Labrel 1-10

1.
SECOND DIVISION
[G. R. No.101738. April 12, 2000]
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON.

BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment, HON.
HENRY PABEL, Director of the Department of Labor and Employment Regional Office
No. XI and/or the Representation Officer of the Industrial Relations Division who will act
for and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF
EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE
WORKERS, respondents.
DECISION
DE LEON, JR., J.: Miso
Before us is a petition for certiorari seeking to annul the Resolution[1] and the Order[2] dated
April 17, 1991 and August 7, 1991, respectively, of public respondent Bienvenido E. Laguesma,
acting then as Undersecretary, now the Secretary, of the Department of Labor and Employment
(DOLE), which reversed the Order dated March 27, 1990[3] of Med-Arbiter Phibun D. Pura
declaring that supervisors and section heads of petitioner under its new organizational structure
are managerial employees and should be excluded from the list of voters for the purpose of a
certification election among supervisory and technical staff employees of petitioner.[4]
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture
of paper and timber products, with principal place of operations at Tabon, Bislig, Surigao del
Sur. It has over 9,000[5] employees, 944[6] of whom are supervisory and technical staff
employees. More or less 487 of these supervisory and technical staff employees are signatory
members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees
Union (PBSTSEU).[7]
On August 9, 1989. PBSTSEU instituted a Petition[8] for Certification Election to determine the
sole and exclusive bargaining agent of the supervisory and technical staff employees of PICOP
for collective bargaining agreement (CBA) purposes.
In a Notice[9] dated August 10, 1989, the initial hearing of the petition was set on August 18,
1989 but it was reset to August 25, 1989, at the instance of PICOP, as it requested a fifteen (15)
day period within which to file its comments and/or position paper. But PICOP failed to file any
comment or position paper. Meanwhile, private respondents Federation of Free Workers (FFW)
and Associated Labor Union (ALU) filed their respective petitions for intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order[10] granting the petitions
for interventions of the FFW and ALU. Another Order[11] issued on the same day set the holding
of a certification election among PICOP's supervisory and technical staff employees in Tabon,
Bislig, Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU; (2) FFW; (3) ALU; and
(4) no union. Nex old
On September 21, 1989, PICOP appealed[12] the Order which set the holding of the certification
election contending that the Med-Arbiter committed grave abuse of discretion in deciding the
case without giving PICOP the opportunity to file its comments/answer, and that PBSTSEU had
no personality to file the petition for certification election.
After PBSTSEU filed its Comments[13] to petitioner's appeal, the Secretary of the Labor[14] issued
a Resolution[15] dated November 17, 1989 which upheld the Med-Arbiter's Order dated
September 17, 1989, with modification allowing the supervising and staff employees in Cebu,
Davao and Iligan City to participate in the certification election.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the
inclusion of some section heads and supervisors in the list of voters whose positions it averred
were reclassified as managerial employees in the light of the reorganization effected by
it.[16] Under the Revised Organizational Structure of the PICOP, the company was divided into
four (4) main business groups, namely: Paper Products Business, Timber Products Business,
Forest Resource Business and Support Services Business. A vice- president or assistant vice-
president heads each of these business groups. A division manager heads the divisions
comprising each business group. A department manager heads the departments comprising each
division. Section heads and supervisors, now called section managers and unit managers, head
the sections and independent units, respectively, comprising each department.[17]PICOP
advanced the view that considering the alleged present authority of these section managers and
unit managers to hire and fire, they are classified as managerial employees, and hence, ineligible
to form or join any labor organization.[18] Mani kx
Following the submission by the parties of their respective position papers[19] and evidence[20] on
this issue, Med-Arbiter Phibun D. Pura issued an Order[21] dated March 27, 1990, holding that
supervisors and section heads of the petitioner are managerial employees and therefore excluded
from the list of voters for purposes of certification election.
PBSTSEU appealed[22] the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU
likewise appealed.[23] PICOP submitted evidence militating against the appeal.[24] Public
respondent Bienvenido E. Laguesma, acting as the then Undersecretary of Labor, issued the
assailed Order[25] dated April 17, 1991 setting aside the Order dated March 27, 1990 of the Med-
Arbiter and declaring that the subject supervisors and section heads are supervisory employees
eligible to vote in the certification election.
PICOP sought[26] reconsideration of the Order dated April 7, 1991. However, public respondent
in his Order[27] dated August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit: Maniks

I.
THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,

UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A
CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER
ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION,
TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF
JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO
PRESENT ADDITIONAL EVIDENCE TO PROVE THAT SOME OF ITS
MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM JOINING OR
FORMING A UNION REPRESENTED BY CO-RESPONDENT PBSTSEU, IN
VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE
CHANGES IN THE ORGANIZATIONAL STRUCTURE OF YOUR
PETITIONER WHICH WAS FULLY IMPLEMENTED IN JANUARY 1991
AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR
DECISION.
II.
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA,

ALSO ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION,
TANTAMOUNT TO ARBITRARILY ACTING WITHOUT OR IN EXCESS OF
JURISDICTION WHEN HE TOTALLY DISREGARDED THE
DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR
PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED
CLAIM AND MERE ALLEGATIONS OF PRIVATE RESPONDENT,
PBSTSEU, THAT THE REORGANIZATION OF YOUR PETITIONER WAS A
SHAM AND CALCULATED MERELY TO FRUSTRATE THE
UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY PERSONNEL;
AND SOLELY ON THIS BASIS, DENIED YOUR PETITIONER'S URGENT
MOTION FOR RECONSIDERATION.[28] Manikan
PICOP's main thesis is that the positions Section Heads and Supervisors, who have been
designated as Section Managers and Unit Managers, as the case may be, were converted to
managerial employees under the decentralization and reorganization program it implemented in
1989. Being managerial employees, with alleged authority to hire and fire employees, they are
ineligible for union membership under Article 245[29] of the Labor Code. Furthermore, PICOP
contends that no malice should be imputed against it for implementing its decentralization
program only after the petition for certification election was filed inasmuch as the same is a valid
exercise of its management prerogative, and that said program has long been in the drawing
boards of the company, which was realized only in 1989 and fully implemented in 1991. PICOP
emphatically stresses that it could not have conceptualized the decentralization program only for
the purpose of "thwarting the right of the concerned employees to self-organization."
The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.
First. In United Pepsi-Co/a Supervisory Union (UPSU) v. Laguesma,[30] we had occasion to
elucidate on the term "managerial employees." Managerial employees are ranked as Top
Managers, Middle Managers and First Line Managers. Top and Middle Managers have the
authority to devise, implement and control strategic and operational policies while the task of
First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file
employees of an organization. Under this distinction, "managerial employees" therefore fall in
two (2) categories, namely, the "managers" per se composed of Top and Middle Managers, and
the "supervisors" composed of First-Line Managers.[31] Thus, the mere fact that an employee is
designated manager" does not ipso facto make him one. Designation should be reconciled with
the actual job description of the employee,[32] for it is the job description that determines the
nature of employment.[33] Oldmis o
In the petition before us, a thorough dissection of the job description[34] of the concerned
supervisory employees and section heads indisputably show that they are not actually managerial
but only supervisory employees since they do not lay down company policies. PICOP's
contention that the subject section heads and unit managers exercise the authority to hire and
fire[35]is ambiguous and quite misleading for the reason that any authority they exercise is not
supreme but merely advisory in character. Theirs is not a final determination of the company
policies inasmuch as any action taken by them on matters relative to hiring, promotion, transfer,
suspension and termination of employees is still subject to confirmation and approval by their
respective superior.[36] Thus, where such power, which is in effect recommendatory in character,
is subject to evaluation, review and final action by the department heads and other higher
executives of the company, the same, although present, is not effective and not an exercise of
independent judgment as required by law.[37]
Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma
for the latter's denial to allow PICOP to present additional evidence on the implementation of its
program inasmuch as in the appeal before the said public respondent, PICOP even then had
already submitted voluminous supporting documents.[38] The record of the case is replete with
position papers and exhibits that dealt with the main thesis it relied upon. What the law prohibits
is the lack of opportunity to be heard.[39] PICOP has long harped on its contentions and these
were dealt upon and resolved in detail by public respondent Laguesma. We see no reason or
justification to deviate from his assailed resolutions for the reason that law and jurisprudence
aptly support them.
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding
of certification election, despite numerous opportunities to ventilate the same, only after
respondent Undersecretary of Labor affirmed the holding thereof, simply bolstered the public
respondents' conclusion that PICOP raised the issue merely to prevent and thwart the concerned
section heads and supervisory employees from exercising a right granted them by law. Needless
to stress, no obstacle must be placed to the holding of certification elections, for it is a statutory
policy that should not be circumvented.[40]
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public
respondent Bienvenido E. Laguesma dated April 17, 1991 and August 17, 1991, respectively,
finding the subject supervisors and section heads as supervisory employees eligible to vote in the
certification election are AFFIRMED. Costs against petitioner.
SO ORDERED.
2. THIRD DIVISION
TUNAY NA PAGKAKAISA NG G.R. No. 162025

MANGGAGAWA SA ASIABREWERY,
Petitioner, Present:
CARPIO MORALES, J.,

- versus - Chairperson,
BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR., JJ.
ASIA BREWERY, INC., Promulgated:

Respondent.
August 3, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:
For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the Decision[1] dated November 22, 2002 and
Resolution[2] dated January 28, 2004 rendered by the Court of Appeals (CA) in CA-G.R. SP No.
55578, granting the petition of respondent company and reversing the Voluntary Arbitrators
Decision[3] dated October 14, 1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of
beer, shandy, bottled water and glass products. ABI entered into a Collective Bargaining
Agreement (CBA),[4] effective for five (5) years from August 1, 1997 to July 31, 2002,
with Bisig at Lakas ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the
exclusive bargaining representative of ABIs rank-and-file employees. On October 3, 2000, ABI
and BLMA-INDEPENDENT signed a renegotiated CBA effective from August 1, 2000 to 31
July 2003.[5]
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. The COMPANY recognizes the UNION as the

sole and exclusive bargaining representative of all the regular rank-and-file daily
paid employees within the scope of the appropriate bargaining unit with respect to
rates of pay, hours of work and other terms and conditions of
employment. The UNION shall not represent or accept for membership
employees outside the scope of the bargaining unit herein defined.
Section 2. Bargaining Unit. The bargaining unit shall be comprised of all

