Note: The workbook gives this case no date; the published decision is dated July 31, 2009. Several defects in the published text are reproduced rather than corrected. The Court refers to "the March 10, 2002 Order of the SOLE" where the date used everywhere else is March 10, 2006; and to "the Med-Arbiter's August 22, 2005 Order" becoming final, where the order granting the certification election is elsewhere dated August 9, 2005 and the order on the segregated votes August 22, 2006. The caption spells the petitioner NUWHRAIN-MPHC while the dispositive portion writes NUWHRAIN-MPC, and the body once prints NUHWHRAIN-MPHC and Pavillion. On numbering: Articles 255 and 256, cited in the decision, are now Articles 267 and 268 under DOLE Department Advisory No. 01, s. 2015.
Facts
- On August 9, 2005, Med-Arbiter Ma. Simonette Calabocal granted the petition for a certification election among the rank and file of the Holiday Inn Manila Pavilion Hotel, operated by Acesite Philippines Hotel Corporation. An appeal was taken, and a March 10, 2006 Order of the SOLE affirmed. Because the appeal stayed the election, nothing could be done meanwhile — including calling for the voters' list.
- On May 25, 2006 the Hotel submitted the list of employees in the bargaining unit "in compliance with the directive of the Med-Arbiter after the appeal and subsequent motion for reconsideration ha[d] been denied." The probationary employees were on that list.
- On June 16, 2006 the election was held. Of 353 on the voters' list, 346 voted: NUWHRAIN-MPHC 151, HIMPHLU 169, No Union 1, spoiled 3, segregated 22.
- The 22 segregated ballots fell into three groups: 11 cast by dismissed employees, "albeit the legality of their dismissal was still pending"; 6 by employees "already occupying supervisory positions at the time of the election"; and 5 by probationary employees, segregated because "pursuant to the existing CBA, such employees cannot vote."
- The vote of one Jose Gatbonton, a probationary employee, was counted — because "during the pre-election conferences, there was no disagreement as to his inclusion" and it was not "timely challenged." One probationary vote in, five out — the anomaly that drives the equal-protection argument.
- By Order of August 22, 2006 the Med-Arbiter opened 17 of the 22 — the dismissed and the supposedly supervisory — leaving the 5 probationary votes sealed.
- By Resolution of January 22, 2007 the SOLE affirmed: the probationary employees could not vote because when the August 9, 2005 Order issued they "were not yet hired"; the dismissed employees' votes counted; the six supervisors' votes counted, "their promotion took effect months after" that Order; Gatbonton's stood because never timely challenged; and in any event the 17 "would not suffice to overturn the 169 votes."
- On November 8, 2007 the Court of Appeals affirmed, confining Airtime Specialists to probationary employees "already employed as of the date of filing of the petition," while conceding that the "majority" means "the majority of valid votes cast." Reconsideration denied January 25, 2008; decided July 31, 2009.
Issue
Should employees on probationary status at the time of the election be allowed to vote — and where a timely appeal was taken from the Med-Arbiter's order, is the reckoning date for the voters' list the Med-Arbiter's order or the finality of the Secretary's? And what of the six employees promoted to supervisory positions before the election?
Secondary issue. Whether HIMPHLU obtained the majority required under the double majority rule, once the number of valid votes cast is correctly determined.
Ancillary issues. Whether a CBA clause disqualifying probationary employees is effective; and whether counting Gatbonton's unchallenged vote required, as equal protection, counting the others.
Ruling
Probationary employees vote; the six supervisors do not. "[T]he inclusion of Gatbonton's vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election. The votes of the six other probationary employees should thus also have been counted." The reckoning date, "in cases where a timely appeal has been filed …, [is] the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory." But "the votes of the six supervisory employees must be excluded because at the time the certification elections was conducted, they had ceased to be part of the rank and file, their promotion having taken effect two months before the election."
Secondary issue. NO, HIMPHLU did not obtain the majority. Valid votes rise "from 321 to 337"; "[t]his majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170," and "HIMPHLU obtained 169 … Clearly, HIMPHLU was not able to obtain a majority vote."
Ancillary issues. The CBA clause is ineffective — it "cannot override the Constitutionally-protected right of workers to self-organization," a law being "read into, and form[ing] part of, a contract."
"WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor and Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE.The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to cause the holding of a run-off election between petitioner, National Union of Workers in Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU).SO ORDERED."
