IV.

RIGHT TO SELF ORGANIZATION

1. CONSTITUTIONAL AND STATUTORY BASIS

1.1 SECTION 8, ARTICLE 3 AND SECTION 3, ARTICLE XII OF THE 1987 CONSTITUTION

SECTION 8, ARTICLE III OF THE 1987 CONSTITUTION

The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridge.

SECTION 3, ARTICLE XII OF THE 1987 CONSTITUTION

Labor

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled

to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their

mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments,

and to expansion and growth.

1.2 LABOR CODE, ARTICLES 253 TO 257

Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall
terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the
duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the
parties.
Art. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5)
years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of
the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not
later than three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the
duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under this Code. (As amended by Section 21, Republic
Act No. 6715, March 21, 1989)

Art. 254. Injunction prohibited. No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise
provided in Articles 218 and 264 of this Code. (As amended by Batas Pambansa Bilang 227, June 1, 1982)

Art. 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right
at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and
decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-
management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by
Section 22, Republic Act No. 6715, March 21, 1989)

Art. 256. Representation issue in organized establishments. In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed before the Department
of Labor and Employment within the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified
petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. To have a
valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all
the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions
receiving the two highest number of votes: Provided, that the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed. (As amended by
Section 23, Republic Act No. 6715, March 21, 1989)

Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of
a petition by a legitimate labor organization. (As amended by Section 24, Republic Act No. 6715, March 21, 1989)

71. Vassar Industrial Employees Union vs. Estrella

VASSAR INDUSTRIES EMPLOYEES, VS. ESTRELLA

 The refusal of respondent Francisco L. Estrella, then the Acting Director of the Bureau of Labor Relations, to register petitioner Vassar Industries Employees Union. His
communication to that effect is worded thus: "We are hereby returning the application for registration of the [Vassar Industries Employees Union] together with all the
accompanying documents with the information that the application is denied on the ground that there is already a registered collective bargaining agent in the company."

Petitioners prayed that a restraining order be issued, and, after hearing, that its application for registration be given due course. Accordingly, in a resolution, this Court issued such
restraining order and required comment from the respondents. The comment of the then Acting Solicitor General Vicente V. Mendoza, after setting forth the pertinent facts,
submitted this conclusion; "From the aforestated undisputed facts, it is the considered opinion of this representation that the actuation of the then Acting [Bureau of Labor
Relations] Director cannot be sustained for the following reasons:

a) The ground for the denial of the registration of petitioner union is the existence of a registered collective bargaining agent, but this is erroneous since the CBA expired on
May 15, 1977, and the records do not show that [the Associated Labor Union] has been certified anew.

b) Besides, the registration of a labor union is not solely for the purpose of qualifying the union as the exclusive collective bargaining agent since it is entitled to other rights
and prerogatives as enumerated in Art. 243 of the Labor Code.

c) As long as an applicant union complies with all of the legal requirements for registration, it becomes the BIR's ministerial duty to so register the union.

d) No hearing, whatsoever, was conducted to ascertain the existence of a collective bargaining agent, thus depriving petitioner union of its day in court."

His recommendation is "that the case be ordered remanded to the BLR for the registration of the petitioner union."

The other private respondents also submitted their comments but failed to meet squarely the issue of the failure to comply with the constitutional mandate of freedom of
association. It is thus obvious that the petition is impressed with merit.

FACTS There was in existence a collective bargaining agreement between private respondents Associated Labor Unions and Vassar Industries, Inc. which expired on May 15, 1977. Prior
to such date, 111 of a total number of 150 employees of such firm disaffiliated from the former labor organization and formed their own union.

Thereafter, they filed an application for registration of their union with the Bureau of Labor Relations, complying with an the requirements of both the Labor Code and its
implementing regulations. While such application was pending, petitioner Union filed a petition for certification as bargaining agent for the rank-and-file employees of the
company. The Med-Arbiter denied their plea on the ground that the union was not duly registered with the Department of Labor. Then came a motion for reconsideration praying
that the dismissal be set aside until action be taken on its pending application for registration. Respondent Estrella, then Acting Director of the Bureau of Labor Relations, denied,
as previously noted, the application for registration "on the ground that there is a registered collective bargaining agent in the company."

Hence this petition. It should also be noted that there is this submission in the comment of the then Acting Solicitor General Vicente V. Mendoza: "It may not be amiss to mention
herein that before filing the instant comment, prior consultation was made with Director Carmelo C. Noriel of the Bureau of Labor Relations, and he shares our view on the matter
leaving it to the undersigned to make the appropriate recommendation in the premises to this Honorable Court."

ISSUE RULING

Whether or not an A notable feature of our Constitution is that "freedom of association is explicitly ordained; it is not merely derivative, peripheral or penumbral. It can trace its origin to the Malolos
application for registration Constitution."
should be denied just
because there is already a An earlier decision, Federacion Obrera v. Noriel, sets forth the scope and amplitude of such right: "Clearly, what is at stake is the constitutional right to freedom of association on
registered collective the part of employees. Petitioner labor union was in the past apparently able to enlist the allegiance of the working force in the Anglo-American Tobacco Corporation. Thereafter, a
bargaining agent in the number of such individuals joined private respondent labor union. That is a matter clearly left to their sole uncontrolled judgment.
company
There is this excerpt from Pan American World Airways, Inc. v. Pan American Employees Association: "There is both a constitutional and statutory recognition that laborers have
the right to form unions to take care of their interests vis-a-viz their employees. Their freedom to form organizations would be rendered nugatory if they could not choose
 their own leaders to speak on their behalf and to bargain for them." It cannot be otherwise, for the freedom to choose which labor organization to join is an aspect of the
constitutional mandate of protection to labor.

That statute certainly was much more emphatic as to the vital aspect of such a right as expressly set forth in the policy of the law. What is more, there is in such enactment this
categorical provision on the right of employees to self-organization: "Employees shall have the right to self-organization and to form, join or assist labor organizations of their own
choosing for the purpose of collective bargaining through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and
other mutual aid or protection." The new Labor Code is equally explicit on the matter. Thus: "The State shall assure the rights of workers to self-organization, collective
bargaining, security of tenure and just and humane conditions of work."

Equally so, whatever question may arise from the disaffiliation was set at rest by a recent decision of this Court in Philippine Labor Alliance Council v. Bureau of Labor Relations.
Thus: "It is indisputable that the present controversy would not have arisen if there were no mass disaffiliation from petitioning union. Such a phenomenon is nothing new in the
Philippine labor movement. Nor is it open to any legal objection. It is implicit in the freedom of association explicitly ordained by the Constitution. There is then the
incontrovertible right of any individual to join an organization of his choice. That option belongs to him.

A workingman is not to be denied that liberty. He may be, as a matter of fact, more in need of it the institution of collective bargaining as an aspect of industrial democracy is to
succeed. No obstacle that may possibly thwart the desirable objective of militancy in labor's struggle for better terms and conditions is then to be placed on his way. Once the fact
of disaffiliation has been demonstrated beyond doubt, as in this case, a certification election is the most expeditious way of determining which labor organization is to be the
exclusive bargaining representative. It is as simple as that."

The only novel feature of this case then is the fact that, as noted in the comment of private respondent Associated Labor Unions, there was subsequently entered into a collective
bargaining agreement with the other private respondent Vassar Industries, Inc. on September 26, 1977, allegedly containing "substantial benefits for the employees, which contract
(CBA) was approved and ratified by the majority of the general membership or employees of the Vassar Industries, Inc. ... ." It is on that basis that a dismissal of the petition is
sought. It may be stated at the outset that while such collective bargaining agreement was entered into during the pendency of a restraining order issued by this Court as far back as
August 29, 1977, it may be argued that there is no technical violation as the restraining order sought by petitioner labor union was limited to preventing the two private respondents
"from continuing to check-off the petitioner's members who disaffiliated from the ALU of union dues and other assessments, until further orders from this Honorable Court …

Nonetheless, it is quite obvious that when the two parties entered into such a collective bargaining agreement, such a move was motivated by the desire to impart a moot and
academic aspect to this petition. It should not therefore elicit the approval of this Court, especially so as upon the expiration oil the collective contract, it is made "the duty of both
parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the sixty-day period and/or until a new agreement is
reached by the parties." With a pending petition for certification, any such agreement entered into by management with a labor organization is fraught with the risk that such a
labor union may not be chosen thereafter as the collective bargaining representative. That is the situation that is confronted by private respondents. Any other view would render
nugatory the clear statutory policy to favor certification election as the means of ascertaining a true expression of the will of the workers as to which labor organization would
represent them.
"As long as an applicant union complies with all of the legal requirements for registration, it becomes the BLR's ministerial duty to so register the union." It suffices then to order
that petitioner Union be registered, there being no legal obstacle to such a step and the duty of the Bureau of Labor Relations being clear. Then there is this ruling in Philippine
Labor Alliance Council v. Bureau of Labor Relations that calls for application that "once the fact of disaffiliation has been demonstrated beyond doubt, as in this case, a
certification election is the most expeditious way of determining which labor organization is to be the exclusive bargaining representative."

In the meanwhile, if as contended by private respondent labor union the interim collective bargaining agreement, which it engineered and entered into on September 26, 1977, has
much more favorable terms for the workers of private respondent Vassar Industries, then it should continue in full force and effect until the appropriate bargaining representative is
chosen and negotiations for a new collective bargaining agreement thereafter concluded. This is one way of assuring that both the social justice, and the protection to labor
provisions would be effectively implemented without sanctioning an attempt to frustrate the exercise of this Court's jurisdiction in a pending case.

72. Victoriano vs, Elizalde

VICTORIANO, VS. ELIZALDE ROPE WORKERS’ UNION.

 FACTS Benjamin Victoriano is a member of the religious sect known as the "Iglesia ni Cristo", had been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred to as
Company) since 1958. As such employee, he was a member of the Elizalde Rope Workers' Union (Union) which had with the Company a collective bargaining agreement
containing a closed shop provision which reads as follows:

(1) Membership in the Union shall be required as a condition of employment for all permanent employees workers covered by this Agreement.

The collective bargaining agreement expired on March 3, 1964 but was renewed the following day, March 4, 1964.

Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by Republic Act No. 3350, the employer was not precluded "from making an agreement with a
labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees." However, Republic Act No.
3350 was enacted, introducing an amendment to — paragraph (4) subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such agreement shall not cover members
of any religious sects which prohibit affiliation of their members in any such labor organization".

Being a member of a religious sect that prohibits the affiliation of its members with any labor organization, Victoriano presented his resignation to appellant Union in 1962, and
when no action was taken thereon, he reiterated his resignation on September 3, 1974. Thereupon, the Union wrote a formal letter to the Company asking the latter to separate
Victoriano from the service in view of the fact that he was resigning from the Union as a member. The management of the Company in turn notified Victoriano and his counsel
that unless Victoriano could achieve a satisfactory arrangement with the Union, the Company would be constrained to dismiss him from the service.

This prompted Victoriano to file an action for injunction, in the Court of First Instance of Manila to enjoin the Company and the Union from dismissing Appellee. In its answer,
the Union invoked the "union security clause" of the collective bargaining agreement; assailed the constitutionality of Republic Act No. 3350; and contended that the Court had no
jurisdiction over the case, pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e).2

ISSUE RULING

Whether or not Republic Both the Constitution and Republic Act No. 875 recognize freedom of association. Section 1 (6) of Article III of the Constitution of 1935, as well as Section 7 of Article IV of the
Act No. 3350 is Constitution of 1973, provide that the right to form associations or societies for purposes not contrary to law shall not be abridged. Section 3 of Republic Act No. 875 provides that
unconstitutional for employees shall have the right to self-organization and to form, join of assist labor organizations of their own choosing for the purpose of collective bargaining and to engage in
impairing the obligation of concerted activities for the purpose of collective bargaining and other mutual aid or protection. What the Constitution and the Industrial Peace Act recognize and guarantee is the
its contract, specifically, "right" to form or join associations.
the "union security clause"
embodied in its Collective A right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being
Bargaining Agreement prevented by law; and second, power, whereby an employee may, as he pleases, join or refrain from Joining an association. It is, therefore, the employee who should decide for
with the Company, by himself whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which association he would join; and even after he
virtue of which has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time. It is clear, therefore, that the right to join a
"membership in the union union includes the right to abstain from joining any union. Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the employee,
was required as a condition is the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law
for employment for all does not enjoin an employee to sign up with any association.
permanent employees
workers". The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to refrain
from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only member of
the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. Thus Section 4 (a) (4) of
the Industrial Peace Act, before its amendment by Republic Act No. 3350, provides that although it would be an unfair labor practice for an employer "to discriminate in regard to
hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization" the employer is, however, not precluded
"from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the
employees". By virtue, therefore, of a closed shop agreement, before the enactment of Republic Act No. 3350, if any person, regardless of his religious beliefs, wishes to be
employed or to keep his employment, he must become a member of the collective bargaining union. Hence, the right of said employee not to join the labor union is curtailed and
withdrawn.

