G.R. No.

L-25246 September 12, 1974

BENJAMIN VICTORIANO, plaintiff-appellee,

vs.
ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., defendants,
ELIZALDE ROPE WORKERS' UNION, defendant-appellant.

Salonga, Ordonez, Yap, Sicat & Associates for plaintiff-appellee.

Cipriano Cid & Associates for defendant-appellant.

ZALDIVAR, J.:p

Appeal to this Court on purely questions of law from the decision of the Court of First Instance of Manila in its Civil Case No. 58894.

The undisputed facts that spawned the instant case follow:

Benjamin Victoriano (hereinafter referred to as Appellee), 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 (hereinafter referred to as Union) which had with the Company a collective bargaining
agreement containing a closed shop provision which reads as follows:

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." On June 18, 1961, 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, Appellee 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 Appellee 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 Appellee and his counsel that unless the Appellee could achieve a satisfactory arrangement
with the Union, the Company would be constrained to dismiss him from the service. This prompted
Appellee to file an action for injunction, docketed as Civil Case No. 58894 in the Court of First
Instance of Manila to enjoin the Company and the Union from dismissing Appellee. In its answer, 1

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). Upon the facts agreed upon 2
by the parties during the pre-trial conference, the Court a quo rendered its decision on August 26,
1965, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, judgment is rendered enjoining the defendant

Elizalde Rope Factory, Inc. from dismissing the plaintiff from his present employment
and sentencing the defendant Elizalde Rope Workers' Union to pay the plaintiff P500
for attorney's fees and the costs of this action. 3

From this decision, the Union appealed directly to this Court on purely questions of law, assigning
the following errors:

I. That the lower court erred when it did not rule that Republic Act No. 3350 is
unconstitutional.

II. That the lower court erred when it sentenced appellant herein to pay plaintiff the
sum of P500 as attorney's fees and the cost thereof.

In support of the alleged unconstitutionality of Republic Act No. 3350, the Union contented, firstly,
that the Act infringes on the fundamental right to form lawful associations; that "the very phraseology
of said Republic Act 3350, that membership in a labor organization is banned to all those belonging
to such religious sect prohibiting affiliation with any labor organization" , "prohibits all the members
4

of a given religious sect from joining any labor union if such sect prohibits affiliations of their
members thereto" ; and, consequently, deprives said members of their constitutional right to form or
5

join lawful associations or organizations guaranteed by the Bill of Rights, and thus becomes
obnoxious to Article III, Section 1 (6) of the 1935 Constitution. 6

Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for impairing the
obligation of contracts in that, while the Union is obliged to comply with its collective bargaining
agreement containing a "closed shop provision," the Act relieves the employer from its reciprocal
obligation of cooperating in the maintenance of union membership as a condition of employment;
and that said Act, furthermore, impairs the Union's rights as it deprives the union of dues from
members who, under the Act, are relieved from the obligation to continue as such members. 7

Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those religious sects
which ban their members from joining labor unions, in violation of Article Ill, Section 1 (7) of the 1935
Constitution; and while said Act unduly protects certain religious sects, it leaves no rights or
protection to labor organizations. 8

Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional provision that "no
religious test shall be required for the exercise of a civil right," in that the laborer's exercise of his civil
right to join associations for purposes not contrary to law has to be determined under the Act by his
affiliation with a religious sect; that conversely, if a worker has to sever his religious connection with
a sect that prohibits membership in a labor organization in order to be able to join a labor
organization, said Act would violate religious freedom. 9

Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection of laws"
clause of the Constitution, it being a discriminately legislation, inasmuch as by exempting from the
operation of closed shop agreement the members of the "Iglesia ni Cristo", it has granted said
members undue advantages over their fellow workers, for while the Act exempts them from union
obligation and liability, it nevertheless entitles them at the same time to the enjoyment of all
concessions, benefits and other emoluments that the union might secure from the employer. 10
Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional provision
regarding the promotion of social justice. 11

Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargaining
agreement cannot be considered violative of religious freedom, as to call for the amendment
introduced by Republic Act No. 3350; and that unless Republic Act No. 3350 is declared
12

unconstitutional, trade unionism in this country would be wiped out as employers would prefer to hire
or employ members of the Iglesia ni Cristo in order to do away with labor organizations. 13

Appellee, assailing appellant's arguments, contended that Republic Act No. 3350 does not violate
the right to form lawful associations, for the right to join associations includes the right not to join or
to resign from a labor organization, if one's conscience does not allow his membership therein, and
the Act has given substance to such right by prohibiting the compulsion of workers to join labor
organizations; that said Act does not impair the obligation of contracts for said law formed part of,
14

and was incorporated into, the terms of the closed shop agreement; that the Act does not violate
15

the establishment of religion clause or separation of Church and State, for Congress, in enacting
said law, merely accommodated the religious needs of those workers whose religion prohibits its
members from joining labor unions, and balanced the collective rights of organized labor with the
constitutional right of an individual to freely exercise his chosen religion; that the constitutional right
to the free exercise of one's religion has primacy and preference over union security measures
which are merely contractual ; that said Act does not violate the constitutional provision of equal
16

protection, for the classification of workers under the Act depending on their religious tenets is based
on substantial distinction, is germane to the purpose of the law, and applies to all the members of a
given class; that said Act, finally, does not violate the social justice policy of the Constitution, for
17

said Act was enacted precisely to equalize employment opportunities for all citizens in the midst of
the diversities of their religious beliefs." 18

I. Before We proceed to the discussion of the first assigned error, it is necessary to premise that
there are some thoroughly established principles which must be followed in all cases where
questions of constitutionality as obtains in the instant case are involved. All presumptions are
indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must
prove its invalidity beyond a reasonable doubt, that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will be
upheld, and the challenger must negate all possible bases; that the courts are not concerned with
the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of the
constitution in favor of the constitutionality of legislation should be adopted.19

1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the members of such
religious sects that forbid affiliation of their members with labor unions from joining labor unions
appears nowhere in the wording of Republic Act No. 3350; neither can the same be deduced by
necessary implication therefrom. It is not surprising, therefore, that appellant, having thus misread
the Act, committed the error of contending that said Act is obnoxious to the constitutional provision
on freedom of association.

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 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 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 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 "right" to form or join associations. Notwithstanding the different theories
propounded by the different schools of jurisprudence regarding the nature and contents of a "right", it
can be safely said that whatever theory one subscribes to, 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 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 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 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 union includes the right to abstain from joining
20

any union. Inasmuch as what both the Constitution and the Industrial Peace Act have recognized,
21

and guaranteed to the employee, 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 does not enjoin an employee to sign up with any association.

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.

2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of its
contract, specifically, the "union security clause" embodied in its Collective Bargaining Agreement
with the Company, by virtue of which "membership in the union was required as a condition for
employment for all permanent employees workers". 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, Appellee, 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.

According to Black, any statute which introduces a change into the express terms of the contract, or
its legal construction, or its validity, or its discharge, or the remedy for its enforcement, impairs the
contract. The extent of the change is not material. It is not a question of degree or manner or cause,
but of encroaching in any respect on its obligation or dispensing with any part of its force. There is
an impairment of the contract if either party is absolved by law from its performance. Impairment
22

has also been predicated on laws which, without destroying contracts, derogate from substantial
contractual rights. 23

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
24

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
25

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
26

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. 27

In several occasions this Court declared that the prohibition against impairing the obligations of
contracts has no application to statutes relating to public subjects within the domain of the general
legislative powers of the state involving public welfare. Thus, this Court also held that the Blue
28

Sunday Law was not an infringement of the obligation of a contract that required the employer to
furnish work on Sundays to his employees, the law having been enacted to secure the well-being
and happiness of the laboring class, and being, furthermore, a legitimate exercise of the police
power. 29

In order to determine whether legislation unconstitutionally impairs contract obligations, no

unchanging yardstick, applicable at all times and under all circumstances, by which the validity of
each statute may be measured or determined, has been fashioned, but every case must be
determined upon its own circumstances. Legislation impairing the obligation of contracts can be
sustained when it is enacted for the promotion of the general good of the people, and when the
means adopted to secure that end are reasonable. Both the end sought and the means adopted
must be legitimate, i.e., within the scope of the reserved power of the state construed in harmony
with the constitutional limitation of that power.30

What then was the purpose sought to be achieved by Republic Act No. 3350? Its purpose was to
insure freedom of belief and religion, and to promote the general welfare by preventing
discrimination against those members of religious sects which prohibit their members from joining
labor unions, confirming thereby their natural, statutory and constitutional right to work, the fruits of
which work are usually the only means whereby they can maintain their own life and the life of their
dependents. It cannot be gainsaid that said purpose is legitimate.

The questioned Act also provides protection to members of said religious sects against two
aggregates of group strength from which the individual needs protection. The individual employee, at
various times in his working life, is confronted by two aggregates of power — collective labor,
directed by a union, and collective capital, directed by management. The union, an institution
developed to organize labor into a collective force and thus protect the individual employee from the
power of collective capital, is, paradoxically, both the champion of employee rights, and a new
source of their frustration. Moreover, when the Union interacts with management, it produces yet a
third aggregate of group strength from which the individual also needs protection — the collective
bargaining relationship. 31

The aforementioned purpose of the amendatory law is clearly seen in the Explanatory Note to House
Bill No. 5859, which later became Republic Act No. 3350, as follows:

It would be unthinkable indeed to refuse employing a person who, on account of his

religious beliefs and convictions, cannot accept membership in a labor organization
although he possesses all the qualifications for the job. This is tantamount to
punishing such person for believing in a doctrine he has a right under the law to
believe in. The law would not allow discrimination to flourish to the detriment of those
whose religion discards membership in any labor organization. Likewise, the law
would not commend the deprivation of their right to work and pursue a modest
means of livelihood, without in any manner violating their religious faith and/or
belief.
32

It cannot be denied, furthermore, that the means adopted by the Act to achieve that purpose —
exempting the members of said religious sects from coverage of union security agreements — is
reasonable.

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. The Supreme
Court of the United States has also declared on several occasions that the rights in the First
Amendment, which include freedom of religion, enjoy a preferred position in the constitutional
system. Religious freedom, although not unlimited, is a fundamental personal right and
33

liberty, and has a preferred position in the hierarchy of values. Contractual rights, therefore, must
34

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.
3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant Union
averred that said Act discriminates in favor of members of said religious sects in violation of Section
1 (7) of Article Ill of the 1935 Constitution, and which is now Section 8 of Article IV of the 1973
Constitution, which provides:

No law shall be made respecting an establishment of religion, or prohibiting the free

exercise thereof, and the free exercise and enjoyment of religious profession and
worship, without discrimination and preference, shall forever be allowed. No religious
test shall be required for the exercise of civil or political rights.

The constitutional provision into only prohibits legislation for the support of any religious tenets or the
modes of worship of any sect, thus forestalling compulsion by law of the acceptance of any creed or
the practice of any form of worship, but also assures the free exercise of one's chosen form of
35

religion within limits of utmost amplitude. It has been said that the religion clauses of the Constitution
are all designed to protect the broadest possible liberty of conscience, to allow each man to believe
as his conscience directs, to profess his beliefs, and to live as he believes he ought to live,
consistent with the liberty of others and with the common good. Any legislation whose effect or
36

purpose is to impede the observance of one or all religions, or to discriminate invidiously between
the religions, is invalid, even though the burden may be characterized as being only indirect. But if
37

the stage regulates conduct by enacting, within its power, a general law which has for its purpose
and effect to advance the state's secular goals, the statute is valid despite its indirect burden on
religious observance, unless the state can accomplish its purpose without imposing such burden. 38

In Aglipay v. Ruiz , this Court had occasion to state that the government should not be precluded
39

from pursuing valid objectives secular in character even if the incidental result would be favorable to
a religion or sect. It has likewise been held that the statute, in order to withstand the strictures of
constitutional prohibition, must have a secular legislative purpose and a primary effect that neither
advances nor inhibits religion. Assessed by these criteria, Republic Act No. 3350 cannot be said to
40

violate the constitutional inhibition of the "no-establishment" (of religion) clause of the Constitution.

The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual or religious or
holy and eternal. It was intended to serve the secular purpose of advancing the constitutional right to
the free exercise of religion, by averting that certain persons be refused work, or be dismissed from
work, or be dispossessed of their right to work and of being impeded to pursue a modest means of
livelihood, by reason of union security agreements. To help its citizens to find gainful employment
whereby they can make a living to support themselves and their families is a valid objective of the
state. In fact, the state is enjoined, in the 1935 Constitution, to afford protection to labor, and
regulate the relations between labor and capital and industry. More so now in the 1973 Constitution
41

where it is mandated that "the State shall afford protection to labor, promote full employment and
equality in employment, ensure equal work opportunities regardless of sex, race or creed and
regulate the relation between workers and employers. 42

The primary effects of the exemption from closed shop agreements in favor of members of religious
sects that prohibit their members from affiliating with a labor organization, is the protection of said
employees against the aggregate force of the collective bargaining agreement, and relieving certain
citizens of a burden on their religious beliefs; and by eliminating to a certain extent economic
insecurity due to unemployment, which is a serious menace to the health, morals, and welfare of the
people of the State, the Act also promotes the well-being of society. It is our view that the exemption
from the effects of closed shop agreement does not directly advance, or diminish, the interests of
any particular religion. Although the exemption may benefit those who are members of religious
sects that prohibit their members from joining labor unions, the benefit upon the religious sects is
merely incidental and indirect. The "establishment clause" (of religion) does not ban regulation on
conduct whose reason or effect merely happens to coincide or harmonize with the tenets of some or
all religions. The free exercise clause of the Constitution has been interpreted to require that
43

religious exercise be preferentially aided. 44

We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of the
constitutional provision. It acted merely to relieve the exercise of religion, by certain persons, of a
burden that is imposed by union security agreements. It was Congress itself that imposed that
burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it so
deems advisable, could take away the same burden. It is certain that not every conscience can be
accommodated by all the laws of the land; but when general laws conflict with scrupples of
conscience, exemptions ought to be granted unless some "compelling state interest" intervenes. In 45

the instant case, We see no such compelling state interest to withhold exemption.

Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects, it
leaves no right to, and is silent as to the protection of, labor organizations. The purpose of Republic
Act No. 3350 was not to grant rights to labor unions. The rights of labor unions are amply provided
for in Republic Act No. 875 and the new Labor Code. As to the lamented silence of the Act regarding
the rights and protection of labor unions, suffice it to say, first, that the validity of a statute is
determined by its provisions, not by its silence ; and, second, the fact that the law may work
46

hardship does not render it unconstitutional. 47

It would not be amiss to state, regarding this matter, that to compel persons to join and remain
members of a union to keep their jobs in violation of their religious scrupples, would hurt, rather than
help, labor unions, Congress has seen it fit to exempt religious objectors lest their resistance spread
to other workers, for religious objections have contagious potentialities more than political and
philosophic objections.

Furthermore, let it be noted that coerced unity and loyalty even to the country, and a fortiori to a
labor — union assuming that such unity and loyalty can be attained through coercion — is not a goal
that is constitutionally obtainable at the expense of religious liberty. A desirable end cannot be
48

promoted by prohibited means.

4. Appellants' fourth 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 taken.
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 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 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. 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. How then can
there be a religious test required for the exercise of a right when no right need be exercised?

We have said that 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. 49
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory legislation,
inasmuch as it grants to the members of certain religious sects undue advantages over other
workers, thus violating Section 1 of Article III of the 1935 Constitution which forbids the denial to any
person of the equal protection of the laws. 50

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the
laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man, woman and child should be affected
alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not require that things which are
different in fact be treated in law as though they were the same. The equal protection clause does
not forbid discrimination as to things that are different. It does not prohibit legislation which is
51

limited either in the object to which it is directed or by the territory within which it is to operate.

