CLAIM OF FRAUD AND MISREPRESENTATION IN UNION REGISTRATION SHOULD BE SUPPORTED WITH CIRCUMSTANCES AND EVIDENCE

De Ocampo Memorial Schools, Inc. vs. Bigkis Manggagawa sa De Ocampo Memorial School, Inc.
G.R. No. 192648, March 15, 2017

Facts:

De Ocampo Medical Schools, Inc. (De Ocampo) is a domestic corporation organized under the laws of the Philippines. It has two main divisions, namely: De Ocampo Memorial Medical Center (DOMMC), its hospital entity, and the De Ocampo Memorial Colleges (DOMC), its school entity.

On September 26, 2003, Union Registration No. NCR-UR-9-3858-2002 was issued in favor of Bigkis Manggagawa sa De Ocampo Memorial Medical Center -LAKAS (BMDOMMC).

Later, on December 5, 2003, Bigkis Manggagawa sa De Ocampo Memorial School, Inc. (BMDOMSI) was issued a Union Registration/Certificate of Creation of Local Chapter No. NCR-l 2-CC-002-2003 and declared a legitimate labor organization.

On March 4, 2004, De Ocampo filed a Petition for Cancellation of Certificate of Registration with the Department of Labor and Employment -National Capital Region (DOLE-NCR). It sought to cancel the Certificate of Registration of BMDOMSI on the following grounds: 1) misrepresentation, false statement and fraud in connection with its creation and registration as a labor union as it shared the same set of officers and members with BMDOMMC; 2) mixed membership of rank-and-file and managerial/supervisory employees; and 3) inappropriate bargaining unit.

On April 13, 2004, De Ocampo filed a Supplemental Petition, informing the DOLE-NCR of the cancellation of the Certificate of Registration of BMDOMMC in Case No. NCR-OD-0307-009-LRD. It attached a copy of the Decision of the DOLE-NCR dated March 3, 2004, which cancelled and struck off Union Registration No. NCR-UR-9-3858-2002 from the registry of legitimate labor organizations for being an inappropriate bargaining unit.

BMDOMSI filed its Comment-Opposition to Petition for Cancellation of Certificate of Registration and Supplemental Petition, denying De Ocampo’s allegations and claiming that the latter only wants to impede the formation of the union.

DOLE (NCR Regional Director) Ruling:

The DOLE-NCR ruled that BMDOMSI committed misrepresentation by making it appear that the bargaining unit is composed of faculty and technical employees. In fact, all the union officers and most of the members are from the General Services Division.

Furthermore, the members of the union do not share commonality of interest, as it is composed of academic and non-academic personnel. The nature of work of the employees of the General Services Division, while falling within the category of non-academic personnel, differs from that of the other non-academic employees composed of clerks, messengers, etc., since they also serve the hospital component of De Ocampo.

BMDOMSI then filed an appeal to the Bureau of Labor Relations (BLR) alleging that the union members are all employees of De Ocampo and that the bargaining unit it seeks to represent is appropriate.

BLR Ruling:

The BLR reversed the Regional Director’s finding of misrepresentation, false statement or fraud in BMDOMSI’ s application for registration. According to the BLR, De Ocampo failed to adduce proof to support its allegation of mixed membership within respondent union.

Further, and contrary to De Ocampo’s claim, records show that BMDOMSI stated in its application that its members are composed of rank-and-file employees falling under either faculty or technical occupational classifications.

The BLR also held that the existence of an inappropriate bargaining unit would not necessarily result in the cancellation of union registration, and the inclusion of a disqualified employee in a union is not a ground for cancellation. Even if BMDOMSI shared the same set of officers and members of BMDOMMC, the latter had already been delisted on March 3, 2004 and there is no prohibition against organizing another union.

De Ocampo filed a Petition for CertiorarP4 with the CA seeking to annul and set aside the BLR Decision as well as the Resolution25 dated January 24, 2005 denying its motion for reconsideration.

CA Ruling:

The CA affirmed the Decision of the BLR. It ruled that there was no misrepresentation, false statement or fraud in the application for registration.

The record shows that, as BMDOMSI had indicated, the bargaining unit as described is composed of rank-and-file employees with occupational classifications under technical and faculty. The CA found that there could be no misrepresentation as the members appearing in the minutes of the general membership meeting, and the list of members who attended the meeting and ratified the union constitution and by-laws, are in truth employees of the school, though some service the hospital.

The CA also ruled that, other than De Ocampo’s bare allegations, there was no proof of intent to defraud or mislead on the part of BMDOMSI. Hence, the charge of fraud, false statement or misrepresentation cannot be sustained. However, the CA observed that the members of the union, who are from academic, non-academic, and general services, do not perform work of the same nature, receive the same wages and compensation, nor share a common stake in concerted activities.

While these factors dictate the separation of the categories of employees for purposes of collective bargaining, the CA reasoned that such lack of mutuality and commonality of interest of the union members is not among the grounds for cancellation of union registration under Article 239 of the Labor Code. De Ocampo filed a motion for reconsideration which was denied in the assailed Resolution dated June 21, 2010.

Hence, the petition.

Issue/s:

1. Whether or not there were fraud and misrepresentation in the application for registration of BMDOMSI
2. Whether or not failure to disclose the existence of another union in the application for registration amounts to misrepresentation
3. Whether or not there is commonality and mutuality of interests among the applicant members

SC Ruling:

The SC denied the Petition.

The only grounds on which the cancellation of a union’s registration may be sought are those found in Article 247 of the Labor Code. Citing Tagaytay Highlands International Golf Club Incorporated vs. Tagaytay Highlands Employees Union-PTGW0, the SC ruled that “[t]he inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and ( c) of Article [247] x x x of the Labor Code.”

Note: Article 247 is formerly Article 239 

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Thus, for purposes of de-certifying a union, it is not enough to establish that the rank-and-file union includes ineligible employees in its membership. Pursuant to paragraphs (a) and (b) of Article 247 of the Labor Code, it must be shown that there was misrepresentation, false statement or fraud in connection with: (1) the adoption or ratification of the constitution and by-laws or amendments thereto; (2) the minutes of ratification; (3) the election of officers; (4) the minutes of the election of officers; and (5) the list of voters. Failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses to the BLR may also constitute grounds for cancellation, lack of mutuality of interests, however, is not among said grounds.

The BLR and the CA’s finding that the members of BMDOMSI are rank-and-file employees is supported by substantial evidence and is binding on this Court. On the other hand, other than the allegation that BMDOMSI has the same set of officers with BMDOMMC and the allegation of mixed membership of rank-and-file and managerial or supervisory employees, De Ocampo has cited no other evidence of the alleged fraud and misrepresentation.

The SC, citing San Miguel Corporation Employees Union-Phi/. Transport and General Workers Org vs. San Miguel Packaging Products Employees Diwa ng Manggagawang Pilipino, (G.R. No. 171153, September 12, 2007), stated as final word that direct challenge to the legitimacy of a labor organization based on fraud and misrepresentation in securing its certificate of registration is a serious allegation which deserves careful scrutiny. Allegations thereof should be compounded with supporting circumstances and evidence. The records of the case are devoid of such evidence.

Furthermore, the SC is not a trier of facts, and this doctrine applies with greater force in labor cases. Findings of fact of administrative agencies and quasi-judicial bodies, such as the BLR, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality.