On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its

chartered local, instituted a petition for certification election among the regular rank-and-
STA. LUCIA EAST COMMERCIAL G.R. No. 162355
file employees of Sta. Lucia East Commercial Corporation and its Affiliates, docketed as
CORPORATION,
Case No. RO400-0202-RU-007. The affiliate companies included in the petition were SLE
Petitioner, Commercial, SLE Department Store, SLE Cinema, Robsan East Trading, Bowling Center,
Planet Toys, Home Gallery and Essentials.
Present:
On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to
- versus -
inappropriateness of the bargaining unit. CLUP-Sta. Lucia East Commercial Corporation
and its Affiliates Workers Union appealed the order of dismissal to this Office on 14
PUNO, C.J., Chairperson, September 2001. On 20 November 2001, CLUP-Sta. Lucia East Commercial Corporation and
CARPIO, its Affiliates Workers Union [CLUP-SLECC and its Affiliates Workers Union] moved for the
HON. SECRETARY OF LABOR AND withdrawal of the appeal. On 31 January 2002, this Office granted the motion and affirmed
EMPLOYMENT and CORONA, the dismissal of the petition.
STA. LUCIA EAST COMMERCIAL CHICO-NAZARIO,*and In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union]
reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation
CORPORATION WORKERS LEONARDO-DE CASTRO, JJ.
Workers Association (herein appellant CLUP-SLECCWA), limiting its membership to the
ASSOCIATION (CLUP LOCAL CHAPTER),
rank-and-file employees of Sta. Lucia East Commercial Corporation. It was issued
Respondents. Certificate of Creation of a Local Chapter No. RO400-0110-CC-004.

Promulgated: On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC]
employs about 115 employees and that more than 20% of employees belonging to the rank-
and-file category are its members. [CLUP-SLECCWA] claimed that no certification election
August 14, 2009 has been held among them within the last 12 months prior to the filing of the petition, and
while there is another union registered with DOLE-Regional Office No. IV on 22 June 2001
x--------------------------------------------------x covering the same employees, namely [SMSLEC], it has not been recognized as the
DECISION exclusive bargaining agent of [SLECCs] employees.

CARPIO, J.:
The Case
This is a petition for review[1]assailing the Decision[2]promulgated on 14 August 2003 as
well as the Resolution[3]promulgated on 24 February 2004 of the Court of Appeals (appellate
court) in CA-G.R. SP No. 77015. The appellate court denied Sta. Lucia East Commercial
Corporations (SLECC) petition for certiorari with prayer for writ of preliminary injunction
and temporary restraining order. The appellate court further ruled that the Secretary of
Labor and Employment (Secretary) was correct when she held that the subsequent
negotiations and registration of a collective bargaining agreement (CBA) executed by
SLECC with Samahang Manggagawa sa Sta. Lucia East Commercial (SMSLEC) could not
bar Sta. Lucia East Commercial Corporation Workers Associations (SLECCWA) petition for
direct certification.
The Facts
The Secretary narrated the facts as follows:
On 22 November 2001, SLECC filed a motion to dismiss the petition. It averred that it has
voluntarily recognized [SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its
regular rank-and-file employees, and that collective bargaining negotiations already
commenced between them. SLECC argued that the petition should be dismissed for
violating the one year and negotiation bar rules under pars. (c) and (d), Section 11, Rule XI,
Book V of the Omnibus Rules Implementing the Labor Code.
On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-
and-file employees and registered with DOLE-Regional Office No. IV on 9 January 2002.
In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its Opposition and
Comment to [SLECCS] Motion to Dismiss. It assailed the validity of the voluntary
recognition of [SMSLEC] by [SLECC] and their consequent negotiations and execution of a
CBA. According to [CLUP-SLECCWA], the same were tainted with malice, collusion and
conspiracy involving some officials of the Regional Office. Appellant contended that Chief
LEO Raymundo Agravante, DOLE Regional Office No. IV, Labor Relations Division should
have not approved and recorded the voluntary recognition of [SMSLEC] by [SLECC]

1
because it violated one of the major requirements for voluntary recognition, i.e., non-
existence of another labor organization in the same bargaining unit. It pointed out that the
time of the voluntary recognition on 20 July 2001, appellants registration as [CLUP-SLECC
and its Affiliates Workers Union], which covers the same group of employees covered by
Samahang Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been
cancelled or abandoned. [CLUP-SLECCWA] also accused Med-Arbiter Bactin of malice,
collusion and conspiracy with appellee company when he dismissed the petition for
certification election filed by [SMSLEC] for being moot and academic because of its
voluntary recognition, when he was fully aware of the pendency of [CLUP-SLECCWAs]
earlier petition for certification election.
Subsequent pleadings filed by [CLUP-SLECCWA] and [SLECC] reiterated their respective
positions on the validity and invalidity of the voluntary recognition. On 29 July 2002, Med-
Arbiter Bactin issued the assailed Order.[4]
The Med-Arbiters Ruling
In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed CLUP-
SLECCWAs petition for direct certification on the ground of contract bar rule. The prior
voluntary recognition of SMSLEC and the CBA between SLECC and SMSLEC bars the filing
of CLUP-SLECCWAs petition for direct certification. SMSLEC is entitled to enjoy the rights,
privileges, and obligations of an exclusive bargaining representative from the time of the
recording of the voluntary recognition. Moreover, the duly registered CBA bars the filing of
the petition for direct certification.
CLUP-SLECCWA filed a Memorandum of Appeal of the Med-Arbiters Order before the Secretary
The Ruling of the Secretary of Labor and Employment
In her Decision promulgated on 27 December 2002, the Secretary found merit in CLUP-
SLECCWAs appeal. The Secretary held that the subsequent negotiations and registration of
a CBA executed by SLECC with SMSLEC could not bar CLUP-SLECCWAs petition. CLUP-
SLECC and its Affiliates Workers Union constituted a registered labor organization at the
time of SLECCs voluntary recognition of SMSLEC. The dispositive portion of the Secretarys
Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the Order of the Med-Arbiter dated 29
July 2002 is REVERSED and SET ASIDE. Accordingly, let the entire records of the case be
remanded to the Regional Office of origin for the immediate conduct of a certification
election, subject to the usual pre-election conference, among the regular rank-and-file
employees of [SLECC], with the following choices:
1. Sta. Lucia East Commercial Corporation Workers Association CLUP Local Chapter;
2. Samahang Manggagawa sa Sta. Lucia East Commercial; and
3. No Union.
2
Pursuant to Rule XI, Section II.1 of Department Order No. 9, appellee corporation is hereby
directed to submit to the office of origin, within ten (10) days from receipt hereof, the
certified list of its employees in the bargaining unit or when necessary a copy of its payroll
covering the same employees for the last three (3) months preceding the issuance of this
Decision.
Let a copy of this Decision be furnished the Bureau of Labor Relations and Labor Relations
Division of Regional Office No. IV for the cancellation of the recording of voluntary
recognition in favor of Samahang Manggagawa sa Sta. Lucia East Commercial and the
appropriate annotation of re-registration of CLUP-Sta. Lucia East Commercial Corporation
and its Affiliates Workers Union to Sta. Lucia East Commercial Corporation Workers
Association-CLUP Local Chapter.
SO DECIDED.[5]
SLECC filed a motion for reconsideration which the Secretary denied for lack of merit in a
Resolution dated 27 March 2003. SLECC then filed a petition for certiorari before the
appellate court.
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary and quoted extensively from the
Secretarys decision. The appellate court agreed with the Secretarys finding that the workers
sought to be represented by CLUP-SLECC and its Affiliates Workers Union included the
same workers in the bargaining unit represented by SMSLEC. SMSLEC was not the only
legitimate labor organization operating in the subject bargaining unit at the time of
SMSLECs voluntary recognition on 20 July 2001. Thus, SMSLECs voluntary recognition was
void and could not bar CLUP-SLECCWAs petition for certification election.
The Issue
SLECC raised only one issue in its petition. SLECC asserted that the appellate court
commited a reversible error when it affirmed the Secretarys finding that SLECCs voluntary
recognition of SMSLEC was done while a legitimate labor organization was in existence in
the bargaining unit.
The Ruling of the Court
The petition has no merit. We see no reason to overturn the rulings of the Secretary and of
the appellate court.
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor organization as any union or association of
employees which exists in whole or in part for the purpose of collective bargaining or of
dealing with employers concerning terms and conditions of employment. Upon compliance
with all the documentary requirements, the Regional Office or Bureau shall issue in favor of
the applicant labor organization a certificate indicating that it is included in the roster of
legitimate labor organizations.[6] Any applicant labor organization shall acquire legal
personality and shall be entitled to the rights and privileges granted by law to legitimate
labor organizations upon issuance of the certificate of registration.[7]
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but
related to, the concept of a bargaining unit. We explained the concept of a bargaining unit
in San Miguel Corporation v. Laguesma,[8]where we stated that:
A bargaining unit is a group of employees of a given employer, comprised of all or less than
all of the entire body of employees, consistent with equity to the employer, indicated to be
the best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.
The fundamental factors in determining the appropriate collective bargaining unit are: (1)
the will of the employees (Globe Doctrine); (2) affinity and unity of the employees interest,
such as substantial similarity of work and duties, or similarity of compensation and
working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining
history; and (4) similarity of employment status
Contrary to petitioners assertion, this Court has categorically ruled that the existence of a
prior collective bargaining history is neither decisive nor conclusive in the determination of
what constitutes an appropriate bargaining unit.
However, employees in two corporations cannot be treated as a single bargaining unit even
if the businesses of the two corporations are related.[9]
A Legitimate Labor Organization Representing
An Inappropriate Bargaining Unit
CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a
legitimate labor organization representing a non-appropriate bargaining unit. However,
CLUP-SLECC and its Affiliates Workers Union subsequently re-registered as CLUP-
SLECCWA, limiting its members to the rank-and-file of SLECC. SLECC cannot ignore that
CLUP-SLECC and its Affiliates Workers Union was a legitimate labor organization at the
time of SLECCs voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by
themselves, decide whether CLUP-SLECC and its Affiliates Workers Union represented an
appropriate bargaining unit.
CONSIDERED AS HAVING ACQUIRED JURIDICAL PERSONALITY WHICH MAY NOT BE
ATTACKED COLLATERALLY. THE PROPER PROCEDURE FOR SLECC IS TO FILE A
PETITION FOR CANCELLATION OF CERTIFICATE OF REGISTRATION[11]OF CLUP-
SLECC AND ITS AFFILIATES WORKERS UNION AND NOT TO IMMEDIATELY
COMMENCE VOLUNTARY RECOGNITION PROCEEDINGS WITH SMSLEC.
SLECCs Voluntary Recognition of SMSLEC
The employer may voluntarily recognize the representation status of a union
in unorganized establishments.[12] SLECC WAS NOT AN UNORGANIZED
ESTABLISHMENT WHEN IT VOLUNTARILY RECOGNIZED SMSLEC AS ITS EXCLUSIVE
BARGAINING REPRESENTATIVE ON 20 JULY 2001. CLUP-SLECC AND ITS AFFILIATES
WORKERS UNION FILED A PETITION FOR CERTIFICATION ELECTION ON 27
FEBRUARY 2001 AND THIS PETITION REMAINED PENDING AS OF 20 JULY 2001. THUS,
SLECCS VOLUNTARY RECOGNITION OF SMSLEC ON 20 JULY 2001, THE SUBSEQUENT
NEGOTIATIONS AND RESULTING REGISTRATION OF A CBA EXECUTED BY SLECC
AND SMSLEC ARE VOID AND CANNOT BAR CLUP-SLECCWAS PRESENT PETITION
FOR CERTIFICATION ELECTION.
EMPLOYERS PARTICIPATION IN A PETITION FOR CERTIFICATION ELECTION
We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-
SLECCWAs petition for certification election. In petitions for certification election, the
employer is a mere bystander and cannot oppose the petition or appeal the Med-Arbiters
decision. The exception to this rule, which happens when the employer is requested to
bargain collectively, is not present in the case before us.[13]
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14
August 2003 as well as the Resolution promulgated on 24 February 2004 of the Court of
Appeals in CA-G.R. SP No. 77015.
SO ORDERED.

The inclusion in the union of disqualified employees is not among the grounds for
cancellation of registration, unless such inclusion is due to misrepresentation, false
statement or fraud under the circumstances enumerated in Sections (a) to (c) of Article 239
of the Labor Code.[10] THUS, CLUP-SLECC AND ITS AFFILIATES WORKERS UNION,
HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF REGISTRATION, SHOULD BE
3

G.R. No. 96189 July 14, 1992
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department
of Labor and Employment, and THE ALL U.P. WORKERS' UNION, represented by its
President, Rosario del Rosario, respondent.
NARVASA, C.J.:
In this special civil action of certiorari the University of the Philippines seeks the nullification
of the Order dated October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor
Relations holding that "professors, associate professors and assistant professors (of the
University of the Philippines) are . . rank-and-file employees . . ;" consequently, they should,
together with the so-called non-academic, non-teaching, and all other employees of the
University, be represented by only one labor organization. 1 The University is joined in this
undertaking by the Solicitor General who "has taken a position not contrary to that of
petitioner and, in fact, has manifested . . that he is not opposing the petition . . ." 2
The case 3 was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990
by a registered labor union, the "Organization of Non-Academic Personnel of UP"
(ONAPUP). 4 Claiming to have a membership of 3,236 members — comprising more than
33% of the 9,617 persons constituting the non-academic personnel of UP-Diliman, Los
Baños, Manila, and Visayas, it sought the holding of a certification election among all said
non-academic employees of the University of the Philippines. At a conference thereafter
held on March 22, 1990 in the Bureau, the University stated that it had no objection to the
election.
On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed a
comment, as intervenor in the certification election proceeding. Alleging that its
membership covers both academic and non-academic personnel, and that it aims to unite all
UP rank-and-file employees in one union, it declared its assent to the holding of the election
provided the appropriate organizational unit was first clearly defined. It observed in this
connection that the Research, Extension and Professional Staff (REPS), who are academic
non-teaching personnel, should not be deemed part of the organizational unit.
For its part, the University, through its General Counsel, 6 made of record its view that there
should be two (2) unions: one for academic, the other for non-academic or administrative,
personnel considering the dichotomy of interests, conditions and rules governing these
employee groups.
4
Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the appropriate
organizational unit . . should embrace all the regular rank-and-file employees, teaching and
non-teaching, of the University of the Philippines, including all its branches" and that there
was no sufficient evidence "to justify the grouping of the non-academic or administrative
personnel into an organization unit apart and distinct from that of the academic or teaching
personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer unit consisting of rank-
and-file employees, unless circumstances otherwise require.
and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2,
Resolution of Public Sector Labor Management Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational unit may refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or controlled corporations with original
charters.
She went on to say that the general intent of EO 180 was "not to fragmentize the employer
unit, as "can be gleaned from the definition of the term "accredited employees'
organization," which refers to:
. . a registered organization of the rank-and-file employees as defined in these rules
recognized to negotiate for the employees in an organizational unit headed by an officer
with sufficient authority to bind the agency, such as . . . . . . state colleges and universities.
The Director thus commanded that a certification election be "conducted among rank-and-
file employees, teaching and non-teaching" in all four autonomous campuses of the UP, and
that management appear and bring copies of the corresponding payrolls for January, June,
and July, 1990 at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational Division
of the DOLE, 8 the University sought further clarification of the coverage of the term, "rank-
and-file" personnel, asserting that not every employee could properly be embraced within
both teaching and non-teaching categories since there are those whose positions are in truth
managerial and policy-determining, and hence, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking
the exclusion from the organizational unit of those employees holding supervisory
positions among non-academic personnel, and those in teaching staff with the rank of
Assistant Professor or higher, submitting the following as grounds therefor:
1) Certain "high-level employees" with policy-making, managerial, or confidential
functions, are ineligible to join rank-and-file employee organizations under Section 3, EO
180:
Sec. 3. High-level employees whose functions are normally considered as policy-making or
managerial or whose duties are of a highly confidential nature shall not be eligible to join
the organization of rank-and file government employees;
2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-
and file: just as there are those occupying managerial positions within the non-teaching
roster, there is also a dichotomy between various levels of the teaching or academic staff;
3) Among the non-teaching employees composed of Administrative Staff and Research
personnel, only those holding positions below Grade 18 should be regarded as rank-and-
file, considering that those holding higher grade positions, like Chiefs of Sections, perform
supervisory functions including that of effectively recommending termination of
appointments or initiating appointments and promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only
those holding appointments at the instructor level may be so considered, because those
holding appointments from Assistant Professor to Associate Professor to full Professor take
part, as members of the University Council, a policy-making body, in the initiation of
policies and rules with respect to faculty tenure and promotion. 9
The ONAPUP quite categorically made of record its position; that it was not opposing the
University's proferred classification of rank-and file employees. On the other hand, the "All
UP Workers' Union" opposed the University's view, in a Position Paper presented by it
under date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the
"sole issue" of "whether or not professors, associate professors and assistant professors are
included in the definition of high-level employee(s)" in light of Rule I, Section (1) of the
Implementing Guidelines of Executive Order No. 180, defining "high level employee" as
follows:
1. High Level Employee — is one whose functions are normally considered policy
determining, managerial or one whose duties are highly confidential in nature. A
managerial function refers to the exercise of powers such as:
1. To effectively recommend such managerial actions;
2. To formulate or execute management policies and decisions; or
3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees.
The Director adjudged that said teachers are rank-and-file employees "qualified to join
unions and vote in certification elections." According to her —
A careful perusal of the University Code . . shows that the policy-making powers of the
Council are limited to academic matters, namely, prescribing courses of study and rules of
discipline, fixing student admission and graduation requirements, recommending to the
Board of Regents the conferment of degrees, and disciplinary power over students. The
policy-determining functions contemplated in the definition of a high-level employee
pertain to managerial, executive, or organization policies, such as hiring, firing, and
5
disciplining of employees, salaries, teaching/working hours, other monetary and non-
monetary benefits, and other terms and conditions of employment. They are the usual
issues in collective bargaining negotiations so that whoever wields these powers would be
placed in a situation of conflicting interests if he were allowed to join the union of rank-and-
file employees.
The University seasonably moved for reconsideration, seeking to make the following
points, to wit:
1) UP professors do "wield the most potent managerial powers: the power to rule on tenure,
on the creation of new programs and new jobs, and conversely, the abolition of old
programs and the attendant re-assignment of employees.
2) To say that the Council is "limited to (acting on) academic matters" is error, since
academic decisions "are the most important decisions made in a University . . (being, as it
were) the heart, the core of the University as a workplace.
3) Considering that the law regards as a "high level" employee, one who performs either
policy-determining, managerial, or confidential functions, the Director erred in applying
only the "managerial functions" test, ignoring the "policy-determining functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an
administrative officer of the College of Law is a high level employee, while a full Professor
who has published several treatises and who has distinguished himself in argument before
the Supreme Court is a mere rank-and-file employee. A dormitory manager is classified as a
high level employee, while a full Professor or Political Science with a Ph. D. and several
Honorary doctorates is classified as rank-and-file." 10
The motion for reconsideration was denied by Director Calleja, by Order dated November
20, 1990.
The University would now have this Court declare void the Director's Order of October 30,
1990 as well as that of November 20, 1990. 11 A temporary restraining order was issued by
the Court, by Resolution dated December 5, 1990 conformably to the University's
application therefor.
