Articles

Legitimate labor organizations

Legitimate labor organizations refer to labor organizations that registered with the Department of Labor and Employment (DOLE).

2. Concept

“Legitimate Labor Organization” – refers to any labor organization in the private sector

registered or reported with the Department in accordance with Rules III and IV of [DOLE Department Order No. 40-03]. (Section 1[ff], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

a. Legitimate labor organizations v. bargaining unit

The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a bargaining unit. (Holy Child Catholic School v. Sto. Tomas, En Banc, G.R. No. 179146, 23 July 2013)

Article 212(g) of the Labor Code defines a labor organization as “any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.” Upon compliance with all the documentary requirements, the Regional Office or Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is included in the roster of legitimate labor organizations. Any applicant labor organization shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration. (Sta. Lucia East Commercial Corporation, v. Secretary of Labor and Employment, G.R. No. 162355, August 14, 2009)

On the other hand, a bargaining unit has been defined as a “group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicated to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law.” (Holy Child Catholic School v. Sto. Tomas, supra.)

A bargaining unit is a group of employees sought to be represented by a petitioning union. Such employees need not be members of a union seeking the conduct of a certification election. A union certified as an exclusive bargaining agent represents not only its members but also other employees who are not union members. (Ibid.)

3. Registration

a. Requirements of Registration

A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

1) Fifty pesos (P50.00) registration fee;

2) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

3) In case the applicant is an independent union, 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;

4) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and,

5) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. (Article 240, P.D. 442, Labor Code)

b. Chartering and Creation of a Local Chapter

A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter. (Article 241, Ibid.)

1) No minimum number of members

To create a local chapter and register it, there is no 20% registration requirement – i.e. the requirement that membership should at least be 20% of the bargaining unit is not applicable to a local chapter.

2) Legal personality, limited

The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate. (Article 241, Ibid.)

3) Rights and privileges

The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate:

1) The names of the chapter’s officers, their addresses, and the principal office of the chapter; and

2) The chapter’s constitution and by-laws: Provided, That where the chapter’s constitution and by-laws are the same as that of the federation or the national union, this fact shall be indicated accordingly. (Paragraph 2, Article 241, Ibid.)

The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president. (Paragraph 3, Article 241, Ibid.)

c. Action on Application

The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president. (Article 242, Ibid.)

d. Denial of Registration; Appeal

The decision of the Labor Relations Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof. (Article 243, Ibid.)

e. Additional Requirements for Federations or National Unions

Subject to Article 238,185 if the applicant for registration is a federation or a national union, it shall, in addition to the requirements of the preceding Articles, submit the following:

1) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and,

2) The names and addresses of the companies where the locals or chapters operate and the list of all the members in each company involved. (Article 244, Ibid.)

4. Cancellation of Registration

The certificate of registration of any legitimate labor organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 hereof. (Article 245, Ibid.)

a. Effect of a Petition for Cancellation of Registration

A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election.

In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts. (Article 246, Ibid.)

b. Grounds for Cancellation of Union Registration

The following may constitute grounds for cancellation of union registration:

1) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;

2) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters;

3) Voluntary dissolution by the members. (Article 247, Ibid.)

c. Voluntary Cancellation of Registration

The registration of a legitimate labor organization may be cancelled by the organization itself: Provided, That at least two-thirds of its general membership votes, in a meeting duly called for that purpose to dissolve the organization: Provided, further, That an application to cancel registration is thereafter submitted by the board of the organization, attested to by the president thereof. (Article 248, Ibid.)

d. Equity of the Incumbent

All existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates. (Article 249, Ibid.)

5. Rights of legitimate labor organizations

A legitimate labor organization shall have the right:

1) To act as the representative of its members for the purpose of collective bargaining;

2) To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining;

3) To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

4) To own property, real or personal, for the use and benefit of the labor organization and its members;

5) To sue and be sued in its registered name; and,

6) To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law.

Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision. (Article 251, P.D. 442, Labor Code)

a. Reportorial Requirements

The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned:

1) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto;

2) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;

3) Its annual financial report within thirty (30) days after the close of every fiscal year; and,

4) Its list of members at least once a year or whenever required by the Bureau of Labor Relations. (Article 252, Ibid.)

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. (Paragraph 2, Article 252, Ibid.)

6. Affiliation

“Affiliate” – refers to an independent union affiliated with a federation, national union or a chartered local which was subsequently granted independent registration but did not disaffiliate from its federation, reported to the Regional Office and the Bureau in accordance with Rule III, Sections 6 and 7 of [DOLE Department Order No. 40-03]. (Section 1[b], Rule I, DOLE Department Order No. 40, Series of 2003, as amended by A-I)

a. Purpose

The purpose of affiliation by a local union with a mother union or a federation “is to increase by collective action the bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.” (MSMG-UWP v. Ramos, G.R. No. 113907, 28 February 2000)

b. Requirements of affiliation

The report of affiliation of independently registered labor unions with a federation or national union shall be accompanied by the following documents:

1) resolution of the labor union’s board of directors approving the affiliation;

2) minutes of the general membership meeting approving the affiliation;

3) the total number of members comprising the labor union and the names of members

who approved the affiliation;

4) the certificate of affiliation issued by the federation in favor of the independently registered labor union; and

5) written notice to the employer concerned if the affiliating union is the incumbent bargaining agent. (Section 7, Rule III, Ibid.)

c. Relationship: Principal-Agent

A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local unions are considered principals while the federation is deemed to be merely their agent. As such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit. (Coastal Subic Bay Terminal, Inc. v. DOLE-Office of the Secretary, G.R. No. 157117, 20 November 2006)

FILIPINO PIPE AND FOUNDRY CORPORATION v. NLRC, G.R. No. 115180, 16 November 1999

⦁ [D]irect and primary responsibility for the damages allegedly caused by the illegal strike sued upon fall on the local union FPWU, being the principal, and not on respondent NLU-TUCP, a mere agent of FPWU-NLU which assisted the latter in filing the notice of strike. Being just an agent, the notice of strike filed by Atty. Eulogio Lerum, the national president of NLU-TUCP, is deemed to have been filed by its principal, the FPWU-NLU. Having thus dismissed the claim for damages against the principal, FPWU-NLU, the action for damages against its agent, respondent NLU-TUCP, and Atty. Lerum, has no more leg to stand on and should also be dismissed.

