RIGHT TO SELF-ORGANIZATION

By: ATTY. EDWIN E. TORRES, MSU (2022)

I. RIGHT TO SELF-ORGANIZATION

Distinction Between Labor Organization and Legitimate Labor Organization

Labor Organization – means any union or association of employees which exists in the whole or
in part for the purpose of collective bargaining or for dealing with employers concerning terms
and conditions or employment. (Sec. 1-h, Rule 1, Book V. ORILC) A legitimate labor organization
is a labor organization registered with the Department of labor. (Sec. 1-h, Rule1, Book V,
ORILC). Only legitimate labor organizations have the right to represent their members for
collective bargaining. (Sec.1, Rule II, Book V, ORILC)>

Legitimate Labor Organization – means any labor organization duly REGISTERED with the
Department of Labor and Employment and includes any branch, local or affiliate thereof. (Sec.
1-j, Rule 1, Book V, ORILC).

Distinction Between Labor Organization and Workers Association:

A labor organization is organized for the purpose of collective bargaining. A workers’

association is organized by “ambulant, intermittent and itinerant workers, self-employed
people, rural workers and those without any definite employers . . . for their mutual aid and
protection.” (Article 243).

Article 243 of the Labor Code states: “x x x. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection.” However, Article 243 should be read
together with Rule 2 of Department Order (D. 0.) No. 40-03, Series of 2003, which provides:
“All other workers, including ambulant, intermittent and other workers, the self-employed,
rural workers and those without any definite employers may form labor organizations for their
mutual aid and protection and other legitimate purposes except collective bargaining.”
Clearly, there is nothing in the foregoing implementing rules which provides that workers, with
definite employers, cannot form or join a workers' association for mutual aid and protection.
Section 2 thereof even broadens the coverage of workers who can form or join a workers'
association. Thus, the right to form a workers' association is not exclusive to ambulant,
intermittent and itinerant workers. The option to form or join a union or a workers' association
lies with the workers themselves, and whether they have definite employers or not. 1

The right to form or join a labor organization necessarily includes the right to refuse or refrain
from exercising the said right. It is self-evident that just as no one should be denied the
exercise of a right granted by law, so also, no one should be compelled to exercise such a
conferred right. Also inherent in the right to self-organization is the right to choose whether to
form a union for purposes of collective bargaining or a workers' association for purposes of
providing mutual aid and protection.2

II. MEMBERSHIP IN LABOR ORGANIZATIONS

Who Can Be Members in A Labor Organization?

1. All persons employed in commercial, industrial and agricultural

enterprises (Art.243, LC);

2. Employees of government-owned or controlled corporations established

under the Corporation Code (Art. 244, LC);

3. Employees of religious, charitable, medical or educational institutions

whether operating for profit or not (Art. 243, LC);

4. Alien employees with valid working permits issued by the DOLE if they
are nationals of a country which grants the same or similar rights to
Filipino workers, as certified, as certified by the Department of Foreign
Affairs (Sec.2 Rule II, Book V, ORILC).
1
Samahan Ng Manggagawa Sa Hanjin Shipyard vs. Bureau of Labor Relations, et al. (G.R. No. 211145, 14 October
2015).
2
Ibid.

1
DISCUSSION:

Section 2(5), B (The Civil Service Commission), Art. IX of the 1987 Philippine Constitution
states: “The right to self-organization shall not be denied to government employees.” However,
government employees cannot organize unions for the purpose of collective bargaining because
their terms and conditions of employment are determined by the Constitution, Civil Service
Laws and regulations. For instance, Section 5, B, Article IX of the Constitution provides that
Congress shall provide for the standardization of compensation of government officials and
employees … Hence, there cannot be negotiation of compensation above the standards fixed by
law for government employees because the same runs counter to the objective of
standardization. So what can public service unions do? Commissioner Ople pointed out:

“. . . they do acquire a forum where, among other things, professional and self-
development is promoted and encouraged. They also act as watchdogs of their own
bosses so that when graft and corruption is committed, generally, it is the unions
who are no longer afraid by virtue of the armor of self-organization that becomes the
public’s own allies for detecting graft and corruption and for exposing it… 3

However, the Civil Service embraces government-owned or controlled corporation with original
Charters but not those established under the Corporation Code. 244 of the Labor Code
expressly provided that the employees of the latter can join labor organizations for the purpose
of collective bargaining. Besides, the authorization under Section 5, B Article IX of the
Constitution for the standardization by Congress of compensation of government officials and
employees only include government-owned or controlled corporations with original charters.

