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1. ALEXANDER REYES vs. CRESENCIANO B. TRAJANO

G.R. No. 84433 June 2, 1992

FACTS:
The certification election was authorized to be conducted by the Bureau of Labor Relations among the employees of Tri-
Union Industries Corporation on October 20, 1987. The competing unions were Tri-Union Employees Union-Organized
Labor Association in Line Industries and Agriculture (TUEU-OLALIA), and Trade Union of the Philippines and Allied
Services (TUPAS). Of the 348 workers initially deemed to be qualified voters, only 240 actually took part in the election,
conducted under the provision of the Bureau of Labor Relations. Among the 240 employees who cast their votes were
141 members of the INK.

The ballots provided for three (3) choices. They provided for votes to be cast, of course, for either of the two (2)
contending labor organizations, (a) TUPAS and (b) TUEU-OLALIA; and, conformably with established rule and practice, 1
for (c) a third choice: "NO UNION."

The challenged votes were those cast by the 141 INK members. They were segregated and excluded from the final count
in virtue of an agreement between the competing unions, reached at the pre-election conference, that the INK members
should not be allowed to vote "because they are not members of any union and refused to participate in the previous
certification elections."

The INK employees promptly made known their protest to the exclusion of their votes. They filed f a petition to cancel
the election alleging that it "was not fair" and the result thereof did "not reflect the true sentiments of the majority of
the employees." TUEU-OLALIA opposed the petition. It contended that the petitioners "do not have legal personality to
protest the results of the election," because "they are not members of either contending unit, but . . . of the INK" which
prohibits its followers, on religious grounds, from joining or forming any labor organization . . . ."

The Med-Arbiter saw no merit in the INK employees’ petition. By Order dated December 21, 1987, he certified the
TUEU-OLALIA as the sole and exclusive bargaining agent of the rank-and-file employees. The petitioners brought the
matter up on appeal to the Bureau of Labor Relations. Assistant Labor Secretary Cresenciano B. Trajano, then Officer-in-
Charge of the Bureau of Labor Relations, denied the appeal in his Decision of July 22, 1988. It is this Decision of July 22,
1988 that the petitioners would have this Court annul and set aside in the present special civil action of certiorari.

ISSUE:
Whether the votes of the INK employees in the certification election be excluded, on ground that INK prohibits its
followers, on religious grounds, from joining or forming any labor organization.

HELD:
Guaranteed to all employees or workers is the "right to self-organization and to form, join, or assist labor organizations
of their own choosing for purposes of collective bargaining." This is made plain by no less than three provisions of the
Labor Code of the Philippines.

ART. 243. Coverage and employees right to self-organization. — All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical, or educational institutions whether operating for profit or
not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for
purposes or collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for their mutual aid and protection.

Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to "interfere with, restrain or
coerce employees in the exercise of their right to self-organization." Similarly, Article 249 (a) makes it an unfair labor
practice for a labor organization to "restrain or coerce employees in the exercise of their rights to self-organization . . . "
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The same legal proposition is set out in the Omnibus Rules Implementing the Labor Code, as amended, as might be
expected Section 1, Rule II (Registration of Unions), Book V (Labor Relations) of the Omnibus Rules provides as follows;

Sec. 1. Who may join unions; exception. — All persons employed in commercial, industrial and agricultural enterprises,
including employees of government corporations established under the Corporation Code as well as employees of
religious, medical or educational institutions, whether operating for profit or not, except managerial employees, shall
have the right to self-organization and to form, join or assist labor organizations for purposes of collective bargaining.
Ambulant, intermittent and without any definite employers people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and protection.

The right of self-organization includes the right to organize or affiliate with a labor union or determine which of two or
more unions in an establishment to join, and to engage in concerted activities with co-workers for purposes of collective
bargaining through representatives of their own choosing, or for their mutual aid and protection, i.e., the protection,
promotion, or enhancement of their rights and interests.

Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is
subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. The right to form
or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is self-evident
that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to
exercise such a conferred right. The fact that a person has opted to acquire membership in a labor union does not
preclude his subsequently opting to renounce such membership. In which case, no union can represent the employees
in collective bargaining. And whether the prevailing "NO" votes are inspired by considerations of religious belief or
discipline or not is beside the point, and may not be inquired into at all.

The right to refuse to join or be represented by any labor organization is recognized not only by law but also in the rules
drawn up for implementation thereof. The present implementing rules no longer explicitly impose the requirement that
the ballots at a certification election include a choice for "NO UNION" Section 8 (rule VI, Book V of the Omnibus Rules)
entitled"Marketing and canvassing of votes," pertinently provides that:

. . . (a) The voter must write a cross (X) or a check (/) in the square opposite the union of his choice. If only one union is
involved, the voter shall make his cross or check in the square indicating "YES" or "NO."

The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in
the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by
which particular labor organization. If the results of the election should disclose that the majority of the workers do not
wish to be represented by any union, then their wishes must be respected, and no union may properly be certified as
the exclusive representative of the workers in the bargaining unit in dealing with the employer regarding wages, hours
and other terms and conditions of employment.

That the INK employees, as employees in the same bargaining unit in the true sense of the term, do have the right of
self-organization, is also in truth beyond question, as well as the fact that when they voted that the employees in their
bargaining unit should be represented by "NO UNION," they were simply exercising that right of self-organization, albeit
in its negative aspect.

The respondents' argument that the petitioners are disqualified to vote because they "are not constituted into a duly
organized labor union" — "but members of the INK which prohibits its followers, on religious grounds, from joining or
forming any labor organization" — and "hence, not one of the unions which vied for certification as sole and exclusive
bargaining representative," is specious. Neither law, administrative rule nor jurisprudence requires that only employees
affiliated with any labor organization may take part in a certification election. On the contrary, the plainly discernible
intendment of the law is to grant the right to vote to all bona fide employees in the bargaining unit, whether they are
members of a labor organization or not.
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Neither does the contention that petitioners should be denied the right to vote because they "did not participate in
previous certification elections in the company for the reason that their religious beliefs do not allow them to form, join
or assist labor organizations," persuade acceptance. No law, administrative rule or precedent prescribes forfeiture of the
right to vote by reason of neglect to exercise the right in past certification elections. In denying the petitioners' right to
vote upon these egregiously fallacious grounds, the public respondents exercised their discretion whimsically,
capriciously and oppressively and gravely abused the same.

2. TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES vs.

NATIONAL HOUSING CORPORATION and ATTY. VIRGILIO SY, as Officer-in-Charge of the Bureau of Labor Relations,
Bonifacio V. Tupaz for petitioner.
The Government Corporate Counsel for respondent NHC.
Raul E. Espinosa for intervenor PACIWU.
G.R. No. L-49677 May 4, 1989

Facts:
Respondent National Housing Corporation (hereinafter referred to as NHC) is a corporation organized in accordance
with Executive Order No. 399, otherwise known as the Uniform Charter of Government Corporations. Its shares of
stock are and have been 100% owned by the Government from its incorporation under Act 459, the former
corporation law. The government entities that own its shares of stock are the Government Service Insurance
System, the Social Security System, the Development Bank of the Philippines, the National Investment and
Development Corporation and the People's Homesite and Housing Corporation. Petitioner Trade Unions of the
Philippines and Allied Services (TUPAS, for brevity) is a legitimate labor organization with a chapter in NHC.

TUPAS filed a petition for the conduct of a certification election with Department of Labor in order to determine the
exclusive bargaining representative of the workers in NHC. It was claimed that its members comprised the majority
of the employees of the corporation. The petition was dismissed holding that NHC "being a government-owned
and/or controlled corporation its employees/workers are prohibited to form, join or assist any labor organization for
purposes of collective bargaining pursuant to Section 1, Rule II, Book V of the Rules and Regulations Implementing
the Labor Code."

From this order of dismissal, TUPAS appealed to the Bureau of Labor Relations where it reversed the order of
dismissal and ordered the holding of a certification election. This order was, however, set aside upon a motion for
reconsideration of respondent NHC. In the instant petition for certiorari, TUPAS seeks the reversal of the said
resolution and prays that a certification election be held among the rank and file employees of NHC.

Issue:
Propriety of and requirements for certification elections in government-owned or controlled corporations like the
respondent

Held:
In retrospect, it will be recalled that in a former case of illegal dismissal involving the same respondent corporation,
We had ruled that the employees of NHC and of other government owned or controlled corporations were
governed by civil service laws, rules and regulations pursuant to the 1973 Constitution which provided that "the civil
service embraces every branch, agency, subdivision and instrumentality of the government, including government-
owned or controlled corporations."

It was therein stressed that to allow subsidiary corporations to be excluded from the civil service laws would be to
permit the circumvention or emasculation of the above-quoted constitutional provision. As perceptively analyzed
therein, "(i)t would be possible for a regular ministry of government to create a host of subsidiary corporations
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under the Corporation Code funded by a willing legislature. A government-owned corporation could create several
subsidiary corporations. These subsidiary corporation rations would enjoy the best of two worlds. Their officials and
employees would be privileged individuals, free from the strict accountability required by the Civil Service Decree
and the regulations of the Commission on Audit. Their incomes would not be subject to the competitive restraints of
the open market nor to the terms and conditions of civil service employment."

The rule, however, was modified in the 1987 Constitution, the corresponding provision whereof declares that "(t)he
civil service embraces all branches, subdivisions, instrumentalities and agencies of the government, including
government-owned or controlled corporations with original charters."

Consequently, the civil service now covers only government owned or controlled corporations with original or
legislative charters, that is those created by an act of Congress or by special law, and not those incorporated under
and pursuant to a general legislation. As We recently held —

..., the situations sought to be avoided by the 1973 Constitution and expressed by this Court in theNational Housing
Corporation case ... appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil
Service embraces government-owned controlled corporationswith original charters and therefore, by clear
implication, the Civil Service does not include government-owned or controlled corporations which are organized as
subsidiaries of government-owned or controlled corporations under the general corporation law.

The workers or employees of NHC undoubtedly have the right to form unions or employees' organizations. The right
to unionize or to form organizations is now explicitly recognized and granted to employees in both the
governmental and the private sectors. The Bill of Rights provides that "(t)he right of the people, including those
employed in the public and private sectors, to form unions, associations or societies for purposes not contrary to law
shall not be abridged"

This guarantee is reiterated in the second paragraph of Section 3, Article XIII, on Social Justice and Human Rights,
which mandates that the State "shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in accordance with law ...."
Specifically with respect to government employees, the right to unionize is recognized in Paragraph (5), Section 2,
Article IX B 12 which provides that "(t)he right to self-organization shall not be denied to government employees."
The rationale of and justification for this innovation which found expression in the aforesaid provision was explained
by its proponents as follows:

... The government is in a sense the repository of the national sovereignty and, in that respect, it must be held in
reverence if not in awe. It symbolizes the unity of the nation, but it does perform a mundane task as well. It is an
employer in every sense of the word except that terms and conditions of work are set forth through a Civil Service
Commission. The government is the biggest employer in the Philippines. There is an employer-employee
relationship and we all know that the accumulated grievances of several decades are now beginning to explode in
our faces among government workers who feel that the rights afforded by the Labor Code, for example, to workers
in the private sector have been effectively denied to workers in government in what looks like a grotesque, (sic) a
caricature of the equal protection of the laws. For example, ... there were many occasions under the old government
when wages and cost of living allowances were granted to workers in the private sector but denied to workers in the
government for some reason or another, and the government did not even state the reasons why. The government
employees were being discriminated against. As a general rule, the majority of the world's countries now entertain
public service unions. What they really add up to is that the employees of the government form their own
association. Generally, they do not bargain for wages because these are fixed in the budget but they do acquire a
forum where, among other things, professional and self-development is (sic) promoted and encouraged. They also
act as watchdogs of their own bosses so that when graft and corruption is committed, generally, it is the unions who
are no longer afraid by virtue of the armor of self-organization that become the public's own allies for detecting
graft and corruption and for exposing it....
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There is, therefore, no impediment to the holding of a certification election among the workers of NHC for it is clear
that they are covered by the Labor Code, the NHC being a government-owned and/or controlled corporation
without an original charter. Statutory implementation of the last cited section of the Constitution is found in Article
244 of the Labor Code, as amended by Executive Order No. 111, thus:

... Right of employees in the public service — Employees of the government corporations established under the
Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All
other employees in the civil service shall have the right to form associations for purposes not contrary to law.
The records do not show that supervening factual events have mooted the present action. It is meet, however, to
also call attention to the fact that, insofar as certification elections are concerned, subsequent statutory
developments have rendered academic even the distinction between the two types of government-owned or
controlled corporations and the laws governing employment relations therein, as hereinbefore discussed. For,
whether the employees of NHC are covered by the Labor Code or by the civil service laws, a certification election
may be conducted.

