Legend International Resorts Ltd. v. Kilusang Manggagawa

G.R. No. 169754 (February 23, 2011)

Facts:

On June 6, 2001, Kilusang Manggagawa ng Legenda (KML) filed a Petition for Certification Election with the Med-Arbitration Unit of the Department of Labor and Employment (DOLE) in San Fernando, Pampanga. KML claimed to be a legitimate labor organization representing the rank-and-file employees of Legend International Resorts Limited (LEGEND) and asserted that it had been issued a Certificate of Registration by the DOLE on May 18, 2001.

LEGEND opposed the petition, arguing that KML was not a legitimate labor organization because its membership included supervisory employees, which violated Article 245 of the Labor Code. LEGEND also accused KML of committing fraud and misrepresentation regarding the attendance of employees at its organizational meeting.

In response, KML contended that even if some members were supervisory employees, the certification election could still proceed as the required number of rank-and-file employees was met. KML further argued that its legitimacy could only be challenged through a separate action for cancellation of its registration, not in the certification election proceedings.

The Med-Arbiter ruled in favor of LEGEND on September 20, 2001, dismissing KML's petition for lack of merit, citing the presence of supervisory employees in KML's membership as a violation of the Labor Code.

KML appealed to the Office of the Secretary of DOLE, which reversed the Med-Arbiter's decision on May 22, 2002, stating that KML's legitimacy could not be collaterally attacked in the certification election process. The Office of the Secretary held that the presence of supervisory employees did not automatically invalidate KML's existence as a labor organization.

LEGEND filed a motion for reconsideration, reiterating its arguments and asserting that it had filed a separate petition for cancellation of KML's registration, which had been granted by the DOLE Regional Office. The Office of the Secretary denied the motion, stating that a final order of cancellation was required before dismissing a petition for certification election based on lack of legal personality.

LEGEND subsequently filed a Petition for Certiorari with the Court of Appeals, which upheld the Office of the Secretary's decision, finding no grave abuse of discretion. LEGEND's motion for reconsideration was also denied.

Legal Issues:

1. Whether the Office of the Secretary of DOLE committed grave abuse of discretion in reversing the Med-Arbiter's decision and allowing KML's petition for certification election.
2. Whether KML's legitimacy as a labor organization could be collaterally attacked in the certification election proceedings.
3. The effect of the pending petition for cancellation of KML's registration on its legal personality and ability to participate in the certification election.

Arguments:

Petitioner (LEGEND):

• KML is not a legitimate labor organization due to the inclusion of supervisory employees in its membership, violating Article 245 of the Labor Code.
• KML committed fraud and misrepresentation regarding the attendance of employees at its organizational meeting.
• The Office of the Secretary of DOLE erred in allowing KML's petition for certification election despite the pending petition for cancellation of its registration.

Respondent (KML):

• Even if some members are supervisory employees, the required number of rank-and-file employees for the certification election is still met.
• KML's legitimacy cannot be collaterally attacked in the certification election proceedings; it can only be challenged through a separate action for cancellation of registration.
• The decision of the Bureau of Labor Relations upholding KML's legitimacy has become final and executory, thus allowing KML to file for certification election.

Court's Decision and Legal Reasoning:

The Supreme Court partly granted LEGEND's petition, affirming the Court of Appeals' decision that upheld the Office of the Secretary of DOLE's ruling. The Court found that the Office of the Secretary did not commit grave abuse of discretion in allowing the certification election to proceed.

The Court emphasized that KML's legal personality could not be collaterally attacked in the certification election proceedings, as established by Section 5, Rule V of the Implementing Rules of the Labor Code. The Court reiterated that a labor organization is deemed registered and vested with legal personality upon the issuance of its certificate of registration, which cannot be subject to collateral attack.

Furthermore, the Court ruled that the pendency of a petition for cancellation of a union's registration does not preclude the holding of a certification election. The rationale is that at the time KML filed its petition for certification, it still possessed the legal personality to do so, absent an order for cancellation.

Significant Legal Principles Established:

1. The legitimacy of a labor organization cannot be collaterally attacked in a certification election; it must be challenged through a separate action for cancellation of registration.
2. A certification election may proceed even if there is a pending petition for cancellation of the union's registration, as the union retains its legal personality until a final order of cancellation is issued.
3. The presence of supervisory employees in a labor organization does not automatically invalidate its existence; the legality of such membership must be determined through appropriate legal channels.