SMC Supervisors and Exempt Union vs Laguesma (Undersecretary of Labor and Employment) Facts: - October 1990, petitioner union

filed before 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. - December 1990, Med-Arbiter Danilo 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. January 1991, SMC filed a notice of appeal pointing out the Med-Arbiter's error in grouping together all three separate plants (Otis, Cabuyao, San Fernando) into one bargaining unit and in including supervisory levels 3 and above whose positions are confidential in nature. - July 1991, Laguesma granted SMC's 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 SMC union's motion, Laguesma directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1-4 and the exempt employees in each of the three plants. SMC filed a Motion for Reconsideration with Motion to suspend proceedings. March 1993, Laguesma issued an Order granting the Motion citing the doctrine in PIDI vs NLRC which stated that 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 confidential employees and are not allowed to participate in the certification election. Issue: - Whether S3 and S4 employees and the exempt employees are considered confidential employees, hence ineligible from joining a union. - If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit? Held: The said employees (S3, S4 and exempt) do not fall within the term "confidential employees" and are therefore allowed to participate in the certification election. The unions from the three plants will form one bargaining unit. Ratio: S3, S4 and exempt employees: The said employees are not vested with the powers and prerogatives to lay down and execute management policies and/or to hires, transfer, suspend, layoff, recall, discharge or dismiss employees. They are 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. 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. Confidential employees are: those who assist or act in a confidential capacity to persons who formulate, determine, and effectuate management policies in the field of 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." Employees should not be placed in a position involving a potential conflict of interests. In determining the confidentiality of certain employees, a key question frequently considered is the employees' necessary access to confidential labor relations information.

(see full case for functions of S3 or higher) In this case, S3 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 sad restrictions. The information they handle are properly classifiable as technical and internal business operations data which has no relevance to negotiations and settlement of grievances. There is also no legal prohibition against confidential employees who are not performing managerial functions to form or join a union. Single bargaining unit: 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 the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." It must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. The employees in this case (from all three plants) have "community or mutuality of interests,' which is the standard in determining the proper constituency of a collective bargaining unit. Although they belong to three plants, they perform work of the same nature, receive the same wages and compensation, ad share a common stake in concerted activities. Separate bargaining units for the three plants will only fragmentize the employees, greatly diminishing their bargaining leverage. Citing UP vs Calleja, geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed.