Takata (Philippines) Corporation vs. Bureau of Labor Relations

The 20% minimum membership requirement under Article 234(c) of the Labor Code pertains to the total number of union members in the bargaining unit, not to the number of attendees at the organizational meeting required under Article 234(b); these are separate and distinct registration requirements, and fraud or misrepresentation warranting cancellation of union registration must be grave and compelling enough to vitiate the consent of a majority of union members.

Petitioner Takata Philippines Corporation is the employer of rank-and-file employees in its bargaining unit. Respondent Samahang Lakas Manggagawa ng Takata (SALAMAT) is an independent labor union organized among petitioner's rank-and-file employees, which was issued Certificate of Registration No. RO400A-2009-05-01-UR-LAG on May 19, 2009. The Bureau of Labor Relations (BLR) exercises appellate jurisdiction over decisions of DOLE Regional Directors in cases involving cancellation of certificate of registration of labor unions. The dispute centers on whether respondent union's registration was procured through fraud and misrepresentation in its declared membership numbers, and whether the filing of two appeals during the cancellation proceedings constituted forum shopping.

Petitioner Takata Philippines Corporation is the employer of rank-and-file employees in its bargaining unit. On May 1, 2009, respondent Samahang Lakas Manggagawa ng Takata (SALAMAT) held an organizational meeting attended by 68 employees who signed the attendance sheet. Respondent thereafter applied for union registration, submitting documents including the attendance sheet of the organizational meeting and a list denominated "Pangalan ng mga Kasapi ng Unyon" containing the names of 119 employees as union members. On May 19, 2009, respondent was issued Certificate of Registration No. RO400A-2009-05-01-UR-LAG. Respondent also filed a petition for certification election, docketed as RO400-A-0905-LAG-RU-004, in which it submitted the document "Sama-Samang Pahayag ng Pagsapi sa Unyon" supporting its claim of 119 members.

On July 7, 2009, petitioner filed with the DOLE Regional Office a Petition for Cancellation of respondent's certificate of registration, alleging that respondent was guilty of misrepresentation, false statement, and fraud. Petitioner contended that only 68 employees attended the May 1, 2009 organizational meeting, comprising merely 17% of the 396 regular rank-and-file employees in the bargaining unit, thus falling short of the 20% minimum membership requirement. Petitioner further claimed that the document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged 119 union members, that employees were not given sufficient information on the documents they signed, that the "Sama-Samang Pahayag ng Pagsapi" was not submitted at the time of filing the application for registration, that the 119 union members were actually only 117, and that the total number of employees as of May 1, 2009 was 470, not 396 as respondent claimed. Respondent denied the charges, asserting that its 119 members exceeded the 20% requirement, that the 68 attendees constituted more than 50% of the total union membership thus establishing a quorum, and that petitioner was estopped from assailing its legal personality having agreed to a certification election and actively participated in the pre-election conference.

On August 27, 2009, DOLE Regional Director Ricardo S. Martinez, Sr. granted the petition and cancelled respondent's certificate of registration, finding that the 68 attendees were less than 20% of the 396 employees and that the attendance sheet contradicted the list of names in the "Pangalan ng mga Kasapi ng Unyon." The Regional Director also noted that the "Sama-Samang Pahayag ng Pagsapi" was submitted only later in the certification election proceedings, not with the registration application. Dissatisfied, respondent filed two separate appeals: one through BMP Paralegal Officer Domingo P. Mole with the BLR, and another through Attys. Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez with the Office of the DOLE Secretary, which referred it to the BLR. Petitioner opposed the appeals, arguing forum shopping due to the filing of two appeals in two separate venues. Respondent countered that Mole was no longer authorized to file an appeal on its behalf, as its link with BMP had been terminated through "Resolusyon Blg. 01-2009," and that only the Union President was authorized to file the appeal.

On December 9, 2009, the BLR reversed the Regional Director's decision, finding that petitioner failed to prove deliberate and malicious misrepresentation. The BLR ruled that the list of employees who participated in the organizational meeting was a separate and distinct requirement from the list of names of members comprising at least 20% of the employees in the bargaining unit, that there was no requirement for signatures opposite the names of union members, and that no evidence showed employees assailed their inclusion in the list. The BLR denied petitioner's motion for reconsideration on January 8, 2010. Petitioner then filed a petition for certiorari under Rule 65 with the Court of Appeals, which on December 22, 2010 denied the petition and affirmed the BLR decision. The CA denied petitioner's motion for reconsideration on March 28, 2011.

