Cooperative Rural Bank Of Davao City v. Ferrer-Calleja
Cooperative Rural Bank of Davao City, Inc. v. Pura Ferrer-Calleja, Director, Bureau of Labor Relations, et al., G.R. No. L-77951, September 26, 1988
- Procedural (Remedial Law)
- Labor Law
- cooperative
- certification election
- collective bargaining
- right to self-organization
- member and co-owner
- Bureau of Labor Relations
- moot and academic
- managerial employees
- certiorari
- rank-and-file employees
I. Facts of the Case
Petitioner Cooperative Rural Bank of Davao City, Inc. is a cooperative bank whose roughly 16 rank-and-file employees are also its members and co-owners. The Federation of Free Workers petitioned for a certification election among those employees, and the Med-Arbiter and the Bureau of Labor Relations (BLR) Director allowed it over the bank's objection that cooperative employees cannot bargain collectively. The bank went to the Supreme Court on certiorari.
August 1986
The Cooperative Rural Bank of Davao City, Inc., a cooperative banking corporation partly owned by the Government, had about 16 rank-and-file employees who were its members and co-owners. There was no collective bargaining agreement between the bank and its employees.
August 27, 1986
The Federation of Free Workers, a labor organization registered with the Department of Labor and Employment, filed with the Davao City Regional Office of the Ministry of Labor and Employment a verified Petition for certification election among the bank's rank-and-file employees (Case No. R-325 ROXI MED-UR-73-86).
September 18, 1986
The Med-Arbiter issued an Order granting the Petition for certification election.
October 3, 1986
The bank appealed to the BLR. It argued that a cooperative, not being an institution operating for profit, is not covered by the rules on certification elections, and that two of the alleged rank-and-file employees are managerial employees disqualified from concerted activities. In sum, it insisted its employees could not form labor organizations for collective bargaining.
October 8, 1986
The Federation filed a Motion to Dismiss the Appeal. The bank filed its opposition on October 15, 1986.
February 11, 1987
BLR Director Pura Ferrer-Calleja affirmed the Med-Arbiter's Order and dismissed the appeal. She ruled that the bank falls under Article 212(c) of the Labor Code as one acting in the interest of an employer. She also held that every worker in an establishment, whether or not operated for profit, has the constitutional right to organize, and that membership in a cooperative does not bar joining a union unless the person is legally disqualified. She found no evidence that the signatories were disqualified or managerial employees.
March 2, 1987
The bank moved for reconsideration. It cited the August 14, 1981 Opinion of then Solicitor General and Minister of Justice Estelito P. Mendoza that employees of an electric cooperative who are members and co-owners cannot form or join labor organizations for collective bargaining.
March 26, 1987
Director Calleja denied the motion for reconsideration, and the certification election was set for April 23, 1987.
April 9, 1987
The bank filed a petition for certiorari under Rule 65 directly with the Supreme Court, alleging grave abuse of discretion or lack or excess of jurisdiction.
April 15, 1987
The Supreme Court issued a temporary restraining order against the certification election. The election nevertheless went ahead as scheduled because the order was allegedly not seasonably transmitted to Davao City.
January 6, 1988
The Solicitor General, for the public respondents, argued that the petition was moot because the election had been held and that there was no jurisdictional error. The case was deemed submitted for decision on this date.
II. Issues
Whether the petition has been rendered moot and academic by the holding of the certification election despite the temporary restraining order.
Whether employees of a cooperative who are also its members and co-owners may form, join or assist labor organizations for purposes of collective bargaining.
Whether two of the signatories to the petition for certification election are managerial employees disqualified from union activities.
III. Ruling
Whether the petition has been rendered moot and academic by the holding of the certification election despite the temporary restraining order.
The case is not moot merely because the certification election was held. The petition alleges jurisdictional errors that, if true, would make the challenged acts void from the start.
How the Court reasoned
- The Solicitor General argued the petition was moot because the election had already taken place.
- The Court disagreed because the petition alleges that the Med-Arbiter and the BLR Director acted without or in excess of jurisdiction, or with grave abuse of discretion.
- If those allegations are true, their acts are void ab initio, meaning void from the very beginning.
- An act that is void from the start cannot be validated by the fact that it was carried out, so the Court still had to resolve the merits.
“Contrary to the view espoused by the Solicitor General, this case cannot be considered moot and academic simply because the certification election sought to be enjoined went on as scheduled.”
Rule applied
Rule 65, Rules of Court (certiorari for lack or excess of jurisdiction or grave abuse of discretion)
Whether employees of a cooperative who are also its members and co-owners may form, join or assist labor organizations for purposes of collective bargaining.
Cooperative employees who are members and co-owners cannot invoke the right to collective bargaining, because an owner cannot bargain with himself or his co-owners. Employees who are not members or co-owners remain entitled to self-organization and collective bargaining.
How the Court reasoned
- The Labor Code protects the right of employees to self-organize and bargain collectively, but this right presupposes an employer-employee relationship with opposing interests.
- Under the cooperative laws, members of a cooperative are its owners. Their relationship to it is that of co-owners, not purely employees.
- An employee who is also a member and co-owner would be on both sides of the bargaining table. An owner cannot bargain with himself or his co-owners.
- The Court agreed with the 1981 opinion of the Solicitor General and Minister of Justice that member-employees of a cooperative cannot form or join unions for collective bargaining.
- Employees who are not members or co-owners of the cooperative are in a different position. They are entitled to self-organization, collective bargaining and negotiation.
- The BLR Director's resolution was therefore modified so that only rank-and-file employees who are not members or co-owners may exercise these rights.
“An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners.”
Rule applied
Article 243 and Article 245 of the Labor Code; Section 2, P.D. No. 175; Opinion of the Solicitor General and Minister of Justice dated August 14, 1981
Whether two of the signatories to the petition for certification election are managerial employees disqualified from union activities.
The Court upheld the BLR Director's finding that no persuasive evidence showed that the two signatories were managerial employees. They were therefore not disqualified on that ground.
How the Court reasoned
- The bank claimed that two signatories to the petition were managerial employees, who by law cannot take part in union activities.
- The BLR Director found that the records contained no evidence that any signatory fell within the legally disqualified class.
- The Court gave weight to this factual finding of the administrative agency, which has expertise in labor matters.
- The bank offered no persuasive evidence to overturn that finding, so the claim of managerial status failed.
“The Court upholds the findings of said public respondent that no persuasive evidence has been presented to show that two of the signatories in the petition for certification election are managerial employees who under the law are disqualified from pursuing union activities.”
Rule applied
Article 212 and Article 245 of the Labor Code (managerial employees ineligible to join labor organizations)
Doctrines
A petition for certiorari alleging lack or excess of jurisdiction is not rendered moot and academic merely because the act sought to be enjoined, such as a certification election, was carried out. If jurisdictional errors are shown, the acts are void ab initio.
An employee of a cooperative who is a member and co-owner cannot invoke the right to collective bargaining, since an owner cannot bargain with himself or his co-owners.
Employees of a cooperative who are not members or co-owners are entitled to the rights of self-organization, collective bargaining and negotiation.
Final Disposition
WHEREFORE, the petition is GRANTED. The Resolution of the Bureau of Labor Relations Director is MODIFIED so that only rank-and-file employees of the petitioner who are not members or co-owners of the cooperative may exercise the rights of self-organization, collective bargaining and negotiation.
Notes
The Court gave weight to the 1981 opinion of Solicitor General and Minister of Justice Estelito P. Mendoza on electric cooperatives, applying it to a cooperative bank.