To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introduced an exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the
 following proviso: "but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization". Republic Act
No. 3350 merely excludes ipso jure from the application and coverage of the closed shop agreement the employees belonging to any religious sects which prohibit affiliation of
their members with any labor organization. What the exception provides, therefore, is that members of said religious sects cannot be compelled or coerced to join labor
unions even when said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects cannot be
refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union.
It is clear, therefore, that the assailed Act, far from infringing the constitutional provision on freedom of association, upholds and reinforces it. It does not prohibit the members of
said religious sects from affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to affiliate, with labor unions. If, notwithstanding
their religious beliefs, the members of said religious sects prefer to sign up with the labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign
up, they can do so; the law does not coerce them to join; neither does the law prohibit them from joining; and neither may the employer or labor union compel them to join.
Republic Act No. 3350, therefore, does not violate the constitutional provision on freedom of association.This agreement was already in existence at the time Republic Act
No. 3350 was enacted on June 18, 1961, and it cannot, therefore, be deemed to have been incorporated into the agreement. But by reason of this amendment, Victoriano, as well
as others similarly situated, could no longer be dismissed from his job even if he should cease to be a member, or disaffiliate from the Union, and the Company could
continue employing him notwithstanding his disaffiliation from the Union. The Act, therefore, introduced a change into the express terms of the union security clause; the
Company was partly absolved by law from the contractual obligation it had with the Union of employing only Union members in permanent positions, It cannot be denied,
therefore, that there was indeed an impairment of said union security clause.

It should not be overlooked, however, that the prohibition to impair the obligation of contracts is not absolute and unqualified. The prohibition is general, affording a broad
outline and requiring construction to fill in the details. The prohibition is not to be read with literal exactness like a mathematical formula, for it prohibits unreasonable impairment
only. In spite of the constitutional prohibition, the State continues to possess authority to safeguard the vital interests of its people. Legislation appropriate to safeguarding said
interests may modify or abrogate contracts already in effect. For not only are existing laws read into contracts in order to fix the obligations as between the parties, but the
reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. All contracts made with reference to any matter that is subject to
regulation under the police power must be understood as made in reference to the possible exercise of that power. Otherwise, important and valuable reforms may be precluded by
the simple device of entering into contracts for the purpose of doing that which otherwise may be prohibited. The policy of protecting contracts against impairment presupposes the
maintenance of a government by virtue of which contractual relations are worthwhile a government which retains adequate authority to secure the peace and good order of society.
The contract clause of the Constitution must, therefore, be not only in harmony with, but also in subordination to, in appropriate instances, the reserved power of the state to
safeguard the vital interests of the people. It follows that not all legislations, which have the effect of impairing a contract, are obnoxious to the constitutional prohibition as to
impairment, and a statute passed in the legitimate exercise of police power, although it incidentally destroys existing contract rights, must be upheld by the courts. This has special
application to contracts regulating relations between capital and labor which are not merely contractual, and said labor contracts, for being impressed with public interest, must
yield to the common good.

It may not be amiss to point out here that the free exercise of religious profession or belief is superior to contract rights. In case of conflict, the latter must, therefore, yield to
the former. Religious freedom, although not unlimited, is a fundamental personal right and liberty, and has a preferred position in the hierarchy of values. Contractual
rights, therefore, must yield to freedom of religion. It is only where unavoidably necessary to prevent an immediate and grave danger to the security and welfare of the community
that infringement of religious freedom may be justified, and only to the smallest extent necessary to avoid the danger.

Whether or not Republic The contention that Republic Act No. 3350 violates the constitutional prohibition against requiring a religious test for the exercise of a civil right or a political right, is not well
Act No. 3350 violates the taken.
constitutional prohibition
against requiring a The Act does not require as a qualification, or condition, for joining any lawful association membership in any particular religion or in any religious sect; neither does the Act
religious test for the require affiliation with a religious sect that prohibits its members from joining a labor union as a condition or qualification for withdrawing from a labor union. Joining or
exercise of a civil right or a withdrawing from a labor union requires a positive act. Republic Act No. 3350 only exempts members with such religious affiliation from the coverage of closed shop agreements.
political right, So, under this Act, a religious objector is not required to do a positive act — to exercise the right to join or to resign from the union. He is exempted ipso jure without need of any
positive act on his part. A conscientious religious objector need not perform a positive act or exercise the right of resigning from the labor union — he is exempted from the
coverage of any closed shop agreement that a labor union may have entered into.

It was within the police power of the State to enact Republic Act No. 3350, and that its purpose was legal and in consonance with the Constitution. It is never an illegal evasion of
a constitutional provision or prohibition to accomplish a desired result, which is lawful in itself, by discovering or following a legal way to do it.

73. Kapatiran sa Meat & Canning Division vs. Calleja

 KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS LOCAL CHAPTER NO. 1027), VS. CALLEJA.

FACTS 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, 1987.

Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice of strike on September 28, 1987 as a means of pressuring the company to
extend, renew, or negotiate a new CBA with it.

The NEW ULO, composed mostly of workers belonging to the IGLESIA NI KRISTO sect, registered as a labor union.

The TUPAS staged a strike. ROBINA obtained an injunction against the strike, resulting in an agreement to return to work and for the parties to negotiate a new CBA. The next
day, NEW ULO, claiming that it has "the majority of the daily wage rank and file employees numbering 191," filed a petition for a certification election at the Bureau of Labor
Relations.

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. It also accused the company of using the NEW ULO to defeat TUPAS' bargaining rights.

MED-ARBITER The Med-Arbiter ordered the holding of a certification election within 20 days.

BUREAU OF LABOR TUPAS appealed to the Bureau of Labor Relations BLR. In the meantime, it was able to negotiate a new 3-year CBA with ROBINA, which was signed on December 3, 1987 and
RELATIONS to expire on November 15, 1990.

Respondent BLR Director Calleja dismissed the appeal.

TUPAS' motion for reconsideration (Annex E) was denied on March 17, 1988 (Annex F). On April 30, 1988, it filed this petition alleging that the public respondent acted in excess
of her jurisdiction and with grave abuse of discretion in affirming the Med-Arbiter's order for a certification election.

ISSUE RULING

We find no merit in the Petition. The public respondent did not err in dismissing the petitioner's appeal in BLR Case No. A-12-389-87. This Court's decision in Victoriano vs.
Elizalde Rope Workers' Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their religious
beliefs, does not bar the members of that sect from forming their own union. The public respondent correctly observed that the "recognition of the tenets of the sect ... should
not infringe on the basic right of self-organization granted by the constitution to workers, regardless of religious affiliation."

The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom period of the existing CBA, does not foreclose the right of the rival union, NEW
ULO, to challenge TUPAS' claim to majority status, by filing a timely petition for certification election on October 13, 1987 before TUPAS' old CBA expired on November 15,
1987 and before it signed a new CBA with the company on December 3, 1987.

As pointed out by Med-Arbiter Abdullah, 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." Since it has not been shown that this order is tainted with unfairness, this Court will not thwart the holding of a
certification election.

74. UST Faculty Union vs. Bitonio

UST FACULTY UNION (USTFU) VS. BITONIO

 FACTS Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year
Collective Bargaining Agreement with its employer, the University of Santo Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on 20
February 1995. It is set to expire on 31 May 1998.

Appellee Collantes, in her capacity as Secretary General of USTFU, posted a notice addressed to all USTFU members announcing a general assembly to be held on 05 October
1996. Among others, the general assembly was called to elect USTFU's next set of officers. Through the notice, the members were also informed of the constitution of a
Committee on Elections (COMELEC) to oversee the elections.

On 01 October 1996, some of herein appellants filed a separate petition with the Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the COMELEC.
Docketed as Case No. NCR-OD-M-9610-001, the petition alleged that the COMELEC was not constituted in accordance with USTFU's constitution and by-laws (CBL) and that
no rules had been issued to govern the conduct of the 05 October 1996 election.

On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presidents, issued notices allowing all faculty members to hold a convocation
on 04 October 1996. Denominated as [a] general faculty assembly, the convocation was supposed to discuss the "state of the unratified UST-USTFU CBA" and "status and
election of USTFU officers"

On 04 October 1996, the med-arbiter issued a temporary restraining order against herein appellees enjoining them from conducting the election scheduled on 05 October 1996.

Also on 04 October 1996, and as earlier announced by the UST secretary general, the general faculty assembly was held as scheduled. The general assembly was attended by
members of the USTFU and, as admitted by the appellants, also by "non-USTFU members [who] are members in good standing of the UST Academic Community Collective
Bargaining Unit". On this occasion, appellants were elected as USTFU's new set of officers by acclamation and clapping of hands.

The election of the appellants came about upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the USTFU CBL and "the rules of the election be suspended
and that the election be held [on] that day".

ISSUE RULING

Whether or not the
Collective Bargaining Unit
of all the faculty members
in that General Faculty
Assembly had the right in
that General Faculty
Assembly to suspend the
provisions of the
Constitution and By-Laws
of the USTFU regarding
the elections of officers of
the union.
Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the
purpose of collective bargaining or for their mutual aid and protection. Whether employed for a definite period or not, any employee shall be considered as such, beginning on his
first day of service, for purposes of membership in a labor union.
Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. Therefore, to become a union member, an employee must, as a rule, not only signify the
intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union's constitution and bylaws. An
employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the union's rules and regulations.
When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion of his individual freedom is surrendered for the benefit of all
members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the
legislature bind all of us, to the constitution and by-laws of the union (unless contrary to good morals or public policy, or otherwise illegal), which are duly enacted through
democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union;
otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union.

On joining a labor union, the constitution and by-laws become a part of the member's contract of membership under which he agrees to become bound by the constitution and
governing rules of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a
contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its
laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal
rights.

Petitioners claim that the numerous anomalies allegedly committed by the private respondents during the latter's incumbency impelled the October 4, 1996 election of the new set
of USTFU officers. They assert that such exercise was pursuant to their right to self-organization.

Whether or not the
suspension of the
provisions of the
Constitution and By-Laws
of the USTFU in that
General Faculty Assembly
is valid pursuant to the
constitutional right of the
Collective Bargaining Unit
to engage in "peaceful
concerted activities" for the
purpose of ousting the
corrupt regime of the
private respondents[.]
Petitioners' frustration over the performance of private respondents, as well as their fears of a "fraudulent" election to be held under the latter's supervision, could not justify the
method they chose to impose their will on the union. Director Bitonio aptly elucidated:
The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize),
to which the Philippines is signatory. Article 3 of the Convention provides that workers' organizations shall have the right to draw up their constitution and rules and to
elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility
imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the union's CBL is the fundamental
law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the
officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the
CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule.
Union Election vs. Certification Election
A union election is held pursuant to the union's constitution and bylaws, and the right to vote in it is enjoyed only by union members. A union election should be distinguished
from a certification election, which is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate bargaining unit,
for purposes of collective bargaining. Specifically, the purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a
labor organization and, in the affirmative case, by which particular labor organization.
In a certification election, all employees belonging to the appropriate bargaining unit can vote. Therefore, a union member who likewise belongs to the appropriate bargaining unit
is entitled to vote in said election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of the union cannot
vote in the union election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and elections cannot be decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot properly be called a union election, because the procedure laid down in the
USTFU's CBL for the election of officers was not followed. It could not have been a certification election either, because representation was not the issue, and the proper
procedure for such election was not followed. The participation of non-union members in the election aggravated its irregularity.
The importance of a union's constitution and bylaws cannot be overemphasized. They embody a covenant between a union and its members and constitute the fundamental law
governing the members' rights and obligations. As such, the union's constitution and bylaws should be upheld, as long as they are not contrary to law, good morals or
public policy.
The October 4, 1996 election was tainted with irregularities because of the following reasons.
(1) First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of faculty clubs, as indicated in the memorandum sent to all faculty
members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo Tomas. It was not convened in accordance with the provision on general membership
meetings as found in the USTFU's CBL, which reads:
ARTICLE VIII-MEETINGS OF THE UNION
Sec. 1. The Union shall hold regular general membership meetings at least once every three (3) months. Notices of the meeting shall be sent out by the Secretary-General
at least ten (10) days prior to such meetings by posting in conspicuous places, preferably inside Company premises, said notices. The date, time and place for the
meetings shall be determined by the Board of Officers.
Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called and participated in by management and non-union members. By no
legal fiat was such assembly transformed into a union activity by the participation of some union members.
(2) Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2 of Article IX of the USTFU's CBL, which provide:
ARTICLE IX - UNION ELECTION
 Sec. 1. There shall be a Committee on Election (COMELEC) to be created by the Board of Officers at least thirty (30) days before any regular or special election. The
functions of the COMELEC include the following:

a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly election, whether regular or special;
b) Pass upon qualifications of candidates;
c) Rule on any question or protest regarding the conduct of the election subject to the procedure that may be promulgated by the Board of Officers; and
d) Proclaim duly elected officers.

Sec. 2. The COMELEC shall be composed of a chairman and two members all of whom shall be appointed by the Board of Officers.

(3) Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of the USTFU's CBL, as well as Article 241 (c) of the Labor Code.

In Rodriguez v. Director, Bureau of Labor Relations, we invalidated the local union elections held at the wrong date without prior notice to members and conducted without regard
for duly prescribed ground rules. We held that the proceedings were rendered void by the lack of due process — undue haste, lack of adequate safeguards to ensure integrity of the
voting, and the absence of the notice of the dates of balloting.

