Knitjoy Manufacturing

Knitjoy Manufacturing, Inc vs Ferrer-Calleja GR No. 81883

Facts: KNITJOY has a CBA agreement with the Federation of Filipino Workers which covered only the regular rank-and-file employees paid on a daily or piece-rate basis which expired on June 15, 1987. FFW was split into 2 factions, the Johnny Tan and the Aranzamendez. The latter eventually became the Confederation of Filipino Workers. The Trade Union of the Philippines and Allied Services filed a petition for the holding of certification election among KNITJOY’s regular rank-andrank -andfile employees paid on a daily or piece-rate basis excluding the regular rankand-file employees paid on a monthly basis. CFW emerged as the winner and thereafter, CBA negotiations between CFW and KNITJOY commenced. Knitjoy Monthly Employees Union filed a petition for certification election among the regular rank-and-file monthly paid employees during the pendency of the said negotiation. The petition was dismissed by the medarbiter. On motion for reconsideration (appeal), Director Pura Ferrer-Calleja of BLR reversed the decision of the med-arbiter granting the petition for certification election filed by KMEU. KNITJOY and CFW separately moved to reconsider the decision alleging that a CBA, signed between them on Nov. 27, 1987, included in its coverage the monthly-paid rank-and-file employees and their removal would lead to fragmentation. The MR was denied for lack of merit. KNITJOY and CFW filed instant petitions contending among others that respondent director violated the one company-one union policy of the labor code and it disregarded the CBA provisions which considered the CFW as the sole and exclusive bargaining agent of all rank and file employees. Issue: Whether or not Knitjoy’s monthly-paid monthly -paid regular rank-and-file employees can constitute a bargaining unit separate from the existing unit composed of employees paid on a daily or piece-rate basis. Whether or not the inclusion in the CBA between Knitjoy and CFW of the monthly paid employees bars the holding of certification election among the said employees.

Held: 1. Yes. Art. 245 of the Labor Code allows supervisory employees who are not performing managerial functions to join, assist or form their separate union but bars them from membership in a labor organization of the rank and file employees. This provision allows more than one union in a company. The one company-one union policy must yield to the right of employees to form unions or associations for purposes not contrary to law, to selforganization and to enter into collective bargaining negotiations, among others, which the constitution guarantees. The record disclose that in the certification election solicited by TUPAS and during the elections which followed thereafter, the monthly paid employees were expressly excluded. Clearly therefore, KNITJOY and CFW recognize that insofar as the monthly paid employees are concerned, the latter’s constituting a separate bargaining unit with the appropriate union as sole bargaining representative, can neither be prevented nor avoided without infringing on these employees’ rights to form  union and to enter into collective bargaining negotiations. 2. No. The new CBA was executed before the resolution of KMEU’s petition for certification election among the monthly paid employees became final. Considering that TUPAS solicited certification election was strictly confined to the employees who are paid on a daily or piece-rate basis, the result of the election must also be necessarily confine the certified union’s representation of the group it represents. While the issue of the monthly paid employees was still pending, KNITJOY and CFW clearly acted with palpable bad faith and malice in including within the scope of the new CBA the monthly paid employees.