For employees in corporations and entities covered by the Labor Code, the determination of the exclusive
bargaining representative is particularly governed by Articles 255 to 259 of said Code. Article 256 provides for the
procedure when there is a representation issue in organized establishments, while Article 257 covers unorganized
establishments. These Labor Code provisions are fleshed out by Rules V to VII, Book V of the Omnibus Implementing
Rules.

With respect to other civil servants, that is, employees of all branches, subdivisions, instrumentalities and agencies
of the government including government-owned or controlled corporations with original charters and who are,
therefore, covered by the civil service laws, the guidelines for the exercise of their right to organize is provided for
under Executive Order No. 180. Chapter IV thereof, consisting of Sections 9 to 12, regulates the determination of the
"sole and exclusive employees representative"; Under Section 12, "where there are two or more duly registered
employees' organizations in the appropriate organization unit, the Bureau of Labor Relations shall, upon petition
order the conduct of certification election and shall certify the winner as the exclusive representative of the rank-
and-file employees in said organizational unit."

Parenthetically, note should be taken of the specific qualification in the Constitution that the State "shall guarantee
the rights of all workers to self-organization, collective bargaining, and peaceful concerted activities, including the
right to strike in accordance with law" and that they shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law."

The conduct of a certification election among the affected employees of respondent National Housing Corporation
in accordance with the rules therefor is hereby GRANTED.

3. MANILA ELECTRIC COMPANY vs.

SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND TECHNICAL EMPLOYEES ASSOCIATION OF MERALCO, and
FIRST LINE ASSOCIATION OF MERALCO SUPERVISORY EMPLOYEES
G.R. No. 91902 May 20, 1991

Facts:
The Staff and Technical Employees Association of MERALCO (STEAM-PCWF) a labor organization of staff and technical
employees of MERALCO, filed a petition for certification election, seeking to represent regular employees of MERALCO
who are: (a) non-managerial employees with Pay Grades VII and above; (b) non-managerial employees in the Patrol
Division, Treasury Security Services Section, Secretaries who are automatically removed from the bargaining unit; and (c)
employees within the rank and file unit who are automatically disqualified from becoming union members of any
organization within the same bargaining unit.
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Among others, the petition alleged that "while there exists a duly-organized union for rank and file employees in Pay
Grade I-VI, which is the MERALCO Employees and Worker's Association (MEWA) which holds a valid CBA for the rank
and file employees, there is no other labor organization except STEAM-PCWF claiming to represent the MERALCO
employees.

MERALCO moved for the dismissal of the petition on the following grounds:
I. The employees sought to be represented by petitioner are either 1) managerial who are prohibited by law from
forming or joining supervisory union; 2) security services personnel who are prohibited from joining or assisting the
rank-and-file union; 3) secretaries who do not consent to the petitioner's representation and whom petitioner
cannot represent; and 4) rank-and-file employees represented by the certified or duly recognized bargaining
representative of the only rank-and-file bargaining unit in the company, the Meralco Employees Workers
Association (MEWA), in accordance with the existing Collective Bargaining Agreement with the latter.
II. The petition for certification election will disturb the administration of the existing CBA in violation of Art. 232 of
the Labor Code.
III. The petition itself shows that it is not supported by the written consent of at least twenty percent (20%) of the
alleged 2,500 employees sought to be represented.

Before Med-Arbiter, MERALCO contended that employees from Pay Grades VII and above are classified as managerial
employees who, under the law, are prohibited from forming, joining or assisting a labor organization of the rank and file.
As regards those in the Patrol Division and Treasury Security Service Section, MERALCO maintains that since these
employees are tasked with providing security to the company, they are not eligible to join the rank and file bargaining
unit, pursuant to Sec. 2(c), Rule V, Book V of the then Implementing Rules and Regulations of the Labor Code (1988)
which reads as follows: Sec. 2. Who may file petition. — The employer or any legitimate labor organization may file the
petition. The petition, when filed by a legitimate labor organization, shall contain, among others: xxx (c) description of
the bargaining unit which shall be the employer unit unless circumstances otherwise require, and provided, further: that
the appropriate bargaining unit of the rank and file employees shall not include security guards (As amended by Sec. 6,
Implementing Rules of EO 111)

As regards those rank and file employees enumerated in Sec. 3, Art. I, MERALCO contends that since they are already
beneficiaries of the MEWA-CBA, they may not be treated as a separate and distinct appropriate bargaining unit.

The Med-Arbiter ruled that having been excluded from the existing CBA for rank and file employees, these employees
have the right to form a union of their own, except those employees performing managerial functions. With respect to
those employees who had resented their alleged involuntary membership in the existing CBA, the Med-Arbiter stated
that the holding of a certification election would allow them to fully translate their sentiment on the matter, and thus
directed the holding of a certification election.

MERALCO appealed, contending that "until such time that a judicial finding is made to the effect that they are not
managerial employee, STEAM-PCWF cannot represent employees from Pay Grades VII and above. STEAM-PCWF
opposed the appeal.

With the enactment of RA 6715, STEAM-PCWF renounced its representation of the employees in Patrol Division,
Treasury Security Services Section and rank-and-file employees in Pay Grades I-VI.

The First Line Association of Meralco Supervisory Employees (FLAMES) filed a similar seeking to represent those
employees with Pay Grades VII to XIV, since "there is no other supervisory union at MERALCO. The petition was
consolidated with that of STEAM-PCWF.

The Secretary of Labor affirmed with modification the order of the Med-Arbiter as far as the employees covered by
Section 3, Article I of the exist CBA in the Company are concerned. Said employees shall remain in the unit of the rank-
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and-file already existing and may exercise their right to self-organization as above enunciated. Further, the FLAMES is
included as among the choices in the certification election.

Issue:
The petition was premised on the exclusion/disqualification of certain MERALCO employees.

Held:
In its petition, MERALCO has relented and recognized respondents STEAM-PCWF and FLAMES' desired representation of
supervisory employees from Grades VII up. However, it believes that all that the Secretary of Labor has to do is to
establish a demarcation line between supervisory and managerial rank, and not to classify outright the group of
employees represented by STEAM-PCWF and FLAMES as rank and file employees.

