Oca, Jr. vs. Trajano

A labor union’s constitution and by-laws are a binding contract on its members, and conventions or elections held in violation of its mandatory provisions on quorum, authority to call meetings, and the sixty-day convention notice are invalid; neither rival faction may claim a valid election. The BLR does not abuse its discretion in refusing to validate either election, but it cannot order new registration certificates or treat the union as dissolved without complying with Article 239 of the Labor Code and due process. The incumbent National Executive Board officers remain in office until their successors are elected, qualified, and installed, and CBAs entered into in good faith by the rival factions are valid until expiry.

The Philippine Transport and General Workers Organization (PTGWO) is a labor federation founded in the 1950s by Roberto Oca, Sr., composed of a good number of affiliate unions and one of the founding members of the Trade Union Congress of the Philippines. Its internal governance is governed by its Constitution and By-Laws, which allocate authority between the National Convention and the National Executive Board and prescribe quorum, meeting, and convention requirements. The Labor Code governs registration of labor organizations and cancellation of a union’s certificate of authority. The dispute involved the leadership of PTGWO after Roberto M. Oca, Jr. and Andres L. Dinglasan, Jr. had been elected National Executive Vice President and National President, respectively, at the 1979 national convention.

During the 11th PTGWO national convention held on April 22, 1979, Andres L. Dinglasan, Jr. was elected National President and Roberto M. Oca, Jr. was elected National Executive Vice President; both were to serve three-year terms.

On February 26, 1982, Dinglasan convened an executive board meeting to thresh out the mechanics of that year’s national convention. Of the thirty-three voting members of the board, thirty-one were present. Before the body could agree on the convention date, a number of participants questioned the qualifications of some members to sit on the board. To cut the heated argument, the meeting was adjourned, and Oca and some members of the board left the conference hall. The nineteen members who remained asked Dinglasan to reconvene the meeting, which he did; this body passed a resolution to hold the national convention on April 18, 1982.

Oca and his group, in a special board meeting on March 19, 1982, decided to hold their convention on April 4, 1982. Dinglasan and his group, in their board meeting of April 1, 1982, then advanced their convention date also to April 4, 1982. On April 4, 1982, the two groups held their respective conventions at different venues and elected their own sets of officers.

On April 15, 1982, PTGWO and Dinglasan filed a petition with the Bureau of Labor Relations to declare the convention and election of officers held by the Oca group illegal, null and void. Pending resolution of the dispute, PTGWO-III, a group of fifteen local unions headed by Carlos T. Rullamas and identified with the Dinglasan faction, moved to intervene, claiming that its members had already “seceded” from the Dinglasan camp. The intervenor prayed that it be permitted to use the name PTGWO or, in the alternative, that the three factions be allowed to operate independently of each other.

On May 15, 1986, BLR Director Cresenciano B. Trajano rendered a decision declaring both conventions of doubtful validity. Finding the rift between the two factions unbridgeable and a unifying convention possibly unworkable, he concluded that the PTGWO had to split into PTGWO-Oca and PTGWO-Dinglasan and that, with the division on April 4, 1982, PTGWO ceased to exist as PTGWO. He dismissed the petition and motion, ordered the Oca and Dinglasan groups to secure new registration certificates as PTGWO-Oca and PTGWO-Dinglasan within thirty days, and allowed PTGWO-III to register as a separate labor federation under a different name after complying with the Labor Code. All parties filed motions for reconsideration; on July 22, 1986, Director Trajano denied Oca’s motion, while the record does not indicate whether the Dinglasan and intervenor motions were resolved.

The BLR Director found that in both board meetings the quorum requirement was not met, considering the thirty-three elective and approximately thirty-six appointive members of the National Executive Board under the PTGWO Constitution. He also found that Oca’s board meeting and subsequent convention were tainted because the call for a special board meeting to fix the special convention was made by National Secretary Johnny Oca, although only the National President was empowered to call a special board meeting at his own initiative or upon petition of at least one-fourth of the board members. Both conventions also violated the sixty-day requirement of Section 24 of the By-Laws: the Dinglasan group fixed the final date of its convention barely three days before holding, while the Oca group did so only sixteen days prior.