• Forum Shopping: Petitioner contended that respondent filed two separate appeals with two different representations at two different venues, violating the rule on multiplicity of suits and forum shopping. Petitioner argued that it was not within the discretion of the BLR to choose which appeal to entertain, as the prohibition attaches to the fact of filing two appeals, not to which representative possessed authority.
• Fraud and Misrepresentation in Registration: Petitioner argued that respondent's registration was tainted with fraud, misrepresentation, and falsification, citing the big disparity between the 68 attendees at the organizational meeting and the claimed 119 union members. Petitioner maintained that respondent did not possess the required number of members at the time of filing its application for registration, pointing to the absence of signatures on the "Pangalan ng mga Kasapi ng Unyon," the late submission of "Sama-Samang Pahayag ng Pagsapi," the duplication of names reducing 119 to 117, and the alleged total employee count of 470 rather than 396.

• No Forum Shopping: Respondent countered that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal on its behalf, as respondent's link with BMP had already been terminated through "Resolusyon Blg. 01-2009." Only the Union President was authorized to file the appeal, and thus only the Appeal Memorandum filed by Attys. Banzuela and Velandrez was sanctioned by the union.
• Compliance with Registration Requirements: Respondent argued that its 119 union members exceeded the 20% requirement for union registration, supported by the document "Sama-Samang Pahayag ng Pagsapi sa Unyon." Respondent also contended that the 68 attendees to the organizational meeting constituted more than 50% of the total union membership, hence a quorum existed for the conduct of the meeting.
• Estoppel: Respondent maintained that petitioner was estopped from assailing its legal personality as it agreed to a certification election and actively participated in the pre-election conference of the certification election proceedings.

• Forum Shopping: Whether respondent committed forum shopping by filing two separate appeals through different representatives at two different venues, warranting the dismissal of both appeals.
• Validity of Union Registration: Whether respondent's application for registration was compliant with the law or was tainted with fraud, misrepresentation, and falsification such that its certificate of registration should be cancelled.

• Forum Shopping: No. Respondent committed no forum shopping because the appeal filed by BMP Paralegal Officer Domingo P. Mole was unauthorized and thus deemed not filed at all, leaving only one valid appeal before the BLR.
• Validity of Union Registration: No fraud or misrepresentation was established. The 20% minimum membership requirement under Article 234(c) of the Labor Code pertains to the total number of union members in the bargaining unit, not to the number of attendees at the organizational meeting under Article 234(b), and respondent's 119 declared members sufficiently exceeded the threshold.

• Forum Shopping: The Court found no error in the CA's conclusion that no forum shopping occurred. BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal on behalf of SALAMAT, as the union had terminated its relationship with BMP and revoked Mole's representation through "Resolusyon Blg. 01-2009." Because Mole's appeal was not specifically authorized by respondent, it was considered not to have been filed at all, producing no legal effect. The only valid appeal was the Appeal Memorandum filed by Attys. Banzuela and Velandrez, which respondent's authorized representative filed with the Labor Secretary. Although the appeal should have been filed with the BLR rather than the Labor Secretary, the latter's motu proprio referral to the BLR vested the BLR with authority to act on it. Since Mole's appeal was a nullity, there was only one existing appeal before the BLR, negating any multiplicity of suits. The case of Abbott Laboratories Philippines, Inc. vs. Abbott Laboratories Employees Union cited by petitioner was inapplicable, as it concerned the authority of the Labor Secretary to review BLR decisions, not forum shopping from unauthorized filings.

• Validity of Union Registration: The Court examined Articles 234, 238, and 239 of the Labor Code. Article 234(b) requires the submission of the minutes of organizational meetings and the list of workers who participated in such meetings, while Article 234(c) requires the names of all union members comprising at least 20% of all employees in the bargaining unit. These are separate and distinct requirements. The 20% minimum requirement pertains to union membership, not to attendance at the organizational meeting. Neither the Labor Code nor its Implementing Rules require that attendees at the organizational meeting comprise 20% of the bargaining unit. With 396 employees in the bargaining unit, 20% was approximately 79, and respondent's 119 declared members exceeded this threshold. The 68 attendees at the organizational meeting constituted a majority of the 119 union members, establishing a quorum to validly ratify the Constitution and By-Laws. Petitioner's claim that employees signed documents without adequate information was unsupported by evidence, and not one of those listed in the "Pangalan ng mga Kasapi ng Unyon" came forward to deny membership. The duplication of one name and the inclusion of a project employee did not constitute misrepresentation absent proof of deliberate intent to inflate membership, and even excluding those two, 117 members still exceeded the 20% requirement. Even using petitioner's figure of 470 total employees, 117 members still comprised more than 20%. The Court further noted that even if the total number of rank-and-file employees were 528 while respondent declared 455, respondent would still have complied with the registration requirement. For fraud and misrepresentation to warrant cancellation under Article 239, the nature thereof must be grave and compelling enough to vitiate the consent of a majority of union members, a standard petitioner failed to satisfy.