The equal protection of the laws clause of the Constitution allows classification. Classification in law,
as in the other departments of knowledge or practice, is the grouping of things in speculation or
practice because they agree with one another in certain particulars. A law is not invalid because of
simple inequality. The very idea of classification is that of inequality, so that it goes without saying
52

that the mere fact of inequality in no manner determines the matter of constitutionality. All that is
53

required of a valid classification is that it be reasonable, which means that the classification should
be based on substantial distinctions which make for real differences; that it must be germane to the
purpose of the law; that it must not be limited to existing conditions only; and that it must apply
equally to each member of the class. This Court has held that the standard is satisfied if the
54

classification or distinction is based on a reasonable foundation or rational basis and is not palpably
arbitrary.55

In the exercise of its power to make classifications for the purpose of enacting laws over matters
within its jurisdiction, the state is recognized as enjoying a wide range of discretion. It is not
56

necessary that the classification be based on scientific or marked differences of things or in their
relation. Neither is it necessary that the classification be made with mathematical nicety. Hence
57 58

legislative classification may in many cases properly rest on narrow distinctions, for the equal
59

protection guaranty does not preclude the legislature from recognizing degrees of evil or harm, and
legislation is addressed to evils as they may appear.

We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act classifies
employees and workers, as to the effect and coverage of union shop security agreements, into those
who by reason of their religious beliefs and convictions cannot sign up with a labor union, and those
whose religion does not prohibit membership in labor unions. Tile classification rests on real or
substantial, not merely imaginary or whimsical, distinctions. There is such real distinction in the
beliefs, feelings and sentiments of employees. Employees do not believe in the same religious faith
and different religions differ in their dogmas and cannons. Religious beliefs, manifestations and
practices, though they are found in all places, and in all times, take so many varied forms as to be
almost beyond imagination. There are many views that comprise the broad spectrum of religious
beliefs among the people. There are diverse manners in which beliefs, equally paramount in the
lives of their possessors, may be articulated. Today the country is far more heterogenous in religion
than before, differences in religion do exist, and these differences are important and should not be
ignored.

Even from the phychological point of view, the classification is based on real and important
differences. Religious beliefs are not mere beliefs, mere ideas existing only in the mind, for they
carry with them practical consequences and are the motives of certain rules. of human conduct and
the justification of certain acts. Religious sentiment makes a man view things and events in their
60

relation to his God. It gives to human life its distinctive character, its tone, its happiness or
unhappiness its enjoyment or irksomeness. Usually, a strong and passionate desire is involved in a
religious belief. To certain persons, no single factor of their experience is more important to them
than their religion, or their not having any religion. Because of differences in religious belief and
sentiments, a very poor person may consider himself better than the rich, and the man who even
lacks the necessities of life may be more cheerful than the one who has all possible luxuries. Due to
their religious beliefs people, like the martyrs, became resigned to the inevitable and accepted
cheerfully even the most painful and excruciating pains. Because of differences in religious beliefs,
the world has witnessed turmoil, civil strife, persecution, hatred, bloodshed and war, generated to a
large extent by members of sects who were intolerant of other religious beliefs. The classification,
introduced by Republic Act No. 3350, therefore, rests on substantial distinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law is
precisely to avoid those who cannot, because of their religious belief, join labor unions, from being
deprived of their right to work and from being dismissed from their work because of union shop
security agreements.

Republic Act No. 3350, furthermore, is not limited in its application to conditions existing at the time
of its enactment. The law does not provide that it is to be effective for a certain period of time only. It
is intended to apply for all times as long as the conditions to which the law is applicable exist. As
long as there are closed shop agreements between an employer and a labor union, and there are
employees who are prohibited by their religion from affiliating with labor unions, their exemption from
the coverage of said agreements continues.

Finally, the Act applies equally to all members of said religious sects; this is evident from its
provision. The fact that the law grants a privilege to members of said religious sects cannot by itself
render the Act unconstitutional, for as We have adverted to, the Act only restores to them their
freedom of association which closed shop agreements have taken away, and puts them in the same
plane as the other workers who are not prohibited by their religion from joining labor unions. The
circumstance, that the other employees, because they are differently situated, are not granted the
same privilege, does not render the law unconstitutional, for every classification allowed by the
Constitution by its nature involves inequality.

The mere fact that the legislative classification may result in actual inequality is not violative of the
right to equal protection, for every classification of persons or things for regulation by law produces
inequality in some degree, but the law is not thereby rendered invalid. A classification otherwise
reasonable does not offend the constitution simply because in practice it results in some
inequality. Anent this matter, it has been said that whenever it is apparent from the scope of the
61

law that its object is for the benefit of the public and the means by which the benefit is to be obtained
are of public character, the law will be upheld even though incidental advantage may occur to
individuals beyond those enjoyed by the general public. 62

6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision on
social justice is also baseless. Social justice is intended to promote the welfare of all the
people. Republic Act No. 3350 promotes that welfare insofar as it looks after the welfare of those
63

who, because of their religious belief, cannot join labor unions; the Act prevents their being deprived
of work and of the means of livelihood. In determining whether any particular measure is for public
advantage, it is not necessary that the entire state be directly benefited — it is sufficient that a
portion of the state be benefited thereby.
Social justice also means the adoption by the Government of measures calculated to insure
economic stability of all component elements of society, through the maintenance of a proper
economic and social equilibrium in the inter-relations of the members of the community. Republic
64

Act No. 3350 insures economic stability to the members of a religious sect, like the Iglesia ni Cristo,
who are also component elements of society, for it insures security in their employment,
notwithstanding their failure to join a labor union having a closed shop agreement with the employer.
The Act also advances the proper economic and social equilibrium between labor unions and
employees who cannot join labor unions, for it exempts the latter from the compelling necessity of
joining labor unions that have closed shop agreements and equalizes, in so far as opportunity to
work is concerned, those whose religion prohibits membership in labor unions with those whose
religion does not prohibit said membership. Social justice does not imply social equality, because
social inequality will always exist as long as social relations depend on personal or subjective
proclivities. Social justice does not require legal equality because legal equality, being a relative
term, is necessarily premised on differentiations based on personal or natural conditions. Social 65

justice guarantees equality of opportunity , and this is precisely what Republic Act No. 3350
66

proposes to accomplish — it gives laborers, irrespective of their religious scrupples, equal

opportunity for work.

7. As its last ground, appellant contends that the amendment introduced by Republic Act No. 3350 is
not called for — in other words, the Act is not proper, necessary or desirable. Anent this matter, it
has been held that a statute which is not necessary is not, for that reason, unconstitutional; that in
determining the constitutional validity of legislation, the courts are unconcerned with issues as to the
necessity for the enactment of the legislation in question. Courts do inquire into the wisdom of
67

laws. Moreover, legislatures, being chosen by the people, are presumed to understand and
68

correctly appreciate the needs of the people, and it may change the laws accordingly. The fear is
69

entertained by appellant that unless the Act is declared unconstitutional, employers will prefer
employing members of religious sects that prohibit their members from joining labor unions, and thus
be a fatal blow to unionism. We do not agree. The threat to unionism will depend on the number of
employees who are members of the religious sects that control the demands of the labor market. But
there is really no occasion now to go further and anticipate problems We cannot judge with the
material now before Us. At any rate, the validity of a statute is to be determined from its general
purpose and its efficacy to accomplish the end desired, not from its effects on a particular
case. The essential basis for the exercise of power, and not a mere incidental result arising from its
70

exertion, is the criterion by which the validity of a statute is to be measured.

71

II. We now pass on the second assignment of error, in support of which the Union argued that the
decision of the trial court ordering the Union to pay P500 for attorney's fees directly contravenes
Section 24 of Republic Act No. 875, for the instant action involves an industrial dispute wherein the
Union was a party, and said Union merely acted in the exercise of its rights under the union shop
provision of its existing collective bargaining contract with the Company; that said order also
contravenes Article 2208 of the Civil Code; that, furthermore, Appellee was never actually dismissed
by the defendant Company and did not therefore suffer any damage at all . 72

In refuting appellant Union's arguments, Appellee claimed that in the instant case there was really no
industrial dispute involved in the attempt to compel Appellee to maintain its membership in the union
under pain of dismissal, and that the Union, by its act, inflicted intentional harm on Appellee; that
since Appellee was compelled to institute an action to protect his right to work, appellant could
legally be ordered to pay attorney's fees under Articles 1704 and 2208 of the Civil Code. 73

The second paragraph of Section 24 of Republic Act No. 875 which is relied upon by appellant
provides that:
 No suit, action or other proceedings shall be maintainable in any court against a
labor organization or any officer or member thereof for any act done by or on behalf
of such organization in furtherance of an industrial dispute to which it is a party, on
the ground only that such act induces some other person to break a contract of
employment or that it is in restraint of trade or interferes with the trade, business or
employment of some other person or with the right of some other person to dispose
of his capital or labor. (Emphasis supplied)

That there was a labor dispute in the instant case cannot be disputed for appellant sought the
discharge of respondent by virtue of the closed shop agreement and under Section 2 (j) of Republic
Act No. 875 a question involving tenure of employment is included in the term "labor dispute". The 74

discharge or the act of seeking it is the labor dispute itself. It being the labor dispute itself, that very
same act of the Union in asking the employer to dismiss Appellee cannot be "an act done ... in
furtherance of an industrial dispute". The mere fact that appellant is a labor union does not
necessarily mean that all its acts are in furtherance of an industrial dispute. Appellant Union,
75

therefore, cannot invoke in its favor Section 24 of Republic Act No. 875. This case is not intertwined
with any unfair labor practice case existing at the time when Appellee filed his complaint before the
lower court.

Neither does Article 2208 of the Civil Code, invoked by the Union, serve as its shield. The article
provides that attorney's fees and expenses of litigation may be awarded "when the defendant's act
or omission has compelled the plaintiff ... to incur expenses to protect his interest"; and "in any other
case where the court deems it just and equitable that attorney's fees and expenses of litigation
should be recovered". In the instant case, it cannot be gainsaid that appellant Union's act in
demanding Appellee's dismissal caused Appellee to incur expenses to prevent his being dismissed
from his job. Costs according to Section 1, Rule 142, of the Rules of Court, shall be allowed as a
matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated August 26, 1965, of the
Court of First Instance of Manila, in its Civil Case No. 58894, appealed from is affirmed, with costs
against appellant Union. It is so ordered.

Makalintal, C.J, Castro, Teehankee, Barredo, Makasiar, Antonio, Esguerra, Muñoz Palma and
Aquino, JJ., concur.
G.R. No. 95770 March 1, 1993

ROEL EBRALINAG, EMILY EBRALINAG, represented by their parents MR. & MRS.
LEONARDO EBRALINAG, JUSTINIANA TANTOG, represented by her father AMOS TANTOG;
JEMILOYAO & JOEL OYAO, represented by their parents MR. & MRS. ELIEZER OYAO;
JANETH DIAMOS & JEREMIAS DIAMOS, represented by parents MR. & MRS. GODOFREDO
DIAMOS; SARA OSTIA & JONATHAN OSTIA, represented by their parents MR. & MRS.
FAUTO OSTIA; IRVIN SEQUINO & RENAN SEQUINO, represented by their parents MR. &
MRS. LYDIO SEQUINO; NAPTHALE TANACAO, represented by his parents MR. & MRS.
MANUEL TANACAO; PRECILA PINO, represented by her parents MR. & MRS. FELIPE PINO;
MARICRIS ALFAR, RUWINA ALFAR, represented by their parents MR. & MRS. HERMINIGILDO
ALFAR; FREDESMINDA ALFAR & GUMERSINDO ALFAR, represented by their parents
ABDON ALFAR; ALBERTO ALFAR & ARISTIO ALFAR, represented by their parents MR. &
MRS. GENEROSO ALFAR; MARTINO VILLAR, represented by his parents MR. & MRS.
GENARO VILLAR; PERGEBRIEL GUINITA & CHAREN GUINITA, represented by their parents
MR. & MRS. CESAR GUINITA; ALVIN DOOP, represented by his parents MR. & MRS.
LEONIDES DOOP; RHILYN LAUDE, represented by her parents MR. & MRS. RENE LAUDE;
LEOREMINDA MONARES, represented by her parents, MR. & MRS. FLORENCIO MONARES;
MERCY MONTECILLO, represented by her parents MR. & MRS. MANUEL MONTECILLO;
ROBERTO TANGAHA, represented by his parent ILUMINADA TANGAHA; EVELYN, MARIA &
FLORA TANGAHA, represented by their parents MR. & MRS. ALBERTO TANGAHA; MAXIMO
EBRALINAG, represented by his parents, MR. & MRS. PAQUITO EBRALINAG; JUTA CUMON,
GIDEON CUMON & JONATHAN CUMON, represented by their father RAFAEL CUMON; EVIE
LUMAKANG & JUNAR LUMAKANG, represented by their parents MR. & MRS. LUMAKANG;
EMILIO SARSOZO, PAZ AMOR SARSOZO & IGNA MARIE SARSOZO, represented by their
parents MR. & MRS. VIRGILIO SARSOZO; MICHAEL JOSEPH & HENRY JOSEPH, represented
by parent ANNIE JOSEPH; EMERSON TABLASON & MASTERLOU TABLASON, represented
by their parent EMERLITO TABLASON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, respondent.

G.R. No. 95887 March 1, 1993

MAY AMOLO, represented by her parents MR. & MRS. ISAIAS AMOLO; REDFORD ALSADO,
JOEBERT ALSADO & RUDYARD ALSADO, represented by their parents MR. & MRS.
ABELARDO ALSADO; NELIA ALSADO, REU ALSADO & LILIBETH ALSADO, represented by
their parents MR. & MRS. ROLANDO ALSADO; SUZETTE NAPOLES, represented by her
parents ISMAILITO NAPOLES & OPHELIA NAPOLES; JESICA CARMELOTES, represented by
her parents MR. & MRS. SERGIO CARMELOTES; BABY JEAN MACAPAS, represented by her
parents MR. & MRS. TORIBIO MACAPAS; GERALDINE ALSADO, represented by her parents
MR. & MRS. JOEL ALSADO; RAQUEL DEMOTOR & LEAH DEMOTOR, represented by their
parents MR. & MRS. LEONARDO DEMOTOR; JURELL VILLA & MELONEY VILLA, represented
by their parents MR. & MRS. JOVENIANO VILLA; JONELL HOPE MAHINAY, MARY GRACE
MAHINAY and MAGDALENE MAHINAY, represented by their parents MR. & MRS. FELIX
MAHINAY; JONALYN ANTIOLA and JERWIN ANTIOLA, represented by their parents FELIFE
ANTIOLA and ANECITA ANTIOLA; MARIA CONCEPCION CABUYAO, represented by her
parents WENIFREDO CABUYAO and ESTRELLITA CABUYAO, NOEMI TURNO represented by
her parents MANUEL TURNO and VEVENCIA TURNO; SOLOMON PALATULON, SALMERO
PALATULON and ROSALINDA PALATULON, represented by their parents MARTILLANO
PALATULON and CARMILA PALATULON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU and ANTONIO A. SANGUTAN,
respondents.

Felino M. Ganal for petitioners.

The Solicitor General for respondents.

GRIÑO-AQUINO, J.:

These two special civil actions for certiorari, Mandamus and Prohibition were consolidated
because they raise essentially the same issue: whether school children who are members or
a religious sect known as Jehovah's Witnesses may be expelled from school (both public and
private), for refusing, on account of their religious beliefs, to take part in the flag ceremony
which includes playing (by a band) or singing the Philippine national anthem, saluting the
Philippine flag and reciting the patriotic pledge.

In G.R. No. 95770 "Roel Ebralinag, et al. vs. Division Superintendent of Schools of Cebu and
Manuel F. Biongcog, Cebu District Supervisor," the petitioners are 43 high school and
elementary school students in the towns of Daan Bantayan, Pinamungajan, Carcar, and
Taburan Cebu province. All minors, they are assisted by their parents who belong to the
religious group known as Jehovah's Witnesses which claims some 100,000 "baptized
publishers" in the Philippines.

