Laguesma, Abrillius Raffy C.

Labor Relations

San Miguel Corporation Employees Union vs. Honorable Ma. Nieves D.

Confesor
262 SCRA 81

FACTS:
On June 28, 1990, San Miguel Corporation Employees Union entered
into a Collective Bargaining Agreement with San Miguel Corporation to take
effect upon the expiration of the previous CBA on June 30, 1989.
San Miguel Corporation (SMC) was formerly composed of four (4)
business divisions namely: (1) Beer, (2) Packaging, (3) Feeds and Livestock,
(4) Magnolia and Agri-business. On August 13, 1991, San Miguel Corporation
informed its employees that it would undergo restructuring effective October
1, 1991. Magnolia and Feed and Livestock Division became two separate and
distinct corporations: Magnolia Corporation and San Miguel Foods
Incorporated. Despite the restructuring, the CBA previously entered into by
the Union and San Miguel Corporation remained in force and effect. On June
30, 1992, the CBA was renegotiated. The Union contends that the bargaining
unit of San Miguel Corporation should still include the employees of Magnolia
and San Miguel Foods Inc. despite the restructuring and that the CBA shall be
effective for the remaining period of two (2) years or until June 30, 1994.
However, San Miguel Corporation argued that the employees who had
moved to Magnolia and San Miguel Foods Inc. automatically ceased to be
part of the bargaining unit at San Miguel Corporation and the CBA should be
effective for three (3) years in accordance with Article 253-A of the Labor
Code. Since the Union and San Miguel Corporation were unable to agree on
the issues, the Union declared a deadlock on September 29, 1990 and a
Notice of Strike was filed against San Miguel Corporation two (2) years after.
To avert a strike, San Miguel Corporation enlisted the intervention of
the National Conciliation and Mediation Board to conduct preventive
mediation. Still, no settlement was arrived at. Subsequently, the Secretary of
Labor assumed jurisdiction over the case and issued the assailed order
directing that the renegotiated terms of the CBA shall be effective for the
period of three (3) years from June 30, 1992 and that the CBA shall cover
only the employees of San Miguel Corporation and not of Magnolia and San
Miguel Foods Inc.

ISSUES:
1. Whether or not the duration of the renegotiated terms of the CBA is to
be effective for three years or for only two years?; and
2. Whether or not the bargaining unit of SMC includes also the employees
of Magnolia and SMFI?
RULING:
1. The renegotiated terms of the CBA is to be effective for three (3) years
following the rule under Article 253-A of the Labor Code. As held by
the Court, the representation aspect refers to the identity and
majority status of the union that negotiated the CBA as the exclusive
bargaining representative and this is given a period of five (5) years.
On the other hand, the Court also held that the phrase all other
provisions simply refers to the rest of the CBA, economic as well as
non-economic provisions which should be renegotiated not later than
three (3) years before expiration.
2. No. Magnolia and San Miguel Foods Inc. became distinct entities with
separate juridical personalities. Thus, they cannot belong to a single
bargaining unit. Furthermore, to determine the appropriate bargaining
unit, the test of grouping is mutuality or commonality of interest. The
employees sought to be represented must have substantial mutual
interest in terms of employment and working conditions as evinced by
the type of work they perform. The interest of the employees in the
different companies differ not only on the nature of the products
produced and skills required but also they have different volumes of
work and different working conditions.

Laguesma, Abrillius Raffy C.

Labor Relations

San Miguel Corporation Supervisors v. Honorable Bienvenido Laguesma

277 SCRA 370

FACTS:
San Miguel Corporation Supervisors and Exempt Union filed before DOLE a
Petition for Direct Certification or Certification Election among the
supervisors and exempt employees of the SMC Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis. Med-Arbiter Danilo L. Reynante
issued an Order ordering the conduct of certification election among the
abovementioned employees of the different plants as one bargaining unit.
San Miguel Corporation filed a Notice of Appeal with Memorandum on
Appeal, pointing out, among others, the Med-Arbiters error in grouping
together all three (3) separate plants, into one bargaining unit, and in
including supervisory levels 3 and above whose positions are confidential in
nature. The public respondent, Undersecretary Laguesma, granted
respondent companys Appeal and ordered the remand of the case to the
Med-Arbiter of origin for determination of the true classification of each of
the employees sought to be included in the appropriate bargaining unit.
Upon petitioner-unions motion, Undersecretary Laguesma granted the
reconsideration prayed for and directed the conduct of separate certification
elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to
S4) and the exempt employees in each of the three plants at Cabuyao, San
Fernando and Otis.
ISSUE:
1. Whether Supervisory employees 3 and 4 and the exempt employees of
the company are considered confidential employees, hence ineligible
from joining a union?
2. If they are not confidential employees, do the employees of the three
plants constitute an appropriate single bargaining unit?
RULING:

1. No. The Court ruled that said employees do not fall within the term
confidential employees who may be prohibited from joining a union.
They are not also qualified to be classified as managerial employees
who, under Article 245 of the Labor Code, are not eligible to join, assist
or form any labor organization. In the very same provision, they are not
allowed membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of
their own.
Furthermore, the Court said that confidential employees are
those who (1) assist or act in a confidential capacity, (2) to persons
who formulate, determine, and effectuate management policies in the
field of labor relations. The two criteria are cumulative, and both must
be met if an employee is to be considered a confidential employee
that is, the confidential relationship must exist between the employee
and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.
The exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management policies
relating to labor relations is a principal objective sought to be
accomplished by the confidential employee rule. The broad rationale
behind this rule is that employees should not be placed in a position
involving a potential conflict of interests. Management should not be
required to handle labor relations matters through employees who are
represented by the union with which the company is required to deal
and who in the normal performance of their duties may obtain advance
information of the companys position with regard to contract
negotiations, the disposition of grievances, or other labor relations
matters. The Court held that if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured
of their loyalty to the Union in view of evident conflict of interest. The
Union can also become company-dominated with the presence of
managerial employees in Union membership.
An important element of the confidential employee rule is the
employees need to use labor relations information. Thus, in
determining the confidentiality of certain employees, a key question
frequently considered is the employees necessary access to
confidential labor relations information.

2. Yes. The fact that the three plants are located in three different places,
namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in

San Fernando, Pampanga is immaterial. Geographical location can be

completely disregarded if the communal or mutual interests of the
employees are not sacrificed. An appropriate bargaining unit may be
defined as a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer,
indicate to be best suited to serve the reciprocal rights and duties of
the parties under the collective bargaining provisions of the law.
A unit to be appropriate must effect a grouping of employees
who have substantial, mutual interests in wages, hours, working
conditions and other subjects of collective bargaining.