Professional Documents
Culture Documents
96566
January 6, 1992
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the
modification of the Order dated 14 December 1990 and the Resolution dated
21 November 1990 issued by the public respondents.
The antecedent facts of the case as gathered from the records are as follows:
The petitioners opposed the private respondent's petition claiming that under
Article 245 of the Labor bode the private respondent cannot represent the
supervisory employees for collective bargaining purposeless because the
private respondent also represents the rank-and-file employees' union.
1.
KAMPIL (KATIPUNAN);
2.
No union.
The petitioners, as expected, appealed for the reversal of the above order.
The public respondent, however, issued a resolution affirming the MedArbiter's order.
The petitioners, in turn, filed a motion for reconsideration but the same was
denied. Hence, this petition for certiorari.
The sole issue to be resolved in this case is whether or not, under Article 245
of the Labor Code, a local union of supervisory employees may be allowed to
affiliate with a national federation of labor organizations of rank-and-file
employees and which national federation actively represents its affiliates in
collective bargaining negotiations with the same employer of the supervisors
and in the implementation of resulting collective bargaining agreements.
The petitioner argues that KAMPIL-KATIPUNAN already represents its rankand-file employees and, therefore, to allow the supervisors of those
employees to affiliate with the private respondent is tantamount to allowing
the circumvention of the principle of the separation of unions under Article
245 of the Labor Code.
It further argues that the intent of the law is to prevent a single labor
organization from representing different classes of employees with conflicting
interests.
The public respondent, on the other hand, contends that despite affiliation
with a national federation, the local union does not lose its personality which
is separate, and distinct from the national federation. It cites as its legal basis
the case of Adamson & Adamson, Inc. v. CIR (127 SCRA 268 [1984]).
It maintains that Rep. Act No. 6715 contemplates the principle laid down by
this Court in the Adamson case interpreting Section 3 of Rep. Act No. 875 (the
Industrial Peace Act) on the right of a supervisor's union to affiliate. The
private respondent asserts that the legislature must have noted the Adamson
ruling then prevailing when it conceived the reinstatement in the present
Labor Code of a similar provision on the right of supervisors to organize.
Under the Industrial Peace Act of 1953, employees were classified into three
groups, namely: (1) managerial employees; (2) supervisors; and (3) rank-and
file employees. Supervisors, who were considered employees in relation to
their employer could join a union but not a union of rank-and-file employees.
With the enactment in 1974 of the Labor Code (Pres Decree No. 442),
employees were classified into managerial and rank-and-file employees.
Neither the category of supervisors nor their right to organize under the old
statute were recognized. So that, in Bulletin Publishing Corporation v.
Sanchez (144 SCRA 628 [1986]), the Court interpreted the superseding labor
law to have removed from supervisors the right to unionize among
themselves. The Court ruled:
In the light of the factual background of this case, We are constrained to hold
that the supervisory employees of petitioner firm may not, under the law,
form a supervisors union, separate and distinct from the existing bargaining
unit (BEU), composed of the rank-and-file employees of the Bulletin
Publishing Corporation. It is evident that most of the private respondents are
considered managerial employees. Also, it is distinctly stated in Section 11,
Rule II, of the Omnibus Rules Implementing the Labor Code, that supervisory
unions are presently no longer recognized nor allowed to exist and operate as
such. (pp. 633, 634)
In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres.
Decree No. 442, the supervisory unions existing since the effectivity of the
New Code in January 1, 1975 ceased to operate as such and the members
who did not qualify as managerial employees under this definition in Article
212 (k) therein became eligible to form, to join or assist a rank-and-file union.
(m)
. . . Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. . . .
The rationale for the amendment is the government's recognition of the right
of supervisors to organize with the qualification that they shall not join or
assist in the organization of rank-and-file employees. The reason behind the
Industrial Peace Act provision on the same subject matter has been adopted
in the present statute. The interests of supervisors on the one hand, and the
rank-and-file employees on the other, are separate and distinct. The functions
of supervisors, being recommendatory in nature, are more identified with the
interests of the employer. The performance of those functions may, thus, run
counter to the interests of the rank-and-file.
This intent of the law is made clear in the deliberations of the legislators on
then Senate Bill 530 now enacted as Rep. Act No. 6715.
In terms of classification, however, while they are more closely identified with
the rank-and-file they are still not allowed to join the union of rank-and-file
employees. To quote the Senate Journal:
The peculiar role of supervisors is such that while they are not managers,
when they recommend action implementing management policy or ask for
the discipline or dismissal of subordinates, they identify with the interests of
the employer and may act contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of interest may arise
in the areas of discipline, collective bargaining and strikes.
More important, the factual issues in the Adamson case are different from the
present case. First, the rank-and-file employees in the Adamson case are not
directly under the supervisors who comprise the supervisors' union. In the
case at bar, the rank-and file employees are directly under the supervisors
organized by one and the same federation.
This was not the consideration in the Adamson case because as mentioned
earlier, the rank-and-file employees in the Adamson case were not under the
supervision of the supervisors involved.
Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715
provides:
Art. 245.
Ineligibility of managerial employees to join any labor
organization: right of supervisory employees. Managerial employees are
not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the
rank-and-file employees but may join, assist or form separate labor
organizations of their own.
The Court construes Article 245 to mean that, as in Section 3 of the Industrial
Peace Act, supervisors shall not be given an occasion to bargain together
with the rank-and-file against the interests of the employer regarding terms
and conditions of work
Second, the national union in the Adamson case did not actively represent its
local chapters. In the present case, the local union is actively represented by
the national federation. In fact, it was the national federation, the KAMPILKATIPUNAN, which initially filed a petition for certification in behalf of the
respondent union.
Thus, if the intent of the law is to avoid a situation where supervisors would
merge with the rank and-file or where the supervisors' labor organization
would represent conflicting interests, then a local supervisors' union should
not be allowed to affiliate with the national federation of union of rank-andfile employees where that federation actively participates in union activity in
the company.
The petitioner further contends that the term labor organization includes a
federation considering that Art. 212 (g) mentions "any union or association of
employees."
The respondent, however, argues that the phrase refers to a local union only
in which case, the prohibition in Art. 245 is inapplicable to the case at bar.
The prohibition against a supervisors' union joining a local union of rank-andfile is replete with jurisprudence. The Court emphasizes that the limitation is
not confined to a case of supervisors wanting to join a rank-and-file local
union. The prohibition extends to a supervisors' local union applying for
membership in a national federation the members of which include local
unions of rank-and-file employees. The intent of the law is clear especially
where, as in the case at bar, the supervisors will be co-mingling with those
employees whom they directly supervise in their own bargaining unit.
Finally, the respondent contends that the law prohibits the employer from
interfering with the employees' right to self-organization.
There is no question about this intendment of the law. There is, however, in
the present case, no violation of such a guarantee to the employee.
Supervisors are not prohibited from forming their own union. What the law
prohibits is their membership in a labor organization of rank-and-file
employees (Art. 245, Labor Code) or their joining a national federation of
rank-and-file employees that includes the very local union which they are not
allowed to directly join.
In a motion dated November 15, 1991 it appears that the petitioner has
knuckled under to the respondents' pressures and agreed to let the national
federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a
collective bargaining agreement. Against the advise of its own counsel and on
the basis of alleged "industrial peace", the petitioner expressed a loss of
interest in pursuing this action. The petitioner is, of course, free to grant
whatever concessions it wishes to give to its employees unilaterally or
through negotiations but we cannot allow the resulting validation of an
erroneous ruling and policy of the Department of Labor and Employment
SO ORDERED.
SECOND DIVISION
[G.R. No. 102084. August 12, 1998]
On April 17, 1991, the Federation of Free Workers (FFW), a national federation
of labor unions, issued a certificate to private respondent FFW-
2. Herein petition seeks for the holding of a certification election among the
supervisory employees of herein respondent. It does not intend to include
managerial employees.
....
[Petitioner] also argues that assuming that some of the employees concerned
are not managerial but mere supervisory employees, the Federation of Free
....
In its position paper, [petitioner] stated that most, if not all, of the employees
listed in . . . the petition are considered managerial employees, thereby
admitting that it has supervisory employees who are undoubtedly qualified to
join or form a labor organization of their own. The record likewise shows that
[petitioner] promised to present the job descriptions of the concerned
employees during the hearing but failed to do so. Thus, this office has no
basis in determining at this point in time who among them are considered
managerial or supervisory employees. At any rate, there is now no question
that [petitioner] has in its employ supervisory employees who are qualified to
join or form a labor union. Consequently, this office is left with no alternative
but to order the holding of certification election pursuant to Article 257 of the
Labor Code, as amended, which mandates the holding of certification election
if a petition is filed by a legitimate labor organization involving an
unorganized establishment, as in the case of herein respondent.
Petitioner moved for a reconsideration but its motion was denied. In his order
dated September 19, 1991, respondent Laguesma stated:
We reviewed the records once more, and find that the issues and arguments
adduced by movant have been squarely passed upon in the Resolution
sought to be reconsidered. Accordingly, we find no legal justification to alter,
much less set aside, the aforesaid resolution. Perforce, the motion for
reconsideration must fail.
WHEREFORE, the instant motion for reconsideration is hereby denied for lack
of merit and the resolution of this office dated 30 August 1991 STANDS.
Commissioner Lerum sought to amend the draft of what was later to become
Art. III, 8 of the present Constitution:
....
....
We are afraid that without any corresponding provision covering the private
sector, the security guards, the supervisory employees ... will still be
excluded and that is the purpose of this amendment.
....
Conformably with the constitutional mandate, Art. 245 of the Labor Code now
provides for the right of supervisory employees to self-organization, subject
to the limitation that they cannot join an organization of rank-and-file
employees:
The affiliation of two local unions in a company with the same national
federation is not by itself a negation of their independence since in relation to
the employer, the local unions are considered as the principals, while the
federation is deemed to be merely their agent. This conclusion is in accord
with the policy that any limitation on the exercise by employees of the right
to self-organization guaranteed in the Constitution must be construed strictly.