In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol Services Section) to be
represented by respondents, MERALCO contends that this contravenes the provisions of the recently passed RA 6715
and its implementing rules which disqualifies supervisory employees and security guards from membership in a labor
organization of the rank and file.

The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212, then par. (k), of the 1988
Labor Code defining "managerial" and "rank and file" employees, the law then in force when the complaint was filed. At
the time, only two groups of employees were recognized, the managerial and rank and file. This explains the absence of
evidence on job descriptions on who would be classified managerial employees. It is perhaps also for this reason why
the Secretary of Labor limited his classification of the Meralco employees belonging to Pay Grades VII and up, to only
two groups, the managerial and rank and file.

However, pursuant to the Department of Labor's goal of strengthening the constitutional right of workers to self-
organization, RA 6715 was subsequently passed which reorganized the employee-ranks by including a third group, or the
supervisory employees, and laying down the distinction between supervisory employees and those of managerial ranks
in Art. 212, renumbered par. [m], depending on whether the employee concerned has the power to lay down and
execute management policies, in the case of managerial employees, or merely to recommend them, in case of
supervisory employees.

It must be emphasized that private respondent FLAMES seeks to represent only the Supervisory Employees with Pay
Grades VII to XIV.

Supervisory Employees with Pay Grades VII to XIV are not managerial employees. There was no need for petitioner to
prove that these employees are not rank-and-file. As adverted to above, the private respondents admit that these are
not the rank-and-file but the supervisory employees, whom they seek to represent. What needs to be established is the
rank where supervisory ends and managerial begins.
Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been recognized and accepted as
supervisory. On the other hand, those employees who have been automatically disqualified have been directed by the
Secretary of Labor to remain in the existing labor organization for the rank and file, (the condition in the CBA deemed as
not having been written into the contract, as unduly restrictive of an employee's exercise of the right to self-
organization).

Anent the instant petition therefore, STEAM-PCWF, and FLAMES would therefore represent supervisory employees only.
In this regard, the authority given by the Secretary of Labor for the establishment of two labor organizations for the rank
and file will have to be disregarded since We hereby uphold certification elections only for supervisory employees from
Pay Grade VII and up, with STEAM-PCWF and FLAMES as choices.
 Page |8

As to the alleged failure of the Secretary of Labor to establish a demarcation line for purposes of segregating the
supervisory from the managerial employees, the required parameter is really not necessary since the law itself, Art. 212-
m, (as amended by Sec. 4 of RA 6715) has already laid down the corresponding guidelines:

Art. 212. Definitions. . . .

(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees
are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such
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 to Book.

. . . Thus, the determinative factor in classifying an employee as managerial, supervisory or rank-and-file is the nature of
the work of the employee concerned.

We shall now discuss the rights of the security guards to self-organize. MERALCO has questioned the legality of allowing
them to join either the rank and file or the supervisory union, claiming that this is a violation of par. 2, Sec. 1, Rule II,
Book V of the Implementing Rules of RA 6715, which states as follows:

Sec 1. Who may join unions. . . .

xxx xxx xxx
Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-
file employees but may join, assist or form separate labor organizations of their own; . . .

Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of the implementing rules of RA 6715:

Sec. 1. . . .
Sec. 2. Who may file.—Any legitimate labor organization or the employer, when requested to bargain collectively, may
file the petition.
The petition, when filed by a legitimate labor-organization shall contain, among others:
(a) . . .
(b) . . .
(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and
provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory
employees and/or security guards;

Both rules, barring security guards from joining a rank and file organization, appear to have been carried over from the
old rules which implemented then Art. 245 of the Labor Code, and which provided thus:

Art. 245. Ineligibility of security personnel to join any labor organization.—Security guards and other personnel employed
for the protection and security of the person, properties and premises of the employer shall not be eligible for
membership in any labor organization.

However, E.O. No. 111 which eliminated the above-cited provision on the disqualification of security guards.
Art. 245. Ineligibility of managerial employees to joint any labor organization.—Managerial employees are not eligible to
join, assist or form any labor organization.

With the elimination, security guards were thus free to join a rank and file organization.

The present Congress passed RA 6715. 2 Section 18 thereof amended Art. 245, to read as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees.—
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be
 Page |9

eligible for membership in a labor organization of the rank-and-file employees but may join, assist, or form separate
labor organizations of their own.

As will be noted, the second sentence of Art. 245 embodies an amendment disqualifying supervisory employees from
membership in a labor organization of the rank-and-file employees. It does not include security guards in the
disqualification.

The implementing rules of RA 6715, therefore, insofar as they disqualify security guards from joining a rank and file
organization are null and void, for being not germane to the object and purposes of EO 111 and RA 6715 upon which
such rules purportedly derive statutory moorings.

While therefore under the old rules, security guards were barred from joining a labor organization of the rank and file,
under RA 6715, they may now freely join a labor organization of the rank and file or that of the supervisory union,
depending on their rank. By accommodating supervisory employees, the Secretary of Labor must likewise apply the
provisions of RA 6715 to security guards by favorably allowing them free access to a labor organization, whether rank
and file or supervisory, in recognition of their constitutional right to self-organization.

Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly abandon their duties,
such as protection of property of their employer and the persons of its officials and employees, the control of access to
the employer's premises, and the maintenance of order in the event of emergencies and untoward incidents.

It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid possible conflict
of interest in security personnel.

ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the Resolution of the Secretary of Labor
dated November 3, 1989 upholding an employee's right to self-organization. A certification election is hereby ordered
conducted among supervisory employees of MERALCO, belonging to Pay Grades VII and above, using as guideliness an
employee's power to either recommend or execute management policies, pursuant to Art. 212 (m), of the Labor Code,
as amended by Sec. 4 of RA 6715, with respondents STEAM-PCWF and FLAMES as choices.

Employees of the Patrol Division, Treasury Security Services Section and Secretaries may freely join either the labor
organization of the rank and file or that of the supervisory union depending on their employee rank. Disqualified
employees covered by Sec. 3, Art. I of the MEWA-CBA, shall remain with the existing labor organization of the rank and
file.

4. SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL) vs.

HONORABLE PURA FERRER CALLEJA, Director, Bureau of Labor Relations, Department of Labor and Employment,
MINDANAO MINERS EMPLOYEE UNION SANDIGAN NG MANGGAGAWANG PILIPINO (SANDIGAN), APEX MINING
COMPANY, INC.
G.R. No. 80882 April 24, 1989

Facts:
Petitioner SPFL filed a petition for certification election among the rank-and-file employees of private respondent Apex
Mining Company, Incorporated with the Department of Labor.

Med-Arbiter issued an Order calling for the holding of the certification election among the rank-and-file employees of
APEX with the following choices:
I. Southern Philippines Federation of Labor (SPFL)
II. Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan) and
III. No union.
 P a g e | 10

A pre-election conference was conducted among the petitioner Union; private respondent Union, MMEU-Sandigan; and
APEX to settle details in the conduct of the election such as the venue of the election and the list of employees qualified
to vote in the election.

During the pre-election conference, the parties agreed to delete from the list of workers prepared and submitted by
APEX numbering 1,716, the names of 19 managerial employees and 73 probationary employees who were statutorily
disqualified from voting. Petitioner Union objected to the inclusion in said list of the following: (1) employees occupying
the positions of Supervisor I, II, and III; (2) employees under confidential/special payrolls; and (3) employees who were
not paying Union dues. The petitioner Union contends that the aforementioned employees were disqualified from
participating in the certification election since the Supervisors were managerial employees while the last two were
disqualified by virtue of their non-membership in the Union and their exclusion from the benefits of the collective
bargaining agreement.

In view of the lack of agreement among the parties on the list of qualified voters, Med-Arbiter declared that the
following groups of workers be not included in the list of employees qualified to vote in the consent election.

The day of the certification election, petitioner Union filed a Motion for Reconsideration. The respondent Union filed an
Urgent Motion to Open the Challenged Ballot. APEX filed a Manifestation and Motion manifesting its interest in the
speedy resolution of the case and primary concern for "the restoration of normalcy and the preservation of industrial
peace in the already explosive situation in the mining area." Med-Arbiter directed that the challenged ballots be opened.

Petitioner Union appealed to the Bureau of Labor Relations where Med- Arbiter's Order affirmed with modification.
Petitioner Union moved for reconsideration. Meanwhile, Med-Arbiter Macasa opened and canvassed the 197
challenged ballots with the result as follows:
SPFL 12 votes
SANDIGAN 178 votes
No Union 2 votes
Spoiled 4 votes
Envelop with
no ballots 1 vote
__________
TOTAL 197 votes

As a consequence of the opening and canvass of the challenged ballots, the outcome of the certification election
became:
SPFL 626 votes
SANDIGAN 706 votes
No Union 11 votes
___________
TOTAL 1,343 votes

Based on the aforementioned results, respondent Union filed a Manifestation with the BLR with prayer for the issuance
of Certification Order certifying it as the sole and exclusive bargaining representative of the rank-and-file employees of
APEX. Director Calleja denied the Motion for reconsideration of Petitioner SPFL.

Issue:
WON the public respondent committed grave abuse of discretion in allowing the 197 employees to vote in the
certification election when, as alleged by the petitioner, they are disqualified by express provision of law or under the
existing collective bargaining agreement.
 P a g e | 11

Held:
It is maintained by the petitioner that under the Labor Code, managerial employees are excluded from forming or
joining a collective bargaining unit; and under the collective bargaining agreement executed between Apex and
respondent union, among those who are excluded from the bargaining unit are: a) managerial employees as defined in
paragraph K, Article 212 of the Labor Code; b) those performing supervisory functions; and c) those holding confidential
positions as determined by the company. Therefore, the employees holding the positions of Supervisors II and III and
those in the confidential payrolls should be excluded from joining the bargaining unit and from voting in the certification
election. Likewise, those employees who are not paying union dues should be excluded from the same since the existing
CBA contains a Union shop provision.

The contentions have no merit.

Although we have upheld the validity of the CBA as the law among the parties, its provisions cannot override what is
expressly provided by law that only managerial employees are ineligible to join, assist or form any labor organization
(See Art. 247, Labor Code). Therefore, regardless of the challenged employees' designations, whether they are employed
as Supervisors or in the confidential payrolls, if the nature of their job does not fall under the definition of "managerial"
as defined in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification
election. Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It
cannot be curtailed by a collective bargaining agreement.

Hence, it is important to determine whether the positions of Supervisors II and III are considered "managerial" under the
law.

A managerial employee is defined as 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.

The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the
interest of his employer in the matter specified in Article 212 (k) of the Labor Code and Section 1 (m) of its
Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of
independent judgment. Thus, 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.

Furthermore, in line with the ruling of this Court, subject employees are not managerial employees because as borne by
the records, they do not participate in policy making but are given ready policies to execute and standard practices to
observe, thus having little freedom of action.

The petitioner's motion for reconsideration before the public respondent outlined the job description of Supervisors. In
the category of Supervisory II, the "General Summary" provides: Assists the Foreman in the effective
dispatching/distribution of manpower and equipment to carry out approved work. while the first duty enumerated in the
position of Supervisor III states: 1. Executes and coordinates work plans emanating from his supervisors.

Thus, it is clear from the above provisions that the functions of the questioned positions are not managerial in nature
because they only execute approved and established policies leaving little or no discretion at all whether to
implement the said policies or not. The respondent Director, therefore, did not commit grave abuse of discretion in
dismissing the petitioner's appeal from the Med-Arbiter's Order to open and count the challenged ballots in denying the
petitioner's motion for reconsideration and in certifying the respondent Union as the sole and exclusive bargaining
representative of the rank-and-file employees of respondent Apex .
 P a g e | 12

As regards the employees in the confidential payroll, the petitioner has not shown that the nature of their jobs is
classified as managerial except for its allegation that they are considered by management as occupying managerial
positions and highly confidential. Neither can payment or non-payment of union dues be the determining factor of
whether the challenged employees should be excluded from the bargaining unit since the union shop provision in the
CBA applies only to newly hired employees but not to members of the bargaining unit who were not members of the
union at the time of the signing of the CBA. It is, therefore, not impossible for employees to be members of the
bargaining unit even though they are non-union members or not paying union dues.

WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the petitioner.

5. BENGUET ELECTRIC COOPERATIVE, INC., vs.

HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES LABOR UNION
G.R. No. 79025. December 29, 1989.