Ratio
- The Court disposed of the Gatbonton anomaly by deciding the merits rather than the waiver — his vote was proper "not because it was not questioned but because probationary employees have the right to vote."
- That right rests on Airtime Specialists: the CBA "binds all employees in the bargaining unit," so "all rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative," and "[t]he Code makes no distinction as to their employment status." It is confirmed by Section 2, Rule II of D.O. No. 40-03: "any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization."
- The CBA clause could not stand against it, because "[a] law is read into, and forms part of, a contract" and stipulations are "valid only if they are not contrary to law, morals, good customs, public order or public policy."
- On the reckoning date, Section 5 "should not be read in isolation and must be harmonized with the other provisions." Section 21 provides that an appeal "stays the holding of any certification election," and Section 13 requires the granting order to direct the employer to submit the certified list — so "rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of eligible voters pending the resolution of the appeal."
- The consequences of the contrary rule are what justify it. "[E]xperience shows that it sometimes takes months"; "[d]uring the pendency of the appeal, the employer may hire additional employees"; and excluding them "would violate the guarantee that every employee has the right to be part of a labor organization from the first day of their service" and "would render inutile the remedy of appeal." The record bore this out: the probationary employees appeared on the list the Hotel filed after the appeal was denied.
- The same reasoning excluded the promoted employees — at the time of the balloting "they had ceased to be part of the rank and file."
- On the result the Court applied the double majority rule — "majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast" — and recomputed: 337 valid votes, majority 170, HIMPHLU 169.
- It rejected the lower tribunals' materiality reasoning as "untenable," and explained why: "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." A segregated ballot raises the threshold as well as a total.
- No choice having reached the majority, "it follows that a run-off election must be held" — three choices on the ballot, none reaching 170, and the unions' combined 320 far exceeding 50% of the 346 cast.
Doctrine
Double majority. "[F]or there to be a valid certification election, majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast"; that majority "is 50% + 1" of the valid votes. "[T]he 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." Two-fold objective: to determine the appropriate bargaining unit and to ascertain majority representation, "if the employees desire to be represented at all by anyone." Probationary employees vote — "any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization" — and a CBA clause disqualifying them "cannot override the Constitutionally-protected right of workers to self-organization." Reckoning date: where a timely appeal was filed, the cut-off for the voters' list is the finality of the SOLE's order, because the appeal "stays the holding of any certification election." Employees promoted to supervisory positions before the election "had ceased to be part of the rank and file" and may not vote. Where no choice obtains the required majority, a run-off is held between the two highest.
Limits. The reckoning rule is expressly conditional — it applies "in cases where a timely appeal has been filed"; absent an appeal, Section 5's ordinary reference to the Med-Arbiter's order governs. Eligibility is tested at two different moments for two different groups, and the case turns on the difference: probationary employees are measured against the finality of the SOLE's order, the promoted supervisors by their status "at the time the certification elections was conducted." The Court flags the fact-specific character of the supervisory exclusion — "under the particular circumstances of this case and the period of time which it took for the appeal to be decided." On the dismissed employees the decision applies without controversy the rule examined in Yokohama Tire Philippines. The run-off carries its own conditions — three or more choices, no majority, and combined union votes of at least 50% of those cast — all satisfied here, but each capable of failing in another case. Renumbering: Articles 255 and 256 are now 267 and 268.
Full Digest — Recitation Format
Gist
At a certification election among the rank and file of the Holiday Inn Manila Pavilion Hotel on 16 June 2006, HIMPHLU took 169 votes and NUWHRAIN-MPHC 151, with 1 for No Union, 3 spoiled and 22 segregated out of 346 cast from a list of 353. The segregated ballots were of three kinds: 11 cast by dismissed employees whose cases were pending, 6 by employees promoted to supervisory positions before the election, and 5 by probationary employees whom the CBA barred from voting. The SOLE and the Court of Appeals counted the dismissed and the supervisory employees' votes, excluded the probationary employees', and certified HIMPHLU. The Supreme Court reversed on both eligibility points and on the result. Probationary employees vote, since every employee is eligible for union membership "beginning on the first day of his/her service" and a CBA cannot override that right; where an appeal was taken, the cut-off for the voters' list is the finality of the Secretary's order, not the Med-Arbiter's; but the six supervisors are out, "their promotion having taken effect two months before the election." Valid votes therefore total 337, so under the double majority rule the required majority is 170 — and HIMPHLU's 169 is one short. The Court ordered a run-off election.