Workers should be allowed the practice of this freedom to the extent
recognized in the fundamental law. As held in Liberty Cotton Mills Workers
Union v. Liberty Cotton Mills, Inc.:[15]
The locals are separate and distinct units primarily designed to secure and
maintain an equality of bargaining power between the employer and their
employee members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of locals into the
national unionwas in furtherance of the same end. These associations are
consensual entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local unions into a
common enterprise to increase by collective action the common bargaining
power in respect of the terms and conditions of labor. Yet the locals remained
the basic units of association, free to serve their own and the common
interest of all, and free also to renounce the affiliation for mutual welfare
upon the terms laid down in the agreement which brought it to existence.[16]
Mention has already been made of the fact that the petition for certification
election in this case was filed by the FFW on behalf of the local union. This
circumstance, while showing active involvement by the FFW in union
activities at the company, is by itself insufficient to justify a finding of
violation of Art. 245 since there is no proof that the supervisors who compose
the local union have direct authority over the rank-and-file employees
composing the other local union which is also affiliated with the FFW. This
fact differentiates the case from Atlas Lithographic Services, Inc. v.
Laguesma,[20] in which, in addition to the fact that the petition for
certification election had been filed by the national federation, it was shown
that the rank-and-file employees were directly under the supervisors
organized by the same federation.
It follows that respondent labor officials did not gravely abuse their discretion.
SO ORDERED.
BELLOSILLO, J.:
The payroll three months prior to the filing of this petition shall be utilized in
determining the list of eligible voters . . . . 1
Respondent Bank appealed the order to the Secretary of Labor on the main
ground that several of the employees sought to be included in the
certification election, particularly the Department Managers, Branch
Managers/OICs, Cashiers and Controllers were managerial and/or confidential
employees and thus ineligible to join, assist or form a union. It presented
annexes detailing the job description and duties of the positions in question
and affidavits of certain employees. It also invoked provisions of the General
Banking Act and the Central Bank Act to show the duties and responsibilities
of the bank and its branches.
NATU filed a motion for reconsideration but the same was denied on 20 April
1990. 3 Hence this recourse assailing public respondent for rendering the
decision of 23 March 1990 and the order of 20 April 1990 both with grave
abuse of discretion.
The crucial issue presented for our resolution is whether the Department
Managers, Assistant Managers, Branch Managers/OICs, Cashiers and
Controllers of respondent Bank are managerial and/or confidential employees
hence ineligible to join or assist the union of petitioner.
Neither is there evidence showing that subject employees are vested with
powers or prerogatives to hire, transfer, suspend, lay off, recall, discharge,
assign or discipline employees. The bare allegations in the affidavits of
respondent Bank's Executive Assistant to the President 4 and the Senior
Manager of the Human Resource Management Department 5 that those
powers and prerogatives are inherent in subject positions are self-serving.
Their claim cannot be made to prevail upon the actual duties and
responsibilities of subject employees.
The other evidence of respondent Bank which purports to show that subject
employees exercise managerial functions even belies such claim. Insofar as
Department Managers and Assistant Managers are concerned, there is
absolutely no reason mentioned in the decision why they are managerial
employees. Not even respondent Bank in its appeal questioned the inclusion
of Assistant Managers among the qualified petitioning employees. Public
respondent has deviated from the real issue in this case, which is, the
determination of whether subject employees are managerial employees
within the contemplation of the Labor Code, as amended by RA 6715;
instead, he merely concentrated on the nature, conduct and management of
banks conformably with the General Banking Act and the Central Bank Act.
The Solicitor General argues that NATU loses sight of the fact that by virtue of
the appeal of respondent Bank, the whole case is thrown open for
consideration by public respondent. Even errors not assigned in the appeal,
such as the exclusion by the Med-Arbiter of Assistant Managers from the
managerial employees category, is within his discretion to consider as it is
closely related to the errors properly assigned. The fact that Department
Managers are managerial employees is borne out by the evidence of
petitioner itself. Furthermore, while it assails public respondent's finding that
subject employees are managerial employees, petitioner never questioned
the fact that said officers also occupy confidential positions and thus remain
prohibited from forming or joining any labor organization.
Respondent Bank has no legal personality to move for the dismissal of the
petition for certification election on the ground that its supervisory employees
are in reality managerial employees. An employer has no standing to
question the process since this is the sole concern of the workers. The only
exception is where the employer itself has to file the petition pursuant to Art.
258 of the Labor Code because of a request to bargain collectively. 6
Republic Act No. 6715, otherwise known as the Herrera-Veloso Law, restored
the right of supervisors to form their own unions while maintaining the
proscription on the right to self-organization of managerial employees.
Accordingly, the Labor Code, as amended, distinguishes managerial,
supervisory and rank-and-file employees thus:
Art. 212 (m) Managerial employee is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions, if the exercise of such
managerial authority is not routinary in nature but requires the use of
independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees (emphasis supplied).