Two issues arise from these undisputed facts. One is whether or not professors, associate
professors and assistant professors are "high-level employees" "whose functions are
normally considered policy determining, managerial or . . highly confidential in nature."
The other is whether or not, they, and other employees performing academic
functions, 12 should comprise a collective bargaining unit distinct and different from that
consisting of the non-academic employees of the University, 13 considering the dichotomy
of interests, conditions and rules existing between them.
As regards the first issue, the Court is satisfied that it has been correctly resolved by the
respondent Director of Bureau Relations. In light of Executive Order No. 180 and its
implementing rules, as well as the University's charter and relevant regulations, the
professors, associate professors and assistant professors (hereafter simply referred to as
professors) cannot be considered as exercising such managerial or highly confidential
functions as would justify their being categorized as "high-level employees" of the
institution.
The Academic Personnel Committees, through which the professors supposedly exercise
managerial functions, were constituted "in order to foster greater involvement of the faculty
and other academic personnel in appointments, promotions, and other personnel matters
that directly affect them." 14 Academic Personnel Committees at the departmental and
college levels were organized "consistent with, and demonstrative of the very idea of
consulting the faculty and other academic personnel on matters directly affecting them" and
to allow "flexibility in the determination of guidelines peculiar to a particular department or
college." 15
Personnel actions affecting the faculty and other academic personnel should, however, "be
considered under uniform guidelines and consistent with the Resolution of the Board (of
Regents) adopted during its 789th Meeting (11-26-69) creating the University Academic
Personnel Board." 16 Thus, the Departmental Academic Personnel Committee is given the
function of "assist(ing) in the review of the recommendations initiated by the Department
Chairman with regard to recruitment, selection, performance evaluation, tenure and staff
development, in accordance with the general guidelines formulated by the University
Academic Personnel Board and the implementing details laid down by the College
Academic Personnel Committee;" 17 while the College Academic Personnel Committee is
entrusted with the following functions: 18
1. Assist the Dean in setting up the details for the implementation of policies, rules,
standards or general guidelines as formulated by the University Academic Personnel Board;
2. Review the recommendation submitted by the DAPCs with regard to recruitment,
selection, performance evaluation, tenure, staff development, and promotion of the faculty
and other academic personnel of the College;
3. Establish departmental priorities in the allocation of available funds for promotion;
4. Act on cases of disagreement between the Chairman and the members of the DAPC
particularly on personnel matters covered by this Order;
5. Act on complaints and/or protests against personnel actions made by the Department
Chairman and/or the DAPC.
The University Academic Personnel Board, on the other hand, performs the following
functions: 19
1. Assist the Chancellor in the review of the recommendations of the CAPC'S.
2. Act on cases of disagreement between the Dean and the CAPC.
3. Formulate policies, rules, and standards with respect to the selection, compensation, and
promotion of members of the academic staff.
4. Assist the Chancellor in the review of recommendations on academic promotions and on
other matters affecting faculty status and welfare.
6
From the foregoing, it is evident that it is the University Academic Personnel Committee,
composed of deans, the assistant for academic affairs and the chief of personnel, which
formulates the policies, rules and standards respecting selection, compensation and
promotion of members of the academic staff. The departmental and college academic
personnel committees' functions are purely recommendatory in nature, subject to review
and evaluation by the University Academic Personnel Board. In Franklin Baker Company of
the Philippines vs. Trajano, 20 this Court reiterated the principle laid down in National
Merchandising Corp. vs. Court of Industrial Relations, 21 that the power to recommend, in order
to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical
nature but should require the use of independent judgment." Where such recommendatory
powers, as in the case at bar, are subject to evaluation, review and final action by the
department heads and other higher executives of the company, the same, although present,
are not effective and not an exercise of independent judgment as required by law.
Significantly, the personnel actions that may be recommended by the departmental and
college academic personnel committees must conform with the general guidelines drawn
up by the university personnel academic committee. This being the case, the members of the
departmental and college academic personnel committees are not unlike the chiefs of
divisions and sections of the National Waterworks and Sewerage Authority whom this
Court considered as rank-and-file employees in National Waterworks & Sewerage Authority vs.
NWSA Consolidated Unions, 22because "given ready policies to execute and standard
practices to observe for their execution, . . . they have little freedom of action, as their main
function is merely to carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively recommend
such managerial actions, to formulate or execute management policies or decisions and/or
to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" 23 is
exercised to a certain degree by the university academic personnel board/committees and
ultimately by the Board of Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of the University, professors,
instructors, lecturers and other employees of the University; to fix their compensation,
hours of service, and such other duties and conditions as it may deem proper; to grant them
in its discretion leave of absence under such regulations as it may promulgate, any other
provision of law to the contrary notwithstanding, and to remove them for cause after
investigation and hearing shall have been had.
Another factor that militates against petitioner's espousal of managerial employment status
for all its professors through membership in the departmental and college academic
personnel committees is that not all professors are members thereof. Membership and the
number of members in the committees are provided as follows: 25
Sec. 2. Membership in Committees. — Membership in committees may be made either through
appointment, election, or by some other means as may be determined by the faculty and
other academic personnel of a particular department or college.
Sec. 3. Number of Members. — In addition to the Chairman, in the case of a department, and
the Dean in the case of a college, there shall be such number of members representing the
faculty and academic personnel as will afford a fairly representative, deliberative and
manageable group that can handle evaluation of personnel actions.
Neither can membership in the University Council elevate the professors to the status of
high-level employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26
Sec. 6. The Board of Regents shall have the following powers and duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline drawn up by the University
Council as hereinafter provided; . . .
Sec. 9. There shall be a University Council consisting of the President of the University and
of all instructors in the university holding the rank of professor, associate professor, or
assistant professor. The Council shall have the power to prescribe the courses of study and
rules of discipline, subject to the approval of the Board of Regents. It shall fix the requirements
for admission to any college of the university, as well as for graduation and the receiving of
a degree. The Council alone shall have the power to recommend students or others to be
recipients of degrees. Through its president or committees, it shall have disciplinary power
over the students within the limits prescribed by the rules of discipline approved by the Board of
Regents. The powers and duties of the President of the University, in addition to those
specifically provided in this Act shall be those usually pertaining to the office of president
of a university.
It is readily apparent that the policy-determining functions of the University Council are
subject to review, evaluation and final approval by the Board of Regents. The Council's
power of discipline is likewise circumscribed by the limits imposed by the Board of
Regents. What has been said about the recommendatory powers of the departmental and
college academic personnel committees applies with equal force to the alleged policy-
determining functions of the University Council.
Even assuming arguendo that UP professors discharge policy-determining functions through
the University Council, still such exercise would not qualify them as high-level employees
within the context of E.O. 180. As correctly observed by private respondent, "Executive
Order No. 180 is a law concerning public sector unionism. It must therefore be construed
within that context. Within that context, the University of the Philippines represents the
government as an employer. 'Policy-determining' refers to policy-determination in
university mattes that affect those same matters that may be the subject of negotiation
between public sector management and labor. The reason why 'policy-determining' has
been laid down as a test in segregating rank-and-file from management is to ensure that
those who lay down policies in areas that are still negotiable in public sector collective
bargaining do not themselves become part of those employees who seek to change these
policies for their collective welfare." 27
The policy-determining functions of the University Council refer to academic matters, i.e.
those governing the relationship between the University and its students, and not the
7
University as an employer and the professors as employees. It is thus evident that no
conflict of interest results in the professors being members of the University Council and
being classified as rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all rank-and-file
employees of the university are to be organized into a single collective bargaining unit?
A "bargaining unit" has been defined as a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicate to be the best
suited to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law. 28
Our labor laws do not however provide the criteria for determining the proper collective
bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the
Industrial Peace Act, simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. — The labor
organization designated or selected for the purpose of collective bargaining by the majority
of the employees in an appropriate collective bargaining unit shall be the exclusive
representative of all the employees in such unit for the purpose of collective bargaining in
respect to rates of pay, wages, hours of employment, or other conditions of
employment; Provided, That any individual employee or group of employees shall have the
right at any time to present grievances to their employer.
Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the
Labor Code with minor changes, no guidelines were included in said Code for
determination of an appropriate bargaining unit in a given case. 30 Thus, apart from the
single descriptive word "appropriate," no specific guide for determining the proper
collective bargaining unit can be found in the statutes.
Even Executive Order No. 180 already adverted to is not much help. All it says, in its
Section 9, is that "(t)he appropriate organizational unit shall be the employer unit consisting
of rank-and-file employees, unless circumstances otherwise require." Case law fortunately
furnishes some guidelines.
When first confronted with the task of determining the proper collective bargaining unit in
a particular controversy, the Court had perforce to rely on American jurisprudence.
In Democratic Labor Association vs. Cebu Stevedoring Company, Inc., decided on February 28,
1958, 31 the Court observed that "the issue of how to determine the proper collective
bargaining unit and what unit would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter
abound . . (to which resort may be had) considering that our present Magna Carta has been
patterned after the American law on the subject." Said the Court:
. . . Under these precedents, there are various factors which must be satisfied and
considered in determining the proper constituency of a bargaining unit. No one particular
factor is itself decisive of the determination. The weight accorded to any particular factor
varies in accordance with the particular question or questions that may arise in a given case.
What are these factors? Rothenberg mentions a good number, but the most pertinent to our
case are: (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees'
interest, such as substantial similarity of work and duties, or similarity of compensation and
working conditions; (3) prior collective bargaining history; and (4) employment status, such
as temporary, seasonal probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining unit is
given in the 10th Annual Report of the National Labor Relations Board wherein it is
emphasized that the factors which said board may consider and weigh in fixing appropriate
units are: the history, extent and type of organization of employees; the history of their
collective bargaining; the history, extent and type of organization of employees in other
plants of the same employer, or other employers in the same industry; the skill, wages,
work, and working conditions of the employees; the desires of the employees; the eligibility
of the employees for membership in the union or unions involved; and the relationship
between the unit or units proposed and the employer's organization, management, and
operation. . . .
. . In said report, it is likewise emphasized that the basic test in determining the appropriate
bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who
have substantial, mutual interests in wages, hours, working conditions and other subjects of
collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . .
The Court further explained that "(t)he test of the grouping is community or mutuality of
interests. And this is so because 'the basic test of an asserted bargaining unit's acceptability
is whether or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights' (Rothenberg on Labor Relations,
490)." Hence, in that case, the Court upheld the trial court's conclusion that two separate
bargaining units should be formed, one consisting of regular and permanent employees and
another consisting of casual laborers or stevedores.
Since then, the "community or mutuality of interests" test has provided the standard in
determining the proper constituency of a collective bargaining unit. In Alhambra Cigar &
Cigarette Manufacturing Company, et al. vs. Alhambra Employees' Association (PAFLU), 107 Phil.
23, the Court, noting that the employees in the administrative, sales and dispensary
departments of a cigar and cigarette manufacturing firm perform work which have nothing
to do with production and maintenance, unlike those in the raw lead (malalasi), cigar,
cigarette, packing (precintera) and engineering and garage departments, authorized the
formation of the former set of employees into a separate collective bargaining unit. The
ruling in the Democratic Labor Association case, supra, was reiterated in Philippine Land-Air-
Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were
barred from joining the union of the permanent and regular employees.
Applying the same "community or mutuality of interests" test, but resulting in the
formation of only one collective bargaining units is the case of National Association of Free
Trade Unions vs. Mainit Lumber Development Company Workers Union-United Lumber and
General Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said case,
8
the Court ordered the formation of a single bargaining unit consisting of the Sawmill
Division in Butuan City and the Logging Division in Zapanta Valley, Kitcharao, Agusan
Norte of the Mainit Lumber Development Company. The Court reasoned:
Certainly, there is a mutuality of interest among the employees of the Sawmill Division and
the Logging Division. Their functions mesh with one another. One group needs the other in
the same way that the company needs them both. There may be difference as to the nature
of their individual assignments but the distinctions are not enough to warrant the formation
of a separate bargaining unit.
In the case at bar, the University employees may, as already suggested, quite easily be
categorized into two general classes: one, the group composed of employees whose
functions are non-academic, i.e., janitors, messengers, typists, clerks, receptionists,
carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers; 32 and two, the
group made up of those performing academic functions, i.e., full professors, associate
professors, assistant professors, instructors — who may be judges or government executives
— and research, extension and professorial staff. 33 Not much reflection is needed to
perceive that the community or mutuality of interests which justifies the formation of a
single collective bargaining unit is wanting between the academic and non-academic
personnel of the university. It would seem obvious that teachers would find very little in
common with the University clerks and other non-academic employees as regards
responsibilities and functions, working conditions, compensation rates, social life and
interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the
dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in
the compensation and working conditions of the academic and non-academic personnel
dictate the separation of these two categories of employees for purposes of collective
bargaining. The formation of two separate bargaining units, the first consisting of the rank-
and-file non-academic personnel, and the second, of the rank-and-file academic employees,
is the set-up that will best assure to all the employees the exercise of their collective
bargaining rights. These special circumstances, i.e., the dichotomy of interests and concerns
as well as the dissimilarity in the nature and conditions of work, wages and compensation
between the academic and non-academic personnel, bring the case at bar within the
exception contemplated in Section 9 of Executive Order No. 180. It was grave abuse of
discretion on the part of the Labor Relations Director to have ruled otherwise, ignoring
plain and patent realities.
WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it
declares the professors, associate professors and assistant professors of the University of the
Philippines as rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the
sense that the non-academic rank-and-file employees of the University of the Philippines
shall constitute a bargaining unit to the exclusion of the academic employees of the
institution — i.e., full professors, associate professors, assistant professors, instructors, and
the research, extension and professorial staff, who may, if so minded, organize themselves
into a separate collective bargaining unit; and that, therefore, only said non-academic rank-
and-file personnel of the University of the Philippines in Diliman, Manila, Los Baños and
the Visayas are to participate in the certification election.
SO ORDERED.
[G.R. No. 111262. September 19, 1996]
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its
President RAYMUNDO HIPOLITO, JR., petitioner, vs. HON. MA. NIEVES D.
CONFESOR, Secretary of Labor, Dept. of Labor & Employment, SAN MIGUEL
CORPORATION, MAGNOLIA CORPORATION (Formerly, Magnolia Plant) and SAN
MIGUEL FOODS, INC. (Formerly, B-Meg Plant), respondents.
DECISION
KAPUNAN, J.:
This is a petition for certiorari assailing the Order of the Secretary of Labor rendered
on February 15, 1993 involving a labor dispute at San Miguel Corporation.
The facts are as follows:
On June 28, 1990, petitioner-union San Miguel Corporation Employees Union - PTGWO
entered into a Collective Bargaining Agreement (CBA) with private respondent San Miguel
Corporation (SMC) to take effect upon the expiration of the previous CBA or on June 30,
1989.
This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
SECTION 1. This Agreement which shall be binding upon the parties hereto and their
respective successors-in-interest, shall become effective and shall remain in force and effect
until June 30, 1992.
SEC. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this
Agreement insofar as the representation aspect is concerned, shall be for five (5) years
9
from July 1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such
representation shall be sixty (60) days prior to June 30, 1994.
SEC. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all
provisions of this Agreement, except insofar as the representation aspect is concerned. If no
agreement is reached in such negotiations, this Agreement shall nevertheless remain in
force up to the time a subsequent agreement is reached by the parties.[1]
In keeping with their vision and long term strategy for business expansion, SMC
management informed its employees in a letter dated August 13, 1991[2]that the company
which was composed of four operating divisions namely: (1) Beer, (2) Packaging, (3) Feeds
and Livestocks, (4) Magnolia and Agri-business would undergo a restructuring.[3]
Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and
became two separate and distinct corporations: Magnolia Corporation (Magnolia) and San
Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained in force and
effect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and
Article 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two
parties submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of SMC
should still include the employees of the spun-off corporations: Magnolia and SMFI; and
that the renegotiated terms of the CBA shall be effective only for the remaining period of
two years or until June 30, 1994.
SMC, on the other hand, contended that the members/employees who had moved to
Magnolia and SMFI, automatically ceased to be part of the bargaining unit at the
SMC.Furthermore, the CBA should be effective for three years in accordance with Art. 253-
A of the Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration of the CBA,
petitioner-union declared a deadlock on September 29, 1990.
On October 2, 1992, a Notice of Strike was filed against SMC.
In order to avert a strike, SMC requested the National Conciliation and Mediation Board
(NCMB) to conduct preventive mediation. No settlement was arrived at despite several
meetings held between the parties.
On November 3, 1992, a strike vote was conducted which resulted in a yes vote in favor of a
strike.
On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition with
the Secretary of Labor praying that the latter assume jurisdiction over the labor dispute in a
vital industry.
As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute
on November 10, 1992.[4] Several conciliation meetings were held but still no
agreement/settlement was arrived at by both parties.
After the parties submitted their respective position papers, the Secretary of Labor issued
the assailed Order on February 15, 1993 directing, among others, that the renegotiated terms
of the CBA shall be effective for the period of three (3) years from June 30, 1992; and that
such CBA shall cover only the employees of SMC and not of Magnolia and SMFI.
Dissatisfied, petitioner-union now comes to this Court questioning this Order of the
Secretary of Labor.
Subsequently, on March 30, 1995,[5] petitioner-union filed a Motion for Issuance of a
Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the holding of the
certification elections in the different companies, maintaining that the employees of
Magnolia and SMFI fall within the bargaining unit of SMC.
On March 29, 1995, the Court issued a resolution granting the temporary restraining order
prayed for.[6]
Meanwhile, an urgent motion for leave to intervene[7]in the case was filed by the Samahan
ng Malayang Manggagawa-San Miguel Corporation-Federation of Free Workers (SMM-
SMC-FFW) through its authorized representiative, Elmer S. Armando, alleging that it is one
of the contending parties adversely effected by the temporary restraining order.
The Intervenor cited the case of Daniel S.L. Borbon v. Hon. Bienvenido B. Laguesma,[8] G.R. No.
101766, March 5, 1993, where the Court recognized the separation of the employees of
Magnolia from the SMC bargaining unit. It then prayed for the lifting of the temporary
restraining order.
Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a petition for the
withdrawal/dismissal of the petition considering that the temporary restraining order
jeopardized the employees right to conclude a new CBA. At the same time, he challenged
the legal personality of Mr. Raymundo Hipolito, Jr. to represent the Union as its president
when the latter was already officially dismissed from the company on October 4, 1994.
Amidst all these pleadings, the following primordial issues arise:
1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for
three years or for only two years; and
2) Whether or not the bargaining unit of SMC includes also the employees of Magnolia and
SMFI.
Petitioner-union contends that the duration for the non-representation provisions of the
CBA should be coterminous with the term of the bargaining agency which in effect shall be
for the remaining two years of the current CBA, citing a previous decision of the Secretary
of Labor on December 14, 1992 in the matter of the labor dispute at Philippine Refining
Company.[9]
However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled that
the renegotiated terms of the CBA at SMC should run for a period of three (3) years.
We agree with the Secretary of Labor.
10
Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:
ART. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its execution. Any agreement on such other
provisions of the Collective Bargaining Agreement entered into within six (6) months from
the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such
agreement is entered into beyond six months, the parties shall agree on the duration of
retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining
agreement, the parties may exercise their rights under this Code. (underlining supplied.)
Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No.