regular rank-and-file daily-paid employees of the COMPANY. However, the
following jobs/positions as herein defined shall be excluded from the bargaining
unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff[6] [EMPHASIS
SUPPLIED.]
Subsequently, a dispute arose when ABIs management stopped deducting union dues from
eighty-one (81) employees, believing that their membership in BLMA-INDEPENDENT violated
the CBA. Eighteen (18) of these affected employees are QA Sampling Inspectors/Inspectresses
and Machine Gauge Technician who formed part of the Quality Control Staff. Twenty (20)
checkers are assigned at the Materials Department of the Administration Division, Full Goods
Department of the Brewery Division and Packaging Division. The rest are secretaries/clerks
directly under their respective division managers.[7]
BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to self-
organization and brought the matter to the grievance machinery. As the parties failed to amicably
settle the controversy, BLMA-INDEPENDENT lodged a complaint before the National
Conciliation and Mediation Board (NCMB). The parties eventually agreed to submit the case for
arbitration to resolve the issue of [w]hether or not there is restraint to employees in the exercise
of their right to self-organization.[8]
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT
after finding that the records submitted by ABI showed that the positions of the subject
employees qualify under the rank-and-file category because their functions are merely routinary
and clerical. He noted that the positions occupied by the checkers and secretaries/clerks in the
different divisions are not managerial or supervisory, as evident from the duties and
responsibilities assigned to them. With respect to QA Sampling Inspectors/Inspectresses and
Machine Gauge Technician, he ruled that ABI failed to establish with sufficient clarity their
basic functions as to consider them Quality Control Staff who were excluded from the coverage
of the CBA. Accordingly, the subject employees were declared eligible for inclusion within the
bargaining unit represented by BLMA-INDEPENDENT.[9]
On appeal, the CA reversed the Voluntary Arbitrator, ruling that:
WHEREFORE, foregoing premises considered, the questioned decision of

the Honorable Voluntary Arbitrator Bienvenido De Vera is hereby REVERSED
and SET ASIDE, and A NEW ONE ENTERED DECLARING THAT:
a) the 81 employees are excluded from and are not eligible for
inclusion in the bargaining unit as defined in Section 2, Article
I of the CBA;
b) the 81 employees cannot validly become members of

respondent and/or if already members, that their membership is
violative of the CBA and that they should disaffiliate from
respondent; and
c) petitioner has not committed any act that restrained or tended to

restrain its employees in the exercise of their right to self-
organization.
NO COSTS.
SO ORDERED.[10]
BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification

election was held on August 10, 2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa
sa Asia (TPMA) won. As the incumbent bargaining representative of ABIs rank-and-file
employees claiming interest in the outcome of the case, petitioner filed with the CA an omnibus
motion for reconsideration of the decision and intervention, with attached petition signed by the
union officers.[11] Both motions were denied by the CA.[12]
The petition is anchored on the following grounds:

(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81
EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR
INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2,
ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81
EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT
THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY
SHOULD DISAFFILIATE FROM RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED
ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS
EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-
ORGANIZATION.[13]
Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or nature of work are required
to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.[14] Confidential employees are thus excluded from the
rank-and-file bargaining unit. The rationale for their separate category and disqualification to
join any labor organization is similar to the inhibition for managerial employees because if
allowed to be affiliated with a Union, the latter might not be assured of their loyalty in view of
evident conflict of interests and the Union can also become company-denominated with the
presence of managerial employees in the Union membership.[15] Having access to confidential
information, confidential employees may also become the source of undue advantage. Said
employees may act as a spy or spies of either party to a collective bargaining agreement.[16]
In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners division
secretaries, all Staff of General Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are confidential employees not included within
the rank-and-file bargaining unit.[18] Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v.
Roldan-Confesor,[19] we declared that legal secretaries who are tasked with, among others, the
typing of legal documents, memoranda and correspondence, the keeping of records and files, the
giving of and receiving notices, and such other duties as required by the legal personnel of the
corporation, fall under the category of confidential employees and hence excluded from the
bargaining unit composed of rank-and-file employees.[20]
Also considered having access to vital labor information are the executive secretaries of the
General Manager and the executive secretaries of the Quality Assurance Manager, Product
Development Manager, Finance Director, Management System Manager, Human Resources
Manager, Marketing Director, Engineering Manager, Materials Manager and Production
Manager.[21]
In the present case, the CBA expressly excluded Confidential and Executive Secretaries from the
rank-and-file bargaining unit, for which reason ABI seeks their disaffiliation from
petitioner. Petitioner, however, maintains that except for Daisy Laloon, Evelyn Mabilangan and
Lennie Saguan who had been promoted to monthly paid positions, the following
secretaries/clerks are deemed included among the rank-and-file employees of ABI:[22]
NAME DEPARTMENT IMMEDIATE SUPERIOR
C1 ADMIN DIVISION
1. Angeles, Cristina C. Transportation Mr. Melito K. Tan

2. Barraquio, Carina P. Transportation Mr. Melito K. Tan
3. Cabalo, Marivic B. Transportation Mr. Melito K. Tan
4. Fameronag, Leodigario C. Transportation Mr. Melito K. Tan
1. Abalos, Andrea A. Materials Mr. Andres G. Co

2. Algire, Juvy L. Materials Mr. Andres G. Co
3. Anouevo, Shirley P. Materials Mr. Andres G. Co
4. Aviso, Rosita S. Materials Mr. Andres G. Co
5. Barachina, Pauline C. Materials Mr. Andres G. Co
6. Briones, Catalina P. Materials Mr. Andres G. Co
7. Caralipio, Juanita P. Materials Mr. Andres G. Co
8. Elmido, Ma. Rebecca S. Materials Mr. Andres G. Co
9. Giron, Laura P. Materials Mr. Andres G. Co
10. Mane, Edna A. Materials Mr. Andres G. Co
xxxx
C2 BREWERY DIVISION
1. Laloon, Daisy S. Brewhouse Mr. William Tan
1. Arabit, Myrna F. Bottling Production Mr. Julius Palmares