Whether or not the
overwhelming ratification
of the Collective
Bargaining Agreement
executed by the petitioners
in behalf of the USTFU
with the University of
Santo Tomas has rendered
moot and academic the
issue as to the validity of
the suspension of the
Constitution and By-Laws
and the elections of
October 4, 1996 in the
General Faculty
Assembly[.]
(1) First, as has been discussed, the general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not all who attended the assembly
were members of the union; some, apparently, were even disqualified from becoming union members, since they represented management. Thus, Director Bitonio
correctly observed:
By appellant's own evidence, the general faculty assembly of 04 October 1996 was not a meeting of USTFU. It was attended by members and non-members
alike, and therefore was not a forum appropriate for transacting union matters. The person who moved for the suspension of USTFU's CBL was not a member
of USTFU. Allowing a non-union member to initiate the suspension of a union's CBL, and non-union members to participate in a union election on the premise
that the union's CBL had been suspended in the meantime, is incompatible with the freedom of association and protection of the right to organize.
If there are members of the so-called "academic community collective bargaining unit" who are not USTFU members but who would nevertheless want to have
a hand in USTFU's affairs, the appropriate procedure would have been for them to become members of USTFU first. The procedure for membership is very
clearly spelled out in Article IV of USTFU's CBL. Having become members, they could then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay
v. Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that "if a member of the union dislikes the provisions of the by-laws he may seek to have them
amended or may withdraw from the union; otherwise he must abide by them." Under Article XVII of USTFU's CBL, there is also a specific provision for
constitutional amendments. What is clear therefore is that USTFU's CBL provides for orderly procedures and remedies which appellants could have easily
availed [themselves] of instead of resorting to an exercise of their so-called "residual power".

(2) Second, the grievances of the petitioners could have been brought up and resolved in accordance with the procedure laid down by the union's CBL and by the Labor
Code. They contend that their sense of desperation and helplessness led to the October 4, 1996 election. However, we cannot agree with the method they used to rectify
years of inaction on their part and thereby ease bottled-up frustrations, as such method was in total disregard of the USTFU's CBL and of due process. The end never
justifies the means.

We agree with the solicitor general's observation that "the act of suspending the constitution when the questioned election was held is an implied admission that the
election held on that date [October 4, 1996] could not be considered valid under the existing USTFU constitution . . .."

The ratification of the new CBA executed between the petitioners and the University of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were
the terms of the new CBA, not the issue of union leadership — a matter that should be decided only by union members in the proper forum at the proper time and after observance
of proper procedures.

75. Tropical Hut Employees Union vs. Tropical Union

 TROPICAL HUT EMPLOYEES’ UNION - CGW, VS. TROPICAL HUT FOOD MARKET, INC.

FACTS The rank and file workers of the Tropical Hut Food Market Incorporated, referred to herein as respondent company, organized a local union called the Tropical Hut Employees
Union, known for short as the THEU, elected their officers, adopted their constitution and by-laws and immediately sought affiliation with the National Association of Trade
Unions (NATU). The NATU accepted the THEU application for affiliation. Following such affiliation with NATU, Registration Certificate was issued by the Department of Labor
in the name of the Tropical Hut Employees Union — NATU. It appears, however, that NATU itself as a labor federation, was not registered with the Department of Labor.

After several negotiations were conducted between THEU-NATU, represented by its local president and the national officers of the NATU, and respondent Tropical Hut Food
Market, Incorporated, a Collective Bargaining Agreement was concluded between the parties, the term of which expired on March 31, 1971.
Respondent company and THEU-NATU entered into a new Collective Bargaining Agreement which ended on March 31, 1974. This new CBA incorporated the previous union-
shop security clause and the attached check-off authorization form.

Arturo Dilag, incumbent President of THEU-NATU, was appointed by the respondent company as Assistant Unit Manager. He wrote the general membership of his union that for
reason of his present position, he was resigning as President of the THEU-NATU effective that date. As a consequence thereof, his Vice-President, Jose Encinas, assumed and
discharged the duties of the presidency of the THEU-NATU.

NATU received a letter, jointly signed by the incumbent officers of the local union informing the NATU that THEU was disaffiliating from the NATU federation. The Secretary of
the THEU made an announcement in an open letter to the general membership of the THEU, concerning the latter's disaffiliation from the NATU and its affiliation with the
Confederation of General Workers (CGW). The letter was passed around among the members of the THEU-NATU, to which around one hundred and thirty-seven (137) signatures
appeared as having given their consent to and acknowledgment of the decision to disaffiliate the THEU from the NATU.

The general membership of the so-called THEU-CGW held its annual election of officers, with Jose Encinas elected as President. Encinas, in his capacity as THEU-CGW
President, informed the respondent company of the result of the elections. Pacifico Rosal, President of the Confederation of General Workers (CGW), wrote a letter in behalf of
complainant THEU-CGW to the respondent company demanding the remittance of the union dues collected by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but
this was refused by the respondent company.

The NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal Mantos, requiring the latter to assume immediately the position of President of the THEU-NATU in place of
Jose Encinas, but the position was declined by Mantos. On the same day, Lontok, Jr., informed Encinas in a letter, concerning the request made by the NATU federation to the
respondent company to dismiss him (Encinas) in view of his violation of Section 3 of Article III of the Collective Bargaining Agreement. Encinas was also advised in the letter that
NATU was returning the letter of disaffiliation on the ground that:

1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine National Trade Union Center in conjunction with the NATU and other established
national labor centers, retail clerks and employees such as our members in the Tropical Hut pertain to Industry II which by consensus, has been assigned already to the
jurisdiction of the NATU;
2. The right to disaffiliate belongs to the union membership who — on the basis of verified reports received by — have not even been consulted by you regarding the
matter;
3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless is unacceptable in view of Article V, Section 1, of the NATU Constitution which
provides that "withdrawal from the organization shall he valid provided three (3) months notice of intention to withdraw is served upon the National Executive Council."

In view of NATU's request, the respondent company suspended Encinas pending the application for clearance with the Department of Labor to dismiss him. Members of the
THEU-CGW passed a resolution protesting the suspension of Encinas and reiterated their ratification and approval of their union's disaffiliation from NATU and their affiliation
with the Confederation of General Workers (CGW). It was Encinas' suspension that caused the filing of NLRC Case against private respondents herein, charging them of unfair
labor practice.

Upon the request of NATU, respondent company applied for clearance with the Secretary of Labor to dismiss the other officers and members of THEU-CGW. The company also
suspended them effective that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual complainants against private respondents for unfair labor practices.

Lontok, acting as temporary chairman, presided over the election of officers of the remaining THEU-NATU in an emergency meeting pending the holding of a special election to
be called at a later date. In the alleged election, Arturo Dilag was elected acting THEU-NATU President together with the other union officers. These temporary officers were

ISSUE
Whether or not the
petitioners failed to exhaust
administrative remedies
when they immediately
elevated the case to this
Court without an appeal
having been made to the
Office of the President;
Whether or not the
disaffiliation of the local
union from the national
federation was valid.
Whether or not the
dismissal of petitioner
employees resulting from
their unions disaffiliation
for the mother federation
was illegal and constituted
unfair labor practice on the
part of respondent
company and federation.
considered as having been elected as regular officers for the year 1974.
Petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary of National Defense, complaining of the unfair labor practices committed by respondent company against its
members and requesting assistance on the matter. The aforementioned letter contained the signatures of one hundred forty-three (143) members.
The secretary of THEU-NATU, notified the entire rank and file employees of the company that they will be given forty-eight (48) hours upon receipt of the notice within which to
answer and affirm their membership with THEU-NATU. When the petitioner employees failed to reply, Arturo Dilag advised them thru letters dated February 26, March 2 and 5,
1974, that the THEU-NATU shall enforce the union security clause set forth in the CBA, and that he had requested respondent company to dismiss them.
Respondent company, thereafter, wrote the petitioner employees demanding the latter's comment on Dilag's charges before action was taken thereon. However, no comment or
reply was received from petitioners. In view of this, Estelita Que, President/General Manager of respondent company, upon Dilag's request, suspended twenty four (24) workers on
March 5, 1974, another thirty seven (37) on March 8, 1974 and two (2) more on March 11, 1974, pending approval by the Secretary of Labor of the application for their dismissal.
RULING
The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21, 1975, which states:
Art. 222. Appeal — . . .
xxx xxx xxx
Decisions of the Secretary of Labor may be appealed to the President of the Philippines subject to such conditions or limitations as the President may direct.
The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory requirement before resort to courts can be had, but an optional relief provided
by law to parties seeking expeditious disposition of their labor disputes. Failure to avail of such relief shall not in any way served as an impediment to judicial intervention. And
where the issue is lack of power or arbitrary or improvident exercise thereof, decisions of the Secretary of Labor may be questioned in a certiorari proceeding without prior appeal
to the President. Since the instant petition raises the same issue of grave abuse of discretion of the Secretary of Labor amounting to lack of or in excess of jurisdiction in deciding
the controversy, this Court can properly take cognizance of and resolve the issues raised herein.
In the celebrated case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512, We held that the validity of the dismissals
pursuant to the union security clause in the collective bargaining agreement hinges on the validity of the disaffiliation of the local union from the federation.
The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances warrant. This right is consistent with the constitutional guarantee of freedom of association.
All employees enjoy the right to self organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining and to engage in
concerted activities for their mutual aid or protection. This is a fundamental right of labor that derives its existence from the Constitution. In interpreting the protection to labor and
social justice provisions of the Constitution and the labor laws or rules or regulations, We have always adopted the liberal approach which favors the exercise of labor rights.
Relevant on this point is the basic principle We have repeatedly in affirmed in many rulings:
. . . The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-
members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of the locals into the national union (PAFLU) was
in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their member. The essential purpose was the
affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-
Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.
The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is merely to stress that the THEU is NATU's affiliate at
the time of the registration. It does not mean that the said local union cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its own interests
independently of the federation. A local union owes its creation and continued existence to the will of its members and not to the federation to which it belongs.

When the local union withdrew from the old federation to join a new federation, it was merely exercising its primary right to labor organization for the effective enhancement and
protection of common interests. In the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union a local may sever its relationship
with its parent.

There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly forbidden to disaffiliate from the federation. The alleged
non-compliance of the local union with the provision in the NATU Constitution requiring the service of three months notice of intention to withdraw did not produce the effect of
nullifying the disaffiliation for the following grounds:

firstly, NATU was not even a legitimate labor organization, it appearing that it was not registered at that time with the Department of Labor, and therefore did not
possess and acquire, in the first place, the legal personality to enforce its constitution and laws, much less the right and privilege under the Labor Code to organize and
affiliate chapters or locals within its group, and secondly, the act of non-compliance with the procedure on withdrawal is premised on purely technical grounds which
cannot rise above the fundamental right of self-organization.

The supposed decision to disaffiliate was not the subject of a free and open discussion and decision on the part of the THEU-NATU general membership. This, however, is
contradicted by the evidence on record. Moreover, We are inclined to believe Arbitrator Villatuya's findings to the contrary, as follows:

. . . . However, the complainants refute this allegation by submitting the following: a) Letter dated December 20, 1.973 signed by 142 members (Exhs. "B to B-5")
resolution dated January 12, 1974, signed by 140 members (Exhs. "H to H-6") letter dated February 26, 1974 to the Department of Labor signed by 165 members (Exhs.
"I to I-10"); d) letter dated January 30, 1974 to the Secretary of the National Defense signed by 144 members (Exhs. "0 to 0-5") and; e) letter dated March 6, 1974 signed
by 146 members addressed to the President of the Philippines (Exhs. "HH to HH-5"), to show that in several instances, the members of the THEU-NATU have
acknowledged their disaffiliation from NATU. The letters of the complainants also indicate that an overwhelming majority have freely and voluntarily signed their
union's disaffiliation from NATU, otherwise, if there was really deception employed in securing their signatures as claimed by NATU/ Dilag, it could not be possible to
get their signatures in five different documents.

We are aware of the time-honored doctrine that the findings of the NLRC and the Secretary of Labor are binding on this Court if supported by substantial evidence. However, in
the same way that the findings of facts unsupported by substantial and credible evidence do not bind this Court, neither will We uphold erroneous conclusions of the NLRC and the
Secretary of Labor when We find that the latter committed grave abuse of discretion in reversing the decision of the labor arbiter. In the instant case, the factual findings of the
arbitrator were correct against that of public respondents.

Further, there is no merit in the contention of the respondents that the act of disaffiliation violated the union security clause of the CBA and that their dismissal as a consequence
thereof is valid. A perusal of the collective bargaining agreements shows that the THEU-NATU, and not the NATU federation, was recognized as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages, hours of work and other terms and conditions of employment. Although NATU was designated
as the sole bargaining agent in the check-off authorization form attached to the CBA, this simply means it was acting only for and in behalf of its affiliate. The NATU possessed
the status of an agent while the local union remained the basic principal union which entered into contract with the respondent company.

When the THEU disaffiliated from its mother federation, the former did not lose its legal personality as the bargaining union under the CBA. Moreover, the union
security clause embodied in the agreements cannot be used to justify the dismissals meted to petitioners since it is not applicable to the circumstances obtaining in this case. The
CBA imposes dismissal only in case an employee is expelled from the union for joining another federation or for forming another union or who fails or refuses to
maintain membership therein. The case at bar does not involve the withdrawal of merely some employees from the union but of the whole THEU itself from its federation.
Clearly, since there is no violation of the union security provision in the CBA, there was no sufficient ground to terminate the employment of petitioners.

