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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 84433 June 2, 1992 ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138 others, petitioners, vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor Relations, Med. Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES UNION, et al., respondent.

NARVASA, C.J.: The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano Trajano) sustained the denial by the Med Arbiter of the right to vote of one hundred forty-one (141) members of the "Iglesia ni Kristo" (INK), all employed in the same company, at a certification election at which two (2) labor organizations were contesting the right to be the exclusive representative of the employees in the bargaining unit. That denial is assailed as having been done with grave abuse of discretion in the special civil action of certiorari at bar, commenced by the INK members adversely affected thereby. 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) TUEUOLALIA; and, conformably with established rule and practice, 1 for (c) a third choice: "NO UNION." The final tally of the votes showed the following results:

TUPAS 1 TUEU-OLALIA 95 NO UNION 1 SPOILED 1 CHALLENGED 141 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." TUEUOLALIA 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 1 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. In that Order he decided the fact that "religious belief was (being) utilized to render meaningless the rights of the nonmembers of the Iglesia ni Kristo to exercise the rights to be represented by a labor organization as the bargaining agent," and declared the petitioners as "not possessed of any legal personality to institute this present cause of action" since they were not parties to the petition for certification election. The petitioners brought the matter up on appeal to the Bureau of Labor Relations. There they argued that the Med-Arbiter had "practically disenfranchised petitioners who had an overwhelming majority," and "the TUEU-OLALIA certified union cannot be legally said to have been the result of a valid election where at least fifty-one percent of all eligible voters in the appropriate bargaining unit shall have cast their votes." 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. He opined that the petitioners are "bereft of legal personality to protest their alleged disenfrachisement" since they "are not constituted into a duly organized labor union, hence, not one of the unions which vied for certification as sole and exclusive bargaining representative." He also pointed out that the petitioners "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." 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.

The Solicitor General having expressed concurrence with the position taken by the petitioners, public respondent NLRC was consequently required to file, and did thereafter file, its own comment on the petition. In that comment it insists that "if the workers who are members of the Iglesia ni Kristo in the exercise of their religious belief opted not to join any labor organization as a consequence of which they themselves can not have a bargaining representative, then the right to be representative by a bargaining agent should not be denied to other members of the bargaining unit." 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. 2 Article 243 of the Code provides as follows: 3 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 selforganization." 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 selforganization . . . " 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; 4 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. xxx xxx xxx 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

. i. L-19912. January 20. Labor Relations). 1010. affiliate with. 1019). it would be absurd to say that the law also imposes. 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. aside from the names of each union. the protection. he still retains the liberty and the power to leave and cancel his membership with said organization at any time (Pagkakaisa Samahang Manggagawa ng San Miguel Brewery vs. 108 Phil. The law does not enjoin an employee to sign up with any association. 6 As early as 1974 this Court had occasion to expatiate on these self-evident propositions in Victoriano v. Elizalde Rope Workers' Union. The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is therefore the employee who should decide for himself whether he should join or not an association. a right comprehends at least two broad notions. 13 SCRA 120. vs. or assist any union.through representatives of their own choosing. and to disaffiliate or resign from a labor organization. et al. affiliate with. et al. whereby an employee may.: . It is clear. so also. the absence of legal restraint. to the effect that he desires not to be represented by any union. to the effect that he desires not to which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain. in the same breath. second. and to maintain membership therein.e. promotion. The original Rules on Certification promulgated by the defunct Court of Industrial Relations required that the ballots to be used at a certification election to determine which of two or more competing labor unions would represent the employees in the appropriate bargaining unit should contain.. The fact that a person has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such membership. no one should be compelled to exercise such a conferred right. 7 viz. is subsumed in the right to join. It is self-evident that just as no one should be denied the exercise of a right granted by law. that the right to join a union includes the right to abstain from joining any union (Abo. upon the employee the duty to join associations. PHILAME [KG] Employees Union. . ." it can be safely said that whatever theory one subscribes to. 8 . Enriquez. as he pleases. an alternative choice of the employee voting. et al.e. the right NOT to join. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a "right. 123... Inasmuch as what both the Constitution and the Industrial Peace Act have recognized. aside from the names of each union. 5 Logically. and even after he has joined. an alternative choice of the employee voting. namely: first. or assist any union. liberty or freedom. join or refrain from joining an association. or enhancement of their rights and interests. i.What the Constitution and Industrial Peace Act recognize and guarantee is the "right" to form or join associations. 1965. or for their mutual aid and protection. quoting Rothenberg. therefore.. is the "right" to join associations of his choice. power. and should he choose to join. the guaranteed to the employee. et al. whereby an employee may act for himself being prevented by law.

join or assist labor organizations. 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. If only one union is involved." xxx xxx xxx Withal. And whether the prevailing "NO" votes are inspired by considerations of religious belief or discipline or not is beside the point. Besides." pertinently provides that: . neither the quoted provision nor any other in the Omnibus Implementing Rules expressly bars the inclusion of the choice of "NO UNION" in the ballots. the right of self-organization embraces not only the right to form. They may not and should not be permitted. Book V of the Omnibus Rules) entitled "Marketing and canvassing of votes." is quite clear acknowledgment of the alternative possibility that the "NO" votes may outnumber the "YES" votes — indicating that the majority of the employees in the company do not wish to be represented by any union — in which case. If the results of the election should disclose that the majority of the workers do not wish to be represented by any union. hours and other terms and conditions of employment. Indeed it is doubtful if the employee's alternative right NOT to form. "No. then their wishes must be respected. but the concomitant." To be sure. 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. the voter shall make his cross or check in the square indicating "YES" or "NO. . . converse right NOT to form. As repeatedly stated. and in the affirmative case. (a) The voter must write a cross (X) or a check (/) in the square opposite the union of his choice. join or assist any labor union. the minority workers. are being denied the right of self-organization and collective bargaining. . no union can represent the employees in collective bargaining. 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. "Yes" the other. and may not be inquired into at all. to impose their will on the majority — who do not desire to have a union certified as the exclusive workers' benefit in the bargaining unit — upon the plea that they. The minority employees — who wish to have a union represent them in collective bargaining — can do nothing but wait for another suitable occasion to petition for a certification election and hope that the results will be different. join or assist any labor organization or withdraw or resign from one may be validly eliminated and he be consequently coerced to vote for one or another of the competing unions and be represented by one of them. the statement in the quoted provision that "(i)f only one union is involved.And where only one union was involved. one indicating the answer. by which particular labor organization. the ballots were required to state the question — "Do you desire to be represented by said union?" — as regards which the employees voting would mark an appropriate square. however.

join or assist labor organizations." they were simply exercising that right of selforganization. albeit in its negative aspect. 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. Neither law. No law. 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. from joining or forming any labor organization" — and "hence. The Code makes no distinction as to their employment for certification election. SO ORDERED. on religious grounds. not one of the unions which vied for certification as sole and exclusive bargaining representative. administrative rule nor jurisprudence requires that only employees affiliated with any labor organization may take part in a certification election. As held in Airtime Specialists. Ferrer-Calleja: 9 In a certification election all rank-and-file employees in the appropriate bargaining unit are entitled to vote. do have the right of self-organization. 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. WHEREFORE. and their ballots should be canvassed and. The law refers to "all" the employees in the bargaining unit. This principle is clearly stated in Art." persuade acceptance. as well as the fact that when they voted that the employees in their bargaining unit should be represented by "NO UNION. . 1988) is ANNULLED and SET ASIDE." is specious. administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections. if validly and properly made out. whether they are members of a labor organization or not. the Decision of the then Officerin-Charge of the Bureau of Labor Relations dated December 21. Costs against private respondents. Inc. probationary or permanent. the public respondents exercised their discretion whimsically. All they need to be eligible to support the petition is to belong to the "bargaining unit". 1987 (affirming the Order of the Med-Arbiter dated July 22. and the petitioners are DECLARED to have legally exercised their right to vote. Hence. On the contrary. the petition for certiorari is GRANTED. capriciously and oppressively and gravely abused the same. counted and tallied for the choices written therein. v. the plainly discernible intendment of the law is to grant the right to vote to all bona fide employees in the bargaining unit. all rank-and-file employees. In denying the petitioners' right to vote upon these egregiously fallacious grounds." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. is also in truth beyond question. as employees in the same bargaining unit in the true sense of the term. have a substantial interest in the selection of the bargaining representative.That the INK employees.

875 [The Industrial Peace Act]. as amended by R. where there is a close shop or similar agreement in effect in the establishments. as amended. No.. 3 Emphasis supplied 4 Emphasis supplied 5 Art. or discontinue membership therein. Footnotes 1 SEE footnote 5. p. 499-501 9 180 SCRA 749.A. R. 6 To be sure. is subject to a certain qualifications or exceptions as.A. concur. infra. 6715-6725 and 6727. op. 66-67 (1974) 8 SEE Fernandez & Quiazon. Nocon. Law of Labor Relations. The Lawphil Project . the right not to join a union. 247. is on leave. J. JJ. Labor Code. cit. although it has been held that such agreements are not applicable to any religious sect which prohibits affiliation of their members in any labor organizations (Sec.Arellano Law Foundation Republic of the Philippines SUPREME COURT Manila FIRST DIVISION .. Nos..Paras. 2 As amended inter alia by R. Padilla and Regalado. 754 (1989). SEE Fernandez and Quiazon. 3350) 7 59 SCRA 54. pp. 162. e. 4(a).g.A.

. Comia. No. From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining representative of the workers in the Meat and Canning Division of the Universal Robina Corporation. with a 3-year collective bargaining agreement (CBA) which was to expire on November 15. Manalo and Associates for petitioner. b) Meat and Canning Division New Employees and Workers United Labor Organization (or "NEW ULO" for brevity). or negotiate a new CBA with it. vs. Within the freedom period of 60 days prior to the expiration of its CBA. shall be the bargaining unit of the daily wage rank and file employees in the Meat and Canning Division of the company. Danilo Bolos for respondent Robina Corporation.R.G. 1027 (or "TUPAS" for brevity). Alar. 1987. 1988 (Annex D) of public respondent Pura Ferrer-Calleja." seeks a review of the resolution dated January 27. 1988 KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No. Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. TUPAS filed an amended notice of strike on September 28. RESOLUTION GRIÑO-AQUINO. Abdullah ordering a certification election to be conducted among the regular daily paid rank and file employees/workers of Universal Robina Corporation-Meat and Canning Division to determine which of the contending unions: a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. dismissing its appeal from the Order dated November 17. respondents. J. petitioner. MEAT AND CANNING DIVISION UNIVERSAL ROBINA CORPORATION and MEAT AND CANNING DIVISION NEW EMPLOYEES AND WORKERS UNITED LABOR ORGANIZATION. 1987 as a means of pressuring the company to extend.: The petitioner. c) No union. renew. 1027). 82914 June 20. Director of the Bureau of Labor Relations. 1987 (Annex C) of the Med-Arbiter Rasidali C. 1027) hereinafter referred to as "TUPAS. THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA.

1988. TUPAS moved to dismiss the petition for being defective in form and that the members of the NEW ULO were mostly members of the Iglesia ni Kristo sect which three (3) years previous refused to affiliate with any labor union. Elizalde Rope Workers' Union. a "certification election is the best forum in ascertaining the majority status of the contending unions wherein the workers themselves can freely choose their bargaining representative thru secret ballot." The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom period of the existing CBA. the TUPAS staged a strike. respondent BLR Director Calleja dismissed the appeal (Annex D). TUPAS' motion for reconsideration (Annex E) was denied on March 17. the Med-Arbiter ordered the holding of a certification election within 20 days (Annex C). 1988. resulting in an agreement to return to work and for the parties to negotiate a new CBA. A-12-389-87. On November 17. TUPAS appealed to the Bureau of Labor Relations BLR. The next day. On October 12. As pointed out by Med-Arbiter Abdullah. 1988 (Annex F). ROBINA obtained an injunction against the strike. composed mostly of workers belonging to the IGLESIA NI KRISTO sect.On October 8. October 13. 1987 and to expire on November 15. 1987.. 1987. 59 SCRA 54. 1990. registered as a labor union. the NEW ULO. which was signed on December 3. The public respondent correctly observed that the "recognition of the tenets of the sect . does not foreclose the right of the rival union. to challenge TUPAS' claim to majority status. it filed this petition alleging that the public respondent acted in excess of her jurisdiction and with grave abuse of discretion in affirming the MedArbiter's order for a certification election. This Court's decision in Victoriano vs. claiming that it has "the majority of the daily wage rank and file employees numbering 191. 1987. In the meantime. regardless of religious affiliation. it was able to negotiate a new 3-year CBA with ROBINA. 1987 before TUPAS' old CBA expired on November 15. NEW ULO. 1987. by filing a timely petition for certification election on October 13. The public respondent did not err in dismissing the petitioner's appeal in BLR Case No. On April 30. It also accused the company of using the NEW ULO to defeat TUPAS' bargaining rights (Annex B). 1987 and before it signed a new CBA with the company on December 3. 1987." Since .. does not bar the members of that sect from forming their own union. We find no merit in the Petition. On January 27. should not infringe on the basic right of self-organization granted by the constitution to workers. upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their religious beliefs. After deliberating on the petition and the documents annexed thereto." filed a petition for a certification election at the Bureau of Labor Relations (Annex A). NEW ULO.

WHEREFORE. Ross. L-25094 April 29.R. 88 SCRA 96). Cruz. Salcedo. with costs against the petitioner.Arellano Law Foundation Republic of the Philippines SUPREME COURT Manila EN BANC G. the petition for certiorari is denied. petitioner. 1969 PAN AMERICAN WORLD AIRWAYS INC.it has not been shown that this order is tainted with unfairness. Gancayco and Medialdea. No.. . JJ. concur. this Court will not thwart the holding of a certification election (Associated Trade Unions [ATU] vs. respondents. Narvasa. Espinas and Associates for respondent Pan American Employees Association. The Lawphil Project . COURT OF INDUSTRIAL RELATIONS. Jose C. SO ORDERED. Noriel. Bito and Misa for petitioner. vs. PAN AMERICAN EMPLOYEES ASSOCIATION. Del Rosario. Selph..

being offensive to a no-strike clause of an existing collective bargaining agreement the result being that the officials could. in its plea to exclude from a return-to-work order five union officials of respondent Pan American Employees Association on the ground of having led an illegal strike. the parties being called to a conference on September 20. Associate Judge of respondent Court on September 20. the refusal to grant the prayer for such exclusion cannot be characterized as an abuse of discretion. 1965. much less as one that possesses an element of gravity. in itself. 21. So it must be unless we are prepared to restrict the broad scope of authority possessed by respondent Court of Industrial Relations in discharging its power of compulsory arbitration in cases certified to it by the President. be liable for dismissal. 23. 1965. It cannot hope to succeed. 2 Several conferences were held between petitioner and respondent Union before the Honorable Amando C. unless an undeserved reflection on the quality of leadership in the labor movement. Bugayong. according to petitioner. It alleged that the strike was illegal. Whatever may be said against such order complained of respondent Court of Industrial Relations. is countenanced.: The failure of the respondent Court of Industrial Relations to indulge petitioner Pan American World Airways. Consequently.FERNANDO. indicative of management refusal to accord to it the presumption of responsibility. and what is worse. It was agreeable to having the workers return to work but not the five officials of respondent Union. the President of the Philippines certified the strike to the respondent Court of Industrial Relations as being an industrial dispute affecting the national interest. 1 Then. it was not agreeable to their . 1965. on September 17. after the usual allegation as to the personality of the parties. Petitioner was of a different mind. The petition thus carries on its face the seeds of its own infirmity. respondent union filed a notice of strike with the Department of Labor and on August 28. It was the position of the Union that its members would not resume the performance of their duties unless its officers were likewise included in the return-to-work order. It was set forth in the petition. J. the same respondent union declared and maintained a strike against the herein petitioner. a sufficient cause for dismissal thus resulting in their losing their incentive and motivation for doing their jobs properly with the consequent fear that they could cause grave injury to it. 24 and 25. as the responsible parties. Inc. 1965. is challenged in this special civil action for certiorari as constituting a grave abuse of discretion. that on August 25. 1965.

which enforces compulsory arbitration in cases of labor disputes in industries indispensable to the national interest when the President certifies the case to the Court of Industrial Relations. 1965." 3 Management did offer. Lastly. with the further promise that they would not even be required to refund any amount should the right to remain in their positions be considered as legally terminated by their calling the alleged illegal strike. if the said court has the power to fix the terms and conditions of employment. 1. 1965. it cannot be contended that the Court of Industrial Relations does not have the power or jurisdiction to carry that solution into effect. Judge Bugayong issued an order requiring petitioner to accept the five union officers pending resolution on the merits of the dispute involved in the strike.being allowed to return to the positions held by them prior to the strike as they would not be only lacking in "incentive and motivation for doing their work properly" but would likewise have the opportunity to cause "grave and irreparable injury to petitioner. 4 There was a motion for reconsideration which was denied by the court on October 8. it certainly can order the return of the workers with or without backpay as a term or condition of the employment. 5 Hence. The law is anything but that. but with the same broad powers and jurisdiction granted by that Act. categorically stated: "We agree with counsel for the Philippine Marine Radio Officers' Association that upon certification by the President under Section 10 of Republic Act 875. this petition. Nonetheless. this Court. with respondent Court exercising its broad authority of compulsory arbitration. however. the case comes under the operation of Commonwealth Act 103. Considering that this is a case certified by the President. If the Court of Industrial Relations is granted authority to find a solution in an industrial dispute and such solution consists in ordering of employees to return back to work. the inherent weakness of the petition cannot escape attention. on September 28. The evident intention of the law is to empower the Court of Industrial Relations to act in such cases. As already noted. And of what use is its power of conciliation and arbitration if it does not have the power and jurisdiction to carry into effect the solution it has adopted. to deposit their salaries even if they would not be working. speaking through Justice Labrador. As far back as 1957. alleging a grave abuse of discretion." 6 . the discretion it possesses cannot be so restricted and emasculated that the mere failure to grant a plea to exclude from the return-to-work order the union officials could be considered as tantamount to a grave abuse thereof. not only in the manner prescribed under Commonwealth Act 103. consisting in the failure to grant petitioner's rather unorthodox demand.

the apprehension entertained by petitioner was in the petition expressed by it thus: "The five officers of the union consist of three (3) Passenger Traffic Representatives and a reservation clerk who in the course of their duties could cause mix-ups in the reservation and accommodation of passengers which could result in very many suits for damages against petitioner such as the case of Nicolas Cuenca vs.000. emphasized: "The overwhelming implication from the quoted text of Section 10 is that CIR is granted great breadth of discretion in its quest for a solution to a labor problem so certified.00 as nominal damages alone. The other union officer who." To be more specific. and that in any event there was enough ground for dismissal. there was present a factor which might make them "lose all their incentive and motivation for doing their work properly" and which would furnish them "the opportunity to cause grave and irreparable injury to petitioner. is in the cargo department could underweight or overweigh cargo to the great detriment of the service or even. 1965 in which this Honorable Court required the airline to pay P20. . L-22425 promulgated August 31. No. speaking through Justice Sanchez. petitioner airline firm rather insistent on their being excluded arguing that since the strike called by them was illegal. The situation thus presented is the validity of the return to work order insofar as five union officers are affected." 8 Petitioner would attempt to remove the sting from its objection to have the union officers return to work by offering to deposit the salaries of the five officers with respondent Court to be paid to them.Only recently this Court.R. coupled with what it considered to be a generous concession that if their right to return to work be not recognized. Northwest Airlines. 2. there would be no need for refund. The allegation as to the grave abuse of discretion is clearly devoid of merit." 7 Hence. G. there can be no legal objection to the mode of exercise of authority in such fashion by respondent Court of Industrial Relations. of the safety of petitioner's aircraft. as was announced at to the outset of this opinion. That should conclude the matter except for the fact that the question presented possesses an element of novelty which may require further reflection.

even if not intended. possibly even constituting a menace to the operations of the enterprise. If petitioner were to succeed in their unprecedented demand. with both union and management equally deserving of public trust.Petitioner. betrayed an inexcusable lack of confidence in the responsibility of union officials and ultimately in the validity of the collective bargaining process itself. much less one clear and present. perhaps without so intending it. to add to the infamy that would thus attach to them necessarily. For it is the basic premise under which a regime of collective bargaining was instituted by the Industrial Peace Act that through the process of industrial democracy. is to be expected from their return to work. then the integrity of the collective bargaining process itself is called into question. labor problems could be susceptible of the just solution and industrial peace attained. more specifically to the right of self-organization. The greater offense is to the labor movement itself. There is both a constitutional and statutory recognition that laborers have the right to form unions to take care of their interests vis-a-vis their employers. would be to call into question their undeniable right to choose their leaders. devoid of any factual basis. the laborers in this particular union would thus be confronted with the sad spectacle of the leaders of their choice condemned as irresponsible. respondent Court was alive to the implication of such an unwarranted demand. be considered insulting. Apparently. What is worse. but to respondent union equally.nêt The moment management displays what in this case appears to be grave but unwarranted distrust in the union officials discharging their functions just because a strike was resorted to. the effect of which would have been to deprive effectively the . while they will be paid their salaries in the meanwhile they would not be considered as fit persons to perform the duties pertaining to the positions held by them. attending to the problems of each without neglecting the common welfare that binds them together. Their freedom organizations would be rendered nugatory if they could not choose their own leaders to speak on their behalf and to bargain for them. purely speculative in character. the result. to repeat. The fact that they would be paid but not be allowed to work is. Implicit in such a concept is the confidence that must be displayed by management in the sense of responsibility of union officials to assure that the two indispensable elements in industry and production could-work side by side. That is an indictment of the gravest character. Necessarily. The record is bereft of slightest indication that any danger.lawphi1. It would have been different if there were a rational basis for such fears. Far from being generous such an offer could rightfully. the union officials have the right to feel offended by the fact that. who must be treated as such with all the respect to which they are legitimately entitled.

B. Fortunately. Zaldivar. and Castro. Nor did it in the process disregard the rights of management. respondent Court was of a different mind it acted. par. 3Ibid. Concepcion. It had a realistic concept of what was in store for labor if its decision were otherwise. 2. Reyes. concur. par. 2Ibid. concurs in the result. JJ. There is no occasion then for the supervisory authority of this Court coming into play. 3. With costs against petitioner. 4. 5. Dizon.J.. 4Ibid.rank and file of their freedom of choice as to who should represent them.. J. J. Footnotes 1Petition. par. To that extent then.L. Actg. Sanchez. are on leave. C. Makalintal. J.. . For what use are leaders so undeserving of the minimum confidence. WHEREFORE.. par. Capistrano. according to law. C. this petition for a writ of certiorari is denied. their constitutional and statutory right to freedom of association suffers an impairment hardly to be characterized as inconsequential. Teehankee and Barredo..J.