While the constitution recognizes the right of government employees to organize, they are
prohibited from staging strikes, demonstrations, mass leaves, walk-outs and other forms of
mass action which will result in temporary stoppage or disruption of public services. The right
of government employees to organize it limited only to the formation of unions or associations,
without including the right to strike. The right of the sovereign to prohibit strikes or work
stoppages by public employees was clearly recognized at the common law. To grant employees
of the public sector the right to strike, there must be a clear and direct legislative authority
therefor.4

A. Classification of employees in the labor code:

1. Managerial – is one who is vested with powers or prerogatives to lay down

and execute management policies and/or hire, transfer, suspend, layoff,
recall, discharge, assign or discipline employees (Sec. 1-t, Rule II, Book V.
ORILC).

2. Supervisory - is one who, in the interest of the employer, effectively

recommends managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent
judgment (Sec. 1-t, Rule II, Book V. ORILC).

3. Rank-and-File – one who is not a managerial or supervisory employee.

Rule: Managerial and confidential employees cannot join unions. Supervisory employees can
form their own union but cannot join the union of the rank-and-file. But they can join the
national federation of the rank-and-file union.

"ART. 245. Ineligibility of Managerial Employees to Join any Labor Organization;

Right of Supervisory Employees. - Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be eligible
for membership in the collective bargaining unit of the rank-and-file employees
but may join, assist or form separate collective bargaining units and/or
legitimate labor organizations of their own. The rank and file union and the
supervisors' union operating within the same establishment may join the same
federation or national union." (Amendment introduced by RA 9481)

DISCUSSION:

3
Bernas. The Constitution of the Republic of the Philippines. p. 1027.
4
Banglasan, et al. vs. Court of Appeals, et.al. G.R. No. 124678, 31 July 1997.

2
1. When the Labor Code (PD 442) was enacted in 1974, the category of supervisors and
their right to join unions were not recognized. RA 6715 passed in 1989 introduced the
amendment which re-classified employees into (a) managerial, (b) supervisory, and (c) rank-
and-file. This recognizes that the interests of supervisors and the rank-and-file are separate
and distinct. The functions of supervisors, being recommendatory in nature, are more
identified with the interests of the employer. The performance of these functions may, thus,
run counter to the interests of the rank-and-file.5

2. "ART. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. -

The inclusion as union members of employees outside the bargaining unit shall not be a
ground for the cancellation of the registration of the union. Said employees are automatically
deemed removed from the list of membership of said union." (Amendment introduced by RA
9481).

3. Confidential employees are those who assist or act in (a) confidential capacity, in regard
(b) to persons who formulate, determine, and effectuate management policies (especially in the
field of labor relations). The two criteria are cumulative, and both must be met if an employee
is to be considered a confidential employee – i.e. the confidential relationship must exist
between the employee and his superior officer; and that the officer must handle the prescribed
responsibilities relating to labor relations. Article 245 of the Labor Code does not directly
prohibit confidential employees from engaging in union activities. However, under the doctrine
of necessary implication, the disqualification of managerial employees equally applies to
confidential employees. The confidential-employee rule justifies exclusion of confidential
employees because in the normal course of their duties they become aware of management
policies relating to labor relations. It must be stressed, however, that when the employee does
not have access to confidential labor relations information, there is no legal prohibition against
confidential employees from forming, assisting, or joining unions. 6 Athough the work of legal
secretaries are routinary and clerical, the are confidential employees because they are tasked
with the typing of legal documents, memoranda and correspondence, the keeping of records
and files, the giving of and receiving notices and such other duties as required by the legal
personnel of the corporation.7