Public respondents considered the existence of Arturo Dilag's group as the remaining true and valid union. We, however, are inclined to agree instead with the Arbitrator's findings
when he declared:

. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the original THEU-NATU has a very doubtful and questionable existence not to
 mention that the alleged president is performing supervisory functions and not qualified to be a bona fide member of the rank and file union.

Records show that Arturo Dilag had resigned in the past as President of THEU-NATU because of his promotion to a managerial or supervisory position as Assistant Unit Manager
of respondent Company. Petitioner Jose Encinas replaced Dilag as President and continued to hold such position at the time of the disaffiliation of the union from the federation. It
is therefore improper and contrary to law for Dilag to reassume the leadership of the remaining group which was alleged to be the true union since he belonged to the managerial
personnel who could not be expected to work for the betterment of the rank and file employees. Besides, managers and supervisors are prohibited from joining a rank and file
union. Correspondingly, if a manager or supervisor organizes or joins a rank and file union, he will be required to resign therefrom.

Public respondents further submit that several employees who disaffiliate their union from the NATU subsequently retracted and reaffirmed their membership with the THEU-
NATU. In the decision which was affirmed by respondent Secretary of Labor, the respondent Commission stated that:

(1) . . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW whose signatures appeared in the "Analysis of Various Documents Signed by
Majority Members of the THEU-CGW, which incidentally was relied upon by Arbitrator Villatuya in holding that complainant THEU-CGW commanded the majority of
employees in respondent company, ninety-three (93) of the alleged signatories reaffirmed their membership with the THEU-NATU and renounced whatever connection
they may have had with other labor unions, (meaning the complainant THEU-CGW) either through resolution or membership application forms they have unwittingly
signed."

Granting arguendo, that the fact of retraction is true, the evidence on record shows that the letters of retraction were executed on various dates beginning January 11, 1974 to
March 8, 1974. This shows that the retractions were made more or less after the suspension pending dismissal on January 11, 1974 of Jose Encinas, formerly THEU-NATU
President, who became THEU-CGW President, and the suspension pending their dismissal of the other elected officers and members of the THEU-CGW on January 15, 1974.

It is also clear that some of the retractions occurred after the suspension of the first set of workers numbering about twenty-four (24) on March 5, 1974. There is no use in saying
that the retractions obliterated the act of disaffiliation as there are doubts that they were freely and voluntarily done especially during such time when their own union officers and
co-workers were already suspended pending their dismissal.

Finally, with regard to the process by which the workers were suspended or dismissed, this Court finds that it was hastily and summarily done without the necessary due process.
The respondent company sent a letter to petitioners herein, advising them of NATU/Dilag's recommendation of their dismissal and at the same time giving them forty-eight (48)
hours within which to comment. When petitioners failed to do so, respondent company immediately suspended them and thereafter effected their dismissal.

This is certainly not in fulfillment of the mandate of due process, which is to afford the employee to be dismissed an opportunity to be heard.

The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of discretion or arbitrainess, for what is at stake is not only the employee's name
or position but also his means of livelihood. Thus, the discharge of an employee from his employment is null and void where the employee was not formally investigated and given
the opportunity to refute the alleged findings made by the company. Likewise, an employer can be adjudged guilty of unfair labor practice for having dismissed its employees in
line with a closed shop provision if they were not given a proper hearing.

In view of the fact that the dispute revolved around the mother federation and its local, with the company suspending and dismissing the workers at the instance of the mother
federation then, the company's liability should be limited to the immediate reinstatement of the workers. And since their dismissals were effected without previous hearing and at
the instance of NATU, this federation should be held liable to the petitioners for the payment of their backwages, as what We have ruled in the Liberty Cotton Mills Case.

76. Philippine Skylanders, Inc. vs. NLRC

PHILIPPINE SKYLANDERS, INC., VS. NLRC

FACTS In November 1993, the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU)
September (PAFLU), won in the certification election conducted among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor.
 Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual
dereliction of duty toward its members. Attached to the notice was a copy of the resolution adopted and signed by the officers and members of PSEA authorizing their local
union to disaffiliate from its mother federation.

PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine Skylanders Employees Association - National Congress of
Workers (PSEA-NCW), and to maintain continuity within the organization, allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers
in the newly-forged PSEA-NCW.

PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with the Department of Labor and Employment.

Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General wrote Mariles C. Romulo requesting a copy of PSI's audited financial statement. Ayroso
explained that with the dismissal of PSEA-WATU's election protest the time was ripe for the parties to enter into a collective bargaining agreement.

PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW.

Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a complaint for unfair labor practice against PSI, its president Mariles Romulo and personnel
manager Francisco Dakila. PAFLU alleged that aside from PSI's refusal to bargain collectively with its workers, the company through its president and personnel manager, was
also liable for interfering with its employees' union activities.

Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair labor practice against Francisco Dakila. Through Ayroso PAFLU claimed
that Dakila was present in PSEA's organizational meeting thereby confirming his illicit participation in union activities. Ayroso added that the members of the local union had
unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to their interests. 7 The two (2)
complaints were thereafter consolidated.

On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party respondents. PAFLU averred that the local officers of
PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol,
Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice since they brazenly allowed themselves to be
manipulated and influenced by petitioner Francisco Dakila.

PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the dismissal of the complaint on the ground that the issue of disaffiliation was an inter-union
conflict which lay beyond the jurisdiction of the Labor Arbiter. On the other hand, PSEA-NCW took the cudgels for its officers who were being sued in their capacities as former
officers of PSEA-PAFLU and asserted that since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no personality to file the instant complaint. In
support of this assertion, PSEA-NCW submitted in evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI disauthorizing Ayroso or PAFLU from
instituting any action in their behalf.

LABOR ARBITER In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective officers guilty of
unfair labor practice. The Decision explained that despite PSEA-PAFLU's status as the sole and exclusive bargaining agent of PSI's rank and file employees, the company
knowingly sanctioned and confederated with Dakila in actively assisting a rival union. This, according to the Labor Arbiter, was a classic case of interference for which PSI could
be held responsible. As PSEA-NCW's personality was not accorded recognition, its collective bargaining agreement with PSI was struck down for being invalid. Ayroso's legal
personality to file the complaint was sustained on the ratiocination that under the Labor Code no petition questioning the majority status of the incumbent bargaining agent shall be
entertained outside of the sixty (60)-day period immediately before the expiry date of such five (5)-year term of the collective bargaining agreement that the parties may enter into.
Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU ₱150,000.00 in damages.

NLRC PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the NLRC upheld the Decision of the Labor Arbiter and conjectured
that since an election protest questioning PSEA-PAFLU's certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA
could not validly separate from PAFLU, join another national federation and subsequently enter into a collective bargaining agreement with its employer-company.

Petitioners separately moved for reconsideration but both motions were denied. Hence, these petitions for certiorari filed by PSI and PSEA-NCW together with their respective
 officers pleading for a reversal of the NLRC's Decision which they claimed to have been rendered in excess of jurisdiction. In due time, both petitions were consolidated.

ISSUE RULING

May PSEA, which is an At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with
independent and separate the Labor Arbiter. Nonetheless, with due recognition of this fact, we deem it proper to settle the controversy at this instance since to remand the case to the BLR would only mean
local union, validly intolerable delay for the parties.
disaffiliate from PAFLU
pending the settlement of The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the landmark case of Liberty Cotton Mills Workers Union vs.
an election protest Liberty Cotton Mills, Inc. we upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations, local unions do not
questioning its status as the owe their creation and existence to the national federation to which they are affiliated but, instead, to the will of their members. The sole essence of affiliation is to increase, by
sole and exclusive collective action, the common bargaining power of local unions for the effective enhancement and protection of their interests. Admittedly, there are times when without succor
bargaining agent of PSI's and support local unions may find it hard, unaided by other support groups, to secure justice for themselves.
rank and file employees?
Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national
federation, and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence.

There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions
imposed for a valid breakaway. As such, the pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid
disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local union, or an equivalent of 92.5% of the total union membership
supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is not a case where one (1) or two (2)
members of the local union decided to disaffiliate from the mother federation, but it is a case where almost all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no
restrictions which could validly hinder it from subsequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the petitions. It stands unchallenged that PAFLU instituted the complaint for unfair labor practice against
the wishes of workers whose interests it was supposedly protecting. The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license
to act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. PAFLU might have
forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. The complaint then for unfair labor practice lodged by
PAFLU against PSI, PSEA and their respective officers, having been filed by a party which has no legal personality to institute the complaint, should have been dismissed at the
first instance for failure to state a cause of action.

Policy considerations dictate that in weighing the claims of a local union as against those of a national federation, those of the former must be preferred. Parenthetically though, the
desires of the mother federation to protect its locals are not altogether to be shunned. It will however be to err greatly against the Constitution if the desires of the federation would
be favored over those of its members. That, at any rate, is the policy of the law. For if it were otherwise, instead of protection, there would be disregard and neglect of the lowly
workingmen.

77. Sampang vs. Inciong

FACTS Natividad Sampang was the president of the labor union of the employees of private respondent Insular Yebana Tobacco Corporation.

She seeks the reversal of an order of the then Deputy Minister of Labor, Amado G. Inciong, who sustained the Regional Director in his decision to grant clearance for her
dismissal, presumably for initiating "a concerted action among the rank and file workers not to perform overtime work [amounting] to gross insubordination" That charge she
denied, her version being that she made "several representations with management, upon request of the members of the union, to cut-off overtime work, as this would mean more
 days of work and additional living allowance for the workers, but to no avail, that the overtime work was a device of management to avoid compliance with P.D. 112; that there is
no exigency for the rendering of overtime work, hence, the concerted refusal to work overtime cannot be recalled a strike."

In the Comment submitted by private respondent La Yebana Tobacco Corporation, there was admission that "the Gabay ng Manggagawa thru petitioner Natividad Sampang
[requested] for the cancellation of overtime work and limit the work to eight (8) hours only." It was, however, alleged that the strike on "January 12, 1978, [was unexpected,
having come] without awaiting the results of the study program being prepared and undertaken by its management's staff so that work schedule could finally be set to mutual
satisfaction of both parties and upon petitioner's investigation the rank-and-file workers of the company [went on a strike after the eight hours working period, despite pleadings of
the company supervisors to finish their unfinished work. [The strike continued] up to the following day, January 13, 1978."

ISSUE RULING

The basis for the dismissal of petitioner Sampang as previously noted, citing the Comment of private respondent. was the "unexpected" character of the strike on the evening of
June 12, 1978, lasting until the next day a strike the blame for which was attributed to petitioner, who allegedly instigated it. It was further stated that the pleas made by the
company supervisor for the employees to do overtime work was disregarded.

As a result, according to an Annex to the Comment of private respondent "the company lost an estimated amount of P2,716.00 worth of unpacked cigarettes which were spoiled."
The same amount was mentioned in its memorandum to the Regional Office IV of the then Department of Labor, in well-nigh Identical language: "As a result of this concerted
action, the Corporation suffered irreparable losses in the amount of P2,761.00, more or less, worth of unfinished products in the form of unpacked and spoiled cigarettes.

What is undeniable, therefore, is that for an unexpected strike lasting for two days resulting in the loss of P2,761.00 more or less, an employee who has worked for thirty-one years
was dismissed. The length of service of petitioner Sampang is found in an affidavit attached as one of the annexes of her memorandum. It reads thus: "That I am working for
Insular Yebana Tobacco Corporation, employed as cajista or cigar packer since 1948 or for more than 30 years." There is here a case, therefore, of an employee, with more than
thirty years service, having been dismissed for instigating a strike that lasted for two days and caused the loss in the amount of P2,716.00. It is quite obvious then that the
constitutional mandate on security of tenure was violated. For even if her denial that she did not instigate such two-day strike be disregarded, still the penalty imposed was
grossly disproportionate to the offense imputed to her.