In G.R. No. 95887, "May Amolo, et al. vs. Division Superintendent of Schools of Cebu and
Antonio A. Sangutan," the petitioners are 25 high school and grade school students enrolled
in public schools in Asturias, Cebu, whose parents are Jehovah's Witnesses. Both petitions
were prepared by the same counsel, Attorney Felino M. Ganal.

All the petitioners in these two cases were expelled from their classes by the public school
authorities in Cebu for refusing to salute the flag, sing the national anthem and recite the
patriotic pledge as required by Republic Act No. 1265 of July 11, 1955, and by Department
Order No. 8 dated July 21, 1955 of the Department of Education, Culture and Sports (DECS)
making the flag ceremony compulsory in all educational institutions. Republic Act No. 1265
provides:

Sec. 1. All educational institutions shall henceforth observe daily flag

ceremony, which shall be simple and dignified and shall include the playing or
singing of the Philippine National anthem.

Sec. 2. The Secretary of Education is hereby authorized and directed to issue

or cause to be issued rules and regulations for the proper conduct of the flag
ceremony herein provided.

Sec. 3. Failure or refusal to observe the flag ceremony provided by this Act
and in accordance with rules and regulations issued by the Secretary of
Education, after proper notice and hearing, shall subject the educational
 institution concerned and its head to public censure as an administrative
punishment which shall be published at least once in a newspaper of general
circulation.

In case of failure to observe for the second time the flag-ceremony provided by
this Act, the Secretary of Education, after proper notice and hearing, shall
cause the cancellation of the recognition or permit of the private educational
institution responsible for such failure.

The implementing rules and regulations in Department Order No. 8 provide:

RULES AND REGULATIONS FOR CONDUCTING THE FLAG CEREMONY IN ALL

EDUCATIONAL INSTITUTIONS.

1. The Filipino Flag shall be displayed by all educational institutions, public

and private, every school day throughout the year. It shall be raised at sunrise
and lowered at sunset. The flag-staff must be straight, slightly and gently
tapering at the end, and of such height as would give the Flag a commanding
position in front of the building or within the compound.

2. Every public and private educational institution shall hold a flag-raising

ceremony every morning except when it is raining, in which event the
ceremony may be conducted indoors in the best way possible. A retreat shall
be held in the afternoon of the same day. The flag-raising ceremony in the
morning shall be conducted in the following manner:

a. Pupils and teachers or students and faculty members who are

in school and its premises shall assemble in formation facing
the flag. At command, books shall be put away or held in the left
hand and everybody shall come to attention. Those with hats
shall uncover. No one shall enter or leave the school grounds
during the ceremony.

b. The assembly shall sing the Philippine National

Anthem accompanied by the school band or without the
accompaniment if it has none; or the anthem may be played by
the school band alone. At the first note of the Anthem, the flag
shall be raised briskly. While the flag is being raised, all persons
present shall stand at attention and execute a salute. Boys and
men with hats shall salute by placing the hat over the heart.
Those without hat may stand with their arms and hands down
and straight at the sides. Those in military or Boy Scout uniform
shall give the salute prescribed by their regulations. The salute
shall be started as the Flag rises, and completed upon last note
of the anthem.

c. Immediately following the singing of the Anthem, the

assembly shall recite in unison the following patriotic
pledge (English or vernacular version), which may bring the
ceremony to a close. This is required of all public schools and of
private schools which are intended for Filipino students or
whose population is predominantly Filipino.
 English Version

I love the Philippines.

It is the land of my birth;
It is the home of my people.
It protects me and helps me to be, strong, happy and useful.
In return, I will heed the counsel of my parents;
I will obey the rules of my school;
I will perform the duties of a patriotic, law-abiding citizen;
I will serve my country unselfishly and faithfully;
I will be a true, Filipino in thought, in word, in deed.

xxx xxx xxx

Jehovah's Witnesses admittedly teach their children not to salute the flag, sing the national
anthem, and recite the patriotic pledge for they believe that those are "acts of worship" or
"religious devotion" (p. 10, Rollo) which they "cannot conscientiously give . . . to anyone or
anything except God" (p. 8, Rollo). They feel bound by the Bible's command to "guard
ourselves from
idols — 1 John 5:21" (p. 9, Rollo). They consider the flag as an image or idol representing the
State (p. 10, Rollo). They think the action of the local authorities in compelling the flag salute
and pledge transcends constitutional limitations on the State's power and invades the sphere
of the intellect and spirit which the Constitution protect against official control (p. 10, Rollo).

This is not the first time that the question, of whether the children of Jehovah's Witnesses
may be expelled from school for disobedience of R.A. No. 1265 and Department Order No. 8,
series of 1955, has been raised before this Court.

The same issue was raised in 1959 in Gerona, et al. vs. Secretary of Education, et al., 106
Phil. 2 (1959) and Balbuna, et al. vs. Secretary of Education, 110 Phil. 150 (1960). This Court in
the Gerona case upheld the expulsion of the students, thus:

The flag is not an image but a symbol of the Republic of the Philippines, an
emblem of national sovereignty, of national unity and cohesion and of freedom
and liberty which it and the Constitution guarantee and protect. Under a
system of complete separation of church and state in the government, the flag
is utterly devoid of any religious significance. Saluting the flag does not
involve any religious ceremony. The flag salute is no more a religious
ceremony than the taking of an oath of office by a public official or by a
candidate for admission to the bar.

In requiring school pupils to participate in the flag salute, the State thru the
Secretary of Education is not imposing a religion or religious belief or a
religious test on said students. It is merely enforcing a
non-discriminatory school regulation applicable to all alike whether Christian,
Moslem, Protestant or Jehovah's Witness. The State is merely carrying out the
duty imposed upon it by the Constitution which charges it with supervision
over and regulation of all educational institutions, to establish and maintain a
complete and adequate system of public education, and see to it that all
schools aim to develop, among other things, civic conscience and teach the
duties of citizenship.
 The children of Jehovah's Witnesses cannot be exempted from participation in
the flag ceremony. They have no valid right to such exemption. Moreover,
exemption to the requirement will disrupt school discipline and demoralize the
rest of the school population which by far constitutes the great majority.

The freedom of religious belief guaranteed by the Constitution does not and
cannot mean exemption from or non-compliance with reasonable and non-
discriminatory laws, rules and regulations promulgated by competent
authority. (pp. 2-3).

Gerona was reiterated in Balbuna, as follows:

The Secretary of Education was duly authorized by the Legislature thru

Republic Act 1265 to promulgate said Department Order, and its provisions
requiring the observance of the flag salute, not being a religious ceremony but
an act and profession of love and allegiance and pledge of loyalty to the
fatherland which the flag stands for, does not violate the constitutional
provision on freedom of religion. (Balbuna, et al. vs. Secretary of Education, et
al., 110 Phil. 150).

Republic Act No. 1265 and the ruling in Gerona have been incorporated in Section 28, Title VI,
Chapter 9 of the Administrative Code of 1987 (Executive Order No. 292) which took effect on
September 21, 1988 (one year after its publication in the Official Gazette, Vol. 63, No. 38 of
September 21, 1987). Paragraph 5 of Section 28 gives legislative cachet to the ruling
in Gerona, thus:

5. Any teacher or student or pupil who refuses to join or participate in the flag
ceremony may be dismissed after due investigation.

However, the petitioners herein have not raised in issue the constitutionality of the above
provision of the new Administrative Code of 1987. They have targeted only Republic Act No.
1265 and the implementing orders of the DECS.

In 1989, the DECS Regional Office in Cebu received complaints about teachers and pupils
belonging to the Jehovah's Witnesses, and enrolled in various public and private schools,
who refused to sing the Philippine national anthem, salute the Philippine flag and recite the
patriotic pledge. Division Superintendent of Schools, Susana B. Cabahug of the Cebu
Division of DECS, and Dr. Atty. Marcelo M. Bacalso, Assistant Division Superintendent,
recalling this Court's decision in Gerona, issued Division Memorandum No. 108, dated
November 17, 1989 (pp. 147-148, Rollo of G.R. No. 95770) directing District Supervisors, High
School Principals and Heads of Private Educational institutions as follows:

1. Reports reaching this Office disclose that there are a number of teachers,
pupils, students, and school employees in public schools who refuse to salute
the Philippine flag or participate in the daily flag ceremony because of some
religious belief.

2. Such refusal not only undermines Republic Act No. 1265 and the DECS
Department Order No. 8, Series of 1955 (Implementing Rules and Regulations)
but also strikes at the heart of the DECS sustained effort to inculcate
patriotism and nationalism.
 3. Let it be stressed that any belief that considers the flag as an image is not in
any manner whatever a justification for not saluting the Philippine flag or not
participating in flag ceremony. Thus, the Supreme Court of the Philippine says:

The flag is not an image but a symbol of the Republic of the

Philippines, an emblem of national sovereignty, of national unity
and cohesion and freedom and liberty which it and the
Constitution guarantee and protect. (Gerona, et al. vs. Sec. of
Education, et al., 106 Phil. 11.)

4. As regards the claim for freedom of belief, which an objectionist may

advance, the Supreme Court asserts:

But between the freedom of belief and the exercise of said belief,
there is quite a stretch of road to travel. If the exercise of said
religious belief clashes with the established institutions of
society and with the law, then the former must yield and give
way to the latter. (Gerona, et al. vs. Sec. of Education, et al., 106
Phil. 11.)

5. Accordingly, teachers and school employees who choose not to participate

in the daily flag ceremony or to obey the flag salute regulation spelled out in
Department Order No. 8, Series of 1955, shall be considered removed from the
service after due process.

6. In strong language about pupils and students who do the same the Supreme
Court has this to say:

If they choose not to obey the flag salute regulation, they merely
lost the benefits of public education being maintained at the
expense of their fellow Citizens, nothing more. According to a
popular expression, they could take it or leave it! Having elected
not to comply with the regulation about the flag salute they
forfeited their right to attend public schools. (Gerona, et al. vs.
Sec. of Education, et al., 106 Phil. 15.)

7. School administrators shall therefore submit to this Office a report on those

who choose not to participate in flag ceremony or salute the Philippine flag.
(pp. 147-148, Rollo of G.R. No. 95770; Emphasis supplied).

Cebu school officials resorted to a number of ways to persuade the children of Jehovah's
Witnesses to obey the memorandum. In the Buenavista Elementary School, the children were
asked to sign an Agreement (Kasabutan) in the Cebuano dialect promising to sing the
national anthem, place their right hand on their breast until the end of the song and recite the
pledge of allegiance to the flag (Annex D, p. 46, Rollo of G.R. No. 95770 and p. 48, Rollo of
G.R. No. 95887), but they refused to sign the "Kasabutan" (p. 20, Rollo of G.R. No. 95770).

In Tubigmanok Elementary School, the Teacher-In-Charge, Antonio A. Sangutan, met with the
Jehovah's Witnesses' parents, as disclosed in his letter of October 17, 1990, excerpts from
which reveal the following:
 After two (2) fruitless confrontation meetings with the Jehovah's Witnesses'
parents on October 2, 1990 and yesterday due to their firm stand not to salute
the flag of the Republic of the Philippines during Flag Ceremony and other
occasions, as mandated by law specifically Republic Act No. 1265, this Office
hereby orders the dropping from the list in the School Register (BPS Form I) of
all teachers, all Jehovah Witness pupils from Grade I up to Grade VI effective
today.

xxx xxx xxx

This order is in compliance with Division Memorandum No. 108 s. 1989 dated
November 17, 1989 by virtue of Department Order No. 8 s. 1955 dated July 21,
1955 in accordance with Republic Act No. 1265 and Supreme Court Decision of
a case "Genaro Gerona, et al., Petitioners and Appellants vs. The Honorable
Secretary of Education, et al., Respondents and Appellees' dated August 12,
1959 against their favor. (p. 149, Rollo of G.R. No. 95770.)

In the Daan Bantayan District, the District Supervisor, Manuel F. Biongcog, ordered the
"dropping from the rolls" of students who "opted to follow their religious belief which is
against the Flag Salute Law" on the theory that "they forfeited their right to attend public
schools." (p. 47, Rollo of G.R. No. 95770.)

1st Indorsement
DAANBANTAYAN DISTRICT II
Daanbantayan, Cebu, July 24, 1990.

Respectfully returned to Mrs. Alicia A. Diaz, School In Charge [sic], Agujo

Elementary School with the information that this office is sad to order the
dropping of Jeremias Diamos and Jeaneth Diamos, Grades III and IV pupils
respectively from the roll since they opted to follow their religious belief which
is against the Flag Salute Law (R.A. 1265) and DECS Order No. 8, series of
1955, having elected not to comply with the regulation about the flag salute
they forfeited their right to attend public schools (Gerona, et al. vs. Sec. of
Education, et al., 106 Philippines 15). However, should they change their mind
to respect and follow the Flag Salute Law they may be re-accepted.

(Sgd.) MANUEL F. BIONGCOG

District Supervisor

(p. 47, Rollo of G.R. No. 95770.)

The expulsion as of October 23, 1990 of the 43 petitioning students of the Daanbantayan
National High School, Agujo Elementary School, Calape Barangay National High School,
Pinamungajan Provincial High School, Tabuelan Central School, Canasojan Elementary
School, Liboron Elementary School, Tagaytay Primary School, San Juan Primary School and
Northern Central Elementary School of San Fernando, Cebu, upon order of then Acting
Division Superintendent Marcelo Bacalso, prompted some Jehovah's Witnesses in Cebu to
appeal to the Secretary of Education Isidro Cariño but the latter did not answer their letter. (p.
21, Rollo.)

The petition in G.R. No. 95887 was filed by 25 students who were similarly expelled because
Dr. Pablo Antopina, who succeeded Susana Cabahug as Division Superintendent of Schools,
would not recall the expulsion orders of his predecessor. Instead, he verbally caused the
expulsion of some more children of Jehovah's Witnesses.

On October 31, 1990, the students and their parents filed these special civil actions
for Mandamus, Certiorari and Prohibition alleging that the public respondents acted without
or in excess of their jurisdiction and with grave abuse of discretion — (1) in ordering their
expulsion without prior notice and hearing, hence, in violation of their right to due process,
their right to free public education, and their right to freedom of speech, religion and worship
(p. 23, Rollo). The petitioners pray that:

c. Judgment be rendered:

i. declaring null and void the expulsion or dropping from the

rolls of herein petitioners from their respective schools;

ii. prohibiting and enjoining respondent from further barring the

petitioners from their classes or otherwise implementing the
expulsion ordered on petitioners; and

iii. compelling the respondent and all persons acting for him to
admit and order the re-admission of petitioners to their
respective schools. (p. 41, Rollo.)

and that pending the determination of the merits of these cases, a temporary restraining
order be issued enjoining the respondents from enforcing the expulsion of the petitioners
and to re-admit them to their respective classes.

On November 27, 1990, the Court issued a temporary restraining order and a writ of
preliminary mandatory injunction commanding the respondents to immediately re-admit the
petitioners to their respective classes until further orders from this Court (p. 57, Rollo).

The Court also ordered the Secretary of Education and Cebu District Supervisor Manuel F.
Biongcog to be impleaded as respondents in these cases.

On May 13, 1991, the Solicitor General filed a consolidated comment to the petitions (p.
98, Rollo) defending the expulsion orders issued by the public respondents on the grounds
that:

1. Bizarre religious practices of the Jehovah's Witnesses produce rebellious

and anti-social school children and consequently disloyal and mutant Filipino
citizens.

2. There are no new and valid grounds to sustain the charges of the Jehovah's
Witnesses that the DECS' rules and regulations on the flag salute ceremonies
are violative of their freedom of religion and worship.