For the purpose of this Act, a bank and its branches shall be treated as a unit
(emphasis supplied).
Conformably with the above, bank policies are laid down and/or executed
through the collective action of the Branch Manager, Cashier and Controller
at the branch level. The Branch Manager exercises over-all control and
supervision over branch operation being on the top of the branch's pyramid
structure. However, both the controller and the cashier who are called in
banking parlance as "Financial Managers" due to their fiscal functions are
given such a share and sphere of responsibility in the operations of the bank.
The cashier controls and supervises the cash division while the controller that
of the Accounting Division. Likewise, their assigned task is of great
significance, without which a bank or branch for that matter cannot operate
or function.
Noteworthy is the "on call client" set up in banks. Under this scheme, the
branch manager is tasked with the responsibility of business development
and marketing of the bank's services which place him on client call. During
such usual physical absences from the branch, the cashier assumes the reins
of branch control and administration. On those occasions, the "dual control
system" is clearly manifest in the transactions and operations of the branch
bank as it will then require the necessary joint action of the controller and the
cashier.
Moreover, the bare statement in the affidavit of the Executive Assistant to the
President of respondent Bank that the Branch Managers, Cashiers and
(a)
Memorandum issued by respondent Bank's Assistant Vice President to
all Regional Managers and Branch Managers giving them temporary
discretionary authority to grant additional interest over the prescribed board
rates for both short-term and long-term CTDs subject, however, to specific
limitations and guidelines set forth in the same memorandum; 15
(b)
Memorandum issued by respondent Bank's Executive Vice President to
all Regional Managers and Branch Officers regarding the policy and guidelines
on drawing against uncollected deposits (DAUD); 16
(c)
Memorandum issued by respondent Bank's President to all Field Offices
regarding the guidelines on domestic bills purchased
(DBP); 17 and
(d)
Memorandum issued by the same officer to all Branch Managers
regarding lending authority at the branch level and the terms and conditions
thereof. 18
Neither do the Branch Managers, Cashiers and Controllers have the power to
hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees. The Senior Manager of the Human Resource Management
Department of respondent Bank, in her affidavit, stated that "the power to
hire, fire, suspend, transfer, assign or otherwise impose discipline among
subordinates within their respective jurisdictions is lodged with the heads of
the various departments, the branch managers and officers-in-charge, the
branch cashiers and the branch controllers. Inherent as it is in the
aforementioned positions, the authority to hire, fire, suspend, transfer, assign
(a)
(b)
Memorandum from a Branch OIC for the Assistant Vice President
recommending a certain employee's promotional adjustment to the present
position he occupies.
No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular
situation. What is thought, at the time of enactment, to be an all-embracing
legislation may be inadequate to provide for the unfolding events of the
future. So-called gaps in the law develop as the law is enforced. One of the
rules of statutory construction used to fill in the gap is the doctrine of
necessary implication . . . . Every statute is understood, by implication, to
contain all such provisions as may be necessary to effectuate its object and
purpose, or to make effective rights, powers, privileges or jurisdiction which it
grants, including all such collateral and subsidiary consequences as may be
fairly and logically inferred from its terms. Ex necessitate
legis . . . .
SO ORDERED.
1.
REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE
AGENCIES; RULE; CASE AT BAR. - We reaffirm the doctrine that considering
their expertise in their respective fields, factual findings of administrative
agencies supported by substantial evidence are accorded great respect and
binds this Court. The Secretary of Labor ruled, thus: x x x Any act committed
during the pendency of the dispute that tends to give rise to further
contentious issues or increase the tensions between the parties should be
considered an act of exacerbation. One must look at the act itself, not on
speculative reactions. A misplaced recourse is not needed to prove that a
dispute has been exacerbated. For instance, the Union could not be expected
to file another notice of strike. For this would depart from its theory of the
case that the layoff is subsumed under the instant dispute, for which a notice
of strike had already been filed. On the other hand, to expect violent
reactions, unruly behavior, and any other chaotic or drastic action from the
Union is to expect it to commit acts disruptive of public order or acts that
may be illegal. Under a regime of laws, legal remedies take the place of
violent ones. x xx Protest against the subject layoffs need not be in the form
of violent action or any other drastic measure. In the instant case the Union
registered their dissent by swiftly filing a motion for a cease and desist order.
Contrary to petitioners allegations, the Union strongly condemned the layoffs
and threatened mass action if the Secretary of Labor fails to timely intervene:
x x x 3. This unilateral action of management is a blatant violation of the
injunction of this Office against committing acts which would exacerbate the
dispute. Unless such act is enjoined the Union will be compelled to resort to
its legal right to mass actions and concerted activities to protest and stop the
said management action. This mass layoff is clearly one which would result
in a very serious dispute unless this Office swiftly intervenes. x x x Metrolab
and the Union were still in the process of resolving their CBA deadlock when
petitioner implemented the subject layoffs. As a result, motions and
oppositions were filed diverting the parties attention, delaying resolution of
the bargaining deadlock and postponing the signing of their new CBA,
thereby aggravating the whole conflict.