6The Phil. 7 and 8. Jose Mario C. NATIONAL LABOR RELATIONS COMMISSION and NBSR SUPERVISORY UNION. Inc. 8Petition. Book V of the Labor Code. 382-383 (1957). Rural Transit Shop Employees Association. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. 374. par. No. 1993. Bunag for petitioner. vs. Court of Industrial Relations. . 102 Phil. v. 101761. July 25. J p: The main issue presented for resolution in this original petition for certiorari is whether supervisory employees. de la Cruz for private respondent. 1967. v. 6.. Marine Radio Officers' Assn. The Solicitor General and the Chief Legal Officer. petitioner. for public respondent. pars.R. March 24. 4. DECISION REGALADO. NLRC. (PACIWU) TUCP. NATIONAL SUGAR REFINERIES CORPORATION. should be considered as officers or members of the managerial staff under Article 82. L26764. and hence are not entitled to overtime rest day and holiday pay.5Ibid. 7Bachrach Transportation Co. Book III of the same Code. as defined in Article 212 (m). Zoilo V. respondents.

and recognize both wage and operational structures. (5) there was a grant of P100. reestablish levels of responsibility. (4) they were entitled to increased company COLA of P225. As such. Employment and Training Supervisor. Shift Boiler Supervisor. Shift Sugar Warehouse Supervisor.00 per month. they used to be paid overtime. 93 and 94 of the Labor Code as amended. 1992 pursuant to Proclamation No. On June 1. Sugar Accountant.00 allowance for rest day/holiday work. Jobs were ranked according to effort. with the union members now enjoying a wide gap (P1. the members of herein respondent union filed a complainant with the executive labor arbiter for non-payment of overtime. The Batangas refinery was privatized on April 11. Junior Financial/Budget Analyst. namely. and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions.Petitioner National Sugar Refineries Corporation (NASUREFCO). Shift Operations Chemist. Head of Inventory Control Section. Instrumentation Supervisor. Head Nurse. . Cost Accountant. petitioner NASUREFCO recognized herein respondent union. Head and Personnel Services. The JE Program was designed to rationalized the duties and functions of all positions. which was organized pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions. petitioner implemented a Job Evaluation (JE) Program affecting all employees. 1988. Shift Electrical Supervisor. from rank-and-file to department heads. Assistant Safety and Security Officer. Senior Financial/Budget Analyst. With the implementation of the JE Program. operates three (3) sugar refineries located at Bukidnon. On May 11. a corporation which is fully owned and controlled by the Government. 50. 1 Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery. rest day and holiday pay pursuant to the provisions of Articles 87. Two years after the implementation of the JE Program. General Services Supervisor. (3) longevity pay was increased on top of alignment adjustments. Day Maintenance Supervisor and Motorpool Supervisor. Iloilo and Batangas.. the members of respondent union were treated in the same manner as rank-and file employees.269. training and working conditions and relative worth of the job. the Technical Assistant to the Refinery Operations Manager. Shift Process Supervisor. Community Development Officer.00 per month) in basic pay compared to the highest paid rank-and-file employee. all positions were re-evaluated. 1990. 1990. as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery. rest day and holiday pay allegedly in violation of Article 100 of the Labor Code. (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program. As a result. specifically on June 20. responsibility. Property Warehouse Supervisor. the following adjustments were made: (1) the members of respondent union were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits. We glean from the records that for about ten years prior to the JE Program. General Accountant.

Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation. as defined under Article 212 (m) of the Labor Code and. 1991 by its Third Division. rest day pay and holiday pay enjoyed by them instead of the P100.On January 7. premises considered. 1991. which arrangement. pay the individual members of complainant union the difference in money value between the P100. the labor ruled that the along span of time during which the benefits were being paid to the supervisors has accused the payment thereof to ripen into contractual obligation. and their main function is to carry out the ready policies and plans of the corporation. at the complainants cannot be estopped from questioning the validity of the new compensation package despite the fact that they have been receiving the benefits therefrom.00 special allowance which was implemented on June 11. therefore. 1988. On appeal. 1991. and 2. rest day and holiday pay.00 special allowance and the overtime pay. they do not participate in the formulation of management policies nor in the hiring or firing of employees. therefore. review and final action by their department heads. 3 Reconsideration of said decision was denied in a resolution of public respondent dated August 30. respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union are not managerial employees. 1988. their responsibilities do not require the exercise of discretion and independent judgment. in a decision promulgated on July 19. All other claims are hereby dismissed for lack of merit. considering that respondent union was formed only a year after the implementation of the Job Evaluation Program. hence there was no way for the individual supervisors to express their collective response thereto prior to the formation of the union.00 special allowance given NASUREFCO fell short of what the supervisors ought to receive had the overtime pay rest day pay and holiday pay not been discontinued. respondent National Sugar refineries Corporation is hereby directed to — 1. rest day and holiday pay. rest day pay and holiday pay that they ought to have received from June 1. Pido rendered a decision 2 disposing as follows: "WHEREFORE. and the comparative computations presented by the private respondent union showed that the P100. amounted to a diminution of benefits. with petitioner NASUREFCO asseverating that public respondent commission committed a grave abuse of discretion in refusing to recognized the fact that the members of respondent union are members of the managerial staff who are not entitled to overtime. pay the individual members of complainant union the usual overtime pay. SO ORDERED. Executive Labor Arbiter Antonio C. and in . they are entitled to overtime." In finding for the members therein respondent union. 4 Hence this petition for certiorari.

as defined under Article 212(m). adopted the definition stated in the aforequoted statutory provision. "As used herein. 82 Coverage. to wit: "Art. lay-off." (Emphasis supplied. Book V of the Labor Code on Labor Relations." Respondent NLRC. Book III of the Rules to Implement the Labor Code. avers that for purposes of determining whether or not the members of respondent union are entitled to overtime. said employees should be considered as "officers or members of the managerial staff" as defined under Article 82. Rule I. Supervisory employees are those who. members of the family of the employer who are dependent on him for support. as defined employees.) xxx xxx xxx . domestic helpers. assign or discipline employees. It is not disputed that the members of respondent union are supervisory employees. Before this can be resolved. however. as supervisory employees. transfer. rest day and holiday pay. rest day and holiday pay. Petitioner. All employees not falling within any of those above definitions are considered rank-and-file employees of this Book. rest day and holiday pay. in holding that the union members are entitled to overtime. suspend. but not to government employees. 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. and in ruling that the latter are not managerial employees. are to be considered as officers or members of the managerial staff who are exempt from the coverage of Article 82 of the Labor Code. 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof. Book III of the Labor Code on "Working Conditions and Rest Periods" and amplified in Section 2. — The provisions of this title shall apply to employees in all establishments and undertakings whether for profit or not. The primordial issue to be resolved herein is whether the members of respondent union are entitled to overtime. discharged. and to other officers or members of the managerial staff. which reads: "(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire.making petitioner assume the "double burden" of giving the benefits due to rank-andfile employees together with those due to supervisors under the JE Program. persons in the personal service of another. managerial employees. We find creditable merit in the petition and that the extraordinary writ of certiorari shall accordingly issue. recall. field personnel. and workers who are paid by results as determined by the Secretary of Labor in Appropriate regulations. however it must of necessity be ascertained first whether or not the union members.

In other words. or knowledge." It is the submission of petitioner that while the members of respondent union. (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof. hence they are not entitled thereto. and (4) Who do not devote more 20 percent of their hours worked in a work-week to activities which are not directly and closely related to the performance of the work described in paragraphs (1). Exemption. or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. they are not entitled to overtime.'Sec. 2. and so forth. and above. as supervisors. for purposes of forming and joining unions. (2) Customarily and regularly exercise discretion and independent judgment. while the right of said employees to the questioned benefits should be considered in the light of the meaning of a managerial employee and of the officers or members of the managerial staff. hence. certification elections. or (ii) execute under general supervision work along specialized or technical lines requiring special training. . if they meet all of the following conditions. however. rest day and supervisory employees under Article 212 (m) should be made to apply only to the provisions on Labor Relations. or (iii) execute under general supervision special assignments and tasks. the union members are supervisory employees. In terms of working conditions and rest periods and entitlement to the questioned benefits. experience. (2). as contemplated under Article 82 of the Code and Section 2. Rule I Book III of the implementing rules. (c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer. may not be occupying managerial positions. — The provisions of this rule shall not apply to the following persons if they qualify for exemption under the condition set forth herein: xxx xxx xxx (b) Managerial employees. collective bargaining. they are officers or members of the managerial staff. namely: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof: (2) They customarily and regularly direct the work of two or more employees therein: (3) They have the authority to hire or fire other employees of lower rank. they are clearly officers or members of the managerial staff because they meet all the conditions prescribed by law and.

this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. has not blinded us to the rule that justice is in every case for the deserving. directing. to be dispensed in the light of the established facts and the applicable law and doctrine. organizing. their duties and functions include. are entitled to respect and enforcement in the interest of simple fair play. the following operations whereby the employee: 1) assists the department superintendent in the following: a) planning of systems and procedures relative to department activities. substantial justice and the peculiar circumstances obtaining herein mandate a deviation from the rule. d) attaining the company's set goals and objectives by giving his full support. Such favoritism. staffing. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. The question whether a given employee is exempt from the benefits of the law is a factual one dependent on the circumstances of the particular case. e) selecting the appropriate man to handle the job in the department. Out of its concern for those with less privileges in life. it should not be supposed that every labor dispute will be automatically decided in favor of labor. 5 This is one such case where we are inclined to tip the scales of justice in favor of the employer.While the Constitution is committed to the policy of social justice and the protection of the working class. among others. More specifically. b) organizing and scheduling of work activities of the department. . rather than the title of the employee's position. follows and implements company policies at all times and recommends disciplinary action on erring subordinates. while generally this Court is not supposed to review the factual findings of respondent commission. and f) preparing annual departmental budget. A cursory perusal of the Job Value Contribution Statements 7 of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning. controlling communicating and in making decisions in attaining the company's set goals and objectives. as such. 2) observes. the criterion is the character of the work performed. which includes employee shifting scheduled and manning complement. c) decision making by providing relevant information data and other inputs. In determining whether an employee is within the terms of the statutes. 6 Consequently. Management also has its own rights which. however.

they are not entitled to overtime. under general supervision. and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. under general supervision. it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff. special assignments and tasks. recommends revisions or modifications to said rules when deemed necessary. 8) recommends measures to improve work methods. is misplaced and inappropriate. work along specialized or technical lines requiring special training. exempt from the coverage of Article 82. (2) they customarily and regularly exercise discretion and independent judgment. we are constrained to agree with petitioner that the union members should be considered as officers and members of the managerial staff and are. to determine the latter's entitlement to the questioned benefits. and initiates and prepares reports for any observed abnormality within the refinery.: (1) their primary duty consists of the performance of work directly related to management policies of their employer. From the foregoing. quality of service and working conditions. as defined in Section 2. The distinction made by respondent NLRC on the basis of whether or not the union members are managerial employees. (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute.3) trains and guides subordinates on how to assume responsibilities and become more productive. 9) sees to it that safety rules and regulations and procedure and are implemented and followed by all NASUREFCO employees. experience. 10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are properly implemented. rest day and holiday. 6) coordinates and communicates with other inter and intra department supervisors when necessary. viz. It is admitted that these union . (5) they execute. or knowledge. and 11) performs other related tasks as may be assigned by his immediate superior. Rule I Book III of the aforestated Rules to Implement the Labor Code. 5) represents the superintendent or the department when appointed and authorized by the former. therefore. 4) conducts semi-annual performance evaluation of his subordinates and recommends necessary action for their development/advancement. Perforce. Under the facts obtaining in this case. equipment performance. 7) recommends disciplinary actions/promotions.

as defined either under Articles 82 or 212 (m) of the Labor Code. aside from the fact that their specific functions and duties then as supervisors had not been properly defined and delineated from those of the rank-and-file. wherein. Hence. it lucidly explained: "But. the practice subsists. "However. after the JE program. simply because they were treated in the same manner as rank-and-file employees. As to them. CA No. complainants no longer occupy the same positions they held before the JE Program. Those positions formerly classified as 'supervisory' and found after the JE Program to be rank-and-file were classified correctly and continue to receive overtime. it should have been practiced over a long period of time. Prior to the JE Program." 9 It bears mention that this positional submission was never refuted nor controverted by respondent union in any of its pleadings filed before herein public respondent or with this Court. I-000058. were re-evaluated. they were rightfully entitled thereto. and must be shown to have been consistent and deliberate. and their basic pay was nearly on the same level as those of the latter. 10 The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowingly fully well that said employees are not covered by the law requiring payment thereof. is puerile and in efficacious. II. while being supervisors. their duties re-defined and in most cases their organizational positions re-designated to confirm their superior rank and duties. We likewise no not subscribe to the finding of the labor arbiter that the payment of the questioned benefits to the union members has ripened into a contractual obligation. Such fact is apparent from the clarification made by petitioner in its motion for reconsideration 8 filed with respondent commission in NLRC Case No. those whose duties confirmed them to be supervisory. the union members. Consequently. The controversy actually involved here seeks a determination of whether or not these supervisory employees ought to be considered as officers or members of the managerial staff. rest day and holiday pay. it can be safely concluded therefrom that the members of respondent union were paid the questioned benefits for the reason that. received benefits similar to the rank-and-file employees such as overtime. holiday and restday pay. complainants cannot be said to occupy the same positions. which cannot be now be unilaterally withdrawn by petitioner. at that time. should have been made along that line and its corresponding conceptual criteria. respondent union failed to sufficiently establish that petitioner has been motivated or is wont to give these benefits out of pure generosity. dated August 16. . 11 In the case at bar. they could not be categorically classified as members or officers of the managerial staff considering that they were then treated merely on the same level as rank-and-file. Thus. 1991. Prior to the JE Program.members are supervisory employees and this is one instance where the nomenclatures or titles of their jobs conform with the nature of their functions. To be considered as such. the payment thereof could not be construed as constitutive of voluntary employer practice. Hence. The distinction. therefore. to distinguish them from a managerial employee. A.

B. As the sating goes by. on this particular score. they could not. there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. get the best of both worlds at the expense of NASUREFCO. and usually accompanied by an increase in salary. Entitlement to the benefits provided for by law requires prior compliance with the conditions set forth therein. their exemption therefrom. It remains undisputed that the implementation of the JE Program. In other words. are hereby ANNULLED and SET ASIDE for having been rendered and adopted with grave abuse of discretion. In the case at bar. Not so long ago. . and that their basic pay was increased by an average of 50% of their basic salary prior to the JE Program. the impugned decision and resolution of respondent National Labor Relations Commission promulgated on July 19. they occupied positions which no longer met the requirements imposed by law. rank and salary. we had the occasion to hold that: ". vindictive or wanton manner or out of malice or spite. that they occupied re-evaluated positions. ergo. respectively. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating on circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious. With the promotion of the members of respondent union. Their assumption of these positions removed them from the coverage of the law. private respondent union has miserably failed to convince this Court that the petitioner acted implementing the JE Program. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. as petitioner suggests. This in essence is a promotion which is defined as the advancement from one position to another with an increase in duties and responsibilities as authorized by law. provided it is done in good faith. As correctly pointed out by petitioner. There is no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive. according to its discretion and judgment. harsh. with the promotion of the union members. after the JE Program there was an ascent in position. they are no longer entitled to the benefits which attach and pertain exclusively to their positions. the members of private respondent union were re-classified under levels S-5 S-8 which were considered under the program as managerial staff purposes of compensation and benefits. it is the prerogative of the management to regulate. 12 Quintessentially." 13 WHEREFORE. . and the basic complaint of private respondent union is DISMISSED. 1991 and August 30. oppressive. Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management. 1991. they cannot have their cake and eat it too or. as a simple matter of law and fairness. all aspects of employment. . if the union members really wanted to continue receiving the benefits which attach to their former positions.

. et al. NLRC. et al. Padilla. vs. Sosito vs. The Lawphil Project . 84-149. Rollo. Subido. et al. Wise and Co. Rollo. 7. J . et al.. vs. 56-57. 11.. Rollo. vs. JJ. 2003] TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED. 72. id. Aguinaldo Development Corporation. Annex G. Petition. 79 10. Petition. petitioner.. vs... Nocon and Campos. No. Annex A. 156 SCRA 392 (1987). 123 SCRA 296 (1983). TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO.. Rollo. Millares vs. NLRC Case CA No. Lourdes C. 94 SCRA 270 (1979).Narvasa. NLRC et al. 20-27. Wise and Co. respondent. 163 SCRA 71 (1988). Rollo. Jr. 12. ibid. 13. Ireneo B. 2. 209. Comm. concur. C . 5. Rayala. Bernardo and Regalio I. penned by Pres. 56 C... Dosch. Oceanic Pharmacal Employees Union (FFW) vs. 9.R. SCRA 536 (1989). 51. Petition.S. 3. Inciong. Employees Union-Natu. Footnotes 1.. Javier. et al.. Inc. 28-29. Annex E. Globe Mackay Cable and Radio Corporation. 6. Sec. 20 SCRA 954 (1967). Inc. Master and Servant. 4. Rollo. with the concurrence of Comm.J. Annexes I to I-23. .Arellano Law Foundation [G. L-000058. 142000.. 8. 151 (11).. January 22.

DECISION CARPIO-MORALES, J.: Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to annul the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998. On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)–Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE MediationArbitration Unit, Regional Branch No. IV. THIGCI, in its Comment1[1] filed on November 27, 1997, opposed THEU‘s petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI. THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed2[2] to its Comment to the petition for certification election. And it therein incorporated the following tabulation3[3] showing the number of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for disqualification: # of Signatures 13 6 2 53 Reasons for Disqualification Supervisors of THIGCI Resigned employees of THIGCI AWOL employees of THIGCI Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc.

1[1]

CA Rollo at 59 – 62. Ibid at 63. Ibid at 60.

2[2]

3[3]

14 6 3 1 4 16 2

Supervisors of The Country Club at Tagaytay Highlands, Inc. Resigned employees of The Country Club at Tagaytay Highlands, Inc. Terminated employees of The Country Club at Tagaytay Highlands, Inc. AWOL employees of The Country Club at Tagaytay Highlands, Inc. Signatures that cannot be deciphered Names in list that were erased Names with first names only

THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition.4[4] Replying to THIGCI‘s Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997,5[5] on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997;6[6] and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. THEU thus concluded in its Reply7[7] that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a certification election.

4[4]

Ibid at 64-66.

Dated May 1, 1997 which took effect on June 21, 1997, “Amending the Rules Implementing Book V of the Labor Code as Amended.”
5[5] 6[6]

CA Rollo at 58. Ibid at 67–70.

7[7]

By Order of January 28, 1998, 8[8] DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI in this wise, quoted verbatim: We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through the submission of all the requirements for registration of a local/chapter is a clear showing that it was already included in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal right and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondent‘s establishment is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a legitimate labor organization. Giving due course to this petition is therefore proper and appropriate.9[9] (Emphasis supplied) Passing on THIGCI‘s allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusioninclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and other supporting documents to bolster its claim that they are disqualified from joining THEU. THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiter‘s Order and accordingly dismissed the petition for certification election on the ground that there is a ―clear absence of community or mutuality of interests,‖ it finding that THEU sought to represent two separate bargaining units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate entities. Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 199810[10] setting aside the June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that since THEU is a local chapter, the twenty
8[8]

Ibid at 74-79. Ibid at 77 – 78. Ibid at 22-27.

9[9]

10[10]

G. The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of certification election. R. February 19. Laguesma. R. 1999 (304 SCRA 405. the present petition for certiorari. G. Martin Funeral Home v. ―the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . No. R. 1998 (295 SCRA 494). and that regarding the participation of alleged resigned and AWOL employees and those whose signatures are illegible. National Labor Relations Commission. 1998 Resolution having been denied by the DOLE Undersecretary by Resolution of December 29. 1997 (268 SCRA 573).13[13] and in strict observance of the hierarchy of courts. Toyota Motor Philippines Corporation Labor Union et al 16[16] and Dunlop Slazenger [Phils.. G. 131248. Hon. Hon. should simply be removed from the THEU‘s roster of membership. Secretary of Labor and Employment et al. raising the following 11[11] Rollo at 29-30. .12[12] referred it to the Court of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. G. March 10. December 11. THIGCI‘s Motion for Reconsideration of the November 12. 1999. 2000. 1998. R. No. the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship following this Court‘s ruling in Toyota Motor Philippines Corporation v. the names of alleged disqualified supervisory employees and employees of the Country Club. Inc.17[17] petitioner failed to adduce substantial evidence to support its allegations. CA Rollo at 111. Rollo at 35-44. 123426. cannot negate the legitimacy it has already acquired before the petition. 1998. No. September 16..14[14] By Decision of February 15. by Resolution of April 14.15[15] the Court of Appeals denied THIGCI‘s Petition for Certiorari and affirmed the DOLE Resolution dated November 12. . as emphasized in the case of St. hence.] v. 1998 (300 SCRA 120). et al . It held that while a petition for certification election is an exception to the innocent bystander rule. hence. a separate and distinct corporation. No.‖ that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations. Hence.11[11] it filed a petition for certiorari before this Court which. 12[12] 13[13] 14[14] 15[15] 16[16] 17[17] . 121084. the issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage.percent (20%) membership requirement is not necessary for it to acquire legitimate status. 130866. Bienvenido E.

Ineligibility of managerial employees to join any labor organization. – Pizza Hut v. Ledesma20[20] which held that: ―The Labor Code requires that in organized and unorganized establishments. assist or form separate labor organizations of their own. Supra. R. is Article 245 of the Labor Code.―ISSUES/ASSIGNMENT OF ERRORS: THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NONEMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANKAND-FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNION‘S STATUS THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES‘ STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE‖18[18] The statutory authority for the exclusion of supervisory employees in a rank-and-file union. 19[19] 20[20] . — Managerial employees are not eligible to join. No. right of supervisory employees. 18[18] Rollo at 17 – 18. or vice-versa. 1997 (271 SCRA 593).‖ and the subsequent case of Progressive Development Corp. first and foremost. it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members. to wit: Article 245. 115077. and vice-versa. depends on whether or not the labor organization has attained the status of a legitimate labor organization. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union. particularly the right to file a petition for certification election. April 18. The acquisition of rights by any union or labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. assist or form any labor organization. a petition for certification election must be filed by a legitimate labor organization. G. Citing Toyota19[19] which held that ―a labor organization composed of both rank-andfile and supervisory employees is no labor organization at all.

Book IV of the ―Rules to Implement the Labor Code‖ (Implementing Rules) which section reads: 21[21] Id at 602. therefore. its legal personality cannot be subject to collateral attack. Not being one. anterior to the granting of an order allowing a certification election. anterior to the granting of an order allowing a certification election. an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the rights of a legitimate labor organization.) The petition fails. be a legitimate labor organization. quoting Toyota. petitioner argues that without resolving the status of THEU. Supra at 582. viz: ‗x x x ―Clearly. a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. 22[22] .).‘‖21[21] (Underscoring and emphasis supplied). It cannot. for any guise or purpose.‖ Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization. 300 SCRA 120 [1998].In the case before us. the DOLE Undersecretary ―conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election‖ which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in ―the preelection conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters. the Med-Arbiter summarily disregarded the petitioner‘s prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that ‗for all intents and purposes. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. petitioner contends that. After a certificate of registration is issued to a union. .. to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. ―[i]t becomes necessary .‖ (Emphasis by petitioner) (Dunlop Slazenger (Phils. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V. Secretary of Labor. including the right to file a petition for certification election for the purpose of collective bargaining. based on this provision [Article 245]. to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code.‖22[22] Continuing. . v. Toyota Motors Philippines Corporation Labor Union. It becomes necessary. Underscoring and emphasis supplied by petitioner.

(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto. (Emphasis supplied). 239. 5. Grounds for cancellation of union registration . Book V of the Implementing Rules. Effect of registration. (f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law. (g) Asking for or accepting attorney‘s fees or negotiation fees from employers. the minutes of ratification. as follows: Art. (h) Other than for mandatory activities under this Code. checking off special assessments or any other fees without duly signed individual written authorizations of the members. (Emphasis supplied) The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code. (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year and misrepresentation. false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto. minutes of the election of officers. The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation. false statements or fraud in connection with the election of officers. but may be questioned only in an independent petition for cancellation in accordance with these Rules. (e) Acting as a labor contractor or engaging in the ―cabo‖ system. (c) Misrepresentation. and (j) Failure to comply with the requirements under Articles 237 and 238. or failure to subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election. . The labor organization or workers‘ association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. the list of voters. (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau. while the procedure for cancellation of registration is provided for in Rule VIII. or otherwise engaging in any activity prohibited by law.Sec. false entries or fraud in the preparation of the financial report itself. and the list of members who took part in the ratification. Such legal personality cannot thereafter be subject to collateral attack.