6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This new provision
states that the CBA has a term of five (5) years instead of three years, before the amendment
of the law as far as the representation aspect is concerned. All other provisions of the CBA
shall be negotiated not later than three (3) years after its execution. The representation
aspect refers to the identity and majority status of the union that negotiated the CBA as the
exclusive bargaining representative of the appropriate bargaining unit concerned. All other
provisions simply refers to the rest of the CBA, economic as well as non-economic
provisions, except representation.[10]
As the Secretary of Labor herself observed in the instant case, the law is clear and definite
on the duration of the CBA insofar as the representation aspect is concerned, but is quite
ambiguous with the terms of the other provisions of the CBA. It is a cardinal principle of
statutory construction that the Court must ascertain the legislative intent for the purpose of
giving effect to any statute. The history of the times and state of the things existing when
the act was framed or adopted must be followed and the conditions of the things at the time
of the enactment of the law should be considered to determine the legislative intent. [11] We
look into the discussions leading to the passage of the law:
THE CHAIRMAN (REP. VELASCO): . . . the CBA, insofar as the economic provisions are
concerned . . .
THE CHAIRMAN (SEN. HERRERA): Maximum of three years?
THE CHAIRMAN (SEN. VELOSO): Maximum of three years.
THE CHAIRMAN (SEN. HERRERA): Present practice?
THE CHAIRMAN (REP. VELOSO): In other words, after three years puwede nang
magnegotiate in that CBA for the remaining two years.
THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years or three
years but assuming three years which, I think, thats the likelihood. . . .
THE CHAIRMAN (REP. VELOSO): Yes.
THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming there will be a
change of agent, at least he has one year to administer and to adjust, to develop rapport
with the management. Yan ang importante.
You know, for us na nagne-negotiate, and hazard talaga sa negotiation, when we negotiate
with somebody na hindi natin kilala, then, we are governed by our biases na ito ay
destroyer ng Labor; ang mga employer, ito bayaran ko lang ito okay na.
Yan ang nangyayari, but let us give that allowance for one year to let them know.
Actually, ang thrust natin ay industrial peace, and there can be no industrial peace if you
encourage union to fight each other. Yan ang problema.[12]
xxxxxxxxx
HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the CBA seem to
provide some doubts later on in the implementation. Sabi kasi rito, insofar as representation
issue is concerned, seven years ang lifetime . . .
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Five years, all the others three years.
HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and conditions, not
later than three years.
HON. ISIDRO: Not later than three years, so within three years you have to make a new
CBA.
HON. CHAIRMAN HERRERA: Yes.
HON. ISIDRO: That is again for purposes of renewing the terms, three years na naman
iyan then, seven years . . .
HON. CHAIRMAN HERRERA: Not later than three years.
HON. ISIDRO: Assuming that they usually follow the period three years nang three years,
but under this law with respect to representation five years, ano? Now, after three years,
nagkaroon ng bagong terms, tapos na iyong term, renewed na iyong terms, ang karapatan
noon sa representation issue mayroon pang two years left.
HON. CHAIRMAN HERRERA: One year na lang because six years nang lahat, three plus
three.
HON ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang ang
natatapos. So, another CBA was formed and this CBA mayroon na naman siyang bagong
five years with respect to representation issue.
11
HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and conditions
for three years.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: On the third year you can start negotiating to change the
terms and conditions.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . .
HON. ISIDRO: Oo.
HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status now can be
questioned, so baka puwedeng magkaroon ng certification election. If the incumbent union
loses, then the new union administers the contract for one year to give him time to know his
counterpart the employer, before he can negotiate for a new term. Iyan ang advantage.
HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect to the terms
and conditions and then, so you have to renew that in three years you renew for another
three years, mayroon na naman another five years iyong ano . . .
HON. ANIAG: Hindi, ang natitira duon sa representation two years na lang.
HON. CHAIRMAN HERRERA: Two years na lang sa representation.
HON. ANIAG: So that if they changed the union, iyong last year. . . .
HON. CHAIRMAN HERRERA: Iyon lang, that you have to administer the contract. Then,
voluntary arbitration na kayo and then mayroon ka nang probisyon retroact on the date of
the expiry date.Pagnatalo and incumbent unyon, mag-aassume and new union, administer
the contract. As far as the term ang condition, for one year, and that will give him time and
the employer to know each other.
HON. JABAR: Boy, let us be realistic. I think if a new union wins a certification election, it
would not want to administer a CBA which has not been negotiated by the union itself.
HON. CHAIRMAN HERRERA: That is not true, Hon. This is true because what is
happening now in the country is that the term ng contract natin, duon din mage-expire ang
representation. Iyon and nangyari. That is where you have the gulo. Ganoon and
nangyari. So, ang nangyari diyan, pag-mayroon certification election, expire ang contract,
ano ang usual issue - company union. I can you (sic) give you more what the incumbent
union is giving. So ang mangyayari diyan, pag-negotiate mo hardline na agad.
HON. CHAIRMAN VELOSO: Mon, for four years?
HON. ISIDRO: Ang tingin ko lang dito, iyong distinction between the terms and the
representation aspect why do we have to distinguish between three and five? Whats wrong
with having a uniform expiration period?
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Puro three years.
HON. CHAIRMAN HERRERA: That is what we are trying to avoid because ang reality
diyan, Mart, pagpasok mo sa kumpanya, mag-ne-negotiate ka ng six months, thats the
average, aabot pa minsan ng one year. Pagkatapos ng negotiation mo, signing kayo. There
will be an allowed period of one year. Third year na, uumpisahan naman ang organizations,
papasok na ang ibang unyon because the reality in Trade Union committee, they organize,
we organize. So, actually, you have only industrial peace for one year, effective industrial
peace. That is what we are trying to change.Otherwise, we will continue to discourage the
investors and the union will never grow because every other year it has to use its money for
the certification election. Ang grabe pang practice diyan, mag-a-advance ang federation for
three years union dues para panggastos lang sa certification election. That is what we are
trying to avoid.
HON. JABAR: Although there are unions which really get advances.
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon ang
mangyayari. And I think our responsibility here is to create a legal framework to promote
industrial peace and to develop responsible and fair labor movement.
HON. CHAIRMAN VELOSO: In other words, the longer the period of the effectivity . . .
xxx
HON. CHAIRMAN VELOSO. (continuing) . . in other words, the longer the period of
effectivity of the CBA, the better for industrial peace.
HON. CHAIRMAN HERRERA: representation status.
HON. CHAIRMAN VELOSO: Only on
HON. CHAIRMAN HERRERA: the representations.
HON. CHAIRMAN VELOSO: But on the economic issues.
HON. CHAIRMAN HERRERA: You have to review that. The parties will have to review
that.
HON. CHAIRMAN VELOSO: At least on second year.
HON. CHAIRMAN HERRERA: Not later than 3 years ang karamihan ng mga, mag-
negotiate when the company is (interrupted)[13]
xxx
From the aforesaid discussions, the legislators were more inclined to have the period of
effectivity for three (3) years insofar as the economic as well as non-economic provisions are
concerned, except representation.
Obviously, the framers of the law wanted to maintain industrial peace and stability by
having both management and labor work harmoniously together without any
disturbance. Thus, no outside union can enter the establishment within five (5) years and
challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, the
12
terms and conditions of employment (economic and non-economic) can not be questioned
by the employers or employees during the period of effectivity of the CBA. The CBA is a
contract between the parties and the parties must respect the terms and conditions of the
agreement.[14] Notably, the framers of the law did not give a fixed term as to the effectivity
of the terms and conditions of employment. It can be gleaned from their discussions that it
was left to the parties to fix the period.
In the instant case, it is not difficult to determine the period of effectivity for the non-
representation provisions of the CBA. Taking it from the history of their CBAs, SMC
intended to have the terms of the CBA effective for three (3) years reckoned from the
expiration of the old or previous CBA which was on June 30, 1989, as it provides:
SECTION 1. This Agreement which shall be binding upon the parties hereto and their
respective successors-in-interest, shall become effective and shall remain in force and effect
until June 30, 1992.
The argument that the PRC case is applicable is indeed misplaced. We quote with favor the
Order of the Secretary of Labor in the light of SMCs peculiar situation as compared with
PRCs company situation.
It is true that in the Philippine Refining Company case (OS-AJ-0031-91 (sic), Labor Dispute
at Philippine Refining Company), we ruled that the term of the renegotiated provisions of
the CBA should coincide with the remaining term of the agency. In doing so, we placed
premium on the fact that PRC has only two (2) unions and no other union had yet executed
a renewed term of 3 years. Nonetheless, in ruling for a shortened term, we were guided by
our considered perception that the said term would improve, rather than ruin, the general
welfare of both the workers and the company. It is equally true that once the economic
provisions of the CBA expire, the residual representative status of the union is effective for
only 2 more years. However, if circumstances warrant that the contract duration which it is
soliciting from the company for the benefit of the workers, shall be a little bit longer than its
lifespan, then this Office cannot stand in the way of a more ideal situation. We must not lose
sight of the fact that the primordial purpose of a collective contract is to promote industrial
harmony and stability in the terms and conditions of employment. To our mind, this
objective cannot be achieved without giving due consideration to the peculiarities and
unique characteristics of the employer. In the case at bar, there is no dispute that the mother
corporation (SMC) spun-off two of its divisions and thereby gave birth to two (2) other
entities now known as Magnolia Corporation and San Miguel Foods, Inc. In order to effect a
smooth transition, the companies concerned continued to recognize the existing unions as
the bargaining agents of their respective bargaining units. In the meantime, the other unions
in these companies eventually concluded their CBA negotiations on the remaining term and
all of them agreed on a 3-year cycle.Notably, the following CBAs were forged incorporating
a term of 3-years on the renegotiated provisions, to wit:
1. SMC - daily-paid employees union (IBM)
2. SMF - monthly-paid employees and daily-paid employees at the Cabuyao Plant.
There is a direct link between the voluntary recognition by the company of the continuing
representative status of the unions after the aforementioned spin-offs and the stand of the
company for a 3-year renegotiated cycle when the economic provisions of the existing CBAs
expired, i.e., to maintain stability and avoid confusion when the umbilical cord of the two
divisions were severed from their parent.These two cannot be considered independently of
each other for they were intended to reinforce one another. Precisely, the company
conceded to face the same union notwithstanding the spin-offs in order to preserve
industrial peace during the infancy of the two corporations. If the union would insist on a
shorter renegotiated term, then all the advantages gained by both parties in this regard,
would have gone to naught. With this in mind, this office feels that it will betray its
mandate should we order the parties to execute a 2-year renegotiated term for then chaos
and confusion, rather than tranquility, would be the order of the day. Worse, there is a
strong likelihood that such a ruling might spawn discontent and possible mass actions
against the company coming from the other unions who had already agreed to a 3-year
renegotiated terms. If this happens, the purpose of this Offices intervention into the parties
controversy would have been defeated.[15]
The issue as to the term of the non-representation provisions of the CBA need not belabored
especially when we take note of the Memorandum of the Secretary of Labor dated February
24, 1994 which was mentioned in the Resolution of Undersecretary Bienvenido Laguesma
on January 16, 1995 in the certification election case involving the SMC employees. [16]In said
memorandum, the Secretary of Labor had occasion to clarify the term of the renegotiated
terms of the CBA vis-a-vis the term of the bargaining agent, to wit:
As a matter of policy the parties are encourages (sic) to enter into a renegotiated CBA with a
term which would coincidde (sic) with the aforesaid five (5) year term of the bargaining
representative.
In the event however, that the parties, by mutual agreement, enter into a renegotiated
contract with a term of three (3) years or one which does not coincide with the said 5-year
term, and said agreement is ratified by majority of the members in the bargaining unit, the
subject contract is valid and legal and therefore, binds the contracting parties. The same will
however not adversely affect the right of another union to challenge the majority status of
the incumbent bargaining agent within sixty (60) days before the lapse of the original five
(5) year term of the CBA.
Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in
ruling that the effectivity of the renegotiated terms of the CBA shall be for three (3) years.
With respect to the second issue, there is, likewise, no merit in petitioner-unions assertion
that the employees of Magnolia and SMFI should still be considered part of the bargaining
unit of SMC.
Magnolia and SMFI were spun-off to operate as distinct companies on October 1,
1991. Management saw the need for these transformations in keeping with its vision and
long term strategy as it explained in its letter addressed to the employees dated August 13,
1991:
13
x x x As early as 1986, we announced the decentralization program and spoke of the need
for structures that can react fast to competition, a changing environment, shorter product
life cycles and shifts in consumer preference. We further stated in the 1987 Annual Report to
Stockholders that San Miguels businesses will be more autonomous and self sufficient so as
to better acquire and master new technologies, cope with a labor force with different
expertises and expectations, and master and satisfy the changing needs of our customers
and end-consumers. As subsidiaries, Magnolia and FLD will gain better industry focus and
flexibility, greater awareness of operating results, and speedier, more responsive decision
making.
xxx
We only have to look at the experience of Coca-Cola Bottlers Philippines, Inc., since this
company was organized about ten years ago, to see the benefits that arise from
restructuring a division of San Miguel into a more competitive organization. As a stand-
alone enterprise, CCBPI engineered a dramatic turnaround and has sustained its sales and
market share leadership ever since.
We are confident that history will repeat itself, and the transformation of Magnolia and FLD
will be successful as that of CCBPI.[17]
Undeniably, the transformation of the companies was a management prerogative and
business judgment which the courts can not look into unless it is contrary to law, public
policy or morals. Neither can we impute any bad faith on the part of SMC so as to justify the
application of the doctrine of piercing the corporate veil. [18] Ever mindful of the employees
interests, management has assured the concerned employees that they will be absorbed by
the new corporations without loss of tenure and retaining their present pay and benefits
according to the existing CBAs.[19] They were advised that upon the expiration of the CBAs,
new agreements will be negotiated between the management of the new corporations and
the bargaining representatives of the employees concerned. As a result of the spin-offs:
1. Each of the companies are run by, supervised and controlled by different management
teams including separate human resource/personnel managers.
2. Each Company enforces its own administrative and operational rules and policies and are
not dependent on each other in their operations.
3. Each entity maintains separate financial statements and are audited separately from each
other.[20]
Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical
personalities. Thus, they can not belong to a single bargaining unit as held in the case
of Diatagon Labor Federation Local 110 of the ULGWP v. Ople.[21] We elucidate:
The fact that their businesses are related and that the 236 employees of Georgia Pacific
International Corporation were originally employees of Lianga Bay Logging Co., Inc. is not
a justification for disregarding their separate personalities. Hence, the 236 employees, who
are now attached to Georgia Pacific International Corporation, should not be allowed to
vote in the certification election at the Lianga Bay Logging Co., Inc. They should vote at a
separate certification election to determine the collective bargaining representative of the between the unit or units proposed and the employers organization, management, and
employees of Georgia Pacific International Corporation. operation x x.
Petitioner-unions attempt to include the employees of Magnolia and SMFI in the SMC x x In said report, it is likewise emphasized that the basic test in determining the
bargaining unit so as to have a bigger mass base of employees has, therefore, no more valid appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of
ground. employees who have substantial, mutual interests in wages, hours, working conditions and
other subjects of collective bargaining (citing Smith on Labor Laws, 316-317; Francisco,
Moreover, in determining an appropriate bargaining unit, the test of grouping is mutuality
Labor Laws, 162) x x.
or commonality of interests. The employees sought to be represented by the collective
bargaining agent must have substantial mutual interests in terms of employment and Finally, we take note of the fact that the separate interests of the employees of Magnolia and
working conditions as evinced by the type of work they performed. [22] Considering the spin- SMFI from those of SMC has been recognized in the case of Daniel Borbon v. Laguesma.[26] We
offs, the companies would consequently have their respective and distinctive concerns in quote:
terms of the nature of work, wages, hours of work and other conditions of
Even assuming in gratia argumenti that at the time of the election they were regular
employment. Interests of employees in the different companies perforce differ. SMC is
employees of San Miguel, nonetheless, these workers are no longer connected with San
engaged in the business of beer manufacturing. Magnolia is involved in the manufacturing
Miguel Corporation in any manner because Magnolia has ceased to be a division of San
and processing of dairy products[23]while SMFI is involved in the production of feeds and
Miguel Corporation and has been formed into a separate corporation with a personality of
the processing of chicken.[24] The nature of their products and scales of business may require
its own (p. 305, Rollo). This development, which was brought to our attention by private
different skills which must necessarily be commensurated by different compensation
respondents, necessarily renders moot and academic any further discourse on the propriety
packages. The different companies may have different volumes of work and different
of the elections which petitioners impugn via the present recourse (p. 319, Rollo).
working conditions. For such reason, the employees of the different companies see the need
to group themselves together and organize themselves into distinctive and different In view of all the foregoing, we do not find any grave abuse of discretion on the part of the
groups. It would then be best to have separate bargaining units for the different companies Secretary of Labor in rendering the assailed Order.
where the employees can bargain separately according to their needs and according to their
own working conditions. WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary Restraining
Order issued on March 29, 1995 is lifted.
We reiterate what we have explained in the case of University of the Philippines v. Ferrer-
SO ORDERED.
Calleja[25] that:
[T]here are various factors which must be satisfied and considered in determining the
proper constituency of a bargaining unit. No one particular factor is itself decisive of the G.R. No. 92357 July 21, 1993
determination. The weight accorded to any particular factor varies in accordance with the
particular question or questions that may arise in a given case. What are these PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION AGENCY
(PSVSIA), GVM SECURITY AND INVESTIGATION AGENCY (GVM) and ABAQUIN
factors? Rothenberg mentions a good number, but the most pertinent to our case are: (1)
SECURITY AND DETECTIVE AGENCY, INC. (ASDA), petitioners,
will of the employees (Globe Doctrine); (2) affinity and unit of employees interest, such as
vs.
substantial similarity of work and duties, or similarity of compensation and working
THE HON. SECRETARY OF LABOR RUBEN D. TORRES AND PGA BROTHERHOOD
conditions; (3) prior collective bargaining history; and (4) employment status, such as
ASSOCIATION-UNION OF FILIPINO WORKERS, respondents.
temporary, seasonal and probationary employees x x.
V.E. Del Rosario & Associates for petitioners.
xxx
German N. Pascua, Jr. for private respondent.
An enlightening appraisal of the problem of defining an appropriate bargaining unit is
given in the 10th Annual Report of the National Labor Relations Board wherein it is NOCON, J.:
emphasized that the factors which said board may consider and weigh in fixing appropriate
The sole issue presented for resolution in this petition for certiorari with prayer for
units are: the history, extent and type of organization of employees; the history of their
preliminary injunction is whether or not a single petition for certification election or for
collective bargaining; the history, extent and type of organization of employees in other
recognition as the sole and exclusive bargaining agent can validly or legally be filed by a
plants of the same employer, or other employers in the same industry; the skill wages,
labor union in three (3) corporations each of which has a separate and distinct legal
work, and working conditions of the employees; the desires of the employees; the eligibility
personality instead of filing three (3) separate petitions.
of the employees for membership in the union or unions involved; and the relationship
14
On April 6, 1989, private respondent labor union, PGA Brotherhood Association - Union of
Filipino Workers (UFW), hereinafter referred to as "the Union " filed a petition for Direct
Certification/Certification Election among the rank and file employees of Philippine Scout
Veterans Security and Investigation Agency (PSVSIA), GVM Security and Investigations
Agency, Inc. (GVM). and Abaquin Security and Detective Agency, Inc. (ASDA). These three
agencies were collectively referred to by private respondent Union as the "PGA Security
Agency," which is actually the first letters of the corporate names of the agencies.
