federation staff employee at the time of his nomination and election.

• Jurisdiction: Article 226 of the Labor Code expressly grants the BLR and the DOLE Regional Directors concurrent original and exclusive authority over all inter-union and intra-union conflicts, including disputes arising from the conduct or nullification of election of union and workers' association officers. While Rule XVI of the Omnibus Rules provides a decentralized mechanism for intra-union disputes by requiring filing in the Regional Office where the union is domiciled, the concept of domicile becomes problematic when the dispute involves a federation, because a federation's geographical presence may encompass more than one administrative region. Since FFW operates in more than one administrative region through its local unions nationwide, the BLR properly exercised original jurisdiction over the dispute arising from disagreement over provisions of the federation's constitution and by-laws.

• Prematurity: While the Implementing Rules require that redress first be sought within the organization in accordance with its constitution and by-laws, this requirement is not absolute and yields to exception under varying circumstances. Atty. Verceles protested Montaño's candidacy during the plenary session before the election, and filed a written protest a day or two after the election. The FFW COMELEC failed to timely act on the protest despite Verceles' requests for a formal hearing. Under the rules, the committee on election must resolve protests within five days after the close of election proceedings. Because the FFW COMELEC failed to act and Montaño had already assumed and started performing the duties of the position, Verceles had no other recourse but to seek redress from the BLR. To insist on further exhaustion would render the internal remedy illusory and vain.

• Certification Against Forum Shopping: The issue of failure to submit a certification against forum shopping was raised only for the first time in Montaño's motion for reconsideration of the CA decision. It is settled that new issues cannot be raised for the first time on appeal or on motion for reconsideration. While the ground of forum shopping was alleged at an early stage, the failure to submit a proper certificate against forum shopping is separate and distinct from the ground of forum shopping itself.

• Mootness: During the pendency of the case, Montaño's challenged term expired in 2006, and Verceles was appointed NLRC Commissioner in 2003, divesting him of interest in and affiliation with the federation under Article 213 of the Labor Code. These supervening events ordinarily would render the case moot. However, the Court applied the "capable of repetition, yet evading review" exception, noting that Montaño ran and won as FFW National President after his challenged term expired. The Court found it necessary to resolve the qualification issue to prevent further repetition and to clarify the proper interpretation and application of the FFW Constitution and By-Laws to ensure credible future elections.

• Qualification to Run: Section 76, Article XIX of the FFW Constitution and By-Laws provides that no member of the Governing Board shall at the same time be an employee in the staff of the federation. It was undisputed that Montaño was head of the FFW Legal Center and president of the FFW Staff Association at the time of his nomination and election, and he continued performing staff functions even after his election without tendering any resignation. The FFW COMELEC, vested under the FFW Constitution and the Implementing Rules with authority to screen candidates, determine qualifications, and act as final arbiter of election protests, correctly disqualified Montaño. The BLR erred in disregarding this clear provision and substituting Section 26 of Article VIII as the applicable provision. The CA also erred in relying on Section 26(d) of Article VIII and in declaring the FFW Staff Association illegitimate, which constituted a collateral attack on its legal personality proscribed by law. Nevertheless, the disqualification was proper under Section 76 of Article XIX, and the election was null and void.

• Binding Force of Union Constitution and By-Laws — The federation/union's constitution and by-laws govern the relationship between and among its members and are akin to ordinary contracts whose provisions have obligatory force. What has been expressly stipulated therein is strictly binding on both the federation/union and its members. The Court applied this principle by enforcing Section 76 of Article XIX of the FFW Constitution, which clearly prohibits federation staff employees from sitting on the Governing Board.

• Authority of the Union Election Committee — The committee on election is vested with authority to prescribe rules on the qualification and eligibility of candidates, to screen candidates, and to determine their qualifications and eligibility. It is regarded as the final arbiter of all election protests. Unless the committee is shown to have committed grave abuse of discretion, its decision and ruling will not be interfered with. The Court upheld the FFW COMELEC's disqualification of Montaño, finding no grave abuse of discretion in its application of the express constitutional prohibition.

• Exhaustion of Administrative Remedies (Exception) — While the rule requires that redress first be sought within the organization in accordance with its constitution and by-laws before resorting to external fora, this requirement is not absolute and yields to exception under varying circumstances. Where the internal body fails to timely act on a protest despite the protestant's efforts, further exhaustion becomes illusory and vain, and recourse to external labor authorities is proper.

• Capable of Repetition, Yet Evading Review — Courts may resolve otherwise moot cases when the issues are capable of repetition yet evading review. The Court applied this exception because Montaño ran for and won another FFW national office after his challenged term expired, and the same qualification question could recur in future elections, making it imperative to clarify the proper interpretation of the FFW Constitution.

