Labor II

NUWHRAIN-MPHC vs. Secretary of Labor

G.R. No. 181531

July 31, 2009

Tags: Certification Election; Waiters Association, Petition Granted; Double Majority Rule

Facts:

A certification election was conducted among the rank-and-file employees of the

respondent Holiday Inn Manila Pavilion Hotel which was won by HIMPHLU with a
number of 353 votes. The unions NUWHRAIN-MPHC and respondent Holiday Inn
Manila Pavillion Hotel Labor Union (HIMPHLU) contended and referred the case back to
Med-Arbiters to decide which among the votes would be opened and tallied.

Among the votes were 11 votes that were initially segregated because they were cast
by dismissed employees albeit the legality of their dismissal was still pending before
the CA.

6 votes were segregated because those were cast by employees already occupying
supervisory positions at the time of the election.

5 votes were segregated because they were cast by probationary employees, which,
pursuant to the existing CBA, cannot vote. But one probationary employee’s vote was
counted (Gatbonton).

CH: The Med-Arbiter ruled to open the 11 and 6 votes. (17 votes)

Petitioner NUWHRAIN-MPHC, which garnered 151 votes appealed to the Secretary of

Labor and Employment (SOLE), arguing that the votes of the probationary employees
should have been opened considering that probationary employee Gatbonton’s vote
was tallied. And petitioner averred that respondent HIMPHLU should not be immediately
certified as bargaining agent as the opening of the 17 segregated ballots would change
the number of valid votes to 338 (151 NUWHRAIN-MPHC + 169 HIMPHLU + 1 + 17);
hence, the 169 votes of HIMPHLU garnered would be one vote short of the majority
which would then become 169.

CH: The SOLE affirmed the Med-Arbiters Order. It ruled that pursuant to Section 5, Rule
IX of the Omnibus Rules Implementing the Labor Code on exclusion and Inclusion of
voters in a certification election, the probationary employees cannot vote, as the 6
probationary employees were not yet hired at the time the Med-Arbiters granted the
petition for the conduct of the certification election. For the 11 dismissed employees,
they could be considered since their dismissal was still pending appeal. As to the 6
supervisory employees, SOLE ruled that their promotion took effect months after the
grant of the petition for certification of election and were, thus, considered as rank-and-
file at that time. As to Gatbonton, there was no disagreement as to his inclusion during
the pre-election and neither was it challenged; hence, should not be segregated. And
that even if the 17 votes were to be counted, the same would not suffice to overturn the
169 votes garnered by HIMPHLU.

CH: CA affirmed the SOLE and the ruling in Airtime Specialist Inc v Calleja is
inapplicable in the case at bar because the 6 probationary employees were not yet
employed at the time of the grant of the certification election. CA also upheld the
SOLE’s ruling regarding Gatbonton: that since it was not properly challenged, its
conclusion could no longer be questioned. CA brushed aside the contention of the
petitioner that the 17 segregated votes would materially affect that results of the election
as there would be a run-off election in the event that none of the contending unions
receive a majority of the valid votes cast. CA held that the majority contemplated refers
to the valid votes cast, not simple majority of votes cast; hence, the SOLE was correct
in ruling that even if the 17 votes were in favor of petitioner, it would still be insufficient
to overturn the results of the certification election.

Contentions of the Petitioner:

That the 17 segregated votes materially affect the results of the election since it would
increase the valid votes from 321 to 338; hence the winner should have garnered at
least 170 and not 169 votes.

Issue:

1. Should the probationary employees at the time of the certification elections be

allowed to vote?
2. When is the reckoning period in determining who shall be included in the list of
eligible voters?
3. What is a certification election?
4. Is the certification of HIMPHLU as the exclusive bargaining agent proper? /
Double Majority Rule
5. What is a run-off election?

Law (Substantive):
Section 5, Rule IX of the Omnibus Rules Implementing the Labor Code on exclusion
and Inclusion of voters in a certification election.

Airtime Specialist, Inc. v Ferrer Calleja stated that, in a certification election, all rank-
and-file employees in the appropriate bargaining unit, whether probationary or
permanent, are entitled to vote. This case only applies to situations wherein the
probationary employees were already employed as of the date of filing of the petition for
certification election.

Rule 255 of the Labor Code states that “…Hence, all rank and file employees,
probationary or permanent, have a substantial interest in the selection of the bargaining
representative. The Code makes no distinction as to their employment status as basis
for eligibility in supporting the petition for certification election. The law refers to all the
employees in the bargaining unit. All they need to be eligible to support the petition is to
belong to the bargaining unit.”

Rule II, Section 2 of DO No. 40-03, series of 2003, which amended Rule IX of the
Omnibus Rules Implementing the Labor Code provides:

Rule II

Section 2. Who may join labor unions and workers' associations. - All
persons employed in commercial, industrial and agricultural enterprises,
including employees of government owned or controlled corporations
without original charters established under the Corporation Code, as well
as employees of religious, charitable, medical or educational institutions
whether operating for profit or not, shall have the right to self-organization
and to form, join or assist labor unions for purposes of collective
bargaining: provided, however, that supervisory employees shall not be
eligible for membership in a labor union of the rank-and-file employees but
may form, join or assist separate labor unions of their own. Managerial
employees shall not be eligible to form, join or assist any labor unions for
purposes of collective bargaining. Alien employees with valid working
permits issued by the Department may exercise the right to self-
organization and join or assist labor unions for purposes of collective
bargaining if they are nationals of a country which grants the same or
similar rights to Filipino workers, as certified by the Department of Foreign
Affairs.

For purposes of this section, 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.