On April 11, 1989, summons was issued to the management of PSVSIA, GVM, ASDA (PGA
Security Agency) at 82 E. Rodriquez Avenue, Quezon City.
On April 11, 26, 1986, petitioners filed a single comment alleging therein that the said three
security agencies have separate and distinct corporate personalities while PGA Security
Agency is not a business or corporate entity and does not possess any personality
whatsoever; the petition was unclear as to whether the rank-and-file employees mentioned
therein refer to those of the three security agencies collectively and if so, the labor union
cannot seek a certification election in three separate bargaining units in one petition; the
labor union included in their organization "security supervisors," in violation of R.A. 6715;
and though R.A. 6715 is already in effect, there were still no implementing rules therefor.
On May 4, 1989, the security agencies filed a Consolidated Motion to Dismiss on the
grounds that the 721 supporting signatures do not meet the 20% minimum requirement for
certification election as the number of employees totals 2374 and that there are no
implementing rules yet of R.A. 6715.
On May 8, 1989, the Union filed an Omnibus Reply to Comment and Motion to Dismiss
alleging that it is clear that it is seeking a certification election in the three agencies; that the
apparent separate personalities of the three agencies were used merely to circumvent the
prohibition in R.A. 5847, as amended by P.D. 11 and P.D. 100, that a security agency must
not have more than 1,000 guards in its employ; that the three security agencies'
administration, management and operations are so intertwined that they can be deemed to
be a single entity; and that the security supervisors cannot be deemed part of management
since they do not meet the definition of "supervisory employees" found in Articles 212(m),
Labor Code, as amended by Section 4, R.A. No. 6715.
On May 18, 1989, the security agencies filed a Rejoinder claiming that there is no violation
of R.A. 5487, as amended by P.D. 11 and P.D. 100 since the three agencies were incorporated
long before the decrees' issuance; that mere duplication of incorporators does not prove that
the three security agencies are actually one single entity; and that security guard
supervisors, most especially detachment commanders, fall within the definition of the term
"supervisors."
On July 6, 1989, Med-Arbiter Rasidali C. Abdullah issued an Order in favor of the labor
union finding that PSVSIA, GVM and ASDA should be deemed as a single entity and
bargaining unit for the purpose of union organizing and the holding of a certification
election. The dispositive portion of the Order reads as follows:
15
WHEREFORE, premises considered, let a certification election be conducted among the
rank and file security guards of PSVSIA, GVM and ASDA within twenty (20) days from
receipt hereof with the usual pre-election conference of the parties. The list of eligible voters
shall be based on the security agencies' payroll three (3) months prior to the filing of this
petition with the following choices:
a) PGA Brotherhood Association-Union of Filipino Workers (UFW); and
b) No union.
SO ORDERED.1
On July 21, 1989, the security agencies appealed the Med-Arbiter's Order to the Secretary of
Labor and Employment claiming that said Order was issued with grave abuse of discretion
when it ruled that the three security agencies could be considered as a single bargaining
entity for purposes of the holding of a certification election.
On December 15, 1989, the Labor Secretary Franklin M. Drilon denied the appeal for lack of
merit while at the same time affirming the Med-Arbiter's Order of July 6, 1989. He also
ordered the immediate conduct of a certification election. The dispositive portion of which
reads as follows:
WHEREFORE, premises considered, the Appeal of respondents Security agencies is hereby
denied for lack of merit and the Order dated 6 July affirmed.
Let therefore, the pertinent records of this case be immediately forwarded to the Regional
Office for he immediate conduct of the certification election.
SO ORDERED. 2
On January 5, 1990, the three security agencies filed a Motion for Reconsideration arguing
that they were denied their rights to due process and that jurisdiction was not acquired over
them by the labor authorities.
On January 26, 1990, the succeeding Labor Secretary, Ruben D. Torres, likewise denied the
Motion for Reconsideration for lack of merit and reiterated the directive that a certification
election be conducted without further delay.
On March 14, 1990, the instant petition was filed by the three security agencies, raising the
following grounds:
I
SERIOUS ERRORS IN THE FINDINGS OF FACTS.
II
GRAVE ABUSE OF DISCRETION ON THE PART OF THE SECRETARY OF LABOR. 3
Petitioners insist that there are three (3) corporations in this petition, each of which has a
separate and distinct corporate personality of its own with separate registrations with the
Securities and Exchange Commission (SEC) and different Articles of Incorporation and By-
Laws; with separate sets of corporate officers and directors; and no common business
address except for GVM and ASDA which are located at 1957 España corner Craig Streets,
Sampaloc, Manila.
Petitioners claim that the facts and circumstances of the case of La Campana Coffee Factory,
Inc. v. Kaisahan Ng Mga Manggagawa sa La Campana 4 which public respondent claims to be
on all fours with the instant case, are very distinct from the facts and circumstance
obtaining in the case at bar. As to form of business organization, in theLa Campana case,
only one of two (2) businesses was a corporation i.e., the La Campana Coffee Factory, Inc.
and the other, the La Campana Gaugau Packing, is a "non-entity," being merely a business
name. In the case at bar, all three (3) agencies are incorporated. Moreover, the issue
involved in the instant case is one of representation while in the La Campana case, the issue
involved is the validity of a demand for wage increases and other labor standards benefits.
Petitioners likewise contend that it was error to hold that the three companies should be
treated as one in a single bargaining unit in one petition for certification elections resulting
in a violation of the right to due process of each corporation as no notice of hearing and
other legal processes were served on each of said corporations. Consequently, no
jurisdiction was acquired on them by the Department of Labor and Employment.
Petitioners' arguments deserve scant consideration. The facts and circumstances extant in
the record indicate that the Med-Arbiter and Secretaries Drilon and Torres were not
mistaken in holding that the three security companies are in reality a single business entity
operating as a single company called the "PGA Security Group" or "PGA Security Services
Group." Factual findings of labor officials are conclusive and binding on the Court when
supported by substantial evidence.5
The public repondent noted the following circumstances in the La Campana case similar to
the case at bar, as indicative of the fact that the La Campana Coffee Factory and La
Campana Gaugau Packing were in reality only one business with two trade names: (1) the
two factories occupied the same address, wherein they had their principal place of business;
(2) their signboards, advertisements, packages of starch, delivery truck and delivery forms
all use one appellation, "La Campana Starch and Coffee Factory"; (3) the workers in either
company received their pay from a single cashier, and (4) the workers in one company
could easily transfer to the other company, and vice-versa. This Court held therein that the
veil of corporate fiction of the coffee factory may be pierced to thwart the attempt to
consider it part from the other business owned by the same family. Thus, the fact that one of
the businesses is not incorporated was not the decisive factor that led the Court to consider
the two factories as one. Moreover, we do not find any materiality in the fact that the La
Campana case was instituted to demand wage increases and other labor standards benefits
while this case was filed by the labor union to seek recognition as the sole bargaining agent
in the establishment. If businesses operating under one management are treated as one for
bargaining purposes, there is not much difference in treating such businesses also as one for
the preliminary purpose of labor organizing.
Indeed, the three agencies in the case at bar failed to rebut the fact that they are managed
through the Utilities Management Corporation with all of their employees drawing their
salaries and wages from said entity; that the agencies have common and interlocking
16
incorporators and officers; and that the PSVSIA, GVM and ASDA employees have a single
Mutual Benefit System and followed a single system of compulsory retirement.
No explanation was also given by petitioners why the security guards of one agency could
easily transfer from one agency to another and then back again by simply filling-up a
common pro forma slip called "Request for Transfer". Records also shows that the PSVSIA,
GVM and ASDA always hold joint yearly ceremonies such as the "PGA Annual Awards
Ceremony". In emergencies, all PSVSIA Detachment Commanders were instructed in a
memorandum dated November 10, 1988 to get in touch with the officers not only of PSVSIA
but also of GVM and ASDA. All of these goes to show that the security agencies concerned
do not exist and operate separately and distinctly from each other with different corporate
directions and goals. On the contrary, all the cross-linking of the three agencies' command,
control and communication systems indicate their unitary corporate personality.
Accordingly, the veil of corporate fiction of the three agencies should be lifted for the
purpose of allowing the employees of the three agencies to form a single labor union. As a
single bargaining unit, the employees therein need not file three separate petitions for
certification election. All of these could be covered in a single petition.
Petitioners' claim of alleged defect in the petition for certification election which although
addressed to the three security agencies merely alleged that there are only 1,000 employees
when the total number of employees in said security agencies is about 2,374 (PSVSIA - 1252;
GVM - 807; and ASDA - 315) thereby failing to comply with the legal requirement that at
least twenty percent (20%) of the employees in the bargaining unit must support the
petition, betrays lack of knowledge of the amendments introduced by R.A 6715 which
became effective on March 21, 1989, prior to the filing of the petition for certification
election on April 6, 1989. Under the amendments, there is no need for the labor union to
prove that at least 20% of the security guards in the three agencies supported the petition.
When a duly organized union files a petition for certification election, the Med-Arbiter has
the duty to automatically conduct an election. He has no discretion on the matter. This is
clearly the mandate of Article 257 of the Labor Code, as amended by Section 24 of R.A. 6715,
which now reads:
Art. 257. Petitions in unorganized establishments. — In any establishment where there is no
certified bargaining agent, a certification election shall automatically be conducted by the
Med-Arbiter upon the filing of a petition by a legitimate labor organization.
The designation of the three agencies collectively as "PGA Security Agency" and the service
of summons to the management thereof at 82 E. Rodriguez Avenue, Quezon City did not
render the petition defective. Labor Secretary Franklin Drilon correctly noted the fact that
the affidavits executed separately and under oath by the three managers of the three
security agencies indicated their office address to be at PSVSIA Center II, E. Rodriguez Sr.
Blvd., Quezon City. Besides, even if there was improper service of summons by the Med-
Arbiter, the three (3) security agencies voluntarily submitted themselves to the jurisdiction
of the labor authorities. The summons were clearly sent to and received by their lawyer
who filed motions and pleadings on behalf of the three security agencies and who always
appeared as their legal counsel. It puzzles this Court why petitioners, who claim to be
separate entities, continue to be represented by one counsel even in this instant petition.
Finally, except where the employer has to file a petition for certification election pursuant to
Article 258 of the Labor Code because of a request to bargain collectively, it has nothing to
do with a certification election which is the sole concern of the workers. Its role in a
certification election has aptly been described in Trade Unions of the Philippines and Allied
Services (TUPAS) v. Trajano,6 as that of a mere by-stander. It has no legal standing in a
certification election as it cannot oppose the petition or appeal the Med-Arbiter's orders
related thereto. An employer that involves itself in a certification election lends suspicion to
the fact that it wants to create a company union.
This Court's disapprobation of management interference in certification elections is even
more forceful in Consolidated Farms, Inc. v. Noriel,7 where we held:
On a matter that should be the exclusive concern of labor, the choice of a collective
bargaining representative, the employer is definitely an intruder. His participation, to say
the least, deserves no encouragement. This Court should be the last agency to lend support
to such an attempt at interference with a purely internal affair of labor.
Indeed, the three security agencies should not even be adverse parties in the certification
election itself. We note with disapproval the title given to the petition for certification
election of the Union by the Med-Arbiter and the Secretary of Labor naming the three
security agencies as respondents. Such is clearly an error. While employers may rightfully
be notified or informed of petitions of such nature, they should not, however, be considered
parties thereto with concomitant right to oppose it. Sound policy dictates that they should
maintain a strictly hands-off policy.
WHEREFORE, finding no reversible error in the questioned decision of the Secretary of
Labor, the instant petition for certiorari is hereby DISMISSED for utter lack of merit.
SO ORDERED.
G.R. No. 102130 July 26, 1994
GOLDEN FARMS, INC., petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR and THE PROGRESSIVE FEDERATION
OF LABOR, respondents.
J.V. Yap Law Office for petitioner.
PUNO, J.:
The sole issue for resolution in this Petition for Certiorari with prayer for the issuance of
preliminary injunction and/or restraining order is whether or not petitioner's monthly paid
rank-and file employees can constitute a bargaining unit separate from the existing
bargaining unit of its daily paid rank-and-file employees.
17
Petitioner Golden Farms, Inc., is a corporation engaged in the production and marketing of
bananas for export. On February 27, 1992, private respondent Progressive Federation of
Labor (PFL) filed a petition before the Med-Arbiter praying for the holding of a certification
election among the monthly paid office and technical rank-and-file employees of petitioner
Golden Farms.
Petitioner moved to dismiss the petition on three (3) grounds. First, respondent PFL failed
to show that it was organized as a chapter within petitioner's establishment. Second, there
was already an existing collective bargaining agreement between the rank-and-file
employees represented by the National Federation of Labor (NFL) and petitioner. And
third, the employees represented by PFL had allegedly been disqualified by this Court from
bargaining with management in Golden Farms, Inc., vs. Honorable Director Pura Ferrer-Calleja,
G.R. No. 78755, July 19, 1989. 1
Respondent PFL opposed petitioner's Motion to Dismiss. It countered that the monthly paid
office and technical employees should be allowed to form a separate bargaining unit
because they were expressly excluded from coverage in the Collecting Bargaining
Agreement (CBA) between petitioner and NFL. It also contended that the case invoked by
petitioner was inapplicable to the present case.
In its reply, petitioner argued that the monthly paid office and technical employees should
have joined the existing collective bargaining unit of the rank-and-file employees if they are
not manegerial employees.
On April 18, 1991, the Med-Arbiter granted the petition and ordered that a certification
election be conducted, viz:
WHEREFORE, premises considered, the present petition filed by the Progressive Federation
of Labor, for certification election among the office and technical employees of Golden
Farms, Inc., is, as it is hereby, GRANTED with the following choices:
1. Progressive Federation of Labor (PFL);
2. No. union.The designated representation officer is hereby directed to call the parties to a
pre-election conference to thresh out the mechanics of the election and to conduct and
supervise the same within twenty (20) days from receipt by the parties of this Order. The
"Masterlist of Office and Technical Employees" shall be the basis in determining the
employees qualified to vote during the certification election.
SO ORDERED. 2
Petitioner seasonably appealed to public respondent Secretary of Labor. On August 6, 1991,
respondent Secretary of Labor issued the assailed Decision denying the appeal for lack of
merit. 3 Petitioner filed a Motion for Reconsideration but the same was also denied on
September 13, 1991.
Thus, this petition for certiorari interposing two (2) issues.
I
THE CREATION OF AN ADDITIONAL BARGAINING UNIT FOR CERTAIN RANK AND
FILE EMPLOYEES WILL NOT ONLY SPLIT THE EXISTING ONE BUT WILL ALSO
NEGATE THE PRINCIPLE OF RES JUDICATA.
II
THE PROGRESSIVE FEDERATION OF LABOR BEING THE EXCLUSIVE BARGAINING
AGENT OF THE SUPERVISORY EMPLOYEES IS DISQUALIFIED FROM REPRESENTING
THE OFFICE AND TECHNICAL EMPLOYEES.
The petition is devoid of merit.
The monthly paid office and technical rank-and-file employees of petitioner Golden Farms
enjoy the constitutional right to self-organization and collective bargaining. 4 A "bargaining
unit" has been defined as a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, which the collective interest of all the employees,
consistent with equity to the employer, indicate to be the best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of the law. 5 The
community or mutuality of interest is therefore the essential criterion in the grouping. "And
this is so because 'the basic test of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best assure to all employees the exercise
of their collective bargaining rights.' 6
In the case at bench, the evidence established that the monthly paid rank-and-file
employees of petitioner primarily perform administrative or clerical work. In
contradistinction, the petitioner's daily paid rank-and-file employees mainly work in the
cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-file
employees of petitioner have very little in common with its daily paid rank-and-file
employees in terms of duties and obligations, working conditions, salary rates, and skills.
To be sure, the said monthly paid rank-and-file employees have even been excluded from
the bargaining unit of the daily paid rank-and-file employees. This dissimilarity of interests
warrants the formation of a separate and distinct bargaining unit for the monthly paid rank-
and-file employees of the petitioner. To rule otherwise would deny this distinct class of
employees the right to self-organization for purposes of collective bargaining. Without the
shield of an organization, it will also expose them to the exploitations of management. So
we held in University of the Philippines vs. Ferrer-Calleja, 7 where we sanctioned the formation
of two (2) separate bargaining units within the establishment, viz:
[T]he dichotomy of interests, the dissimilarity in the nature of the work and duties as well
as in the compensation and working conditions of the academic and non-academic
personnel dictate the separation of these two categories of employees for purposes of
collective bargaining. The formation of two separate bargaining units, the first consisting of
the rank-and-file non-academic employees, and the second, of the rank-and-file academic
employees, is the set-up that will best assure to all the employees the exercise of their
collective bargaining rights.
Petitioner next contends that these monthly paid office and technical employees are
managerial employees. They allegedly include those in the accounting and personnel
department, cashier, and other employees holding positions with access to classified
information.
We are not persuaded. Article 212, paragraph (m) of the Labor Code, as amended, defines
as managerial employee as follows:
"Managerial employee" is one who is vested with power 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 authority
is not merely routinary or clerical 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 for purposes of this Book.
Given this definition, the monthly paid office and technical employees, accountants, and
cashiers of the petitioner are not managerial employees for they do not participate in policy-
making but are given cut out policies to execute and standard practices to observe. 8 In the
main, the discharge of their duties does not involve the use of independent judgment. As
factually found by the Med-Arbiter, to wit:
A perusal of the list of the office and technical employees sought to be represented in the
instant case, with their corresponding designation does not show that said Office and
Technical employees exercises supervisory or managerial functions.
The office believes and so hold that the employees whose names appear in the "Masterlist of
Office and Technical Employees" submitted during the hearing are eligible to join/form a
labor organization of their own choice. 9
Our decision in Golden Farms, Inc., vs. Honorable Pura Ferrer-Calleja, op. cit., does not pose any
obstacle in holding a certification election among petitioner's monthly paid rank-and-file
employees. The issue brought to fore in that case was totally different, i.e., whether or not
petitioner's confidential employees, considering the nature of their work, should
be included in the bargaining unit of the daily paid rank-and-file employees. In the case at
bench, the monthly paid rank-and-file employees of petitioner are being separated as a
bargaining unit from its daily paid rank-and-file employees, on the ground that they have
different interest to protect. The principle of res judicata is,therefore, inapplicable.
The second assigned error which was not raised in the proceedings below must necessarily
fail. The alleged error involves a question of fact which this Court cannot resolve. Petitioner
submitted this contention only in its Memorandum dated February 12, 1993. 10 In this
Memorandum, petitioner cited LRD Case No. OXI-UR-70 for Direct
Recognition/Certification Election. But even a side glance of the cited case will reveal that it
involves a petition for direct certification among the rank-and-file office and technical
employees of the Golden Farms Inc., (not supervisory employees) under the House of
Investment, Ladislawa Village, Buhaning, Davao City filed by the National Federation of
Labor (not the respondent Progressive Federation of Labor). The averment of petitioner is
baseless and its recklessness borders the contemptuous.