• Separate and Distinct Requirements for Union Registration — Article 234(b) of the Labor Code, requiring the minutes of organizational meetings and the list of workers who participated, is a separate and distinct requirement from Article 234(c), requiring the names of all union members comprising at least 20% of all employees in the bargaining unit. The 20% minimum membership requirement pertains to total union membership, not to the number of attendees at the organizational meeting. The law does not prescribe a required number of members to attend the organizational meeting; a majority of the union members attending suffices for a quorum to ratify the Constitution and By-Laws.

• Grave and Compelling Standard for Cancellation of Union Registration — For fraud and misrepresentation to constitute grounds for cancellation of union registration under Article 239 of 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. The cancellation of a union's registration has an impairing dimension on the right of labor to self-organization and must not be lightly undertaken.

• Unauthorized Pleading Produces No Legal Effect — If a complaint or appeal is filed for and on behalf of a party who is not authorized to do so, the pleading is not deemed filed and produces no legal effect. An unauthorized filing cannot be counted as a separate appeal for purposes of determining forum shopping.

• "It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational meeting must comprise 20% of the employees in the bargaining unit. In fact, even the Implementing Rules and Regulations of the Labor Code does not so provide. It is only under Article 234 (c) that requires the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to the employees' membership in the union and not to the list of workers who participated in the organizational meeting." — This passage articulates the ratio decidendi distinguishing the separate registration requirements under Articles 234(b) and 234(c), resolving the central dispute over whether organizational meeting attendance must satisfy the 20% threshold.

• "For fraud and misrepresentation to be 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 is the canonical formulation of the standard for cancellation of union registration, frequently cited in subsequent labor jurisprudence and establishing the high bar that employers must meet when seeking to revoke a union's certificate of registration.

• "Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is considered to have not been filed at all. It has been held that 'if a complaint is filed for and in behalf of the plaintiff who is not authorized to do so, the complaint is not deemed filed. An unauthorized complaint does not produce any legal effect.'" — This passage establishes the principle that an unauthorized filing is a legal nullity, which was decisive in rejecting the forum shopping claim.

• Tamondong vs. Court of Appeals, 486 Phil. 729 (2004) — Cited for the proposition that an unauthorized complaint does not produce any legal effect, supporting the conclusion that Mole's unauthorized appeal was deemed not filed and thus could not constitute a second appeal for forum shopping purposes.
• Abbott Laboratories Philippines, Inc. vs. Abbott Laboratories Employees Union, 380 Phil. 364 (2000) — Cited by petitioner but distinguished and held inapplicable, as it concerned the authority of the Labor Secretary to review BLR decisions in cancellation of registration cases, not the issue of forum shopping from unauthorized filings.
• San Miguel Corporation Employees Union-Phil. Transport and General Workers Org. vs. San Miguel Packaging Products Employees Union-Pambansang Diwang Manggagawang Pilipino, 559 Phil. 549 (2007) — Cited for the principle that allegations of misrepresentation and fraud in securing union registration are serious charges that must be compounded with supporting circumstances and evidence.
• Mariwasa Siam Ceramics, Inc. vs. Secretary of the Department of Labor and Employment, G.R. No. 183317, December 21, 2009, 608 SCRA 706 — Cited for the standard that fraud and misrepresentation warranting cancellation of union registration must be grave and compelling enough to vitiate the consent of a majority of union members, and that the bare fact of duplicate signatures does not justify cancellation.
• P.T. Cerna Corporation vs. Court of Appeals, G.R. No. 91622, April 6, 1993, 221 SCRA 19 — Cited for the evidentiary rule that the one who alleges a fact has the burden of proving it and a mere allegation is not evidence.

• Article 234, Labor Code — Enumerates the requirements for registration of a labor organization, including the ₱50.00 registration fee (a), the names of officers, addresses, principal address, minutes of organizational meetings, and list of workers who participated (b), the names of all members comprising at least 20% of all employees in the bargaining unit for independent unions (c), annual financial reports for unions existing one or more years (d), and four copies of the constitution and by-laws, minutes of adoption or ratification, and list of members who participated (e). The Court applied this provision to distinguish the separate requirements under (b) and (c), holding that the 20% threshold applies to union membership under (c), not to organizational meeting attendance under (b).
• Article 238, Labor Code — Provides that the certificate of registration of any legitimate labor organization may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239. The Court cited this provision to frame the exclusive grounds for cancellation of union registration.
• Article 239, Labor Code — 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, 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 election, and list of voters; and (c) voluntary dissolution by the members. The Court applied this provision to evaluate petitioner's charges and found the evidence insufficient to meet the grave and compelling standard required for cancellation.

Presbitero J. Velasco, Jr. (Chairperson), Martin S. Villarama, Jr., Jose Catral Mendoza, and Marvic Mario Victor F. Leonen concurred.