2. APPLICABILITY TO SPECIFIC TYPES OF EMPLOYEES

2.1 MANAGERIAL EMPLOYEES (ARTICLE 255 OF THE LABOR CODE)

78. United Pepsi Cola vs. Laguesma

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), VS. LAGUESMA

FACTS Petitioner is a union of supervisory employees. It appears that on March 20, 1995 the union filed a petition for certification election on behalf of the route managers at Pepsi-Cola
Products Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal, by the Secretary of Labor and Employment, on the ground that the route managers
are managerial employees and, therefore, ineligible for union membership under the first sentence of Art. 245 of the Labor Code, which provides:

Ineligibility of managerial employees to join any labor organization; right of supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own.
Petitioner brought this suit challenging the validity of the order dated August 31, 1995, as reiterated in the order dated September 22, 1995, of the Secretary of Labor and
Employment. Its petition was dismissed by the Third Division for lack of showing that respondent committed grave abuse of discretion. But petitioner filed a motion for
reconsideration, pressing for resolution its contention that the first sentence of Art. 245 of the Labor Code, so far as it declares managerial employees to be ineligible to form, assist
or join unions, contravenes Art. III, §8 of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.
For this reason, the petition was referred to the Court en banc.
 ISSUE
Whether or not the route
managers at Pepsi-Cola
Products Philippines, Inc.
are managerial employees
Whether or not Article 245,
insofar as it prohibits
managerial employees
from forming, joining or
assisting labor unions,
violates Article III, Section
8 of the Constitution.
RULING
The employees concerned are managerial employees within the purview of Article 212 which provides:
(m) “managerial employees” is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
Earlier in this opinion, reference was made to the distinction between managers per se (top managers and middle managers) and supervisors (first-line managers). That distinction
is evident in the work of the route managers which sets them apart from supervisors in general. Unlike supervisors who basically merely direct operating employees in line with set
tasks assigned to them, route managers are responsible for the success of the company's main line of business through management of their respective sales teams. Such
management necessarily involves the planning, direction, operation and evaluation of their individual teams and areas which the work of supervisors does not entail.
The route managers cannot thus possibly be classified as mere supervisors because their work does not only involve, but goes far beyond, the simple direction or supervision of
operating employees to accomplish objectives set by those above them. They are not mere functionaries with simple oversight functions but business administrators in their own
right. An idea of the role of route managers as managers per se can be gotten from a memo sent by the director of metro sales operations of respondent company to one of the route
managers.
The plasticized card given to route managers, although entitled "RM's Job Description," is only a summary of performance standards. It does not show whether route managers are
managers per se or supervisors. Obviously, these performance standards have to be related to the specific tasks given to route managers in the four-page "Route Manager Position
Description," and, when this is done, the managerial nature of their jobs is fully revealed. Indeed, if any, the card indicates the great latitude and discretion given to route managers
— from servicing and enhancing company goodwill to supervising and auditing accounts, from trade (new business) development to the discipline, training and monitoring of
performance of their respective sales teams, and so forth, — if they are to fulfill the company's expectations in the "key result areas."
Article 212(m) says that "supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment." Thus, their only power is to recommend. Certainly, the route managers in this case more
than merely recommend effective management action. They perform operational, human resource, financial and marketing functions for the company, all of which involve the
laying down of operating policies for themselves and their teams. For example, with respect to marketing, route managers, in accordance with B.1.1.1 to B.1.1.9 of the Route
Managers Job Description, are charged, among other things, with expanding the dealership base of their respective sales areas, maintaining the goodwill of current dealers, and
distributing the company's various promotional items as they see fit. It is difficult to see how supervisors can be given such responsibility when this involves not just the routine
supervision of operating employees but the protection and expansion of the company's business vis-a-visits competitors.
While route managers do not appear to have the power to hire and fire people (the evidence shows that they only "recommended" or "endorsed" the taking of disciplinary action
against certain employees), this is because this is a function of the Human Resources or Personnel Department of the company. And neither should it be presumed that just because
they are given set benchmarks to observe, they are ipso facto supervisors. Adequate control methods (as embodied in such concepts as "Management by Objectives [MBO]" and
"performance appraisals") which require a delineation of the functions and responsibilities of managers by means of ready reference cards as here, have long been recognized in
management as effective tools for keeping businesses competitive.
Art. III, Section VIII of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be
abridged.
As already stated, whether they belong to the first category (managers per se) or the second category (supervisors), managers are employees.
Thus, the dictum in the Caltex case which allowed at least for the theoretical unionization of top and middle managers by assimilating them with the supervisory group under the
broad phrase "managerial personnel," provided the lynchpin for later laws denying the right of self-organization not only to top and middle management employees but to front
line managers or supervisors as well. Following the Caltex case, the Labor Code, promulgated in 1974 under martial law, dropped the distinction between the first and second sub-
groups of managerial employees. Instead of treating the terms "supervisor" and "manager" separately, the law lumped them together and called them "managerial employees," as
follows:

Art. 212. Definitions . . . .

(k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered
rank and file employees for purposes of this Book.
The definition shows that it is actually a combination of the commonly understood definitions of both groups of managerial employees, grammatically joined by the phrase
"and/or."

This general definition was perhaps legally necessary at that time for two reasons. First, the 1974 Code denied supervisors their right to self-organize as theretofore
guaranteed to them by the Industrial Peace Act. Second, it stood the dictum in the Caltex case on its head by prohibiting all types of managers from forming unions. The
explicit general prohibition was contained in the then Art. 246 of the Labor Code.

The practical effect of this synthesis of legal concepts was made apparent in the Omnibus Rules Implementing the Labor Code which the Department of Labor promulgated on
January 19, 1975. Book V, Rule II, §11 of the Rules provided:

Supervisory unions and unions of security guards to cease operation. — All existing supervisory unions and unions of security guards shall, upon the effectivity of the
Code, cease to operate as such and their registration certificates shall be deemed automatically canceled. However, existing collective agreements with such unions, the
life of which extends beyond the date of effectivity of the Code, shall be respected until their expiry date insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible to join or assist the rank and file labor organization,
and if none exists, to form or assist in the forming of such rank and file organization. The determination of who are managerial employees and who are not shall be the
subject of negotiation between representatives of the supervisory union and the employer. If no agreement is reached between the parties, either or both of them may
bring the issue to the nearest Regional Office for determination.

The Department of Labor continued to use the term "supervisory unions" despite the demise of the legal definition of "supervisor" apparently because these were the unions of
front line managers which were then allowed as a result of the statutory grant of the right of self-organization under the Industrial Peace Act. Had the Department of Labor seen fit
to similarly ban unions of top and middle managers which may have been formed following the dictum in Caltex, it obviously would have done so. Yet it did not, apparently
because no such unions of top and middle managers really then existed.In sum, Lerum's proposal to amend Art. III, §8 of the draft Constitution by including labor unions in the
guarantee of organizational right should be taken in the context of statements that his aim was the removal of the statutory ban against security guards and supervisory
employees joining labor organizations. The approval by the Constitutional Commission of his proposal can only mean, therefore, that the Commission intended the absolute
right to organize of government workers, supervisory employees, and security guards to be constitutionally guaranteed. By implication, no similar absolute constitutional
right to organize for labor purposes should be deemed to have been granted to top-level and middle managers. As to them the right of self-organization may be regulated and even
abridged conformably to Art. III, Section 8.Finally, the question is whether the present ban against managerial employees, as embodied in Art. 245 (which superseded Art. 246) of
the Labor Code, is valid. This provision reads:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. — Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own.
This provision is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the
provisions of the Labor Code which it superseded, R.A. No. 6715 provides separate definitions of the terms "managerial" and "supervisory employees," as follows:

Art. 212. Definitions. . . .

(m) "managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire transfer, suspend, lay off,
recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.

Although the definition of "supervisory employees" seems to have been unduly restricted to the last phrase of the definition in the Industrial Peace Act, the legal significance given
 to the phrase "effectively recommends" remains the same. In fact, the distinction between top and middle managers, who set management policy, and front-line supervisors, who
are merely responsible for ensuring that such policies are carried out by the rank and file, is articulated in the present definition. When read in relation to this definition in Art.
212(m), it will be seen that Art. 245 faithfully carries out the intent of the Constitutional Commission in framing Art. III, §8 of the fundamental law.

Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against managerial employees forming a union. The right guaranteed in Art. III, §8 is subject to the
condition that its exercise should be for purposes "not contrary to law." In the case of Art. 245, there is a rational basis for prohibiting managerial employees from forming or
joining labor organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in his ponencia in Philips Industrial Development, Inc. v. NLRC:

In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are confidential employees. Their classification as such is
not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature
of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the
field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or joint a labor union equally applies to them.

In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:
. . . The rationale for this inhibition has been stated to be, because 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 interests. The Union can also become company-dominated with the presence of managerial employees
in Union membership.

To be sure, the Court in Philips Industrial was dealing with the right of confidential employees to organize. But the same reason for denying them the right to organize justifies
even more the ban on managerial employees from forming unions. After all, those who qualify as top or middle managers are executives who receive from their employers
information that not only is confidential but also is not generally available to the public, or to their competitors, or to other employees. It is hardly necessary to point out that to say
that the first sentence of Art. 245 is unconstitutional would be to contradict the decision in that case.

79. NATU-RPB vs. Torres

NATIONAL ASSOCIATION OF TRADE UNIONS (NATU) - REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER, VS. TORRES.

FACTS NATu filed a petition for certification election to determine the exclusive bargaining representatives of respondent Bank’s employees occupying supervisory positions. The Bank
moved to dismiss the petition on the ground that the supposed supervisory employees were actually managerial and/or confidential employees thus ineligible to join, assist or form
a union, and that the petitioner lacked the 20% signatory requirement under the Labor Code.

MED-ARBITER Med-Arbiter granted the petition thus - “let a certification election be ordered conducted among all the regular employees of the Republic Planters Bank occupying supervisory
positions or the equivalent within 20 days from receipt of a copy of this Order. The choice shall be:

(1) National Association of Trade Unions (NATU) - Republic Planters Bank Supervisors Chapter; and
(2) No Union.

SECRETARY OF Respondent Ban appealed the order to the Secretary of Labor on the ground that several of the employees sought to be included in the certification election, particularly the
LABOR Department Managers, Branch Managers/OICs Cashiers and Controllers were managerial and/or confidential employees and thus ineligible to join, assist or form a union.

ISSUE RULING

Whether or not Department Art. 212, par. (m), of the Labor Code is explicit. A managerial employee is
Managers, Assistant
Managers, Branch (a) one who is vested with powers or prerogatives to lay down and execute management policies, or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline
Managers/OICs, Cashiers employees; or
and Controllers of (b) one who is vested with both powers or prerogatives.
respondent Bank are
manager and/or A supervisory employee is different from a managerial employee in the sense that the supervisory employee, in the interest of the employer, effectively recommends such
confidential employees, managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment.
hence ineligible to join or
assist the union of Ranged against these definitions and after a thorough examination of the evidence submitted by both parties, we arrive at a contrary conclusion. Branch Managers, Cashiers and
petitioner. Controllers of respondent Bank are not managerial employees but supervisory employees. The finding of public respondent that bank policies are laid down and/or executed
through the collective action of these employees is simply erroneous. His discussion on the division of their duties and responsibilities does not logically lead to the conclusion that
they are managerial employees, as the term is defined in Art. 212, par. (m).

Among the general duties and responsibilities of a Branch Manager is "[t]o discharge his duties and authority with a high sense of responsibility and integrity and shall at all times
be guided by prudence like a good father of the family, and sound judgment in accordance with and within the limitations of the policy/policies promulgated by the Board of
Directors and implemented by the Management until suspended, superseded, revoked or modified" (par. 5)

Similarly, the job summary of a Controller states: "Supervises the Accounting Unit of the branch; sees to the compliance by the Branch with established procedures, policies, rules
and regulations of the Bank and external supervising authorities; sees to the strict implementation of control procedures.

The job description of a Cashier does not mention any authority on his part to lay down policies, either.

On the basis of the foregoing evidence, it is clear that subject employees do not participate in policy-making but are given approved and established policies to execute and
standard practices to observe, leaving little or no discretion at all whether to implement said policies or not. It is the nature of the employee's functions, and not the nomenclature or
title given to his job, which determines whether he has rank-and-file, supervisory or managerial status.

Moreover, the bare statement in the affidavit of the Executive Assistant to the President of respondent Bank that the Branch Managers, Cashiers and Controllers "formulate and
implement the plans, policies and marketing strategies of the branch towards the successful accomplishment of its profit targets and objectives," is contradicted by the following
evidence submitted by respondent Bank itself:

(a) Memorandum issued by respondent Bank's Assistant Vice President to all Regional Managers and Branch Managers giving them temporary discretionary authority to
grant additional interest over the prescribed board rates for both short-term and long-term CTDs subject, however, to specific limitations and guidelines set forth in the
same memorandum;
(b) Memorandum issued by respondent Bank's Executive Vice President to all Regional Managers and Branch Officers regarding the policy and guidelines on drawing
against uncollected deposits (DAUD);
(c) Memorandum issued by respondent Bank's President to all Field Offices regarding the guidelines on domestic bills purchased (DBP); and
(d) Memorandum issued by the same officer to all Branch Managers regarding lending authority at the branch level and the terms and conditions thereof.

As a consequence, the affidavit of the Executive Assistant cannot be given any weight at all.

Neither do the Branch Managers, Cashiers and Controllers have the power to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The Senior Manager
of the Human Resource Management Department of respondent Bank, in her affidavit, stated that "the power to hire, fire, suspend, transfer, assign or otherwise impose discipline
among subordinates within their respective jurisdictions is lodged with the heads of the various departments, the branch managers and officers-in-charge, the branch cashiers and
the branch controllers. Inherent as it is in the aforementioned positions, the authority to hire, fire, suspend, transfer, assign or otherwise discipline employees within their respective
domains was deemed unnecessary to be incorporated in their individual job descriptions; By way of illustration, on August 24, 1989, Mr. Renato A. Tuates, the Officer-in-
Charge/Branch Cashier of the Bank's Dumaguete Branch, placed under preventive suspension and thereafter terminated the teller of the same branch . . . . Likewise, on February
22, 1989, Mr. Francis D. Robite, Sr., the Officer-in-Charge of International Department, assigned the cable assistant of the International Department as the concurrent FCDU
Accountable Forms Custodian."