18
Finally, we note that it was petitioner company that filed the motion to dismiss the petition
for election. The general rule is that an employer has no standing to question a certification
election since this is the sole concern of the workers. 11 Law and policy demand that
employers take a strick, hands-off stance in certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence of
management. A labor bargaining representative, to be effective, must owe its loyalty to the
employees alone and to no other.
WHEREFORE, the petition is DISMISSED for lack of merit. With costs against petitioner.
SO ORDERED.
[G.R. No. 110399. August 15, 1997]
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND
ERNESTO L. PONCE, President, petitioners, vs. HONARABLE BIENVENIDO E.
LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-
ARBITER AND SAN MIGUEL CORPORATION, respondents.
19
DECISION
ROMERO, J.:
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.
The antecedent facts are undisputed:
On October 5, 1990, petitioner union filed before the Department of Labor and Employment
(DOLE) a Petition for District Certification or Certification Election among the supervisors
and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San
Fernando and Otis.
On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the
conduct of certification among the supervisors and exempt employees of the SMC Magnolia
Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.
On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with
Memorandum on Appeal, pointing out, among others, the Med-Arbiters 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 July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent
companys Appeal and ordered the remand of the case to the Med-Arbiter of origin for
determination of the true classification of each of the employees sought to be included in
the appropriate bargaining unit.
Upon petitioner-unions motion dated August 7, 1991, Undersecretary Laguesma granted
the reconsideration prayed for on September 3, 1991 and directed the conduct of separate
certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4)
and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.
On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for
Reconsideration with Motion to suspend proceedings.
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:
x x x Confidential employees, like managerial employees, are not allowed to form, join or
assist a labor union for purposes of collective bargaining.
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]
Hence this petition.
For resolution in this case are the following issues:
1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are
considered confidential employees, hence ineligible from joining a union.
2. If they are not confidential employees, do the employees of the three plants constitute an
appropriate single bargaining unit.
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.
Confidential employees are those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor
relations.[5] The two criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee that is, the confidential relationship must exist between
the employees and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.[6]
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
20
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]
An important element of the confidential employee rule is the employees need to use labor
relations information. Thus, in determining the confidentiality of certain employees, a key
questions frequently considered is the employees necessary access to confidential labor
relations information.[13]
It is the contention of respondent corporation that Supervisory employees 3 and 4 and the
exempt employees come within the meaning of the term confidential employees primarily
because they answered in the affirmative when asked Do you handle confidential data or
documents? in the Position Questionnaires submitted by the Union.[14] In the same
questionnaire, however, it was also stated that the confidential information handled by
questioned employees relate to product formulation, product standards and product
specification which by no means relate to labor relations.[15]
Granting arguendo that an employee has access to confidential labor relations information
but such is merely incidental to his duties and knowledge thereof is not necessary in the
performance of such duties, said access does not render the employee a confidential
employee.[16] If access to confidential labor relations information is to be a factor in the
determination of an employees confidential status, such information must relate to the
employers labor relations policies. Thus, an employee of a labor union, or of a management
association, must have access to confidential labor information with respect to his employer,
the union, or the association, to be regarded a confidential employee, and knowledge of
labor relations information pertaining to the companies with which the union deals, or
which the association represents, will not clause an employee to be excluded from the
bargaining unit representing employees of the union or association.[17] Access to
information which is regarded by the employer to be confidential from the business
standpoint, such as financial information[18] or technical trade secrets, will not render an
employee a confidential employee.[19]
Herein listed are the functions of supervisors 3 and higher:
1. To undertake decisions to discontinue/temporarily stop shift operations when situations
require.
2. To effectively oversee the quality control function at the processing lines in the storage of
chicken and other products.
3. To administer efficient system of evaluation of products in the outlets.
4. To be directly responsible for the recall, holding and rejection of direct manufacturing
materials.
5. To recommend and initiate actions in the maintenance of sanitation and hygiene
throughout the plant.[20]
It is evident that whatever confidential data the questioned employees may handle will
have to relate to their functions. From the foregoing functions, it can be gleaned that the
confidential information said employees have access to concern the employers internal
business operations. As held in Westinghouse Electric Corporation v. National Labor
Relations Board,[21] an employee may not be excluded from appropriate bargaining unit
merely because he has access to confidential information concerning employers internal
business operations and which is not related to the field of labor relations.
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 self-organization. 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]
In the case at bar, supervisors 3 and above may not be considered confidential employees
merely because they handle confidential data as such must first be strictly classified as
pertaining to labor relations for them to fall under said restrictions. The information they
handle are properly classifiable as technical and internal business operations data which, to
our mind, has no relevance to negotiations and settlement of grievances wherein the
interests of a union and the management are invariably adversarial. Since the employees are
not classifiable under the confidential type, this Court rules that they may appropriately
form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming
that they are confidential employees, jurisprudence has established that there is no legal
prohibition against confidential employees who are not performing managerial functions to
form and join a union.[23]
In this connection, the issue of whether the employees of San Miguel Corporation Magnolia
Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining
unit needs to be threshed out.
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.
This Court finds the contention of the petitioner meritorious.
21
An appropriate bargaining unit may be defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the employer, indicate to be
best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.[24]
A unit to be appropriate must effect a grouping of employees who have substantial, mutual
interests in wages, hours, working conditions and other subjects of collective bargaining. [25]
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.

G.R. No. L-28223 August 30, 1968
MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL
RAILWAYS, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS and SAMAHAN NG MGA MANGGAGAWA
SA CALOOCAN SHOPS,respondents.
Sisenando Villaluz for petitioner.
Gregorio E. Fajardo for respondent Samahan ng mga Manggagawa sa Caloocan Shops.
REYES, J.B.L., J.:
Petition by the "Mechanical Department Labor Union sa PNR" for a review of an order of
the Court of Industrial Relations, in its Case No. 1475-MC, directing the holding of a
plebiscite election to determine whether the employees at the Caloocan Shops desire the
respondent union, "Samahan ng mga Manggagawa sa Caloocan Shops", to be separated
from the Mechanical Department Labor Union, with a view to the former being recognized
as a separate bargaining unit.
The case began on 13 February 1965 by a petition of the respondent "Samahan ng mga
Manggagawa, etc." calling attention to the fact that there were three unions in the Caloocan
shops of the Philippine National Railways: the "Samahan", the "Kapisanan ng Manggagawa
sa Manila Railroad Company", and the Mechanical Department Labor Union; that no
certification election had been held in the last 12 months in the Caloocan shops; that both
the "Samahan" and the Mechanical Department Labor Union had submitted different labor
demands upon the management for which reason a certification election was needed to
determine the proper collective bargaining agency for the Caloocan shop workers.
The petition was opposed by the management as well as by the Mechanical Department
Labor Union, the latter averring that it had been previously certified in two cases as sole
and exclusive bargaining agent of the employees and laborers of the PNR'S mechanical
department, and had negotiated two bargaining agreements with management in 1961 and
1963; that before the expiration of the latter, a renewal thereof had been negotiated and the
contract remained to be signed; that the "Samahan" had been organized only in 21 January
1965; that the Caloocan shops unit was not established nor separated from the Mechanical
Department unit; that the "Samahan" is composed mainly of supervisors who had filed a
pending case to be declared non-supervisors; and that the purpose of the petition was to
disturb the present smooth working labor management relations.
By an order of 18 August 1967, Judge Arsenio Martinez, after receiving the evidence, made
the following findings:.1äwphï1.ñët
The Court, after a cursory examination of the evidence presented made the following
findings: That petitioner union is composed of workers exclusively at the Caloocan shops of
the Philippine National Railways charged with the maintenance of rolling stocks for repairs;
major repairs of locomotive, engines, etc. are done in the Caloocan shops while minor ones
22
in the Manila sheds; workers in the Caloocan shops do not leave their station unlike Manila
shop workers who go out along the routes and lines for repairs; workers both in the
Caloocan shops and Manila sheds are exposed to hazards occasioned by the nature of their
work; that with respect to wages and salaries of employees, categories under the Job
Classification and Evaluation Plan of the company apply to all workers both in the
Caloocan Shops and Manila sheds; administration over employees, members of petitioner
union as well as oppositor is under the Administrative Division of the company; that from
the very nature of their work, members of petitioner union and other workers of the
Mechanical Department have been under the coverage of the current collective bargaining
agreement which was a result of a certification by this Court of the Mechanical Department
Labor union, first in 1960 and later in 1963. Subsequently, when the latter contract expired,
negotiations for its renewal were had and at the time of the filing of this petition was
already consummated, the only act remaining to be done was to affix the signatures of the
parties thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid
collective bargaining agreement was signed between the Philippine National Railways and
the Mechanical Department Labor Union sa Philippine National Railways (Manila Railroad
Company).
The main issue involved herein is: Whether or not a new unit should be established, the
Caloocan shops, separate and distinct from the rest of the workers under the Mechanical
Department now represented by the Mechanical Department Labor Union.
The Caloocan Shops, all located at Caloocan City have 360 workers more or less. It is part
and parcel of the whole Mechanical Department of the Philippine National Railways. The
department is composed of four main divisions or units, namely: Operations, Manila Area
and Lines; Locomotive Crew; Motor Car Crew; and the Shops Rolling Stocks Maintenance.
(Exhibits "D" and "D-1").
The Locomotive crew and Motor Car Crew, though part of the Mechanical Department, is a
separate unit, and is represented by the Union de Maquinistas, Fogoneros Y Motormen. The
workers under the other two main units of the departments are represented by the
Mechanical Department Labor Union. The workers of the Shops Rolling Stocks
Maintenance Division or the Caloocan Shops now seek to be separated from the rest of the
workers of the department and to be represented by the "Samahan Ng Mga Manggagawa sa
Caloocan Shops." .
There is certainly a community of interest among the workers of the Caloocan Shops. They
are grouped in one place. They work under one or same working condition, same working
time or schedule and are exposed to same occupational risk.
Though evidence on record shows that workers at the Caloocan Shops perform the same
nature of work as their counterparts in the Manila Shed, the difference lies in the fact that
workers at the Caloocan Shops perform major repairs of locomotives, rolling stocks,
engines, etc., while those in the Manila Shed, works on minor repairs. Heavy equipment
and machineries are found in the Caloocan Shops.
The trial judge then reviewed the collective bargaining history of the Philippine National
Railways, as follows: 1äwphï1.ñët
On several similar instances, this Court allowed the establishment of new and separate
bargaining unit in one company, even in one department of the same company, despite the
existence of the same facts and circumstances as obtaining in the case at bar.
The history of the collective bargaining in the Manila Railroad Company, now the
Philippine National Railways shows that originally, there was only one bargaining unit in
the company, represented by the Kapisanan Ng Manggagawa sa MRR. Under Case No. 237-
MC, this Court ordered the establishment of two additional units, the engine crew and the
train crew to be represented by the Union de Maquinistas, Fogoneros, Ayudante Y
Motormen and Union de Empleados de Trenes, respectively. Then in 1961, under Cases
Nos. 491-MC, 494-MC and 507-MC three new separate units were established, namely, the
yard crew unit, station employees unit and engineering department employees unit,
respectively, after the employees concerned voted in a plebiscite conducted by the court for
the separation from existing bargaining units in the company. Then again, under Case No.
763-MC, a new unit, composed of the Mechanical Department employees, was established
to be represented by the Mechanical Department Labor Union. Incidentally, the first
attempt of the employees of the Mechanical Department to be separated as a unit was
dismissed by this Court of Case No. 488-MC.
In the case of the yard crew, station employees and the Engineering Department employees,
the Supreme Court sustained the order of this Court in giving the employees concerned the
right to vote and decide whether or not they desire to be separate units (See G.R. Nos. L-
16292-94, L-16309 and L-16317-18, November, 1965).
In view of its findings and the history of "union representation" in the railway company,
indicating that bargaining units had been formed through separation of new units from
existing ones whenever plebiscites had shown the workers' desire to have their own
representatives, and relying on the "Globe doctrine" (Globe Machine & Stamping Co., 3
NLRB 294) applied in Democratic Labor Union vs. Cebu Stevedoring Co., L-10321, 28
February 1958, Judge Martinez held that the employees in the Caloocan Shops should be
given a chance to vote on whether their group should be separated from that represented
by the Mechanical Department Labor Union, and ordered a plebiscite held for the purpose.
The ruling was sustained by the Court en banc; wherefore, the Mechanical Department
Labor Union appealed to this Court questioning the applicability under the circumstances
of the "Globe doctrine" of considering the will of the employees in determining what union
should represent them.
Technically, this appeal is premature, since the result of the ordered plebiscite among the
workers of the Caloocan shops may be adverse to the formation of a separate unit, in which
event, as stated in the appealed order, all questions raised in this case would be rendered
moot and academic. Apparently, however, the appellant Mechanical Department Labor
Union takes it for granted that the plebiscite would favor separation.
We find no grave abuse of discretion in the issuance of the ruling under appeal as would
justify our interfering with it. Republic Act No. 875 has primarily entrusted the prosecution
of its policies to the Court of Industrial Relations, and, in view of its intimate knowledge
concerning the facts and circumstances surrounding the cases brought before it, this Court
has repeatedly upheld the exercise of discretion of the Court of Industrial Relations in
matters concerning the representation of employee groups (Manila Paper Mills Employees
& Workers' Association vs. C.I.R. 104 Phil. 10; Benguet Consolidated vs. Bobok Lumber Jack
Association, 103 Phil. 1150).
Appellant contends that the application of the "Globe doctrine" is not warranted because the
workers of the Caloocan shops do not require different skills from the rest of the workers in
the Mechanical Department of the Railway Company. This question is primarily one of
facts. The Industrial Court has found that there is a basic difference, in that those in the
Caloocan shops not only have a community of interest and working conditions but perform
major repairs of railway rolling stock, using heavy equipment and machineries found in
said shops, while the others only perform minor repairs. It is easy to understand, therefore,
that the workers in the Caloocan shops require special skill in the use of heavy equipment
and machinery sufficient to set them apart from the rest of the workers. In addition, the
record shows that the collective bargaining agreements negotiated by the appellant union
have been in existence for more than two (2) years; hence, such agreements can not
constitute a bar to the determination, by proper elections, of a new bargaining
representative (PLDT Employees' Union vs. Philippine Long Distance Telephone Co., 51
Off. Gaz., 4519).
As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are
actually supervisors, it appears that the question of the status of such members is still
pending final decision; hence, it would not constitute a legal obstacle to the holding of the
plebiscite. At any rate, the appellant may later question whether the votes of those
ultimately declared to be supervisors should be counted.
Whether or not the agreement negotiated by the appellant union with the employer, during
the pendency of the original petition in the Court of Industrial Relations, should be
considered valid and binding on the workers of the Caloocan shops is a question that
should be first passed upon by the Industrial Court.
IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs against
appellant Mechanical Department Labor Union sa Philippine National Railways

23

G.R. No. L-26736 August 18, 1972
FILOIL REFINERY CORPORATION, petitioner,
vs.
FILOIL SUPERVISORY & CONFIDENTIAL EMPLOYEES ASSOCIATION AND
COURT OF INDUSTRIAL RELATIONS, respondents.
Beltran, Lacson & Associates for petitioner.
Lanting, Morabe Law Offices for private respondent.
TEEHANKEE, J.:p
The present appeal questions the right of supervisors and confidential employees to
organize the respondent labor association and to bargain collectively with their employer,
petitioner corporation herein, as upheld by respondent court of industrial relations in its
appealed orders and resolution.
Respondent association is a labor organization duly registered with the Department of
Labor. It is composed exclusively of the supervisory and confidential employees of
petitioner corporation. There exists another entirely distinct labor association composed of
the corporation's rank-and-file employees, the Filoil Employees & Workers Association
(FEWA) with which petitioner executed a collective bargaining agreement. This collective
bargaining agreement expressly excluded from its coverage petitioner's supervisory and
confidential employees, who in turn organized their own labor association, respondent
herein.
Respondent association filed on February 18, 1965 with the industrial court its petition for
certification as the sole and exclusive collective bargaining agent of all of petitioner's
supervisory and confidential employees working at its refinery in Rosario, Cavite.
Petitioner corporation filed a motion to dismiss the petition on the grounds of lack of cause
of action and of respondent court's lack of jurisdiction over the subject-matter, under its
claim that supervisors are not employees within the meaning of Republic Act 875, the
Industrial Peace Act, and that since they are part of management, they do not have the right
to bargain collectively although they may organize an organization of their own.
Respondent court in its order of May 26, 1965 denied the dismissal motion. It ruled that
under the express provisions of section 3 of the Industrial Peace Act, "(I)ndividuals
employed as supervisors shall not be eligible for membership in a labor organization of
employees under their supervision but may form separate organizations their own."1
24
It rejected petitioner's claim against respondent association's right to bargain collectively,
holding that such was expressly granted under section 24 of the Industrial Peace Act, and
asserting that "if Congress deemed it wise for supervisors not to have the right to strike,
then it should have been so expressly stated as in the case of government employees.
Section 11 of the Industrial Peace Act gives government employees the right to belong to
any labor organization provided no obligation to strike or join a strike is imposed by such
labor organization. The denial to government employees of the right to strike is significant
in the controversy before this Court because it manifests to all that Congress in enacting
Republic Act No. 875 was aware of the implications that when supervisors were given the right to
organize themselves into a labor organization, they have correlative right to declare a strike. In the
case of supervisors, they were enfranchised by Congress to organize themselves into a labor
organization and were denied the right to strike. This means that the right to strike was not
denied them since no special reason obtains among the supervisors as it does obtain among
government employees."2
The industrial court likewise dismissed petitioner's objection against the composition of
respondent association in that it included as members technical men and confidential
employees in this wise: "(A)t this point, it may be stressed that supervisors as a general rule
should form an association of their own and should exclude all other types of personnel
unless a special consideration exists, like example, that they are so few in number and that
there are other technical men or confidential men equally few in number. In the latter case,
the supervisors, technical men and confidential employees may be constituted into one
unit."3
Petitioner's motion for reconsideration of said order of May 26, 1965 was denied by
respondent court en banc per its resolution dated September 7, 1965 which affirmed the said
order. No appeal having been taken from the resolution, the petition was accordingly set for
hearing and the parties submitted their stipulation of facts, stipulating inter aliathat
respondent association "has forty-seven (47) members among the supervisory, technical
men and confidential employees of the company" and that "all the forty seven (47) members
of the (respondent association) are being checked-off by the company for union dues
pursuant to the individual check-off authorization submitted to the company."
The parties could not agree, however, on the composition of the appropriate bargaining
unit with petitioner corporation proposing that the 47 members of respondent association
should be broken up into five (5) separate collective bargaining units, viz, the supervisors
should form a distinct unit separate from the rest of the personnel who in turn would be
divided into separate and independent units or confidential employees, professional
personnel, "fringe" employees consisting of five firemen, and twelve (12) office and clerical
employees.
