This Supreme Court decision clarifies when employees of a cooperative can form or join a labor union for collective bargaining. The Court ruled that employees who are not members or co-owners of the cooperative are entitled to exercise their rights to organization and collective bargaining. This distinction ensures that the right to self-organization is protected for those employees who do not have an ownership stake in the cooperative, preventing conflicts of interest between owners and employees.

Union or Ownership? When Cooperative Employees Can Organize

The case of Negros Oriental Electric Cooperative 1 (NORECO1) vs. The Secretary of the Department of Labor and Employment (DOLE) and PACIWU-NACUSIP arose from a petition for certification election filed by a local chapter of PACIWU-TUCP seeking to represent the rank-and-file employees of NORECO1. The Med-Arbiter initially dismissed the petition on the grounds that the union had not yet acquired the status of a legitimate labor organization. However, the Secretary of Labor reversed this decision, leading NORECO1 to file a petition for certiorari, arguing that the appeal was filed late, the union included supervisory employees, and its members were also members of the cooperative.

NORECO1’s first contention was the timeliness of the appeal. The petitioner claimed that the Motion for Reconsideration from the Med-Arbiter’s Decision was filed beyond the allowed ten-day period. The Court of Appeals dismissed this claim, noting the absence of specific dates to substantiate the allegation of late filing. The Supreme Court agreed, emphasizing that the burden of proof lies with the party making the allegation, and without concrete evidence, the claim of untimeliness must fail.

Building on this, NORECO1 invoked Article 245 of the Labor Code, arguing that the union’s composition was invalid because it included supervisory employees. The petitioner cited Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Corporation Labor Union, which affirms the ineligibility of managerial or supervisory employees to join rank-and-file unions due to conflicting interests. NORECO1 claimed that it had raised this issue at the earliest opportunity and submitted a list of supervisory employees. However, the Secretary of Labor and the Court of Appeals found that this issue was raised belatedly and lacked sufficient supporting evidence.

The Supreme Court sided with the Court of Appeals, underscoring that the issue of supervisory employees was raised late in the proceedings. The Court emphasized that factual matters are not proper subjects for certiorari, which is limited to questions of jurisdiction and grave abuse of discretion. Determining the nature of an employee’s functions is best left to the Department of Labor and Employment’s regional offices, reinforcing the doctrine of primary jurisdiction.

The final issue brought forth by NORECO1 was that all or most members of the petitioning union were also members of the cooperative, disqualifying them from collective bargaining. The petitioner cited Cooperative Bank of Davao City, Inc. vs. Ferrer-Calleja, which states that an employee of a cooperative who is also a member and co-owner cannot invoke the right to collective bargaining. However, the Supreme Court, referencing the same case, also noted that employees who are not members or co-owners are entitled to exercise their rights to organization and collective bargaining.

“However, in so far as it involves cooperatives with employees who are not members or co-owners thereof, certainly such employees are entitled to exercise the rights of all workers to organization, collective bargaining, negotiations and others as are enshrined in the constitution and existing laws of the country.”

The Secretary of Labor and the Court of Appeals both found that NORECO1 failed to provide any evidence that the union members were also members or co-owners of the cooperative. The Supreme Court echoed this finding, emphasizing that the factual determination was not within the purview of a certiorari proceeding. This highlights the importance of presenting sufficient evidence at the appropriate administrative level.

This case reinforces the principle that not all employees of a cooperative are barred from joining or forming a labor union. Only those who are also members or co-owners are excluded from collective bargaining due to the inherent conflict of interest. For those employees without an ownership stake, the right to self-organization remains intact.

FAQs

What was the key issue in this case?	The central issue was whether employees of an electric cooperative could form or join a union for collective bargaining purposes, especially if some or all of them were also members of the cooperative.
What did the Med-Arbiter initially decide?	The Med-Arbiter initially dismissed the union’s petition for certification election because the union had not yet acquired the status of a legitimate labor organization.
How did the Secretary of Labor respond to the Med-Arbiter’s decision?	The Secretary of Labor reversed the Med-Arbiter’s decision and ordered the conduct of a certification election among the rank-and-file employees of NORECO1.
What was NORECO1’s main argument against the union?	NORECO1 argued that the union’s membership included supervisory employees and that most or all of the union members were also members of the cooperative, thus disqualifying them from collective bargaining.
How did the Court address the claim of supervisory employees in the union?	The Court found that NORECO1 raised this issue belatedly and without sufficient evidence, and that determining the nature of employee functions falls under the jurisdiction of the DOLE’s regional offices.
What did the Court say about cooperative members joining unions?	The Court clarified that only cooperative employees who are also members or co-owners are barred from collective bargaining; those who are not members or co-owners retain their right to unionize.
What evidence did NORECO1 fail to provide?	NORECO1 failed to provide evidence that any of the union members were also members or co-owners of the cooperative, which was crucial to their argument against the union’s legitimacy.
What is the doctrine of primary jurisdiction, as it applies to this case?	The doctrine of primary jurisdiction means that courts should refrain from resolving controversies over which an administrative body, like the DOLE, has initial jurisdiction and special competence.
What was the final ruling of the Supreme Court?	The Supreme Court denied NORECO1’s petition, upholding the decision of the Court of Appeals and reinforcing the employees’ right to a certification election.

In conclusion, the Supreme Court’s decision underscores the importance of distinguishing between cooperative employees who are also owners and those who are not when determining eligibility for union membership and collective bargaining. This ruling ensures that the rights of non-owner employees are protected while acknowledging the unique nature of cooperatives and the potential conflicts of interest that may arise.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NORECO1 vs. DOLE, G.R. No. 143616, May 09, 2001