4. Employees who encounter or handle trade secrets and financial information are not
automatically classified as confidential employees. They may encounter and handle financial
as well as physical production data and other information which are considered vital and
important from the business operations’ standpoint. Nevertheless, that such information is not
the kind of information that is relevant to collective bargaining negotiations and settlement of
grievances as would classify them as confidential employees. Exposure to internal business
operations of the company is not per se a ground for the exclusion in the bargaining unit.8

5. Types of managerial employee: The term manager generally refers to anyone who is
responsible for subordinates and other organizational resources. As a class, managers
constitute three levels of a pyramid:

Top
M an
age
m en
M iddle
t
M anagem ent
First-line M anagem ent (also called
Supervisors)

1. FIRST-LINE MANAGERS – the lowest level in an organization at which

individuals are responsible for the work of others is called first-line or first-
level management. First-line managers direct operating employees only; they
do not supervise other managers. Examples of first-line managers are the
foreman or production supervisor in a manufacturing plant, the technical
supervisor in a research department, and the clerical supervisor in a large
office. First-level managers are often called supervisors.

5
Atlas Lithographic Services, Inc. vs. Laguesma, et.al. G.R. No. 96566, 6 January 1992.
6
Subguanon rural Bank, Inc. vs. Laguesma, et.al. G.R. No. 116194, 2 February 2000.
7
Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confessor, G.R. No. 110854, 3 February 1995.
8
Coca-Cola Bottlers Philippines, Inc. vs. Ilocos Professional and Technical Employees Union (G.R. No. 193793, 8
September 2015).

3
 2. MIDDLE MANAGERS – the term middle management can refer to more than
one level in an organization. Middle managers direct the activities of other
managers and sometimes also those of operating employees.

3. TOP MANAGERS – composed of a comparatively small group of executives.

Top management is responsible for the overall management of the
organization. It establishes operating policies and guides the organization’s
interactions with its environment. Typical titles of top managers are “chief
executive officer,” “president,” and “senior vice-president.” Actual titles vary
from one organization to another and are not always a reliable guide to
membership in the highest management classification.

A distinction, therefore, exists between those who have the authority to devise, implement and
control strategic and operational policies (top and middle managers) and those whose task is
simply to ensure that such policies are carried out by the rank and file employees of an
organization (first-level managers). What distinguishes them from the rank-and-file employees
is that they act in the interest of the employer in supervising such rank-and-file employees.

Unlike supervisors who basically merely direct operating employees in line with set tasks
assigned to them, the route managers of Pepsi Cola are responsible for the success of the
company’s main line of business through management of their respective sales teams. Such
management necessarily involves the planning, direction, operation and evaluation of their
individual teams and areas which the work of supervisors does not entail. The route managers
cannot thus possible be classified as mere supervisors because their work does not only
involve, but goes far beyond, the simple direction or supervision of operating employees to
accomplish objectives set by those above them. They are not mere functionaries with simple
oversight functions but business administrators in their own right. The supervisory employees
defined in Article 212(m) of the Labor Code have only the power to recommend managerial
actions. The route managers more than recommend effective management action. They
perform operational, human resource, financial and marketing functions for the company, all
of which involve the laying down of operating policies for themselves and their teams.
Therefore, they are ineligible from joining labor unions.9

A. When can an employee join a labor organization?

Any employee whether employed for a definite period or not shall, beginning on the first day of
his service, be eligible for membership in any labor organization. (Sec. 2, Rule II, Book V,
ORILC). Therefore, probationary employees are eligible for union membership.

III. ACQUISITION OF LEGAL PERSONALITY

A. Kinds of labor organizations:

1. Independent Union – a labor organization operating at the enterprise

level whose legal personality is derived through an independent action for
registration with the DOLE. It may be affiliated with a federation,
national or industry union, in which case it may also be referred to as an
affiliate.

2. National Union/Federation – a labor organization with at least ten (10)

locals/chapters or affiliates each of which must be a duly certified or
recognized collective bargaining agent.