3. The flag salute is devoid of any religious significance; instead, it inculcates

respect and love of country, for which the flag stands.

4. The State's compelling interests being pursued by the DECS' lawful

regulations in question do not warrant exemption of the school children of the
 Jehovah's Witnesses from the flag salute ceremonies on the basis of their own
self-perceived religious convictions.

5. The issue is not freedom of speech but enforcement of law and

jurisprudence.

6. State's power to regulate repressive and unlawful religious practices

justified, besides having scriptural basis.

7. The penalty of expulsion is legal and valid, more so with the enactment of
Executive Order No. 292 (The Administrative Code of 1987).

Our task here is extremely difficult, for the 30-year old decision of this court
in Gerona upholding the flag salute law and approving the expulsion of students who refuse
to obey it, is not lightly to be trifled with.

It is somewhat ironic however, that after the Gerona ruling had received legislative cachet by
its in corporation in the Administrative Code of 1987, the present Court believes that the time
has come to re-examine it. The idea that one may be compelled to salute the flag, sing the
national anthem, and recite the patriotic pledge, during a flag ceremony on pain of being
dismissed from one's job or of being expelled from school, is alien to the conscience of the
present generation of Filipinos who cut their teeth on the Bill of Rights which guarantees
their rights to free speech ** and the free exercise of religious profession and worship (Sec.
5, Article III, 1987 Constitution; Article IV, Section 8, 1973 Constitution; Article III, Section 1[7],
1935 Constitution).

Religious freedom is a fundamental right which is entitled to the highest priority and the
amplest protection among human rights, for it involves the relationship of man to his Creator
(Chief Justice Enrique M. Fernando's separate opinion in German vs. Barangan, 135 SCRA
514, 530-531).

The right to religious profession and worship has a two-fold aspect, vis.,
freedom to believe and freedom to act on one's belief. The first is absolute as
long as the belief is confined within the realm of thought. The second is
subject to regulation where the belief is translated into external acts that affect
the public welfare (J. Cruz, Constitutional Law, 1991 Ed., pp. 176-177).

Petitioners stress, however, that while they do not take part in the compulsory flag ceremony,
they do not engage in "external acts" or behavior that would offend their countrymen who
believe in expressing their love of country through the observance of the flag ceremony.
They quietly stand at attention during the flag ceremony to show their respect for the right of
those who choose to participate in the solemn proceedings (Annex F, Rollo of G.R. No.
95887, p. 50 and Rollo of G.R. No. 95770, p. 48). Since they do not engage in disruptive
behavior, there is no warrant for their expulsion.

The sole justification for a prior restraint or limitation on the exercise of

religious freedom (according to the late Chief Justice Claudio Teehankee in his
dissenting opinion in German vs. Barangan, 135 SCRA 514, 517) is the
existence of a grave and present danger of a character both grave and
imminent, of a serious evil to public safety, public morals, public health or any
other legitimate public interest, that the State has a right (and duty) to
 prevent." Absent such a threat to public safety, the expulsion of the petitioners
from the schools is not justified.

The situation that the Court directly predicted in Gerona that:

The flag ceremony will become a thing of the past or perhaps conducted with
very few participants, and the time will come when we would have citizens
untaught and uninculcated in and not imbued with reverence for the flag and
love of country, admiration for national heroes, and patriotism — a pathetic,
even tragic situation, and all because a small portion of the school population
imposed its will, demanded and was granted an exemption. (Gerona, p. 24.)

has not come to pass. We are not persuaded that by exempting the Jehovah's Witnesses
from saluting the flag, singing the national anthem and reciting the patriotic pledge, this
religious group which admittedly comprises a "small portion of the school population" will
shake up our part of the globe and suddenly produce a nation "untaught and uninculcated in
and unimbued with reverence for the flag, patriotism, love of country and admiration for
national heroes" (Gerona vs. Sec. of Education, 106 Phil. 2, 24). After all, what the petitioners
seek only is exemption from the flag ceremony, not exclusion from the public schools where
they may study the Constitution, the democratic way of life and form of government, and
learn not only the arts, sciences, Philippine history and culture but also receive training for a
vocation of profession and be taught the virtues of "patriotism, respect for human rights,
appreciation for national heroes, the rights and duties of citizenship, and moral and spiritual
values (Sec. 3[2], Art. XIV, 1987 Constitution) as part of the curricula. Expelling or banning
the petitioners from Philippine schools will bring about the very situation that this Court had
feared in Gerona. Forcing a small religious group, through the iron hand of the law, to
participate in a ceremony that violates their religious beliefs, will hardly be conducive to love
of country or respect for dully constituted authorities.

As Mr. Justice Jackson remarked in West Virginia vs. Barnette, 319 U.S. 624 (1943):

. . . To believe that patriotism will not flourish if patriotic ceremonies are

voluntary and spontaneous instead of a compulsory routine is to make an
unflattering estimate of the appeal of our institutions to free minds. . . . When
they [diversity] are so harmless to others or to the State as those we deal with
here, the price is not too great. But freedom to differ is not limited to things
that do not matter much. That would be a mere shadow of freedom. The test of
its substance is the right to differ as to things that touch the heart of the
existing order.

Furthermore, let it be noted that coerced unity and loyalty even to the
country, . . . — assuming that such unity and loyalty can be attained through
coercion — is not a goal that is constitutionally obtainable at the expense of
religious liberty. A desirable end cannot be promoted by prohibited means.
(Meyer vs. Nebraska, 262 U.S. 390, 67 L. ed. 1042, 1046.)

Moreover, the expulsion of members of Jehovah's Witnesses from the schools where they
are enrolled will violate their right as Philippine citizens, under the 1987 Constitution, to
receive free education, for it is the duty of the State to "protect and promote the right of all
citizens to quality education . . . and to make such education accessible to all (Sec. 1, Art.
XIV).
In Victoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54, 72-75, we upheld the exemption
of members of the Iglesia ni Cristo, from the coverage of a closed shop agreement between
their employer and a union because it would violate the teaching of their church not to join
any labor group:

. . . It is certain that not every conscience can be accommodated by all the laws
of the land; but when general laws conflict with scruples of conscience,
exemptions ought to be granted unless some "compelling state interests"
intervenes. (Sherbert vs. Berner, 374 U.S. 398, 10 L. Ed. 2d 965, 970, 83 S. Ct.
1790.)

We hold that a similar exemption may be accorded to the Jehovah's Witnesses with regard to
the observance of the flag ceremony out of respect for their religious beliefs, however
"bizarre" those beliefs may seem to others. Nevertheless, their right not to participate in the
flag ceremony does not give them a right to disrupt such patriotic exercises. Paraphrasing
the warning cited by this Court in Non vs. Dames II, 185 SCRA 523, 535, while the highest
regard must be afforded their right to the free exercise of their religion, "this should not be
taken to mean that school authorities are powerless to discipline them" if they should commit
breaches of the peace by actions that offend the sensibilities, both religious and patriotic, of
other persons. If they quietly stand at attention during the flag ceremony while their
classmates and teachers salute the flag, sing the national anthem and recite the patriotic
pledge, we do not see how such conduct may possibly disturb the peace, or pose "a grave
and present danger of a serious evil to public safety, public morals, public health or any
other legitimate public interest that the State has a right (and duty) to prevent (German vs.
Barangan, 135 SCRA 514, 517).

Before we close this decision, it is appropriate to recall the Japanese occupation of our
country in 1942-1944 when every Filipino, regardless of religious persuasion, in fear of the
invader, saluted the Japanese flag and bowed before every Japanese soldier. Perhaps, if
petitioners had lived through that dark period of our history, they would not quibble now
about saluting the Philippine flag. For when liberation came in 1944 and our own flag was
proudly hoisted aloft again, it was a beautiful sight to behold that made our hearts pound
with pride and joy over the newly-regained freedom and sovereignty of our nation.

Although the Court upholds in this decision the petitioners' right under our Constitution to
refuse to salute the Philippine flag on account of their religious beliefs, we hope,
nevertheless, that another foreign invasion of our country will not be necessary in order for
our countrymen to appreciate and cherish the Philippine flag.

WHEREFORE, the petition for certiorari and prohibition is GRANTED. The expulsion orders
issued by the public respondents against the petitioners are hereby ANNULLED AND SET
ASIDE. The temporary restraining order which was issued by this Court is hereby made
permanent.

SO ORDERED.
G.R. No. 82914 June 20, 1988

KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No. 1027), petitioner,
vs.
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND CANNING DIVISION
UNIVERSAL ROBINA CORPORATION and MEAT AND CANNING DIVISION NEW EMPLOYEES
AND WORKERS UNITED LABOR ORGANIZATION, respondents.

Alar, Comia, Manalo and Associates for petitioner.

Danilo Bolos for respondent Robina Corporation.

RESOLUTION

GRIÑO-AQUINO, J.:

The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a review
of the resolution dated January 27, 1988 (Annex D) of public respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations,
dismissing its appeal from the Order dated November 17, 1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah ordering a certification
election to be conducted among the regular daily paid rank and file employees/workers of Universal Robina Corporation-Meat and Canning
Division to determine which of the contending unions:

a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027 (or
"TUPAS" for brevity);

b) Meat and Canning Division New Employees and Workers United Labor
Organization (or "NEW ULO" for brevity);

c) No union.

shall be the bargaining unit of the daily wage rank and file employees in the Meat and Canning
Division of the company.

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.
On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the IGLESIA NI
KRISTO sect, registered as a labor union.

On October 12, 1987, 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, October 13, 1987, 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 (Annex A).

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 (Annex B).

On November 17, 1987, the Med-Arbiter ordered the holding of a certification election within 20 days
(Annex C).

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 to expire on November
15, 1990.

On January 27, 1988, respondent BLR Director Calleja dismissed the appeal (Annex D).

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.

After deliberating on the petition and the documents annexed thereto, 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 (Associated Trade Unions [ATU] vs. Noriel, 88 SCRA 96).

WHEREFORE, the petition for certiorari is denied, with costs against the petitioner.

SO ORDERED.
G.R. No. 76273 July 31, 1987

FEU-DR. NICANOR REYES MEDICAL FOUNDATION, INC., petitioner,

vs.
HON. CRESENCIANO TRAJANO and RICARDO C. CASTRO, FAR EASTERN UNIVERSITY DR.
NICANOR REYES MEDICAL FOUNDATION, INC. ALLIANCE OF FILIPINO WORKERS
(AFW), respondents.

PARAS, J.:

This is a petition for certiorari seeking to annul and set aside the decision of the respondent Director
which affirmed the Order of the Med-Arbiter in the petition for certification election (NCR-LRD-N-2-
050-86) filed by private respondent, thus ordering the holding of a certification election among the
rank and file employees of the herein petitioner.

The facts of the case are as follows:

The petitioner, Far Eastern University-Dr. Nicanor Reyes Memorial Foundation, Inc., has a work
force of about 350 rank and file employees, majority of whom are members of private respondent
Alliance of Filipino Workers.

On February 13, 1986, private respondent filed a Petition for Consent and/or Certification Election
with The Ministry of Labor and Employment. The petitioner opposed the petition on the ground that a
similar petition involving the same issues and the same parties is pending resolution before the
Supreme Court, docketed as G.R. No. L-49771.

In its position paper, private respondent admitted: that as early as May 10, 1976, private respondent
filed a similar petition for certification election with the Ministry of Labor and Employment but the
petition was denied by the MED Arbiter and the Secretary of Labor on appeal, on the ground that the
petitioner was a non-stock, non-profit medical institution, therefore, its employees may not form, join,
or organize a union pursuant to Article 244 of the Labor Code; that private respondent filed a petition
for certiorari with the Supreme Court (docketed as G.R. No. L-49771) assailing the constitutionality
of Article 244 of the Labor Code; that pending resolution of the aforesaid petition, or on May 1, 1980,
Batas Pambansa Bilang 70 was enacted amendfing Article 244 of the Labor Code, thus granting
even employees of non-stock, non-profit institutions the right to form, join and organize labor unions
of their choice; and that in the exercise of such right, private respondent filed another petition for
certification election with the Ministry of Labor and Employment (NCR-LRD-N-2-050-86).
On April 17, 1986, the Med Arbiter issued an Order granting the petition, declaring that a certification
election be conducted to determine the exclusive bargaining representative of all the rank and file
employees of the petitioner (p. 4, Rollo).

Respondent Director affirmed said Order on appeal. In dismissing the appeal, however, respondent
Director said that:

... respondent's (petitioner herein, reliance on the petition with the Supreme Court involving
as it does the provisions of Article 244 of the Labor Code vis-a-vis the character of the
hospital, which has been alleged as a non-profit medical foundation, has been rendered
moot and academic by virtue of the amendatory BP #70, which allows employees of non-
profit medical institutions to unionize.

Whatever doubt there may be on the right of the workers in a medical institution has been
laid to rest by BP#70.

WHEREFORE, premises considered, the present appeal is hereby dismissed for lack of
merit and the Order of the Med-Arbiter dated 17 April 1986 affirmed. ... (p. 19, Rollo)

Hence, this petition, raising the issue of whether or not respondent Director gravely abused his
discretion in granting the petition for certification election, despite the pendency of a similar petition
before the Supreme Court (G.R. No. 49771) which involves the same parties for the same cause.

The Petition is devoid of merit.

At the time private respondent filed its petition for certification election on February 13, 1986, Article
244 of the Labor Code was already amended by Batas Pambansa Bilang 70, to wit:

Art. 244. Coverage and employees' right to self-organization. — All persons employed in
commercial, industrial and charitable, medical or educational institutions whether operating
for profit or not, shall have the right to self-organizations of their own choosing for purposes
of collective bargaining. Ambulant intermittent and itinerant workers, self-employed people,
rural workers and those without any definite employers may form labor organizations for the
purpose of enhancing and defending their interests and for their mutual aid and protection.
(underscoring supplied).

Under the aforequoted provision, there is no doubt that rank and file employees of non-profit medical
institutions (as herein petitioner) are now permitted to form, organize or join labor unions of their
choice for purposes of collective bargaining. Since private respondent had complied with the
requisites provided by law for calling a certification election (p. 15, Rollo), it was incumbent upon
respondent Director to conduct such certification election to ascertain the bargaining representative
of petitioner's employees (Samahang Manggagawa Ng Pacific Mills, Inc. vs. Noriel, 134 SCRA 152).

As held in Quimpo v. Dela Victoria, 46 SCRA 139, in order that the pendency of another action
between the same parties for the same cause may be availed of as a ground to dismiss a case,
there must be, between the action under consideration and the other action: (1) Identity of parties, or
at least such as representing the same interest in both actions; (2) Identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (3) the Identity on the two
preceding particulars should be such that any judgment which may be rendered on the other action
wig, regardless of which party is successful, amount to res judicata in the action under
consideration. 1avvphi1
In the instant case, any judgment which may be rendered in the petition for certiorari pending before
the Supreme Court (G. R. No. L-49771) wig not constitute res judicata in the petition for certification
election under consideration, for while in the former, private respondent questioned the
constitutionality of Article 244 of the Labor Code before its amendment, in the latter, private
respondent invokes the same article as already amended.

Petitioner, however, has pointed out that respondent Director should not have arrogated upon
himself the power to declare the aforesaid petition for certiorari (G.R. No. L-49771) moot and
academic, as the same is sub-judice and only the Supreme Court can decide the matter. The
Director cannot be faulted for he had to make a decision.

WHEREFORE, this petition is DISMISSED, and the decision appealed from is hereby AFFIRMED.

SO ORDERED.
G.R. No. 121084 February 19, 1997

TOYOTA MOTOR PHILIPPINES CORPORATION , petitioner,

vs.
TOYOTA MOTOR PHILIPPINES CORPORATION LABOR UNION AND THE SECRETARY OF
LABOR AND EMPLOYMENT, respondents.