Facts
- On August 9, 2005, Med-Arbiter Ma. Simonette Calabocal issued the Order granting the petition for the conduct of a certification election among the rank-and-file employees of the Holiday Inn Manila Pavilion Hotel, operated by Acesite Philippines Hotel Corporation.
- An appeal was taken to the Secretary of Labor and Employment, and a March 10, 2006 Order of the SOLE affirmed the Med-Arbiter's Order. Because the appeal stayed the election, nothing could be done in the meantime — including calling for the voters' list.
- On May 25, 2006, the Hotel submitted the list of employees in the bargaining unit "in compliance with the directive of the Med-Arbiter after the appeal and subsequent motion for reconsideration ha[d] been denied." The probationary employees, including Jose Gatbonton, were on that list.
- On June 16, 2006, the certification election was held. Of 353 employees on the voters' list, 346 voted: NUWHRAIN-MPHC 151, HIMPHLU 169, No Union 1, spoiled 3, segregated 22.
- The 22 segregated ballots fell into three groups: 11 cast by dismissed employees, "albeit the legality of their dismissal was still pending before the Court of Appeals"; 6 cast by employees "already occupying supervisory positions at the time of the election"; and 5 cast by probationary employees, segregated because "pursuant to the existing Collective Bargaining Agreement (CBA), such employees cannot vote."
- The vote of one Jose Gatbonton, a probationary employee, was counted. One probationary vote in, five out — the anomaly that drives the equal-protection argument. The reason was procedural: "during the pre-election conferences, there was no disagreement as to his inclusion in the voters' list, and neither was it timely challenged when he voted on election day."
- By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 of the 22 segregated votes — those of the 11 dismissed and the 6 supposedly supervisory employees — leaving the 5 probationary votes sealed.
- NUWHRAIN appealed to the SOLE, arguing that the probationary votes should be opened since Gatbonton's had been counted, and that HIMPHLU should not be certified because opening the 17 would raise the valid votes to 338, making the majority 170 and leaving HIMPHLU "one vote short."
- By Resolution of January 22, 2007, the SOLE, through Acting Secretary Luzviminda Padilla, affirmed. It held under Section 5, Rule IX that the probationary employees could not vote because "at the time the Med-Arbiter issued on August 9, 2005 the Order granting the petition..., the six probationary employees were not yet hired"; that the dismissed employees' votes counted, their dismissal being on appeal; that the six supervisory employees' votes counted, "their promotion took effect months after the issuance of the... August 9, 2005 Order"; that Gatbonton's vote stood because it was never timely challenged and so could not be the basis for including the others; and that "even if the 17 votes... were to be counted and presumed to be in favor of petitioner, still, the same would not suffice to overturn the 169 votes garnered by HIMPHLU."
- Reconsideration was denied by Resolution of March 22, 2007.
- On November 8, 2007, the Court of Appeals affirmed, holding Airtime Specialists, Inc. v. Ferrer-Calleja inapplicable because the six probationary employees "were not yet employed by the Hotel at the time the August 9, 2005 Order... was issued," and that Airtime Specialists "applies only to situations wherein the probationary employees were already employed as of the date of filing of the petition for certification election." It also held that the "majority" contemplated "refers to the majority of valid votes cast, not the simple majority of votes cast," but concluded that even so the 17 votes could not change the outcome.
- Reconsideration was denied by Resolution of January 25, 2008, and NUWHRAIN brought this petition, decided July 31, 2009.
Arguments of the Parties
A. Petitioner NUWHRAIN-MPHC. Three contentions. First, counting Gatbonton's vote while excluding the six other probationary employees' "violated the principle of equal protection and is not in accord with the ruling in Airtime Specialists"; it explained its failure to challenge Gatbonton by saying "it was precisely its position that probationary employees should be allowed to vote," so "justice and equity dictate" that the rest be counted too. Second, the reckoning date is not August 9, 2005 — the Med-Arbiter's Order — but the date the SOLE's affirming Order became final, "order" in Section 5 meaning "an order which has already become final and executory." Third, on the count: opening the 17 ballots would raise valid votes from 321 to 338, making the majority 170, so "the votes garnered by HIMPHLU is one vote short of the majority for it to be certified."
