Labor Law: Book V; Title IV Labor Organizations Chapter III Rights of Legitimate Labor Organizations (Arts. 251-252)

 Book V

Labor Relations

Title IV

Labor Organizations

Chapter III

Rights of Legitimate Labor Organizations

Arts. 251-252

Q: Is every legitimate labor organization a bargaining representative of employees?

Q: Is an employer obliged to furnish confidential data or information to the union?

Art. 251. Rights of legitimate labor organizations. 

A legitimate labor organization shall have the right:

(a) To act as the representative of its members for the purpose of collective bargaining;

(b) To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining;

(c) To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

(d) To own property, real or personal, for the use and benefit of the labor organization and its members;

(e) To sue and be sued in its registered name; and

(f) To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law.

Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision.

Own Notes

• Rights of a legitimate labor organization
1. act as the representative for collective bargaining
2. be certified as the exclusive representative of all employees for collective bargaining
3. be furnished by the employer, upon written request, the annual audited financial statements
• within thirty (30) calendar days 
• from the date of receipt of the request
• after the union has been duly recognized or certified as the sole and exclusive bargaining representative
• within sixty (60) calendar days 
• before the expiration of the existing collective bargaining agreement
• during the collective bargaining negotiation;
4. own property, real or personal, for the use and benefit of the labor organization and its members;
5. sue and be sued in its registered name; and
6. undertake all other activities designed to benefit the organization and its members, including:
• cooperative
• housing
• welfare
• other projects not contrary to law
• Income and properties of legitimate labor organizations are exempt from taxes, duties and other assessments.
• Applicable to income and properties that are actually, directly and exclusively used for their lawful purposes.
• May only be withdrawn by a special law expressly repealing this provision.

• The opening of this Article is loosely worded. 
• Not every legitimate labor organization (LLO) possesses the rights mentioned in this article.
• The right to represent employees in collective bargaining is true only for the union of the majority members of the bargaining unit.
• The right does not attach to a minority union although it is an LLO.
• Similarly, the right to be certified as exclusive bargaining representative is true only for the union that won in a certification or consent election.
• The losing union has no representational status and cannot be certified as bargaining representative, although the union is an LLO.

Authority of the Union

• A registered labor union has the requisite personality to sue on behalf of its members for their individual money claims. (La Carlota, May 19, 1975)
• But the authority of the union to waive or quitclaim all or part of the judgment award in favor of the individual workers cannot be lightly presumed.
• It must be expressly granted, and the employer, as judgment debtor, must deal in all good faith with the union as the agent of the individual workers.
• The court, for its part, should verify the extent of the authority of the union leadership to execute any compromise or settlement. (Heirs of Cruz, 30 SCRA 917 [1969])
• A judgment based on a compromise agreement authorized by the members does not bind the individual members or complainants who are not parties to it. (Kaisahan ng mga Manggagawa, 33 SCRA 220)
• Thus, a compromise agreement, which waives the complainants' claims for reinstatement and backwages, does not bind the complainants who neither consented to nor ratified such agreement, This is true even if the majority (257 out of 262) of the complainants conformed with the agreement and even if the agreement was signed by the union officers and its counsel. Even the labor arbiter's decision based on such compromise agreement does not constitute res judicata (settled case) upon the objecting minority. (Golden Donuts, January 19, 2000)

Union Registration, Unclear

• In one case, it is not clear from the record whether the union is a registered organization.  But considering that it filed petition for certification election and such petition was granted on appeal by the labor undersecretary the Court ruled that the union had the personality to sue in its own name to challenge the ULP acts committed by the employer. The union could institute the action in its representative capacity. (Me-Shurn Corp. January 11, 2005)

Union Merger or Consolidation

• Together with multi-employer bargaining, union merger and consolidation are new concepts (in the Philippines) introduced by D.O. No. 40-03.
• "Merger" of labor organizations is the process where a labor organization absorbs another, resulting in the cessation of the absorbed labor organization's existence and the continued existence of the absorbing labor organization; 
• that is, if Union A absorbs Union B, Union A remains and Union B disappears.
• Another name of merger is "absorption." 
• One effect of merger is to transfer to the absorbing organization all the rights, interest and obligations of the absorbed organization. 
• "Consolidation" of unions refers to the creation or formation of a new union arising from the unification of two or more unions; 
• that is, if Union A and Union B consolidate themselves, both of them disappear and Union C is born.
• Another name for consolidation is "amalgamation."
• In consolidation, the newly created labor organization acquires all the rights, interest and obligations of the consolidating labor organizations. (Sec 10, Rule IV, D.O. No 40-03)
• The notice of merger or consolidation of local unions and of workers' associations shall be filed with the DOLE Regional Office where the organization is registered or with the BLR in case of federation or national union.
• The notice of merger/consolidation shall be accompanied by the:
• minutes of merger/consolidation convention
• amended constitution and by-laws 
• minutes of its ratification

Art. 252.  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

(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.

Own Notes:

• Reportorial Requirements:
• to be submitted to the Bureau

1. Constitution and by-laws, or amendments thereto
• minutes of ratification
• list of members who took part in the ratification
• within thirty (30) days from adoption or ratification
2. List of officers
• minutes of the election 
• list of voters 
• within thirty (30) days from election
3. Annual financial report 
• within thirty (30) days after the close of every fiscal year
4. List of members
• at least once a year
• whenever required by the Bureau

• Failure to comply:
• not a ground for cancellation of union registration 
• subject the erring officers or members to:
• suspension
• expulsion from membership
• any appropriate penalty.

Q: What are the rights of a Legitimate Labor Organization? Are these rights available to all labor organizations? 

• The following are the rights of a Legitimate Labor Organization: 
1. To act as the representative for collective bargaining; 
2. To be certified as the exclusive representative of all employees for collective bargaining;
3. To be furnished with the annual audited financial statements by the employer; 
4. To own property for the use and benefit of the organization and its members; 
5. To sue and be sued in its registered name; and 
6. To undertake activities for the benefit of the organization and its members.
• No, these rights are not available to all labor organizations. These rights are available only to the legitimate labor organization of the majority members of the bargaining union.