Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja
NEW DOCTRINEFacts
1. The Antecedents: The underlying dispute concerns whether employees of a cooperative, who are also members and co-owners, can organize for the purposes of collective bargaining. The petitioner, Cooperative Rural Bank of Davao City, Inc., is a cooperative banking corporation with approximately sixteen rank-and-file employees who are also members and co-owners. The Federation of Free Workers sought to represent these employees for collective bargaining. 2. Procedural History: The Federation of Free Workers filed a petition for a certification election among the rank-and-file employees of the Cooperative Rural Bank of Davao City, Inc. The Med-Arbiter granted this petition. The Cooperative Rural Bank appealed this order, arguing that cooperatives are not covered by certification election rules as they are not profit-making institutions and that some employees were managerial. The Bureau of Labor Relations Director affirmed the Med-Arbiter's order and dismissed the appeal. A motion for reconsideration was denied, and the certification election was scheduled. The Cooperative Rural Bank then filed a petition for certiorari with the Supreme Court. 3. The Petition: The petitioner filed a Petition for certiorari under Rule 65 of the Rules of Court, arguing that the public respondents acted without or in excess of jurisdiction by allowing the certification election. The core of the petitioner's argument is that employees of cooperatives who are also members and co-owners are disqualified from forming or joining labor organizations for collective bargaining purposes, citing a prior opinion from the Solicitor General. The petitioner also maintained that two of the signatories were managerial employees disqualified from union activities.
Issue(s)
Whether the employees of a cooperative can organize themselves for purposes of collective bargaining. Whether the certification election conducted was rendered moot and academic by its completion despite a temporary restraining order. Whether the public respondents acted without or in excess of jurisdiction or with grave abuse of discretion.
Ruling
The petition is GRANTED. The resolution of the Bureau of Labor Relations Director Pura Ferrer-Calleja dated February 11, 1987, is MODIFIED to the effect that only the rank and file employees of the petitioner who are not its members or co-owners are entitled to self-organization, collective bargaining, and negotiations, while the other employees who are members or co-owners thereof cannot enjoy such right. The finding that no persuasive evidence was presented to show that two signatories were managerial employees is upheld.
Ratio Decidendi
On the issue of whether employees of a cooperative can organize for collective bargaining: The Court held that while Article 243 of the Labor Code generally grants the right to self-organization to all employees, and Article 245 disqualifies only managerial employees, the nature of a cooperative as defined by P.D. No. 175 presents a unique situation. A cooperative is an organization of small producers and consumers who voluntarily join together to form business enterprises they themselves own, control, and patronize, with principles of open membership, democratic control, limited interest to capital, and patronage refund. Consequently, an employee of such a cooperative who is also a member and co-owner cannot invoke the right to collective bargaining because an owner cannot bargain with himself or his co-owners. This aligns with the opinion of Solicitor General Estelito P. Mendoza dated August 14, 1981, regarding electric cooperatives. However, the Court clarified that this inapplicability does not extend to employees of cooperatives who are not members or co-owners; such employees are unequivocally entitled to exercise their constitutional and legal rights to organization and collective bargaining. On the issue of mootness: The Court ruled that the case could not be considered moot and academic simply because the certification election proceeded as scheduled, even with a temporary restraining order. The petition was for certiorari, alleging jurisdictional errors. If such errors were found, the actions of the Med-Arbiter and the BLR Director would be null and void ab initio, rendering the certification election legally unjustified. The arguments presented directly challenged the validity of the election itself, necessitating a resolution on the merits. On the issue of jurisdiction and grave abuse of discretion: The Court found that the public respondents did commit jurisdictional errors by misinterpreting the scope of the right to self-organization in the context of cooperative ownership. While the general provisions of the Labor Code appear to grant the right to all employees not classified as managerial, the specific nature of cooperatives, where employees can be owners and members, creates an exception. The BLR's failure to recognize this distinction and its reliance on general principles without considering the unique structure of cooperatives constituted an act in excess of jurisdiction or with grave abuse of discretion. The Court modified the ruling to correctly delineate the rights of employees who are co-owners versus those who are not.
Main Doctrine
Employees of a cooperative who are also its members and co-owners cannot invoke the right to collective bargaining as they cannot bargain with themselves or their co-owners. However, employees of cooperatives who are not members or co-owners are entitled to exercise the rights of all workers to organization and collective bargaining.