Evidence was received by respondent court and it was satisfied that executive personnel
handling personnel matters for the employer were duly excluded from respondent
association. Thus, per respondent court's order of July 23, 1966, it is noted that "not one of
the employees listed under Groups I and II including (their supervisor) Leonardo R. Santos
under Group III, is a member of (respondent association)", since "(I)t appears that the
personnel listed under Groups I and Group II ... are in the category of executives who have
supervision over the supervisors who are members of (respondent association) and that
Marcelo Bernardo handles personnel matters of the employer ... All of them should,
therefore, be excluded from the appropriate bargaining unit.4
Respondent court in its said order of July 23, 1966 consequently cast aside petitioner's
sedulous objections against the inclusion of the confidential employees in the supervisors
respondent association, thus: "(F)rom the memorandum and manifestation of the company,
a persistent assault against the inclusion of the confidential emloyees with supervisors
under one bargaining unit would seem to be evident. Although this inclusion has already
been raised in the motion to dismiss filed by the company and has already been resolved by
the Court en banc, with no appeal to the Supreme Court having been taken by the company,
we shall try once more to show why such inclusion. It is admitted by the company that
confidential employees are outside the coverage of the existing collective bargaining
agreement between the respondent company and the rank and file union (FEWA) by
specific agreement. Since the confidential employees are very few and are, by practice and tradition,
identified with management, the NLRB, because of such "identity of interest" (Wilson & Co., 68
NLRB 84), has allowed their inclusion in the bargaining unit of supervisors who are likewise
identified with management. This Court, a counterpart of the NLRB, for same reason, should
also allow the inclusion of the confedential employees in the bargaining unit of supervisor
except of course Marcelo Bernardo who, pursuant to Order of May 26, 1965, as affirmed by
the Court en banc, should be excluded because he handles personnel matters for the
employer."5
Respondent court pointed out that "in fact, out of forty-three (43), excluding the twelve (12)
executive personnel under Groups I and II, the company proposes five (5) bargaining units
or eight (8) employees per unit. This Court will be creating fragmentary units which would not
serve the interest of industrial peace, much less in an industry indispensable to the national interest
like the one at bar, as is now obtaining in the Philippine National Railways, also an industry
indispensable to the national interest (Union de Maquinistas, Fogoneros y Motormen vs.
Philippine National Railways, Case No. 67-IPA), with thirteen (13) unions, if it breaks up
the petitioner union into five (5) bargaining units. The Court is likewise aware of
the ineffectiveness of a small union with a scanty members as bargaining unit. The breaking up of
bargaining agents into tiny units will greatly impair their organizational value. It has always been
the policy of the United States National Labor Relations Board that, in deciding upon
whether to include or exclude a group of employees from a bargaining unit, the Board has
always allowed itself to be guided by the determination as to whether its action "will insure
to the employees of the Company the full benefit of their right to self-organization and to
collective bargaining and otherwise effectuate the policies of the Act" (20 NLRB 705). We see
no reason why this Tribunal whose basic functions are the same as that of the NLRB, should
do less or otherwise depart from this sound policy." 6
Since respondent association "clearly represents the majority of the employees in the
appropriate bargaining unit," respondent court therefore certified it as the sole and
exclusive bargaining agent for all the employees in the unit.
Respondent court per its resolution en banc dated September 15, 1966 dismissed petitioner's
motion for reconsideration, holding that "as to the question of the right of supervisors and
25
confidential employees to compel their employer to bargain collectively, this has already
been passed upon by the Trial Court in its Order dated May 26, 1965 which Order was
affirmed by the Court en banc in a resolution dated September 7, 1965. The Company did
not appeal this resolution to the Supreme Court. Hence, this matter, as far as we are
concerned, has already been resolved. We find it, therefore, unnecessary to pass upon the
same again," and that it found no sufficient justification to alter or modify the trial court's
order upholding the appropriateness of the bargaining unit. On this latter point, Judge
Salvador, while concurring with the supervisors' right of self-organization and collective
bargaining, cast a dissenting vote on the ground that the Industrial Peace Act did not
contemplate nor provide for supervisors and confidential employees to be under one
bargaining unit and as to "executive personnel" who have supervision over the supervisors
being excluded from any representation, urged that "another supervisors' unit must be
created for these executive personnel." The second point is not in contention at bar since the
"executive personnel" concerned have not appealed their exclusion.
In this appeal, petitioner pursues anew its contention that supervisors form part of
management and are not considered as employees entitled to bargain collectively, arguing
that "as supervisors form part and parcel of management, it is absurd for management to
bargain collectively with itself." Petitioner further argues that under the American concept,
supervisors are not considered employees and that since our Congress copied verbatim the
Taft-Hartley Act's definition of supervisor,7 its act of "incorporating the definition in the
Taft-Hartley Act" must be deemed an expression of its intention "to follow the intendment
of said Act."
Petitioner's contentions are untenable, prescinding from the fact of its failure to appeal in
due course respondent court's en banc resolution of September 7, 1965 upholding the right
of the supervisors and confidential employees to organize respondent association and to
compel petitioner to negotiate and bargain collectively with it. Petitioner's argument that
since supervisors form part of management, to allow them to bargain collectively would be
tantamount to management bargaining with itself may be a well-turned phrase but ignores
the dual status of a supervisor as a representative of management and as an employee.
If indeed the supervisor is absolutely undistinguishable from management, then he would
be beyond removal or dismissal, for as respondent association counters, "how can
management remove or dismiss itself?"
As stated for the Court by the now Chief Justice in AG & P Co. of Manila, Inc. vs.
C.I.R.,8 section 3 of the Industrial Peace Act "explicitly provides that "employees" — and this
term includes supervisors — "shall have the right to self-organization, and to form, join or
assist labor organizations of their own choosing for the purpose of collective bargaining
through representations of their own choosing and to engage in concerted activities for the
purpose of collective bargaining and other mutual aid or protection" and that "individuals
employed as supervisors ... may form separate organizations of their own". Indeed, it is well
settled that "in relation to his employer," a foreman or supervisor "is an employee within the
meaning of the Act" ... For this reason, supervisors are entitled to engage in union activities
and any discrimination against them by reason thereof constitutes an unfair labor practice."
Petitioner's arguments go in reality to the wisdom and policy of the Industrial Peace Act
which expressly grants supervisors the right to organize and bargain collectively, which are
beyond the Court's power of review. Thus, the argument that "it is axiomatic in the law of
self-interest that an employer must give a "better deal" to those who act in his interest and in
whom he has trust and confidence. These are the supervisors and confidential employees"9 and
that "In the United States there was a move to have a part of the supervisory group to be
aligned with labor. But the enactment of the Taft-Hartley Act put an end to this move." 10
So with petitioner's thesis that "(T)o then give supervisors the right to compel employers to
bargain would in effect align labor and management together against stockholders and
bondholders (capital) and inexorably tilt the balance of power in favor of these hitherto
confliction forces. This is contrary to the nature and philosophy of free enterprise." 11 This
further serves to point up the validity and rationale of the Industrial Peace Act's provision,
since the supervisors and confidential employees, even though they may exercise the
prerogatives of management as regards the rank and file employees are indeed employees
in relation to their employer, the company which is owned by the "stockholders and
bondholders (capital)" in petitioner's own words, and should therefore be entitled under the
law to bargain collectively with the top management with respect to their terms and
conditions of employment.
Petitioner's argument that the express provisions of section 3 of our Industrial Peace Act
must give way to the intendment of the Taft-Hartley Act which exempts employers from
the legal obligation to recognize and negotiate with supervisors is tenuous and groundless.
The language of our own statute is plain and unambiguous and admits of no other
interpretation.
The other principal ground of petitioner's appeal questioning the confidential employees'
inclusion in the supevisors bargaining unit is equally untenable. Respondent court correctly
held that since the confidential employee are very few in number and are by practice and
tradition identified with the supervisors in their role as representives of management vis-a-
vis the rank and file employee such identity of interest has allowed their inclusion in the
bargaining unit of supervisors-managers for purposes of collective bargaining in turn as
employees in relation to the company as their employer.
No arbitrariness or grave abuse of discretion can be attributed against respondent court's
allowing the inclusion of the confidential employees in the supervisors' association for as
admitted by petitioner itself, supra, the supervisors and confidential emplyees enjoy its trust
and confidence. Thisidentity of interest logically calls for their inclusion in the same
bargaining unit and at the same time fulfills the law's objective of insuring to them the full
benefit of their right to self-organization and to collective bargaining, which could hardly be
accomplished if the respondent association's membership were to be broken up into five
separate ineffective tiny units, as urged by petitioner.
Respondent court's action not being vulnerable to challenge as being arbitrary or capricious
is therefore sustained, in line with the Court's consistent rulings that the industrial court
"enjoys a wide discretion in determining the procedure necessary to insure the fair and free
choice of bargaining representations by employees," and that its action "in deciding upon an
26
appropriate unit for collective bargaining purposes is discretionary ... and (that) its
judgment in this respect is entitled to almost complete finality, unless its action is arbitrary
or capricious" 12 and that absent any grave abuse of discretion as to justify the Court's
intervention, "this Court has repeatedly upheld the exercise of the Court of Industrial
Relations in matters concerning the representation of employee groups." 13
ACCORDINGLY, the orders and resolution appealed from are hereby affirmed and the
petition at bar is dismissed. No pronouncement as to costs.
G.R. No. 143616 May 9, 2001
NEGROS ORIENTAL ELECTRIC COOPERATIVE 1 (NORECO1), represented by ATTY.
SUNNY R.A. MADAMBA, as General Manager, petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE),
and PACIWU-NACUSIP, NORECO 1 Chapter of Bindoy, Negros Oriental, respondents.
GONZAGA-REYES, J.:
Petitioner assails the Decision of the Court of Appeals1 dated August 20, 1999 dismissing its
petition for certiorari in C.A.-G.R. SP No. 50295 and the order denying its Motion for
Reconsideration therefrom.
The antecedents are recited by the Court of Appeals as follows:
"It appears that on December 4, 1997, some employees of the petitioner organized
themselves into a local chapter of the Philippine Agricultural Commercial and Industrial
Workers' Union - Trade Union Congress of the Philippines (PACIWU-TUCP). The private
respondent-union submitted its charter certificate and supporting documents on the same
date.1âwphi1.nêt
On December 10, 1997, PACIWU-TUCP filed a petition for certification election on behalf of
the NORECO 1 chapter, seeking to represent the seventy-seven (77) rank-and-file
employees of NORECO 1. PACIWU-TUCP alleged in its petition that it had created a local
chapter in NORECO 1 which had been duly reported to the DOLE Regional Office (Region
VII) on December 4, 1997. It was further averred therein that NORECO 1 is an unorganized
establishment, and that there is no other labor organization presently existing at the said
employer establishment.
The Med-Arbiter dismissed the petition in an order dated December 23, 1997, which stated
that:
'It appears in the records of this Office that the petitioner has just applied for registration.
The corresponding certificate has not yet been issued. Accordingly, it has not yet acquired
the status of a legitimate labor organization.
The instant petition, not having been filed by legitimate labor organization, the same is
hereby DENIED.
WHEREFORE, this case is DISMISSED.1âwphi1.nêt
SO ORDERED.'
PACIWU-TUCP filed a Motion for Reconsideration of the said order, which was treated as
an appeal by the public respondent. On July 31, 1998, the public respondent rendered the
assailed judgment as previously quoted.2 The petitioner filed a Motion for Reconsideration
on August 24, 1998, but the same was denied in a Resolution dated September 21, 1998." 3
The appellate court ruled that the Secretary of Labor properly treated PACIWU-TUCP's
Motion for Reconsideration as an appeal, and held that the said chapter is deemed to have
acquired legal personality as of December 4, 1997 upon submission of the documents
required under the Omnibus Rules for the creation of a local chapter. The said court also
dismissed petitioner's contention assailing the composition of the private respondent union.
Motion for Reconsideration of the above decision was denied. Hence this petition for review
on certiorari which submits the following arguments in support thereof:
"I. THE COURT OF APPEALS HAS DEPARTED FROM THE ACCEPTED PRINCIPLE
THAT THE PERIOD TO APPEAL CANNOT BE EXTENDED AND THUS THE
RESPONDENT SECRETARY OF LABOR HAS NO JURISDICTION TO REVERSE THE
DECISION OF THE MED-ARBITER, BECAUSE THE APPEAL HAS NOT BEEN
PERFECTED ON TIME;
II. THE COURT OF APPEALS DECIDED THIS CASE CONTRARY TO THE DECISION OF
THE SUPREME COURT IN THE CASE OF TOYOTA MOTOR PHILIPPINES VS. TOYOTA
MOTOER PHILIPPINES CORPORATION UNION AND THE SECRETARY OF LABOR
AND EMPLOYMENT, G.R. NO. 121084, FEBRUARY 19, 1997, BY COMPLETELY
IGNORING THE TOYOTA CASE WHICH IS ON FOUR SQUARE WITH THIS CASE,
WHEN THE COURT OF APPEALS SUSTAINED THE ORDER FOR CERTIFICATION
ELECTIONS IN SPITE OF THE EXISTENCE OF SUPERVISORY EMPLOYEES IN THE
RANK AND FILE UNION OF THE RESPONDENT PACIWU-NACUSIP NORECO 1
CHAPTER;
III. THE COURT OF APPEALS ERRED IN ALLOWING CERTIFICATION ELECTIONS
WHEN ALL THE MEMBERS OF THE UNION ARE MEMBERS OF THE COOPERATIVE."4
The first contention was correctly resolved by the Court of Appeals. Petitioner reiterates
that the Motion for Reconsideration from the Decision of the Med-Arbiter was filed by
PACIWU-NACUSIP out of time, i.e. beyond the ten (10) days allowed for filing such motion
for reconsideration. The allegation of late filing is bare, it does not even specify the material
dates, nor furnish substantiation of the said allegation. The Court of Appeals noted that the
original record does not disclose the actual date of receipt by the private respondent of the
27
order of the Med-Arbiter dismissing the petition for certification election, and hence it
"cannot conclude that the Med-Arbiter's Decision had already become final and executory
pursuant to Section 14, Rule XI Book V of the Omnibus Implementing Rules". Neither the
present Petition or the Reply to Comment of Solicitor General for public respondent
attempts to supply the omission and we are accordingly constrained to dismiss this
assigned error concerning the timeliness of respondent's appeal to the Secretary of Labor.
In its Petition for Certiorari filed in the Court of Appeals dated November 7, 1998, the
allegation that the Motion for Reconsideration filed by respondent PACIWU-NACUSIP was
"filed out of time" was similarly unsubstantiated. Moreover, the issue was raised below for
the first time in the Motion for Reconsideration filed by NORECO I (Motion dated August
22, 1998), and the Secretary of labor rejected the petitioner's contention for not having been
seasonably filed; the DOLE Resolution stated categorically that:
"there being no question as to the timeliness of the filing of appellant's Motion for
Reconsideration which was elevated to us by the Regional Office, the same can be treated as
an appeal xxx".5
We find no cogent justification to reverse the finding on the basis of the records before us.
The second argument posited by petitioner is also without merit. Petitioner invokes Article
245 of the Labor Code and the ruling in Toyota Motor Philippines Corp. vs. Toyota Motor
Philippines Corporation Labor Union6 which declare the ineligibility of managerial or
supervisory employees to join any labor organization consisting of rank and file employees
for the reason that the concerns which involve either group "are normally disparate and
contradictory". Petitioner claims that it challenged the composition of the union at the
earliest possible time after the decision of the Med-Arbiter was set aside by the DOLE; and
that the list of the names of supervisory or confidential employees was submitted with the
petition for certiorari filed in the Court of Appeals, which did not consider the same.
Petitioner further argues that the failure of the Secretary of Labor and the Court of Appeals
to resolve this question constituted a denial of its right to due process.
The contentions are unmeritorious.
The issue was raised for the first time in petitioner's Motion for Reconsideration of the
Decision of the Secretary of Labor dated July 13, 1998 which set aside the Order of the Med-
Arbiter dated December 23, 1997 dismissing the PACIWU-TUCP's petition for certification
election.7 In its Resolution dated September 21, 1998, denying the Motion for
Reconsideration, the Secretary of Labor categorically stated:
"On the fourth ground, in the cited case of Toyota Motor Philippines Corporation v. Toyota
Motor Philippines Corporation Labor Union, 268 SCRA 573, the employer, since the
beginning opposed the petition indicating the specific names of the supervisory employees
and their respective job descriptions. In the instant case, movant not only belatedly raised
the issue but miserably failed to support the same. Hence, between the belated and bare
allegation of movant that "there are supervisory and confidential employees in the union"
vis-à-vis the open and repeated declaration under oath of the union members in the
minutes of their organizational meeting and the ratification of their Constitution and By-
Laws that they are rank and file employees, we are inclined to give more credence to the
latter. Again, in Cooperative Rural Bank of Davao City, Inc. vs. Ferrer-Calleja, supra, the
Supreme Court held:
'the Court upholds the findings of said public respondent that no persuasive evidence has
been presented to show that two of the signatories in the petition for certification election
are managerial employees who under the law are disqualified from pursuing union
activities.'
In the instant case, there is no persuasive evidence to show that there are indeed
supervisory and confidential employees in appellant union who under the law are
disqualified to join the same."8
The above finding was correctly upheld by the Court of Appeals, and we find no cogent
basis to reverse the same. Factual issues are not a proper subject for certiorari which is
limited to the issue of jurisdiction and grave abuse of discretion.1âwphi1.nêt
Indeed, the Court of Appeals cannot be expected to go over the list of alleged supervisory
employees attached to the petition before it and to pass judgment in the first instance on the
nature of the functions of each employee on the basis of the job description pertaining to
him. As appropriately observed by the said court, the determination of such factual issues is
vested in the appropriate Regional Office of the Department of Labor and Employment and
pursuant to the doctrine of primary jurisdiction, the Court should refrain from resolving
such controversies. The doctrine of primary jurisdiction does not warrant a court to arrogate
unto itself the authority to resolve a controversy the jurisdiction over which is initially
lodged with an administrative body of special competence.9
The petitioner questions the remedy suggested by the Court of Appeals i.e., to file a petition
for cancellation of registration before the appropriate Regional Office arguing that the
membership of supervisory employees in the rank-and-file is not one of the grounds for
cancellation of registration under the Omnibus Rules. Whether the inclusion of the
prohibited mix of rank-and-file and supervisory employees in the roster of officers and
members of the union can be cured by cancellation of registration under Article 238 et seq.
of the Labor Code vis-à-vis Rule VIII of the Omnibus Rules, or by simple inclusion-
exclusion proceedings in the pre-election conference,10 the fact remains that the
determination of whether there are indeed supervisory employees in the roster of members
of the rank-and-file union has never been raised nor resolved by the appropriate fact
finding body, and the petition for certiorari filed in the Court of Appeals cannot cure the
procedural lapse. It bears notice that unlike in Toyota Motor Philippines Corp. vs. Toyota
Motor Philippines Corp. Labor Union11 where the objection that "the union was composed
of both rank-and-file and supervisory employees in violation of law" was promptly raised
in the position paper to oppose the petition for certification election, and this objection was
resolved by the Med-Arbiter, this issue was belatedly raised in the case at bar and was
sought to be ventilated only before the Court of Appeals in the petition for certiorari. Time
and again, this Court has ruled that factual matters are not proper subjects for certiorari. 12
The above observations are in point with respect to the last assigned error challenging the
inclusion of members of the cooperative in the union. The argument that NORECO I is a
28
cooperative and most if not all of the members of the petitioning union are members of the
cooperative was raised only in the Motion for Reconsideration from the Decision of the
Secretary of Labor dated July 31, 1998. The Secretary of Labor ruled that the argument
should be rejected as it was not seasonably filed. Nevertheless the DOLE resolved the
question in this wise:
"On the third ground, while movant correctly cited Cooperative Bank of Davao City, Inc. vs.
Ferrer-Calleja, 165 SCRA 725, that "an employee of a cooperative who is a member and co-
owner thereof cannot invoke the right to collective bargaining…" it failed to mention the
proviso provided by the Supreme Court in the same decision:
'However, in so far as it involves cooperatives with employees who are not members or co-
owners thereof, certainly such employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as are enshrined in the
constitution and existing laws of the country.
The questioned ruling therefore of public respondent Pura Ferrer-Calleja must be upheld in
so far as it refers to the employees of petitioner who are not members or co-owners of
petitioner.'
Not only did movant fail to show any proof that anyone of the union members are members
or co-owners of the cooperative. It also declared that not all members of the petitioning
union are members of the cooperative".13
The ruling was upheld by the appellate court thus:
"The petitioner is indeed correct in stating that employees of a cooperative who are
members-consumers or members-owners, are not qualified to form, join or assist labor
organizations for purposes of collective bargaining, because of the principle that an owner
cannot bargain with himself. However, the petitioner failed to mention that the Supreme
Court has also declared that in so far as it involves cooperatives with employees who are
not members or co-owners thereof, certainly such employees are entitled to exercise the
rights of all workers to organization, collective bargaining, negotiations and others as are
enshrined in the Constitution and existing laws of the country.
The public respondent found that petitioner failed to show any proof that any member of
the private respondent was also a member or co-owner of the petitioner-cooperative. Hence
the members of the private respondent could validly form a labor organization." 14
In the instant petition, NORECO 1 fails to controvert the statement of the Court of Appeals
that the petitioner "failed to show any proof that any member of the private respondent was
also a member or co-owner of the petitioner cooperative." More important, the factual issue
is not for the Court of Appeals to resolve in a petition for certiorari. Finally, the instant
petition ambiguously states that "NORECO1 is an electric cooperative and all the employees
of the subject union are members of the cooperative", but submitted "a certified list of
employees who are members-co-owners of the petitioner electric cooperative." Impliedly,
there are rank-and-file employees of the petitioner who are not themselves members-co-
owners, or who are the ones qualified to form or join a labor organization. Again, the core
issue raises a question of fact that the appellate court correctly declined to resolve in the
first instance.1âwphi1.nêt
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
G.R. No. 74262 October 29, 1987
GENERAL RUBBER and FOOTWEAR CORPORATION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, NATIONAL ASSOCIATION OF TRADE UNION
OF MONTHLY PAID EMPLOYEES-NATU, respondents.
PARAS, J.:
Petitioner is a corporation engaged in the business of manufacturing rubber sandals and
oilier rubber products. In 1985, the Samahang Manggagawa sa General Rubber Corporation
— ANGLO was formed by the daily paid — rank and file employees as their union for
collective bargaining, after the expiration on October 15, 1985 of the collective bargaining
agreement previously executed by petitioner with General Rubber Workers Union
(Independent) on October 15, 1982. Be it noted however that on July 17, 1985, the monthly
— paid employees of the petitioner-corporation, after forming their own collective
bargaining unit the National Association of Trade Unions of Monthly Paid Employees-
NATU, filed a petition for direct certification with tile Bureau of Labor Relations which
petition was opposed by herein petitioner. On September 2, 1985, the Med-Arbiter issued an
Order for the holding of a certification election after finding that a certification election is in
order in this case and observing that it is the fairest remedy to determine whether
29
employees of petitioner desire to have a union or not. On appeal, the Bureau of Labor
Relations denied both the appeal and motion for reconsideration interposed by petitioner
and affirmed the ruling of the Med-Arbiter. Hence, the present petition, imputing serious
error's of law and grave abuse of discretion on the part of the Bureau of Labor Relations in
issuing the assailed order which sanctioned the creation of two (2) bargaining units within
petitioner-corporation with the following:
GROUNDS FOR REVIEW
I
The Bureau of Labor Relations committed serious error of law and grave abuse of discretion
in ordering the creation of a new bargaining unit at petitioner, notwithstanding that there is
already an existing bargaining unit, whose members are represented for collective
bargaining purposes by Samahang Manggagawa sa General Rubber Corporation- ANGLO.
II
The Bureau of Labor Relations committed serious error of law in holding that managerial
employees or those employees exercising managerial functions can legally form and join a
labor organization and be members of the new bargaining unit.
III
The Bureau of Labor Relations committed grave abuse of discretion in holding that
supervisors, employees perform- ing managerial, confidential and technical functions and
office personnel, who are negotiated by petitioner to be excluded from the existing
bargaining unit because they are performing vital functions to management, can form and
join a labor organization and be members of the new bargaining unit.
Expounding on its position, petitioner argues that:
1. The order violates the thrust of the Labor Code insofar as formation of a bargaining unit
is concerned. A policy is in favor of a larger unit and not the creation of smaller units in one
establishment which might lead to formation, thus impractical.
2. Article 246 of the Labor Code explicitly provides that managerial employees are ineligible
to join or form any labor organization. Since it has been shown by the petitioners that 30%
of the monthly-paid employees are managers or employees exercising managerial
functions, it was grave error for the Bureau of Labor Relations to allow these monthly paid
employees to form a union and/or a bargaining unit.
3. The Bureau of Labor Relations overlooked the fact that these monthly-paid-employees
are excluded from the first existing bargaining unit of the daily-paid rank and file
employees because in the year 1963, when the employees of petitioner initially started to
exercise their right to self-organization, herein petitioner bargained for the exclusion of the
monthly-paid employees from the existing bargaining unit because they are performing
vital functions of management. In view of this exclusion, petitioner took upon itself to take
care of them and directly gave them the benefits or privileges without having to bargain for
them or without the aid of the bargaining arm or force of a union.
Petitioner's contentions are devoid of merit.
Among other issues answered in the assailed order are the following findings of fact:
Regarding the second issue, we deem it necessary to examine the respective functions of the
employees. It appears therefrom that they perform supervisory functions. Verily they make
recommendation petitions as to what Managerial actions to take in disciplinary cases.
However, that fact alone does not make them managerial employees already, It is more a
question of how effective are those recommendations which aspect has not been clearly
established in this case. As defined in the Labor Code, a "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, or to
effectively recommend such managerial actions." Thus, employees who do not fall within
this definition are considered rank-and-file employees.
Lastly, we find that the third issue has been raised for the first time on appeal. It has been
the policy of the Bureau to encourage the formation of an employer unit "unless
circumstances otherwise require. The proliferation of unions in an employer unit is
discouraged as a matter of policy unless there are compelling reasons which would deny a
certain class of employees the right to self-organization for purposes of collective
bargaining, This case does not fall squarely within the exception. It is undisputed that the
monthlies who are rank-and-file have been historically excluded from the bargaining unit
composed of daily-paid rank-and-filers that is, since 1963 when the existing rank- and- file
union was recognized. In fact, the collective bargaining agreement (CBA) which expired last
15 October 1985 provides as follows:
ARTICLE I
SCOPE
Section 1. Appropriate bargaining unit. — This Agreement covers all regular employees and
workers employed by the company at its factory in Malabon, Metro Manila. The words
"employee," "laborer" and "workers" when used in this Agreement shall be deemed to refer
to those employees within the bargaining unit. Employees who occupy managerial,
confidential or technical positions, supervisors, contract employees, monthly-paid
employees, security as wen as office personnel are excluded from the appropriate
bargaining unit (emphasis supplied).
In view of the above, the monthly-paid rank-and-file employees ran form a union of their
own, separate and distinct from the existing rank-and-file union composed of daily-paid
workers. (Rollo, pp. 1920)
Thus, it can be readily seen from the above findings of the Bureau of labor Relations that the
members of private respondent are not managerial employees as claimed by petitioners but
merely considered as rank-and-file employees who have every right to self-organization or
to be heard through a duly certified collective bargaining union. The Supervisory power of
the members of private respondent union consists merely in recommending as to what
managerial actions to take in disciplinary cases. These members of private respondent
union do not fit the definition of managerial employees which We laid down in the case of
30
Bulletin Publishing Corporation v. Sanchez (144 SCRA 628). These members of private
respondent union are therefore not prohibited from forming their own collective bargaining
unit since it has not been shown by petitioner that "the responsibilities (of these monthly-
paid-employees) inherently require the exercise of discretion and independent judgment as
supervisors" or that "they possess the power and authority to lay down or exercise
management policies." Similarly, he held in the same case that "Members of supervisory
unions who do not fall within the definition of managerial employees shall become eligible
to loin or assist the rank-and-file labor organization, and if none exists, to form or assist in
the forming of such rank-and-file organizations.
Perhaps it is unusual for the petitioner to have to deal with two (2) collective bargaining
unions but there is no one to blame except petitioner itself for creating the situation it is in.
From the beginning of the existence in 1963 of a bargaining limit for the employees up to
the present, petitioner had sought to indiscriminately suppress the members of the private
respondent"s right to self-organization provided for by law. Petitioner, in justification of its
action, maintained that the exclusion of the members of the private respondent from the
bargaining union of the rank-and-file or from forming their own union was agreed upon by
petitioner corporation with the previous bargaining representatives namely: the General
"Rubber Workers Union PTGWO the General Workers Union — NAFLU and the General
Rubber Workers Union (independent). Such posture has no leg to stand on. It has not been
shown that private respondent was privy to this agreement. And even if it were so, it can
never bind subsequent federations and unions particularly private respondent-union
because it is a curtailment of the right to self-organization guaranteed by the labor laws.
However, to prevent any difficulty. and to avoid confusion to all concerned and, more
importantly, to fulfill the policy of the New Labor Code as well as to be consistent with Our
ruling in the Bulletin case, supra, the monthly-paid rank-and-file employees should be
allowed to join the union of the daily-paid-rank-and-file employees of petitioner so that
they can also avail of the CBA benefits or to form their own rank-and-file union, without
prejudice to the certification election that has been ordered.
WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit.
SO ORDERED.
[G.R. No. 109002. April 12, 2000]
DELA SALLE UNIVERSITY, petitioner, vs. DELA SALLE UNIVERSITY EMPLOYEES
ASSOCIATION (DLSUEA) and BUENAVENTURA MAGSALIN, respondents.[G.R. No.
110072. April 12, 2000]
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION
OF TEACHERS AND EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner, vs. DELA
SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.
DECISION
BUENA, J.:
Filed with this Court are two petitions for certiorari,[1] the first petition with preliminary
injunction and/or temporary restraining order,[2] assailing the decision of voluntary
arbitrator Buenaventura Magsalin, dated January 19, 1993, as having been rendered with
grave abuse of discretion amounting to lack or excess of jurisdiction. These two petitions
have been consolidated inasmuch as the factual antecedents, parties involved and issues
raised therein are interrelated.[3] Missc
The facts are not disputed and, as summarized by the voluntary arbitrator, are as follows.
On December 1986, Dela Salle University (hereinafter referred to as UNIVERSITY) and Dela
Salle University Employees Association - National Federation of Teachers and Employees
Union (DLSUEA-NAFTEU), which is composed of regular non-academic rank and file
employees,[4](hereinafter referred to as UNION) entered into a collective bargaining
agreement with a life span of three (3) years, that is, from December 23, 1986 to December
22, 1989.[5] During the freedom period, or 60 days before the expiration of the said collective
bargaining agreement, the Union initiated negotiations with the University for a new
collective bargaining agreement[6]which, however, turned out to be unsuccessful, hence, the
Union filed a Notice of Strike with the National Conciliation and Mediation Board, National
Capital Region.[7] After several conciliation-mediation meetings, five (5) out of the eleven
(11) issues raised in the Notice of Strike were resolved by the parties. A partial collective
bargaining agreement was thereafter executed by the parties. [8] On March 18, 1991, the
parties entered into a Submission Agreement, identifying the remaining six (6) unresolved
issues for arbitration, namely: "(1) scope of the bargaining unit, (2) union security clause, (3)
security of tenure, (4) salary increases for the third and fourth years [this should properly
read second and third years][9] of the collective bargaining agreement, (5) indefinite union
leave, reduction of the union presidents workload, special leave, and finally, (6) duration of
the agreement."[10] The parties appointed Buenaventura Magsalin as voluntary
arbitrator.[11] On January 19, 1993, the voluntary arbitrator rendered the assailed
decision.[12] Spped
In the said decision, the voluntary arbitrator, on the first issue involving the scope of the
bargaining unit, ruled that "the Computer Operators assigned at the CSC [Computer
Services Center], just like any other Computer Operators in other units, [should be]
included as members of the bargaining unit,"[13] after finding that "[e]vidently, the
Computer Operators are presently doing clerical and routinary work and had nothing to do
with [the] setting of management policies for the University, as [may be] gleaned from the
duties and responsibilities attached to the position and embodied in the CSC [Computer
Services Center] brochure. They may have, as argued by the University, access to vital
information regarding the Universitys operations but they are not necessarily
confidential."[14] Regarding the discipline officers, the voluntary arbitrator "believes that this
type of employees belong (sic) to the rank-and-file on the basis of the nature of their
job."[15] With respect to the employees of the College of St. Benilde, the voluntary arbitrator
found that the College of St. Benilde has a personality separate and distinct from the
University and thus, held "that the employees therein are outside the bargaining unit of the
Universitys rank-and-file employees."[16]
31
On the second issue regarding the propriety of the inclusion of a union shop clause in the
collective bargaining agreement, in addition to the existing maintenance of membership
clause, the voluntary arbitrator opined that a union shop clause "is not a restriction on the
employees right of (sic) freedom of association but rather a valid form of union security
while the CBA is in force and in accordance with the Constitutional policy to promote
unionism and collective bargaining and negotiations. The parties therefore should
incorporate such union shop clause in their CBA."[17]
On the third issue with respect to the use of the "last-in-first-out" method in case of
retrenchment and transfer to other schools or units, the voluntary arbitrator upheld the
"elementary right and prerogative of the management of the University to select and/or
choose its employees, a right equally recognized by the Constitution and the law. The
employer, in the exercise of this right, can adopt valid and equitable grounds as basis for
lay-off or separation, like performance, qualifications, competence, etc. Similarly, the right
to transfer or reassign an employee is an employers exclusive right and prerogative."[18]
Regarding the fourth issue concerning salary increases for the second and third years of the
collective bargaining agreement, the voluntary arbitrator opined that the "proposed budget
of the University for SY 1992-93 could not sufficiently cope up with the demand for
increases by the Union. xxx xxx. With the present financial condition of the University, it
cannot now be required to grant another round of increases through collective bargaining
without exhausting its coffers for other legitimate needs of the University as an
institution,"[19] thus, he ruled that "the University can no longer be required to grant a
second round of increase for the school years under consideration and charge the same to
the incremental proceeds."[20] Misspped
On the fifth issue as to the Unions demand for a reduction of the workload of the union
president, special leave benefits and indefinite union leave with pay, the voluntary
arbitrator rejected the same, ruling that unionism "is no valid reason for the reduction of the
workload of its President,"[21] and that there is "no sufficient justification to grant an
indefinite leave."[22] Finding that the Union and the Faculty Association are not similarly
situated, technically and professionally,[23] and that "[w]hile professional growth is highly
encouraged on the part of the rank-and-file employees, this educational advancement
would not serve in the same degree as demanded of the faculty members,"[24]the voluntary
arbitrator denied the Unions demand for special leave benefits.
On the last issue regarding the duration of the collective bargaining agreement, the
voluntary arbitrator ruled that "when the parties forged their CBA and signed it on 19
November 1990, where a provision on duration was explicitly included, the same became a
binding agreement between them. Notwithstanding the Submission Agreement, thereby
reopening this issue for resolution, this Voluntary Arbitrator is constrained to respect the
original intention of the parties, the same being not contrary to law, morals or public
policy."[25] As to the economic aspect of the collective bargaining agreement, the voluntary
arbitrator opined that the "economic provisions of the CBA shall be re-opened after the
third year in compliance with the mandate of the Labor Code, as amended."[26]
Subsequently, both parties filed their respective motions for reconsideration which,
however, were not entertained by the voluntary arbitrator "pursuant to existing rules and
jurisprudence governing voluntary arbitration cases."[27] Josp-ped
On March 5, 1993, the University filed with the Second Division of this Court, a petition
for certiorari with temporary restraining order and/or preliminary injunction assailing the
decision of the voluntary arbitrator, as having been rendered "in excess of jurisdiction
and/or with grave abuse of discretion."[28] Subsequently, on May 24, 1993, the Union also
filed a petition for certiorari with the First Division.[29] Without giving due course to the
petition pending before each division, the First and Second Divisions separately resolved to
require the respondents in each petition, including the Solicitor General on behalf of the
voluntary arbitrator, to file their respective Comments. [30] Upon motion by the Solicitor
General dated July 29, 1993, both petitions were consolidated and transferred to the Second
Division.[31]
In his consolidated Comment[32] filed on September 9, 1993 on behalf of voluntary arbitrator
Buenaventura C. Magsalin, the Solicitor General agreed with the voluntary arbitrators
assailed decision on all points except that involving the employees of the College of St.
Benilde. According to the Solicitor General, the employees of the College of St. Benilde
should have been included in the bargaining unit of the rank-and-file employees of the
University.[33] The Solicitor General came to this conclusion after finding "sufficient
evidence to justify the Unions proposal to consider the University and the CSB [College of
St. Benilde] as only one entity because the latter is but a mere integral part of the
University," to wit:[34]
"1. One of the duties and responsibilities of the CSBs Director of Academic Services is to
coordinate with the Universitys Director of Admissions regarding the admission of
freshmen, shiftees and transferees (Annex "3" of the Universitys Reply);
"2. Some of the duties and responsibilities of the CSBs Administrative Officer are as follows:
A. xxx xxx xxx.
4. Recommends and implements personnel policies and guidelines (in accordance with the
Staff Manual) as well as pertinent existing general policies of the university as a whole. xxx.
12. Conducts and establishes liaison with all the offices concerned at the Main Campus as
well (sic) with other government agencies on all administrative-related matters. xxx Spp-
edjo
B. xxx xxx xxx
7. Handles processing, canvassing and direct purchasing of all requisitions worth more than
P10,000 or less. Coordinates and canvasses with the Main Campus all requisitions worth
more than P10,000. xxx
C. xxx xxx xxx
32
7. Plans and coordinates with the Security and Safety Committee at the Main Campus the
development of a security and safety program during times of emergency or occurrence of
fire or other natural calamities. xxx (Annex "4" of the Universitys Reply).
"3. The significant role which the University assumes in the admission of students at the
CSB is revealed in the following provisions of the CSBs Bulletin for Arts and Business
Studies Department for the schoolyear 1992-1993, thus:
Considered in the process of admission for a (sic) high school graduate applicants are the
following criteria: results of DLSU College Entrance Examination xxx.
Admission requirements for transferees are: xxx and an acceptable score in the DLSU
admission test. xxx
Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with the
DLSU policy on shifting. Considering that there sometimes exist exceptional cases where a
very difficult but temporary situation renders a DLSU student falling under this category a
last chance to be re-admitted provided he meets the cut-off scores required in the qualifying
examination administered by the university. xxx
He may not be remiss in his study obligations nor incur any violation whatsoever, as such
will be taken by the University to be an indication of his loss of initiative to pursue further
studies at DLSU. In sch (sic) a case, he renders himself ineligible to continue studying at
DLSU. DLSU thus reserves the right to the discontinuance of the studies of any enrolee
whose presence is inimical to the objectives of the CSB/DLSU. xxx Mi-so
As a college within the university, the College of St. Benilde subscribes to the De La Salle
Mission." (Annexes "C-1," "C-2," and "C-3" of the Unions Consolidated Reply and Rejoinder)
"4. The academic programs offered at the CSB are likewise presented in the Universitys
Undergraduate Prospectus for schoolyear 1992-1993 (Annex "D" of the Unions Consolidated
Reply and Rejoinder).