• Grave Abuse of Discretion: Petitioners alleged grave abuse of discretion amounting to lack of jurisdiction on the part of the BLR Director.
• Validity of Oca Convention: Petitioners assailed the BLR conclusion that PTGWO ceased to exist and insisted on the validity of their own convention and right to continue using the PTGWO name and Registration Permit No. 1194-MM-IP.
• Section 40 Interpretation: Petitioner argued that Section 40 of the By-Laws provides alternately and successively for the National Executive Board to meet immediately after the regular convention, at least once every quarter thereafter, upon call of the National President at his initiative, or upon petition of at least one-fourth of its members for a special meeting.

• Validity of Dinglasan Convention: Private respondents assailed the BLR Director’s conclusion that PTGWO ceased to exist and insisted on the validity of their own convention and their right to continue using the name PTGWO and Registration Permit No. 1194-MM-IP.
• Intervenor PTGWO-III: PTGWO-III, headed by Carlos T. Rullamas, moved to intervene on the claim that its members had seceded from the Dinglasan camp; it prayed to be allowed to use the name PTGWO or, alternatively, for the three factions to operate independently.
• BLR Director’s Position: The BLR Director concluded that both conventions were of doubtful validity, that the rift was unbridgeable, and that PTGWO had ceased to exist, requiring the Oca and Dinglasan groups to secure new registration certificates and allowing PTGWO-III to register separately.

• Validity of Rival Conventions and Elections: Whether either the Oca group’s or the Dinglasan group’s executive board meetings, national conventions, and elections of officers were valid under the PTGWO Constitution and By-Laws.
• Grave Abuse of Discretion: Whether the BLR Director committed grave abuse of discretion amounting to lack of jurisdiction in refusing to declare the validity of either group’s election of officers.
• Cessation and New Registration: Whether the BLR Director validly concluded that PTGWO ceased to exist and validly ordered the factions to secure new registration certificates as PTGWO-Oca and PTGWO-Dinglasan.
• Due Process in Cancellation: Whether the order for new registration certificates or cancellation of union authority complied with Article 239 of the Labor Code and due process requirements.
• Incumbent Officers: Whether the incumbent officers constituting the National Executive Board are entitled to remain in office pending election of successors.
• CBA Validity: Whether the collective bargaining agreements entered into by PTGWO-Dinglasan and PTGWO-Oca are valid and binding.

• Validity of Rival Conventions and Elections: No. Both groups’ board meetings and conventions were invalid under the PTGWO Constitution and By-Laws: quorum was not met, Oca’s special board meeting was improperly called by the National Secretary, and both conventions violated the mandatory sixty-day notice requirement.
• Grave Abuse of Discretion: No. The BLR Director’s refusal to declare either group’s election valid was not tainted with abuse of discretion, because neither convention complied with the union constitution and by-laws.
• Cessation and New Registration: No. The order for new registration certificates had no basis in the Labor Code; cancellation of a union’s certificate of authority under Article 239 requires substantial proof of statutory causes, notices, and hearings. The BLR was instead directed to supervise a new election within sixty days, without prejudice to secession.
• Due Process in Cancellation: No. The elementary elements of due process were not observed before the BLR ordered new registrations, so that portion of the decision was set aside.
• Incumbent Officers: Yes. Under Sections 38 and 47 of the By-Laws, the incumbent officers constituting the National Executive Board remain in office until their successors are elected, qualified, and duly installed at a National Convention.
• CBA Validity: Yes. The CBAs entered into by PTGWO-Dinglasan and PTGWO-Oca in good faith are recognized as valid and binding until their respective expiry dates.

• Validity of Rival Conventions and Elections: The Constitution and By-Laws of an organization serve as a contract binding its members. Section 40 of the PTGWO By-Laws requires a majority of the National Executive Board to constitute a quorum. The BLR Director found that in both the Oca and Dinglasan board meetings the quorum requirement was not met, considering the thirty-three elective and approximately thirty-six appointive members of the Board. Oca’s board meeting and subsequent convention were further tainted because the call for a special board meeting to fix the special convention was made by National Secretary Johnny Oca, although Section 40 lodges the power to call a special meeting in the National President, at his initiative or upon petition of at least one-fourth of the Board members. Petitioner’s reading of Section 40 confused the instances when the Board shall meet with the authority to call the meeting; the Secretary’s duty to call or inform members is ministerial. Matters taken up during the improperly called special meeting, including the calling of a national convention, were therefore tainted. Both conventions also violated Section 24, which mandates that the National Executive Board fix the convention date at least sixty days before holding; the Dinglasan group fixed the final date barely three days before, and the Oca group only sixteen days prior. The word “shall” is mandatory. Thus neither group’s election of officers was valid.
• Grave Abuse of Discretion: Since both board meetings and conventions were tainted, the BLR Director’s refusal to declare the validity of either party’s election of officers was not tainted with abuse of discretion. The Director correctly declined to recognize either faction’s officers as the legitimate PTGWO leadership.
• Cessation and New Registration: The portion of the BLR decision ordering the parties to secure new registration certificates as PTGWO-Oca and PTGWO-Dinglasan within thirty days was without basis. No provision in the Labor Code sanctions such an act. For cancellation of a labor union’s certificate of authority under Article 239 of the Labor Code, the causes provided therein must be substantially proved, with the requisite notices given and hearings held. Those elementary due process requirements were not observed. Reliance should instead have been placed on the Union Constitution and By-Laws. The BLR was directed to supervise the election of PTGWO officers within sixty days from finality, without prejudice to the right of any group of workers or unions to secede and form their own or affiliate with another federation.
• Due Process in Cancellation: Article 239 requires substantial proof of statutory causes, notices, and hearings before a labor union’s certificate of authority may be cancelled. The BLR effectively treated PTGWO as dissolved and required new registrations without observing these requirements. Because the elementary elements of due process were absent, the order for new registration certificates could not stand.
• Incumbent Officers: Sections 38 and 47 of the By-Laws provide that between conventions the supreme authority is exercised by the National Executive Board, and that elective officers serve until their successors are elected, qualified, and duly installed at the next National Convention. Since the conventions and board meetings of both petitioners and private respondents were tainted, the incumbent officers constituting the National Executive Board are entitled to remain in office until their successors are elected, qualified, and duly installed at a National Convention.
• CBA Validity: Pending resolution of the case, the two factions negotiated collective bargaining agreements with various companies. These CBAs were entered into in good faith, each faction acting in the honest belief that it was entitled to operate as the legitimate PTGWO. So as not to disturb the rights, benefits, and privileges accorded by the CBAs to the parties therein, the CBAs entered into by PTGWO-Dinglasan and PTGWO-Oca are recognized as valid and binding until their respective expiry dates.

• Union Constitution and By-Laws as Binding Contract — The constitution and by-laws of an organization serve as a contract that binds its members. The Court applied this principle to require strict compliance with the PTGWO Constitution and By-Laws on quorum, authority to call special board meetings, and the sixty-day convention notice; violations invalidated both factions’ board meetings, conventions, and elections.
• Mandatory Nature of “Shall” — The word “shall” in laws, regulations, or directives expresses what is mandatory. Section 24 of the PTGWO By-Laws required the National Executive Board to fix the convention date at least sixty days before holding; because the Dinglasan group fixed it only three days prior and the Oca group sixteen days prior, both conventions were invalid.
• Due Process in Cancellation of Union Registration — Under Article 239 of the Labor Code, cancellation of a labor union’s certificate of authority requires substantial proof of the statutory causes, with the requisite notices given and hearings held. The BLR cannot order new registration certificates or treat a union as dissolved without these elementary due process requirements.
• Holdover Authority of Incumbent Officers — Where rival conventions are invalid, the incumbent officers constituting the National Executive Board remain in office under the union’s by-laws until their successors are elected, qualified, and duly installed at a National Convention.
• Good Faith CBA Recognition — Collective bargaining agreements entered into by rival factions in good faith, each honestly believing it is the legitimate union, are recognized as valid and binding until their respective expiry dates so as not to disturb the rights, benefits, and privileges of the parties.
• Right to Secede — The BLR was directed to supervise the election of PTGWO officers without prejudice to the right of any group of workers or unions to secede and form their own organization or affiliate with another federation. This preserves the statutory freedom of workers to disaffiliate.