All other workers, including ambulant, intermittent and other

workers, the self-employed, rural workers and those without any definite
 employers may form labor organizations for their mutual aid and protection
and other legitimate purposes except collective bargaining. (Emphasis
supplied)
Rule XI, Section 5, DO 40-03:

Rule XI

xxxx
Section 5. Qualification of voters; inclusion-exclusion. - All employees
who are members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the issuance of the order
granting the conduct of a certification election shall be eligible to
vote. 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. (Emphasis supplied)

xxxx
Section 13. Order/Decision on the petition. - Within ten (10) days from the
date of the last hearing, the Med-Arbiter shall issue a formal order granting
the petition or a decision denying the same. In organized establishments,
however, no order or decision shall be issued by the Med-Arbiter during
the freedom period.

The order granting the conduct of a certification election shall state

the following:

(a) the name of the employer or establishment;

(b) the description of the bargaining unit;

(c) a statement that none of the grounds for dismissal enumerated in the
succeeding paragraph exists;

(d) the names of contending labor unions which shall appear as follows:
petitioner union/s in the order in which their petitions were filed,
forced intervenor, and no union; and

(e) a directive upon the employer and the contending union(s) to

submit within ten (10) days from receipt of the order, the
certified list of employees in the bargaining unit, or where
necessary, the payrolls covering the members of the bargaining unit
 for the last three (3) months prior to the issuance of the
order. (Emphasis supplied)
xxxx

Section 21. Decision of the Secretary. - The Secretary shall have fifteen
(15) days from receipt of the entire records of the petition within which to
decide the appeal. The filing of the memorandum of appeal from the
order or decision of the Med-Arbiter stays the holding of any
certification election.

The decision of the Secretary shall become final and executory after
ten (10) days from receipt thereof by the parties. No motion for
reconsideration of the decision shall be entertained. (Emphasis supplied)

Case History:

The Med-Arbiter (August 22, 2006): ruled for the opening of 17 out of 22 segregated
votes especially those cast by the 11 dismissed employees and those cast by 6
supposedly supervisory employees of the Hotel.

The Secretary of Labor and Employment affirmed the Med-Arbiters to exclude the 17
votes.

CA affirmed the Secretary of Labor and Employment.

SC ruled in favor of the petitioner, annulling and setting aside the resolution of the CA
and SOLE.

Ruling:

1. Yes. Gatbonton’s vote was properly included because all probationary

employees have the right to vote in accordance with the case of Airtime
Specialissts, Inc. v Ferrer-Calleja and in Article 255 of the Labor Code.
2. In cases where a timely appeal has been filed from the Order of the Med-Arbiter,
it shall be the date when the Order of the Secretary of Labor and Employment,
whether affirming or denying the appeal, becomes final and executory. During
the pendency of the appeal, the employer may hire additional employees. To
exclude the employees hired after the issuance of the Med-Arbiters Order but
before the appeal has been resolved would violate the guarantee that every
employee has the right to be part of a labor organization from the first day of their
service – like that of the case of Gatbonton since he was included in the list of
employees submitted by the Hotel after the appeal and subsequent motion for
 reconsideration have been denied by the SOLE. Such employees are, in light of
the discussion, deemed eligible to vote.
To rule that only those employees hired as of the date of the issuance of the
Med-Arbiters Order are qualified to vote would effectively disenfranchise
employees hired during the pendency of the appeal. More importantly, reckoning
the date of the issuance of the Med-Arbiters Order as the cut-off date would
render inutile the remedy of appeal to the SOLE.
However, for the 6 supervisory employees, they shall be excluded since at the
time the certification election was conducted, they had ceased to be part of the
rank-and-file, their promotion having taken effect 2 months before the election.
3. A certification election is the process of determining the sole and exclusive
bargaining agent off the employees in an appropriate bargaining unit for
purposes of collective bargaining. Collective bargaining, refers to the negotiated
contract between a legitimate labor organization and the employer concerning
wages, hours of work and all other terms and conditions of employment in a
bargaining unit.
4. No. It was not proper. HIMPHLU was not able to obtain the required majority to
be certified.
The Court ruled under the so-called DOUBLE MAJORITY RULE – that 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.
If the probationary employees’ votes would be deemed valid, while the
supervisory employees’ excluded, it follows that the number of valid votes would
increase from 321 to 337. And Under Article 256 of the Labor Code, the union
obtaining the majority of the valid votes cast by the eligible voters shall be
certified as the sole and exclusive bargaining agent of all the workers in the
appropriate bargaining unit. The majority is 50% + 1. Hence, 50% + 1 of 337 is
168..5 + 1 or at least 170.

The contention of the HIMPHLU that the inclusion of the votes would not
materially affect the results of the election is untenable because that 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 election. To be sure, the conduct of a certification election has a two-fold
objective: 1) to determine the appropriate bargaining unit and 2) to ascertain the
majority representation of the bargaining representative, if the employees desire
to be represented at all by anyone.
 Hence, no choice in the certification election conducted obtained the required
majority. A run-off election must be held to determine which between HIMPHLU
and petitioner should represent the rank-and-file employees.

5. A run-off election refers to an election between the labor unions receiving the 2
highest number of votes in a certification or consent election with 3 or more
choices, where such a certified or consent election results in none of the 3 or
more choices receiving the majority of the valid votes cast; provided, that the
total number of votes for all contending unions is at least 50% of the number of
votes cast. With 346 votes cast, 337 of which are now deemed valid and
HIMPHLU having only garnered 169 and petitioner having obtained 151 and the
choice NO UNION receiving 1 vote, then the holding of a run-off election
between HIMPHLU and petitioner is in order.

Opinion: