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PEPSI COLA PRODUCTS PHILS V. SECRETARY OF LABOR 312 SCRA 104 (1999)
FACTS: Private respondent Pepsi-Cola Employees Organization-UEOF (Union) filed a
petition for certification election with the Med-Arbiter seeking to be the exclusive
bargaining agent of the supervisors of Pepsi-Cola Philippines
1. The Med-Arbiter granted the petition, expressly stating that the Union was an
affiliate of Union de Obreros Estivadores de Filipinas (Federation) together with 2
rank-and-file unions: Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees
Union of the Philippines (PCEUP)
2. Subsequently, PEPSI filed with the Bureau of Labor Relations a petition to set
aside, cancel and/or revoke the charter affiliation of the union on the grounds that
the members of the union were managers and that the supervisors union cannot
affiliate with a federation whose members include the rank and file union of the
same company
3. The Secretary of Labor held that Art 245 Labor Code does not preclude the
supervisors union and the rank-and-file union from being affiliated with the same
federation since a federation of local union is not the labor organization
contemplated in Art 245 Labor Code but it only becomes entitled to all the rights
enjoyed by the labor organization when it has complied with the registration
requirements found in Art 234 and 237 Labor Code. What is prohibited by Art 245
is membership of supervisory employees in a labor union of rank-and-file
employees
4. Pepsi assailed the Secretary of Labors decision that credit and collection
managers and accounting managers are eligible for membership in a
supervisors union
ISSUE: WON confidential employees can join the labor union of the rank-and-file
employees
HELD: No. 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 Labor Code singles out managerial employee 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.
In the collective bargaining process, managerial employees are supposed to be
on the side of the employer, to act as its representatives, and to see to it that its
interests are well protected. The employer is not assured of such protection if
these employees themselves are union members. Collective bargaining in such a
situation can become one-sided. It is the same reason that confidential
employees considered as included in the disqualification found in Art 245; it is as
if the disqualification of confidential employees were written in the provision. If
confidential employees could unionize in order to bargain for advantages for
themselves, then they could be governed by their own motives rather than the
interest of the employers. Moreover, unionization of confidential employees for the
purpose of collective bargaining would mean the extension of the law to persons or
individuals who are supposed to act "in the interest of" the employers. It is not
farfetched that in the course of collective bargaining, they might jeopardize that interest
which they are duty bound to protect. As held in Golden Farms v. Ferrer-Calleja,
"confidential employees such as accounting personnel, radio and telegraph operators
who, having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as spy or spies of either party to a collective
bargaining agreement.
Route Managers, Chief Checkers and Warehouse Operations Managers are
supervisors while Credit & Collection Managers and Accounting Managers are highly
confidential employees. Designation should be reconciled with the actual job description
of subject employees. What is essential is the nature of the employee's function and not
the nomenclature or title given to the job which determines whether the employee has
rank and file or managerial status, or whether he is a supervisory employee.
ISSUE: WON the computer operators assigned at CSC and the universitys discipline
officers may be considered as confidential employees and should therefore be excluded
from the bargaining unit which is composed of rank-and-file employees of the university
HELD: No, computer operators and discipline officers are not confidential employees
and are as such, eligible to join the labor union. The express exclusion of the computer
operators and discipline officers from the bargaining unit of rank-and-file employees in
the 1986 collective bargaining agreement does not bar any re-negotiation for the future
inclusion of the said employees in the bargaining unit. During the freedom period, the
parties may not only renew the existing collective bargaining agreement but may also
propose and discuss modifications or amendments thereto. With regard to the alleged
confidential nature of the said employees' functions, after a careful consideration of the
pleadings filed before this Court, we rule that the said computer operators and discipline
officers are not confidential employees. As carefully examined by the Solicitor General,
the service record of a computer operator reveals that his duties are basically clerical
and non-confidential in nature. As to the discipline officers, we agree with the voluntary
arbitrator that based on the nature of their duties, they are not confidential employees
and should therefore be included in the bargaining unit of rank-and-file employees.
With regard to the employees of CSB, they should be excluded from the bargaining unit
of the rank-and-file employees of DLSU, because the two educational institutions have
their own separate juridical personality and no sufficient evidence was shown to justify
the piercing of the veil of corporate fiction.
HELD: Yes. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, the
locals are separate and distinct units primarily designed to secure and maintain the
equality of bargaining power between the employer and their employee-member in the
economic struggle for the fruits of the joint productive effort of labor and capital; and the
association of the locals into the national union was in the furtherance of the
same end. These associations are consensual entities capable of entering into such
legal relations with their members. The essential purpose was the affiliation of the
local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association; free to serve their own and the
common-interest of all, subject to the restraints imposed by the Constitution and
By-laws of the Association; and free also to renounce the affiliation for mutual
welfare upon the terms laid down in the agreement which brought it into
existence.
CIR correctly pointed out that the confusion seems to have stemmed from the prefix of
FFW after the name of the local unions in the registration of both. Nonetheless, the
inclusion of FWW in the registration is merely to stress that they are its affiliates
at the time of registrations. It does not mean that said local unions cannot stand
on their own Neither can it be construed that their personalities are so merged
with the mother federation that for one difference or another they cannot pursue
their own ways, independently of the federation. This is borne by the fact that
FFW, like other federation is a legitimate labor organization separate and distinct
from its locals and affiliates and to construe the registration certificates of the
aforecited unions, along the line of the Company's argument. would tie up any
affiliates to the shoe string of the federation.
The Adamson and Adamson Supervisory Union and the Adamson and Adamson, Inc.,
Salesmen Association (FFW), have their own respective constitutions and by-laws.
They are separately and independently registered of each other. Both sent their
separate proposals for collective bar agreements with their employer. There could be no
employer influence on rank-and-file organizational activities nor could there be any rank
and file influence on the supervisory function of the supervisors because of the
representation sought to be proscribed.
In the first place, had petitioners merely disaffiliated from the. Amigo Employees UnionPAFLU, there could be no legal objections thereto for it was their right to do so. But
what petitioners did by the very clear terms of their "Sama-Samang Kapasiyahan"
was to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which
they could not have done with any effective consequence because they
constituted the minority in the Amigo Employees Union-PAFLU.
It is clear from the facts that petitioners were among the ninety-six (96) who signed the
"Sama-Samang Kapasiyahan" whereas there are two hundred thirty four (234) union
members in the Amigo Employees Union-PAFLU. Hence, petitioners constituted a
small minority for which reason they could not have successfully disaffiliated the
local union from PAFLU. Since only 96 wanted disaffiliation, it can be inferred that
the majority wanted the union to remain an affiliate of PAFLU and this is not
denied or disputed by petitioners. The action of the majority must, therefore,
prevail over that of the minority members.
Neither is there merit to petitioners' contention that they had the right to present
representation issues within the 60-day freedom period. It is true, as contended by
petitioners, that under Art 257 Labor Code and Section 3, Rule 2, Book 2 IRR,
questions of exclusive bargaining representation are entertainable within the 60 days
prior to the expiry date of an existing CBA, and that they did file a petition for
certification election within that period. But the petition was filed in the name of the
Amigo Employees Union which had not disaffiliated from PAFLU, the mother union.
Petitioners being a mere minority of the local union may not bind the majority members
of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly
registered as such with the Bureau of Labor Relations. As such unregistered
union, it acquires no legal personality and is not entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration.
A closed-shop is a valid form of union security, and a provision in a collective bargaining
agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution. Where in a closed-shop agreement it is stipulated that union members who
cease to be in good standing shall immediately be dismissed, such dismissal does not
constitute an unfair labor practice exclusively cognizable by the CIR.
treasurer, as the case may be, of such local or chapter, and attested to by
its president.
Absent compliance with these mandatory requirements, the local or chapter does
not become a legitimate labor organization.
Corollarily, the satisfaction of all these requirements by the local or chapter shall
vest upon it the status of legitimacy with all its concomitant statutory privileges,
one of which is the right to be certified as the exclusive representative of all the
employees in an appropriate bargaining unit.
In the case at bar, a close scrutiny of the records shows that at the time of the filing of
the subject petition on 24 September 1993 by the petitioner Ilaw at Buklod ng
Manggagawa, for and in behalf of its local affiliate IBM at SMFI-CEBU B-MEG, the latter
has been clothed with the status and/or character of a legitimate labor organization.
This is so, because on 19 July 1993, petitioner submitted to the Bureau of Labor
Relations (BLR), this Department, the following documents: charter certificate,
constitution and by-laws, names and addresses of the union officers and certification of
the union's secretary on the non-availability of the union's Books of Accounts. Said
documents (expect the charter certificate) are certified under oath and attested to by the
local union's secretary and President, respectively.
The contention of the respondent that unless and until the issue on who is the legitimate
national president of IBM is resolved, the petitioner cannot claim that is has a valid
charter certificate necessary for it to acquire legal personality is untenable. The
resolution of the said issue will not, in any way, affect the validity of the charter
certificate issued by the IBM in favor of the local union. It must be borne in mind that the
said charter certificate was issued by the IBM in its capacity as a labor organization, a
juridical entity which has a separate and distinct legal personality from its members.
Since there is no showing that the Federation acting as a separate entity is questioning
the legality of the issuance of the said charter certificate, the legality of the issuance of
the same in favor of the local union is presumed.
apprehensions of management. Not only is the issuance of any false statement and
misrepresentation a ground for cancellation of registration, it is also a ground for a
criminal charge of perjury.
The certification and attestation requirements are preventive measures against the
commission of fraud. They likewise afford a measure of protection to unsuspecting
employees who may be lured into joining unscrupulous or fly-by-night unions whose
sole purpose is to control union funds or to use the union for dubious ends.
In the case of union affiliation with a federation, the documentary requirements are
found in Rule II, Section 3 (e), Book V of the Implementing Rules provides that: "The
local or chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and books of accounts. For reporting purposes,
the procedure governing the reporting of independently registered unions, federations or
national unions shall be observed"
beginning, it cannot be assumed that such number could not grow to 128 as reflected
on the signature sheet for attendance. The meeting lasted 12 hours. There is no
evidence that the meeting hall was locked up to exclude late attendees. There is also
nothing essentially mysterious or irregular about the fact that only 127 members ratified
the unions constitution and by-laws when 128 signed the attendance sheet. It cannot
be assumed that all those who attended approved of the constitution and by-laws. Any
member had the right to hold out and refrain from ratifying those documents or to simply
ignore the process. Finally, the 100 names submitted by respondent was substantial
compliance with the LC requisite on the names of members in the bargaining unit, for
20% of the employees in petitioner corporation is merely 50 members.
The fact that some of respondent PIGLAS unions members were also members of the
old rank and file union, the HHE union, is not a ground for canceling the new unions
registration. The right of any person to join an organization also includes the right to
leave that organization and join another one. Besides, HHE union is dead. It had
ceased to exist and its certificate of registration had already been cancelled. Thus,
petitioners arguments on this point may also be now regarded as moot and academic.
revoking petitioners charter certificate had attained finality. However, in this petition,
petitioner prayed that its charter certificate be "reinstated in the roster of active
legitimate labor [organizations]." The proceedings on a petition for cancellation of
registration are independent of those of a petition for certification election. This
case originated from the latter. If it is shown that petitioners legal personality had
already been revoked or cancelled with finality in accordance with the rules, then
it is no longer a legitimate labor organization with the right to petition for a
certification election.