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PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT v. BIENVENIDO LAGUESMA

FACTS:

On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan, on behalf of the rank and file employees of the Progressive Development Corporation (Pizza Hut), filed a petition for certification election with the Department of Labor (National Capital Region) docketed as NCR Case No. NCR-OD-M-9307-020. Petitioner filed a motion to dismiss the petition on August 20, 1993, alleging fraud and misrepresentation in respondent Union's registration. Petitioner claimed that the registration was tainted with false, forged, and multiple signatures, and that there were inconsistencies in the dates of the alleged organizational meeting and the issuance of the charter certification. Petitioner filed a supplement to its motion to dismiss on August 29, 1993, citing additional instances of misrepresentation and fraud. Petitioner also filed a petition seeking cancellation of the Union's registration on August 30, 1993. Petitioner requested the suspension of the certification election proceedings until the issue of the Union's legal personality is resolved in the cancellation proceedings. However, the Med-Arbiter ordered the holding of a certification election among petitioner's rank and file employees. This order was affirmed by the Labor Undersecretary on appeal. Petitioner filed a petition for certiorari, arguing that the Med-Arbiter and Labor Undersecretary committed grave abuse of discretion in allowing the certification election to proceed despite the pending cancellation case.

ISSUES:

  1. Whether a labor organization should be denied recognition if its application for registration is found to have falsification and serious irregularities.

  2. Whether the requirements for registration under Article 234 of the Labor Code are valid exercises of police power.

  3. Whether the Bureau of Labor Relations committed grave abuse of discretion in affirming the Med-Arbiter's order despite allegations of fraud and falsification in the labor organization's application for registration.

  4. Whether the respondent Union is a legitimate labor organization.

  5. Whether the Med-Arbiter should have considered the petitioner's request to suspend the certification election proceedings until the legality of the Union's registration is resolved.

RULING:

  1. Yes, a labor organization should be denied recognition if its application for registration is found to have falsification and serious irregularities.

  2. Yes, the requirements for registration under Article 234 of the Labor Code are valid exercises of police power.

  3. The ruling on whether the Bureau of Labor Relations committed grave abuse of discretion is not yet provided in the given text.

  4. The grounds for cancellation of the respondent Union's registration under Article 239 of the Labor Code constitute a grave challenge to its right to ask for certification election. The Med-Arbiter should have looked into the merits of the petition for cancellation before issuing an order calling for certification election. The registration of a labor organization based on false and fraudulent statements and documents confers no legitimacy upon it. Under such circumstances, the labor organization acquires no rights, particularly the right to ask for certification election in a bargaining unit. The invalidity of the Union's registration would negate its legal personality to participate in a certification election.

  5. It would have been more prudent for the Med-Arbiter and public respondent to have granted the petitioner's request for the suspension of proceedings in the certification election case until the issue of the legality of the Union's registration is resolved. Failure to do so constituted a grave abuse of discretion.

PRINCIPLES:

  • The requirements for registration under Article 234 of the Labor Code are intended as preventive measures against fraud and to protect unsuspecting employees.

  • The certification and attestation requirements for labor organizations are preventive measures against fraud and also provide protection to unsuspecting employees.

  • Labor organizations must strictly comply with the statutory requirements in order to exercise their right to be certified as the employees' bargaining agent.

  • The Bureau of Labor Relations has a period of 30 days to review all applications for registration.

  • The acquisition of rights by a labor organization, including the right to file a petition for certification election, depends on the organization attaining the status of a legitimate labor organization.

  • Fraud, falsification, and misrepresentation in obtaining recognition as a legitimate labor organization are not collateral issues but directly affect the legal personality of the organization.

  • A strict enforcement of the Labor Code's requirements for the acquisition of the status of a legitimate labor organization is necessary.

  • The suspension of proceedings in a certification election case may be warranted when the legality of the Union's registration is seriously challenged.