KAPUNAN, J.:

On November 26, 1992, the Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a
petition for certification election with the Department of Labor, National Capital Region, for all rank-
and-file employees of the Toyota Motor Corporation. 1

In response, petitioner filed a Position Paper on February 23, 1993 seeking the denial of the
issuance of an Order directing the holding of a certification election on two grounds: first, that the
respondent union, being "in the process of registration" had no legal personality to file the same as it
was not a legitimate labor organization as of the date of the filing of the petition; and second, that the
union was composed of both rank-and-file and supervisory employees in violation of law. Attached
2

to the position paper was a list of union members and their respective job classifications, indicating
that many of the signatories to the petition for certification election occupied supervisory positions
and were not in fact rank-and-file employees. 3

The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for certification election for
lack of merit. In his March 8, 1993 Order, the Med-Arbiter found that the labor organization's
membership was composed of supervisory and rank-and-file employees in violation of Article 245 of
the Labor Code, and that at the time of the filing of its petition, respondent union had not even
4

acquired legal personality yet.5

On appeal, the Office of the Secretary of Labor, in a Resolution dated November 9, 1993 signed by
6

Undersecretary Bienvenido E. Laguesma, set aside the Med-Arbiter's Order of March 3, 1993, and
directed the holding of a certification election among the regular rank.-and-file employees of Toyota
Motor Corporation. In setting aside the questioned Order, the Office of the Secretary contended that:
 Contrary to the allegation of herein respondent-appellee, petitioner-appellant was
already a legitimate labor organization at the time of the filing of the petition on 26
November 1992. Records show that on 24 November 1992 or two (2) days before
the filing of the said petition, it was issued a certificate of registration.

We also agree with petitioner-appellant that the Med-Arbiter should have not
dismissed the petition for certification election based on the ground that the proposed
bargaining unit is a mixture of supervisory and rank-and-file employees, hence,
violative of Article 245 of the Labor Code as amended.

A perusal of the petition and the other documents submitted by petitioner-appellant

will readily show that what the former really seeks to represent are the regular rank-
and-file employees in the company numbering about 1,800 more or less, a unit which
is obviously appropriate for bargaining purposes. This being the case, the mere
allegation of respondent-appellee that there are about 42 supervisoy employees in
the proposed bargaining unit should have not caused the dismissal of the instant
petition. Said issue could very well be taken cared of during the pre-election
conference where inclusion/exclusion proceedings will be conducted to determine
the list of eligible voters.
7

Not satisfied with the decision of the Office of the Secretary of Labor, petitioner filed a Motion for
Reconsideration of the Resolution of March 3, 1993, reiterating its claim that as of the date of filing of
petition for certification election, respondent TMPCLU had not yet acquired the status of a legitimate
labor organization as required by the Labor Code, and that the proposed bargaining unit was
inappropriate.

Acting on petitioner's motion for reconsideration, the public respondent, on July 13, 1994 set aside
its earlier resolution and remanded the case to the Med-Arbiter concluding that the issues raised by
petitioner both on appeal and in its motion for reconsideration were factual issues requiring further
hearing and production of evidence. The Order stated
8

We carefully re-examined the records vis-a-vis the arguments raised by the movant,
and we note that movant correctly pointed out that petitioner submitted a copy of its
certificate of registration for the first time on appeal and that in its petition, petitioner
alleges that it is an independent organization which is in the process of registration."
Movant strongly argues that the foregoing only confirms what it has been pointing out
all along, that at the time the petition was filed petitioner is (sic) not yet the holder of
a registration certificate; that what was actually issued on 24 November 1992 or two
(2) days before the filing of the petition was an official receipt of payment for the
application fee; and, that the date appearing in the Registration certificate which is
November 24, 1992 is not the date when petitioner was actually registered, but the
date when the registration certificate was prepared by the processor. Movant also
ratiocinates that if indeed petitioner has been in possession of the registration
certificate at the time this petition was filed on November 26, 1992, it would have
attached the same to the petition.

The foregoing issues are factual ones, the resolution of which is crucial to the
petition. For if indeed it is true that at the time of filing of the petition, the said
registration certificate has not been approved yet, then, petitioner lacks the legal
personality to file the petition and the dismissal order is proper. Sadly, we can not
resolve the said questions by merely perusing the records. Further hearing and
 introduction of evidence are required. Thus, there is a need to remand the case to
the Med-Arbiter solely for the purpose.

WHEREFORE, the motion is hereby granted and our Resolution is hereby set aside.
Let the case be remanded to the Med-Arbiter for the purpose aforestated.

SO ORDERED. 9

Pursuant to the Order, quoted above, Med-Arbiter Brigida C. Fodrigon submitted her findings on
September 28, 1994, stating the following: 10

[T]he controvertible fact is that petitioner could not have been issued its Certificate of
Registration on November 24, 1992 when it applied for registration only on
November 23, 1992 as shown by the official receipt of payment of filing fee. As
Enrique Nalus, Chief LEG, this office, would attest in his letter dated September 8,
1994 addressed to Mr. Porfirio T. Reyes, Industrial Relations Officer of respondent
company, in response to a query posed by the latter, "It is unlikely that an application
for registration is approved on the date that it is filed or the day thereafter as the
processing course has to pass thought routing, screening, and assignment,
evaluation, review and initialing, and approval/disapproval procedure, among others,
so that a 30-day period is provided for under the Labor Code for this purpose, let
alone opposition thereto by interested parties which must be also given due course.

Another evidence which petitioner presented. . . is the "Union Registration 1992

Logbook of IRD". . . and the entry date November 25, 1992 as allegedly the date of
the release of the registration certificate. . . On the other hand, respondent company
presented . . . a certified true copy of an entry on page 265 of the Union Registration
Logbook showing the pertinent facts about petitioner but which do not show the
petitioner's registration was issued on or before November 26, 1992. 11

Further citing other pieces of evidence presented before her, the Med-Arbiter concluded that
respondent TMPCLU could not have "acquire[d] legal personality at the time of the filing of (its)
petition."
12

On April 20, 1996, the public respondent issued a new Resolution, "directing the conduct of a
certification election among the regular rank-and-file employees of the Toyota Motor Philippines
Corporation. Petitioner's motion for reconsideration was denied by public respondent in his Order
13

dated July 14, 1995. 14

Hence, this special civil action for certiorari under Rule 65 of the Revised Rules of Court, where
petitioner contends that "the Secretary of Labor and Employment committed grave abuse of
discretion amounting to lack or excess of jurisdiction in reversing, contrary to law and facts the
findings of the Med-Arbiters to the effect that: 1) the inclusion of the prohibited mix of rank-and file
and supervisory employees in the roster of members and officers of the union cannot be cured by a
simple inclusion-exclusion proceeding; and that 2) the respondent union had no legal standing at the
time of the filing of its petition for certification election.
15

We grant the petition.

The purpose of every certification election is to determine the exclusive representative of employees
in an appropriate bargaining unit for the purpose of collective bargaining. A certification election for
the collective bargaining process is one of the fairest and most effective ways of determining which
labor organization can truly represent the working force. In determining the labor organization
16

which represents the interests of the workforce, those interests must be, as far as reasonably
possible, homogeneous, so as to genuinely reach the concerns of the individual members of a labor
organization.

According to Rothenberg, an appropriate bargaining unit is a group of employees of a given

17

employer, composed of all or less than the entire body of employees, which the collective interests
of all the employees, consistent with equity to the employer indicate to be best suited to serve
reciprocal rights and duties of the parties under the collective bargaining provisions of law. In Belyca
Corporation v. Ferrer Calleja, we defined the bargaining unit as "the legal collectivity for collective
18

bargaining purposes whose members have substantially mutual bargaining interests in terms and
conditions of employment as will assure to all employees their collective bargaining rights." This in
mind, the Labor Code has made it a clear statutory policy to prevent supervisory employees from
joining labor organizations consisting of rank-and-file employees as the concerns which involve
members of either group are normally disparate and contradictory. Article 245 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.

Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file
and supervisory employees cannot possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to
inquire into the composition of any labor organization whenever the status of the labor organization
is challenged on the basis of Article 245 of the Labor Code.

It is the petitioner's contention that forty-two (42) of the respondent union's members, including three
of its officers, occupy supervisory positions In its position paper dated February 22, 1993, petitioner
19

identified fourteen (14) union members occupying the position of Junior Group Chief 11 and 20

twenty-seven (27) members in level five positions. Their respective job-descriptions are quoted
below:

LEVEL 4 (JUNIOR GROUP CHIEF II) — He is responsible for all operators and
assigned stations, prepares production reports related to daily production output. He
oversees smooth flow of production, quality of production, availability of manpower,
parts and equipments. He also coordinates with other sections in the Production
Department.

LEVEL 5 — He is responsible for overseeing initial production of new models,

prepares and monitors construction schedules for new models, identifies manpower
requirements for production, facilities and equipment, and lay-out processes. He also
oversees other sections in the production process (e.g. assembly, welding,
painting)." (Annex "V" of Respondent TMP's Position Paper; which is the Job
Description for an Engineer holding Level 5 position in the Production Engineering
Section of the Production Planning and Control Department).
While there may be a genuine divergence of opinion as to whether or not union members occupying
Level 4 positions are supervisory employees, it is fairly obvious, from a reading of the Labor Code's
definition of the term that those occupying Level 5 positions are unquestionably supervisory
employees. Supervisory employees, as defined above, are those who, in the interest of the
employer, effectively recommend managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but require the use of independent judgment. Under the job
21

description for level five employees, such personnel — all engineers — having a number of
personnel under them, not only oversee production of new models but also determine manpower
requirements, thereby influencing important hiring decisions at the highest levels. This determination
is neither routine nor clerical but involves the independent assessment of factors affecting
production, which in turn affect decisions to hire or transfer workers. The use of independent
judgment in making the decision to hire, fire or transfer in the identification of manpower
requirements would be greatly impaired if the employee's loyalties are torn between the interests of
the union and the interests of management. A supervisory employee occupying a level five position
would therefore find it difficult to objectively identify the exact manpower requirements dictated by
production demands.

This is precisely what the Labor Code, in requiring separate unions among rank-and-file employees
on one hand, and supervisory employees on the other, seeks to avoid. The rationale behind the
Code's exclusion of supervisors from unions of rank-and-file employees is that such employees,
while in the performance of supervisory functions, become the alter ego of management in the
making and the implementing of key decisions at the sub-managerial level. Certainly, it would be
difficult to find unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-
file and supervisory employees. And this is so because the fundamental test of a bargaining unit's
acceptability is whether or not such a unit will best advance to all employees within the unit the
proper exercise of their collective bargaining rights. The Code itself has recognized this, in
22

preventing supervisory employees from joining unions of rank-and-file employees.

In the case at bar, as respondent union's membership list contains the names of at least twenty-
seven (27) supervisory employees in Level Five positions. the union could not, prior to purging itself
of its supervisory employee members, attain the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a petition for certification election.

The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised as to
whether or not respondent union was in possession of the status of a legitimate labor organization at
the time of filing, when, as petitioner vigorously claims, the former was still at the stage of processing
of its application for recognition as a legitimate labor organization. The union's composition being in
violation of the Labor Code's Prohibition of unions composed of supervisory and rank-and-file
employees, it could not possess the requisite personality to file for recognition as a legitimate labor
organization. In any case, the factual issue, albeit ignored by the public respondent's assailed
Resolution, was adequately threshed out in the Med-Arbiter's September 28, 1994 Order

The holding of a certification election is based on clear statutory policy which cannot be
circumvented. Its rules, strictly construed by this Court, are designed to eliminate fraud and
23

manipulation. As we emphasized in Progressive Development Corporation v. Secretary, Department

of Labor and Employment, the Court's conclusion should not be interpreted as impairing any
24

union's right to be certified as the employees' bargaining agent in the petitioner's establishment.
Workers of an appropriate bargaining unit must be allowed to freely express their choice in an
election where everything is open to sound judgment and the possibility for fraud and
misrepresentation is absent. 25
WHEREFORE, the petition is GRANTED. The assailed Resolution dated April 20, 1995 and Order
dated July 14, 1995 of respondent Secretary of Labor are hereby SET ASIDE. The Order dated
September 28, 1994 of the Med-Arbiter is REINSTATED.

SO ORDERED.

[G.R. No. 85915. January 17, 1990.]

PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED

LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (PMTI-
ULGWF), Petitioner, v. PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF
LABOR RELATIONS AND THE CONFEDERATION OF FILIPINO WORKERS (CFW),
PROGRESSIVE EMPLOYEES UNION (PEU-TIPI), Respondents.

Godofredo R. Paceño, Jr. for Petitioner.

Sycip, Salazar, Hernandez & Gatmaitan for Triumph International Phils. Inc.

Rogelio R. Udarbe for Private Respondents.

SYLLABUS

1. LABOR LAWS; BUREAU OF LABOR RELATIONS; FINDING OF FACT OF QUASI-

JUDICIAL BODIES SUPPORTED BY SUBSTANTIAL EVIDENCE ARE BINDING ON THE
COURT. — In the determination of whether or not the members of respondent union
are managerial employees, we accord due respect and, therefore, sustain the findings
of fact made by the public respondent pursuant to the time-honored rule that findings
of fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported
by substantial evidence are binding on us and entitled to great respect considering their
expertise in their respective fields. (see Phil. Airlines Employees Asso. (PALEA) v.
Ferrer-Calleja, 162 SCRA 426 [1988]; Producers Bank of the Philippines v. National
Labor Relations Commission, G.R. No. 76001, September 5, 1988; Salvador Lacorte v.
Hon. Amado G. Inciong, Et Al., G.R. No. 52034, September 27, 1988; Johnson and
Johnson Labor Union-FFW, Et. Al. v. Director of Labor Relations, G.R. No. 76427,
February 21, 1989; Teofila Arica, Et. Al. v. National Labor Relations Commission, Et Al.,
G.R. No. 78210, February 28, 1989; A.M. Oreta & Co. Inc. v. National Labor Relations
Commission, G.R. No. 74004, August 10, 1989). According to the Med-Arbiter, while
the functions, and we may add, the titles of the personnel sought to be organized
appear on paper to involve an apparent exercise of managerial authority, the fact
remains that none of them discharge said functions. The petitioner has failed to show
reversible error insofar as this finding is concerned.

2. ID.; ID.; RULE IN DETERMINING WHETHER OR NOT THE UNION MEMBERS ARE
RANK & FILE EMPLOYEES. — In ruling that the members of respondent union are rank-
and-file and not managerial employees, the public respondent made the following
findings: ". . . (1) They do not have the power to lay down and execute management
policies as they are given ready policies merely to execute and standard practices to
observe; 2) they do not have the power to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees but only to recommend for such actions as
the power rests upon the personnel manager; and 3) they do not have the power to
effectively recommend any managerial actions as their recommendations have to pass
through the department manager for review, the personnel manager for attestation and
the general manager/president for final actions."cralaw virtua1aw library

3. ID.; ID.; TEST OF SUPERVISORY OR MANAGERIAL STATUS. — The Court had

explicitly explained in the case of Franklin Baker Company of the Philippines v. Trajano,
157 SCRA 416 [1988] that: "The test of ‘supervisory or managerial status’ depends on
whether a person possesses authority to act in the interest of his employer in the
matter specified in Article 212 (K) of the Labor Code and Section 1 (m) of its
Implementing Rules and whether such authority is not merely routinary or clerical in
nature, but requires the use of independent judgment. Thus, where such
recommendatory powers as in the case at bar, are subject to evaluation, review and
final action by the department heads and other higher executives of the company, the
same, although present, are not effective and not an exercise of independent judgment
as required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963])." The
public respondent, in its factual findings, found that the supervisory employees sought
to be represented by the respondent union are not involved in policy-making and their
recommendatory powers are not even instantly effective since the same are still subject
to review by at least three managerial heads (department manager, personnel manager
and general manager) before final action can be taken. Hence, it is evidently settled
that the said employees do not possess a managerial status. The fact that their work
designations are either managers or supervisors is of no moment considering that it is
the nature of their functions and not the said nomenclatures or titles of their jobs which
determines their statuses (see Engineering Equipment, Inc. v. National Labor Relations
Commission, 133 SCRA 752 [1984] citing National Waterworks and Sewerage Authority
v. NWSA Consolidated Unions, 11 SCRA 766 [1964]).

4. ID.; ID.; CERTIFICATION ELECTION; CONTRACT BAR RULE; APPLICABLE IN CASE AT

BAR. — Anent the correlative issue of whether or not the contract-bar rule applies to
the present case, Rule V, Section 3, Book V of the Implementing Rules and Regulations
of the Labor Code is written in plain and simple terms. It provides in effect that if a
collective bargaining agreement validly exists, a petition for certification election can
only be entertained within sixty (60) days prior to the expiry date of said agreement.
Respondent union’s petition for certification election was filed on November 25, 1987.
At the time of the filing of the said petition, a valid and existing CBA was present
between petitioner and Triumph International. The CBA was effective up to September
24, 1989. There is no doubt that the respondent union’s CBA constituted a bar to the
holding of the certification election as petitioned by the respondent union with
public Respondent. (see Associated Trade Unions [ATU] v. Trajano, 162 SCRA 318
[1988], Federation of Democratic Trade Union v. Pambansang Kilusan ng Paggawa, 156
SCRA 482 [1987]); Tanduay Distillery Labor Union v. National Labor Relations
Commission, 149 SCRA 470 [1987]). The members of the respondent union should wait
for the proper time.

DECISION

GUTIERREZ, JR., J.:

Once again we uphold the existing law which encourages one-union, one-company
policy in this petition for certiorari with prayer for preliminary injunction. The petitioner
assails the resolutions of the public respondent dated August 24, 1988 and October 28,
1988 both ordering the holding of a certification election among certain monthly-paid
employees of Triumph International Philippines, Inc. (Triumph International for
brevity).

The petitioner is the recognized collective bargaining agent of the rank-and-file

employees of Triumph International with which the latter has a valid and existing
collective bargaining agreement effective up to September 24, 1989.

On November 25, 1987, a petition for certification election was filed by the respondent
union with the Department of Labor and Employment.

On January 30, 1988, a motion to dismiss the petition for certification election was filed
by Triumph International on the grounds that the respondent union cannot lawfully
represent managerial employees and that the petition cannot prosper by virtue of the
contract-bar rule. On the same grounds, the petitioner, as intervenor, filed its
opposition to the petition on February 18, 1988.

On April l3, 1988, the Labor Arbiter issued an order granting the petition for
certification election and directing the holding of a certification election to determine the
sole and exclusive bargaining representative of all monthly-paid administrative,
technical, confidential and supervisory employees of Triumph International. chanrobles virtual lawlibrary

On appeal, the public respondent on August 24, 1988 affirmed the Labor Arbiter’s order
with certain modifications as follows: jgc:chanrobles.com.ph

"WHEREFORE, premises considered, the order appealed from is hereby affirmed subject
to the modification in that the subject employees sought to be represented by the
petitioner union are given the option whether to join the existing bargaining unit
composed of daily paid rank-and-file employees. If they opt to join, the pertinent
provision of the existing CBA should be amended so as to include them in its coverage."
(Rollo, p. 19)

On September 5, 1988, Triumph International filed a motion for reconsideration which

was denied by the public respondent in a resolution dated October 28, 1988.

The sole issue presented by the petitioner in the instant case is whether or not the
public respondent gravely abused its discretion in ordering the immediate holding of a
certification election among the workers sought to be represented by the respondent
union.

The petitioner argues that the members of respondent union are managerial employees
who are expressly excluded from joining, assisting or forming any labor organization
under Art. 245 of the Labor Code.

In the determination of whether or not the members of respondent union are

managerial employees, we accord due respect and, therefore, sustain the findings of
fact made by the public respondent pursuant to the time-honored rule that findings of
fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported by
substantial evidence are binding on us and entitled to great respect considering their
expertise in their respective fields. (see Phil. Airlines Employees Asso. (PALEA) v.
Ferrer-Calleja, 162 SCRA 426 [1988]; Producers Bank of the Philippines v. National
Labor Relations Commission, G.R. No. 76001, September 5, 1988; Salvador Lacorte v.
Hon. Amado G. Inciong, Et Al., G.R. No. 52034, September 27, 1988; Johnson and
Johnson Labor Union-FFW, Et. Al. v. Director of Labor Relations, G.R. No. 76427,
February 21, 1989; Teofila Arica, Et. Al. v. National Labor Relations Commission, Et Al.,
G.R. No. 78210, February 28, 1989; A.M. Oreta & Co. Inc. v. National Labor Relations
Commission, G.R. No. 74004, August 10, 1989). According to the Med-Arbiter, while
the functions, and we may add, the titles of the personnel sought to be organized
appear on paper to involve an apparent exercise of managerial authority, the fact
remains that none of them discharge said functions. The petitioner has failed to show
reversible error insofar as this finding is concerned.

In ruling that the members of respondent union are rank-and-file and not managerial
employees, the public respondent made the following findings: jgc:chanrobles.com.ph

". . . (1) They do not have the power to lay down and execute management policies as
they are given ready policies merely to execute and standard practices to observe; 2)
they do not have the power to hire, transfer, suspend, lay-off, recall, discharge, assign
or discipline employees but only to recommend for such actions as the power rests
upon the personnel manager; and 3) they do not have the power to effectively
recommend any managerial actions as their recommendations have to pass through the
department manager for review, the personnel manager for attestation and the general
manager/president for final actions. . . ." (At pp. 17-18, Rollo)

The petitioner further argues that while it has recognized those signatories and
employees occupying the positions of Assistant Manager, Section Chief, Head
Supervisor and Supervisor as managerial employees under the existing collective
bargaining agreement, in the event that they are declared as rank-and-file employees
in the present case they are not precluded from joining and they should join the
petitioner.
chanrobles virtual lawlibrary
We find the aforesaid contention of the petitioner meritorious in the absence of a
showing that there are compelling reasons such as the denial of the right to join the
petitioner which is the certified bargaining unit to the members of respondent union or
that there are substantial distinctions warranting the recognition of a separate group of
rank-and-file employees even as there is an existing bargaining agent for rank-and-file
employees.

In the case of Philtranco Service Enterprises v. Bureau of Labor Relations, et. al., G.R.
No. 85343 promulgated on June 28, 1989, we stated that: jgc:chanrobles.com.ph

"The Labor Code recognizes two (2) principal groups of employees, namely, the
managerial and the rank-and-file groups. Thus, Art. 212 (k) of the Code provides: chanrob1es virtual 1aw library

x x x

"(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 action. All employees not falling within this definition are considered rank-
and-file employees for purposes of this Book.

"In implementation of the aforequoted provision of the law, Section II of Rule II, Book V
of the Omnibus Rules implementing the Labor Code did away with existing supervisory
unions classifying the members either as managerial or rank and file employees
depending on the work they perform. If they discharge managerial functions,
supervisors are prohibited from forming or joining any labor organization. If they do not
perform managerial work, they may join the rank and file union and if none exists, they
may form one such rank and file organization. This rule was emphasized in the case of
Bulletin Publishing Corp. v. Sanchez, (144 SCRA 628 [1986])." cralaw virtua1aw library

We have explicitly explained in the case of Franklin Baker Company of the Philippines v.
Trajano, 157 SCRA 416 [1988] that: jgc:chanrobles.com.ph

"The test of ‘supervisory or managerial status’ depends on whether a person possesses

authority to act in the interest of his employer in the matter specified in Article 212 (K)
of the Labor Code and Section 1 (m) of its Implementing Rules and whether such
authority is not merely routinary or clerical in nature, but requires the use of
independent judgment. Thus, where such recommendatory powers as in the case at
bar, are subject to evaluation, review and final action by the department heads and
other higher executives of the company, the same, although present, are not effective
and not an exercise of independent judgment as required by law (National Warehousing
Corp. v. CIR, 7 SCRA 602-603 [1963])." cralaw virtua1aw library

The public respondent, in its factual findings, found that the supervisory employees
sought to be represented by the respondent union are not involved in policy-making
and their recommendatory powers are not even instantly effective since the same are
still subject to review by at least three managerial heads (department manager,
personnel manager and general manager) before final action can be taken. Hence, it is
evidently settled that the said employees do not possess a managerial status. The fact
that their work designations are either managers or supervisors is of no moment
considering that it is the nature of their functions and not the said nomenclatures or
titles of their jobs which determines their statuses (see Engineering Equipment, Inc. v.
National Labor Relations Commission, 133 SCRA 752 [1984] citing National Waterworks
and Sewerage Authority v. NWSA Consolidated Unions, 11 SCRA 766 [1964]). chanrobles.com.ph : virtual law library

Under the old Industrial Peace Act (Republic Act No. 875), the term "supervisors" had
the following definition, to wit: jgc:chanrobles.com.ph

"Sec. 2. Definitions — As used in this Act —

x x x

(k) ‘Supervisor’ means any person having authority in the interest of an employer, to
hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline,
other employees, or responsibly to direct them, and to adjust their grievances, or
effectively to recommend such acts if, in connection with the foregoing, the exercise of
such authority is not of a merely routinary or clerical nature but requires the use of
independent judgment." cralaw virtua1aw library

Section 3 of the same Act further provides that the supervisors as defined above shall
not be eligible for membership in a labor organization of employees under their
supervision but may form separate organizations of their own.

With the enactment of the Labor Code (Presidential Decree No. 442 as amended), the
term "supervisor" was replaced by "managerial employee." Book V, Art. 212,
subparagraph (k) of said Code reads: jgc:chanrobles.com.ph

"(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." cralaw virtua1aw library

Art. 245 of the aforementioned Code prohibits managerial employees from joining,
assisting or forming any labor organization. Hence, employees who had then formed
supervisory unions were classified either as managerial or rank-and-file depending on
their functions in their respective work assignments. (Bulletin Publishing Corp. v.
Sanchez, supra.)

The recent amendments to the Labor Code contain separate definitions for managerial
and supervisory employees. Section 4 of Republic Act No. 6715 states that: jgc:chanrobles.com.ph

"Section 4, Article 212 of the Labor Code of the Philippines, as amended, is further
amended to read as follows: chanrob1es virtual 1aw library

x x x
"(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 management 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." cralaw virtua1aw library

Section 18 of the same Act retains the provision on the ineligibility of managerial
employees to join any labor organization. However, the right of supervisory employees
to form their own union is revived under the said section which states, in part, to wit: jgc:chanrobles.com.ph

". . . 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." cralaw virtua1aw library

Thus, the right of supervisory employees to organize under the Industrial Peace Act is
once more recognized under the present amendments to the Labor Code. (see
Adamson & Adamson, Inc., v. The Court of Industrial Relations, 127 SCRA 268 [1984]).
In the absence of any grave abuse of discretion on the part of the public respondent as
to the status of the members of the respondent union, we adopt its findings that the
employees sought to be represented by the respondent union are rank-and-file
employees.

There is no evidence in the records which sufficiently distinguishes and clearly

separates the group of employees sought to be represented by the private respondents
into managerial and supervisory on one hand or supervisory and rank-and-file on the
other. The ‘respondents’ pleadings do not show the distinctions in functions and
responsibilities which differentiate the managers from the supervisors and sets apart
the rank-and-file from either the managerial or supervisory groups. As a matter of fact,
the formation of a supervisor’s union was never before the Labor Arbiter and the
Bureau of Labor Relations and neither is the issue before us. We, therefore, abide by
the public respondent’s factual findings in the absence of a showing of grave abuse of
discretion.
chanrobles.com.ph : virtual law library

In the case at bar, there is no dispute that the petitioner is the exclusive bargaining
representative of the rank-and-file employees of Triumph International. A careful
examination of the records of this case reveals no evidence that rules out the
commonality of interests among the rank-and-file members of the petitioner and the
herein declared rank-and-file employees who are members of the respondent union.
Instead of forming another bargaining unit, the law requires them to be members of
the existing one. The ends of unionism are better served if all the rank-and-file
employees with substantially the same interests and who invoke their right to self-
organization are part of a single unit so that they can deal with their employer with just
one and yet potent voice. The employees’ bargaining power with management is
strengthened thereby. Hence, the circumstances of this case impel us to disallow the
holding of a certification election among the workers sought to be represented by the
respondent union for want of proof that the right of said workers to self-organization is
being suppressed.

Once again we enunciate that the proliferation of unions in an employer unit is

discouraged as a matter of policy unless compelling reasons exist which deny a certain
and distinct class of employees the right to self-organization for purposes of collective
bargaining. (see General Rubber & Footwear Corporation v. Bureau of Labor Relations,
155 SCRA 283 [1987]).

Anent the correlative issue of whether or not the contract-bar rule applies to the
present case, Rule V, Section 3, Book V of the Implementing Rules and Regulations of
the Labor Code is written in plain and simple terms. It provides in effect that if a
collective bargaining agreement validly exists, a petition for certification election can
only be entertained within sixty (60) days prior to the expiry date of said agreement.
Respondent union’s petition for certification election was filed on November 25, 1987.
At the time of the filing of the said petition, a valid and existing CBA was present
between petitioner and Triumph International. The CBA was effective up to September
24, 1989. There is no doubt that the respondent union’s CBA constituted a bar to the
holding of the certification election as petitioned by the respondent union with
public Respondent. (see Associated Trade Unions [ATU] v. Trajano, 162 SCRA 318
[1988], Federation of Democratic Trade Union v. Pambansang Kilusan ng Paggawa, 156
SCRA 482 [1987]); Tanduay Distillery Labor Union v. National Labor Relations
Commission, 149 SCRA 470 [1987]). The members of the respondent union should wait
for the proper time.

The CBA in this case expired on September 24, 1989. If a new CBA with the same
provisions as the old one has been executed, its terms should be amended so as to
conform to the tenor of this decision.

WHEREFORE, in view of the foregoing, the assailed resolutions of the public respondent
dated August 24, 1988 and October 28, 1988 are hereby SET ASIDE. The restraining
order dated January 11, 1989 issued by the Court is made permanent.

SO ORDERED.

Fernan, C.J., Bidin and Cortes, JJ., concur.

Feliciano, J., took no part.

G.R. No. 93468 December 29, 1994

NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK

SUPERVISORS CHAPTER, petitioner,
vs.
HON. RUBEN D. TORRES, SECRETARY OF LABOR AND EMPLOYMENT and REPUBLIC
PLANTERS BANK, respondents.

Filemon G. Tercero for petitioner.

The Government Corporate Counsel for Republic Planters Bank.

BELLOSILLO, J.:

NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK

SUPERVISORS CHAPTER seeks nullification of the decision of public respondent Secretary of
Labor dated 23 March 1990, which modified the order of Med-Arbiter Manases T. Cruz dated 17
August 1989 as well as his order dated 20 April 1990 denying reconsideration.

On 17 March 1989, NATU filed a petition for certification election to determine the exclusive
bargaining representative of respondent Bank's employees occupying supervisory positions. On 24
April 1989, 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 petition lacked the 20% signatory requirement under the Labor Code.

On 17 August 1989, Med-Arbiter Manases T. Cruz granted the petition thus —

WHEREFORE, . . . 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.

The payroll three months prior to the filing of this petition shall be utilized in
determining the list of eligible voters . . . .
1

Respondent Bank appealed the order to the Secretary of Labor on the main ground that several of
the employees sought to be included in the certification election, particularly the Department
Managers, Branch Managers/OICs, Cashiers and Controllers were managerial and/or confidential
employees and thus ineligible to join, assist or form a union. It presented annexes detailing the job
description and duties of the positions in question and affidavits of certain employees. It also invoked
provisions of the General Banking Act and the Central Bank Act to show the duties and
responsibilities of the bank and its branches.