Facts:
Beneco Worker's Labor Union-Association of Democratic Labor Organizations (hereinafter referred to as BWLU- ADLO)
filed a petition for direct certification as the sole and exclusive bargaining representative of all the rank and file
employees of Benguet Electric Cooperative, Inc. (hereinafter referred to as BENECO) at Alapang, La Trinidad, Benguet
alleging, inter alia, that BENECO has in its employ two hundred and fourteen (214) rank and file employees; that one
hundred and ninety-eight (198) or 92.5% of these employees have supported the filing of the petition; that no
certification election has been conducted for the last 12 months; that there is no existing collective bargaining
representative of the rank and file employees sought to represented by BWLU- ADLO; and, that there is no collective
bargaining agreement in the cooperative.

An opposition to the petition was filed by the Beneco Employees Labor Union (hereinafter referred to as BELU)
contending that it was certified as the sole and exclusive bargaining representative of the subject workers pursuant to
an order issued by the med-arbiter; that pending resolution by the National Labor Relations Commission are two cases it
filed against BENECO involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases bars
any representation question.

BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit electric cooperative
engaged in providing electric services to its members and patron-consumers in the City of Baguio and Benguet Province;
and, that the employees sought to be represented by BWLU-ADLO are not eligible to form, join or assist labor
organizations of their own choosing because they are members and joint owners of the cooperative.

On September 2, 1985 the med-arbiter issued an order giving due course to the petition for certification election.
However, the med-arbiter limited the election among the rank and file employees of petitioner who are non-members
thereof and without any involvement in the actual ownership of the cooperative. Based on the evidence during the
hearing the med-arbiter found that there are thirty-seven (37) employees who are not members and without any
involvement in the actual ownership of the cooperative.

BELU and BENECO appealed from this order but the same was dismissed for lack of merit.

Bureau of Labor Relations (BLR) director Pura Ferrer-Calleja affirmed the med-arbiter's order and certified BELU as the
sole and exclusive bargaining agent of all the rank and file employees of BENECO.

Under Article 256 of the Labor Code to have a valid certification election, "at least a majority of all eligible voters in the
unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the
exclusive bargaining agent of all workers in the unit." Petitioner BENECO asserts that the certification election was null
 P a g e | 13

and void since members-employees of petitioner cooperative who are not eligible to form and join a labor union for
purposes of collective bargaining were allowed to vote therein.

Respondent director and private respondent BELU on the other hand submit that members of a cooperative who are
also rank and file employees are eligible to form, assist or join a labor union.

Issues:
a. Whether or not employees of a cooperative are qualified to form or join a labor organization for purposes of
collective bargaining
b. Whether or not respondent director committed grave abuse of discretion in certifying respondent BELU as the sole
and exclusive bargaining representative of the rank and file employees of BENECO.

Held:
The Court finds the present petition meritorious.
a. No. The issue of whether or not employees of a cooperative are qualified to form or join a labor organization for
purposes of collective bargaining has already been resolved and wherein the Court had stated that the right to
collective bargaining is not available to an employee of a cooperative who at the same time is a member and co-
owner thereof. With respect, however, to employees who are neither members nor co-owners of the cooperative
they are entitled to exercise the rights to self-organization, collective bargaining and negotiation as mandated by the
1987 Constitution and applicable statutes.

Respondent director argues that to deny the members of petitioner cooperative the right to form, assist or join a labor
union of their own choice for purposes of collective bargaining would amount to a patent violation of their right to self-
organization.

Private respondent BELU concurs with the above contention of respondent director and, additionally, claims that since
membership in petitioner cooperative is only nominal, the rank and file employees who are members thereof should not
be deprived of their right to self-organization.

The above contentions are untenable. Contrary to respondents' claim, the fact that the members-employees of
petitioner do not participate in the actual management of the cooperative does not make them eligible to form, assist or
join a labor organization for the purpose of collective bargaining with petitioner. The Court's ruling in the Davao City
case that members of cooperative cannot join a labor union for purposes of collective bargaining was based on the fact
that as members of the cooperative they are co-owners thereof. As such, they cannot invoke the right to collective
bargaining for "certainly an owner cannot bargain with himself or his co-owners." It is the fact of ownership of the
cooperative, and not involvement in the management thereof, which disqualifies a member from joining any labor
organization within the cooperative. Thus, irrespective of the degree of their participation in the actual management of
the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective
bargaining.

Respondent union further claims that if nominal ownership in a cooperative is "enough to take away the constitutional
protections afforded to labor, then there would be no hindrance for employers to grant, on a scheme of generous profit
sharing, stock bonuses to their employees and thereafter claim that since their employees are not stockholders [of the
corporation], albeit in a minimal and involuntary manner, they are now also co-owners and thus disqualified to form
unions." To allow this, BELU argues, would be "to allow the floodgates of destruction to be opened upon the rights of
labor which the Constitution endeavors to protect and which welfare it promises to promote."

The above contention of respondent union is based on the erroneous presumption that membership in a cooperative is
the same as ownership of stocks in ordinary corporations. While cooperatives may exercise some of the rights and
privileges given to ordinary corporations provided under existing laws, such cooperatives enjoy other privileges not
granted to the latter. Similarly, members of cooperatives have rights and obligations different from those of
 P a g e | 14

stockholders of ordinary corporations. It was precisely because of the special nature of cooperatives, that the Court held
in the Davao City case that members-employees thereof cannot form or join a labor union for purposes of collective
bargaining. The Court held that:

A cooperative ... is by its nature different from an ordinary business concern being run either by persons, partnerships,
or corporations. Its owners and/or members are the ones who run and operate the business while the others are its
employees. As above stated, irrespective of the number of shares owned by each member they are entitled to cast one
vote each in deciding upon the affairs of the cooperative. Their share capital earn limited interest. They enjoy special
privileges as-exemption from income tax and sales taxes, preferential right to supply their products to State agencies
and even exemption from the minimum wage laws.