25[25] Atlas Free Workers Union (AFWU)—PSSLU Local v. 56 SCRA 480 (1974). 725. as reflected above. unless such inclusion is due to misrepresentation. 23[23] 24[24] Records at 347-354. No. Phil. the proper procedure is.The inclusion in a union of disqualified employees is not among the grounds for cancellation. Noriel. for it to file a petition for cancellation of the certificate of registration. G. 113638. 25[25] . THEU. and not to intervene in a petition for certification election. Vide AD Gothong Manufacturing Corporation Employees Union—ALU v. 54 SCRA 76 (1973). false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions. No. Communications. vide LVN Pictures. does not lie given. L-51905. R.24[24] there is nothing mentioned about the supervisors‘ respective duties. citations omitted). May 26. Paredes. vs. Inc. Confessor. CIR. While petitioner submitted a list of its employees with their corresponding job titles and ranks. 1999. as found by the court a quo. 572-73. this Court‘s following ruling is instructive: ―‗[T]he best forum for determining whether there were indeed retractions from some of the laborers is in the certification election itself wherein the workers can freely express their choice in a secret ballot. Musicians Guild. fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer. November 16. As for petitioner‘s allegation that some of the signatures in the petition for certification election were obtained through fraud.‘ Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry.‖23[23] As for the lack of mutuality of interest argument of petitioner. 1981 (104 SCRA 565. 110 Phil. Electronics and Electricity Workers Federation v. powers and prerogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment. it. having been validly issued a certificate of registration. Such representation and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary. 318 SCRA 58. at all events. Federation of Free Workers v. false statement and misrepresentation. Phil. Regarding the alleged withdrawal of union members from participating in the certification election. should be considered to have already acquired juridical personality which may not be assailed collaterally.

. 118). No. (Emphasis supplied). SO ORDERED. (Chairman). 1999 (312 SCRA 104. Let the records of the case be remanded to the office of origin. IV. Inc. 1996). R. 96663.As this Court put it in Pepsi-Cola Products Philippines. 96663. for the immediate conduct of a certification election subject to the usual preelection conference. concur. Regional Branch No. the petition is hereby DENIED. Laguesma (G. In the case of National Steel Corporation vs. v. Otherwise. January 29. August 10. 312 SCRA 104. Panganiban. there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. G. R.27[27] WHEREFORE. JJ. 88957 June 25. No. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. the Mediation-Arbitration Unit. 27[27] . No. 1992 26[26] G.R. R. Sandoval-Gutierrez and Corona. No. 103743. Puno. 1999. Secretary of Labor:26[26] Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. August 10. it was stressed that: What is essential is the nature of the employee’s function and not the nomenclature or title given to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee.

A. dated 16 January 1989 and 17 March 1989. 1981-1983. it had a total of six (6) collective bargaining agreements (CBAs) with private respondent Philips Employees Organization-FFW (PEO-FFW). In the first CBA (1971-1974). (PIDI) seeks to set aside the Decision and Resolution. of the National Labor Relations Commission (NLRC) in Case No. PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products Since 1971. fiscal and financial system manager and audit and EDP manager.: In this petition for certiorari and prohibition under Rule 65 of the Rules of Court with a prayer for a temporary restraining order and/or a writ of preliminary injunction. marketing managers." As the parties failed to agree on a voluntary arbitrator. among others. JR. J.PHILIPS INDUSTRIAL DEVELOPMENT. NLRCNCR-00-11-03936-87. No.. and the staff of both the General Management and the Personnel Department. PEO-FFW filed a petition before the Bureau of Labor Relations (BLR) praying for an order "directing the parties to select a voluntary arbitrator in accordance with its rules and regulations. 875. secretaries of the corporate planning and business manager. respectively. 2 In the sixth CBA covering the years 1987 to 1989. the sales force. Labor Arbiter Amansec rendered a decision. that the subject of inclusion or exclusion of service engineers. petitioner. sales representatives and confidential employees of PIDI are qualified to be included in the existing bargaining unit. together with the managerial employees. Docketed as Case No. and 1984-1986). temporary employees and security personnel. confidential employees and heads of small units. temporary employees and sales representatives were excluded from the bargaining unit. In the second to the fifth CBAs (1975-1977. NLRC-NCR-00-11-03936-87 on the ground that it committed grave abuse of discretion amounting to lack of jurisdiction in holding that service engineers. the BLR endorsed the petition to the Executive Labor Arbiter of the National Capital Region for compulsory arbitration pursuant to Article 228 of the Labor Code. DAVIDE. were specifically excluded from the bargaining unit. the dispositive portion of which states: . vs.. NATIONAL LABOR RELATIONS COMMISSION and PHILIPS EMPLOYEES ORGANIZATION (FFW). On 17 March 1988. the case was assigned to Executive Labor Arbiter Arthur Amansec. sales personnel and confidential employees in the coverage of the bargaining unit would be submitted for arbitration. INC. security guards. 1978-1980. Pursuant thereto. a registered labor union and the certified bargaining agent of all the rank and file employees of PIDI. on June 1987. 1 The confidential employees are the division secretaries of light/telecom/data and consumer electronics. Inc. confidential employees. petitioner Philips Industrial Development. it was agreed upon. the supervisors referred to in R. respondents.

It further ruled that: The Executive Labor Arbiters directive that the service engineers and sales representatives to (sic) conduct a referendum among themselves is erroneous inasmuch as it arrogates unto said employees the right to define what the law means.In view of the foregoing.O. Book V of the Omnibus Rules Implementing the Labor Code. sales representatives as to their inclusion or exclusion in the bargaining unit. . as amended by Section 6 4 of the Implementing Rules of E. all workers. SO ORDERED. 3 Rule II. . No. are qualified to join or be a part of the bargaining unit. the dispositive portion of which reads: WHEREFORE. 111. EDP and Financial Systems are included within the rank and file bargaining unit. the NLRC rendered the questioned decision. secretaries of audit. a decision is hereby rendered. It would not be amiss to state at this point that there would be no one more interested in excluding the subject employees from the bargaining unit than management and that it would not be improbable for the latter to lobby and/or exert pressure on the employees concerned. . On 16 January 1989. secretaries of audit.O. Personnel and Industrial Relations Department. ordering the respondent to conduct a referendum to determine the will of the service engineers. Sales Force. as amended: . personnel and industrial relations department. SO ORDERED. Likewise. all Staff of General Management. the Executive Labor Arbiter's declaration that the Division Secretaries and all Staff of general management. paragraph (c) Section 2. personnel and industrial relations department. as amended by Section 3. 111. financial system are confidential employees and as such are hereby deemed excluded in the bargaining unit. EDP. except managerial employees and security personnel. . thus agitating unrest among the rank-and-file. division secretaries. the foregoing premises considered. . and Article 245 5 of the Labor Code. The reversal is anchored on the respondent NLRC's conclusion that based on Section 1. EDP and financial system "are confidential employees and as such are hereby deemed . It is hereby declared that the Division Secretaries and all Staff of general management. the appealed decision of the Executive Labor Arbiter is hereby SET ASIDE and a new one entered declaring respondent company's Service Engineers. No. Rule V of the same Code. Secretaries of Audit. PEO-FFW appealed from the decision to the NLRC. Implementing Rules of E.

. which amended Article 223 of the Labor Code. II THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT APPLYING THE TIME HONORED "GLOBE DOCTRINE. moved for. PEO-FFW moved that its Motion and manifestation dated 23 August 1989 be considered as its Memorandum.excluded in (sic) the bargaining unit" is contrary to law for the simple reason that the law. does not mention them as among those to be excluded from the bargaining unit only (sic) managerial employees and security guards. No-6715 with respect to the finality of decisions of the NLRC. as amended by R. which PEO-FFW complied with on 28 August 1989. 6 Its motion for the reconsideration of this decision having been denied by the NLRC in its Resolution of 16 March 1989. required the respondents to comment on the petition." 7 On 31 July 1989. As a matter of fact. Public respondent NLRC. The parties subsequently complied with the Resolution. The petitioner and the Office of the Solicitor General filed their separate Memoranda. On 10 September 1990. 6715 R. as earlier quoted. The parties complied separately with the same.. and was granted a 30-day extension to file its Comment. No. as amended by Section 12 of R. this Court gave due course to the petition and required the parties to submit their respective Memoranda. this Court granted the same. On 18 September 1989. was enacted on 2 March 1989 and took effect on 21 March 1989. 6715. a copy of which it received on 8 June 1989. On 16 May 1990. SALES REPRESENTATIVES AND CONFIDENTIAL EMPLOYEES OF PETITIONER ARE QUALIFIED TO BE PART OF THE EXISTING BARGAINING UNIT. the Solicitor General.A. this Court required the parties to show cause why the petition should not be dismissed in view of the finality of the NLRC decision as provided for by the penultimate sentence of Article 223 of the Labor Code. No. thru its counsel. alleging that: I THE NLRC COMMITTED ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT SERVICE ENGINEERS.A. On the other hand. supervisory unions have already been dissolved and their members who do not fall within the definition of managerial employees have become eligible to join or assist the rank-and-file organization.A. this Court. petitioner PIDI filed the instant petition on 20 July 1989. this Court required the parties to submit Memoranda explaining the effect in this case of Article 223 of the Labor Code.

It would cripple the company's bargaining position and would give undue advantage to the union. Work Schedule With Night Shift None Schedule Night Shift 10% of Basic Rate None Differential Pay Stand-By Call & On Stand-By Call with: None Allowance First Line:15% of basic rate Second Line: 10% of basic rate Uniforms None 2 sets of polo & pants every 6 months Retirement Benefits 15 yrs. secretaries of audit. The parties' five (5) previous CBAs consistently excluded this group of employees from the scope of the bargaining unit. confidential and of a highly fiduciary nature. to include them in the bargaining unit may subject the company to breaches in security and the possible revelation of highly sensitive and confidential matters. and in support of its stand that said employees should not be absorbed by the existing bargaining unit. A table prepared by the petitioner shows the disparity of interests between the said groups: SERVICE ENGINEERS SERVICE SALES REPRESENTATIVES TECHNICIANS (Non-Bargaining (Bargaining AREAS OF INTEREST Unit Employees) Unit Employees) Qualifications Professional Employees High School/ Vocational Grads. 50% 16 75% 16 85% 17 80% 17 90% 18 85% 18 100% 19 90% 19 115% 20 100% 20 135% Year End Performance Merit Increase system None .70% 15 yrs. 2) The absence of mutuality of interests between this group of employees and the regular rank and file militates against such inclusion.As stated earlier. serv. Petitioner maintains that it did. EDP and financial system) are qualified to be included in the existing bargaining unit. sales representatives and confidential employees (division secretaries. the principal issue in this case is whether the NLRC committed grave abuse of discretion in holding that service engineers. ser. personnel and industrial relations department. The rationale for such exclusion is that these employees hold positions which are highly sensitive. it urges this Court to consider these points: 1) The inclusion of the group in the existing bargaining unit would run counter to the history of this parties CBA. staff of general management.

are disqualified from joining the PEO-FFW as they are confidential employees. EDP and Financial Systems. vs. still. reading as follows: Art. We express Our agreement with the petitioner's view that respondent NLRC did not quite accurately comprehend the issue raised before it. FerrerCalleja. As regards the sales representatives and service engineers. 8 the rationale for the disqualification of managerial employees from joining unions holds true also for confidential employees. except managerial employees and security personnel. Indeed.Evaluation Sales Commission Yes None Car Loan Yes None Precalculated Yes None Kilometer allowance The Office of the Solicitor General supports the decision of the Executive Labor Arbiter and refuses to uphold the position of the NLRC. however. repealed the original provisions of Article 245 of the Labor Code. or form part of a bargaining unit. properties and premises of the employer shall not be eligible for membership. Inc. Considering that they have interests dissimilar to those of the rank and file employees comprising the existing bargaining unit. and substituted it with the following provision: . all workers. they should be allowed to determine for themselves what union to join or form. security personnel were no longer disqualified from joining or forming a union. and following the Globe Doctrine enunciated in In Re: Globe Machine and Stamping Company 9 to the effect that in determining the proper bargaining unit the express will or desire of the employees shall be considered. Ineligibility of security personnel to join any labor organization . but rather. At the time Case No. as held in Golden Farms. whether or not they may be part of the existing bargaining unit for the rank and file employees of PIDI. in any labor organization. NLRC-NCR-00-11-03936-87 was filed in 1987.O. — Security guards and other personnel employed for the protection and security of the person. the staff members of General Management. referendum was decreed by the Executive Labor Arbiter. and the secretaries of Audit. The best way to determine their preference is through a referendum. as perceived by the NLRC. Even if the issue was. 111. At the outset. a palpable error was committed by it in ruling that under the law. the issue is not whether the subject employees may join or form a union. there is no doubt that they are entitled to join or form a union. No. such a. They cannot even form a union of their own for. enacted on 24 December 1986. Personnel and the Industrial Relations Department. The petition is impressed with merit. It holds the view that the division Secretaries. 245. Section 6 of E. as they are not disqualified by law from doing so. As shown by the records. indeed. are qualified to join a union.

Inc. Said employee(s) may act as a spy or. EDP and Financial Systems are included within the rank and file bargaining unit. vs. assist or join a labor union equally applies to them. radio and telegraph operators. The Union can also become company-dominated with the presence of managerial employees in Union membership. — xxx xxx xxx 10 By virtue of such repeal and substitution. with the exception of the service engineers and the sales force personnel. the five (5) previous CBAs between PIDI and PEOFFW explicitly considered them as confidential employees. . the latter might not be assured of their loyalty. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/ positions are expressly excluded. persons who exercise managerial functions in the field of labor relations. they assist and act in a confidential capacity to. are confidential employees. Right of employees in the public service. to the Union in view of evident conflict of interests. 245. Inc. The rationale for this inhibition has been stated to be. all these employees.Art. Ferrer-Calleja. may become the source of undue advantage. because if these managerial employees would belong to or be affiliated with a Union. or have access to confidential matters of. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. all Staff of General Management. who having access to confidential information. security guards became eligible for membership in any labor organization. the rationale behind the ineligibility of managerial employees to form. By the very nature of their functions. 12 As such. Hon Augusto Sanchez. Personnel and Industrial Relations Department. vs. In Golden Farms. division secretaries. ." In the first place. this rationale. Their classification as such is not seriously disputed by PEO-FFW. Sales Force.. thus: 13 this Court elaborated on . spies of either party to a collective bargaining agreement. . 11 On the main issue raised before Us. In Bulletin Publishing Co. it is quite obvious that respondent NLRC committed grave abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service Engineers. Secretaries of Audit. applicable to confidential employees: 14 this Court explicitly made this rationale This rationale holds true also for confidential employees such as accounting personnel.

in the same breath. The law does not enjoin an employee to sign up with any association. that the right to join a union includes the right to abstain from joining any union. 18 It is clear. 17 this Court already ruled: . 16 In Victoriano vs. insofar as service engineers and sales representatives holding supervisory positions or functions are concerned. join or refrain from joining an association. power. sales representatives as to their inclusion or exclusion in (sic) the bargaining unit" is the most appropriate procedure that conforms with their right to form. namely: first. . now reads: ARTICLE 245. as amended by R. No. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized. take into account the present Article 245 20 of the Labor Code which. it can be safely said that whatever theory one subscribes to.. he still retains the liberty and the power to leave and cancel his membership with said organization at any time. it must now be stressed that its future application to the private parties in this case should. therefore. a right comprehends at least two broad notions. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a "right". as he pleases. This violates. is the "right" to join associations of his choice. in holding that they are included in the bargaining unit for the rank and file employees of PIDI. . 6715. (emphasis supplied) .e. and second. the NLRC practically forced them to become members of PEO-FFW or to be subject to its sphere of influence. It is. since this decision was rendered before the effectivity of R. upon the employee the duty to join associations. impairs and impedes the service engineers' and the sales representatives' constitutional right to form unions or associations 15 and to self-organization. and should he choose to join. i.A. it being the certified bargaining agent for the subject bargaining unit. Elizalde Rope Workers Union. whereby an employee may act for himself without being prevented by law. and even after he has joined. therefore. Ineligibility of managerial employees to join any labor organization. The decision then of the Executive Labor Arbiter in merely directing the holding of a referendum "to determine the will of the service engineers. assist or form any labor organization.A. assist or join in labor union or organization. the employee who should decide for himself whether he should join or not an association. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. he himself makes up his mind as to which association he would join. and guaranteed to the employee. assist or form separate labor organizations of their own. Firstly. liberty or freedom.As regards the service engineers and the sales representatives. However. right of supervisory employees. — Managerial employees are not eligible to join. 6715. it would be absurd to say that the law also imposes. No. whereby an employee may. two (2) points which respondent NLRC likewise arbitrarily and erroneously ruled upon agreed to be discussed. obstructs. the absence of legal restraint.

is hereby SET ASIDE while the Decision of the Executive Labor Arbiter in said case dated 17 March 1988 is hereby REINSTATED. Feliciano. 6 Rollo. Suffice it to state here that since the only issue is the subject employees' inclusion in or exclusion from the bargaining unit in question. Secretary of Labor and Employment. 10 In view of the repeal of Article 238 of the Labor Code by Section 5 of E. NLRC-NCR-00-11-03936-87. and PIDI never questioned the decision of the Executive Labor Arbiter.. . this Article was deemed renumbered as Article 244. this doctrine applies only in instances of evenly balanced claims by competitive groups for the right to be established as the bargaining unit. WHEREFORE. Besides. the petition is hereby GRANTED. the Globe Doctrine finds no application. 111. 21 which do not obtain in this case. 9 3 NLRC 294 [1937].O. vs. 11 Manila Electric Co. 7 Id. promulgated on 16 January 1989. JJ.The foregoing disquisitions render unnecessary a discussion on the second ground on the alleged grave abuse of discretion on the part of the NLRC in not applying the "Globe Doctrine". 8 175 SCRA 471 [1989]. 5 On ineligibility of managerial employees to join any labor organization. The Decision of public respondent National Labor Relations Commission in Case No. SO ORDERED. Bidin and Romero. Gutierrez.. 3 On who may join labor unions. Footnotes 1 Rollo. 2 Id. 197 SCRA 275 [1991]. 4 On exclusion of security guards from the bargaining unit of the rank and file employees. subject to the modifications above indicated. concur. Costs against private respondent. 4. 111. 2.

THE HON. 108 Phil. C. 635 [1986]. Article III (Bill of Rights) and Section 3. 1010 [1960]. 1986 ed. 18 Citing Pagkakaisa Samahang Manggagawa ng San Miguel Brewery at mga Kasangay (PAFLU) vs. 16 Article 246.R. Vassar Industries Employees Union vs. 13 144 SCRA 628. Enriquez. 80 SCRA 350 [1977]. Labor Relations Law. 15 Section 8. as amended. respondents. 20 Originally Article 246... Article XIII of the present Constitution. Estrelia. No. SECRETARY OF LABOR AND EMPLOYMENT..12 PASCUAL. 82 SCRA 280 [1978].Arellano Law Foundation Republic of the Philippines SUPREME COURT Manila EN BANC G. PHILAME (KG) Employees & Workers Union. 66-67 [1974]. 17 59 SCRA 54. See also Anucension vs. . 159. Labor Code of the Philippines. 21 Rothenberg on Labor Relations. 91902 May 20. 1949 ed. 483. 13 SCRA 120 [1965]. vs. STAFF AND TECHNICAL EMPLOYEES ASSOCIATION OF MERALCO. 1991 MANILA ELECTRIC COMPANY. 14 Supra. 19 Citing Abo vs. National Labor Union. petitioner. and FIRST LINE ASSOCIATION OF MERALCO SUPERVISORY EMPLOYEES. The Lawphil Project .

Among others. Parungo (Case No. Drilon dated November 3. and Gil S. J. the Staff and Technical Employees Association of MERALCO (hereafter "STEAM-PCWF") a labor organization of staff and technical employees of MERALCO. The facts are as follows: On November 22. Secretaries who are automatically removed from the bargaining unit. 1 there is no other labor organization except STEAM-PCWF claiming to represent the MERALCO employees. 2. Secs.Rolando R. 1989 which affirmed an Order of Med-Arbiter Renato P. (b) non-managerial employees in the Patrol Division. Guevarra. filed a petition for certification election. which is the MERALCO Employees and Worker's Association (MEWA) which holds a valid CBA for the rank and file employees. 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. the petition alleged that "while there exists a duly-organized union for rank and file employees in Pay Grade I-VI. 1990 which denied the Motion for Reconsideration of MERALCO. directing the holding of a certification election among certain employees of petitioner Manila Electric Company (hereafter "MERALCO") as well as the Order dated January 16. Excluded from the appropriate bargaining unit and therefore outside the scope of this Agreement are: . seeking to represent regular employees of MERALCO who are: (a) non-managerial employees with Pay Grades VII and above. San Diego for petitioner. Atilano S. Treasury Security Services Section. 2 and 3 of the existing MEWA CBA as follows: ARTICLE I SCOPE xxx xxx xxx Sec. 1988. The Solicitor General for public respondent. The petition was premised on the exclusion/disqualification of certain MERALCO employees pursuant to Art. Jr. MEDIALDEA. NCR-O-D-M-1-70).:p This petition seeks to review the Resolution of respondent Secretary of Labor and Employment Franklin M. Wakay & Wakay Legal Services for First Line Association of Meralco Supervisory Employees. I. Felipe Gojar for STEAM-PCWF. Arbues.

(b) Employees in Treasury Security Services Section. Regular rank-and-file employees in the organization elements herein below listed shall be covered within the bargaining unit. (c) Managerial Employees. Corporate Staff Services Department 3. General Accounting Section xxx xxx xxx (p. Manpower Planning & Research Division 8. except Cash Section 11. 3. He shall thereby likewise be deemed automatically to have ceased to be member of the union. 19. Managerial Payroll Office 4. and shall desist from further engaging in union activity of any kind. Sec. Legal Service Department 5. Treasury Department. Financial Planning & Control Department 10. shall be considered automatically removed from the bargaining unit and excluded from the coverage of this agreement. and (d) Secretaries. Personnel Administration Division 7. but shall be automatically disqualified from becoming union members: 1.(a) Employees in Patrol Division. Office of the Corporate Secretary 2. Computer Services Department 9. Rollo) MERALCO moved for the dismissal of the petition on the following grounds: . or becomes Managerial Employee or a Secretary. Labor Relations Division 6. Any member of the Union who may now or hereafter be assigned or transferred to Patrol Division or Treasury Security Services Section.

joining or assisting a labor organization of the rank and file. MERALCO maintains that since these employees are tasked with providing security to the company. pursuant to Sec. are prohibited from forming. Rule V. 2. Parungo. MERALCO contended that employees from Pay Grades VII and above are classified as managerial employees who. Implementing Rules of EO 111) xxx xxx xxx . As regards those in the Patrol Division and Treasury Security Service Section. Rollo) Before Med-Arbiter R. 3) secretaries who do not consent to the petitioner's representation and whom petitioner can not represent. of Labor. further: that the appropriate bargaining unit of the rank and file employees shall not include security guards (As amended by Sec. pp. 6.500 employees sought to be represented. Book V of the then Implementing Rules and Regulations of the Labor Code (1988) which reads as follows: Sec. and 4) rank-and-file employees represented by the certified or duly recognized bargaining representative of the only rankand-file bargaining unit in the company. 2(c). under the law. they are not eligible to join the rank and file bargaining unit. when filed by a legitimate labor organization. shall contain. in accordance with the existing Collective Bargaining Agreement with the latter. The petition. — The employer or any legitimate labor organization may file the petition. among others: xxx xxx xxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require. 223-224. 2) security services personnel who are prohibited from joining or assisting the rank-and-file union. III The petition itself shows that it is not supported by the written consent of at least twenty percent (20%) of the alleged 2. the Meralco Employees Workers Association (MEWA). (Resolution. Sec. Who may file petition.I The employees sought to be represented by petitioner are either 1) managerial who are prohibited by law from forming or joining supervisory union. 232 of the Labor Code. II The petition for certification election will disturb the administration of the existing Collective Bargaining Agreement in violation of Art. and provided.

they may not be treated as a separate and distinct appropriate bargaining unit. The dispositive portion of the Resolution provides as follows: WHEREFORE. 2. within 20 days from receipt hereof. SO ORDERED. the Med-Arbiter stated that the holding of a certification election would allow them to fully translate their sentiment on the matter. except those employees performing managerial functions. No Union. Non-managerial employees of Patrol Division. claiming that these were already covered by the MEWACBA. Labor Code. Staff and Technical.) As regards those rank and file employees enumerated in Sec. 1988 Ed. MERALCO appealed. 1989. a certification election is hereby ordered conducted among the regular rank-and-file employees of MERALCO to wit: 1. Treasury Security Services Section and Secretaries. Employees prohibited from actively participating as members of the union. 222. (p. premises considered. subject to the usual pre-election conference with the following choices: 1. STEAM-PCWF cannot represent employees from Pay Grades VII and above. 1989. MERALCO raised the same argument with respect to employees sought to be represented by STEAM-PCWF. Employees Association of MERALCO (STEAMPCWF). contending that "until such time that a judicial finding is made to the effect that they are not managerial employee. 111. these employees have the right to form a union of their own. I. With respect to those employees who had resented their alleged involuntary membership in the existing CBA. and 3. MEWA filed an appeal-in-intervention. and thus directed the holding of a certification election. submitting as follows: . On April 7. the Med-Arbiter ruled that having been excluded from the existing Collective Bargaining Agreement for rank and file employees. 2. 1989. Rollo) On April 4. Art. additionally reiterating the same reasons they had advanced for disqualifying respondent STEAM-PCWF. 3. Non-managerial employees with Pay Grades VII and above. MERALCO contends that since they are already beneficiaries of the MEWA-CBA.(p. On March 15.