2.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;
EXERCISE OF MANAGEMENT PREROGATIVES; NOT ABSOLUTE; SUBJECT TO
EXCEPTIONS IMPOSED BY LAW. - This Court recognizes the exercise of
management prerogatives and often declines to interfere with the legitimate
business decisions of the employer. However, this privilege is not absolute
but subject to limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301
[1993]), we issued this reminder: ... the exercise of management prerogatives
was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565
[1989]), it was held that managements prerogatives must be without abuse
of discretion ...All this points to the conclusion that the exercise of managerial
prerogatives is not unlimited. It is circumscribed by limi(ations found in law,
a collective bargaining agreement, or the general principles of fair play and
justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]).
3.
ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench
constitutes one of the exceptions. The Secretary of Labor is expressly given
the power under the Labor Code to assume jurisdiction and resolve labor
disputes involving industries indispensable to national interest. The disputed
injunction is subsumed under this special grant of authority. Art. 263 (g) of
the Labor Code specifically provides that: x x x (g) When, in his opinion, there
4.
ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO
JOIN, FORM AND ASSIST ANY LABOR ORGANIZATION; PROHIBITION EXTENDED
TO CONFIDENTIAL EMPLOYEES. - Although Article 245 of the Labor Code limits
the ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are
required to assist or act in a fiduciary manner to managerial employees and
hence, are likewise privy to sensitive and highly confidential records.
5.
ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND
FILE BARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. - Confidential
employees cannot be classified as rank and file. As previously discussed, the
nature of employment of confidential employees is quite distinct from the
rank and file, thus, warranting a separate category. Excluding confidential
employees from the rank and file bargaining unit, therefore, is not
tantamount to discrimination.
APPEARANCES OF COUNSEL
This is a petition for certiorari under Rule 65 of the Revised Rules of Court
seeking the annulment of the Resolution and Omnibus Resolution of the
Secretary of Labor and Employment dated 14 April 1992 and 25 January
1993, respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCRNS-09-678-91) on grounds that these were issued with grave abuse of
discretion and in excess of jurisdiction.
entire labor dispute at Metro Drug, Inc. - Metro Drug Distribution Division and
Metrolab Industries Inc.
Finally, the parties are directed to submit their position papers and evidence
on the aforequoted deadlocked issues to this office within twenty (20) days
from receipt hereof.
On the same date, the Union filed a motion for a cease and desist order to
enjoin Metrolab from implementing the mass layoff, alleging that such act
violated the prohibition against committing acts that would exacerbate the
dispute as specifically directed in the assumption order.[2]
On the other hand, Metrolab contended that the layoff was temporary and in
the exercise of its management prerogative. It maintained that the company
would suffer a yearly gross revenue loss of approximately sixty-six (66)
million pesos due to the withdrawal of its principals in the Toll and Contract
Manufacturing Department. Metrolab further asserted that with the
Thereafter, on various dates, Metrolab recalled some of the laid off workers
on a temporary basis due to availability of work in the production lines.
SO RESOLVED.[4]
new CBA. The execution, however, was without prejudice to the outcome of
the issues raised in the reconsideration and clarification motions submitted
for decision to the Secretary of Labor.[5]
xxx
xxx
xxx.
SO RESOLVED.[7]
Labor Secretary Confesor also ruled that executive secretaries are excluded
from the closed-shop provision of the CBA, not from the bargaining unit.
Anent the first issue, we are asked to determine whether or not public
respondent Labor Secretary committed grave abuse of discretion and
exceeded her jurisdiction in declaring the subject layoffs instituted by
Metrolab illegal on grounds that these unilateral actions aggravated the
conflict between Metrolab and the Union who were, then, locked in a
stalemate in CBA negotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties from
committing any act that might exacerbate the dispute is overly broad,
sweeping and vague and should not be used to curtail the employers right to
manage his business and ensure its viability.
xxx
xxx
xxx
xxx
xxx
xxx
All this points to the conclusion that the exercise of managerial prerogatives
is not unlimited. It is circumscribed by limitations found in law, a collective
bargaining agreement, or the general principles of fair play and justice
(University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)
xxx
xxx
xxx.
The case at bench constitutes one of the exceptions. The Secretary of Labor
is expressly given the power under the Labor Code to assume jurisdiction and
resolve labor disputes involving industries indispensable to national interest.
The disputed injunction is subsumed under this special grant of authority.
Art. 263 (g) of the Labor Code specifically provides that:
xxx
xxx
xxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as
specified in the assumption or certification order. If one has already taken
place at the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well as
with such orders as he may issue to enforce the same. . . (Italics ours.)
xxx
xxx
xxx.
xxx
xxx
xxx.
MII is right to the extent that as a rule, we may not interfere with the
legitimate exercise of management prerogatives such as layoffs. But it may
nevertheless be appropriate to mention here that one of the substantive evils
which Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a
labor dispute to the further detriment of the national interest. When a labor
dispute has in fact occurred and a general injunction has been issued
restraining the commission of disruptive acts, management prerogatives
must always be exercised consistently with the statutory objective.[11]
xxx
xxx
xxx.
Metrolab insists that the subject layoffs did not exacerbate their dispute with
the Union since no untoward incident occurred after the layoffs were
implemented. There were no work disruptions or stoppages and no mass
actions were threatened or undertaken. Instead, petitioner asserts, the
affected employees calmly accepted their fate as this was a matter which
they had been previously advised would be inevitable.[12]
xxx
xxx
xxx.
Any act committed during the pendency of the dispute that tends to give rise
to further contentious issues or increase the tensions between the parties
should be considered an act of exacerbation. One must look at the act itself,
not on speculative reactions. A misplaced recourse is not needed to prove
that a dispute has been exacerbated. For instance, the Union could not be
expected to file another notice of strike. For this would depart from its theory
of the case that the layoff is subsumed under the instant dispute, for which a
notice of strike had already been filed. On the other hand, to expect violent
reactions, unruly behavior, and any other chaotic or drastic action from the
Union is to expect it to commit acts disruptive of public order or acts that
may be illegal. Under a regime of laws, legal remedies take the place of
violent ones.[14]
xxx
xxx
xxx.
Protest against the subject layoffs need not be in the form of violent action or
any other drastic measure. In the instant case the Union registered their
dissent by swiftly filing a motion for a cease and desist order. Contrary to
petitioners allegations, the Union strongly condemned the layoffs and
threatened mass action if the Secretary of Labor fails to timely intervene:
xxx
xxx
xxx.
xxx
xxx
xxx.
Metrolab and the Union were still in the process of resolving their CBA
deadlock when petitioner implemented the subject layoffs. As a result,
motions and oppositions were filed diverting the parties attention, delaying
resolution of the bargaining deadlock and postponing the signing of their new
CBA, thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94
rank-and-file employees was temporary, despite the recall of some of the laid
off workers.
xxx
xxx
xxx.
Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming
tingin ay matatagalan bago magkaroon ng dagdag na trabaho. Dahil dito,
sinimulan na namin ang isang Redundancy Program sa mga supervisors.
Nabawasan ang mga puwesto para sa kanila, kaya sila ay mawawalan ng
trabaho at bibigyan na ng redundancy pay.[16] (Italics ours.)
xxx
xxx
xxx.
xxx
xxx
xxx.
. . .MII insists that the layoff in question is temporary not permanent. It then
cites International Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the
Supreme Court held that the 30-day notice required under Article 283 of the
Labor Code need not be complied with if the employer has no intention to
permanently severe (sic) the employment relationship.
such an intention, MII could have made it very clear in the notices of layoff.
But as it were, the notices are couched in a language so uncertain that the
only conclusion possible is the permanent termination, not the continuation,
of the employment relationship.
MII also seeks to excuse itself from compliance with the 30-day notice with a
tautology. While insisting that there is really no best time to announce a bad
news, (sic) it also claims that it broke the bad news only on 27 January 1992
because had it complied with the 30-day notice, it could have broken the bad
news on 02 January 1992, the first working day of the year. If there is really
no best time to announce a bad news (sic), it wouldnt have mattered if the
same was announced at the first working day of the year. That way, MII could
have at least complied with the requirement of the law.[17]
xxx
xxx
xxx.
xxx
xxx
xxx.
These aside, we reconsider our denial of the modifications which the Union
proposes to introduce on the close shop provision. While we note that the
provision as presently worded has served the relationship of the parties well
under previous CBAs, the shift in constitutional policy toward expanding the
1.
2. The executive secretaries of the President, Executive Vice-President, VicePresident, Vice President for Sales, Personnel Manager, and Director for
Corporate Planning who may have access to vital labor relations information
or who may otherwise act in a confidential capacity to persons who
determine or formulate management policies.
The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall
thus be modified consistently with the foregoing.
b)Close Shop. - All Qualified Employees must join the Association immediately
upon regularization as a condition for continued employment. This provision
shall not apply to: (i) managerial employees who are excluded from the scope
of the bargaining unit; (ii) the auditors and executive secretaries of senior
executive officers, such as, the President, Executive Vice-President, VicePresident for Finance, Head of Legal, Vice-President for Sales, who are
excluded from membership in the Association; and (iii) those employees who
are referred to in Attachment I hereof, subject, however, to the application of
the provision of Article II, par. (b) hereof. Consequently, the above-specified
employees are not required to join the Association as a condition for their
continued employment.
The following positions in the Bargaining Unit are not covered by the Close
Both MDD and MII read the exclusion of managerial employees and executive
secretaries in our 14 April 1992 resolution as exclusion from the bargaining
unit. They point out that managerial employees are lumped under one
classification with executive secretaries, so that since the former are
excluded from the bargaining unit, so must the latter be likewise excluded.