2. Burgos, Adelaida D. Bottling Production Mr. Julius Palmares
3. Menil, Emmanuel S. Bottling Production Mr. Julius Palmares
4. Nevalga, Marcelo G. Bottling Production Mr. Julius Palmares
1. Mapola, Ma. Esraliza T. Bottling Maintenance Mr. Ernesto Ang
2. Velez, Carmelito A. Bottling Maintenance Mr. Ernesto Ang
1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Tetonche

2. Deauna, Edna R. Bottled Water Mr. Faustino Tetonche
3. Punongbayan, Marylou F. Bottled Water Mr. Faustino Tetonche
4. Saguan, Lennie Y. Bottled Water Mr. Faustino Tetonche
1. Alcoran, Simeon A. Full Goods Mr. Tsoi Wah Tung

2. Cervantes, Ma. Sherley Y. Full Goods Mr. Tsoi Wah Tung
3. Diongco, Ma. Teresa M. Full Goods Mr. Tsoi Wah Tung
4. Mabilangan, Evelyn M. Full Goods Mr. Tsoi Wah Tung
5. Rivera, Aurora M. Full Goods Mr. Tsoi Wah Tung
6. Salandanan, Nancy G. Full Goods Mr. Tsoi Wah Tung
1. Magbag, Ma. Corazon C. Tank Farm/ Mr. Manuel Yu Liat

Cella Services
1. Capiroso, Francisca A. Quality Assurance Ms. Regina Mirasol
1. Alconaba, Elvira C. Engineering Mr. Clemente Wong

2. Bustillo, Bernardita E. Electrical Mr. Jorge Villarosa
3. Catindig, Ruel A. Civil Works Mr. Roger Giron
4. Sison, Claudia B. Utilities Mr. Venancio Alconaba
xxxx
C3 PACKAGING DIVISION
1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella

2. Caiza, Alma A. GP Technical Mr. Chen Tsai Tyan
3. Cantalejo, Aida S. GP Engineering Mr. Noel Fernandez
4. Castillo, Ma. Riza R. GP Production Mr. Tsai Chen Chih
5. Lamadrid, Susana C. GP Production Mr. Robert Bautista
6. Mendoza, Jennifer L. GP Technical Mr. Mel Oa
As can be gleaned from the above listing, it is rather curious that there would be several
secretaries/clerks for just one (1) department/division performing tasks which are mostly routine
and clerical. Respondent insisted they fall under the Confidential and Executive Secretaries
expressly excluded by the CBA from the rank-and-file bargaining unit.However, perusal of the
job descriptions of these secretaries/clerks reveals that their assigned duties and responsibilities
involve routine activities of recording and monitoring, and other paper works for their respective
departments while secretarial tasks such as receiving telephone calls and filing of office
correspondence appear to have been commonly imposed as additional duties.[23] Respondent
failed to indicate who among these numerous secretaries/clerks have access to confidential data
relating to management policies that could give rise to potential conflict of interest with their
Union membership. Clearly, the rationale under our previous rulings for the exclusion
of executive secretaries or division secretaries would have little or no significance considering
the lack of or very limited access to confidential information of these secretaries/clerks. It is not
even farfetched that the job category may exist only on paper since they are all daily-paid
workers. Quite understandably, petitioner had earlier expressed the view that the positions were
just being reclassified as these employees actually discharged routine functions.
We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees
and not confidential employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician, there
seems no dispute that they form part of the Quality Control Staff who, under the express terms of
the CBA, fall under a distinct category. But we disagree with respondents contention that the
twenty (20) checkers are similarly confidential employees being quality control staff entrusted
with the handling and custody of company properties and sensitive information.
Again, the job descriptions of these checkers assigned in the storeroom section of the Materials
Department, finishing section of the Packaging Department, and the decorating and glass
sections of the Production Department plainly showed that they perform routine and mechanical
tasks preparatory to the delivery of the finished products.[24] While it may be argued that quality
control extends to post-production phase -- proper packaging of the finished products -- no
evidence was presented by the respondent to prove that these daily-paid checkers actually form
part of the companys Quality Control Staff who as such were exposed to sensitive, vital and
confidential information about [companys] products or have knowledge of mixtures of the
products, their defects, and even their formulas which are considered trade secrets. Such
allegations of respondent must be supported by evidence.[25]
Consequently, we hold that the twenty (20) checkers may not be considered confidential
employees under the category of Quality Control Staff who were expressly excluded from the
CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor
relations. The two (2) criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee that is, the confidential relationship must exist between the
employee and his supervisor, and the supervisor must handle the prescribed responsibilities
relating to labor relations. The exclusion from bargaining units of employees who, in the normal
course of their duties, become aware of management policies relating to labor relations is a
principal objective sought to be accomplished by the confidential employee rule.[26] There is no
showing in this case that the secretaries/clerks and checkers assisted or acted in a confidential
capacity to managerial employees and obtained confidential information relating to labor relations
policies. And even assuming that they had exposure to internal business operations of the
company, respondent claimed, this is not per se ground for their exclusion in the bargaining unit of
the daily-paid rank-and-file employees.[27]
Not being confidential employees, the secretaries/clerks and checkers are not disqualified from
membership in the Union of respondents rank-and-file employees. Petitioner argues that
respondents act of unilaterally stopping the deduction of union dues from these employees
constitutes unfair labor practice as it restrained the workers exercise of their right to self-
organization, as provided in Article 248 (a) of the Labor Code.
Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts
are related to the workers right to self organization and to the observance of a CBA. For a charge
of unfair labor practice to prosper, it must be shown that ABI was motivated by ill will, bad faith,
or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or
public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted
x x x[28] from ABIs act in discontinuing the union dues deduction from those employees it
believed were excluded by the CBA. Considering that the herein dispute arose from a simple
disagreement in the interpretation of the CBA provision on excluded employees from the
bargaining unit, respondent cannot be said to have committed unfair labor practice that restrained
its employees in the exercise of their right to self-organization, nor have thereby demonstrated an
anti-union stance.
WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and
Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R. SP No. 55578 are
hereby REVERSED and SET ASIDE. The checkers and secretaries/clerks of respondent
company are hereby declared rank-and-file employees who are eligible to join the Union of the
rank-and-file employees.
No costs.
SO ORDERED.
3. Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78755 July 19, 1989
GOLDEN FARMS, INC., petitioner,