" (p. the Order appealed from is hereby affirmed but modified as far as the employees covered by Section 3. Treasury Security Services Section and rank-and-file employees in Pay Grades I-VI.A. 1989. since "there is no other supervisory union at MERALCO. Rollo). 7. the Secretary of Labor affirmed with modification. STEAM-PCWF opposed the appeal-in-intervention. 266. the assailed order of the Med-Arbiter. therefore. premised on the following ground: RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN EXCESS OF JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN RULING THAT: . 1990. Said employees shall remain in the unit of the rank-and-file already existing and may exercise their right to self organization as above enunciated. Let. Article I of the exist CBA in the Company are concerned. the pertinent records of the case be immediately forwarded to the Office of origin for the conduct of the certification election. STEAM-PCWF renounced its representation of the employees in Patrol Division. B. 1990. MERALCO filed this petition. disposing as follows: WHEREFORE. the First Line Association of Meralco Supervisory Employees (FLAMES) is included as among the choices in the certification election. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9-73189) seeking to represent those employees with Pay Grades VII to XIV. The petition was consolidated with that of STEAM-PCWF. The Order is invalid because the bargaining unit it delineated is not an appropriated (sic) bargaining unit. Further. On May 4. (p. On February 9. With the enactment of RA 6715 and the rules and regulations implementing the same. premises considered. On September 13. the First Line Association of Meralco Supervisory Employees. SO ORDERED. The Order of the Med-Arbiter violates Article 232 of the Labor Code. and C. 1989. Rollo) MERALCO's motion for reconsideration was denied on January 16. 1989. The Order of the Med-Arbiter is null and void for being in violation of Article 245 of the Labor Code. On November 3.

or the supervisory 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. 1. 2. In this petition. 212. to only two groups. (p. Treasury . only two groups of employees were recognized. MERALCO has admitted that the employees belonging to Pay Grades VII and up are supervisory (p. Book V) which disqualifies supervisory employees and security guards from membership in a labor organization of the rank and file (p. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE RANK-AND-FILE UNION AND/OR THE SUPERVISORY UNION. the law then in force when the complaint was filed. However. At the time. or merely to recommend them. in case of supervisory employees. then par. The Secretary of Labor's Resolution was obviously premised on the provisions of Art. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED INDEPENDENT. However. In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol Services Section) to be represented by respondents. In its petition. pursuant to the Department of Labor's goal of strenghthening the constitutional right of workers to self-organization. renumbered par. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANKAND-FILE EMPLOYEES. 8. in the case of managerial employees. II. and not to classify outright the group of employees represented by STEAM-PCWF and FLAMES as rank and file employees. III. Rule II. the managerial and rank and file. and laying down the distinction between supervisory employees and those of managerial ranks in Art. of the 1988 Labor Code defining "managerial" and "rank and file" employees. We issued a temporary restraining order (TRO) against the implementation of the disputed resolution. DISTINCT AND SEPARATE FROM THE EXISTING RANK-AND-FILE BARGAINING UNIT. (k). Rollo) On February 26. it believes that all that the Secretary of Labor has to do is to establish a demarcation line between supervisory and managerial rank. 10. RA 6715 was subsequently passed which reorganized the employee-ranks by including a third group. MERALCO has relented and recognized respondents STEAM-PCWF and FLAMES' desired representation of supervisory employees from Grades VII up. Rollo). This explains the absence of evidence on job descriptions on who would be classified managerial employees. 212.I. 11. [m]. the managerial and rank and file. The records also show that STEAM-PCWF had "renounced its representation of the employees in Patrol Division. Sec. depending on whether the employee concerned has the power to lay down and execute management policies. MERALCO contends that this contravenes the provisions of the recently passed RA 6715 and its implementing rules (specifically par. 1990. Rollo).

Rollo). paragraph 3 of the petition stated as follows. had limited its representation to employees belonging to Pay Grades VII-XIV. while FLAMES. although employees with Pay Grade XV carry the Rank of Department Managers. As adverted to above. generally accepted as supervisory employees. (the condition in the CBA deemed as not having been written into the contract. these employees only enjoys (sic) the Rank Manager but their recommendatory powers are subject to evaluation. the private respondents admit that these are not the rank-andfile but the supervisory employees. as follows: It must be emphasized that private respondent First Line Association of Meralco Supervisory Employees seeks to represent only the Supervisory Employees with Pay Grades VII to XIV. Definitions. (FLAMES' Memorandum. 305. and First Line Association of Meralco Supervisory Employees herein states that Pay Grades VII to XIV are not managerial employees. 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. . as unduly restrictive of an employee's exercise of the right to self-organization). MEWA-CBA later. I. . What needs to be established is the rank where supervisory ends and managerial begins. with STEAM-PCWF and FLAMES as choices. In this regard. Rollo) Based on the foregoing. the required parameter is really not necessary since the law itself.Security Service Section and rank and file employees in Pay Grades I-VI" (p. . to wit: There was no need for petitioner to prove that these employees are not rank-and-file. p. 212. it is clear that the employees from Pay Grades VII and up have been recognized and accepted as supervisory. Art. . Supervisory Employees with Pay Grades VII to XIV are not managerial employees. STEAM-PCWF. Anent the instant petition therefore. 4 of RA 6715) has already laid down the corresponding guidelines: Art. 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. 212-m. We shall discuss the rights of the excluded employees (or those covered by Sec. on the other hand. 2. (as amended by Sec. On the other hand. review and final action by the department heads and other higher executives of the company. Art. In fact the petition itself of petitioner Manila Electric Company on page 9. whom they seek to represent. and FLAMES would therefore represent supervisory employees only. In fact. 6. 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.

assist or form separate labor organizations of their own. . that he has the authority to hire or discharge other employees or that his suggestions and recommendations as to the hiring and discharging and or to the advancement and promotion or any other change of status of other employees are given particular weight. . transfer. suspend. the determinative factor in classifying an employee as managerial. that the employee's primary duty consists of the management of the establishment or of a customarily recognized department or subdivision thereof. Who may join unions. MERALCO has questioned the legality of allowing them to join either the rank and file or the supervisory union. . Book V of the Implementing Rules of RA 6715. supervisory or rank-and-file is the nature of the work of the employee concerned. . . Sec. in the interest of the employer. In National Waterworks and Sewerage Authority vs. which states as follows: Sec 1. that he customarily and regularly directs the work of other employees therein. 2. . In his resolution. recall. National Waterworks and Sewerage Authority Consolidated Unions (11 SCRA 766) the Supreme Court had the occasion to come out with an enlightening dissertation of the nature of the work of a managerial employees as follows: . 226. Thus. Rule II. 1. 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. . discharge. . lay-off. Rollo) We shall now discuss the rights of the security guards to self-organize. that he customarily and regularly exercises discretionary powers . . xxx xxx xxx (emphasis ours) . claiming that this is a violation of par. Supervisory employees are those who. 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. . All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of to Book. . (56 CJS. . 666-668. pp. the Secretary of Labor further elaborated: .(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire. (p. assign or discipline employees.

.Paragraph 2. . Aquino issued E. properties and premises of the employer shall not be eligible for membership in any labor organization. barring security guards from joining a rank and file organization. (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require. renumbered as Art. Rule V. 1986. also of Book V of the implementing rules of RA 6715: Rule V. What was retained was the disqualification of managerial employees. 245. Book V. Rule II. 2 (c). REPRESENTATION CASES AND INTERNAL-UNION CONFLICTS Sec. and which provided thus: Art. is similar to Sec. when requested to bargain collectively. . The petition. that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. Sec. 1. assist or form any labor organization. 2. and provided further.—Managerial employees are not eligible to join. 1. 245 of the Labor Code. Sec. . No.— Security guards and other personnel employed for the protection and security of the person. On December 24. may file the petition. appear to have been carried over from the old rules which implemented then Art. when filed by a legitimate labor-organization shall contain. Pres. security guards were thus free to join a rank and file organization. Ineligibility of security personnel to join any labor organization . Corazon C. 111 which eliminated the above-cited provision on the disqualification of security guards. 246). . 245 (previously Art.O. . among others: (a) .—Any legitimate labor organization or the employer. With the elimination. (b) . 245. Ineligibility of managerial employees to joint any labor organization. Who may file. xxx xxx xxx (emphasis ours) Both rules. . . as follows: Art.

Board of Tax Appeals. vs. 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. By accommodating supervisory employees. (citing University of Sto. security personnel may neglect or outrightly abandon their duties. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. 51353. 245 embodies an amendment disqualifying supervisory employees from membership in a labor organization of the rank-and-file employees. insofar as they disqualify security guards from joining a rank and file organization are null and void. in the event of a strike declared by their union. We are aware however of possible consequences in the implementation of the law in allowing security personnel to join labor unions within the company they serve. 245. 376). the present Congress passed RA 6715. . 1988. therefore. June 27. such as protection of property of their employer and the persons of its officials and employees. Ineligibility of managerial employees to join any labor organization. the control of access to the employer's premises. While therefore under the old rules. to read as follows: 2 Section 18 thereof Art. under RA 6715. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. they may now freely join a labor organization of the rank and file or that of the supervisory union. We stated: The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. (emphasis ours) As will be noted.—Managerial employees are not eligible to join. 162 SCRA 628. 245. In Shell Philippines. and the maintenance of order in the event of emergencies and untoward incidents. Thus. amended Art. whether rank and file or supervisory. No. or form separate labor organizations of their own. G.On March 2. 1989. It does not include security guards in the disqualification. Tomas vs. for being not germane to the object and purposes of EO 111 and RA 6715 upon which such rules purportedly derive statutory moorings. right of supervisory employees. Rules that subvert the statute cannot be sanctioned. the second sentence of Art. The implementing rules of RA 6715. assist or form any labor organization. in recognition of their constitutional right to self-organization. 93 Phil. security guards were barred from joining a labor organization of the rank and file. aware as they are that it is usually union action that obtains for them increased pecuniary benefits. The law is apt to produce divided loyalties in the faithful performance of their duties. Inc. Economic reasons would present the employees concerned with the temptation to subordinate their duties to the allegiance they owe the union of which they are members.R. assist. Central Bank. depending on their rank.

using as guideliness an employee's power to either recommend or execute management policies. Gancayco. with respondents STEAM-PCWF and FLAMES as choices. Paras. Employees of the Patrol Division.J.. therefore. appropriate for purposes of collective bargaining. 1990 is hereby LIFTED. JJ. The composition of the bargaining unit should be left to the agreement of the parties. and unless there are legal infirmities in such agreement. (p. Gutierrez. Consistent with the story of collective bargaining in the company. Cruz. Jr. belonging to Pay Grades VII and above. they find the bargaining unit. Narvasa. 229.. 3. we cannot approve of the condition set in Section 3. pursuant to Art. Footnotes . Rollo) The Temporary Restraining Order (TRO) issued on February 26. I of the MEWA-CBA. of the Labor Code. the petition is hereby DISMISSED. shall remain with the existing labor organization of the rank and file.. Article I of the CBA that the employees covered are automatically disqualified from becoming union members. 4 of RA 6715. Sarmiento. Accordingly. It is contrary to law and public policy and. Griño-Aquino. SO ORDERED. should be considered to have not been written into the contract. Costs against petitioner. Bidin. Feliciano. A certification election is hereby ordered conducted among supervisory employees of MERALCO. The condition unduly restricts the exercise of the right to self organization by the employees in question. 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. Art. the option to join or not to join the union should be left entirely to the employees themselves. Disqualified employees covered by Sec.It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid possible conflict of interest in security personnel. Fernan. for it will enhance stability in that unit already well establish.. concur. pursuant to the Secretary of Labor's directive: By the parties' own agreement. C. Melencio-Herrera. Regalado and Davide. We AFFIRM with modification the Resolution of the Secretary of Labor dated November 3. as amended by Sec. Article I of their CBA. ACCORDINGLY. However. Jr. Padilla. this Office will not substitute its judgment for that of the parties. the membership of said group of employees in the existing rank-and-file unit should continue. 1989 upholding an employee's right to self-organization. which includes the positions enumerated in Section 3. 212 (m).

D.19 .. Achilles V. D. respondents.. In the inclusion-exclusion proceedings. 1993 affirming in toto the Resolution of Mediator-Arbiter. DEPARTMENT OF LABOR AND EMPLOYMENT and A.: Petitioner A. petitioner.and-file employees of A.... The Lawphil Project ...... petitioner A.20 NO . DECISION GONZAGA_REYES.1 This CBA expired on November 30. The certification election was conducted as scheduled and yielded the following results: YES . Rollo.. p... HON... the parties agreed to the inclusion of Romulo Plaza and Paul Michael Yap in the list of eligible voters on condition that their votes are considered challenged on the ground that they were supervisory employees.... vs.. D.. Gothong Manufacturing Corporation.. Respondent Company opposed the petition as it excluded office personnel who are rank and file employees. dated March 6. Dole.. GOTHONG MANUFACTURING CORPORATION. D. November 16. Gothong Manufacturing Corporation Employees Union-ALU seeks to reverse and set aside the decision of the Secretary of Labor promulgated on September 30. 1990. 248. NIEVES CONFESOR. 113638. 1989. On May 12. the law took effect on March 21.. Gothong Manufacturing Corporation (―Company‖) excluding its office staff and personnel. Mandaue City. 1999] A.. Subangdaku.. 1989. SECRETARY. J.. Manit declaring Romulo Plaza and Paul Michael Yap as rank. 2 Published in two newspapers. There is an on-going CBA negotiation with National Capitol Region. per Comment of FLAMES. No. GOTHONG MANUFACTURING CORPORATION EMPLOYEES UNION-ALU.Arellano Law Foundation [G..R. Gothong Manufacturing Corporation Employees Union-ALU (―Union‖) filed a petition for certification election in its bid to represent the unorganized regular rank-and-file employees of respondent A. D.. D.. 1993.

the petitioner Union submitted the following: 1. D. and Yap argued that he is a mere expediter whose job includes the facilitation of the processing of the bills of lading of all intended company shipments... that the challenged voters used to attend the quarterly meeting of the staff employees of A. et al....Spoiled .. A not-so-legible photocopy of a memorandum dated March 1...0 Challenged . Gothong Manufacturing Corporation.. and 5.. Plaza claimed that he was a mere salesman based in Cebu. 1991 regarding the compulsory attendance of department heads/supervisors to the regular quarterly meeting of all regular workers of A. respondent Company stressed that Pacita Gothong is the company‘s corporate secretary and not Baby L.... Joint affidavit of Ricardo Cañete. which alleges that Michael Yap is a supervisory employee of A. Appearing therein are the names ROMULO PLAZA and MICHAEL YAP. that the affiant knows the challenged voters because they are also supervisory employees of the same corporation. D. Gothong Manufacturing Corporation. 2. Gothong Manufacturing Corporation on January 13........-41 Both Plaza and Yap argued that they are rank-and-file employees. Petitioner Union appealed to the Secretary of Labor insisting that Yap and Plaza are supervisor and manager respectively of the corporation and are prohibited from joining the proposed bargaining unit of rank-and-file employees. Photocopy of the minutes of the regular quarterly staff meeting on August 13._2 Total votes cast . Gothong Manufacturing Corporation and can effectively recommend for their suspension/dismissal.. Petitioner Union maintains that both Plaza and Yap are supervisors who are disqualified to join the proposed bargaining unit for rank-and-file employees. 1991. In an attempt to controvert the arguments of petitioner. 1989 wherein the name ―ROMY PLAZA‖ is mentioned as the acting OIC of GT Marketing in Davao.-.. who signed the minutes of the meeting submitted in evidence. 4. 3.. 1989 at Mandaue City wherein Michael Yap is mentioned as a shipping assistant and a newly hired member of the staff. Siador. D. Respondent also argued that Romulo Plaza could not qualify as a manager of the Davao Branch the opening of which branch never materialized.. Affidavit of Pedro Diez which alleges that the affiant is a supervisor in the production department of A.. D. In support of its position paper. .. Photocopy of the memorandum dated January 4..i[1] The Med-Arbiter declared that the challenged voters Yap and Plaza are rank-and-file employees.

iv[4] . but requires the use of independent judgment. namely. CEBU CITY IN DENYING PETITIONER‘S MOTION FOR RECONSIDERATION. are subject to evaluation. 7. Motion for Reconsideration of the above resolution having been denied. DEPARTMENT OF LABOR AND EMPLOYMENT. and (4) that he does not devote more than twenty percent of his time to work other than those described above. where such recommendatory powers as in the case at bar.ii[2] We find no merit in the instant petition. Section 2 (c). petitioner Union appeals to this Court by petition for review on certiorari alleging the following grounds: I. although present. are not exercise of independent judgment as required by law. THAT THE SECRETARY OF LABOR AND EMPLOYMENT ACTED WITH GRAVE ABUSE OF DISCRETION AND CONTRARY TO LAW IN AFFIRMING IN TOTO THE DECISION OF HONORABLE ACHILLES V. 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. lay-off. the following elements must concur or co-exist. The Labor Code recognizes two (2) principal groups of employees. assign or discipline employees. (2) that he customarily and regularly exercises discretion and independent judgment in the performance of his functions. to wit: (1) that his primary duty consists of the performance of work directly related to management policies. MANIT. In the case of Franklin Baker Company of the Philippines vs. (3) that he regularly and directly assists in the management of the establishment. the managerial and the rank and file groups. suspend. the same. in the interest of the employer.Respondent Secretary of Labor affirmed the finding of the Med-Arbiter. THAT THE SECRETARY OF LABOR AND EMPLOYMENT CLEARLY COMMITTED MISAPPREHENSION OF FACTS/EVIDENCE AND IF IT WERE NOT FOR SUCH MISAPPREHENSION IT WOULD HAVE ARRIVED AT DIFFERENT CONCLUSION FAVORABLE TO PETITIONER. II. this Court stated: ―The test of ‗supervisory‘ or ‗managerial status‘ depends on whether a person possess 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. Thus. Article 212 (m) of the Code provides: ―(m) ‗Managerial employee‘ is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire. REGIONAL OFFICE No. review and final action by the department heads and other higher executives of the company. Book III of the Implementing Rules of the Labor Code. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book. recall. transfer.‖ Under Rule I. Trajanoiii[3]. Supervisory employees are those who. to be a member of managerial staff. discharge.

powers and prerogatives as employees which would have indicated that they are indeed supervisory employees. but nothing is mentioned about their respective duties. The only instance when the name of Romy Plaza was mentioned in the said report was in reference to his designation as an OIC of the Davao City Branch while all the aspect of the creation of the said branch is awaiting final approval by the Company president and general manager (p. The imputation on the exercise of the said prerogative is misleading if not malicious because a plain reading of that portion of the report shows in clear and simple language that one who made the said hiring and payment was no other than Mr.v[5] The petition has failed to show reversible error in the findings of the Med-Arbiter and the Secretary of the Department of Labor. the Med-Arbiter evaluated the evidence as follows: ―The said joint affidavit of Ricardo Cañete. as evidenced by the certification issued by the Revenue District Office and Office of the Mayor in Davao City (pp. particularly on the report of the Sales Department. granting that they are the exact replica of a genuine and authentic original copy. 197. 198-199. John Chua.It has also been established that in the determination of whether or not certain employees are managerial employees. the Sales Manager. In ruling against petitioner Union. Romulo Plaza and Paul Michael Yap can not qualify as managerial and supervisory employees. respectively. In the case of Romulo Plaza. relative to the company branch in Davao City. There is no statement about an instance where the challenged voters effectively recommended such managerial action which required the use of independent judgment. et al. records). did not materialize. The setting up of said branch however. The aforementioned documents have not been properly identified which renders them inadmissible in evidence. the respondent Secretary of Labor rationalized: ―Based on the foregoing. there is nothing in them which specifically and precisely tells that the challenged voters can exercise the powers and prerogatives to effectively recommended such managerial actions which require the use of independent judgment. . last paragraph. and that of Pedro Diez merely tagged the challenged voters as supervisors. records).vi[6] In upholding the above findings. this Court accords due respect and therefore sustains the findings of fact made by quasi-judicial agencies which are supported by substantial evidence considering their expertise in their respective fields. But. the Med-Arbiter ruled that the petitioner Union failed to present concrete and substantial evidence to establish the fact that challenged voters are either managerial or supervising employees. we note that indeed there is nothing in the minutes of the staff meeting held on 05 March 1993. indicating that said appellee had been exercising managerial prerogatives by hiring workers and issuing a check for the payment of rentals of a warehouse. because there is nothing in the documentary evidence offered by herein petitioner-appellant showing that they are actually conferred or actually exercising the said managerial/supervisory attributes.