• Elementary is the rule that the Constitution and By-laws of an organization serve as a contract that binds its members. — This is the foundational rule used to measure the validity of the rival PTGWO board meetings, conventions, and elections against the union’s own Constitution and By-Laws.
• The word used in the underscored phrase is “shall.” According to Webster’s Third International Dictionary of the English Language the word “shall” means “ought to, must, ... obligation-used to express a command or exhortation, used in laws, regulations or directives to express what is mandatory.” — This passage establishes that Section 24’s sixty-day convention notice requirement is mandatory, not merely directory, thereby invalidating both factions’ conventions.
• No provision in the Labor Code sanctions such an act. For the cancellation of a labor union’s certificate of authority under Article 239 of the Labor Code, the causes provided therein must be substantially proved, with the requisite notices given and hearings held. In this case, such elementary elements of due process were not observed. — This states the ratio for striking down the BLR order requiring the factions to secure new registration certificates.
• Since we have ruled that the Conventions/Board Meetings of both petitioners and private respondents are tainted, then it necessarily follows that the incumbent officers constituting the National Executive Board are entitled to remain in office, until their successors have been elected, qualified and duly installed at a National Convention. — This is the Court’s holding on the holdover authority of the incumbent National Executive Board officers pending a valid election.

• Baranda vs. Gustillo, 165 SCRA 757 — Cited in the decision as authority for the definition of “shall” as mandatory, supporting the conclusion that the sixty-day convention notice requirement in the PTGWO By-Laws had to be strictly followed.

• Article VII, Section 24, PTGWO Constitution and By-Laws — Requires the National Convention to be held every three years during the first half of April, with the inclusive dates, time, and place fixed by the National Executive Board at least sixty days before the holding. Applied to invalidate both conventions because the Dinglasan group fixed the date three days prior and the Oca group sixteen days prior.
• Article VII, Section 34, PTGWO Constitution and By-Laws — Allows special conventions on fifteen days’ notice, called by the National Executive Board or upon petition of affiliates whose combined membership represents a majority of the organization. Quoted as part of the governing rules on conventions.
• Article VIII, Section 38, PTGWO Constitution and By-Laws — Provides that between conventions, supreme authority, subject to the general policies laid down by the Convention, is exercised by the National Executive Board. Applied to hold that the incumbent National Executive Board remains in authority pending a valid election.
• Article VIII, Section 39, PTGWO Constitution and By-Laws — Defines the composition of the National Executive Board, including elective and appointive officers. Used to determine the number of Board members and the quorum requirement.
• Article VIII, Section 40, PTGWO Constitution and By-Laws — Requires a majority of the National Executive Board to constitute a quorum and allows special meetings upon call of the National President at his initiative or upon petition of at least one-fourth of the members. Applied to find quorum lacking in both board meetings and to hold Oca’s special board meeting improperly called by the National Secretary.
• Section 46, PTGWO Constitution and By-Laws — Lists appointive officers to be appointed by the National President subject to confirmation by the National Executive Board. Referenced in relation to the Board’s composition and quorum.
• Article VIII, Section 47, PTGWO Constitution and By-Laws — Provides that elective officers serve until their successors are elected, qualified, and duly installed at the next National Convention. Applied to hold that incumbent officers remain in office after the invalid conventions.
• Article 239, Labor Code — Governs cancellation of a labor union’s certificate of authority, requiring the statutory causes to be substantially proved with requisite notices and hearings. Applied to set aside the BLR order for new registration certificates for lack of due process.

Gutierrez, Jr., Feliciano, Bidin, and Davide, Jr., JJ., concur.