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32 Progressive DevCor-Pizza Hut v. Laguesma

This case involved a petition filed by Pizza Hut to cancel the registration of a labor union representing its employees. Pizza Hut alleged fraud and falsification in the union's registration documents. While lower courts dismissed the petition, the Supreme Court ruled that a union's legitimacy can be challenged on grounds of fraud, and remanded the case to determine if the registration should be cancelled.

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Josef Dielle Gacutan
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42 views3 pages

32 Progressive DevCor-Pizza Hut v. Laguesma

This case involved a petition filed by Pizza Hut to cancel the registration of a labor union representing its employees. Pizza Hut alleged fraud and falsification in the union's registration documents. While lower courts dismissed the petition, the Supreme Court ruled that a union's legitimacy can be challenged on grounds of fraud, and remanded the case to determine if the registration should be cancelled.

Uploaded by

Josef Dielle Gacutan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Progressive Development Corporation-Pizza Hut v.

Laguesma
GR No. 115077; April 18, 1997
J. Kapunan

Digest Author: N Munoz

PETITIONERS: PROGRESSIVE DEVELOPMENT CORPORATION-PIZZA HUT,


RESPONDENTS: HON. BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor, and
NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN,

Case Summary: NLM-Katipunan filed a petition for certification election with DOLE on behalf of
rank-and-file employees of PDC-Pizza Hut. PDC opposed this, alleging fraud, falsification and
misrepresentation on part of NLM regarding its registration as a Union. In brief, PDC alleged that there
are discrepancies and irregularities concerning the election of the Union’s officers and the ratification of
its very own constitution and by-laws. Simultaneously, PDC filed a separate petition for cancellation of
NLM’s registration before the Med-Arbiter, invoking the same grounds in the certification election case.
The lower tribunals dismissed the case, stating that since NLM had already submitted the necessary
registration requirements and documents, it became a ministerial duty for them to recognize NLM’s
legitimacy as a labor organization. Upon elevation to the SC however, the Court ruled that a registered
labor organization’s legitimacy may be assailed on grounds stated under Art. 239, with emphasis on
misrepresentation, fraud and falsification. This may be done by either filing a petition for cancellation of
registration against the impugned organization, or by challenging the organization’s petition for
certification election. The lower tribunals therefore erred in not entertaining the petitioner’s arguments
since the grounds it invoked are clearly those contemplated under Art. 239 LC.

Doctrine: The legitimacy of a labor organization’s registration may be challenged on grounds of fraud,
misrepresentation and/or falsification, as enumerated under Art. 239 LC. This may be effected through
filing a petition for cancellation of registration or challenging the disputed organization’s petition for
certification election.

FACTS:
1. July 1993: Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan filed a petition for certification
election with DOLE (NCR) in behalf of the rank-and-file employees of the Progressive Development
Corporation (Pizza Hut).

2. Pizza Hut filed a verified motion to dismiss, alleging fraud, falsification and misrepresentation in
the respondent’s Union registration, making it void and invalid. Specifically, it averred:
a. Union’s registration was tainted with false, forged, double or multiple signatures of those
who allegedly took part in the ratification of the Union’s constitution and by-laws;
b. The alleged chapter is claimed to have been supported by 318 members when the
signatories were much less;
c. There’s a discrepancy between the date that the charter was supposed to have been
approved (June 27 1993) and the date the charter certification was issued by the federation
(June 26, 1993), which was one day prior to formation of the chapter.

3. It then filed a Supplement to their motion, citing:


a. That the Union alleged that its officers election was held on June 27, but the Union’s
constitution and by-laws were only adopted on July 7
i. Thus the election had no basis whatsoever as there existed no positions yet to
which the officers could be validly elected;
b. That the voting was not conducted via secret ballot in violation of Art. 241 LC;
c. That the constitution and the by-laws submitted were not properly acknowledged and
notarized

4. Aug. 30 1993: Pizza Hut filed a separate petition for cancellation of the Union’s registration on
grounds of fraud and falsification, using the same allegations it stated in response to NLM’s
petition.
5. Med-Arbiter: directed the holding of the certification election among the petitioner’s rank and file
employees.
a. Upheld the legitimacy of the Union
6. SOLE: affirmed MA and denied Pizza-Hut’s appeal.
a. Held that once a labor organization has filed the necessary documents and papers and the
same have been certified under oath, said organization becomes clothed with the character
of a legitimate labor organization.
b. It is the ministerial function of the Bureau of Labor Relations therefore to recognize the
Union in this case as a legitimate labor organization.
7. Hence, this rule 65 appeal by Pizza Hut.

ISSUES+HELD:

1. W/N BLR HAS A MINISTERIAL DUTY TO RECOGNIZE LEGITIMACY OF A LABOR


ORGANIZATION ONCE LATTER SUBMITS NECESSARY REQUIREMENTS — NO.
a. Art. 234 LC lists down the requirements for registration of a labor organization.
i. A234: Requirements of registration. — Any applicant labor organization, association or group of unions
or workers 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. (a) Fifty pesos (P50.00) registration fee;
2. (b) 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. (c) 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. (d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
5. (e) Four (4) 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.

b. Clearly, the purpose of A234 LC requirements is to act as preventive measures


against commission of fraud.
i. After a labor organization has filed the necessary papers and documents for
registration, it becomes mandatory for the Bureau of Labor Relations to check if the
requirements under Article 234 have been sedulously complied with.

c. Thus, if the registration was vitiated by fraud, falsification or serious irregularities, the
legitimacy of a labor organization should be impugned.
i. Remedies: If a certificate of recognition was issued, this may be assailed thru:
1. filing a cancellation of registration case in accordance to A238+239 LC;
2. challenging the said organization’s petition for a certificate election
ii. Note: these remedies are not alternative and may be availed of simultaneously.

d. In fact, the BLR is given by the LC 30 days within which to review all applications for
registration.
i. Art. 235 LC: Action on application. — The Bureau shall act on all applications for
registration within thirty (30) days from filing.
1. 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.

2. W/N THE UNION’S REGISTRATION MAY BE CANCELLED DUE TO FRAUD/FALSIFICATION —


YES.
a. Art. 239 lists down grounds by which one may invoke to cancel a labor organization’s
registration. Pertinent grounds:
i. A239(A) — 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, the list of members
who took part in the ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, the list of members who took part in the ratification;
ii. A239(C) — Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, the list of voters, or failure to submit these documents together with
the list of the newly elected-appointed officers and their postal addresses within thirty (30) days from
election.
b. Med-Arbiter therefore erred in not considering the grounds stated by the petitioner for
the cancellation of respondent’s registration since misrepresentation and fraud clearly
falls under A239(a) and (c).
i. Fraud, falsification and misrepresentation in obtaining recognition as a legitimate
labor organization are contrary to the Med-Arbiter's conclusion not merely collateral
issues.
ii. The invalidity of respondent Union's registration would negate its legal personality to
participate in certification election.

- RULING: Petition GRANTED. Case REMANDED to Med-Arbiter to resolve the petition for
cancellation of respondent-Union’s registration.

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