Assistant General Manager. Plaza was assigned as officer-in-charge of the company‘s branch in Davao. We have examined the documentary evidence. the job descriptions extant on records vividly exhibit no trace of the performance of managerial or supervisory functions (pp.x[10] The issue raised herein is basically one of fact: whether in the light of the evidence submitted by both parties. The last piece of evidence was not discussed by the Med-Arbiter. because titles or nomenclatures attached to the position is not controlling. attesting that he was ―forced to sign‖ the earlier memorandum on the job assignment of Yap and Plaza. 124-126. Finally. and nowhere is there a statement therein about any instance where the challenged voters effectively recommended any managerial action which would require the use of independent judgment.ix[9] Petitioner Union however reiterates that Loseo‘s affidavit is corroborated by the other public documents indicating that Plaza and Yap are not rank-and-file employees. petitioner Union claims that the documentary evidence was ―misapprehended‖ by public respondent.vii[7] In this petition. Plaza and Yap are managerial employees or rank-and-file employees.viii[8] The reliance of petitioner on the affidavit of Jose Loseo. the names of Yap and Plaza are listed under the heading Department Heads/Supervisors duly signed by President/General Manager Albino Gothong and Asst. evidence pinpointing that Paul Michael Yap is a supervisory employee is altogether lacking. 1993. Petitioner Union reiterates that: (1) in minutes of the staff meeting of respondent Company on August 13. 1991. and (3) in the staff meeting of March 5. (2) in the regular quarterly meeting on January 4. 1989. duly signed by the President Albino Gothong and attested by Jose F. however a perusal thereof would show that while one J. General Manager Gertrudo Lao. On the other hand. Loseo presiding officer/VP and Gertrudo Lao. Following . that Plaza and Yap were hired by him as department head and supervisor of the respondent Company cannot be sustained in light of the affidavit of said Loseo dated September 28. As earlier stated. 1993. This affidavit is sought to be discarded by respondent Company for being perjurious and ill-motivated. Chua of the Sales Department reported that ―Romy Plaza was in Davao right now acting as OIC. Personnel Manager. The fact that he was designated as shipping assistant/expediter is of no moment. it is not the function of this Court to examine and evaluate the probative value of all evidence presented to the concerned tribunal which formed the basis of its impugned decision or resolution. This Court is not a trier of facts. the claim of respondent Company that Plaza is the head of the Davao branch is belied by the certification of the City Treasurer of Davao and of the Bureau of Internal Revenue of Mandaue City that the plan to open a branch in Davao City did not materialize. records)‖.‖ the same document states that the Davao operations still had to be finalized.Likewise. Paul Michael Yap was listed as one of the staff. We find no cogent reason to disturb the finding of the Med-Arbiter and the Secretary of Labor that the copies of the minutes presented in evidence do not prove that Yap and Plaza were managerial or supervisory employees.

1990. REGALADO. and Purisima. No pronouncement as to costs.xi[11] They are binding on this Court as we are satisfied that they are supported by substantial evidence. INC. HONORABLE SECRETARY. Melo. concur. JJ. and we find no capricious exercise of judgment warranting reversal by certiorari. No. 94045 September 13. J.:p In this special civil action for certiorari. Edmundo G. Panganiban. declaring the projected certification election unnecessary and directing petitioner CENECO to continue recognizing private . vs. Manlapao for private respondent. DEPARTMENT OF LABOR AND EMPLOYMENT. WHEREFORE. the petition is denied for lack of merit. respondents. Vitug.established precedents. Enrique S. (Chairman). and CENECO UNION OF RATIONAL EMPLOYEES (CURE).. (CENECO) seeks to annul the order 1 issued by then Acting Secretary of Labor Bienvenido E. SO ORDERED. Tabino for petitioner. 1991 CENTRAL NEGROS ELECTRIC COOPERATIVE. Inc. petitioner.R. it is inappropriate to review that factual findings of the MedArbiter regarding the issue whether Romulo Plaza and Paul Michael Yap are or are not rank-and-file employees considering that these are matters within their technical expertise. Laguesma on June 6. petitioner Central Negros Electric Cooperative. (CENECO). Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.

5023. citing the ruling laid down by this Court in Batangas I Electric Cooperative Labor Union vs. under applicable decisions of the Supreme Court." 4 By reason of CENECO's refusal to renegotiate a new CBA. 1990 under Resolution No. 2 Prior to the submission of the proposal for CBA renegotiation. CENECO denied CURE's request on the ground that. supported by 282 or 72% of the 388 rank-and-file employees in the bargaining unit of CENECO. a labor union representing its rank-andfile employees. in a general assembly held on December 9. employees who at the same time are members of an electric cooperative are not entitled to form or join a union. It appears from the records that on August 15. . approved Resolution No. 1990. CURE wrote CENECO proposing that negotiations be conducted for a new collective bargaining agreement (CBA). On December 28. 90 "for the reason that the basis of withdrawal is not among the grounds covered by Board Resolution No. 1987 and extending up to March 31. 1989 and that said request is contrary to Board Resolution No. was a denial of CENECO's motion to dismiss. were furnished copies of this resolution. CENECO filed a motion to dismiss on the ground that there are legal constraints to the filing of the certification election. 1990. 1989. CENECO appealed to the Department of Labor and Employment which issued the questioned order modifying the aforestated order of the med-arbiter by directly . and the supposed benefits that our union may avail (of) under the renewed CBA. the withdrawal from membership was denied by CENECO on February 27. Young . providing for a term of three years retroactive to April 1. On January 18. 5033 dated December 13. 35 whereby it was agreed that 'tall union members shall withdraw. for certainly an owner cannot bargain with himself or his co-owners. 3 This was ratified by 259 of the 362 union members. 1989. retract. in order to avail (of) the full benefits under the existing Collective Bargaining Agreement entered into by and between CENECO and CURE.respondent CENECO Union of Rational Employees (CURE) as the sole and exclusive bargaining representative of all the rank-and-file employees of petitioner's electric cooperative for purposes of collective bargaining. Romeo A. 5 (BATANGAS case) to the effect that "employees who at the same time are members of an electric cooperative are not entitled to form or join unions for purposes of collective bargaining agreement. Serapio issued an order. However. Bacolod District. CENECO and the Department of Labor and Employment. Inc. CURE members. in effect. CURE filed a petition for direct recognition or for certification election." Med-Arbiter Felizardo T. 6 granting the petition for certification election which. and directing the holding of a certification election between CURE and No Union.. 1989. or recall the union members' membership from Central Negros Electric Cooperative.. dated November 22. CENECO entered into a collective bargaining agreement with CURE. 1987.

3. is properly vested in the NEA which has control and supervision over all electric cooperatives. this petition. it claims. as well as the Med-Arbiter. as a consequence. petitioner does not hesitate to admit that the prohibition does not extend to employees of an electric cooperative who are not members of the cooperative. Thus. The issue. therefore.certifying CURE as the exclusive bargaining representative of the rank-and-file employees of CURE. . and 4. it avers that this is not absolute. CENECO avers that the med-arbiter has no jurisdiction to rule on the issue of withdrawal from membership of its employees in the cooperative which. Assuming that the Secretary has jurisdiction. As culled from the records. We first rule on the alleged procedural infirmities affecting the instant case. The Secretary of Labor. CURE failed to exhaust administrative remedies by not referring the matter of membership withdrawal to the NEA. actually involves a determination of whether or not the employees of CENECO who withdrew their membership from the cooperative are entitled to form or join CURE for purposes of the negotiations for a collective bargaining agreement proposed by the latter. it opines that employees of an electric cooperative who at the same time are members thereof are not allowed to form or join labor unions for purposes of collective bargaining. The petition is destitute of merit. Hence. To allow the withdrawal of the members of CENECO from the cooperative without justifiable reason would greatly affect the objectives and goals of petitioner as an electric cooperative. the employees' acquisition of membership in the union cannot be allowed for the following reasons: 1. It was made as a subterfuge or to subvert the ruling in the BATANGAS case: 2. has no jurisdiction over the issue of the withdrawal from membership which is vested in the National Electrification Administration (NEA) which has direct control and supervision over the operations of electric cooperatives. certiorari will not lie. it is the submission of CENECO that the withdrawal from membership in the cooperative and. While CENECO recognizes the employees' right to self-organization. Petitioner CENECO argues that respondent Secretary committed a grave abuse of discretion in not applying to the present case the doctrine enunciated in the BATANGAS case that employees of an electric cooperative who at the same time are members of the electric cooperative are prohibited from forming or joining labor unions for purposes of a collective bargaining agreement. However.

Under Article 256 of the Labor Code. Section 9 of the Articles of Incorporation and By. In so doing. Hence. The argument of CENECO that the withdrawal was merely to subvert the ruling of this Court in the BATANGAS case is without merit. the member is merely required to surrender his membership certificate and he is to be refunded his membership fee less any obligation that he has with the cooperative." The same section provides that upon withdrawal. In the case at bar. it becomes readily apparent that the sole basis for petitioner's motion is the illegality of the employees' membership in respondent union despite the fact that they allegedly are still members of the cooperative. Furthermore. and there is nothing to prevent it from doing so. nowhere in said case is it stated that member-employees are prohibited from withdrawing their membership in the cooperative in order to join a labor union. It would be absurd to fault the employees for the neglect or laxity of petitioner in protecting its own interests. Petitioner itself adopted the aforesaid argument in seeking the dismissal of the petition for certification election filed with the med-arbiter. it is petitioner herein who is actually questioning the propriety of the withdrawal of its members from the cooperative. and the finding made by the latter was merely in answer to the arguments advanced by petitioner. It is apparent that incidental to the power of the med-arbiter to hear and decide representation cases is the power to determine who the eligible voters are. Petitioner could have brought the matter before the NEA if it wanted to and.Laws of CENECO provides that "any member may withdraw from membership upon compliance with such uniform terms and conditions as the Board may prescribe. Lastly. There appears to be no other condition or requirement imposed upon a withdrawing member. However. As discussed by the Solicitor General. there is no just cause for petitioner's denial of the withdrawal from membership of its employees who are also members of the union. petitioner is deemed to have submitted the issue of membership withdrawal from the cooperative to the jurisdiction of the med-arbiter and it is now estopped from questioning that same jurisdiction which it invoked in its motion to dismiss after obtaining an adverse ruling thereon. if such remedy had really been available. The case referred to merely declared that employees who are at the same time members of the cooperative cannot join labor unions for purposes of collective bargaining. It appears that the Articles of Incorporation of CENECO do not provide any ground for withdrawal from membership which . if any. 7 The alleged board resolutions relied upon by petitioner in denying the withdrawal of the members concerned were never presented nor their contents disclosed either before the med-arbiter or the Secretary of Labor if only to prove the ratiocination for said denial.From a perusal of petitioner's motion to dismiss filed with the med-arbiter. Article I. it obviously becomes necessary to consider first the propriety of the employees' membership withdrawal from the cooperative before a certification election can be had. to have a valid certification election at least a majority of all eligible voters in the unit must have cast their votes. Hence. CENECO never averred non-compliance with the terms and conditions for withdrawal. it is axiomatic that the med-arbiter should determine the legality of the employees' membership in the union.

As pointed out by CURE. the mere fact that no opposition is made does not warrant a direct certification. vested naturally in the employee's to choose their collective bargaining representative.. he has in effect arrogated unto himself the right. This amendment affirms the superiority of the certification election over the direct certification which is no longer available now under the change in said provision. . membership in the cooperative is on a voluntary basis. wherein the respondent Minister directly certified the union.. 1987. the direct certification originally allowed under Article 257 of the Labor Code has apparently been discontinued as a method of selecting the exclusive bargaining agent of the workers. The avowed policy of the State to afford fall protection to labor and to promote the primacy of free collective bargaining mandates that the employees' right to form and join unions for purposes of collective bargaining be accorded the highest consideration. As pointed out by petitioner in its petition. Membership in an electric cooperative which merely vests in the member a right to vote during the annual meeting becomes too trivial and insubstantial vis-a-vis the primordial and more important constitutional right of an employee to join a union of his choice. some of whom have never been members of the cooperative. By virtue of Executive Order No. (c) By directly certifying a Union without sufficient proof of majority representation.000. the 390 employees of CENECO. the resignation of the member. (d) He has in effect imposed upon the petitioner the obligation to negotiate with a union whose majority representation is under serious question. it does not enjoy the blessing of the employees. In addition. It is inconceivable how the withdrawal of a negligible number of members could adversely affect the business concerns and operations of CENECO. that the direct certification ordered by respondent Secretary is not proper. The right of the employees to self-organization is a compelling reason why their withdrawal from the cooperative must be allowed. withdrawal therefrom cannot be restricted unnecessarily.. Petitioner is therefore under threat of being held liable for refusing to negotiate with a union whose right to bargaining status has not been legally established.accordingly gives rise to the presumption that the same may be done at any time and for whatever reason. 8 We have said that where a union has filed a petition for certification election. what the respondent Minister achieved in rendering the assailed orders was to make a mockery of the procedure provided under the law for representation cases because: . we held that: . Besides. which became effective on March 4. 9 In said case which has similar features to that at bar. 111..employees is an expression of their preference for union membership over that of membership in the cooperative. Hence. We rule. represent a very small percentage of the cooperative's total membership of 44. The right to join an organization necessarily includes the equivalent right not to join the same. however. This is highly irregular because while the Union enjoys the blessing of the Minister.

Rollo. Petition. The most effective way of determining which labor organization can truly represent the working force is by certification election. 179 SCRA (1989). 20.file employees of CENECO with CURE and No Union as the choices therein. 2 Annex J. 139. Ibid. Id. Footnotes 1 Annex A. 80. Ferrer-Calleja.. 3 Annex 4.....While there may be some factual variances. the questioned order for the direct certification of respondent CURE as the bargaining representative of the employees of petitioner CENECO is hereby ANNULLED and SET ASIDE. vs. 7 Rollo. The med-arbiter is hereby ordered to conduct a certification election among the rank-and.. Inc.. concur. 163 SCRA 323 (1988). Ibid. 107. J. Comment of CURE. 9 Colgate Palmolive Philippines. 6 Annex F. Paras and Padilla. Sarmiento. Id. Ibid. 164 SCRA 12 (1988). etc. Petition. et al.. JJ. 108. is on leave.. What is equally important is that everyone be given a democratic space in the bargaining unit concerned. Ibid. 10 WHEREFORE.. 167-170. Bureau of Labor Relations (BLR) et al. Ople. et al. 8 National Association of Free Trade Unions (NAFTU-TUCP) vs. .. 5 167 SCRA 136 (1988)... the rationale therein is applicable to the present case in the sense that it is not alone sufficient that a union has the support of the majority. Melencio-Herrera (Chairperson). 10 Associated Labor Unions (ALU) vs. SO ORDERED. 4 Annex I.

HONORABLE SECRETARY OF LABOR.[G. G. Cagayan de Oro City. CELENIO N. OFFICE OF THE SECRETARY DEPARTMENT OF LABOR AND HON. entitled PCPPI v. on the grounds that (a) the members of the Union were managers and (b) a supervisors‘ union can not affiliate with a federation whose members include the rank and file union of the same company.R.ARBITER NAPOLEON V. [G. 725-90. for Cancellation of Registration Certificate No. 1999] PEPSI COLA PRODUCTS PHILIPPINES. Cancel and/or Revoke Charter Affiliation of the Union. MED ARB Case No. 1990. MED . No. R100-9101-RU-002 for Certification Election filed by Pepsi Cola Supervisors Union-UOEF (Union). DECISION PURISIMA. INC.COLA SUPERVISORY EMPLOYEES ORGANIZATION . R. the Pepsi-Cola Employees Organization-UOEF (Union) filed a petition for certification election with the Med-Arbiter seeking to be the exclusive bargaining agent of supervisors of Pepsi-Cola Philippines. 103300. X. PEPSI filed with the Bureau of Labor Relations a petition to Set Aside. 1999] PEPSI . 725-90. in his capacity as MedArbiter Labor Regional Office No. PEPSI submitted its position paper to the BLR in Case No. On September 4. R1000-9102-RU008.: These are petitions for certiorari relating to three (3) cases filed with the Med-Arbiter.COLA PRODUCTS PHILIPPINES. R1000-9104-RU-012. Pepsi-Cola Labor Unity (PCLU) and PepsiCola Employees Union of the Philippines (PEUP). J. Cancel and/ or Revoke the Charter Affiliation of the Union. DAING. CAGAYAN DE ORO PEPSI COLA SUPERVISORS UNION (UOEF).. 1990. FERNANDO & PEPSI . . the Med-Arbiter granted the Petition. August 10. 96663. 96663 The facts that matter can be culled as follows: Sometime in June 1990.R. with the explicit statement that it was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together with two (2) rank and file unions. (PEPSI). vs. No. No.1990. vs. to wit: MED ARB ROX Case No. and MED-ARB ROX Case No.UOEF. PCEUUOEF and docketed as Case No. August 10. petitioner. petitioner. 1990. Re: Petition to Set Aside. On July 23. respondents. On August 29. PEPSI presented a motion to re-open the case since it was not furnished with a copy of the Petition for Certification Election. On July 12. Inc. 11492-LC in favor of the Union. respondents.

Ineligibility of managerial employees to join any labor organization. Even as the Petition to Cancel. assist or form any labor organization. the Secretary of Labor denied the appeal and Motion for Reconsideration. right of supervisory employees. 1990. On October 12. 1990. the Court granted the prayer for temporary restraining order and/or preliminary injunction. as amended. 1991. 1990.‖ In its Comment dated March 19. On February 6. PEPSI filed a Notice of Appeal and Memorandum of Appeal with the Secretary of Labor. and the inclusion of managerial employees is not one of the grounds. by Republic Act 6715. 245. the private respondent herein) remains to be a legitimate labor organization. It also presented an urgent Ex-Parte Motion to Suspend the Certification Election. xxx xxx xxx xxx the Petition to Cancel. PEPSI received summons to appear at the pre-trial conference set on September 25. ―Supervisory employees shall not be eligible for membership in a labor organization of the rank and file employees but may join. The grounds for the cancellation of the registration certificate of a labor organization are provided in Section 7 of Rule II. assist or form separate labor organizations of their own.‖xii[1] . 1991. The pivot of inquiry here is: whether or not a supervisors‘ union can affiliate with the same Federation of which two (2) rank and file unions are likewise members. PEPSI found its way to this Court via the present petition for certiorari. Revoke and Suspend Union Charter Certificate was pending before the BLR. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. which motion was granted on October 18.Managerial employees are not eligible to join. assist or form separate labor organization of their own..‖ This provision of law does not prohibit a local union composed of supervisory employees from being affiliated to a federation which has local unions with rank-andfile members as affiliates. 1990.On September 21. Book V of the Omnibus Rules Implementing the Labor Code. 1990 but which the hearing officer rescheduled on October 21. Revoke or Set Aside the Charter Certificate of the private respondent is anchored on the alleged ground that certain managerial employees are included as members thereof. On November 12. 1990. without violating Article 245 of the Labor Code (PD 442). which provides: ―Art. the Federation argued that: ―The pertinent portion of Article 245 of the Labor Code states that. questioning the setting of the certification election on the said date and five (5) days after. xxx (in this case.

On April 8, 1991, the Secretary of Labor and Employment, through the Office of the Solicitor General, sent in a Comment, alleging inter alia, that: ―xxx under Article 259 of the New Labor Code, only orders of the Med-Arbiter can be appealed through the Secretary of Labor and only on the ground that the rules and regulations for the conduct of the certification election have been violated. The Order of the Representation Officer is ―interlocutory‖ and not appealable. xxx xxx until and unless there is a final order cancelling its certificate of registration or charter certificate, a labor organization remains to be a legitimate labor organization entitled to exercise all the rights and duties accorded to it by the Labor Code including the right to be certified as a bargaining representative. xxx xxx Public respondent cannot be deemed to have committed grave abuse of discretion with respect to an issue that was never presented before it for resolution. xxx Article 245 of the New Labor Code does not preclude the supervisor‘s union and the rank-and-file union from being affiliated with the same federation. xxx xxx xxx

A federation of local union is not the labor organization referred to in Article 245 but only becomes entitled to all the rights enjoyed by the labor organization (at the company level) when it has complied with the registration requirements found in Articles 234 and 237. Hence, what is prohibited by Article 245 is membership of supervisory employees in a labor union (at the company level) of the rank and file. xxx xxx In other words, the affiliation of the supervisory employee‘s union with the same federation with which the rank and file employees union is affiliated did not make the supervisory employees members of the rank and file employee‘s union and vice versa.‖xiii[2] xxx PEPSI, in its Reply dated May 7, 1991, asserted: ―It is our humble contention that a final determination of the Petition to Set-Aside, Cancel, Revoke Charter Union Affiliation should first be disposed of before granting the Petition for the Conduct of Certification Election. To allow the conduct of the certification election to proceed would make any decision arrived at by the Bureau of Labor Relations useless inasmuch as the same would necessarily be rendered moot and academic.‖xiv[3] On June 7, 1991, petitioner again filed a Supplemental Reply stressing: ―It is likewise stressed that officials of both the PCLU and PEUP are top ranking officers of UOEF, the federation of supervisors‘ union, to wit: POSITION IN RANK AND FILE UNION POSITION IN FEDERATION

1. Rogelio de la Cruz 2. Felix Gatela 3. Carlito Epino xxx xxx xxx

PCLU -President PEUP - President PCLU Board Member

General Vice President General Treasurer Educational Research Director

The respondent supervisory union could do indirectly what it could not do directly as the simple expedient of affiliating with UOEF would negate the manifest intent and letter of the law that supervisory employees can only ―join, assist or form separate labor organizations of their own‖ and cannot ―be eligible for membership in a labor organization of the rank and file employees.‖xv[4] On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder, claiming thus: ―xxx an employer has no legal standing to question the validity of a certifi cation election. xxx For this reason, the Supreme Court has consistently held that, as a rule, a certification election is the sole and exclusive concern of the employees and that the employer is definitely an intruder or a mere bystander (Consolidated Farms vs. Noriel, L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation vs. Ople, L- 43861, September 4, 1981, 107 SCRA 211; Trade Unions of the Philippines and Allied Services (TUPAS) vs. Trajano No. L-61153, January 17, 1983, 120 SCRA 64]. xxx xxx xxx

In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984, 127 SCRA 268, the Supreme Court (then dealing with the interpretation of Section 3 of the Industrial Peace Act, from which Section 245 of the Labor Code was derived) grappled with the issue in the case at bar. It held that, ‗There is nothing in the provisions of the Industrial Peace Act which provides that a duly registered local union affiliating with a national union or federation loses its legal personality, or its independence.‘ xxx xxx xxx

However, there is absolutely nothing in the Labor Code that prohibits a federation from representing or exercising influence over its affiliates. On the contrary, this is precisely the reason why federations are formed and are allowed by law to exist.‖xvi[5] On November 8, 1991, the Union also filed a Rejoinder. On December 9, 1991, the Court resolved to DISMISS the case for ―failure to sufficiently show that the questioned judgment is tainted with grave abuse of discretion.‖

In a Resolution dated March 2, 1992, the Second Division of the Court resolved to grant the motion for reconsideration interposed on January 28, 1992.
G.R. No. 103300

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the Decision and Order of the Secretary of Labor and Employment, dated October 4, 1991 and December 12, 1991, respectively. The decretal portion of the Med-Arbiter Order under attack, reads: ―WHEREFORE, premises considered, an order is hereby issued: 1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102RU-008 for lack of merit; and 2. Ordering the conduct of a Certification Election to be participated by and among the supervisory workers of the respondent company, Pepsi-Cola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City, including all the satellite warehouse within the territorial coverage and control of the Cagayan de Oro Pepsi-Cola Plant. The choices are as follows: 1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.) 2. No union The parties are directed to attend a pre-election conference on June 10, 1991, 2:30 p.m. at the Regional Office to determine the qualification of the voters and to thresh out the mechanics of the election. Respondent/employer is directed to submit five (5) copies of the names of the rank and file workers taken from the payroll on October 131, 1991, alphabetically arranged (sic) indicating their names and positions and dates of employment and to bring the aforementioned payroll during the pre-election conference for verification purposes.‖xvii[6] xxx The supervisory employees of the Union are: POSITION 1. Felipe Valdehueza 2. Gerberto Vertudazo 3. Paul Mendoza 4. Gilberto Emano, Jr. 5. Jaime Huliganga Route Manager C & C Manager Sales Service Department Manager Route Manager Chief Checker

Jovenal Albaque 10. OS-A232-91. PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF WITH A FEDERATION ALREADY AFFILIATED WITH THE RANK AND FILE UNION. Deodoro Ramos Accounting Manager Route Manager Route Manager Route Manager Route Manager Route Manager Route Manager Route Manager Route Manager Warehouse Operations Manager and Maintenance Manager On June 6. contending that: “PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PRIVATE RESPONDENT’S OFFICERS AND MEMBERS ARE NOT MANAGERIAL EMPLOYEES. Inc. R1000-9104-RU-012 and R1000-9102-RU-008 are hereby referred to the Office of the Regional Director which has jurisdiction over these cases. Apolinario Opiniano 12. 1991. docketed as Case No. PEPSI brought the instant petition for certiorari. 7. The call for certification election among the supervisory workers of the Pepsi-Cola Products Philippines. Cagayan de Oro City is hereby sustained. Marco Ilano 16. Alfredo Panas 13. Sr. Raul Yacapin 9. Arthur Rodriguez 15. 1991. Fulvio Narciso 11. Simplicio Nelie 14. the Order of the Med-Arbiter dated 23 May 1991 is hereby modified to the effect that MED ARB ROX Case No.‖xviii[7] On October 19. . 11492-LC in favor of the Union. Meanwhile. PEPSI appealed the said Order to the Secretary of Labor and Employment on the ground of grave abuse of discretion. the Secretary modified the appealed decision. the BLR issued Registration Certificate No. PEPSI presented a motion for reconsideration of the aforesaid Order but the same was denied on December 12. On October 4. at its plant at Tin-ao. Dissatisfied therewith. 1991. Elias Edgama. ruling thus: ―WHEREFORE. Romanico Ramos 8.6. 1991.

Hon. v. there was a Resolution of the Union withdrawing from the Federation. 1980. Espino. the court resolved the case. 96 SCRA 361. et. it must be stressed that on September 1. however to indulge in academic discussion of a moot question. Feliciano..24087. 96663.R. G. 205 SCRA 12. al.36188 .. Laguesma. give our thanks to the said federation for its help and guidance rendered to this Union in the past.. In the case of F. No. 96 SCRA 402). Court of Appeals. al. No.37586 February 29.R. as it is hereby RESOLVED. At the outset.. Its Resolution would have been useless. [1992] decided by the Third Division with J. 1915. Crisanto Aragon.. al.. February 28. has thus become moot and academic in view of the Union‘s withdrawal from the federation. vs. 1980. L . if the intent of the law is to avoid a situation where supervisors would merge with the rank-and-file or where the supervisors‘ labor organization would represent conflicting interests. Bidin.PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF DISCRETION IN RULING THAT THE INSTITUTION OF A PETITION FOR CANCELLATION OF UNION REGISTRATION DOES NOT CONSTITUTE A PREJUDICIAL QUESTION TO A PETITION CERTIFICATION ELECTION. the Court dismissed the petition for being moot and academic.”xix[8] The petitions must fail for want of merit. . No. 95 SCRA 85. vs. Its judgment would have been impossible of execution xxx. to wit: ―BE IT RESOLVED. Inc. G. et al. L-37960. 1992. Fisher v. the Court held: ―It is unnecessary. Jr. then a local supervisors‘ union should not be allowed to affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union activity in the company. 1980. In a long line of cases (Narciso Nakpil. whether or not the supervisors union can be affiliated with a Federation with two (2) rank and file unions directly under the supervision of the former.‖ However. No. C. Jr. as it hereby WITHDRAWS its affiliation from the Union de Obreros Estivadores de Filipinas. The question left for the court was a moot one... March 31. Bidin.‖xx[9] The issue in G. R. ruling that ―even if a case were moot and academic. Gutierrez. that this UNION WITHDRAW. et. Toribio v. et al.. Yangco Steamship Co.R. Romero and now Chief Justice Davide. as members it was ratiocinated: ― xxx xxx xxx Thus. a statement of the governing principle is appropriate in the resolution of dismissal for the guidance not only of the parties but of others similarly situated. as ponente and JJ. January 22. Gumaua v. Inc. xxx‖xxi[10] In Atlas Lithographic Services. G. et. L. xxx xxx The action would have been dismissed at any time on a showing of the facts as they were . and at the same time. in the case of University of San Agustin.

183 SCRA 451 [1990]. xxx xxx xxx‖ As regards the issue of whether or not confidential employees can join the labor union of the rank and file. but an investigation of a non-adversarial and fact finding character.xxx xxx xxx The prohibition against a supervisors‘ union joining a local union of rank and file is replete with jurisprudence. as . Inc. The Court emphasizes that the limitation is not confined to a case of supervisors‘ wanting to join a rank-and-file union. 245 of the Labor Code singles out managerial employee as ineligible to join. applies to this case. handling. assist or form any labor organization. Hon. the supervisors will be comingling with those employees whom they directly supervise in their own bargaining unit. al. Philippine Telegraph and Telephone Corporation v. ―At any rate. December 29. The intent of the law is clear especially where. or care and protection of the employer‘s property. and Pier 8 Arrastre and Stevedoring Services. Ferrer-Calleja. 1995.‖ (Associated Labor Unions (ALU) v. is in point. Golden Farms vs. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed. G. 93468. The prohibition extends to a supervisors‘ local union applying for membership in a national federation the members of which include local unions of rank and file employees. what was held in the case of National Association of Trade Unions (NATU) . 110854. under the doctrine of necessary implication. 1994.‖ Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for certification election. No. the Court applies the established rule correctly followed by the public respondent that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. While Art. it still had the legal personality to perform such act absent an order directing the cancellation. [1991]. in her capacity as Director. Hon.R. the Court ruled: ―xxx A confidential employee is one entrusted with confidence on delicate matte rs. NLRC. 203 ACRA 597. the following ruling in the case of Association of the Court of Appeals Employees (ACAE) vs. Sanchez. 144 SCRA 628.. Pura FerrerCalleja. Nieves Roldan-Confessor et al. Citing Bulletin Publishing Corporation vs. Torres. Al. 179 SCRA 127 [1989]. Bureau of Labor Relations et. 598. the technical rules of evidence do not apply if the decision to grant it proceeds from an examination of the sufficiency of the petition as well as a careful look into the arguments contained in the position papers and other documents. confidential employees are similarly disqualified.635.R. et. vs. The rationale for this is that at the time the respondent union filed its petition. G. or with the custody.Republic Planters Bank Supervisors Chapter vs. Thus. NLRC. February 14. No. Hon. as in this case at bar.. D. R. 175 SCRA 471.. to wit: xxx It is a well-settled rule that ―a certification proceedings is not a litigation in the sense that the term is ordinarily understood.

that ―confidential employees such as accounting personnel. by implication. they might jeopardize that interest which they are duty bound to protect. Ferrer-Calleja reiterated in Philips Industrial Development. 245 as if the disqualification of confidential employees were written in the provision. Inc. The mere fact that an employee is designated manager does not necessarily make him one. So-called gaps in the law develop as the law is enforced. to act as its representatives. Designation should be reconciled with the actual job description of subject employees. Chief Checkers and Warehouse Operations Managers are supervisors while Credit & Collection Managers and Accounting Managers are highly confidential employees. then they could be governed by their own motives rather than the interest of the employers. vs. we took into consideration the rationale behind the disqualification of managerial employees expressed in Bulletin Publishing Corporation v. at the time of the enactment. may become the source of undue advantage.‖ The Court finds merit in the submission of the OSG that Route Managers. It is not farfetched that in the course of collective bargaining. unionization of confidential employees for the purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act ―in the interest of‖ the employers. What is thought.elucidated in several case. Otherwise. the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. Theirs is not a final determination of the company policies since they have to report to their respective superior. Every statute is understood. A careful scrutiny of their job description indicates that they don‘t lay down company policies. including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. to be an all embracing legislation maybe inadequate to provide for the unfolding events of the future. Ex necessitate legis xxx In applying the doctrine of necessary implication. Sanchez.‖ Stated differently. powers. Inc. Along the same line of reasoning we held in Golden Farms. radio and telegraph operators who. managerial employees are supposed to be on the side of the employer. The employer is not assured of such protection if these employees themselves are union members. having access to confidential information. Moreover. If confidential employees could unionize in order to bargain for advantages for themselves. or to make effective rights. It is the same reason that impelled this Court to consider the position of confidential employees as included in the disqualification found in Art.. The Union can also become company – dominated with the presence of managerial employees in Union membership. Civil Service Commission where we said: No statute can be enacted that can provide all the details involved in its application. thus ―xxx if these managerial employees would belong to or be affiliated with a Union. privileges or jurisdiction which it grants. There is always an omission that may not meet a particular situation. and to see to it that its interest are well protected. there would be an absurd situation where one can be given the title just to be deprived of the right to be a . the latest of which is Chua v. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication xxx. NLRC. in the collective bargaining process. to contain all such provisions as may be necessary to effectuate its object and purpose. Collective bargaining in such a situation can become one-sided. Said employee(s) may act as spy or spies of either party to a collective bargaining agreement.

R. 35-45. No. BIENVENIDO E.. pp. petitioner. HENRY PABEL. In the case of National Steel Corporation v. 2000] PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES. Vitug. JR.1996. Undersecretary of Labor and Employment. 103743. it was stressed that: ―What is essential is the nature of the employee‘s function and not the nomenclature or title given to the job which determines whether the employee has rank and file or managerial status. 31-34. G. (Chairman). JJ. and Gonzaga-Reyes.: Miso Before us is a petition for certiorari seeking to annul the Resolution28[1] and the Order29[2] dated April 17. 1991. No pronouncement as to costs. dated October 4. of the Secretary of Labor and Employment is MODIFIED in that Credit and Collection Managers and Accounting Managers are highly confidential employees not eligible for membership in a supervisors‘ union. J. Panganiban. of public 28[1] Rollo. XI and/or the Representation Officer of the Industrial Relations Division who will act for and in his behalf. SECOND DIVISION [G. LAGUESMA.. pp.101738. 29[2] Rollo. 1991. the petitions under consideration are DISMISSED but subject Decision. concur. .‖ WHEREFORE. PCOP. J.member of a union. Director of the Department of Labor and Employment Regional Office No. HON. HON. Melo. in the result. January 29. DECISION DE LEON. vs. No. R. ASSOCIATED LABOR UNION and FEDERATION OF FREE WORKERS. 1991 and August 7. Laguesma.. April 12.BISLIG SUPERVISORY AND TECHNICAL STAFF EMPLOYEES UNION. or whether he is a supervisory employee. SO ORDERED. respectively. respondents.

53-62. PBSTSEU instituted a Petition35[8] for Certification Election to determine the sole and exclusive bargaining agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement (CBA) purposes. with four (4) choices. p. Laguesma. But PICOP failed to file any comment or position paper. Surigao del Sur. (3) ALU. (2) FFW. Another Order38[11] issued on the same day set the holding of a certification election among PICOP's supervisory and technical staff employees in Tabon. More or less 487 of these supervisory and technical staff employees are signatory members of the private respondent PICOPBislig Supervisory and Technical Staff Employees Union (PBSTSEU). 49-51. p. 542. with principal place of operations at Tabon. 1989. Surigao del Sur. 33[6] Rollo. pp.34[7] On August 9. Gamolo issued an Order37[10] granting the petitions for interventions of the FFW and ALU. 321-333. 199030[3] of Med-Arbiter Phibun D. Nexâ old On September 21. Ramirez. 31[4] Rollo. 37[10] Rollo. . It has over 9. pp. On September 14.respondent Bienvenido E. 38[11] Rollo. p. which reversed the Order dated March 27. In a Notice36[9] dated August 10. 1989. ibid. 36[9] Issued by Assistant Regional Director Teodulo B. Department of Labor and Employment (DOLE). Pura declaring that supervisors and section heads of petitioner under its new organizational structure are managerial employees and should be excluded from the list of voters for the purpose of a certification election among supervisory and technical staff employees of petitioner. acting then as Undersecretary. PICOP appealed39[12] the Order which set the holding of the certification election contending that the Med-Arbiter committed grave abuse of discretion in deciding the case without giving PICOP the opportunity to file its 30[3] Rollo.00032[5] employees. 94433[6] of whom are supervisory and technical staff employees. Bislig. 39[12] Rollo. 52. private respondents Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective petitions for intervention. Rollo. Regional Office XI in Davao City. 1989. 1989 but it was reset to August 25. 1989. pp. at the instance of PICOP. 34[7] Ibid. now the Secretary. 32[5] Rollo. 35[8] Docketed as R-202-ROXI MED-UR-59-89.31[4] The facts of the case are the following: Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper and timber products. Meanwhile. 46-47. Med-Arbiter Arturo L. 48. of the Department of Labor and Employment (DOLE). 332. pp. and (4) no union. Bislig. the initial hearing of the petition was set on August 18. as it requested a fifteen (15) day period within which to file its comments and/or position paper. p. namely: (1) PBSTSEU. 1989.

comprising each department. 48[21] Rollo. Forest Resource Business and Support Services Business. with modification allowing the supervising and staff employees in Cebu. 51[24] Rollo. 1989. 45[18] Rollo. namely: Paper Products Business. 542-694. 98-110. 63-92. and that PBSTSEU had no personality to file the petition for certification election. 402-406. Pura issued an Order48[21] dated March 27.45[18] Maniâ kx Following the submission by the parties of their respective position papers46[19] and evidence47[20] on this issue. pp. 52[25] See Note No. ineligible to form or join any labor organization.1989. pp. 46[19] Rollo. pp. p. 44[17] Rollo. ALU likewise appealed. 93-97. Drilon. 41[14] Franklin M. respectively. pp. 49[22] Petition dated April 12.44[17] PICOP advanced the view that considering the alleged present authority of these section managers and unit managers to hire and fire. 265-272. the Secretary of the Labor41[14] issued a Resolution42[15] dated November 17. 103. 250-264. During the pre-election conference on January 18. 1989 which upheld the Med-Arbiter's Order dated September 17. 322. issued the assailed Order52[25] dated April 17. now Senator. pp. supra.311-320.p.50[23] PICOP submitted evidence militating against the appeal. PBSTSEU appealed49[22] the Order of the Med-Arbiter to the Office of the Secretary.237-249. 290-310. 273-276. holding that supervisors and section heads of the petitioner are managerial employees and therefore excluded from the list of voters for purposes of certification election. acting as the then Undersecretary of Labor. Timber Products Business.1. p. A division manager heads the divisions comprising each business group. and hence. PICOP questioned and objected to the inclusion of some section heads and supervisors in the list of voters whose positions it averred were reclassified as managerial employees in the light of the reorganization effected by it. 148-163. 334-361. head the sections and independent units. now called section managers and unit managers. Section heads and supervisors. 1990. DOLE. After PBSTSEU filed its Comments40[13] to petitioner's appeal. 47[20] Rollo. 321-333. 111-146. pp.51[24] Public respondent Bienvenido E. pp. 50[23] Rollo. Med-Arbiter Phibun D. 43[16] Rollo. they are classified as managerial employees. 1990. . 42[15] Rollo. A department manager heads the departments comprising each division. 1990.543. Davao and Iligan City to participate in the certification election.43[16] Under the Revised Organizational Structure of the PICOP. the company was divided into four (4) main business groups. 164-236.277-289. pp. 1990 of the Med-Arbiter and declaring that the 40[13] Dated October 5.comments/answer. Laguesma. A vice. Rollo.president or assistant vice-president heads each of these business groups. 1991 setting aside the Order dated March 27. Rollo.

p. to wit: Maniksâ I. supra. PBSTSEU. 54[27] See Note No. ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION. . THE PUBLIC RESPONDENT. 55[28] Rollo. Hence.2. PICOP anchors its petition on two (2) grounds. as the case may be. 14.715. However. who have been designated as Section Managers and Unit Managers. TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE TO PROVE THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM JOINING OR FORMING A UNION REPRESENTED BY CO-RESPONDENT PBSTSEU. pp. 1991 denied PICOP's motion for reconsideration.subject supervisors and section heads are supervisory employees eligible to vote in the certification election. LAGUESMA. IN VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE CHANGES IN THE ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED IN JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR DECISION. THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. ALSO ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION. IN A CAPRICIOUS. TANTAMOUNT TO ARBITRARILY ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE TOTALLY DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND MERE ALLEGATIONS OF PRIVATE RESPONDENT. 703. LAGUESMA. UNDERSECRETARY OF LABOR AND EMPLOYMENT. DENIED YOUR PETITIONER'S URGENT MOTION FOR RECONSIDERATION. 1991. HONORABLE BIENVENIDO E. II. this petition. THAT THE REORGANIZATION OF YOUR PETITIONER WAS A SHAM AND CALCULATED MERELY TO FRUSTRATE THE UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY PERSONNEL.55[28] Manikanä PICOP's main thesis is that the positions Section Heads and Supervisors. were converted to managerial employees under the decentralization and reorganization 53[26] Rollo. AND SOLELY ON THIS BASIS. PICOP sought53[26] reconsideration of the Order dated April 7. public respondent in his Order54[27] dated August 7.

Pepsi Cola Products Philippines v. Theirs is not a final determination of the company policies inasmuch as any action taken by them on matters relative to hiring. the mere fact that an employee is designated manager" does not ipso facto make him one. Pagkakaisa ng mga Manggagawa sa Triumph International-United Lumber and General Workers of the Philippines v.. a thorough dissection of the job description61[34] of the concerned supervisory employees and section heads indisputably show that they are not actually managerial but only supervisory employees since they do not lay down company policies. PICOP's contention that the subject section heads and unit managers exercise the authority to hire and fire62[35] is ambiguous and quite misleading for the reason that any authority they exercise is not supreme but merely advisory in character. Top and Middle Managers have the authority to devise. 1987) 59[32] Pepsi-Cola Products Phil. Inc. 559-563. 127 (1998) citing Engineering Equipment. "managerial employees" therefore fall in two (2) categories.file employees of an organization. PICOP emphatically stresses that it could not have conceptualized the decentralization program only for the purpose of "thwarting the right of the concerned employees to self-organization. Ferer-Calleja. namely. right of supervisory employees.60[33] Oldmisâ o In the petition before us. Management 11 (3rd. not being meritorious. 181 SCRA 119. which was realized only in 1989 and fully implemented in 1991. 133 SCRA 752. Ineligibility of managerial employees to join any labor organization. 103. the "managers" per se composed of Top and Middle Managers. Secretary of Labor and Employment. Office of the Secretary Department of Labor et al. 549-554. 245.57[30] we had occasion to elucidate on the term "managerial employees. ed. G. v. 62[35] Rollo.. 300 SCRA 120. 57[30] 288 SCRA 15 (1998) 58[31] Ibid.R.program it implemented in 1989. Laguesma. First. 1999. pp. Middle Managers and First Line Managers. Furthermore.96663. August 10. implement and control strategic and operational policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and. and the "supervisors" composed of First-Line Managers. -Managerial employees are not eligible to join. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. v. 56[29] Art. v. 126 (1990) 60[33] Dunlop Slazenger (Phils. 555-558. assist or form any labor organization. must fail and the same should be as it is hereby dismissed. with alleged authority to hire and fire employees. PICOP contends that no malice should be imputed against it for implementing its decentralization program only after the petition for certification election was filed inasmuch as the same is a valid exercise of its management prerogative. In United Pepsi-Co/a Supervisory Union (UPSU) v.58[31] Thus. assist or form separate labor organizations of their own. Secretary of Labor. No. 545-548. Stoner & Charles Wankel. Being managerial employees. 760-761 (1984) 61[34] Rollo. Designation should be reconciled with the actual job description of the employee. citing James A. they are ineligible for union membership under Article 24556[29] of the Labor Code.).103300. and that said program has long been in the drawing boards of the company. p.59[32] for it is the job description that determines the nature of employment. G. . et al.. NLRC. Under this distinction.F." Managerial employees are ranked as Top Managers. No." The petition. promotion.R. Inc.

JJ. 737 (1993) citing Franklin Baker Company of the Philippines v. 157 SCRA 416. Laguesma. Laguesma dated April 17. only after respondent Undersecretary of Labor affirmed the holding thereof. Finally. PICOP even then had already submitted voluminous supporting documents. 1991. the petition is hereby DISMISSED.64[37] Second. Progressive Development Corporation v. 66[39] Alliance of Democratic Free Labor Organization v. considering all the foregoing. suspension and termination of employees is still subject to confirmation and approval by their respective superior. Laguesma. where such power. no obstacle must be placed to the holding of certification elections. No denial of due process can be ascribed to public respondent Undersecretary Laguesma for the latter's denial to allow PICOP to present additional evidence on the implementation of its program inasmuch as in the appeal before the said public respondent. 574 (1996) 67[40] Trade Unions of the Philippines v. review and final action by the department heads and other higher executives of the company. Trajano. simply bolstered the public respondents' conclusion that PICOP raised the issue merely to prevent and thwart the concerned section heads and supervisory employees from exercising a right granted them by law. We see no reason or justification to deviate from his assailed resolutions for the reason that law and jurisprudence aptly support them. 145. Secretary Department of Labor and Employment. Laguesma. 1991 and August 17.63[36] Thus. for it is a statutory policy that should not be circumvented. 422-433 (1988) 65[38] Rollo. 6/5/00 3:14 PM 63[36] Authority Chart revised December 20. 571 (1994). Mendoza. is not effective and not an exercise of independent judgment as required by law. Inc. 233 SCRA 565. see Atlas Lithographic Services. 542-694. the fact that PICOP voiced out its objection to the holding of certification election.65[38] The record of the case is replete with position papers and exhibits that dealt with the main thesis it relied upon. concur. despite numerous opportunities to ventilate the same. 807 (1992) ..transfer. is subject to evaluation. respectively. Laguesma. 17 (1992) 64[37] Philippine Appliance Corporation v. finding the subject supervisors and section heads as supervisory employees eligible to vote in the certification election are AFFIRMED. 226 SCRA 730. SO ORDERED. Rollo. and Buena. and the Resolution and Order of public respondent Bienvenido E. Bellosillo. which is in effect recommendatory in character. p. pp. 205 SCRA 12. the same. What the law prohibits is the lack of opportunity to be heard. Quisumbing. v. 1989. 205 SCRA 802. 254 SCRA 565. Costs against petitioner. Needless to stress. although present.67[40] WHEREFORE.66[39] PICOP has long harped on its contentions and these were dealt upon and resolved in detail by public respondent Laguesma. (Chairman).

R. Chua Law Firm for petitioner in 85750.R. G.. Araullo. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents. (IRRI) from the application of Philippine labor laws.R. 89331 September 28. respondents. 1990 INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION. Gruba. INC.: Consolidated on 11 December 1989. Zambrano. Cabana & Associates for petitioner in G. petitioner vs HON. No. Armamento. 85750 September 28. Alfredo L. Dominguez. 89331. Inc. Bentulan for private respondent in 85750. No. No. these two cases involve the validity of the claim of immunity by the International Catholic Migration Commission (ICMC) and the International Rice Research Institute. vs SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE. petitioner. J. Jimenez & Associates for IRRI. 1990 KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE. I Facts and Issues .Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. MELENCIO-HERRERA.

ICMC v. As an international organization rendering voluntary and humanitarian services in the Philippines. reversed the Med-Arbiter's Decision and ordered the immediate conduct of a certification election. Vol. ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong.A. G. however. Bataan. Subsequently. Category II. ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity expressly granted but the same was denied by respondent BLR Director who. granted ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities. the Philippine Government. 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. again. through the DEFORAF. 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. Rollo. . Petition. hence.R. A-2-62-87. as a non-profit agency involved in international humanitarian and voluntary work. Rollo. enjoys diplomatic immunity. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction. No. the plight of Vietnamese refugees fleeing from South Vietnam's communist rule confronted the international community. 85750 — the International Catholic Migration Commission (ICMC) Case. as evidenced by a Memorandum of Agreement between the Government and ICMC (Annex "E". 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 (Annex "A". pp. On appeal by TUPAS. on 23 February 1981. 22-32). Calleja. pp. On 14 July 1986. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status. Med-Arbiter Anastacio L. on 15 July 1988. at the request of the Holy See. On 5 February 1987. As an aftermath of the Vietnam War. It was incorporated in New York. infra. USA. ordered the immediate conduct of a pre-election conference. 41-43). 1]. At that time. ICMC's two Motions for Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October 1988 that said BLR Order violated ICMC's diplomatic immunity. Director Pura Calleja of the Bureau of Labor Relations (BLR). ICMC's request for recognition as a specialized agency was still pending with the Department of Foreign Affairs (DEFORAF). In response to this crisis.