3. Local Union/Chapter – any labor organization operating at the enterprise

level whose legal personalty is derived through the issuance of a charter
by a duly registered federation or national union.

"ART. 234-A. 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. 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.” (Amendment introduced by RA 9481).

4. Industry Union – any labor organization operating within an identified

industry, organized for collective bargaining or for dealing with employers
concerning terms and conditions of employment within an industry, or

9
United Pepsi-Cola Supervisory Union (UPSU) vs. Laguesma, et al., G.R. No. 122226, March 25, 1998.

4
 for participating in the formulation of social and employment policies,
standards and programs in such industry.

5. Trade Union Center – any group of registered national unions or

federations organized for the mutual aid and protection of its members,
for assisting such members in collective bargaining, or for participating
in the formulation of social and employment policies, standards and
programs.

Rule: The DOLE issued Department Order No. 40-03 (effective 15 March 2003) which
amended Book V of the ORILC. It provides that applications for registration of labor
organizations shall be filed either with the Regional Office or with the BLR.

DISCUSSION:

1. Two ways for a labor organization to acquire legitimacy: (a) when it is issued a
Certificate of Registration by the BLR; and (b) when an unregistered union becomes a local or
chapter of a national federation. In the later case, the unregistered union need not be given a
Certificate of Registration by the BLR.

2. 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 agents. 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.10

3. A union that affiliated with PAFLU won a certification election which was protested by
another union. While the election protest was pending, the union disaffiliated from PAFLU and
then affiliated with NCW. Then it negotiated a CBA with the employer while affiliated with
NCW. Was the disaffiliation during the pendency of an election protest in order? Answer: Yes.
Local unions have the right to disaffiliate from their mother federation on the ground that as
separate and voluntary associations, they do not owe their creation and existence to the
national federation to which they are affiliated but, instead, to the will of their members. The
sole essence of affiliation is to increase, by collective action, the common bargaining power of
local unions for the effective enhancement and protection of their interests. Yet the local
unions remain the basic units of association, free to serve their own interests subject to the
restraints imposed by the constitution and by-laws of the national federation, and free also to
renounce the affiliation upon the terms laid down in the agreement which brought such
affiliation into existence.11

4. Art. 245 of LC as amended by RA 9481: “The rank-and-file union and the supervisor’s
union operating within the same establishment may join the same federation or national
union.”

5. Section 5, Rule V of the Implementing Rules of Book V: “The labor organization or

workers’ association shall be deemed registered and vested with legal personality on the date of
issuance of its certificate of registration. Such legal personality cannot thereafter be subject to
collateral attack but may be questioned only in an independent petition for cancellation in
accordance with these Rules.” Hence, the legitimacy of a union cannot be collaterally attacked
through a challenge in a petition for certification election.

6. While a "national union" or "federation" is a labor organization with at least ten locals or
chapters or affiliates, each of which must be a duly certified or recognized collective bargaining
agent; a trade union center, on the other hand, is composed of a group of registered national
unions or federations. Department Order No. 9 mentions two labor organizations either of
which is allowed to directly create a local or chapter through chartering – a duly registered
federation or a national union. Department Order No. 9 defines a "chartered local" as a labor
organization in the private sector operating at the enterprise level that acquired legal
personality through a charter certificate, issued by a duly registered federation or national
union and reported to the Regional Office in accordance with Rule III, Section 2-E of these

10
Coastal Subic Bay Terminal, Inc. vs. DOLE, G.R. No. 157117, November 20, 2006.
11
Philippine Skylanders, Inc., et.al. vs. NLRC, et.al. G.R. No. 127374, 31 January 1992.

5
Rules. A trade union center is not included as having the right to issue a charter certificate.
Hence, it cannot create a local chapter by the issuance of a charter certificate. 12

IV. DETERMINATION OF REPRESENTATION STATUS

A. Appropriateness of the Bargaining Unit:

A bargaining unit is a group of employees of a given employer, comprised of all or less

than all the entire body of employees, consistent with equity to the employer, that indicate
to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.