An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to
collective bargaining for certainly an owner cannot bargain with himself or his co-owners.

b. Yes. It is important to note that, in her order dated September 2, 1985, med-arbiter Elnora V. Balleras made a
specific finding that there are only thirty-seven (37) employees of petitioner who are not members of the
cooperative and who are, therefore, the only employees of petitioner cooperative eligible to form or join a labor
union for purposes of collective bargaining [Annex "A" of the Petition, p. 12; Rollo, p. 22]. However, the minutes of
the certification election [Annex "C" of the Petition: Rollo, p. 28] show that a total of eighty-three (83) employees
were allowed to vote and of these, forty-nine (49) voted for respondent union. Thus, even if We agree with
respondent union's contention that the thirty seven (37) employees who were originally non-members of the
cooperative can still vote in the certification election since they were only "forced and compelled to join the
cooperative on pain of disciplinary action," the certification election held on October 1, 1986 is still null and void
since even those who were already members of the cooperative at the time of the issuance of the med-arbiter's
order, and therefore cannot claim that they were forced to join the union were allowed to vote in the election.

Article 256 of the Labor Code provides, among others, that:

To have a valid, election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union
receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit.

In this case it cannot be determined whether or not respondent union was duly elected by the eligible voters of the
bargaining unit since even employees who are ineligible to join a labor union within the cooperative because of their
membership therein were allowed to vote in the certification election. Considering the foregoing, the Court finds that
respondent director committed grave abuse of discretion in certifying respondent union as the sole and exclusive
bargaining representative of the rank and file employees of petitioner cooperative.

WHEREFORE, the petition is hereby GRANTED and the assailed resolution of respondent director is ANNULLED. The
certification election conducted on October 1, 1986, is SET ASIDE. The Regional Office No. 1 of San Fernando, La Union is
hereby directed to immediately conduct new certification election proceedings among the rank and file employees of
the petitioner who are not members of the cooperative.

6. SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE vs.
HONORABLE 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
G.R. No. 110399 August 15, 1997

Facts:
Petitioner union filed before DOLE a Petition for Direct Certification or Certification Election among the supervisors and
exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis which was granted
by the Med-Arbiter.
 P a g e | 15

Respondent SMC filed a Notice of Appeal pointing out, among others, the Med-Arbiter's 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. The respondent company's Appeal was granted.

Respondent company filed a Motion for Reconsideration with Motion to suspend proceedings. An Order was issued by
the public respondent granting the Motion which “Confidential employees, like managerial employees, are not allowed
to form, join or assist a labor union for purposes of collective bargaining.”

Hence this petition.

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.

Held:
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 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. 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 employee and his supervisor, and the supervisor must handle the prescribed responsibilities
relating to labor relations.

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. "Management should not be required to handle labor relations matters through
employees who are represented by the union with which the company is required to deal and who in the normal
performance of their duties may obtain advance information of the company's position with regard to contract
negotiations, the disposition of grievances, or other labor relations matters."

There have been precedents in this regards, "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 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.
 P a g e | 16

An important element of the "confidential employee rule" is the employee's need to use labor relations information.
Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employee's
necessary access to confidential labor relations information.

It is the contention of respondent corporation that Supervisor 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. 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."

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. "If access to confidential labor relations information is to be a factor in the
determination of an employee's confidential status, such information must relate to the employer's labor relations
policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor
relations 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 cause an employee to be excluded from the bargaining unit representing
employees of the union or association."

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 employer's internal business operations. 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 to bargain collectively through representatives of their choosing.

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.

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.

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
 P a g e | 17

law."

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.

It is readily seen that the employees in the instant case have "community or mutuality of interests," 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.

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 employee of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los
Baños, 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.

7. SINGER SEWING MACHINE COMPANY vs.

HON. FRANKLIN M. DRILON
G.R. No. 91307 January 24, 1991

FACTS:
On February 15, 1989, the respondent union filed a petition for direct certification as the sole and exclusive bargaining
agent of all collectors of the Singer Sewing Machine Company, Baguio City branch.

The Company opposed the petition mainly on the ground that the union members are actually not employees but are
independent contractors as evidenced by the collection agency agreement which they signed.

The respondent Med-Arbiter, finding that there exists an employer-employee relationship between the union members
and the Company, granted the petition for certification election. On appeal, Secretary of Labor Franklin M. Drilon
affirmed it. The motion for reconsideration of the Secretary's resolution was denied. Hence, this petition in which the
Company alleges that public respondents acted in excess of jurisdiction and/or committed grave abuse of discretion.

ISSUE:
 P a g e | 18

Whether private respondents are employees of the Company, entitled to the constitutional right to join or form a labor
organization for purposes of collective bargaining.

HELD:
The present case mainly calls for the application of the control test, which if not satisfied, would lead us to conclude that
no employer-employee relationship exists. Hence, if the union members are not employees, no right to organize for
purposes of bargaining, nor to be certified as such bargaining agent can ever be recognized. The following elements are
generally considered in the determination of the employer-employee relationship; "(1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's
conduct — although the latter is the most important element".

The nature of the relationship between a company and its collecting agents depends on the circumstances of each
particular relationship. Not all collecting agents are employees and neither are all collecting agents independent
contractors. The collectors could fall under either category depending on the facts of each case.

The Agreement confirms the status of the collecting agent in this case as an independent contractor not only because he
is explicitly described as such but also because the provisions permit him to perform collection services for the company
without being subject to the control of the latter except only as to the result of his work. After a careful analysis of the
contents of the agreement, we rule in favor of the petitioner.

The requirement that collection agents utilize only receipt forms and report forms issued by the Company and that
reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the
job of collection is to be performed. The agreement itself specifically explains that receipt forms shall be used for the
purpose of avoiding a co-mingling of personal funds of the agent with the money collected on behalf of the Company.
Likewise, the use of standard report forms as well as the regular time within which to submit a report of collection are
intended to facilitate order in office procedures. Even if the report requirements are to be called control measures, any
control is only with respect to the end result of the collection since the requirements regulate the things to be done
after the performance of the collection job or the rendition of the service.

The Court finds that since private respondents are not employees of the Company, they are not entitled to the
constitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there is no
constitutional and legal basis for their "union" to be granted their petition for direct certification.

8. INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION vs

HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS
OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU
G.R. No. 89331 September 28, 1990

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND

AGRICULTURE vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE, INC.,

Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International
Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of
Philippine labor laws.

Facts and Issues

A. G.R. No. 85750 — the International Catholic Migration Commission (ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist rule
confronted the international community.
 P a g e | 19

In response to this crisis, , an Agreement was forged between the Philippine Government and the United Nations High
Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for eventual
resettlement to other countries was to be established in Bataan.

ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong,
Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in
international humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council
(ECOSOC) and enjoys Consultative Status, Category II. As an international organization rendering voluntary and
humanitarian services in the Philippines, its activities are parallel to those of the International Committee for Migration
(ICM) and the International Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v.
Calleja, Vol. 1].

Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a
Petition for Certification Election among the rank and file members employed by ICMC The latter opposed the petition
on the ground that it is an international organization registered with the United Nations and, hence, enjoys diplomatic
immunity.
Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's Decision
and ordered the immediate conduct of a certification election. At that time, ICMC's request for recognition as a
specialized agency was still pending with the Department of Foreign Affairs (DEFORAF).

Subsequently, however, the Philippine Government, through the DEFORAF, granted ICMC the status of a specialized
agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement
between the Government and ICMC.

ISSUE IN THE FIRST CASE:

The issue is whether or not the grant of diplomatic privileges and immunites to ICMC extends to immunity from the
application of Philippine labor laws.

RULING:
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine
Government giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of
Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine
Senate through Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification was signed by the President
on 30 August 1949 and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987
Constitution, which declares that the Philippines adopts the generally accepted principles of international law as part of
the law of the land.

Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the DEFORAF
determination that the BLR Order for a certification election among the ICMC employees is violative of the diplomatic
immunity of said organization.

Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy and Philippine
labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of the 1987 Constitution,
infra; and Articles 243 and 246 of the Labor Code, as amended, ibid. In addition, she contends that a certification
election is not a litigation but a mere investigation of a non-adversary, fact-finding character. It is not a suit against ICMC
its property, funds or assets, but is the sole concern of the workers themselves.

B. G.R. No. 89331 — (The International Rice Research Institute [IRRI] Case).
FACTS:
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Philippine Government and the Ford and Rockefeller Foundations signed a Memorandum of Understanding establishing
the International Rice Research Institute (IRRI) at Los Baños, Laguna. It was intended to be an autonomous,
philanthropic, tax-free, non-profit, non-stock organization designed to carry out the principal objective of conducting
"basic research on the rice plant, on all phases of rice production, management, distribution and utilization with a view
to attaining nutritive and economic advantage or benefit for the people of Asia and other major rice-growing areas
through improvement in quality and quantity of rice."

Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject
to all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted
the status, prerogatives, privileges and immunities of an international organization.

The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization with an
existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.

The Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of the Department of Labor
and Employment (DOLE).

IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international organization
and granting it immunity from all civil, criminal and administrative proceedings under Philippine laws. Med-Arbiter
Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620 and dismissed the Petition for Direct
Certification.

On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's Order and
authorized the calling of a certification election among the rank-and-file employees of IRRI. Said Director relied on
Article 243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the 1987 Constitution, 1and held that "the
immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws." Reconsideration
sought by IRRI was denied.

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order, dismissed the
Petition for Certification Election, and held that the grant of specialized agency status by the Philippine Government to
the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI.

Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary
of Labor in upholding IRRI's diplomatic immunity.

RULINGS IN BOTH CASES:

There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.

The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and
respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their
internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very
purpose of immunity, which is to shield the affairs of international organizations, in accordance with international
practice, from political pressure or control by the host country to the prejudice of member States of the organization,
and to ensure the unhampered performance of their functions.

ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which are guaranteed
by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and
implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by Kapisanan.

For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention
on the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized
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agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other
disputes of private character to which the specialized agency is a party." Moreover, pursuant to Article IV of the
Memorandum of Agreement between ICMC the the Philippine Government, whenever there is any abuse of privilege by
ICMC, the Government is free to withdraw the privileges and immunities accorded. Thus:

Art. IV. Cooperation with Government Authorities. —

1. The Commission shall cooperate at all times with the appropriate authorities of the Government to ensure the
observance of Philippine laws, rules and regulations, facilitate the proper administration of justice and prevent the
occurrences of any abuse of the privileges and immunities granted its officials and alien employees in Article III of this
Agreement to the Commission.

2. In the event that the Government determines that there has been an abuse of the privileges and immunities granted
under this Agreement, consultations shall be held between the Government and the Commission to determine whether
any such abuse has occurred and, if so, the Government shall withdraw the privileges and immunities granted the
Commission and its officials.

Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been
organized a forum for better management-employee relationship as evidenced by the formation of the Council of IRRI
Employees and Management (CIEM) wherein "both management and employees were and still are represented for
purposes of maintaining mutual and beneficial cooperation between IRRI and its employees." The existence of this
Union factually and tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges
and immunities of an international organization, deprives its employees of the right to self-organization.

The immunity granted being "from every form of legal process except in so far as in any particular case they have
expressly waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that
immunity for the reason that it is not a suit against ICMC. A certification election cannot be viewed as an independent or
isolated process. It could tugger off a series of events in the collective bargaining process together with related incidents
and/or concerted activities, which could inevitably involve ICMC in the "legal process," which includes "any penal, civil
and administrative proceedings." The eventuality of Court litigation is neither remote and from which international
organizations are precisely shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional
immunity are said to be standard provisions in the constitutions of international Organizations. "The immunity covers
the organization concerned, its property and its assets. It is equally applicable to proceedings in personam and
proceedings in rem."

We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS calls
attention to the case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January
1989, 169 SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of payment of salary for the
unexpired portion of a six-month probationary employment), the Court is now estopped from passing upon the question
of DOLE jurisdiction petition over ICMC.

We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or before the
grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because
ICMC in that case did not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during
that period (1983-1985) it was tacitly recognized as enjoying such immunity.

Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated 15
February 1989, had not become final because of a Motion for Reconsideration filed by IRRI Said Motion was acted upon
only on 30 March 1989 when Rep. Act No. 6715, which provides for direct appeals from the Orders of the Med-Arbiter
to the Secretary of Labor in certification election cases either from the order or the results of the election itself, was
already in effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to respondent
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Secretary of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's allegations. The pertinent portion
of that law provides:

Art. 259. — Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter
directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof
established by the Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal
shall be decided within 15 calendar days.

En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments of the
executive branch of government have been rectified and the resultant embarrassment to the Philippine Government in
the eyes of the international community now, hopefully, effaced.

WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor Relations for
certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been committed by the
Secretary of Labor and Employment in dismissing the Petition for Certification Election.
No pronouncement as to costs.