vs.
THE HONORABLE DIRECTOR PURA FERRER-CALLEJA, BUREAU OF LABOR
RELATIONS and NATIONAL FEDERATION OF LABOR, respondents.
J. V. Yap Law Office for petitioner.
Beethoven L. Orcullo for private respondent.
PARAS, J.:
Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent Department
of Labor and Employment Director Pura Ferrer-Calleja in BLR Case No. A-2-56-87 which
affirmed on appeal the decision of Labor Arbiter Conrado O. Macasa, Sr., in NLRC Case No. R-
418-ROXI-MED-UR-8886, issuing a directive as follows:
In view of the foregoing, the herein petition for certification election filed by the
National Federation of Labor (NFL) is hereby DISMISSED; whereas, its resultant
and relevant consequence of its recognized representation of the entire rank-and-
file employees of the bargaining unit should be given life and meaning, as it is
hereby directed, and Employer Golden Farms, Incorporated likewise enjoined to
negotiate for a supplementary collective bargaining agreement, or for the
inclusion of the herein monthly paid rank-and- file employees at Luna, Kapalong,
Davao del Norte, and Lanang, Davao City in the still existing negotiated contract,
whichever the parties may consider just and appropriate under the circumstances.
SO ORDERED. (p. 29, Rollo)
The case originated as a Petition for Direct Certification Election or Recognition filed by herein
private respondent in behalf of certain office employees and foremen before Regional Office No.
XI, Davao City of the Ministry of Labor and Employment. Petitioner herein opposed said
petition on the ground among others that a perusal of the names allegedly supporting the said
petition showed that said persons by the nature of their jobs are performing managerial functions
and/or occupying confidential positions such that they cannot validly constitute a separate or
distinct group from the existing collective bargaining unit also represented by private respondent.
Petitioner is a corporation engaged in the production of bananas for export. Private respondent
Union represents the employees/workers of petitioner corporation, who were the same
signatories to an earlier Petition for Certification Election filed in 1984 before the Ministry of
Labor known as ROXI Case No. UR-70-84, which was dismissed by a Resolution issued by
Med-Arbiter Conchita Martinez when it was established that a collective bargaining unit (NFL)
between the Corporation and the rank-and-file employees was and is in existence at the time of
the filing of the said petition for certification election until the present filing. However, in the
order of dismissal, it was stated:
After taking into consideration the functions exercised by the foremen as

contained in their joint affidavits (Annexes "A-1", "A-2" & "A-3", Petitioner's
Position Paper) apparently, they fall within the classification of rank-and-file
employees. For, as consistently ruled in a long line of decisions, mere supervisory
designations in the position titles, do not make the holders of such positions any
less rank and filers, without the convincing proof that such supervisory
designations are coupled with actual performance of managerial functions. In the
cases at bar, what was submitted by the respondent companies are only lists of
employees holding the positions of foremen and confidential positions and as
such are not covered by the bargaining unit. Such piece of evidence alone does
not constitute convincing proof for us to adapt respondents' stance (Annexes "A",
"B", "C", & "D"). Comment on Petition). (p. 13, Rollo)
Having had no opportunity to contest the abovementioned statement in the order of dismissal,
petitioner herein as private respondent therein, filed a "Manifestation" stating among others:
2. That since the petitions were dismissed the herein employees make clear for the
record that said view would run counter to the provision of the pertinent
Collective Bargaining Agreement whereby the foremen were already
acknowledged and agreed upon to be managerial employees and accordingly
excluded from the coverage of the said CBA;
3. That with respect to those employees holding confidential positions, it is a

basic principle that they cannot be included in any bargaining unit, the fact being
that having access to confidential informations, said employees may be the source
of undue advantage. Said employees may act as spies for either parties to
collective bargaining agreement. This is especially true in this case where the
petitioning union is already the bargaining agent of the rank-and-file employees in
the establishment. To allow confidential employees to join existing bargaining
unit will defeat the very purpose for which an employee holding confidential
position was in the first place excluded. (p. 68, Rollo)
Private respondent herein as petitioner therein appealed the order of dismissal which was
accordingly opposed (Annex "L" p. 69, Rollo) by Golden Farms, Inc., reiterating the grounds
and arguments set forth in its Manifestation filed earlier. The appeal was dismissed and
subsequently the National Federation of Labor Union refiled the Petition for Certification in
NLRC Case No. R-418- ROX-MED-UR-88-86 which was also dismissed. Said order of
dismissal is now the subject of this review for containing directives not within the power of a
Med-Arbiter to issue. Petitioner Golden Farms, Inc., now poses the following questions:
I HAS A MED-ARBITER THE POWER OR AUTHORITY TO