I (b)(i) of the 1988-1990 CBA. In the same manner, the exclusion of executive
secretaries should be read together with the qualifying phrase are excluded
from membership in the Association of the same Article and with the
heading of Attachment I. The latter refers to Exclusions from Scope of Close
Shop Provision and provides that [t]he following positions in Bargaining Unit
are not covered by the close shop provision of the CBA.
The issue of exclusion has different dimension in the case of MII. In an earlier
motion for clarification, MII points out that it has done away with the positions
of Executive Vice-President, Vice-President for Sales, and Director for
Corporate Planning. Thus, the foregoing group of exclusions is no longer
appropriate in its present organizational structure. Nevertheless, there
remain MII officer positions for which there may be executive secretaries.
These include the General Manager and members of the Management
Committee, specifically i) the Quality Assurance Manager; ii) the Product
Development Manager; iii) the Finance Director; iv) the Management System
Manager; v) the Human Resources Manager; vi) the Marketing Director; vii)
the Engineering Manager; viii) the Materials Manager; and ix) the Production
Manager.
xxx
xxx
xxx
The basis for the questioned exclusions, it should be noted, is no other than
the previous CBA between MII and the Union. If MII had undergone an
organizational restructuring since then, this is a fact to which we have never
been made privy. In any event, had this been otherwise the result would have
been the same. To repeat, we limited the exclusions to recognize the
expanded scope of the right to self-organization as embodied in the
Constitution.[18]
Although Article 245 of the Labor Code[20] limits the ineligibility to join, form
and assist any labor organization to managerial employees, jurisprudence has
extended this prohibition to confidential employees or those who by reason of
their positions or nature of work are required to assist or act in a fiduciary
manner to managerial employees and hence, are likewise privy to sensitive
and highly confidential records.
xxx
xxx
xxx.
On the main issue raised before Us, it is quite obvious that respondent NLRC
committed grave abuse of discretion in reversing the decision of the
Executive Labor Arbiter and in decreeing that PIDIs Service Engineers, Sales
Force, division secretaries, all Staff of General Management, Personnel and
Industrial Relations Department, Secretaries of Audit, EDP and Financial
Systems are included within the rank and file bargaining unit.
In the first place, all these employees, with the exception of the service
engineers and the sales force personnel, are confidential employees. Their
classification as such is not seriously disputed by PEO-FFW; the five (5)
previous CBAs between PIDI and PEO-FFW explicitly considered them as
confidential employees. By the very nature of their functions, they assist and
act in a confidential capacity to, or have access to confidential matters of,
persons who exercise managerial functions in the field of labor relations. As
such, the rationale behind the ineligibility of managerial employees to form,
assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court
elaborated on this rationale, thus:
x x x The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident
conflict of interests. The Union can also become company-dominated with
the presence of managerial employees in Union membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this
rationale applicable to confidential employees:
This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said employee(s)
may act as a spy or spies of either party to a collective bargaining
agreement. This is specially true in the present case where the petitioning
Union is already the bargaining agent of the rank-and-file employees in the
establishment. To allow the confidential employees to join the existing Union
of the rank-and-file would be in violation of the terms of the Collective
Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.
xxx
xxx
xxx.
xxx
xxx
xxx.
xxx
xxx
xxx.
xxx
xxx
xxx.
And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs.
Roldan-Confesor,[23] we ruled that:
xxx
xxx
xxx.
Upon the other hand, legal secretaries are neither managers nor supervisors.
Their work is basically routinary and clerical. However, they should be
differentiated from rank-and-file employees because they are tasked with,
among others, the typing of legal documents, memoranda and
correspondence, the keeping of records and files, the giving of and receiving
notices, and such other duties as required by the legal personnel of the
corporation. Legal secretaries therefore fall under the category of
confidential employees. . . .
xxx
xxx
xxx.
We thus hold that public respondent acted with grave abuse of discretion in
not excluding the four foremen and legal secretary from the bargaining unit
composed of rank-and-file employees.
xxx
xxx
xxx.
In the case at bench, the Union does not disagree with petitioner that the
executive secretaries are confidential employees. It however, makes the
following contentions:
xxx
xxx
xxx.
Confidential employees are rank and file employees and they, like all the
other rank and file employees, should be granted the benefits of the
Collective Bargaining Agreement. There is no valid basis for discriminating
against them. The mandate of the Constitution and the Labor Code, primarily
of protection to Labor, compels such conclusion.[24]
xxx
xxx
xxx.
SO ORDERED.
This is a Petition for Certiorari with Prayer for the Issuance of Preliminary
Injunction seeking to reverse and set aside the Order of public respondent,
Undersecretary of the Department of Labor and Employment, Bienvenido E.
Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91[1] entitled
In Re: Petition for Certification Election Among the Supervisory and Exempt
Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao,
San Fernando and Otis, San Miguel Corporation Supervisors and Exempt
Union, Petitioner. The Order excluded the employees under supervisory
levels 3 and 4 and the so-called exempt employees from the proposed
bargaining unit and ruled out their participation in the certification election.