(infra). (2) the Convention on the Privileges and Immunities of Specialized Agencies. 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. adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. Before a Decision could be rendered in the ICMC Case. 89331 — (The International Rice Research Institute [IRRI] Case). G. which declares that the Philippines adopts the generally accepted principles of international law as part of the law of the land. through its Legal Adviser. the Court allowed DEFORAF intervention. On 28 November 1988. she contends that a certification election is not a litigation but a mere investigation of a nonadversary. On 10 January 1989. It is not a suit against ICMC its property. 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. the Court issued a Temporary Restraining Order enjoining the holding of the certification election. No. particularly. On 12 July 1989. funds or assets.R. Respondent BLR Director. 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.R. the DEFORAF. but is the sole concern of the workers themselves. as amended. filed a Motion for Intervention alleging that. Over the opposition of the Solicitor General. and Articles 243 and 246 of the Labor Code. infra. which has been complied with. and tasked with the conduct of Philippine diplomatic and consular relations with foreign governments and UN organizations. As initially stated. it has a legal interest in the outcome of this case. cites State policy and Philippine labor laws to justify its assailed Order. Section 2 of the 1987 Constitution. on the other hand. fact-finding character. ICMC filed the present Petition for Certiorari with Preliminary Injunction assailing the BLR Order. the Second Division gave due course to the ICMC Petition and required the submittal of memoranda by the parties. Section 18 and Article III. on 11 December 1989. with whom the Solicitor General agrees. 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. the Third Division.R. ibid. as the highest executive department with the competence and authority to act on matters involving diplomatic immunity and privileges. . Section 8 of the 1987 Constitution. resolved to consolidate G. and (3) Article II. In addition. retired Justice Jorge C. on 24 November 1988. Coquia of the Court of Appeals. No. Article II. 89331 pending before it with G.Thus. B.

the Kapisanan filed a Petition for Direct Certification Election with Region IV. the Philippine Government and the Ford and Rockefeller Foundations signed a Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at Los Baños. as amended. upheld the opposition on the basis of Pres. is a legitimate labor organization with an existing local union. IRRI opposed the petition invoking Pres. On 7 July 1987. management. Regional Office of the Department of Labor and Employment (DOLE). in a Resolution of 5 July 1989. privileges and immunities of an international organization. Med-Arbiter Leonardo M. the Secretary of Labor. the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan. 1620. set aside the BLR Director's Order. Said Director relied on Article 243 of the Labor Code. prerogatives. 1 and held that "the immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws. non-profit. set aside the Med-Arbiter's Order and authorized the calling of a certification election among the rank-and-file employees of IRRI. On 20 April 1987. Decree No. Garcia. dismissed the Petition for Certification Election. However. philanthropic. IRRI was granted the status. IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject to all laws and regulations. Decree No. upon manifestation by the Solicitor General that both cases involve similar issues. 1620 conferring upon it the status of an international organization and granting it immunity from all civil. the BLR Director. On appeal. The facts disclose that on 9 December 1959. 1620 which grants to the IRRI the status. infra and Article XIII. It provides in categorical terms that: . promulgated on 19 April 1979." Initially. tax-free. Decree No. Section 3 of the 1987 Constitution. non-stock organization designed to carry out the principal objective of conducting "basic research on the rice plant. by virtue of Pres. who is the public respondent in the ICMC Case. 85750. The Organized Labor Association in Line Industries and Agriculture (OLALIA). 1620 and dismissed the Petition for Direct Certification. Laguna. for short) in respondent IRRI. the lower-numbered case pending with the Second Division. prerogatives.No. On appeal. It was intended to be an autonomous. privileges and immunities of an international organization is clear and explicit. criminal and administrative proceedings under Philippine laws. 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 Said Resolution reads in part as follows: Presidential Decree No. 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." Reconsideration sought by IRRI was denied. on all phases of rice production.

the Secretary of Labor relied on Section 25 of Rep. the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary of Labor in upholding IRRI's diplomatic immunity. in entertaining the appeal. orders. Verily. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S appeal from the Order of the Director of the Bureau of Labor Relations directing the holding of a certification election. The Third Division. decisions or proceedings ordered by any court or administrative or quasi-judicial agency are enforceable as against the Institute. The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in dismissing the Petition for Certification Election filed by Kapisanan. is unconstitutional in so far as it deprives the Filipino workers of their fundamental and constitutional right to form trade unions for the purpose of collective bargaining as enshrined in the 1987 Constitution. Decree No. In the case at bar there was no such waiver made by the Director-General of the Institute. subpoena. Instead of a Comment. The Court acceded to the Solicitor General's prayer. 1620 granting IRRI the status. Kapisanan contends that Article 3 of Pres. 8. No.R. invoked by the Secretary of Labor. 6715. G. the Solicitor General filed a Manifestation and Motion praying that he be excused from filing a comment "it appearing that in the earlier case of International Catholic Migration Commission v. the Secretary of Labor declared that it was "not adopting as his own" the decision of the BLR Director in the ICMC Case as well as the Comment of the Solicitor General sustaining said Director. On the other hand. Hon. privileges. Pura Calleja. providing for the direct .Art. In a Manifestation filed on 4 August 1990. 3 — The Institute shall enjoy immunity from any penal." the present case. Kapisanan contends that pursuant to Sections 7. Act. which took effect on 21 March 1989. no summons. the Institute. Hence. therefore. at the very first opportunity already vehemently questioned the jurisdiction of this Department by filing an ex-parte motion to dismiss the case. except insofar as immunity has been expressly waived by the Director-General of the Institution or his authorized representative. 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the Labor Code. No. A procedural issue is also raised. No. civil and administrative proceedings.R. to which the case was originally assigned. the Secretary of Labor had no more jurisdiction over the said appeal. 85750. The last pleading was filed by IRRI on 14 August 1990. 89331. which position has been superseded by respondent Secretary of Labor in G. prerogatives and immunities of an international organization. Indeed. the Office of the Solicitor General had sustained the stand of Director Calleja on the very same issue now before it. required the respondents to comment on the petition. unless and until the Institute expressly waives its immunity. the Order of the BLR Director had become final and unappeable and that.

their property and assets. sustained ICMC'S invocation of immunity when in a Memorandum. confiscation. — The Institute shall enjoy immunity from any penal. wherever located and by whomsoever held. is explicit in its grant of immunity. The property and assets of the specialized agencies. expropriation and any other form of interference. dated 17 June 1987. The specialized agencies. 5. IRRI is similarly situated. adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. Article 3. in respect of IRRI. requisition. Sections 4 and 5 of the Convention on the Privileges and Immunities of Specialized Agencies. Section 4. Decree No." Similarly. It is. however." Article III. Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC shall have a status "similar to that of a specialized agency. the DEFORAF speaking through The Acting Secretary of Foreign Affairs. Pres. (Emphasis supplied). III Findings in Both Cases. judicial or legislative action. Immunity from Legal Process. Jose D.filing of appeal from the Med-Arbiter to the Office of the Secretary of Labor and Employment instead of to the Director of the Bureau of Labor Relations in cases involving certification election orders. thus: Art. whether by executive. in fact. 19 on 17 May 1949. except insofar as that immunity has been expressly waived by the DirectorGeneral of the Institute or his authorized representatives. civil and administrative proceedings. been granted ICMC and IRRI. administrative. it expressed the view that "the Order of the Director of the Bureau of Labor Relations dated 21 September 1988 for the conduct of Certification Election within ICMC violates the diplomatic immunity of the organization. — The premises of the specialized agencies shall be inviolable. shall enjoy immunity from every form of legal process except insofar as in any particular case they have expressly waived their immunity. III. through its Legal Adviser. 1620. wherever located and by whomsoever held shall be immune from search. 3." . to the Secretary of Labor. maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in this particular instance. understood that no waiver of immunity shall extend to any measure of execution. dated 17 October 1988. explicitly provides: Art. Thus it is that the DEFORAF. Ingles. There can be no question that diplomatic immunity has. in a letter. Sec.

health. The term "international organization" is generally used to describe an organization set up by agreement between two or more states. contemplates that these tasks will be mainly fulfilled not by organs of the United Nations itself but by autonomous international organizations established by inter-governmental agreements outside the United Nations. sea transport. . railways. are then to be known as "specialized agencies. Hence. "Specialized agencies" are international organizations having functions in particular fields." 10 .g. some are regional or otherwise limited in their membership. and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the government as in the case at bar. trade. canals. in posts. atomic energy. . It is a recognized principle of international law and under our system of separation of powers that diplomatic immunity is essentially a political question and courts should refuse to look beyond a determination by the executive branch of the government. meteorology. educational and related matters. cultural.The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC and IRRI enjoy immunities accorded to international organizations. for instance. or other officer acting under his direction. health and refugees. e. such organizations are endowed with some degree of international legal personality 5 such that they are capable of exercising specific rights. education and culture. 3 A brief look into the nature of international organizations and specialized agencies is in order. it is then the duty of the courts to accept the claim of immunity upon appropriate suggestion by the principal law officer of the government . . it is accepted doctrine that in such cases the judicial department of (this) government follows the action of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction. Some are virtually world-wide in their membership. The term appears in Articles 57 8 and 63 9 of the Charter of the United Nations: The Charter. 4 Under contemporary international law. finance. The Charter provides that those agencies which have "wide international responsibilities" are to be brought into relationship with the United Nations by agreements entered into between them and the Economic and Social Council. in adherence to the settled principle that courts may not so exercise their jurisdiction . which determination has been held to be a political question conclusive upon the Courts in order not to embarrass a political department of Government. telecommunications. is an international organization dedicated to the propagation of world peace. as to embarrass the executive arm of the government in conducting foreign relations. while it invests the United Nations with the general task of promoting progress and international cooperation in economic. social. . There are now many such international agencies having functions in many different fields. rivers. 6 They are organized mainly as a means for conducting general international business in which the member states have an interest. civil aviation. 7 The United Nations. duties and powers.

pursuant to Article IV of the Memorandum of Agreement between ICMC the the Philippine Government. The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and respective purposes. dignity or privileges of individuals." Moreover. which is to shield the affairs of international organizations. contained in the ILO Memorandum are stated thus: 1) international institutions should have a status which protects them against control or interference by any one government in the performance of functions for the effective discharge of which they are responsible to democratically constituted international bodies in which all the nations concerned are represented. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their functions by the agencies concerned. For. in accordance with international practice. A series of conventions. Section 31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized 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. whenever there is any abuse of privilege by . be accorded the facilities for the conduct of its official business customarily extended to each other by its individual member States. and 3) the international organization should. 12 The theory behind all three propositions is said to be essentially institutional in character. and to ensure the unhampered performance of their functions. 11 There are basically three propositions underlying the grant of international immunities to international organizations. agreements and protocols defining the immunities of various international organizations in relation to their members generally are now widely in force. Section 18. . These principles.The rapid growth of international organizations under contemporary international law has paved the way for the development of the concept of international immunities. "It is not concerned with the status. Section 8. of the 1987 Constitution. Section 3 (supra). The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. from political pressure or control by the host country to the prejudice of member States of the organization. representatives of their member states and persons acting on behalf of the organizations. but with the elements of functional independence necessary to free international institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their members. 15 and Article XIII. . It is now usual for the constitutions of international organizations to contain provisions conferring certain immunities on the organizations themselves. and implemented by Articles 243 and 246 of the Labor Code. 14 Article III. 16 relied on by the BLR Director and by Kapisanan. . ICMC employees are not without recourse whenever there are disputes to be settled. which are guaranteed by Article II. as a collectivity of States members. ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights. 2) no country should derive any national financial advantage by levying fiscal charges on common international funds.

which could inevitably involve ICMC in the "legal process. deprives its employees of the right to selforganization. It is equally applicable to proceedings in personam and proceedings in rem. A certification election cannot be viewed as an independent or isolated process. rules and regulations.ICMC. the Government is free to withdraw the privileges and immunities accorded. 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. civil and administrative proceedings. Decree No. and claims that. the Court is now estopped from passing upon the question of DOLE jurisdiction petition over ICMC. — 1.." which includes "any penal. in the ICMC Case (p. Rollo)." 18 We take note of a Manifestation. 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. 1620. (G. 161." 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. . privileges and immunities of an international organization. consultations shall be held between the Government and the Commission to determine whether any such abuse has occurred and. Cooperation with Government Authorities. 30 January 1989. in fact. In the event that the Government determines that there has been an abuse of the privileges and immunities granted under this Agreement. Neither are the employees of IRRI without remedy in case of dispute with management as. wherein TUPAS calls attention to the case entitled "International Catholic Migration Commission v. 2. dated 28 September 1989. It could tugger off a series of events in the collective bargaining process together with related incidents and/or concerted activities. "The immunity covers the organization concerned. 72222. et als. if so." The existence of this Union factually and tellingly belies the argument that Pres. having taken cognizance of that dispute (on the issue of payment of salary for the unexpired portion of a six-month probationary employment). No. 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.R. which grants to IRRI the status. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions of international Organizations. its property and its assets." 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. 169 SCRA 606). The Commission shall cooperate at all times with the appropriate authorities of the Government to ensure the observance of Philippine laws. the Government shall withdraw the privileges and immunities granted the Commission and its officials. Thus: Art. IV. NLRC.

the Order of the Bureau of Labor Relations for certification election is SET ASIDE. In G. and the Temporary Restraining Order earlier issued is made PERMANENT. therefore. WHEREFORE. No. 6715. 89331 (the IRRI Case)..R. Hence. is on leave. Sarmiento and Regalado. J. suffice it to state that the Decision of the BLR Director. 85750 (the ICMC Case). but also because ICMC in that case did not invoke its immunity and. no grave abuse of discretion may be imputed to respondent Secretary of Labor in his assumption of appellate jurisdiction. no grave abuse of discretion having been committed by the Secretary of Labor and Employment in dismissing the Petition for Certification Election. the Petition is Dismissed. — 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. effaced. was already in effect. concur. or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities.. En passant. Paras.R. The pertinent portion of that law provides: Art. specifically since 21 March 1989. Anent the procedural issue raised in the IRRI Case. assuming that during that period (1983-1985) it was tacitly recognized as enjoying such immunity. Padilla. Footnotes . 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.We find no merit to said submission. JJ. Such appeal shall be decided within 15 calendar days (Emphasis supplied). No. dated 15 February 1989. contrary to Kapisanan's allegations. 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. 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. the Petition is GRANTED. may be deemed to have waived it. No pronouncement as to costs. 259. hopefully. in G. SO ORDERED. Act No. Not only did the facts of said controversy occur between 1983-1985.

The decision of the Bureau in all cases shall be final and unappealable.L. local and overseas. at 70. and promote full employment opportunities for all. 3 World Health Organization and Dr. 6 M. Section 7. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. Benjamin Aquino. The State shall afford full protection to labor. — The Bureau shall have twenty (20) working days within which to decide the appeal from receipt of the records of the case. AKEHURST supra. Section 3. Leonce Verstuyft v. collective bargaining and negotiations and peaceful concerted activities including the right to strike in accordance with law. Likewise. THE LAW OF NATIONS (1963) at 95. The various specialized-agencies. — 1. 29 November 1972. the appellee shall file his answer thereto within ten (10) working days from receipt of the appeal. established by intergovernmental agreement and having wide international responsibilities. 4 MICHAEL AKEHURST A MODERN INTRODUCTION TO INTERNATIONAL LAW (1984) at 69. — The appeal shall be filed within ten (10) working days from receipt of the Order by the appellant. organized and unorganized.C. 48 SCRA 242.J.1 Article XIII. . Period to Appeal. L-35131. Section 8. 2 RULE V. Hon. 5 The leading judicial authority on the personality of international organizations is the advisory opinion even by the ICJ in the Reparation for Injuries Suffered in the Service of the United Nations Case ([1949] I. 7 J.. Appeal — Any aggrieved party may appeal the order of the Med-Arbiter to the Bureau only on the following grounds: a) grave abuse of discretion and b) gross incompetence. copy furnished the appellee. BRIERLY. Section 9. The appeal shall specifically state the grounds relied upon by the appellant with supporting memorandum. in the Regional Office where the case originated. It shall guarantee the rights of all workers to self-organization. They shall be entitled to security of tenure. The Regional Director shall immediately forward the entire records of the case to the Bureau. humane conditions of work and a living wage. Rep 174) where the Court recognized the UNs international personality. Decision of the Bureau is final and unappealable. et al. Section 10. 8 Article 57. Where to file appeal — appellant shall file his appeal which shall be under oath.

industrial and agricultural enterprises and in religious. coerce. 13 Ibid. Coverage and Employees' Right to Self. to form unions. The right of the people. supra. at 17. Such agreements shall be subject to approval by the General Assembly. in economic. Non-abridgement of Right to Self-organization. associations. Such agencies thus brought into relationship with the United Nations are hereinafter referred to as specialized agencies. self. rural workers and those without any definite employees may form labor organizations for their mutual aid and protection. 10 BRIERLY.. social. educational. WILFRED JENKS. It may co-ordinate the activities of the specialized agencies through consultation with and recommendations to such agencies and through recommendations to the General Assembly and to the Members of the United Nations. Ambulant. at 121-122. medical or educational institutions whether operating for profit or not. Section 18.employed people.as defined in their basic instruments.Organization. 15 Article III. 2. It shall protect the rights of workers and promote their welfare. 9 Article 63. shall have the right to self-organization and to form. or assist labor organizations for the purpose of collective bargaining . — All persons employed in commercial. INTERNATIONAL IMMUNITIES (1961) at 2-3. Section 8. join or assist labor organizations of their own choosing for purposes of collective bargaining. cultural. — It shall be unlawful for any person to restrain. intermittent and itinerant workers. and related fields. The State affirms labor as a primary social economic force. charitable. 16 Article 243. Such right shall include the rignt to form. The Economic and Social Council may enter into agreements with any of the agencies referred to in Article 57. or societies for purposes not contrary to law shall not be abridged. 12 Ibid. — 1. including those employed in the public and private sectors. shall be brought into relationship with the United Nations in accordance with the provisions of Article 63. health. 11 C. Article 246. defining the terms on which the agency concerned shall be brought into relationship with the United Nations. 14 Article II. 2. join. discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization.

.N.R. Phil. the resolution of then Labor Secretary Franklin M. dated 17 May 1949. 91307 January 24. was concurred in by the Philippine Senate under Senate Resolution No. Domogan. Castro. Narvasa & Pesigan for petitioner. Treaty Series.:p This is a petition for certiorari assailing the order of Med-Arbiter Designate Felix B. Orate & Dao-ayan Law Office for private respondent. 17 This Convention. Chaguile. DRILON. 621). Jr. Drilon affirming said order on appeal and the order denying the motion for reconsideration in the case entitled "In Re: Petition for Direct Certification as the Sole and Exclusive Collective Bargaining Agent of Collectors of Singer Sewing Machine Company-Singer Machine . MED-ARBITER FELIX B. 1991 SINGER SEWING MACHINE COMPANY. Misa. Lockey. 1947. GUTIERREZ. HON. petitioner vs. No. The Lawphil Project . subject to the provisions of Article 264 of this Code. (Vol. JR. 1. p... Villanueva. supra at 38. 21. respondents.Arellano Law Foundation Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. General Assembly on November 21. FRANKLIN M. 18 JENKS. Oposa. and SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB). CHAGUILE. J. The Philippine Instrument of Ratification was signed by the Philippine President on 21 February 1959. adopted by the U. JR.through representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection.

finding that there exists an employer-employee relationship between the union members and the Company. would lead us to conclude that no employer-employee relationship exists. tools. which defines job-contracting. To prove that union members are employees. Drilon affirmed it. The respondent Med-Arbiter. they cannot legally qualify as independent contractors who must be free from control of the alleged employer. d) the public respondents whimsically disregarded the well-settled rule that commission agents are not employees but are independent contractors." They also contend that under Section 8. it is asserted that they "perform the most desirable and necessary activities for the continuous and effective operations of the business of the petitioner Company" (citing Article 280 of the Labor Code). On appeal. On February 15. 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.Collectors Union-Baguio (SIMACUB)" docketed as OS-MA-A-7-119-89 (IRD Case No. 1989. They add that the termination of the agreement by the petitioner pending the resolution of the case before the DOLE "only shows the weakness of petitioner's stand" and was "for the purpose of frustrating the constitutionally mandated rights of the members of private respondent union to self-organization and collective organization. Baguio City branch (hereinafter referred to as "the Company"). on the other hand. granted the petition for certification election. The respondents. no right to organize for purposes of . and the like necessary in the conduct of the business. 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. b) the right of petitioner to due process was denied when the evidence of the union members' being commission agents was disregarded by the Labor Secretary. c) the public respondents patently erred in finding that there exists an employeremployee relationship. insist that the provisions of the Collection Agency Agreement belie the Company's position that the union members are independent contractors. if the union members are not employees. this petition in which the Company alleges that public respondents acted in excess of jurisdiction and/or committed grave abuse of discretion in that: a) the Department of Labor and Employment (DOLE) has no jurisdiction over the case since the existence of employer-employee relationship is at issue. Hence. Rule 8. Secretary of Labor Franklin M. The motion for reconsideration of the Secretary's resolution was denied. who carry independent businesses and who have substantial capital or investment in the form of equipment. Book No. The present case mainly calls for the application of the control test. Hence. III of the Omnibus Rules Implementing the Labor Code. which if not satisfied. 02-89 MED).

(d) an agent is required to post a cash bond of three thousand pesos (P3. (e) he is subject to all the terms and conditions in the agreement. (3) the power of dismissal. 175 SCRA 537 [1989]. Broadway Motors Inc. Ople. v. 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. The petitioner relies on the following stipulations in the agreements: (a) a collector is designated as a collecting agent" who is to be considered at all times as an independent contractor and not employee of the Company.000. Meanwhile. The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular relationship. National Labor Relations Commission. The Collection Agency Agreement defines the relationship between the Company and each of the union members who signed a contract.bargaining. v. and (4) the power to control the employee's conduct — although the latter is the most important element" (Mafinco Trading Corporation v. Inc. nor to be certified as such bargaining agent can ever be recognized. Brotherhood Labor Unity Movement in the Philippines v. (2) the payment of wages. They quote paragraph 2 which states that an agent shall utilize only receipt forms authorized and issued by the Company. NLRC. and (g) his services shall be terminated in case of failure to satisfy the minimum monthly collection performance required. failure to post a cash bond. The collectors could fall under either category depending on the facts of each case. (c) an agent is paid his compensation for service in the form of a commission of 6% of all collections made and turned over plus a bonus on said collections. we rule in favor of the petitioner. 70 SCRA 139 [1976]. (f) the agreement is effective for one year from the date of its execution and renewable on a yearly basis. After a careful analysis of the contents of the agreement. 156 SCRA 522 [1987]. Paragraph 4 on the monthly collection quota required by the Company is deemed by respondents as a control measure over the means by which an agent is to perform his services. The following elements are generally considered in the determination of the employeremployee relationship. (b) collection of all payments on installment accounts are to be made monthly or oftener. . 147 SCRA 49 [1986]). Not all collecting agents are employees and neither are all collecting agents independent contractors. They also note paragraph 3 which states that an agent has to submit and deliver at least once a week or as often as required a report of all collections made using report forms furnished by the Company. the respondents rely on other features to strengthen their position that the collectors are employees. Rosario Brothers. or cancellation of the agreement at the instance of either party unless the agent has a pending obligation or indebtedness in favor of the Company. "(1) the selection and engagement of the employee. 131 SCRA 72 [1984]. Development Bank of the Philippines v.00) to assure the faithful performance and observance of the terms and conditions under the agreement. Zamora. Ople.