On 23 March 1990, public respondent issued a decision partially granting the appeal, which is now
being challenged before us —

WHEREFORE, . . . the appeal is hereby partially granted. Accordingly, the Order

dated 17 August 1989 is modified to the extent that Department Managers, Assistant
Managers, Branch Managers, Cashiers and Controllers are declared managerial
employees. Perforce, they cannot join the union of supervisors such as Division
Chiefs, Accounts Officers, Staff Assistants and OIC's (sic) unless the latter are
regular managerial employees . . . . 2

NATU filed a motion for reconsideration but the same was denied on 20 April 1990. Hence this
3

recourse assailing public respondent for rendering the decision of 23 March 1990 and the order of
20 April 1990 both with grave abuse of discretion.

The crucial issue presented for our resolution is whether the Department Managers, Assistant
Managers, Branch Managers/OICs, Cashiers and Controllers of respondent Bank are managerial
and/or confidential employees hence ineligible to join or assist the union of petitioner.

NATU submits that an analysis of the decision of public respondent readily yields certain flaws that
result in erroneous conclusions. Firstly, a branch does not enjoy relative autonomy precisely
because it is treated as one unit with the head office and has to comply with uniform policies and
guidelines set by the bank itself. It would be absurd if each branch of a particular bank would be
adopting and implementing different policies covering multifarious banking transactions. Moreover,
respondent Bank's own evidence clearly shows that policies and guidelines covering the various
branches are set by the head office. Secondly, there is absolutely no evidence showing that bank
policies are laid down through the collective action of the Branch Manager, the Cashier and the
Controller. Thirdly, the organizational setup where the Branch Manager exercises control over
branch operations, the Controller controls the Accounting Division, and the Cashier controls the
Cash Division, is nothing but a proper delineation of duties and responsibilities. This delineation is a
Central Bank prescribed internal control measure intended to objectively establish responsibilities
among the officers to easily pinpoint culpability in case of error. The "dual control" and "joint custody"
aspects mentioned in the decision of public respondent are likewise internal control measures
prescribed by the Central Bank.

Neither is there evidence showing that subject employees are vested with powers or prerogatives to
hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The bare
allegations in the affidavits of respondent Bank's Executive Assistant to the President and the
4
Senior Manager of the Human Resource Management Department that those powers and
5

prerogatives are inherent in subject positions are self-serving. Their claim cannot be made to prevail
upon the actual duties and responsibilities of subject employees.

The other evidence of respondent Bank which purports to show that subject employees exercise
managerial functions even belies such claim. Insofar as Department Managers and Assistant
Managers are concerned, there is absolutely no reason mentioned in the decision why they are
managerial employees. Not even respondent Bank in its appeal questioned the inclusion of Assistant
Managers among the qualified petitioning employees. Public respondent has deviated from the real
issue in this case, which is, the determination of whether subject employees are managerial
employees within the contemplation of the Labor Code, as amended by RA 6715; instead, he merely
concentrated on the nature, conduct and management of banks conformably with the General
Banking Act and the Central Bank Act.

Petitioner concludes that subject employees are not managerial employees but supervisors. Even
assuming that they are confidential employees, there is no legal prohibition against confidential
employees who are not performing managerial functions to form and join a union.

On the other hand, respondent Bank maintains that the Department Managers, Branch Managers,
Cashiers and Controllers are inherently possessed of the powers enumerated in Art. 212, par. (m),
of the Labor Code. It relies heavily on the affidavits of its Executive Assistant to the President and
Senior Manager of the Human Resource Department. The Branch Managers, Cashiers and
Controllers are vested not only with policy-making powers necessary to run the affairs of the branch,
given the independence and relative autonomy which it enjoys in the pursuit of its goals and
objectives, but also with the concomitant disciplinary authority over the employees.

The Solicitor General argues that NATU loses sight of the fact that by virtue of the appeal of
respondent Bank, the whole case is thrown open for consideration by public respondent. Even errors
not assigned in the appeal, such as the exclusion by the Med-Arbiter of Assistant Managers from the
managerial employees category, is within his discretion to consider as it is closely related to the
errors properly assigned. The fact that Department Managers are managerial employees is borne
out by the evidence of petitioner itself. Furthermore, while it assails public respondent's finding that
subject employees are managerial employees, petitioner never questioned the fact that said officers
also occupy confidential positions and thus remain prohibited from forming or joining any labor
organization.

Respondent Bank has no legal personality to move for the dismissal of the petition for certification
election on the ground that its supervisory employees are in reality managerial employees. An
employer has no standing to question the process since this is the sole concern of the workers. The
only exception is where the employer itself has to file the petition pursuant to Art. 258 of the Labor
Code because of a request to bargain collectively. 6

Public respondent, invoking RA 6715 and the inherent functions of Department Managers, Assistant
Managers, Branch Managers, Cashiers and Controllers, held that these officers properly fall within
the definition of managerial employees. The ratiocination in his Decision of 23 March 1990 is that —
7

Republic Act No. 6715, otherwise known as the Herrera-Veloso Law, restored the
right of supervisors to form their own unions while maintaining the proscription on the
right to self-organization of managerial employees. Accordingly, the Labor Code, as
amended, distinguishes managerial, supervisory and rank-and-file employees thus:
 Art. 212 (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 managerial authority is not
routinary 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 (emphasis supplied).

At first glance, pursuant to the above-definitions and based on their job descriptions
as guideposts, there would seem to be no difficulty in distinguishing a managerial
employee from that of a supervisor, or from that of a mere rank-and-file employee.
Yet, this task takes on a different dimension when applied to banks, particularly the
branches thereof. This is so because unlike ordinary corporations, a bank's
organizational operation is governed and regulated by the General Banking Act and
the Central Bank Act, both special laws . . . .

As pointed out by the respondent, in the banking industry, a branch is the microcosm
of a banking institution, uniquely autonomous and
self-governing.

This relative autonomy of a branch finds legal basis in Section 27 of the General
Banking Act, as amended, thus:

. . . . The bank shall be responsible for all business conducted in such

branches to the same extent and in the same manner as though such
business had all been conducted in the head office.

For the purpose of this Act, a bank and its branches shall be treated
as a unit (emphasis supplied).

Conformably with the above, bank policies are laid down and/or executed through
the collective action of the Branch Manager, Cashier and Controller at the branch
level. The Branch Manager exercises over-all control and supervision over branch
operation being on the top of the branch's pyramid structure. However, both the
controller and the cashier who are called in banking parlance as "Financial
Managers" due to their fiscal functions are given such a share and sphere of
responsibility in the operations of the bank. The cashier controls and supervises the
cash division while the controller that of the Accounting Division. Likewise, their
assigned task is of great significance, without which a bank or branch for that matter
cannot operate or function.

Through the collective action of these three branch officers operational transactions
are carried out like: The two (2)-signature requirement of the manager, on one hand,
and that of the controller or cashier on the other hand as required in bank's
issuances and releases. This is the so-called "dual control" through check-and-
balance as prescribed by the Central Bank, per Section 1166.6, Book I, Manual of
Regulations for Banks and Financial Intermediaries. Another is in the joint custody of
the branch's cash in vault, accountable forms, collaterals, documents of title, deposit,
ledgers and others, among the branch manager and at least two (2) officers of the
 branch as required under Section 1166.6 of the Manual of Regulations for Banks and
Other Financial Intermediaries.

This structural set-up creates a triad of managerial authority among the branch
manager, cashier and controller. Hence, no officer of the bank ". . . have (sic)
complete authority and responsibility for handling all phases of any transaction from
beginning to end without some control or balance from some other part of the
organization" (Section 1166.3, Division of Duties and Responsibilities, Ibid). This
aspect in the banking system which calls for the division of duties and responsibilities
is a clear manifestation of managerial power and authority. No operational
transaction at branch level is carried out by the singular act of the Branch Manager
but rather through the collective act of the Branch Manager, Cashier/Controller
(emphasis supplied).

Noteworthy is the "on call client" set up in banks. Under this scheme, the branch
manager is tasked with the responsibility of business development and marketing of
the bank's services which place him on client call. During such usual physical
absences from the branch, the cashier assumes the reins of branch control and
administration. On those occasions, the "dual control system" is clearly manifest in
the transactions and operations of the branch bank as it will then require the
necessary joint action of the controller and the cashier.

The grave abuse of discretion committed by public respondent is at once apparent. Art. 212, par.
(m), of the Labor Code is explicit. A managerial employee is (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 employees; or (b) one who is vested with both powers or
prerogatives. 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 managerial
actions, if the exercise of such managerial authority is not routinary in nature but requires the use of
independent judgment.

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 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, emphasis supplied). Similarly, the job
8

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
(emphasis supplied). The job description of a Cashier does not mention any authority on his part to
9

lay down policies, either. On the basis of the foregoing evidence, it is clear that subject employees
10

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
11
or not. It is the nature of the employee's functions, and not the nomenclature or title given to his job,
12

which determines whether he has rank-and-file, supervisory or managerial status. 13

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
14

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; 15

(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); 16

(c) Memorandum issued by respondent Bank's President to all Field Offices

regarding the guidelines on domestic bills purchased
(DBP); and
17

(d) Memorandum issued by the same officer to all Branch Managers regarding
lending authority at the branch level and the terms and conditions thereof.18

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." 19

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
20

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,
21

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
22

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.
23

1166.4 of the Central Bank Manual regarding joint custody, this claim is not even disputed by
24

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
25

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
26 27

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
28

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 29

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
30

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
31

Development, Inc. v. NLRC, that "confidential employees such as accounting personnel, radio and
32

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.

WHEREFORE, the petition is partially GRANTED. The decision of public respondent Secretary of
Labor dated 23 March 1990 and his order dated 20 April 1990 are MODIFIED, hereby declaring that
only the Branch Managers/OICs, Cashiers and Controllers of respondent Republic Planters Bank
are ineligible to join or assist petitioner National Association of Trade Unions (NATU)-Republic
Planters Bank Supervisors Chapter, or join, assist or form any other labor organization.

SO ORDERED.

Davide, Jr., Quiason and Kapunan, JJ., concur.

ff

G.R. No. 96189 July 14, 1992

UNIVERSITY OF THE PHILIPPINES, petitioner,

vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of
Labor and Employment, and THE ALL U.P. WORKERS' UNION, represented by its President,
Rosario del Rosario, respondent.

NARVASA, C.J.:

In this special civil action of certiorari the University of the Philippines seeks the nullification of the
Order dated October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor Relations
holding that "professors, associate professors and assistant professors (of the University of the
Philippines) are . . rank-and-file employees . . ;" consequently, they should, together with the so-
called non-academic, non-teaching, and all other employees of the University, be represented by
only one labor organization. The University is joined in this undertaking by the Solicitor General
1

who "has taken a position not contrary to that of petitioner and, in fact, has manifested . . that he is
not opposing the petition . . ." 2

The case was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a
3

registered labor union, the "Organization of Non-Academic Personnel of UP" (ONAPUP). Claiming 4

to have a membership of 3,236 members — comprising more than 33% of the 9,617 persons
constituting the non-academic personnel of UP-Diliman, Los Baños, Manila, and Visayas, it sought
the holding of a certification election among all said non-academic employees of the University of the
Philippines. At a conference thereafter held on March 22, 1990 in the Bureau, the University stated
that it had no objection to the election.

On April 18, 1990, another registered labor union, the "All UP Workers' Union," filed a comment, as
5

intervenor in the certification election proceeding. Alleging that its membership covers both
academic and non-academic personnel, and that it aims to unite all UP rank-and-file employees in
one union, it declared its assent to the holding of the election provided the appropriate organizational
unit was first clearly defined. It observed in this connection that the Research, Extension and
Professional Staff (REPS), who are academic non-teaching personnel, should not be deemed part of
the organizational unit.

For its part, the University, through its General Counsel, made of record its view that there should
6

be two (2) unions: one for academic, the other for non-academic or administrative, personnel
considering the dichotomy of interests, conditions and rules governing these employee groups.

Director Calleja ruled on the matter on August 7, 1990. She declared that "the appropriate
7

organizational unit . . should embrace all the regular rank-and-file employees, teaching and non-
teaching, of the University of the Philippines, including all its branches" and that there was no
sufficient evidence "to justify the grouping of the non-academic or administrative personnel into an
organization unit apart and distinct from that of the academic or teaching personnel." Director Calleja
adverted to Section 9 of Executive Order No. 180, viz.:

Sec. 9. The appropriate organizational unit shall be the employer unit consisting of
rank-and-file employees, unless circumstances otherwise require.

and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2,
Resolution of Public Sector Labor Management Council dated May 14, 1989, viz.:

xxx xxx xxx

For purposes of registration, an appropriate organizational unit may refer to:

xxx xxx xxx

d. State universities or colleges, government-owned or controlled corporations with

original charters.

She went on to say that the general intent of EO 180 was "not to fragmentize the employer
unit, as "can be gleaned from the definition of the term "accredited employees' organization,"
which refers to:

. . a registered organization of the rank-and-file employees as defined in these rules

recognized to negotiate for the employees in an organizational unit headed by an
officer with sufficient authority to bind the agency, such as . . . . . . state colleges and
universities.

The Director thus commanded that a certification election be "conducted among rank-and-file
employees, teaching and non-teaching" in all four autonomous campuses of the UP, and that
management appear and bring copies of the corresponding payrolls for January, June, and July,
1990 at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the
DOLE, 8 the University sought further clarification of the coverage of the term, "rank-and-file" personnel,
asserting that not every employee could properly be embraced within both teaching and non-teaching
categories since there are those whose positions are in truth managerial and policy-determining, and
hence, excluded by law.

At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the
exclusion from the organizational unit of those employees holding supervisory positions among non-
academic personnel, and those in teaching staff with the rank of Assistant Professor or higher,
submitting the following as grounds therefor:

1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are

ineligible to join rank-and-file employee organizations under Section 3, EO 180:

Sec. 3. High-level employees whose functions are normally considered as policy-

making or managerial or whose duties are of a highly confidential nature shall not be
eligible to join the organization of rank-and file government employees;

2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-and file:
just as there are those occupying managerial positions within the non-teaching roster, there is also a
dichotomy between various levels of the teaching or academic staff;

3) Among the non-teaching employees composed of Administrative Staff and Research personnel,
only those holding positions below Grade 18 should be regarded as rank-and-file, considering that
those holding higher grade positions, like Chiefs of Sections, perform supervisory functions including
that of effectively recommending termination of appointments or initiating appointments and
promotions; and

4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those
holding appointments at the instructor level may be so considered, because those holding
appointments from Assistant Professor to Associate Professor to full Professor take part, as
members of the University Council, a policy-making body, in the initiation of policies and rules with
respect to faculty tenure and promotion. 9

The ONAPUP quite categorically made of record its position; that it was not opposing the
University's proferred classification of rank-and file employees. On the other hand, the "All UP
Workers' Union" opposed the University's view, in a Position Paper presented by it under date of
October 18, 1990.

Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the "sole
issue" of "whether or not professors, associate professors and assistant professors are included in
the definition of high-level employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines
of Executive Order No. 180, defining "high level employee" as follows:

1. High Level Employee — is one whose functions are normally considered policy
determining, managerial or one whose duties are highly confidential in nature. A
managerial function refers to the exercise of powers such as:

1. To effectively recommend such managerial actions;

2. To formulate or execute management policies and decisions; or

 3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or
discipline employees.