Appeal with Memorandum on Appeal, pointing out, among others, the MedArbiters error in grouping together all three (3) separate plants, Otis,
Cabuyao and San Fernando, into one bargaining unit, and in including
supervisory levels 3 and above whose positions are confidential in nature.
On March 11, 1993, an Order was issued by the public respondent granting
the Motion, citing the doctrine enunciated in Philips Industrial Development,
Inc. v. NLRC[2] case. Said Order reads in part:
In this case, S3 and S4 and the so-called exempt employees are admittedly
confidential employees and therefore, they are not allowed to form, join or
assist a labor union for purposes of collective bargaining following the above
courts ruling. Consequently, they are not allowed to participate in the
certification election.
WHEREFORE, the motion is hereby granted and the Decision of this Office
dated 03 September 1991 is hereby modified to the extent that employees
under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt
employees are not allowed to join the proposed bargaining unit and are
therefore excluded from those who could participate in the certification
election.[3]
On the first issue, this Court rules that said employees do not fall within the
term confidential employees who may be prohibited from joining a union.
There is no question that the said employees, supervisors and the exempt
employees, are not vested with the powers and prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, layoff, recall,
discharge or dismiss employees. They are, therefore, not qualified to be
classified as managerial employees who, under Article 245[4] of the Labor
Code, are not eligible to join, assist or form any labor organization. In the
very same provision, they are not allowed membership in a labor organization
of the rank-and-file employees but may join, assist or form separate labor
organizations of their own. The only question that need be addressed is
whether these employees are properly classified as confidential employees or
not.
The exclusion from bargaining units of employees who, in the normal course
of their duties, become aware of management policies relating to labor
relations is a principal objective sought to be accomplished by the
confidential employee rule. The broad rationale behind this rule is that
employees should not be placed in a position involving a potential conflict of
interests.[7] Management should not be required to handle labor relations
matters through employees who are represented by the union with the
company is required to deal and who in the normal performance of their
duties may obtain advance information of the companys position with regard
to contract negotiations, the disposition of grievances, or other labor relations
matters.[8]
There have been ample precedents in this regard, thus in Bulletin Publishing
Company v. Hon. Augusto Sanchez,[9] the Court held that if these
managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident
conflict of interest. The Union can also become company-dominated with the
presence of managerial employees in Union membership. The same
rationale was applied to confidential employees in Golden Farms, Inc. v.
Ferrer-Calleja[10] and in the more recent case of Philips Industrial
Development, Inc. v. NLRC[11] which held that confidential employees, by
the very nature of their functions, assist and act in a confidential capacity to,
or have access to confidential matters of, persons who exercise managerial
functions in the field of labor relations. Therefore, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union was
held equally applicable to them.[12]
It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution
mandates the State to guarantee to all workers the right to selforganization. Hence, confidential employees who may be excluded from
bargaining unit must be strictly defined so as not to needlessly deprive many
employees of their right bargain collectively through representatives of their
choosing.[22]
It is the contention of the petitioner union that the creation of three (3)
separate bargaining units, one each for Cabuyao Otis and San Fernando as
ruled by the respondent Undersecretary, is contrary to the one-company,
one-union policy. It adds that Supervisors level 1 to 4 and exempt employees
of the three plants have a similarity or a community of interests.
It is readily seen that the employees in the instant case have community or
mutuality of interest, which is the standard in determining the proper
constituency of a collective bargaining unit.[26] It is undisputed that they all
belong to the Magnolia Poultry Division of San Miguel Corporation. This
means that, although they belong to three different plants, they perform work
of the same nature, receive the same wages and compensation, and most
importantly, share a common stake in concerted activities.
In light of these considerations, the Solicitor General has opined that separate
bargaining units in the three different plants of the division will fragmentize
the employees of the said division, thus greatly diminishing their bargaining
leverage. Any concerted activity held against the private respondent for a
labor grievance in one bargaining unit will, in all probability, not create much
impact on the operations of the private respondent. The two other plants still
in operation can well step up their production and make up for the slack
caused by the bargaining unit engaged in the concerted activity. This
situation will clearly frustrate the provisions of the Labor Code and the
Mandate of the Constitution.[27]
The fact that the three plants are located in three different places, namely, in
Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando,
Pampanga is immaterial. Geographical location can be completely
disregarded if the communal or mutual interests of the employees are not
sacrificed as demonstrated in UP v. Calleja-Ferrer where all non-academic
rank and file employees of the University of the Philippines inDiliman, Quezon
City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to
participate in a certification election. We rule that the distance among the
three plants is not productive of insurmountable difficulties in the
administration of union affairs. Neither are there regional differences that are
likely to impede the operations of a single bargaining representative.
WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and
the Order of the Med-Arbiter on December 19, 1990 is REINSTATED under
which a certification election among the supervisors (level 1 to 4) and exempt
employees of the San Miguel Corporation Magnolia Poultry Products Plants of
Cabuyao, San Fernando, and Otis as one bargaining unit is ordered
conducted.
SO ORDERED.