2. it is subject to agreement by both parties. 5. The collection agents shoulder their transportation expenses incurred in the collections of the accounts assigned to them. . 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. 1. which is a result of the job performed. Likewise. naturally and necessarily. it is clear that the Company and each collecting agent intended that the former take control only over the amount of collection. 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. They do not receive any commission if they do not effect any collection even if they put a lot of effort in collecting. The collection agents do not have to devote their time exclusively for SINGER. The amounts paid to them are based solely on the amounts of collection each of them make. 4. The collection agents are not required to observe office hours or report to Singer's office everyday except. section b gives a bonus. Even if the report requirements are to be called control measures. The manner and method of effecting collections are left solely to the discretion of the collection agents without any interference on the part of Singer. paragraph 5. he can choose not to sign it. From the records. They are paid commission on the basis of actual collections. Hence. The respondents' contention that the union members are employees of the Company is based on selected provisions of the Agreement but ignores the following circumstances which respondents never refuted either in the trial proceedings before the labor officials nor in its pleadings filed before this Court. The collection agents are paid strictly on commission basis. As a requirement for the fulfillment of the contract. Nor are these agents required to account for their time and submit a record of their activity. if the other contracting party does not accede to it. 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.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 monthly collection quota is a normal requirement found in similar contractual agreements and is so stipulated to encourage a collecting agent to report at least the minimum amount of proceeds. aside from the regular commission every time the quota is reached. In fact. for the purpose of remitting their collections. 3. There is no prohibition on the part of the collection agents from working elsewhere.

In Investment Planning Corp. Social Security System. 166 SCRA 625 [1988]). Agarrado. His right to compensation depends upon and is measured by the tangible results he produces. the collection agent does his work "more or less at his own pleasure" without a regular daily time frame imposed on him (Investment Planning Corporation of the Philippines v. of the Phil. the agreement did not fix an amount for wages nor the required working hours. The net amount is what is then remitted to Singer." (Rollo.6. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. thus: We are convinced from the facts that the work of petitioner's agents or registered representatives more nearly approximates that of an independent contractor than that of an employee. i. La Suerte Cigar and Cigarette Factory v. 21 SCRA 924 [1967] which involved commission agents. No such words as "to hire and employ" are present. xxx xxx xxx Even if an agent of petitioner should devote all of his time and effort trying to sell its investment plans he would not necessarily be entitled to compensation therefor. supra. this Court had the occasion to rule. v. Relations. 30 SCRA 210 [1969]). for the acts of which such labor consists the former is paid for the result thereof . of the Philippines v.. Social Security System. As there seems to be no objections on the part of the respondents. . they should have explicitly said so in detail by specifically denying each of the facts asserted by the petitioner. supra) . . 7-8) If indeed the union members are controlled as to the manner by which they are supposed to perform their collections. Civil Code. pp. The grounds specified in the contract for termination of the relationship do not support the view that control exists "for the causes of termination thus specified have no relation to the means and methods of work that are ordinarily required of or imposed upon employees. Compensation is earned only on the basis of the tangible results produced. The latter is paid for the labor he performs. Court of Appeals. Director of Bureau of Labor. See also Social Security System v. the Court finds that they miserably failed to defend their position. A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee relationship between the Company and the collection agents cannot be sustained. The commissions earned by the collection agents are directly deducted by them from the amount of collections they are able to effect. Social Security System.e. Moreover. 123 SCRA 679 [1983]). . that is." (Investment Planning Corp." Moreover. This is consistent with the first rule of interpretation that the literal meaning of the stipulations in the contract controls (Article 1370. total collections made (Sarra v.

Book III of the Omnibus Rules Implementing the Labor Code does not apply to this case. equipment. There is nothing in the agreement which implies control by the Company not only over the end to be achieved but also over the means and methods in achieving the end (LVN Pictures. the provision must be viewed in relation to Article 106 of the Labor Code which provides: Art. and other materials which are necessary in the conduct of his business. the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract. Inc. The Court finds the contention of the respondents that the union members are employees under Article 280 of the Labor Code to have no basis.e. equipment. shall be paid in accordance with the provisions of this Code. Respondents assert that the said provision on job contracting requires that for one to be considered an independent contractor. in the same manner and extent that he is liable to employees directly employed by him. to join or form a union. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code. regular employees and casual employees. Philippine Musicians Guild.. i. work premises. if any. or to security of tenure. The Court agrees with the petitioner's argument that Article 280 is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees. the employees of the contractor and of the latter's subcontractor." There is no showing that a collection agent needs tools and machineries. for purposes of determining the right of an employee to certain benefits. work premises. — Whenever an employer enters into a contract with another person for the performance of the former's work. This is precisely true in the case of an independent contractorship as well as in an agency agreement. and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. Any agreement may provide that one party shall render services for and in behalf of another for a consideration (no matter how necessary for the latter's business) even without being hired as an employee. v. The definition that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case. Moreover. he must have "substantial capital or investment in the form of tools. among others. In . Rule 8. Contractor or subcontractor. Article 280 does not apply where the existence of an employment relationship is in dispute.The last and most important element of the control test is not satisfied by the terms and conditions of the contracts. 106. xxx xxx xxx There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools. machineries. 1 SCRA 132 [1961]). Even Section 8. machineries.

. concur. Director of Bureau of Labor Relations.. JJ. 689) WHEREFORE." (p. Rule 8. the petitioner submitted itself as well as the issue of existence of an employment relationship to the jurisdiction of the DOLE which was faced with a dispute on an application for certification election. 1989 and December 14. Drilon dated November 2. . Fernan. Feliciano and Bidin. the Resolution and Order of Secretary Franklin M. Accordingly. there is no constitutional and legal basis for their "union" to be granted their petition for direct certification. Jr. It is important in the determination of who shall be included in a proposed bargaining unit because. C. Chaguile. it is the sine qua non. respectively are hereby REVERSED and SET ASIDE. 1989 is made permanent.. It means the ineligibility of the union members to present a petition for certification election as well as to vote therein . medicare. supra: . . social security. the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. The question of whether employer-employee relationship exists is a primordial consideration before extending labor benefits under the workmen's compensation.such cases. Hence.J. they are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. . Failure to establish this juridical relationship between the union members and the employer affects the legality of the union itself. 1989.1989 of Med-Arbiter Designate Felix B. the fundamental and essential condition that a bargaining unit be composed of employees. . . The petition for certification election is ordered dismissed and the temporary restraining order issued by the Court on December 21. (At p. . The Court finds that since private respondents are not employees of the Company. This Court made this pronouncement in La Suerte Cigar and Cigarette Factory v. The assumption of jurisdiction by the DOLE over the case is justified as the case was brought on appeal by the petitioner itself which prayed for the reversal of the Order of the Med-Arbiter on the ground that the union members are not its employees. SO ORDERED. 20) It can readily be seen that Section 8. Book Ill and Article 106 are relevant in determining whether the employer is solidarily liable to the employees of an alleged contractor and/or sub-contractor for unpaid wages in case it is proven that there is a job-contracting situation. the Order dated June 14. termination pay and labor relations law.

It must have been an awareness on appellant's part that on the substantive aspect.Republic of the Philippines SUPREME COURT Manila EN BANC G. As will be more fully explained. According to the decision: "From the evidence presented it appears that the defendant Cebu Shipyard & Engineering Works.. Mendoza & Associates for intervenor-appellant. The plaintiff was successful both in the City Court of Lapulapu where such complaint was first started as well as in the Court of First Instance of Cebu. 2 did file a money claim in the amount of P4..R. rendered on February 22.. On November 28. Intervenor. intervenor-appellant. Inc. and the Associated Labor Union entered into a 'Collective Bargaining Agreement' . J. JESUS DIAGO. Inc. The facts are not in dispute. The former in its complaint on behalf of seventy-two of its members working in defendant corporation. DON RAMON ABOITIZ. that this appeal was interposed by intervenor Associated Labor Union. Inc. Andales Law Office for plaintiffs-appellees. It is from the decision of the latter court.82 representing the second installment of a profit-sharing agreement under a collective bargaining contract entered into between such business firm and intervenor labor union as the exclusive collective bargaining representative of its workers. the claim of plaintiff to what was due its members under such collective bargaining agreement was meritorious that led it to rely on alleged procedural obstacles for the reversal sought. The [Company] agrees to give a profit-sharing bonus to its employees and laborers to be taken from ten per cent (10%) of its net profits or net income derived from the direct operation of its shipyard and shop in Lapulapu City and after deducting the income tax and the bonus annually given to its General Manager and the Superintendent and the members of the Board of Directors and Secretary of the Corporation. Seno. defendants-appellees. President. 1972 MACTAN WORKERS UNION and TOMAS FERRER. Inc. the first installment being payable . there are no applicable procedural doctrines that stand in the way of plaintiff's suit. Inc. as Treasurer.. [reads thus]: '.. has not thereby dented the judgment. L-30241 June 30. INC. Article XIII thereof. as President thereof. Cebu Shipyard & Engineering Works. the pertinent part of which. 1964. Pedro B. Uy Calderon for defendants-appellees.:p The dispute in this appealed decision from the Court of First Instance of Cebu on questions of law is between plaintiff Mactan Workers Union 1 and intervenor Associated Labor Union. No. to be payable in two (2) installments. 1968. FERNANDO. ASSOCIATION LABOR UNION. We affirm. however. vs. Seventytwo of these employees or laborers whose names appear in the complaint are affiliated with the Mactan Workers Union while the rest are members of the intervenor Associated Labor Union. the defendant Cebu Shipyard & Engineering Works. WILFREDO VIRAY. Superintendent of the aforesaid corporation. plaintiffsappellees.. EDDIE LIM. and the CEBU SHIPYARD & ENGINEERING WORKS. in Lapulapu City is employing laborers and employees belonging to two rival labor unions.035.. as Resident Manager of the Shipyard & Engineering Works. Cebu Shipyard and Engineering Works.

as stated herein-above-commencing from the earnings during the year 1964.. judgment is hereby rendered ordering the defendants to deliver to the Associated Labor Union the sum of P4. the aggrieved party has the right to go to court for redress. 1965 the defendant Cebu Shipyard & Engineering Works. If a laborer or employee of the [Company] does not want to accept the profit-sharing bonus which the said employee or laborer is entitled under this Agreement. the uncollected shares of the plaintiff union members was returned by the ALU to the defendant corporation.82 for distribution to the employees of the defendant corporation who are members of the Mactan Workers Union. Inc. to pay the members of the Mactan Workers Union their corresponding shares in the profit-sharing bonus for the second installments for the year 1965. in March. shall be included." 5 It is from such a decision that an appeal was taken by intervenor Associated Labor Union. Those who are entitled to its benefits can invoke its provisions.82 which was returned by the Associated Labor Union.035. The members of the Mactan Workers Union failed to receive their shares in the second installment of bonus because they did not like to go to the office of the ALU to collect their shares.035. delivered to the ALU for distribution to the laborers or employees working with the defendant corporation to the profit-sharing bonus corresponding to the first installment for the year 1965.'" 3 The decision went on to state: "In compliance with the said collective bargaining agreement. and ordering the intervenor Associated Labor Union. only the income derived by the [Company] from the direct operation of its shipyard and shop in Lapulapu City. In accordance with the terms of the collective bargaining after 60 days. In the event that an obligation therein imposed is not fulfilled. Because this warning given by the intervenor union the defendant corporation did not pay to the plaintiffs the sum of P4. Again in June 1965 the defendant corporation delivered to the Associated Labor Union the profit-sharing bonus corresponding to the second installment for 1965. as will be hereafter discussed.in March and the second installment in June. we have to affirm. For the recovery of this amount this case was filed with the lower court. has any weakness thereof been demonstrated on the procedural questions raised by appellant. the lower court did nothing except to require literal compliance with the terms of a collective bargaining contract. 1. 6 Nor does it suffice as a defense that the claim is . it shall be the duty of the [Associated Labor Union] to return the money received by [it] as profit-sharing bonus to the [Company] within a period of sixty (60) days from the receipt by the [Union] from the [Company] of the said profitsharing bonus. deposited the said amount with the Labor Administrator. The terms and conditions of a collective bargaining contract constitute the law between the parties. Said profit-sharing bonus shall be paid by the [Company] to [Associated Labor Union] to be delivered by the latter to the employees and laborers concerned and it shall be the duty of the Associated Labor Union to furnish and deliver to the [Company] the corresponding receipts duly signed by the laborers and employees entitled to receive the profit-sharing bonus within a period of sixty (60) days from the date of receipt by [it] from the [Company] of the profit-sharing bonus. As is quite apparent on the face of such judgment." 4 The dispositive portion of such decision follows: "[Wherefore]. but instead. each year out of the profits in agreement. . At the same time the defendant corporation was advised by the ALU not to deliver the said amount to the members of the Mactan Workers Union unless ordered by the Court. Nor.. To repeat. In the computation of said ten per cent (10%) to [be] distributed as a bonus among the employees and laborers of the [Company] in proportion to their salaries or wages. immediately after receipt of the said amount. otherwise the ALU will take such step to protect the interest of its members .

arising in his municipality or city. Intervenor Associated Labor Union. It represents all the employees in such a bargaining unit. the highly salutory purpose and objective of the collective bargaining scheme to enable labor to secure better terms in employment condition as well as rates of pay would be frustrated insofar as non-members are concerned. Certainly the lower court. It is not to be indulged in any attempt on its part to disregard the rights of non-members. As was held in United Restauror's Employees and Labor Union v." 10 It is true that if an element of .000. Torres." 9 If it were otherwise. restricted itself to compelling the parties to abide by what was agreed upon. stand. as did the City Court of Lapu-lapu. The outcome was not at all unexpected. It is appropriate that such should be the case. The impression given is that of a litigant clutching at straws. The labor union that gets the majority vote as the exclusive bargaining representative does not act for its members alone. require anything else other than that set forth in the collective bargaining agreement. including those who do not belong to the chosen bargaining labor organization.00. for it is a wellsettled doctrine that the benefits of a collective bargaining agreement extend to the laborers and employees in the collective bargaining unit. The highly sophisticated line of argument followed in its brief as appellant does not carry a persuasive ring. How then can the appealed decision be impugned? 2. What is apparent is that intervenor was hard put to prop up what was inherently a weak. 8 this Court speaking through Justice Sanchez. of jurisdiction of the City Court of Lapulapu and of personality of the Mactan Workers Union to represent its members. Nor did the lower court in the decision now on appeal. a grievance that called for redress? The assignment of error that the City Court of Lapulapu was bereft of jurisdiction is singularly unpersuasive. laboring under such a predicament had perforce to rely on what it considered procedural lapses. How can the allegation of a lack of a cause of action be taken seriously when precisely there was a right violated on the part of the members of plaintiff Mactan Workers Union. the total sum was less than P10. who were in the ranks of plaintiff Mactan Labor Union. and not exclusively cognizable by the Court of First Instance. It would be next to impossible for intervenor Associated Labor Union to point to any feature thereof that could not in any wise be objected to as repugnant to the provisions of the collective bargaining contract. It would assail the alleged lack of a cause of action. There is no merit to such an approach.made on behalf of non-members of intervenor Associated Labor Union. Section 88 of the Judiciary Act in providing for the original jurisdiction of city courts in civil cases provides: "In all civil actions. including those mentioned in Rules fiftynine and sixty-two (now Rules 57 and 60) of the Rules of Court. 7 Any other view would be a discrimination on which the law frowns.82 and if the damages and attorney's fees be added.035. The right being clear all that had to be done was to see to its enforcement. not to say an indefensible. "the right to be the exclusive representative of all the employees in an appropriate collective bargaining unit is vested in the labor union 'designated or selected' for such purpose 'by the majority of the employees' in the unit concerned. All that was done was to have the covenants therein contained as to the profit-sharing scheme carried out and respected. the municipal judge and the judge of a city court shall have exclusive original jurisdiction where the value of the subject matter or amount of the demand does not exceed ten thousand pesos. deprived as they are of participation in whatever advantages could thereby be gained. The amount claimed by plaintiff Mactan Workers Union on behalf of its members was P4. Yet that is what intervenor labor union was guilty of. exclusive of interests and costs. resulting in the complaint filed on behalf of the laborers.

Concepcion. in the defense of the rights of its rank and file. Seno v . Costs against Associated Labor Union. although arising from a labor dispute. Certainly.. then the matter is solely cognizable by the Court of Industrial Relations. as officers of the court. or more specifically the working men and women. Zaldivar. still. Teehankee. but the labor movement itself. The latter are merely the instrumentalities through which their welfare may be promoted and fostered. Barredo. That is the raison d'etre of labor unions. but seeks the enforcement of a provision of the collective bargaining agreement. which may well be the recipient of a crippling blow. it certainly appeared to be oblivious of how far a labor union can go. J.B. it is not to be forgotten that what is entitled to constitutional protection is labor. C. Moreover. 11 It is equally true that as of the date the lower court decision was rendered. does not refer to one affecting an industry which is indispensable to the national interest and certified by the President to the Industrial Court. namely that plaintiff Mactan Workers Union could not file the suit on behalf of its members. The struggle is likely to be marked with bitterness. It is quite understandable that labor unions in their campaign for membership.. Castro. 3. . jurisdiction pertains to the ordinary courts and not to the Industrial Court. without the least justification especially so if there be insistence on flimsy and insubstantial contentions just to give some semblance of plausibility to their pleadings. or is expected to. or what passes for it. concur. the decision of the lower court of February 22. intransigent attitude on behalf of their members. It is easy to see why it should be thus. nor to minimum wage under the Minimum Wage Law. they alone are not the sole victims. In the language of Justice Makalintal. That is evident by intervenor Associated Labor Union devoting only half a page in its brief to such an assertion. 13 where such a doctrine was reiterated..unfair labor practice may be discerned in a suit for the enforcement of a collective bargaining contract.. nor to an unfair labor practice. to lend credence to the third error assigned. the ponente: "As the issue involved in the instant case. WHEREFORE. injustice be committed against opposing labor organizations. On its face. Makalintal.L. if it could be called that. In the final analysis. for acquiring ascendancy in any shop. no quarter being given or expected on the part of either side. labor lawyers not excluded. considering that such a contention came from a labor organization. That is a creed to which all members of the legal profession. the question of such enforcement had been held to be for the regular courts to pass upon. nor to hours of employment under the Eight-Hour Labor Law. plant. This brings us to one last point. Nevertheless. Makasiar and Antonio. . Reyes." 14 There was only a half-hearted attempt. 1968 is affirmed. not labor organizations. technical virtuosity. there should be an awareness that resort to such a technique does result in clogged dockets. The utmost care should be taken then.. There was an element of surprise. while it is equally understandable that their counsel would take advantage of every legal doctrine deemed applicable or conjure up any defense that could serve their cause. which under normal condition should be the last to lay itself open to a charge that it is not averse to denigrating the effectiveness of labor unions.J. or industry would do what lies in their power to put down competing groups. JJ.. Mendoza. is no substitute for an earnest and sincere desire to assure that there be justice according to law. 12 Counsel for intervenor Associated Labor Union was precisely the petitioner in one of the decisions of this Court. lest in displaying an unyielding. should do their best to live by.

Footnotes 1 Its President. July 20. vs. 440. 90 Phil. Republic Savings Bank v. Elizalde Paint and Oil Factory v. . Inc. September 27. Ramon Aboitiz. Leyte Farmers' and Laborers' Union. 1066 (1958) and International Oil Factory Workers Union v. L-25984. 8-9. 30. NLRC. 1968. 1967. Oct. Inc. Wilfredo Viray. National Warehousing Corp. 17 SCRA 882. 417 (1957). v. 27. Lacorte vs. May 31. 39 SCRA 276. Iron Mines. 104 Phil. pp. pp. Inc. Court of Industrial Relations. p. 6 Cf. pp. 7 SCRA 602 [1963]. Citing Leyte Land Transportation v. 106 Phil. G. 101 Phil. iii[3] 157 SCRA 416. Aug. 401 (1959). Court of Industrial Relations. vs. L-19372. Inc. CIR. 49 (1960). Dee Cho Lumber Workers' Union v. December 18. San Miguel Brewery. National Waterworks and Sewerage Authority vs. R. Arica vs. R. Jesus Diago and Resident Manager. Dee Cho Lumber Co. 80 Phil. 24 SCRA 86. 842 (1948). No. 1989. R. 35. No. 1131. 1989. 5 Ibid. 12 SCRA 316 and Nasipit Labor Union v. 13 L-20565. Tomas Ferrer. Land Settlement and Development Corporation v. Rivera v. April 30. 78210. vs. Record on Appeal. its Treasurer Eddie Lim. 7 Cf. 11 SCRA 766. were joined as co-defendants. 110 Phil. August 10. 4 Ibid. 133 SCRA 752. February 28. v[5] Philippine Airline Employees Ass. 100. Article 1159 and Articles 1700-1702 of the Civil Code. 1970. 95-97. Sept. 21 SCRA 1124. L-17838. 1968.. Oreta & Co. Inciong. Martinez. Security Bank and Trust Co. p. Republic Act 296 (1948). 1966.. 110 Phil. L-28536. A. Price Stabilization Corporation v.. Oct. (PALEA) vs. 21 SCRA 226. 1971. Ferrer-Calleja. 31. 1968. NLRC. 3 Decision. i[1] Rollo. Alhambra Industries. Philippine Sugar Institute v. Shell Company of the Philippines. 35. 1988. Also Shell Oil Workers Union v. 10 Section 88 of the Judiciary Act. was joined as co-plaintiff. 2 Its President. Bautista. p. L-26197. 8 L-24993. Inc. p. Court of Industrial Relations. its Superintendent. 26 SCRA 435. iv[4] See also Engineering Equipment. ii[2] Rollo. Prisco Workers' Union. 14 Ibid. vi[6] Rollo. National Mines and Allied Workers Union v. 9 Ibid. M. 162 SCRA 426. p. 29. G. 97-98. 12 Cf. L-20303. Court of Industrial Relations. 595 (1960). 23 SCRA 503. No. Phil.. 74004. Nov. 1967. NWSA Consolidated Unions. 52034. 35 SCRA 550. 817 (1952). G. Caledonia Pile Workers' Union. L-28607. 1964. Security Bank Employees Union v. 11 Cf. NLRC.

pp.146. 133.UOEF. pp. xiv[3] Rollo. pp. et al. Rollo. 3 -4. 92. 14. xix[8] Petition. ix[9] Rejoinder to petitioner Appellant’s Reply. xvii[6] OSG Comment. Rollo.126. 104. citing Eastern Broadcasting Corporation (DYRE) vs. Rollo. 9. 236 SCRA 586.Cola Supervisory Employees Organization . 5.10. 145 . 4-6. Rollo. 29-31. xvi[5] Rejoinder. xv[4] Rollo. pp. p. etc. 247. pp. xiii[2] Rollo. 147. xxi[10] 230 SCRA 761.14. p.vii[7] Rollo. 137 SCRA 628 .137. 14. xx[9] Annex I. pp. pp. p. pp.3. xviii[7] OSG Comment. Rollo. Dans.110. Rollo. xii[1] Pepsi . 13. x[10] Memorandum for petitioner. 371. 15. xi[11] Trade Unions of the Philippines vs. p. pp. p. 86-89. p. 213. Laguesma.. viii[8] Annexes D & E. 125. Comments to petitioner’s Petition for Review on Certiorari. pp. 770. 8. 71-73. 2. Comment. Rollo. Rollo. p.