GR 77231; (May, 1989) (Digest)
G.R. No. 77231 May 31, 1989
SAN JOSE CITY ELECTRIC SERVICE COOPERATIVE, INC. (SAJELCO), petitioner, vs. MINISTRY OF LABOR AND EMPLOYMENT and MAGKAISA-ADLO, respondents.
FACTS
The case originated from a petition for direct certification election filed by the labor union MAGKAISA-ADLO, representing the rank-and-file employees of the electric cooperative SAJELCO. The cooperative opposed the petition, arguing that a significant number of the employees were also member-consumers (co-owners) of the cooperative itself. SAJELCO contended that these individuals held a dual personality, being both part of the employer (the General Assembly of members) and the employees, making collective bargaining legally untenable as an owner cannot bargain with himself. The Med-Arbiter and the Bureau of Labor Relations Director dismissed this opposition and ordered a certification election to proceed.
A certification election was subsequently held on April 13, 1987, wherein a majority voted for the union. SAJELCO elevated the case to the Supreme Court via certiorari, seeking to nullify the orders directing the election. The Solicitor General supported SAJELCO’s position, arguing that employee-members are not genuine “employees” entitled to collective bargaining rights under the Labor Code. The union, however, argued the petition was moot due to the already-concluded election.
ISSUE
Whether the rank-and-file employees of SAJELCO who are simultaneously member-consumers (co-owners) of the cooperative are entitled to the right to self-organization and collective bargaining.
RULING
The Supreme Court granted the petition and modified the assailed orders. The legal logic hinges on the distinct legal statuses of “employee” and “owner.” The Court ruled that employees who are also member-consumers (co-owners) of the cooperative are not qualified to form, join, or assist labor organizations for the purpose of collective bargaining. The fundamental principle is that an owner cannot bargain with himself; the employer-employee relationship necessary for collective bargaining does not exist when the workers are part of the ownership body that controls the cooperative.
However, the Court clarified that this prohibition applies only to employees who are themselves member-consumers. It noted that SAJELCO’s by-laws also allowed the employment of members of the immediate family of member-consumers. Employees falling under this latter category, who are not themselves co-owners, retain their status as regular employees under the Labor Code. Consequently, they are fully entitled to the constitutional and statutory rights to self-organization and collective bargaining. The Court set aside the previously held certification election because it improperly included employee-members who were disqualified from bargaining. It ordered the Labor Department to determine the qualified employees (non-member-consumers) and, if statutory requirements are met, to conduct a new certification election exclusively among them.