• Prohibition Against Collateral Attack on Labor Organization Legitimacy — A declaration that a labor organization is not legitimate, made in a proceeding where the organization's legal personality is not the primary issue, constitutes a collateral attack proscribed by law. The Court held that the CA's declaration that the FFW Staff Association was not a legitimate labor organization was improper, as it was not raised as an issue and amounted to a collateral attack on the union's legal personality.

• "The Federation/Union's Constitution and By-Laws govern the relationship between and among its members. They are akin to ordinary contracts in that their provisions have obligatory force upon the federation/ union and its member. What has been expressly stipulated therein shall be strictly binding on both." — This opening passage establishes the foundational principle that union constitutions and by-laws are binding contracts, setting the analytical framework for enforcing Section 76's prohibition.

• "To insist on the contrary is to render the exhaustion of remedies within the union as illusory and vain." — This statement articulates the exception to the exhaustion of administrative remedies doctrine in intra-union disputes, holding that when the internal body fails to act, further exhaustion is futile.

• "We find it necessary and imperative to resolve this issue not only to prevent further repetition but also to clear any doubtful interpretation and application of the provisions of FFW Constitution & By-laws in order to ensure credible future elections in the interest and welfare of affiliate unions of FFW." — This passage explains the Court's application of the "capable of repetition, yet evading review" exception to justify resolving the case despite supervening mootness.

• "The FFW Constitution and By-laws are clear that no member of the Governing Board shall at the same time perform functions of the rank-and-file staff. The BLR erred in disregarding this clear provision." — This statement constitutes the ratio decidendi on the qualification issue, affirming the FFW COMELEC's disqualification and correcting both the BLR's and CA's misapplication of the constitutional provisions.

• Villar vs. Hon. Inciong, 206 Phil. 366 (1983) — Cited for the proposition that the requirement to exhaust internal remedies within the union is not absolute and yields to exception under varying circumstances.
• Diokno vs. Cacdac, G.R. No. 168475, July 4, 2007, 526 SCRA 440 — Cited in support of the ruling that the petition was not prematurely filed, as the protestant had exhausted available internal remedies before seeking redress from the BLR.
• Arceño vs. Government Service Insurance System, G.R. No. 162374, June 18, 2009, 589 SCRA 420 — Cited for the settled rule that new issues cannot be raised for the first time on appeal or on motion for reconsideration, supporting the rejection of the certification against forum shopping objection.
• Province of North Cotabato vs. Government of the Republic of the Philippines Peace Panel on Ancestral Domain (GRP), G.R. No. 183591, October 14, 2008, 568 SCRA 402 — Cited as authority for the Court's power to resolve cases despite supervening events that would ordinarily render them moot, under the "capable of repetition, yet evading review" doctrine.
• 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 — Cited for the doctrine that a collateral attack on the legal personality of a labor organization is proscribed by law, supporting the rejection of the CA's declaration that the FFW Staff Association was not a legitimate labor organization.

• Article 226, Labor Code — Grants the BLR and the Labor Relations Divisions in the regional offices of DOLE original and exclusive authority over all inter-union and intra-union conflicts, including disputes, grievances, or problems arising from or affecting labor-management relations. Applied to confirm the BLR's jurisdiction over the intra-union dispute involving a federation operating in more than one administrative region.
• Section 76, Article XIX, 1998 FFW Constitution and By-Laws — Provides that no member of the Governing Board shall at the same time be an employee in the staff of the federation. Applied as the controlling provision to disqualify Montaño, who remained a federation staff employee at the time of his nomination and election.
• Section 26, Article VIII, 1998 FFW Constitution and By-Laws — Sets forth qualifications for candidates for National President, National Vice-President, and National Treasurer, including the requirement under paragraph (d) that candidates for National President and National Vice-President must be or have been an officer or member of a legitimate labor organization in FFW for at least three years. The BLR and CA erroneously applied this provision instead of Section 76; the Court held it was not the applicable provision for determining Montaño's qualification.
• Section 6, Rule XV, Book V, Omnibus Rules Implementing the Labor Code — Provides that protests or petitions for annulment of election results shall be filed with the DOLE Regional Director, and that no protest shall be entertained unless the issue has been resolved by the committee. The Court held that this provision does not divest the BLR of concurrent jurisdiction under Article 226, and that the exhaustion requirement was satisfied because the FFW COMELEC failed to timely act.
• Article 213, Labor Code — Cited in connection with Atty. Verceles' appointment as NLRC Commissioner, which divested him of interest in and affiliation with the federation, contributing to the mootness of the case.

Chief Justice Renato C. Corona (Chairperson), Associate Justice Presbitero J. Velasco, Jr., Associate Justice Teresita J. Leonardo-De Castro, and Associate Justice Jose Portugal Perez.