However, a close scrutiny of the memorandum of Mr. Tuates reveals that he does not have said managerial power because as plainly stated therein, it was issued "upon instruction
from Head Office." With regard to the memorandum of Mr. Robite, Sr., it appears that the power he exercised was merely in an isolated instance, taking into account the other
evidence submitted by respondent Bank itself showing lack of said power by other Branch Managers/OICs:
 (a) Memorandum from the Branch Manager for the AVP-Manpower Management Department expressing the opinion that a certain employee, due to habitual absenteeism
and tardiness, must be penalized in accordance with respondent Bank's Code of Discipline; and
(b) Memorandum from a Branch OIC for the Assistant Vice President recommending a certain employee's promotional adjustment to the present position he occupies.

Clearly, those officials or employees possess only recommendatory powers subject to evaluation, review and final action by higher officials. Therefore, the foregoing
affidavit cannot bolster the stand of respondent Bank.The positions of Department Managers and Assistant Managers were also declared by public respondent as managerial,
without providing any basis therefor. Petitioner asserts that the position of Assistant Manager was not even included in the appeal filed by respondent Bank. While we agree with
the Office of the Solicitor General that it is within the discretion of public respondent to consider an unassigned issue that is closely related to an issue properly assigned, still,
public respondent's error lies in the fact that his finding has no leg to stand on. Anyway, inasmuch as the entire records are before us, now is the opportunity to discuss this issue.

We analyzed the evidence submitted by respondent Bank in support of its claim that Department Managers are managerial employees and concluded that they are not. Like Branch
Managers, Cashiers and Controllers, Department Managers do not possess the power to lay down policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or
discipline employees. They occupy supervisory positions, charged with the duty among others to "recommend proposals to improve and streamline operations." With respect to
Assistant Managers, there is absolutely no evidence submitted to substantiate public respondent's finding that they are managerial employees; understandably so, because
this position is not included in the appeal of respondent Bank.

As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential employees, having control, custody and/or access to
confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable
instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, this claim is not even disputed by petitioner.

A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer's property. While Art. 245 of
the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees
are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed , as elucidated in several cases the latest of
which is Chua v. Civil Service Commission where we said:

No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is
thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding events of the future. So-called gaps in the law
develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication . . . . Every statute is understood,
by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction
which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis . . . .

In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of managerial employees expressed in Bulletin Publishing
Corporation v. Sanchez, thus: ". . . 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 interests. The Union can also become company-dominated with the presence of managerial employees in Union membership." Stated differently, in
the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act as its representatives, and to see to it that its interests are well
protected. The employer is not assured of such protection if these employees themselves are union members. Collective bargaining in such a situation can become one-sided.
It is the same reason that impelled this Court to consider the position of confidential employees as included in the disqualification found in Art. 245 as if the disqualification of
confidential employees were written in the provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed by
their own motives rather than the interest of the employers. Moreover, 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. It is not farfetched that in the course of collective bargaining, they might jeopardize
that interest which they are duty-bound to protect.

Along the same line of reasoning we held in Golden Farms, Inc. v. Ferrer-Calleja reiterated in Philips Industrial Development, Inc. v. NLRC, that "confidential employees such as
accounting personnel, radio and telegraph operators who, having access to confidential information, may become the source of undue advantage. Said employee(s) may act
as spy or spies of either party to a collective bargaining agreement."

In fine, only the Branch Managers/OICs, Cashiers and Controllers of respondent Bank, being confidential employees, are disqualified from joining or assisting petitioner
Union, or joining, assisting or forming any other labor organization. But this ruling should be understood to apply only to the present case based on the evidence of the parties,
as well as to those similarly situated. It should not be understood in any way to apply to banks in general.
 2.2 CONFIDENTIAL EMPLOYEES

80. SMC vs. Laguesma

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION VS. LAGUESMA

FACTS Petitioner union filed before the Department of Labor and Employment (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 supervisors and exempt employees of the SMC Magnolia Poultry
Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.

Respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter's error in grouping together all three (3)
separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

The public respondent, Undersecretary Laguesma, granted respondent company's Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the
true classification of each of the employees sought to be included in the appropriate bargaining unit.

Upon petitioner-union's motion, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections
among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.

Respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings.

An Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC 2 case. Said Order reads in part:

. . . Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining.

In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor
union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election.

ISSUE RULING

Whether Supervisory This Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union.
employees 3 and 4 and the
exempt employees of the There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies
company are considered and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245
confidential employees, 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-
hence ineligible from and-file employees but may join, assist or form separate labor organizations of their own.
joining a union.
The only question that need be addressed is whether these employees are properly classified as confidential employees or not.

Confidential employees are those who:

(1) assist or act in a confidential capacity,

(2) to persons who formulate, determine, and effectuate management policies in the field of labor relations.

The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee — that is, the confidential relationship must exist between the
employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations.

The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the ''confidential employee rule." The broad rationale behind this rule is that employees should not be placed in a position involving a
potential conflict of interests. "Management should not be required to handle labor relations matters through employees who are represented by the union with which the company
is required to deal and who in the normal performance of their duties may obtain advance information of the company's position with regard to contract negotiations, the
disposition of grievances, or other labor relations matters."

There have been precedents in this regards, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, the Court held that "if these managerial employees would belong to or
be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated
with the presence of managerial employees in Union membership." The same rationale was applied to confidential employees in "Golden Farms, Inc. v. Ferrer-Calleja" and in the
more recent case of "Philips Industrial Development, Inc. v. NLRC" which held that confidential employees, by the very nature of their functions, assist and act in a confidential
capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of
managerial employees to form, assist or join a labor union was held equally applicable to them.

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

It is the contention of respondent corporation that Supervisor employees 3 and 4 and the exempt employees come within the meaning of the term "confidential employees"
primarily because they answered in the affirmative when asked "Do you handle confidential data or documents?" in the Position Questionnaires submitted by the Union. In the
same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product
specification which by no means relate to "labor relations."

Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in
the performance of such duties, said access does not render the employee a confidential employee. "If access to confidential labor relations information is to be a factor in the
determination of an employee's confidential status, such information must relate to the employer's labor relations policies. Thus, an employee of a labor union, or of a management
association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and
knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded
from the bargaining unit representing employees of the union or association." "Access to information which is regarded by the employer to be confidential from the business
standpoint, such as financial information or technical trade secrets, will not render an employee a confidential employee."

Herein listed are the functions of supervisors 3 and higher:

1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.
2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products.
3. To administer efficient system of evaluation of products in the outlets.
4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.
5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant.

It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the
confidential information said employees have access to concern the employer's internal business operations. As held in Westinghouse Electric Corporation v. National Labor
Relations Board, "an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employer's
internal business operations and which is not related to the field of labor relations."

It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all" workers the right to self-organization. Hence, confidential
employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through
representatives of their choosing.

In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as
pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which,
 to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are
not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming
that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to
form and join a union.

If they are not confidential In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single
employees, do the bargaining unit needs to be threshed out.
employees of the three
plants constitute an It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent
appropriate single Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community
bargaining unit. of interests.

This Court finds the contention of the petitioner meritorious.

An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining
provisions of the law."
A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective
bargaining.
It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective
bargaining unit. It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three
different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.
The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial.
Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all
non-academic rank and file employee of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baños, Laguna and the Visayas were allowed to
participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither
are there regional differences that are likely to impede the operations of a single bargaining representative.

2.3 EMPLOYEE - MEMBERS OF COOPERATIVES

81. Cooperative Rural Bank of Davao City vs. Ferrer - Calleja

COOPERATIVE RURAL BANK OF DAVAO CITY, INC. VS. FERRER-CALLEJA

FACTS Petitioner Cooperative Rural Bank of Davao City, Inc. is a cooperative banking corporation operating in Davao City. It is owned in part by the Government and its employees are
members and co-owners of the same. The petitioner has around 16 rank-and-file employees. As of August, 1986, there was no existing collective bargaining agreement between
the said employees and the establishment. On the other hand, the herein private respondent Federation of Free Workers is a labor organization registered with the Department of
Labor and Employment. It is interested in representing the said employees for purposes of collective bargaining.

The private respondent filed with the Davao City Regional Office of the then Ministry of Labor and Employment a verified Petition for certification election among the rank-and-
file employees of the petitioner.

ISSUE RULING

Article 243 of the Labor Code enumerates who are eligible to form, join, or assist labor organizations for purposes of collective bargaining, to wit —

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 of collective bargaining. ....

The recognized exception to this enumeration is found in Article 245 of the same code, which provides for the ineligibility of managerial employees to join any labor
reorganization, viz-

ART. 245. Ineligibility of managerial employees to join any labor organization. Managerial employees are not eligible to join, assist or form any labor organization.

From the foregoing provisions of law it would appear at first blush that all the rank and file employees of a cooperative who are not managerial employees are eligible to form, join
or assist any labor organization of their own choosing for the purpose of collective bargaining.

However, under Section 2 of P.D. No. 175, a cooperative is defined to mean "organizations composed primarily of small producers and of consumers who voluntarily join
together to form business enterprises which they themselves own, control, and patronize." Its creation and growth were declared as a policy of the State as a means of increasing
the income and purchasing power of the low-income sector of the population in order to attain a more equitable distribution of income and wealth . The principles governing it are:

a) Open membership—"Should be voluntary and available without artificial restriction, or any social, political, racial or religious discrimination, to all persons who can
make use of its services and are willing to accept responsibilities of membership;"
b) Democratic control.—"Irrespective of the number of shares owned, each member can only cast one vote in deciding upon the affairs of the cooperative;"
c) Limited interests to capital.— "Share capital shall earn only limited interest, the maximum rate of interest to be established by the Department of Local Government and
Community Development from time to time;" and
d) Patronage refund — "Net income after the interest on capital has been paid shall be redistributed among the members in proposition to their patronage.”

While cooperatives may exercise the same rights and privileges given to persons, partnership and corporations provided under existing laws, operate business enterprises of all
kinds, establish rural banks, enjoy all the privileges and incentives granted by the NACIDA Act and other government agencies to business organizations under existing laws, to
expropriate idle urban or rural lands for its purposes, to own and dispose of properties, enter into contracts, to sue and be sued and perform other acts necessary to pursue its
objectives, such cooperatives enjoy such privileges as:

a) Exemption from income tax and sales taxes;

b) Preferential right to supply rice, corn and other grains, and other commodities produced by them to State agencies administering price stabilization program; and
c) In appropriate cases, exemption from application of minimum wage law upon recommendation of the Bureau of Cooperative Development subject to the approval of the
Secretary of Labor.

A cooperative development loan fund has been created for the development of the cooperative movement.

It may be, further stated that the Department of Local Govemment and Community Development through the Bureau of Cooperative Development is vested with full authority to
promulgate rules and regulations to cover the promotion, organization, registration, regulation and supervision of all types of cooperatives. Electric cooperatives, however, are
under the regulation and supervision of the National Electrification Ad. Administration, while it is the Monetary Board of the Central Bank that has exclusive responsibility and
authority over the banking functions and operations of cooperative banks.

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

An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot
bargain with himself or his co-owners. In the opinion of August 14, 1981 of the Solicitor General he correctly opined that employees of cooperatives who are themselves
members of the cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves co-owners of the cooperative.

However, in so far as it involves cooperatives with employees who are not members or co-owners thereof, certainly such employees are entitled to exercise the rights of all
 workers to organization, collective bargaining, negotiations and others as are enshrined in the Constitution and existing laws of the country.

The questioned ruling therefore of public respondent Pura Ferrer-Calleja must be upheld insofar as it refers to the employees of petitioner who are not members or co-owners of
petitioner. It cannot extend to the other employees who are at the same time its members or co-owners.

2.4 GOVERNMENT EMPLOYEES (ARTICLE 254 OF THE LABOR CODE)

82. Arizala vs. CA

ARIZALA VS. COURT OF APPEALS

FACTS It was under the regime of said Industrial Peace Act that the Government Service Insurance System (GSIS, for short) became bound by a collective bargaining agreement executed
between it and the labor organization representing the majority of its employees, the GSIS Employees Association. The agreement contained a "maintenance-of-membership"
clause, i.e., that all employees who, at the time of the execution of said agreement, were members of the union or became members thereafter, were obliged to maintain their union
membership in good standing for the duration of the agreement as a condition for their continued employment in the GSIS.

There appears to be no dispute that at that time, the petitioners occupied supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were, respectively, the Chief of the
Accounting Division, and the Chief of the Billing Section of said Division, in the Central Visayas Regional Office of the GSIS. Leonardo Joven and Felino Bulandus were,
respectively, the Assistant Chief of the Accounting Division (sometimes Acting Chief in the absence of the Chief) and the Assistant Chief of the Field Service and Non-Life
Insurance Division (and Acting Division Chief in the absence of the Chief), of the same Central Visayas Regional Office of the GSIS. Demands were made on all four of them to
resign from the GSIS Employees Association, in view of their supervisory positions. They refused to do so. Consequently, two (2) criminal cases for violation of the Industrial
Peace Act were lodged against them in the City Court of Cebu: one involving Arizala and Maribao and the other, Joven and Bulandus.