B. Respondents SOLE, Bureau of Labor Relations, HIMPHLU and Acesite. Their position, sustained below, was that eligibility is fixed at the Med-Arbiter's order of August 9, 2005, when the six probationary employees "were not yet hired"; that Gatbonton's vote stood only because it was never timely challenged and could not be made the basis for including the others; that the promoted employees' votes counted because their promotion post-dated that Order; and that in any event "even if such member were all in favor of petitioner, still, HIMPHLU would win," so opening the ballots was immaterial.
C. Common Ground. The tally was undisputed — 353 on the list, 346 cast, 151 for NUWHRAIN, 169 for HIMPHLU, 1 No Union, 3 spoiled, 22 segregated. It was also common ground that the 11 dismissed employees' cases were pending before the Court of Appeals, that the six promoted employees held supervisory positions on election day, that the CBA barred probationary employees from voting, and that Gatbonton's vote had been counted.
Issue
A. Main Issue (Topic/Subtopic-Centered). Should employees on probationary status at the time of the certification election be allowed to vote — and where a timely appeal was taken from the Med-Arbiter's order, is the reckoning date for the voters' list the Med-Arbiter's order or the finality of the Secretary's? And what of the six employees promoted to supervisory positions before the election?
B. Secondary Issues. Whether HIMPHLU obtained the majority required for certification under the double majority rule, once the number of valid votes cast is correctly determined.
C. Ancillary/Incidental Issues. Whether a CBA provision disqualifying probationary employees from voting is effective; and whether the inclusion of Gatbonton's unchallenged vote required, as a matter of equal protection, the inclusion of the other probationary votes.
Ruling
Main Issue: Probationary employees vote; the six supervisors do not. "[T]he inclusion of Gatbonton's vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election. The votes of the six other probationary employees should thus also have been counted." The reckoning date, "in cases where a timely appeal has been filed from the Order of the Med-Arbiter, [is] the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory." But "the votes of the six supervisory employees must be excluded because at the time the certification elections was conducted, they had ceased to be part of the rank and file, their promotion having taken effect two months before the election." Secondary Issue: NO, HIMPHLU did not obtain the majority. Valid votes rise "from 321 to 337"; "[t]his majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170," and "HIMPHLU obtained 169... Clearly, HIMPHLU was not able to obtain a majority vote," so a run-off election must be held. Ancillary Issue: the CBA clause is ineffective — it "cannot override the Constitutionally-protected right of workers to self-organization," a law being "read into, and form[ing] part of, a contract."
Dispositive portion (verbatim):
"WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor and Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE.The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to cause the holding of a run-off election between petitioner, National Union of Workers in Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC), and respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU).SO ORDERED."
Ratio
- The Court disposed of the Gatbonton anomaly by deciding the merits rather than the waiver: "[t]he inclusion of Gatbonton's vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election."
- That right rests on Airtime Specialists and on the reasoning it supplies: the CBA "binds all employees in the bargaining unit," so "all rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative," and "[t]he Code makes no distinction as to their employment status."
- It is confirmed by Section 2, Rule II of D.O. No. 40-03: "any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization."
- The CBA clause could not stand against it. It "cannot override the Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor Code and its Implementing Rules," because "[a] law is read into, and forms part of, a contract" and stipulations are "valid only if they are not contrary to law, morals, good customs, public order or public policy."
- On the reckoning date, the Court held that Section 5 "should not be read in isolation and must be harmonized with the other provisions." Section 21 provides that an appeal "stays the holding of any certification election," and Section 13 requires the order granting an election to direct the employer to submit the certified list of employees — so "rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of eligible voters pending the resolution of the appeal."
- The rule follows: "the period of reckoning in determining who shall be included in the list of eligible voters is, in cases where a timely appeal has been filed..., the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory."
- The consequences of the contrary rule are what justify it. "Even if the Implementing Rules gives the SOLE 20 days to decide the appeal..., experience shows that it sometimes takes months"; "[d]uring the pendency of the appeal, the employer may hire additional employees"; and to exclude them "would violate the guarantee that every employee has the right to be part of a labor organization from the first day of their service" and "would render inutile the remedy of appeal to the SOLE."
- The record bore this out: the probationary employees "were included in the list of employees in the bargaining unit submitted by the Hotel on May 25, 2006 in compliance with the directive of the Med-Arbiter after the appeal and subsequent motion for reconsideration ha[d] been denied."