DISCUSSION:

1. The fundamental factors in determining the appropriate collective bargaining unit are:

1) The will of the employees (Globe doctrine);

2) Affinity and unity of the employees’ interest, such as substantial similarity of
work and duties, or similarity of compensation and working conditions
(substantial Mutual Interests Rule);
3) Prior collective bargaining history; and
4) Similarity of employment status.

The test of grouping is mutuality or commonality of interests. The employees sought to be

represented by the collective bargaining agent must have substantial mutual interest in terms
of employment and working conditions as evidenced by the type of work they perform. 13

2. Employees in two corporations cannot be treated as a single bargaining unit even if the
businesses of the two corporations are related.14

B. Modes Of Determining Exclusive Bargaining Agent:

1. Voluntary recognition - in an unorganized establishment, the employer may

voluntarily recognize the representation status of a union.

2. Compulsory recognition - the recognition of an exclusive bargaining agent via a

certification election. A certification election may be initiated by:
a) A legitimate labor organization, or by
b) An employer when requested to bargain collectively and the status of
the union is in doubt.

C. Distinction Between Unorganized and an Organized Establishment:

a) An organized establishment – a establishment where there exists a
recognized or certified exclusive bargaining agent.
b) An unorganized establishment – an establishment where a recognized
or certified exclusive bargaining agent does not exists.

DISCUSSION:

1. Importance of distinction: In an “unorganized establishment,” the employer may

voluntarily recognize a union as the sole and exclusive bargaining agent of its employees.
Voluntary recognition of a union cannot be made in an “organized establishment.” The
employer cannot voluntarily recognize one union when there is already another union that is
recognized or certified as the exclusive bargaining agent of its employees.

2. When a PCE is filed in an “unorganized establishment,” the Med-Arbiter shall

automatically conduct a certification election. But when the establishment is “organized,” the
Med-Arbiter shall conduct a certification election only when the PCE is verified and is
supported by the written consent of at least 25% of all the employees in the bargaining unit.
However, 25% consent signatures may be submitted after the filing of the PCE. The
administrative rule that they should be attached to the PCE should only be given directory
12
San Miguel Corporation Employees Union-Philippine Transport and General Workers Organization (SMCEU-
PTGWO) vs. San Miguel Packaging Products Employees Union-Pambansang Diwa ng Manggagawang Pilipino
(SMPPEU-PDMP), G.R. No. 171153, September 12, 2007.
13
San Miguel corporation vs. Laguesma. G.R. No. 100485, 21 September 1994. In this case the Supreme court
found appropriate the bargaining unit of all Magnolia sales personnel in North Luzon as against the sale offices as
bargaining units.
14
Sta. Lucia East Commercial Corporation vs. Secretary of Labor, G.R. No. 162355, August 14, 2009.

6
effect so as not to frustrate the determination of the legitimate representative of the workers. 15
Per Department Order No. 40, an appeal of a Med-Arbiter’s order to hold a certification election
will not stay the holding thereof where the employer company is an unorganized establishment,
and where no union has yet been duly recognized or certified as a bargaining representative. 16

3. In an “unorganized establishment,” a PCE may be filed any time. But in an

“unorganized establishment,” a PCE may only be filed within the “freedom period,” i.e., 60 days
before the expiration of an existing CBA.

4. The fact that a company’s rank-and-file employees are already represented by a certified
bargaining agent does not make the company an “organized establishment” with respect to the
supervisory employees. The company may be deemed an “unorganized establishment” since no
certified bargaining agent represented the supervisory employees.17

____________________________________________________________________________________

BASIC DOCUMENT:

REPUBLIC ACT No. 9481 (2007)

AN ACT STRENGTHENING THE WORKERS' CONSTITUTIONAL RIGHT TO SELF-

ORGANIZATION, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442, AS
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES

SECTION 1. Article 234 of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines, is hereby further amended to read as follows:

"ART. 234. 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:

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

(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;

(c) 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;

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

(e) 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."

SEC. 2. A new provision is hereby inserted into the Labor Code as Article 234-A to read as
follows:

"ART. 234-A. 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. 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.