"5. The Leave Form Request (Annex "F" of the Unions Position Paper) at the CSB requires
prior permission from the University anent leaves of CSB employees, to wit:
AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE
UNIVERSITY OR WHO OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE
WITHOUT SECURING AUTHORITY FROM THE UNIVERSITY, OR WHO REFUSE TO BE
RECALLED FROM AN APPROVED LEAVE SHALL BE CONSIDERED ABSENT
WITHOUT LEAVE AND SHALL BE SUBJECT TO DISCIPLINARY ACTION.
"6. The University officials themselves claimed during the 1990 University Athletic
Association of the Philippines (UAAP) meet that the CSB athletes represented the
University since the latter and the CSB comprise only one entity."
On February 9, 1994, this Court resolved to give due course to these consolidated petitions
and to require the parties to submit their respective memoranda. [35]
In its memorandum filed on April 28, 1994,[36] pursuant to the above-stated
Resolution,[37] the University raised the following issues for the consideration of the
Court:[38] Ne-xold
I.
"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
VOLUNTARY ARBITRATOR WHEN HE INCLUDED, WITHIN THE BARGAINING UNIT
COMPRISING THE UNIVERSITYS RANK-AND-FILE EMPLOYEES, THE COMPUTER
OPERATORS ASSIGNED AT THE UNIVERSITYS COMPUTER SERVICES CENTER AND
THE UNIVERSITYS DISCIPLINE OFFICERS, AND WHEN HE EXCLUDED THE
COLLEGE OF SAINT BENILDE EMPLOYEES FROM THE SAID BARGAINING UNIT.
II.
"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
VOLUNTARY ARBITRATOR WHEN HE UPHELD THE UNIONS DEMAND FOR THE
INCLUSION OF A UNION SHOP CLAUSE IN THE PARTIES COLLECTIVE
BARGAINING AGREEMENT.
III.
"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
VOLUNTARY ARBITRATOR WHEN HE DENIED THE UNIONS PROPOSAL FOR THE
"LAST-IN-FIRST-OUT" METHOD OF LAY-OFF IN CASES OF RETRENCHMENT. Sc
IV.
"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
VOLUNTARY ARBITRATOR WHEN HE RULED THAT THE UNIVERSITY CAN NO
LONGER BE REQUIRED TO GRANT A SECOND ROUND OF WAGE INCREASES FOR
THE SCHOOL YEARS 1991-92 AND 1992-93 AND CHARGE THE SAME TO THE
INCREMENTAL PROCEEDS.
V.
"WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
VOLUNTARY ARBITRATOR WHEN HE DENIED THE UNIONS PROPOSALS ON THE
DELOADING OF THE UNION PRESIDENT, IMPROVED LEAVE BENEFITS AND
INDEFINITE UNION LEAVE WITH PAY."
The Union, on the other hand, raised the following issues, in its memorandum, [39] filed
pursuant to Supreme Court Resolution dated February 9, 1994,[40] to wit; that the voluntary
arbitrator committed grave abuse of discretion in:
"(1)......FAILING AND/OR REFUSING TO PIERCE THE VEIL OF CORPORATE FICTION
OF THE COLLEGE OF ST. BENILDE-DLSU DESPITE THE PRESENCE OF SUFFICIENT
BASIS TO DO SO AND IN FINDING THAT THE EMPLOYEES THEREAT ARE OUTSIDE
OF THE BARGAINING UNIT OF THE DLSUS RANK-AND-FILE EMPLOYEES. HE ALSO
ERRED IN HIS INTERPRETATION OF THE APPLICATION OF THE DOCTRINE; x-sc
33
"(2)......DENYING THE PETITIONERS PROPOSAL FOR THE LAST-IN FIRST-OUT
METHOD OF LAY-OFF IN CASE OF RETRENCHMENT AND IN UPHOLDING THE
ALLEGED MANAGEMENT PREROGATIVE TO SELECT AND CHOOSE ITS
EMPLOYEES DISREGARDING THE BASIC TENETS OF SOCIAL JUSTICE AND EQUITY
UPON WHICH THIS PROPOSAL WAS FOUNDED;
"(3)......FINDING THAT THE MULTISECTORAL COMMITTEE IN THE RESPONDENT
UNIVERSITY IS THE LEGITIMATE GROUP WHICH DETERMINES AND SCRUTINIZES
ANNUAL SALARY INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;
"(4)......HOLDING THAT THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS
IS THE ONLY SOURCE OF SALARY INCREASES AND FRINGE BENEFITS OF THE
EMPLOYEES;
"(5)......FAILING/REFUSING/DISREGARDING TO CONSIDER THE RESPONDENT
UNIVERSITYS FINANCIAL STATEMENTS FACTUALLY TO DETERMINE THE
FORMERS CAPABILITY TO GRANT THE PROPOSED SALARY INCREASES OVER AND
ABOVE THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS AND IN
GIVING WEIGHT AND CONSIDERATION TO THE RESPONDENT UNIVERSITYS
PROPOSED BUDGET WHICH IS MERELY AN ESTIMATE.
"(6)......FAILING TO EQUATE THE POSITION AND RESPONSIBILITIES OF THE UNION
PRESIDENT WITH THOSE OF THE PRESIDENT OF THE FACULTY ASSOCIATION
WHICH IS NOT EVEN A LEGITIMATE LABOR ORGANIZATION AND IN
SPECULATING THAT THE PRESIDENT OF THE FACULTY ASSOCIATION SUFFERS A
CORRESPONDING REDUCTION IN SALARY ON THE ACCOUNT OF THE
REDUCTION OF HIS WORKLOAD; IN FAILING TO APPRECIATE THE EQUAL RIGHTS
OF THE MEMBERS OF THE UNION AND OF THE FACULTY FOR PROFESSIONAL
ADVANCEMENT AS WELL AS THE DESIRABLE EFFECTS OF THE
INSTITUTIONALIZATION OF THE SPECIAL LEAVE AND WORKLOAD REDUCTION
BENEFITS."[41] xl-aw
The question which now confronts us is whether or not the voluntary arbitrator committed
grave abuse of discretion in rendering the assailed decision, particularly, in resolving the
following issues: (1) whether the computer operators assigned at the Universitys Computer
Services Center and the Universitys discipline officers may be considered as confidential
employees and should therefore be excluded from the bargaining unit which is composed
of rank and file employees of the University, and whether the employees of the College of
St. Benilde should also be included in the same bargaining unit; (2) whether a union shop
clause should be included in the parties collective bargaining agreement, in addition to the
existing maintenance of membership clause; (3) whether the denial of the Unions proposed
"last-in-first-out" method of laying-off employees, is proper; (4) whether the ruling that on
the basis of the Universitys proposed budget, the University can no longer be required to
grant a second round of wage increases for the school years 1991-92 and 1992-93 and charge
the same to the incremental proceeds, is correct; (5) whether the denial of the Unions
proposals on the deloading of the union president, improved leave benefits and indefinite
union leave with pay, is proper; (6) whether the finding that the multi-sectoral committee in
the University is the legitimate group which determines and scrutinizes the annual salary
increases and fringe benefits of the employees of the University, is correct; and (7) whether
the ruling that the 70% share in the incremental tuition proceeds is the only source of salary
increases and fringe benefits of the employees, is proper.
Now, before proceeding to the discussion and resolution of the issues raised in the pending
petitions, certain preliminary matters call for disposition. As we reiterated in the case of
Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes,[42] the following are
the well-settled rules in a petition for certiorari involving labor cases. "First, the factual
findings of quasi-judicial agencies (such as the Department of Labor and Employment),
when supported by substantial evidence, are binding on this Court and entitled to great
respect, considering the expertise of these agencies in their respective fields. It is well-
established that findings of these administrative agencies are generally accorded not only
respect but even finality.[43] Man-ikx
"Second, substantial evidence in labor cases is such amount of relevant evidence which a
reasonable mind will accept as adequate to justify a conclusion. [44]
"Third, in Flores vs. National Labor Relations Commission, [45] we explained the role and
function of Rule 65 as an extraordinary remedy:
"It should be noted, in the first place, that the instant petition is a special civil action for
certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is
available only and restrictively in truly exceptional cases those wherein the action of an
inferior court, board or officer performing judicial or quasi-judicial acts is challenged for
being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the
correction of errors of jurisdiction including the commission of grave abuse of discretion
amounting to lack or excess of jurisdiction. It does not include correction of public
respondent NLRC's evaluation of the evidence and factual findings based thereon, which
are generally accorded not only great respect but even finality.
"No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench.
Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of
the evidence on record, which is certainly beyond the province of the extraordinary writ of
certiorari. Such demand is impermissible for it would involve this Court in determining
what evidence is entitled to belief and the weight to be assigned it. As we have reiterated
countless times, judicial review by this Court in labor cases does not go so far as to
evaluate the sufficiency of the evidence upon which the proper labor officer or office
based his or its determination but is limited only to issues of jurisdiction or grave abuse
of discretion amounting to lack of jurisdiction." (emphasis supplied).
With the foregoing rules in mind, we shall now proceed to discuss the merit of these
consolidated petitions.
We affirm in part and modify in part. Scl-aw
On the first issue involving the classification of the computer operators assigned at the
Universitys Computer Services Center and discipline officers, the University argues that
they are confidential employees and that the Union has already recognized the confidential
34
nature of their functions when the latter agreed in the parties 1986 collective bargaining
agreement to exclude the said employees from the bargaining unit of rank-and-file
employees. As far as the said computer operators are concerned, the University contends
that " the parties have already previously agreed to exclude all positions in the Universitys
Computer Services Center (CSC), which include the positions of computer operators, from
the collective bargaining unit. xxx xxx."[46] The University further contends that "the nature
of the work done by these Computer Operators is enough justification for their exclusion
from the coverage of the bargaining unit of the Universitys rank-and-file employees. xxx
xxx."[47] According to the University, the Computer Services Center, where these computer
operators work, "processes data that are needed by management for strategic planning and
evaluation of systems. It also houses the Universitys confidential records and information
[e.g. student records, faculty records, faculty and staff payroll data, and budget allocation
and expenditure related data] which are contained in computer files and computer-
generated reports. xxx xxx. Moreover, the Computer Operators are in fact the repository of
the Universitys confidential information and data, including those involving and/or
pertinent to labor relations. xxx xxx."[48]
As to the discipline officers, the University maintains that "they are likewise excluded from
the bargaining unit of the rank-and-file employees under the parties 1986 CBA. The
Discipline Officers are clearly alter egos of management as they perform tasks which are
inherent in management [e.g. enforce discipline, act as peace officers, secure peace and
safety of the students inside the campus, conduct investigations on violations of University
regulations, or of existing criminal laws, committed within the University or by University
employees] xxx xxx."[49] The University also alleges that "the Discipline Officers are privy to
highly confidential information ordinarily accessible only to management." [50] Manik-s
With regard to the employees of the College of St. Benilde, the Union, supported by the
Solicitor General at this point, asserts that the veil of corporate fiction should be pierced,
thus, according to the Union, the University and the College of St. Benilde should be
considered as only one entity because the latter is but a mere integral part of the
University.[51]
The Universitys arguments on the first issue fail to impress us. The Court agrees with the
Solicitor General that the express exclusion of the computer operators and discipline officers
from the bargaining unit of rank-and-file employees in the 1986 collective bargaining
agreement does not bar any re-negotiation for the future inclusion of the said employees in
the bargaining unit. During the freedom period, the parties may not only renew the existing
collective bargaining agreement but may also propose and discuss modifications or
amendments thereto. With regard to the alleged confidential nature of the said employees
functions, after a careful consideration of the pleadings filed before this Court, we rule that
the said computer operators and discipline officers are not confidential employees. As
carefully examined by the Solicitor General, the service record of a computer operator
reveals that his duties are basically clerical and non-confidential in nature.[52] As to the
discipline officers, we agree with the voluntary arbitrator that based on the nature of their
duties, they are not confidential employees and should therefore be included in the
bargaining unit of rank-and-file employees.
The Court also affirms the findings of the voluntary arbitrator that the employees of the
College of St. Benilde should be excluded from the bargaining unit of the rank-and-file
employees of Dela Salle University, because the two educational institutions have their own
separate juridical personality and no sufficient evidence was shown to justify the piercing of
the veil of corporate fiction.[53] Man-ikan
On the second issue involving the inclusion of a union shop clause in addition to the
existing maintenance of membership clause in the collective bargaining agreement, the
University avers that "it is in the spirit of the exercise of the constitutional right to self-
organization that every individual should be able to freely choose whether to become a
member of the Union or not. The right to join a labor organization should carry with it the
corollary right not to join the same. This position of the University is but in due recognition
of the individuals free will and capability for judgment." [54] The University assails the
Unions demand for a union shop clause as "definitely unjust and amounts to oppression.
Moreover, such a demand is repugnant to democratic principles and the constitutionally
guaranteed freedom of individuals to join or not to join an association as well as their right
to security of tenure, particularly, on the part of present employees."[55]
The Union, on the other hand, counters that the Labor Code, as amended, recognizes the
validity of a union shop agreement in Article 248 thereof which reads:
"ART. 248. Unfair labor practices of employers.
xxx......xxx......xxx
(e) To discriminate in regard to hire or tenure of employment or any term or condition of
employment in order to encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law shall prevent the parties from
requiring membership in a recognized collective bargaining agent as a condition for
employment, except of those employees who are already members of another union at
the time of the signing of the collective bargaining agreement. xxx xxx." (emphasis
supplied) Ol-dmiso
We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision
in addition to the existing maintenance of membership clause in the collective bargaining
agreement. As the Solicitor General asserted in his consolidated Comment, the Universitys
reliance on the case of Victoriano vs. Elizalde Rope Workers Union[56] is clearly misplaced.
In that case, we ruled that "the right to join a union includes the right to abstain from joining
any union. xxx xxx. The right to refrain from joining labor organizations recognized by
Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to
such right to refrain from joining is withdrawn by operation of law, where a labor union
and an employer have agreed on a closed shop, by virtue of which the employer may
employ only members of the collective bargaining union, and the employees must continue
to be members of the union for the duration of the contract in order to keep their jobs. xxx
xxx."[57]
On the third issue regarding the Unions proposal for the use of the "last-in-first-out"
method in case of lay-off, termination due to retrenchment and transfer of employees, the
35
Union relies on social justice and equity to support its proposition, and submits that the
Universitys prerogative to select and/or choose the employees it will hire is limited, either
by law or agreement, especially where the exercise of this prerogative might result in the
loss of employment.[58] The Union further insists that its proposal is "in keeping with the
avowed State policy (q) To ensure the participation of workers in decision and policy-
making processes affecting their rights, duties and welfare (Art. 211, Labor Code, as
amended)."[59]
On the other hand, the University asserts its management prerogative and counters that
"[w]hile it is recognized that this right of employees and workers to participate in policy
and decision-making processes affecting their rights and benefits as may be provided by
law has been enshrined in the Constitution (Article III, [should be Article XIII], Section 3,
par. 2), said participation, however, does not automatically entitle the Union to dictate as to
how an employer should choose the employees to be affected by a retrenchment program.
The employer still retains the prerogative to determine the reasonable basis for selecting
such employees."[60] Nc-m
We agree with the voluntary arbitrator that as an exercise of management prerogative, the
University has the right to adopt valid and equitable grounds as basis for terminating or
transferring employees. As we ruled in the case of Autobus Workers' Union (AWU) and
Ricardo Escanlar vs. National Labor Relations Commission,[61] "[a] valid exercise of
management prerogative is one which, among others, covers: work assignment, working
methods, time, supervision of workers, transfer of employees, work supervision, and the
discipline, dismissal and recall of workers. Except as provided for, or limited by special
laws, an employer is free to regulate, according to his own discretion and judgment, all
aspects of employment." (emphasis supplied)
On the fourth issue involving the voluntary arbitrators ruling that on the basis of the
Universitys proposed budget, the University can no longer be required to grant a second
round of wage increases for the school years 1991-92 and 1992-93 and charge the same to
the incremental proceeds, we find that the voluntary arbitrator committed grave abuse of
discretion amounting to lack or excess of jurisdiction. As we ruled in the case of Caltex
Refinery Employees Association (CREA) vs. Jose S. Brillantes,[62] "xxx xxx. [w]e believe that
the standard proof of a company's financial standing is its financial statements duly audited
by independent and credible external auditors."[63] Financial statements audited by
independent external auditors constitute the normal method of proof of profit and loss
performance of a company.[64] The financial capability of a company cannot be based on its
proposed budget because a proposed budget does not reflect the true financial condition of
a company, unlike audited financial statements, and more importantly, the use of a
proposed budget as proof of a companys financial condition would be susceptible to abuse
by scheming employers who might be merely feigning dire financial condition in their
business ventures in order to avoid granting salary increases and fringe benefits to their
employees.
On the fifth issue involving the Unions proposals on the deloading of the union president,
improved leave benefits and indefinite union leave with pay, we agree with the voluntary
arbitrators rejection of the said demands, there being no justifiable reason for the granting
of the same. Nc-mmis
On the sixth issue regarding the finding that the multi-sectoral committee in the University
is the legitimate group which determines and scrutinizes the annual salary increases and
fringe benefits of the employees of the University, the Court finds that the voluntary
arbitrator did not gravely abuse his discretion on this matter. From our reading of the
assailed decision, it appears that during the parties negotiations for a new collective
bargaining agreement, the Union demanded for a 25% and 40% salary increase for the
second and third years, respectively, of the collective bargaining agreement. [65] The
Universitys counter-proposal was for a 10% increase for the third year.[66] After the meeting
of the multi-sectoral committee on budget, which is composed of students, parents, faculty,
administration and union, the University granted across-the-board salary increases of 11.3%
and 19% for the second and third years, respectively. [67] While the voluntary arbitrator
found that the said committee "decided to grant the said increases based on the Universitys
viability which were exclusively sourced from the tuition fees. xxx xxx.," no finding was
made as to the basis of the committees decision. Be that as it may, assuming for the sake of
argument that the said committee is the group responsible for determining wage increases
and fringe benefits, as ruled by the voluntary arbitrator, the committees determination must
still be based on duly audited financial statements following our ruling on the fourth issue.
On the seventh and last issue involving the ruling that the 70% share in the incremental
tuition proceeds is the only source of salary increases and fringe benefits of the employees,
the Court deems that any determination of this alleged error is unnecessary and irrelevant,
in view of our rulings on the fourth and preceding issues and there being no evidence
presented before the voluntary arbitrator that the University held incremental tuition fee
proceeds from which any wage increase or fringe benefit may be satisfied.
WHEREFORE, premises considered, the petitions in these consolidated cases, G.R. No.
109002 and G.R. No. 110072 are partially GRANTED. The assailed decision dated January
19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby AFFIRMED with the
modification that the issue on salary increases for the second and third years of the
collective bargaining agreement be REMANDED to the voluntary arbitrator for definite
resolution within one month from the finality of this Decision, on the basis of the externally
audited financial statements of the University already submitted by the Union before the
voluntary arbitrator and forming part of the records. Scnc-m
SO ORDERED.

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