- The Court emphasised what is at stake: "[a] certification election is the process of determining the sole and exclusive bargaining agent... The significance of an employee's right to vote in a certification election cannot thus be overemphasized. For he has considerable interest in the determination of who shall represent him in negotiating the terms and conditions of his employment."
- But the same reasoning excluded the promoted employees: "the votes of the six supervisory employees must be excluded because at the time the certification elections was conducted, they had ceased to be part of the rank and file, their promotion having taken effect two months before the election."
- On the result, the Court applied the double majority rule — "majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast" — and recomputed: valid votes rise "from 321 to 337"; "[t]his majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170." HIMPHLU had 169.
- It rejected the lower tribunals' materiality reasoning as "untenable," and explained why: "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." A segregated ballot raises the threshold as well as a total.
- The Court restated the purpose of the exercise: "the conduct of a certification election has a two-fold objective: to determine the appropriate bargaining unit and to ascertain the majority representation of the bargaining representative, if the employees desire to be represented at all by anyone... whether it effectively ascertains the will of the members of the bargaining unit as to whether they want to be represented and which union they want to represent them."
- No choice having obtained the required majority, "it follows that a run-off election must be held" — the conditions being satisfied with three choices on the ballot, none reaching 170, and the contending unions' combined 320 votes far exceeding 50% of the 346 cast.
Doctrine
B. Doctrines/Rules/Principles. Under the double majority rule, "for there to be a valid certification election, majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast"; that majority "is 50% + 1" of the valid votes. "[T]he 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." A certification election has a two-fold objective — to determine the appropriate bargaining unit and to ascertain majority representation, "if the employees desire to be represented at all by anyone." Probationary employees vote: "all rank and file employees in the appropriate bargaining unit, whether probationary or permanent[,] are entitled to vote," and "any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization." A CBA provision disqualifying them "cannot override the Constitutionally-protected right of workers to self-organization," since "[a] law is read into, and forms part of, a contract." Where a timely appeal was filed from the Med-Arbiter's order, the cut-off for the voters' list is "the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory," because the appeal "stays the holding of any certification election." Employees promoted to supervisory positions before the election "had ceased to be part of the rank and file" and may not vote. Where no choice obtains the required majority, a run-off election is held between the two unions with the highest totals.
C. Distinctions/Limitations/Qualifications. The reckoning rule is expressly conditional — it applies "in cases where a timely appeal has been filed." Absent an appeal, Section 5's ordinary reference to the Med-Arbiter's order governs. Note that eligibility is tested at two different moments for two different groups, and the case turns on the difference: probationary employees are measured against the finality of the SOLE's order, while the promoted supervisors are excluded by reference to their status "at the time the certification elections was conducted." The Court also flags the fact-specific character of the supervisory exclusion — "under the particular circumstances of this case and the period of time which it took for the appeal to be decided" — the promotions having taken effect two months before the balloting. On the dismissed employees, this decision applies without controversy the rule examined in Yokohama Tire Philippines, Inc. v. Yokohama Employees Union. Finally, the run-off carries its own conditions — three or more choices, no majority, and combined union votes of at least 50% of the votes cast — all satisfied here, but each capable of failing in another case.
D. Topic/Subtopic Integration (Mandatory). Classified DIRECT. The syllabus assigns this case at item 21 under item 7.c for supervisory employees in a certification election, and the Court squarely excludes the six whose promotions took effect before the balloting. But the decision reaches three further items of the same syllabus and is best read as the week's synthesis of the certification-election machinery: eligible voters (item 20, with Yokohama Tire), the double majority rule (item 7.e), and the run-off election (item 7.h, with Confederation of Citizens Labor Unions v. Noriel). Its holding on the CBA clause connects back to Southern Philippines Federation of Labor v. Calleja — the right to self-organization "cannot be curtailed by a collective bargaining agreement" — and its recomputation of the majority is the sharpest illustration in the week of why voter-eligibility questions are questions of validity, not of housekeeping, a point Benguet Electric Cooperative v. Calleja makes from the opposite direction.
Separate Opinions
None. The Decision, penned by Justice Carpio Morales, was concurred in by Justices Quisumbing (Chairperson), Chico-Nazario and Leonardo-De Castro, both designated additional members.