8. Disaffiliation

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate and voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its autonomy from the federation to which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association. (MSMG-UWP v. Ramos, G.R. No. 113907, 28 February 2000)

[A] local union which has affiliated itself with a federation is free to sever such affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federations constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its parent union. (Ibid.)

[L]abor unions may disaffiliate from their mother federations to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA… However, such disaffiliation must be effected by a majority of the members in the bargaining unit. (National Union of Bank Employees [NUBE] v. Philnabank Employees Association[PEMA], G.R. No. 174287, 12 August 2013)

a. When prevented

[T]he right of the local members to withdraw from the federation and to form a new local union depends upon the provisions of the union’s constitution, by-laws and charter and, in the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent. (Coastal Subic Bay Terminal, Inc. v. DOLE-Office of the Secretary, supra.)

[T]he right of the local members to withdraw from the federation and to form a new local union depends upon the provisions of the union’s constitution, by-laws and charter and, in the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent. (National Union of Bank Employees [NUBE] v. Philnabank Employees Association[PEMA], supra.)

1) Disaffiliation procedure vs. Right to self-organization

NATIONAL UNION OF BANK EMPLOYEES [NUBE] v. PHILNABANK EMPLOYEES ASSOCIATION [PEMA], G.R. No. 174287, 12 August 2013

⦁ [T]here is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-observance of the procedure that union members should make such determination through secret ballot and after due deliberation, conformably with Article 241 (d) of the Labor Code, as amended.38 Conspicuously, other than citing the opinion of a “recognized labor law authority,” NUBE failed to quote a specific provision of the law or rule mandating that a local union’s disaffiliation from a federation must comply with Article 241 (d) in order to be valid and effective.

⦁ Granting, for argument’s sake, that Article 241 (d) is applicable, still, We uphold PEMA’s disaffiliation from NUBE. First, non-compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise above the employees’ fundamental right to self-organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining.39 Second, the Article nonetheless provides that when the nature of the organization renders such secret ballot impractical, the union officers may make the decision in behalf of the general membership. In this case, NUBE did not even dare to contest PEMA’s representation that “PNB employees, from where [PEMA] [derives] its membership, are scattered from Aparri to Jolo, manning more than 300 branches in various towns and cities of the country,” hence, “[to] gather the general membership of the union in a general membership to vote through secret balloting is virtually impossible.”40 It is understandable, therefore, why PEMA’s board of directors merely opted to submit for ratification of the majority their resolution to disaffiliate from NUBE. Third, and most importantly, NUBE did not dispute the existence of the persons or their due execution of the document showing their unequivocal support for the disaffiliation of PEMA from NUBE. Note must be taken of the fact that the list of PEMA members (identifying themselves as “PEMA-Serrana Group”41) who agreed with the board resolution was attached as Annex “H” of PEMA’s petition before the CA and covered pages 115 to 440 of the CA rollo. While fully displaying the employees’ printed name, identification number, branch, position, and signature, the list was left unchallenged by NUBE. No evidence was presented that the union members’ ratification was obtained by mistake or through fraud, force or intimidation. Surely, this is not a case where one or two members of the local union decided to disaffiliate from the mother federation, but one where more than a majority of the local union members decided to disaffiliate.

⦁ Consequently, by PEMA’s valid disaffiliation from NUBE, the vinculum that previously bound the two entities was completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act performed by the former that affects the interests and affairs of the latter, including the supposed expulsion of Serrana et al., is rendered without force and effect.

⦁ Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The moment that PEMA separated from and left NUBE and exists as an independent labor organization with a certificate of registration, the former is no longer obliged to pay dues and assessments to the latter; naturally, there would be no longer any reason or occasion for PNB to continue making deductions…

b. Union dues

VOLKSCHEL LABOR UNION v. BUREAU OF LABOR RELATIONS, G.R. No. L-45824, 19 June 1985

⦁ In other words, [Federation/National Union] ALUMETAL is entitled to receive the dues from respondent companies as long as petitioner union is affiliated with it and respondent companies are authorized by their employees (members of petitioner union) to deduct union dues. Without said affiliation, the employer has no link to the mother union. The obligation of an employee to pay union dues is coterminous with his affiliation or membership. “The employees’ check-off authorization, even if declared irrevocable, is good only as long as they remain members of the union concerned.” A contract between an employer and the parent organization as bargaining agent for the employees is terminated by the disaffiliation of the local of which the employees are members. Respondent companies therefore were wrong in continuing the check-off in favor of respondent federation since they were duly notified of the disaffiliation and of petitioner’s members having already rescinded their check-off authorization.

References

Book V, Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

Book V, Omnibus Rules Implementing the Labor Code

DOLE Department Order No. 40, Series of 2003

DOLE Department Order No. 40-A-I, Series of 2003

DOLE Department Order No. 40-B, Series of 2003

DOLE Department Order No. 40-C, Series of 2004

DOLE Department Order No. 40-D, Series of 2005

DOLE Department Order No. 40-F-3, Series of 2008

DOLE Department Order No. 40-G-03, Series of 2010

DOLE Department Order No. 40-I, Series of 2015

DOLE Department Order No. 15, Series of 2015

/Updated: February 9, 2023

Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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