Both criminal actions resulted in the conviction of the accused in separate decisions. They were each sentenced "to pay a fine of P 500.00 or to suffer subsidiary imprisonment in
case of insolvency." They appealed to the Court of Appeals.

The appeals were consolidated on motion of the appellants, and eventuated in a judgment promulgated on January 29, 1976 affirming the convictions of all four appellants. The
appellants moved for reconsideration. They argued that when the so called "1973 Constitution" took effect on January 17, 1973 pursuant to Proclamation No. 1104, the case of
Arizala and Maribao was still pending in the Court of Appeals and that of Joven and Bulandus, pending decision in the City Court of Cebu; that since the provisions of that
constitution and of the Labor Code subsequently promulgated (eff., November 1, 1974), repealing the Industrial Peace Act-placed employees of all categories in government-
owned or controlled corporations without distinction within the Civil Service, and provided that the terms and conditions of their employment were to be "governed by the Civil
Service Law, rules and regulations" and hence, no longer subject of collective bargaining, the appellants ceased to fall within the coverage of the Industrial Peace Act and should
thus no longer continue to be prosecuted and exposed to punishment for a violation thereof. They pointed out further that the criminal sanction in the Industrial Peace Act no longer
appeared in the Labor Code. The Appellate Court denied their plea for reconsideration.

ISSUE RULING

The GSIS performs proprietary functions. It is a non-stock corporation, managed by a Board of Trustees exercising the "usual corporate powers." In other words, it exercises all the
powers of a corporation under the Corporation Law in so far as they are not otherwise inconsistent with other applicable law. It is engaged essentially in insurance, a business that
"is not inherently or exclusively a governmental function, ... (but) is on the contrary, in essence and practice, of a private nature and interest."

1. The petitioners contend that the right of self-organization and collective bargaining had been withdrawn by the Labor Code from government employees including those
in government-owned and controlled corporations- chiefly for the reason that the terms and conditions of government employment, all embraced in civil service, may not
be modified by collective bargaining because set by law. It is therefore immaterial, they say, whether supervisors are members of rank-and-file unions or not; after all,
the possibility of the employer's control of the members of the union thru supervisors thus rendering collective bargaining illusory, which is the main reason for the
prohibition, is no longer of any consequence.

This was true, for a time. As already discussed, both under the Labor Code and PD 807, government employees, including those in government-owned or controlled
 corporations, were indeed precluded from bargaining as regards terms and conditions of employment because these were set by law and hence could not possibly be
altered by negotiation.

But EO 111 restored the right to organize and to negotiate and bargain of employees of "government corporations established under the Corporation Code." And EO 180, and
apparently RA 6715, too, granted to all government employees the right of collective bargaining or negotiation except as regards those terms of their employment which were fixed
by law; and as to said terms fixed by law, they were prohibited to strike to obtain changes thereof.

2. The petitioners appear to be correct in their view of the disappearance from the law of the prohibition on supervisors being members of labor organizations composed of
employees under their supervision. The Labor Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file unions. And under the Implementing Rules of
RA 6715, supervisors who were members of existing labor organizations on the effectivity of said RA 6715 were explicitly authorized to "remain therein."

83. SSEA vs. CA

FACTS The SSS filed with the Regional Trial Court of Quezon City a complaint for damages with a prayer for a writ of preliminary injunction against petitioners, alleging
● that the officers and members of SSSEA staged an illegal strike and baricaded the entrances to the SSS Building, preventing non-striking employees from reporting for
work and SSS members from transacting business with the SSS;
● that the strike was reported to the Public Sector Labor - Management Council, which ordered the strikers to return to work;
● that the strikers refused to return to work; and that the SSS suffered damages as a result of the strike.

The complaint prayed that a writ of preliminary injunction be issued to enjoin the strike and that the strikers be ordered to return to work; that the defendants (petitioners herein) be
ordered to pay damages; and that the strike be declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which included:
● implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of union dues;
● payment of accrued overtime pay, night differential pay and holiday pay;
● conversion of temporary or contractual employees with six (6) months or more of service into regular and permanent employees and their entitlement to the same
salaries, allowances and benefits given to other regular employees of the SSS; and
● payment of the children's allowance of P30.00, and after the SSS deducted certain amounts from the salaries of the employees and allegedly committed acts of
discrimination and unfair labor practices.

ISSUE RULING

Whether or not employees The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall guarantee the rights of all workers to self-organization, collective
of the Social Security bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law" [Art. XIII, Sec. 31].
System (SSS) have the
right to strike. By itself, this provision would seem to recognize the right of all workers and employees, including those in the public sector, to strike. But the Constitution itself fails to expressly
confirm this impression, for in the Sub-Article on the Civil Service Commission, it provides, after defining the scope of the civil service as "all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters," that "[t]he right to self-organization shall not be
denied to government employees" [Art. IX(B), Sec. 2(l) and (50)]. Parenthetically, the Bill of Rights also provides that "[tlhe right of the people, including those employed in the
public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not abridged" [Art. III, Sec. 8]. Thus, while there is no question that
the Constitution recognizes the right of government employees to organize, it is silent as to whether such recognition also includes the right to strike.

Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of these provisions. A reading of the proceedings of the Constitutional
Commission that drafted the 1987 Constitution would show that in recognizing the right of government employees to organize, the commissioners intended to limit the right to the
formation of unions or associations only, without including the right to strike.
It will be recalled that the Industrial Peace Act (R.A. No. 875), which was repealed by the Labor Code (P.D. 442) in 1974, expressly banned strikes by employees in the
Government, including instrumentalities exercising governmental functions, but excluding entities entrusted with proprietary functions:

Sec. 11. Prohibition Against Strikes in the Government. — The terms and conditions of employment in the Government, including any political subdivision or
instrumentality thereof, are governed by law and it is declared to be the policy of this Act that employees therein shall not strike for the purpose of securing changes or
modification in their terms and conditions of employment. Such employees may belong to any labor organization which does not impose the obligation to strike or to
join in strike: Provided, however, That this section shall apply only to employees employed in governmental functions and not those employed in proprietary functions of
the Government including but not limited to governmental corporations.

No similar provision is found in the Labor Code, although at one time it recognized the right of employees of government corporations established under the Corporation Code to
organize and bargain collectively and those in the civil service to "form organizations for purposes not contrary to law" [Art. 244, before its amendment by B.P. Blg. 70 in 1980],
in the same breath it provided that "[t]he terms and conditions of employment of all government employees, including employees of government owned and controlled
corporations, shall be governed by the Civil Service Law, rules and regulations" [now Art. 276]. Understandably, the Labor Code is silent as to whether or not government
employees may strike, for such are excluded from its coverage [Ibid]. But then the Civil Service Decree [P.D. No. 807], is equally silent on the matter.

On June 1, 1987, to implement the constitutional guarantee of the right of government employees to organize, the President issued E.O. No. 180 which provides guidelines for the
exercise of the right to organize of government employees. In Section 14 thereof, it is provided that "[t]he Civil Service law and rules governing concerted activities and strikes in
the government service shall be observed, subject to any legislation that may be enacted by Congress." The President was apparently referring to Memorandum Circular No. 6, s.
1987 of the Civil Service Commission under date April 21, 1987 which, "prior to the enactment by Congress of applicable laws concerning strike by government employees ...
enjoins under pain of administrative sanctions, all government officers and employees from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action
which will result in temporary stoppage or disruption of public service." The air was thus cleared of the confusion. At present, in the absence of any legislation allowing
government employees to strike, recognizing their right to do so, or regulating the exercise of the right, they are prohibited from striking, by express provision of Memorandum
Circular No. 6 and as implied in E.O. No. 180. [At this juncture, it must be stated that the validity of Memorandum Circular No. 6 is not at issue].

But are employees of the SSS covered by the prohibition against strikes?
The Court is of the considered view that they are. Considering that under the 1987 Constitution "[t]he civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government-owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the
employees in the civil service are denominated as "government employees"] and that the SSS is one such government-controlled corporation with an original charter, having been
created under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are covered by the Civil
Service Commission's memorandum prohibiting strikes. This being the case, the strike staged by the employees of the SSS was illegal.

The statement of the Court in Alliance of Government Workers v. Minister of Labor and Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is relevant as it furnishes
the rationale for distinguishing between workers in the private sector and government employees with regard to the right to strike:

The general rule in the past and up to the present is that 'the terms and conditions of employment in the Government, including any political subdivision or
instrumentality thereof are governed by law" (Section 11, the Industrial Peace Act, R.A. No. 875, as amended and Article 277, the Labor Code, P.D. No. 442, as
amended). Since the terms and conditions of government employment are fixed by law, government workers cannot use the same weapons employed by workers in
the private sector to secure concessions from their employers. The principle behind labor unionism in private industry is that industrial peace cannot be secured through
compulsion by law. Relations between private employers and their employees rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws
and other labor and welfare legislation, the terms and conditions of employment in the unionized private sector are settled through the process of collective bargaining. In
government employment, however, it is the legislature and, where properly given delegated power, the administrative heads of government which fix the terms and
conditions of employment. And this is effected through statutes or administrative circulars, rules, and regulations, not through collective bargaining agreements.

Apropos is the observation of the Acting Commissioner of Civil Service, in his position paper submitted to the 1971 Constitutional Convention, and quoted with approval by the
Court in Alliance, to wit:

It is the stand, therefore, of this Commission that by reason of the nature of the public employer and the peculiar character of the public service, it must necessarily regard
the right to strike given to unions in private industry as not applying to public employees and civil service employees. It has been stated that the Government, in contrast
 to the private employer, protects the interest of all people in the public service, and that accordingly, such conflicting interests as are present in private labor relations
could not exist in the relations between government and those whom they employ. [At pp. 16-17; also quoted in National Housing Corporation v. Juco, G.R. No. 64313,
January 17,1985,134 SCRA 172,178-179].

E.O. No. 180, which provides guidelines for the exercise of the right to organize of government employees, while clinging to the same philosophy, has, however, relaxed the rule
to allow negotiation where the terms and conditions of employment involved are not among those fixed by law. Thus:

SECTION 13. Terms and conditions of employment or improvements thereof, except those that are fixed by law, may be the subject of negotiations between duly
recognized employees' organizations and appropriate government authorities.
The same executive order has also provided for the general mechanism for the settlement of labor disputes in the public sector to wit:

SECTION 16. The Civil Service and labor laws and procedures, whenever applicable, shall be followed in the resolution of complaints, grievances and cases involving
government employees. In case any dispute remains unresolved after exhausting all the available remedies under existing laws and procedures, the parties may jointly
refer the dispute to the [Public Sector Labor- Management] Council for appropriate action.

Government employees may, therefore, through their unions or associations, either petition the Congress for the betterment of the terms and conditions of employment
which are within the ambit of legislation or negotiate with the appropriate government agencies for the improvement of those which are not fixed by law. If there be any
unresolved grievances, the dispute may be referred to the Public Sector Labor - Management Council for appropriate action. But employees in the civil service may not resort to
strikes, walk-outs and other temporary work stoppages, like workers in the private sector, to pressure the Govemment to accede to their demands. As now provided under Sec. 4,
Rule III of the Rules and Regulations to Govern the Exercise of the Right of Government- Employees to Self- Organization, which took effect after the instant dispute arose, "[t]he
terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and government- owned and controlled corporations with
original charters are governed by law and employees therein shall not strike for the purpose of securing changes thereof."

The strike staged by the employees of the SSS belonging to petitioner union being prohibited by law, an injunction may be issued to restrain it.

It is futile for the petitioners to assert that the subject labor dispute falls within the exclusive jurisdiction of the NLRC and, hence, the Regional Trial Court had no jurisdiction to
issue a writ of injunction enjoining the continuance of the strike. The Labor Code itself provides that terms and conditions of employment of government employees shall be
governed by the Civil Service Law, rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests the Public Sector Labor - Management Council with jurisdiction over
unresolved labor disputes involving government employees [Sec. 16]. Clearly, the NLRC has no jurisdiction over the dispute.

This being the case, the Regional Trial Court was not precluded, in the exercise of its general jurisdiction under B.P. Blg. 129, as amended, from assuming jurisdiction over the
SSS's complaint for damages and issuing the injunctive writ prayed for therein. Unlike the NLRC, the Public Sector Labor - Management Council has not been granted by law
authority to issue writs of injunction in labor disputes within its jurisdiction. Thus, since it is the Council, and not the NLRC, that has jurisdiction over the instant labor dispute,
resort to the general courts of law for the issuance of a writ of injunction to enjoin the strike is appropriate.

Neither could the court a quo be accused of imprudence or overzealousness, for in fact it had proceeded with caution. Thus, after issuing a writ of injunction enjoining the
continuance of the strike to prevent any further disruption of public service, the respondent judge, in the same order, admonished the parties to refer the unresolved controversies
emanating from their employer- employee relationship to the Public Sector Labor - Management Council for appropriate action.

2.5 SUPERVISORY EMPLOYEES (ARTICLE 255 OF THE LABOR CODE)

84. Altas Lithographic vs. Laguesma

ATLAS LITHOGRAPHIC SERVICES, INC. VS. LAGUESMA

FACTS The supervisory, administrative personnel, production, accounting and confidential employees of the petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with private
respondent Kaisahan ng Manggagawang Pilipino, a national labor organization. The local union adopted the name Atlas Lithographic Services, Inc. Supervisory, Administrative,
Personnel, Production, Accounting and Confidential Employees Association or ALSI-SAPPACEA-KAMPIL in short and which we shall hereafter refer to as the "supervisors"
 union.

Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the "supervisors" union a petition for certification election so that it could be the sole and exclusive
bargaining agent of the supervisory employees.

The petitioners opposed the private respondent's petition claiming that under Article 245 of the Labor bode the private respondent cannot represent the supervisory employees for
collective bargaining purposeless because the private respondent also represents the rank-and-file employees' union.

MED-ARBITER The Med-Arbiter issued an order in favor of the private respondent, “a certification election among the supervisory employees belonging to the Administrative, Personnel,
Production, Accounting Departments as well as confidential employees performing supervisory functions of Atlas Lithographic Services, Incorporated is hereby ordered conducted
within 20 days from receipt hereof, subject to usual pre-election conference, with the following choices:

1. KAMPIL (KATIPUNAN);
2. No union.

ISSUE RULING

Whether or not, under
Article 245 of the Labor
Code, a local union of
supervisory employees
may be allowed to affiliate
with a national federation
of labor organizations of
rank-and-file employees
and which national
federation actively
represents its affiliates in
collective bargaining
negotiations with the same
employer of the supervisors
and in the implementation
of resulting collective
bargaining agreements.
Under the Industrial Peace Act of 1953, employees were classified into three groups, namely: (1) managerial employees; (2) supervisors; and (3) rank-and file employees.
Supervisors, who were considered employees in relation to their employer could join a union but not a union of rank-and-file employees.
With the enactment in 1974 of the Labor Code (Pres Decree No. 442), employees were classified into managerial and rank-and-file employees. Neither the category of supervisors
nor their right to organize under the old statute were recognized. So that, in Bulletin Publishing Corporation v. Sanchez (144 SCRA 628 [1986]), the Court interpreted the
superseding labor law to have removed from supervisors the right to unionize among themselves.
In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree No. 442, the supervisory unions existing since the effectivity of the New Code in January 1, 1975
ceased to operate as such and the members who did not qualify as managerial employees under this definition in Article 212 (k) therein became eligible to form, to join or assist a
rank-and-file union.
A revision of the Labor Code undertaken by the bicameral Congress brought about the enactment of Rep. Act No. 6715 in March 1989 in which employees were reclassified into
three groups, namely: (1) the managerial employees; (2) supervisors; and (3) the rank and file employees. Under the present law, the category of supervisory employees is once
again recognized. Hence, Art. 212 (m) states:
(1) (m) . . . Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent judgment. . . .

The rationale for the amendment is the government's recognition of the right of supervisors to organize with the qualification that they shall not join or assist in the
organization of rank-and-file employees. The reason: “The interests of supervisors on the one hand, and the rank-and-file employees on the other, are separate and distinct.” The
functions of supervisors, being recommendatory in nature, are more identified with the interests of the employer. The performance of those functions may, thus, run counter to the
interests of the rank-and-file. This intent of the law is made clear in the deliberations of the legislators on then Senate Bill 530 now enacted as Rep. Act No. 6715.

The definition of managerial employees was limited to those having authority to hire and fire while those who only recommend effectively the hiring or firing or transfers of
personnel would be considered as closer to rank-and-file employees. The exclusion, therefore, of middle level executives from the category of managers brought about a third
classification, the supervisory employees. These supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of
conflict of interest. In terms of classification, however, while they are more closely identified with the rank-and-file they are still not allowed to join the union of rank-and-file
employees.
The peculiar role of supervisors is such that while they are not managers, when they recommend action implementing management policy or ask for the discipline or dismissal of
subordinates, they identify with the interests of the employer and may act contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective bargaining and strikes.

Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-file employees.

In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the other. Moreover, in the event of a strike, the national
federation might influence the supervisors' union to conduct a sympathy strike on the sole basis of affiliation.

More important, the factual issues in the Adamson case are different from the present case. First, the rank-and-file employees in the Adamson case are not directly under the
supervisors who comprise the supervisors' union. In the case at bar, the rank-and file employees are directly under the supervisors organized by one and the same federation.

The contemplation of the law in Sec. 3 of the Industrial Peace Act is to prohibit supervisors from joining a labor organization of employees under their supervision. This was not
the consideration in the Adamson case because as mentioned earlier, the rank-and-file employees in the Adamson case were not under the supervision of the supervisors involved.

Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides:

Art. 245. Ineligibility of managerial employees to join any labor organization: right of supervisory employees. — Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own.

The Court construes Article 245 to mean that, as in Section 3 of the Industrial Peace Act, supervisors shall not be given an occasion to bargain together with the rank-and-file
against the interests of the employer regarding terms and conditions of work

Second, the national union in the Adamson case did not actively represent its local chapters. In the present case, the local union is actively represented by the national federation. In
fact, it was the national federation, the KAMPIL-KATIPUNAN, which initially filed a petition for certification in behalf of the respondent union.

Thus, 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, 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.

The prohibition against a supervisors' union joining a local union of rank-and-file is replete with jurisprudence. The Court emphasizes that the limitation is not confined to a case of
supervisors wanting to join a rank-and-file local union. 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. The intent of the law is clear especially where, as in the case at bar, the supervisors will be co-mingling with those
employees whom they directly supervise in their own bargaining unit.

Technicalities should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. What should be paramount is the intent
behind the law, not its literal construction. Where one interpretation would result in mischievous consequences while another would bring about equity, justice, and the promotion
of labor peace, there can be no doubt as to what interpretation shall prevail.

Finally, the respondent contends that the law prohibits the employer from interfering with the employees' right to self-organization.

There is no question about this intendment of the law. There is, however, in the present case, no violation of such a guarantee to the employee. Supervisors are not prohibited
from forming their own union. What the law prohibits is their membership in a labor organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national
federation of rank-and-file employees that includes the very local union which they are not allowed to directly join.

In a motion dated November 15, 1991 it appears that the petitioner has knuckled under to the respondents' pressures and agreed to let the national federation KAMPIL-
KATIPUNAN represent its supervisors in negotiating a collective bargaining agreement. Against the advise of its own counsel and on the basis of alleged "industrial peace", the
petitioner expressed a loss of interest in pursuing this action. The petitioner is, of course, free to grant whatever concessions it wishes to give to its employees unilaterally or
 through negotiations but we cannot allow the resulting validation of an erroneous ruling and policy of the Department of Labor and Employment (DOLE) to remain on the basis of
the petitioner's loss of interest.

85. PHILPOST vs. Torres

FACTS Philphos Movement for Progress, Inc. (PMPI) filed with the Department of Labor and Employment a petition for certification election among the supervisory employees of
petitioner, alleging that as a supervisory union duly registered with the Department of Labor and Employment it was seeking to represent the supervisory employees of Philippine
Phosphate Fertilizer Corporation.

The petition for certification election filed by PMPI was not opposed by PHILPHOS. In fact, PHILPHOS submitted a position paper with the Mediator-Arbiter stating that its
management welcomed the creation of a supervisory employees' union provided the necessary requisites of law were properly observed, but exempting from the union its
superintendents who were managerial and not supervisory employees as they managed a division, subdivision or section, and were vested with powers or prerogatives to
lay down and execute management policies.

PHILPHOS also asserted that its professional or technical employees were not within the definition of supervisory employees under the Labor Code as they were immediately
under the direction and supervision of its superintendents and supervisors. Moreover, the professional and technical employees did not have a staff of workers under them.
Consequently, petitioner prayed for the exclusion of its superintendents and professional/technical employees from the PMPI supervisory union.

MED-ARBITER Mediator-Arbiter Rodolfo S. Milado issued an order directing the holding of a certification election among the supervisory employees of petitioner, excluding therefrom the
superintendents and the professional and technical employees. He also directed the parties to attend the pre-election conference on 19 April 1990 for the determination of the
mechanics of the election process and the qualifications and eligibility of those allowed to vote.

PMPI filed an amended petition with the Mediator-Arbiter wherein it sought to represent not only the supervisory employees of petitioner but also its professional/technical and
confidential employees. The amended petition was filed in view of the amendment of the PMPI Construction which included in its membership the professional/technical and
confidential employees.

The parties therein agreed to submit their respective position papers and to consider the amended petition submitted for decision on the basis thereof and related documents.

Mediator-Arbiter Milado issued an order granting the petition and directing the holding of a certification election among the "supervisory, professional (engineers, analysts,
mechanics, accountants, nurses, midwives, etc.), technical, and confidential employees" to comprise the proposed bargaining unit.

SECRETARY OF PHILPHOS appealed the order of 28 March 1990 to the Secretary of Labor and Employment who rendered a decision through Undersecretary Bienvenido Laguesma dismissing
LABOR the appeal. PHILPHOS moved for reconsideration but the same was denied; hence, the instant petition alleging grave abuse of discretion on the part of public respondents in
rendering the assailed rulings.

ISSUE RULING

Whether or not its Being a supervisory union, respondent PMPI cannot represent the professional/technical and confidential employees of petitioners whose positions we find to be more of the rank
professional/technical and and file than supervisory.
confidential employees
may validly join With the enactment in March 1989 of R.A. 6715, employees were thereunder reclassified into three (3) groups, namely:
respondent PMPI union (a) managerial employees,
which is composed of (b) supervisory employees, and
supervisors. (c) rank and file employees.
The category of supervisory employees is once again recognized in the present law.

Article 212, par. (m), of the Labor Code, as amended, provides, that "(s)upervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment." The definition of managerial
employees is limited to those having authority to hire and fire, while those who only recommend effectively the hiring or firing or transfer of personnel; are considered closer to
rank and file employees. The exclusion therefore of mid-level executives from the category of managers has brought about a third classification, the supervisory employees. The
peculiar role of supervisors is such that while they are not managers, when they recommend action implementing management policy or ask for the discipline or dismissal of
subordinates, they identify with the interests of the employer and may act contrary to the interests of the rank and file.

In its position paper submitted to the Mediator-Arbiter, petitioner described the positions and functions of it professional /technical employees, (engineers, analysts, mechanics,
accountants, nurses, and midwives). The guidelines, which were not refuted by respondent PMPI, state:

. . . . Professional and Technical positions are those whose primary duty consists of the performance of work directly related to management programs; who customarily,
regularly and routinarily exercise judgment in the application of concepts, methods, systems and procedures in their respective fields of specialization; who regularly and
directly assist a managerial and/or supervisory employee, execute under general supervision, work along specialized or technical lines requiring special training,
experience or knowledge, or execute under general supervision special assignments and task . . . . They are immediately under the direction and supervision of
supervisors or superintendents. They have no men under them but are regularly called upon by their supervisors or superintendents on some technical matters.

Moreover, Herculano, A. Duhaylungsod, Personnel Officer of petitioner, attested that there was no community of interests between the supervisors of petitioner and the
professional/technical employees; that as of 25 July 1990, personnel records showed that there were 125 supervisors and 271 professional/technical employees; that of the 271
professional/technical employees, 150 were directly under and being supervised by supervisors, while the rest were staff members of superintendents.
The certification of Personnel Officer Duhaylungsod that its professional/technical employees occupy positions that are non-supervisory is evidence that said employees belong to
the rank and file. Quite obviously, these professional/technical employees cannot effectively recommend managerial actions with the use of independent judgment because they are
under the supervision of superintendents and supervisors. Because it is unrefuted that these professional/technical employees are performing non-supervisory functions, hence
considered admitted, they should be classified, at least for purposes of this case, as rank and file employees. Consequently, these professional/technical employees cannot be
allowed to join a union composed of supervisors. Conversely, supervisory employees cannot join a labor organization of employees under their supervision but may validly form a
separate organization of their own.

This is provided in Art. 245 of the Labor Code, as amended by R.A. No. 6715, to wit:

(1) . . . Managerial employees are not eligible to join, assist or form any 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 separate labor organizations of their own.

Respondent PMPI is supposed to be a union of 125 supervisors. If the professional/technical employees are included as members, and records show that they are 271 in all or much
more than the supervisors, then PMPI will turn out to be a rank and file union with the supervisors as members.

This is precisely the situation which the law prohibits. It would create an obvious conflict of views among the members, or at least between two (2) groups of members espousing
opposing interests. 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, especially where, as in the case at bar, the supervisors will be commingling with those employees whom they directly supervise in their own bargaining unit.
Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank and file employees.

Supervisors have the right to form their own union or labor organization. What the law prohibits is a union whose membership comprises of supervisors merging with the rank and
file employees because this is where conflict of interests may arise in the areas of discipline, collective bargaining and strikes. The professional/technical employees of petitioner
therefore may join the existing rank and file union, or form a union separate and distinct from the existing union organized by the rank and file employees of the same company.

As to the confidential employees of the petitioner, the latter has not shown any proof or compelling reason to exclude them from joining respondent PMPI and from participating in
the certification election, unless these confidential employees are the same professional/technical employees whom we find to be occupying rank and file positions.
The professional/technical employees of petitioner Philippine Phosphate Fertilizer Corporation (PHILPHOS) are declared disqualified from affiliating with respondent Philphos
Movement for Progress, Inc. (PMPI).