The Director adjudged that said teachers are rank-and-file employees "qualified to join unions and
vote in certification elections." According to her —

A careful perusal of the University Code . . shows that the policy-making powers of
the Council are limited to academic matters, namely, prescribing courses of study
and rules of discipline, fixing student admission and graduation requirements,
recommending to the Board of Regents the conferment of degrees, and disciplinary
power over students. The policy-determining functions contemplated in the definition
of a high-level employee pertain to managerial, executive, or organization policies,
such as hiring, firing, and disciplining of employees, salaries, teaching/working hours,
other monetary and non-monetary benefits, and other terms and conditions of
employment. They are the usual issues in collective bargaining negotiations so that
whoever wields these powers would be placed in a situation of conflicting interests if
he were allowed to join the union of rank-and-file employees.

The University seasonably moved for reconsideration, seeking to make the following points, to wit:

1) UP professors do "wield the most potent managerial powers: the power to rule on tenure, on the
creation of new programs and new jobs, and conversely, the abolition of old programs and the
attendant re-assignment of employees.

2) To say that the Council is "limited to (acting on) academic matters" is error, since academic
decisions "are the most important decisions made in a University . . (being, as it were) the heart, the
core of the University as a workplace.

3) Considering that the law regards as a "high level" employee, one who performs either policy-
determining, managerial, or confidential functions, the Director erred in applying only the "managerial
functions" test, ignoring the "policy-determining functions" test.

4) The Director's interpretation of the law would lead to absurd results, e.g.: "an administrative officer
of the College of Law is a high level employee, while a full Professor who has published several
treatises and who has distinguished himself in argument before the Supreme Court is a mere rank-
and-file employee. A dormitory manager is classified as a high level employee, while a full Professor
or Political Science with a Ph. D. and several Honorary doctorates is classified as rank-and-file." 10

The motion for reconsideration was denied by Director Calleja, by Order dated November 20, 1990.

The University would now have this Court declare void the Director's Order of October 30, 1990 as
well as that of November 20, 1990. A temporary restraining order was issued by the Court, by
11

Resolution dated December 5, 1990 conformably to the University's application therefor.

Two issues arise from these undisputed facts. One is whether or not professors, associate
professors and assistant professors are "high-level employees" "whose functions are normally
considered policy determining, managerial or . . highly confidential in nature." The other is whether
or not, they, and other employees performing academic functions, should comprise a collective
12

bargaining unit distinct and different from that consisting of the non-academic employees of the
University, considering the dichotomy of interests, conditions and rules existing between them.
13
As regards the first issue, the Court is satisfied that it has been correctly resolved by the respondent
Director of Bureau Relations. In light of Executive Order No. 180 and its implementing rules, as well
as the University's charter and relevant regulations, the professors, associate professors and
assistant professors (hereafter simply referred to as professors) cannot be considered as exercising
such managerial or highly confidential functions as would justify their being categorized as "high-
level employees" of the institution.

The Academic Personnel Committees, through which the professors supposedly exercise
managerial functions, were constituted "in order to foster greater involvement of the faculty and other
academic personnel in appointments, promotions, and other personnel matters that directly affect
them." Academic Personnel Committees at the departmental and college levels were organized
14

"consistent with, and demonstrative of the very idea of consulting the faculty and other academic
personnel on matters directly affecting them" and to allow "flexibility in the determination of
guidelines peculiar to a particular department or college." 15

Personnel actions affecting the faculty and other academic personnel should, however, "be
considered under uniform guidelines and consistent with the Resolution of the Board (of Regents)
adopted during its 789th Meeting (11-26-69) creating the University Academic Personnel
Board." Thus, the Departmental Academic Personnel Committee is given the function of
16

"assist(ing) in the review of the recommendations initiated by the Department Chairman with regard
to recruitment, selection, performance evaluation, tenure and staff development, in accordance with
the general guidelines formulated by the University Academic Personnel Board and the
implementing details laid down by the College Academic Personnel Committee;" while the College
17

Academic Personnel Committee is entrusted with the following functions: 18

1. Assist the Dean in setting up the details for the implementation of policies, rules,
standards or general guidelines as formulated by the University Academic Personnel
Board;

2. Review the recommendation submitted by the DAPCs with regard to recruitment,

selection, performance evaluation, tenure, staff development, and promotion of the
faculty and other academic personnel of the College;

3. Establish departmental priorities in the allocation of available funds for promotion;

4. Act on cases of disagreement between the Chairman and the members of the
DAPC particularly on personnel matters covered by this Order;

5. Act on complaints and/or protests against personnel actions made by the

Department Chairman and/or the DAPC.

The University Academic Personnel Board, on the other hand, performs the following functions: 19

1. Assist the Chancellor in the review of the recommendations of the CAPC'S.

2. Act on cases of disagreement between the Dean and the CAPC.

3. Formulate policies, rules, and standards with respect to the selection,

compensation, and promotion of members of the academic staff.
 4. Assist the Chancellor in the review of recommendations on academic promotions
and on other matters affecting faculty status and welfare.

From the foregoing, it is evident that it is the University Academic Personnel Committee, composed
of deans, the assistant for academic affairs and the chief of personnel, which formulates the policies,
rules and standards respecting selection, compensation and promotion of members of the academic
staff. The departmental and college academic personnel committees' functions are purely
recommendatory in nature, subject to review and evaluation by the University Academic Personnel
Board. In Franklin Baker Company of the Philippines vs. Trajano, this Court reiterated the principle
20

laid down in National Merchandising Corp. vs. Court of Industrial Relations, that the power to
21

recommend, in order to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical nature
but should require the use of independent judgment." Where such recommendatory powers, as in
the case at bar, are subject to evaluation, review and final action by the department heads and other
higher executives of the company, the same, although present, are not effective and not an exercise
of independent judgment as required by law.

Significantly, the personnel actions that may be recommended by the departmental and college
academic personnel committees must conform with the general guidelines drawn up by the
university personnel academic committee. This being the case, the members of the departmental
and college academic personnel committees are not unlike the chiefs of divisions and sections of the
National Waterworks and Sewerage Authority whom this Court considered as rank-and-file
employees in National Waterworks & Sewerage Authority vs. NWSA Consolidated
Unions, because "given ready policies to execute and standard practices to observe for their
22

execution, . . . they have little freedom of action, as their main function is merely to carry out the
company's orders, plans and policies."

The power or prerogative pertaining to a high-level employee "to effectively recommend such
managerial actions, to formulate or execute management policies or decisions and/or to hire,
transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" is exercised to a certain
23

degree by the university academic personnel board/committees and ultimately by the Board of
Regents in accordance with Section 6 of the University
Charter, thus:
24

(e) To appoint, on the recommendation of the President of the University, professors,

instructors, lecturers and other employees of the University; to fix their
compensation, hours of service, and such other duties and conditions as it may
deem proper; to grant them in its discretion leave of absence under such regulations
as it may promulgate, any other provision of law to the contrary notwithstanding, and
to remove them for cause after investigation and hearing shall have been had.

Another factor that militates against petitioner's espousal of managerial employment status for all its
professors through membership in the departmental and college academic personnel committees is
that not all professors are members thereof. Membership and the number of members in the
committees are provided as follows: 25

Sec. 2. Membership in Committees. — Membership in committees may be made

either through appointment, election, or by some other means as may be determined
by the faculty and other academic personnel of a particular department or college.

Sec. 3. Number of Members. — In addition to the Chairman, in the case of a

department, and the Dean in the case of a college, there shall be such number of
 members representing the faculty and academic personnel as will afford a fairly
representative, deliberative and manageable group that can handle evaluation of
personnel actions.

Neither can membership in the University Council elevate the professors to the status of high-level
employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26

Sec. 6. The Board of Regents shall have the following powers and duties . . . ;

xxx xxx xxx

(f) To approve the courses of study and rules of discipline drawn up by the University
Council as hereinafter provided; . . .

Sec. 9. There shall be a University Council consisting of the President of the

University and of all instructors in the university holding the rank of professor,
associate professor, or assistant professor. The Council shall have the power to
prescribe the courses of study and rules of discipline, subject to the approval of the
Board of Regents. It shall fix the requirements for admission to any college of the
university, as well as for graduation and the receiving of a degree. The Council alone
shall have the power to recommend students or others to be recipients of degrees.
Through its president or committees, it shall have disciplinary power over the
students within the limits prescribed by the rules of discipline approved by the Board
of Regents. The powers and duties of the President of the University, in addition to
those specifically provided in this Act shall be those usually pertaining to the office of
president of a university.

It is readily apparent that the policy-determining functions of the University Council are subject to
review, evaluation and final approval by the Board of Regents. The Council's power of discipline is
likewise circumscribed by the limits imposed by the Board of Regents. What has been said about the
recommendatory powers of the departmental and college academic personnel committees applies
with equal force to the alleged policy-determining functions of the University Council.

Even assuming arguendo that UP professors discharge policy-determining functions through the
University Council, still such exercise would not qualify them as high-level employees within the
context of E.O. 180. As correctly observed by private respondent, "Executive Order No. 180 is a law
concerning public sector unionism. It must therefore be construed within that context. Within that
context, the University of the Philippines represents the government as an employer. 'Policy-
determining' refers to policy-determination in university mattes that affect those same matters that
may be the subject of negotiation between public sector management and labor. The reason why
'policy-determining' has been laid down as a test in segregating rank-and-file from management is to
ensure that those who lay down policies in areas that are still negotiable in public sector collective
bargaining do not themselves become part of those employees who seek to change these policies
for their collective welfare."
27

The policy-determining functions of the University Council refer to academic matters, i.e. those
governing the relationship between the University and its students, and not the University as an
employer and the professors as employees. It is thus evident that no conflict of interest results in the
professors being members of the University Council and being classified as rank-and-file employees.

Be that as it may, does it follow, as public respondent would propose, that all rank-and-file
employees of the university are to be organized into a single collective bargaining unit?
A "bargaining unit" has been defined as a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, which the collective interest of all the employees,
consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law. 28

Our labor laws do not however provide the criteria for determining the proper collective bargaining
unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act,
simply reads as follows: 29

Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. —

The labor organization designated or selected for the purpose of collective
bargaining by the majority of the employees in an appropriate collective bargaining
unit shall be the exclusive representative of all the employees in such unit for the
purpose of collective bargaining in respect to rates of pay, wages, hours of
employment, or other conditions of employment; Provided, That any individual
employee or group of employees shall have the right at any time to present
grievances to their employer.

Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor
Code with minor changes, no guidelines were included in said Code for determination of an
appropriate bargaining unit in a given case. Thus, apart from the single descriptive word
30

"appropriate," no specific guide for determining the proper collective bargaining unit can be found in
the statutes.

Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is
that "(t)he appropriate organizational unit shall be the employer unit consisting of rank-and-file
employees, unless circumstances otherwise require." Case law fortunately furnishes some
guidelines.

When first confronted with the task of determining the proper collective bargaining unit in a particular
controversy, the Court had perforce to rely on American jurisprudence. In Democratic Labor
Association vs. Cebu Stevedoring Company, Inc., decided on February 28, 1958, the Court31

observed that "the issue of how to determine the proper collective bargaining unit and what unit
would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound . . (to
which resort may be had) considering that our present Magna Carta has been patterned after the
American law on the subject." Said the Court:

. . . Under these precedents, there are various factors which must be satisfied and
considered in determining the proper constituency of a bargaining unit. No one
particular factor is itself decisive of the determination. The weight accorded to any
particular factor varies in accordance with the particular question or questions that
may arise in a given case. What are these factors? Rothenberg mentions a good
number, but the most pertinent to our case are: (1) will of the employees (Globe
Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of
work and duties, or similarity of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment status, such as temporary,
seasonal probationary employees. . . .

xxx xxx xxx

 An enlightening appraisal of the problem of defining an appropriate bargaining unit is
given in the 10th Annual Report of the National Labor Relations Board wherein it is
emphasized that the factors which said board may consider and weigh in fixing
appropriate units are: the history, extent and type of organization of employees; the
history of their collective bargaining; the history, extent and type of organization of
employees in other plants of the same employer, or other employers in the same
industry; the skill, wages, work, and working conditions of the employees; the desires
of the employees; the eligibility of the employees for membership in the union or
unions involved; and the relationship between the unit or units proposed and the
employer's organization, management, and operation. . . .

. . In said report, it is likewise emphasized that the basic test in determining the
appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of
employees who have substantial, mutual interests in wages, hours, working
conditions and other subjects of collective bargaining (citing Smith on Labor Laws,
316-317; Francisco, Labor Laws, 162). . . .

The Court further explained that "(t)he test of the grouping is community or mutuality of interests.
And this is so because 'the basic test of an asserted bargaining unit's acceptability is whether or not
it is fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights' (Rothenberg on Labor Relations, 490)." Hence, in that case, the Court
upheld the trial court's conclusion that two separate bargaining units should be formed, one
consisting of regular and permanent employees and another consisting of casual laborers or
stevedores.

Since then, the "community or mutuality of interests" test has provided the standard in determining
the proper constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing
Company, et al. vs. Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that
the employees in the administrative, sales and dispensary departments of a cigar and cigarette
manufacturing firm perform work which have nothing to do with production and maintenance, unlike
those in the raw lead (malalasi), cigar, cigarette, packing (precintera) and engineering and garage
departments, authorized the formation of the former set of employees into a separate collective
bargaining unit. The ruling in the Democratic Labor Association case, supra, was reiterated
in Philippine Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual
employees were barred from joining the union of the permanent and regular employees.

Applying the same "community or mutuality of interests" test, but resulting in the formation of only
one collective bargaining units is the case of National Association of Free Trade Unions vs. Mainit
Lumber Development Company Workers Union-United Lumber and General Workers of the
Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said case, the Court ordered the
formation of a single bargaining unit consisting of the Sawmill Division in Butuan City and the
Logging Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development
Company. The Court reasoned:

Certainly, there is a mutuality of interest among the employees of the Sawmill

Division and the Logging Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs them both. There may be
difference as to the nature of their individual assignments but the distinctions are not
enough to warrant the formation of a separate bargaining unit.

In the case at bar, the University employees may, as already suggested, quite easily be categorized
into two general classes: one, the group composed of employees whose functions are non-
academic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters, electricians, grounds-
keepers, chauffeurs, mechanics, plumbers; and two, the group made up of those performing
32

academic functions, i.e., full professors, associate professors, assistant professors, instructors —
who may be judges or government executives — and research, extension and professorial
staff. Not much reflection is needed to perceive that the community or mutuality of interests which
33

justifies the formation of a single collective bargaining unit is wanting between the academic and
non-academic personnel of the university. It would seem obvious that teachers would find very little
in common with the University clerks and other non-academic employees as regards responsibilities
and functions, working conditions, compensation rates, social life and interests, skills and intellectual
pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the
nature of the work and duties as well as in the compensation and working conditions of the
academic and non-academic personnel dictate the separation of these two categories of employees
for purposes of collective bargaining. The formation of two separate bargaining units, the first
consisting of the rank-and-file non-academic personnel, and the second, of the rank-and-file
academic employees, is the set-up that will best assure to all the employees the exercise of their
collective bargaining rights. These special circumstances, i.e., the dichotomy of interests and
concerns as well as the dissimilarity in the nature and conditions of work, wages and compensation
between the academic and non-academic personnel, bring the case at bar within the exception
contemplated in Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part
of the Labor Relations Director to have ruled otherwise, ignoring plain and patent realities.

WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares
the professors, associate professors and assistant professors of the University of the Philippines as
rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the sense that the non-
academic rank-and-file employees of the University of the Philippines shall constitute a bargaining
unit to the exclusion of the academic employees of the institution — i.e., full professors, associate
professors, assistant professors, instructors, and the research, extension and professorial staff, who
may, if so minded, organize themselves into a separate collective bargaining unit; and that,
therefore, only said non-academic rank-and-file personnel of the University of the Philippines in
Diliman, Manila, Los Baños and the Visayas are to participate in the certification election.

SO ORDERED.

Padilla, Regalado and Nocon, JJ., concur.

Paras, J., Retired.