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:

15
Port Workers Union of the Philippines (PWUP) vs. Laguesma, G.R. No. 94929, March 18, 1992.
16
Notre Dame of Greater Manila vs. Laguesma, G.R. No.149833, June 29, 2004.
17
Philippine Telegraph and Telephone Corporation vs. Laguesma, G.R. No. 101730, June 17,1993.

7
 (a) The names of the chapter's officers, their addresses, and the principal office
of the chapter; and

(b) 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.

The additional supporting requirements shall be certified under oath by the secretary or
treasurer of the chapter and attested by its president."

SEC. 3. Article 238 of the Labor Code is hereby amended to read as follows:

"ART. 238. 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."

SEC. 4. A new provision is hereby inserted into the Labor Code as Article 238-A t o read as
follows:

"ART. 238-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."

SEC. 5. Article 239 of the Labor Code is amended to read as follows:

"ART. 239. Grounds for Cancellation of Union Registration. - The following may

constitute grounds for cancellation of union registration:

(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, and the list of members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election

of officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members."

SEC. 6. A new provision, Article 239-A is inserted into the Labor Code to read as follows:

"ART. 239-A. 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."

SEC. 7. A new provision, Article 242-A is hereby inserted into the Labor Code to read as
follows:

"ART. 242-A. Reportorial Requirements. - The following are documents required to be

submitted to the Bureau by the legitimate labor organization concerned:

(a) 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-lam or amendments thereto;

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

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

8
 (d) Its list of members at least once a year or whenever required by the Bureau.

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."

SEC. 8. Article 245 of the Labor Code is hereby amended to read as follows:

"ART. 245. Ineligibility of Managerial Employees to Join any Labor Organization; Right of

Supervisory Employees. - Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in
the collective bargaining unit of the rank-and-file employees but may join, assist or
form separate collective bargaining units and/or legitimate labor organizations of their
own. The rank and file union and the supervisors' union operating within the same
establishment may join the same federation or national union."

SEC. 9. A new provision, Article 245-A is inserted into the Labor Code to read as follows:

"ART. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. -

The inclusion as union members of employees outside the bargaining unit shall not be
a ground for the cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said union."

SEC. 10. Article 256 of the Labor Code is hereby amended to read as follows:

"ART. 256. Representation Issue in Organized Establishments. - In organized

establishments, when a verified petition questioning the majority status of the
incumbent bargaining agent is filed by any legitimate labor organization including a
national union or federation which has already issued a charter certificate to its local
chapter participating in the certification election or a local chapter which has been
issued a charter certificate by the national union or federation before the Department of
Labor and Employment within the sixty (60)-day period before the expiration of the
collective bargaining agreement, the Med-Arbiter shall automatically order an election
by secret ballot when the verified petition is supported by the written consent of at least
twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the
will of the employees in the appropriate bargaining unit. To have a valid election, at
least a majority of all eligible voters in the unit must have cast their votes. The labor
union receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. When an election which provides for
three or more choices results in no choice receiving a majority of the valid votes cast, a
run-off election shall be conducted between the labor unions receiving the two highest
number of votes: Provided, That the total number of votes for all contending unions is at
least fifty percent (50%) of the number of votes cast. In cases where the petition was
filed by a national union or federation, it shall not be required to disclose the names of
the local chapter's officers and members.

At the expiration of the freedom period, the employer shall continue to recognize the
majority status of the incumbent bargaining agent where no petition for certification
election is filed."

SEC. 11. Article 257 of the Labor Code is hereby amended to read as follows:

"ART. 257. Petitions in Unorganized Establishments. - In any establishment where there

is no certified bargaining agent, a certification election shall automatically be conducted
by the Med-Arbiter upon the filing of a petition by any legitimate labor organization,
including a national union or federation which has already issued a charter certificate
to its 1ocal/chapter participating in the certification election or a local/chapter which
has been issued a charter certificate by the national union or federation. In cases where
the petition was filed by a national union or federation, it shall not be required to
disclose the names of the local chapter's officers and members."