DIRECT MANAGEMENT TO ENTER INTO A
SUPPLEMENTAL COLLECTIVE BARGAINING
AGREEMENT WITH A CONTRACTING UNION.
II MAY SUPERVISORS, CASHIERS, FOREMEN, AND

EMPLOYEES HOLDING CONFIDENTIAL/MANAGERIAL
FUNCTION COMPEL MANAGEMENT TO ENTER INTO A
COLLECTIVE BARGAINING AGREEMENT WITH THEM. (p.
14, Rollo)
The petition merits Our consideration.
Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees
who were signatories to the petition for certification election and represented by respondent
Union are actually rank-and-file workers not disqualified from entering into a collective
bargaining agreement with management. In said findings of fact, Med-Arbiter Martinez singled
out in her classification as rank-and-file employees the foremen of Petitioner Corporation
considered from their joint affidavits and for lack of convincing proof that their supervisory
designations are coupled with the actual performance of managerial functions.
Whether or not such finding is supported by the evidence is beside the point. Respondents herein
do not dispute that the signatories (listed in Annex "A", page 30, Rollo) to the Petition for
certification election subject of this case, were holding the positions of cashier, purchasers,
personnel officers, foremen and employees having access to confidential information such as
accounting personnel, radio and telegraph operators and head of various sections. It is also a fact
that respondent Union is the exclusive bargaining Unit of the rank-and-file employees of
petitioner corporation and that an existing CBA between petitioner corporation and the Union
representing these rank-and-file employees was still enforced at the time the Union filed a
petition for certification election in behalf of the aforementioned signatories. Under the terms of
said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:
Section 1. The COMPANY and the UNION hereby agree that the recognized
bargaining unit for purposes of this agreement shall consist of regular rank-and-
file workers employed by the COMPANY at the plantation presently situated at
Alejal, Carmen, Davao. Consequently, all managerial personnel like,
superintendents, supervisor, foremen, administrative, professional and
confidential employees, and those temporary, casual, contractual, and seasonal
workers are excluded from the bargaining unit and therefore, not covered by this
agreement.
(p. 41, Rollo)

Respondents do not dispute the existence of said collective bargaining agreement. We must
therefore respect this CBA which was freely and voluntarily entered into as the law between the
parties for the duration of the period agreed upon. Until then no one can be compelled to accept
changes in the terms of the collective bargaining agreement.
Furthermore, the signatories to the petition for certification election are the very type of
employees by the nature of their positions and functions which We have decreed as disqualified
from bargaining with management in case of Bulletin Publishing Co. Inc. vs. Hon. Augusto
Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such ruling as follows: if these
managerial employees would belong to or be affiliated with a Union, the latter might not be
assured of their loyalty to the Union in view of evident conflict of interests or that the Union can
be company- dominated with the presence of managerial employees in Union membership. A
managerial employee is defined under Art. 212 (k) of the new Labor Code as "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 definitions are
considered rank-and-file employees for purposes of this Book."
This rationale holds true also for 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 a spy or spies of either party to a collective
bargaining agreement. This is specially true in the present case where the petitioning Union is
already the bargaining agent of the rank-and-file employees in the establishment. To allow the
confidential employees to join the existing Union of the rank-and-file would be in violation of
the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature
of their functions/positions are expressly excluded.
As to the company foremen, while in the performance of supervisory functions, they may be the
extension or alter ego of the management. Adversely, the foremen, by their actuation, may
influence the workers under their supervision to engage in slow down commercial activities or
similar activities detrimental to the policy, interest or business objectives of the company or
corporation, hence they also cannot join.
WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr. which was
affirmed by Director Pura Ferrer-Calleja reiterating the directive of Med- Arbiter Conchita
Martinez "to negotiate for a supplementary collective bargaining agreement, or for the inclusion
of the herein monthly paid rank-and- file employees" to be erroneous as it is in complete
disregard of the terms of the collective bargaining agreement, the same is hereby DECLARED to
be without force and effect.
SO ORDERED.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 88957 June 25, 1992
PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and PHILIPS EMPLOYEES
ORGANIZATION (FFW), respondents.
DAVIDE, JR., J.:
In this petition for certiorari and prohibition under Rule 65 of the Rules of Court with a prayer
for a temporary restraining order and/or a writ of preliminary injunction, petitioner Philips
Industrial Development, Inc. (PIDI) seeks to set aside the Decision and Resolution, dated 16
January 1989 and 17 March 1989, respectively, of the National Labor Relations Commission
(NLRC) in Case No. NLRC-NCR-00-11-03936-87 on the ground that it committed grave abuse
of discretion amounting to lack of jurisdiction in holding that service engineers, sales
representatives and confidential employees of PIDI are qualified to be included in the existing
bargaining unit.
PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic

products Since 1971, it had a total of six (6) collective bargaining agreements (CBAs) with
private respondent Philips Employees Organization-FFW (PEO-FFW), a registered labor union
and the certified bargaining agent of all the rank and file employees of PIDI. In the first CBA
(1971-1974), the supervisors referred to in R.A. No. 875, confidential employees, security
guards, temporary employees and sales representatives were excluded from the bargaining unit.
In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 1984-1986), the sales
force, confidential employees and heads of small units, together with the managerial employees,
temporary employees and security personnel, were specifically excluded from the bargaining
unit. 1 The confidential employees are the division secretaries of light/telecom/data and
consumer electronics, marketing managers, secretaries of the corporate planning and business
manager, fiscal and financial system manager and audit and EDP manager, and the staff of both
the General Management and the Personnel Department. 2
In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among others, that the
subject of inclusion or exclusion of service engineers, sales personnel and confidential
employees in the coverage of the bargaining unit would be submitted for arbitration. Pursuant
thereto, on June 1987, PEO-FFW filed a petition before the Bureau of Labor Relations (BLR)
praying for an order "directing the parties to select a voluntary arbitrator in accordance with its
rules and regulations."
As the parties failed to agree on a voluntary arbitrator, the BLR endorsed the petition to the
Executive Labor Arbiter of the National Capital Region for compulsory arbitration pursuant to
Article 228 of the Labor Code. Docketed as Case No. NLRC-NCR-00-11-03936-87, the case
was assigned to Executive Labor Arbiter Arthur Amansec.
On 17 March 1988, Labor Arbiter Amansec rendered a decision, the dispositive portion of which
states:
In view of the foregoing, a decision is hereby rendered, ordering the respondent to

conduct a referendum to determine the will of the service engineers, sales
representatives as to their inclusion or exclusion in the bargaining unit.
It is hereby declared that the Division Secretaries and all Staff of general
management, personnel and industrial relations department, secretaries of audit,
EDP, financial system are confidential employees and as such are hereby deemed
excluded in the bargaining unit.
SO ORDERED.
PEO-FFW appealed from the decision to the NLRC.
On 16 January 1989, the NLRC rendered the questioned decision, the dispositive portion of
which reads:
WHEREFORE, the foregoing premises considered, the appealed decision of the

Executive Labor Arbiter is hereby SET ASIDE and a new one entered declaring
respondent company's Service Engineers, Sales Force, division secretaries, all
Staff of General Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems are included within the rank and
file bargaining unit.
SO ORDERED.
The reversal is anchored on the respondent NLRC's conclusion that based on Section 1, 3 Rule II,
Book V of the Omnibus Rules Implementing the Labor Code, as amended by Section 3,
Implementing Rules of E.O. No. 111; paragraph (c) Section 2, Rule V of the same Code, as
amended by Section 6 4 of the Implementing Rules of E.O. No. 111; and Article 245 5 of the
Labor Code, as amended:
. . . all workers, except managerial employees and security personnel, are

qualified to join or be a part of the bargaining unit. . . .
It further ruled that:

The Executive Labor Arbiters directive that the service engineers and sales
representatives to (sic) conduct a referendum among themselves is erroneous
inasmuch as it arrogates unto said employees the right to define what the law
means. It would not be amiss to state at this point that there would be no one more
interested in excluding the subject employees from the bargaining unit than
management and that it would not be improbable for the latter to lobby and/or
exert pressure on the employees concerned, thus agitating unrest among the rank-
and-file. Likewise, the Executive Labor Arbiter's declaration that the Division
Secretaries and all Staff of general management, personnel and industrial relations
department, secretaries of audit, EDP and financial system "are confidential
employees and as such are hereby deemed excluded in (sic) the bargaining unit" is
contrary to law for the simple reason that the law, as earlier quoted, does not
mention them as among those to be excluded from thebargaining unit only
(sic) managerial employees and security guards. As a matter of fact, supervisory
unions have already been dissolved and their members who do not fall within the
definition of managerial employees have become eligible to join or assist the
rank-and-file organization. 6
Its motion for the reconsideration of this decision having been denied by the NLRC in its
Resolution of 16 March 1989, a copy of which it received on 8 June 1989, petitioner PIDI filed
the instant petition on 20 July 1989, alleging that:
THE NLRC COMMITTED ABUSE OF DISCRETION AMOUNTING TO

LACK OF JURISDICTION IN HOLDING THAT SERVICE ENGINEERS,
SALES REPRESENTATIVES AND CONFIDENTIAL EMPLOYEES OF
PETITIONER ARE QUALIFIED TO BE PART OF THE EXISTING
BARGAINING UNIT.
II
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING

TO LACK OF JURISDICTION IN NOT APPLYING THE TIME HONORED
"GLOBE DOCTRINE." 7
On 31 July 1989, this Court; required the respondents to comment on the petition, which PEO-
FFW complied with on 28 August 1989. Public respondent NLRC, thru its counsel, the Solicitor
General, moved for, and was granted a 30-day extension to file its Comment.
On 18 September 1989, this Court required the parties to show cause why the petition should not
be dismissed in view of the finality of the NLRC decision as provided for by the penultimate
sentence of Article 223 of the Labor Code, as amended by R.A. No. 6715 R..A. No. 6715, which
amended Article 223 of the Labor Code, was enacted on 2 March 1989 and took effect on 21
March 1989. The parties subsequently complied with the Resolution.
On 16 May 1990, this Court required the parties to submit Memoranda explaining the effect in
this case of Article 223 of the Labor Code, as amended by Section 12 of R.A. No-6715 with
respect to the finality of decisions of the NLRC. The parties complied separately with the same.
On 10 September 1990, this Court gave due course to the petition and required the parties to
submit their respective Memoranda. The petitioner and the Office of the Solicitor General filed
their separate Memoranda. On the other hand, PEO-FFW moved that its Motion and
manifestation dated 23 August 1989 be considered as its Memorandum; this Court granted the
same.
As stated earlier, the principal issue in this case is whether the NLRC committed grave abuse of
discretion in holding that service engineers, sales representatives and confidential employees
(division secretaries, staff of general management, personnel and industrial relations department,
secretaries of audit, EDP and financial system) are qualified to be included in the existing
bargaining unit. Petitioner maintains that it did, and in support of its stand that said employees
should not be absorbed by the existing bargaining unit, it urges this Court to consider these
points:
1) The inclusion of the group in the existing bargaining unit would run counter to the history of
this parties CBA. The parties' five (5) previous CBAs consistently excluded this group of
employees from the scope of the bargaining unit. The rationale for such exclusion is that these
employees hold positions which are highly sensitive, confidential and of a highly fiduciary
nature; to include them in the bargaining unit may subject the company to breaches in security
and the possible revelation of highly sensitive and confidential matters. It would cripple the
company's bargaining position and would give undue advantage to the union.
2) The absence of mutuality of interests between this group of employees and the regular rank
and file militates against such inclusion. A table prepared by the petitioner shows the disparity of
interests between the said groups:
SERVICE ENGINEERS SERVICE

SALES REPRESENTATIVES TECHNICIANS
(Non-Bargaining (Bargaining
AREAS OF INTEREST Unit Employees) Unit Employees)
Qualifications Professional Employees High School/

Vocational
Grads.
Work Schedule With Night Shift None
Schedule
Night Shift 10% of Basic Rate None
Differential Pay
Stand-By Call & On Stand-By Call with: None
Allowance First Line:15% of
basic rate
Second Line: 10% of
basic rate
Uniforms None 2 sets of polo
& pants every
6 months
Retirement Benefits 15 yrs. ser.70% 15 yrs. serv. 50%
16 75% 16 85%
17 80% 17 90%
18 85% 18 100%
19 90% 19 115%
20 100% 20 135%
Year End Performance Merit Increase system None
Evaluation
Sales Commission Yes None
Car Loan Yes None
Precalculated Yes None
Kilometer allowance
The Office of the Solicitor General supports the decision of the Executive Labor Arbiter and
refuses to uphold the position of the NLRC. It holds the view that the division Secretaries; the
staff members of General Management, Personnel and the Industrial Relations Department; and
the secretaries of Audit, EDP and Financial Systems, are disqualified from joining the PEO-FFW
as they are confidential employees. They cannot even form a union of their own for, as held
in Golden Farms, Inc. vs. Ferrer-Calleja, 8 the rationale for the disqualification of managerial
employees from joining unions holds true also for confidential employees. As regards the sales
representatives and service engineers, however, there is no doubt that they are entitled to join or
form a union, as they are not disqualified by law from doing so. Considering that they have
interests dissimilar to those of the rank and file employees comprising the existing bargaining
unit, and following the Globe Doctrine enunciated in In Re: Globe Machine and Stamping
Company 9 to the effect that in determining the proper bargaining unit the express will or desire
of the employees shall be considered, they should be allowed to determine for themselves what
union to join or form. The best way to determine their preference is through a referendum. As
shown by the records, such a. referendum was decreed by the Executive Labor Arbiter.
The petition is impressed with merit.
At the outset, We express Our agreement with the petitioner's view that respondent NLRC did
not quite accurately comprehend the issue raised before it. Indeed, the issue is not whether the
subject employees may join or form a union, but rather, whether or not they may be part of the
existing bargaining unit for the rank and file employees of PIDI.
Even if the issue was, indeed, as perceived by the NLRC, still, a palpable error was committed
by it in ruling that under the law, all workers, except managerial employees and security
personnel, are qualified to join a union, or form part of a bargaining unit. At the time Case No.
NLRC-NCR-00-11-03936-87 was filed in 1987, security personnel were no longer disqualified
from joining or forming a union.
Section 6 of E.O. No. 111, enacted on 24 December 1986, repealed the original provisions of
Article 245 of the Labor Code, reading as follows:
Art. 245. Ineligibility of security personnel to join any labor organization. —

Security guards and other personnel employed for the protection and security of
the person, properties and premises of the employer shall not be eligible for
membership, in any labor organization.
and substituted it with the following provision:
Art. 245. Right of employees in the public service. — 10
xxx xxx xxx
By virtue of such repeal and substitution, security guards became eligible for membership
in any labor organization. 11
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave
abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that
PIDI's "Service Engineers, Sales Force, division secretaries, all Staff of General Management,
Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems
are included within the rank and file bargaining unit."
In the first place, all these employees, with the exception of the service engineers and the sales
force personnel, are confidential employees. Their classification as such is not seriously disputed
by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered
them as confidential employees. By the very nature of their functions, they assist and act in a
confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. 12 As such, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union equally applies to
them.
In Bulletin Publishing Co., Inc. vs. Hon Augusto Sanchez, 13 this Court elaborated on this
rationale, thus:
. . . The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter
might not be assured of their loyalty, to the Union in view of evident conflict of
interests. The Union can also become company-dominated with the presence of
managerial employees in Union membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, 14 this Court explicitly made this rationale applicable
to confidential employees:
This rationale holds true also for 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 a spy or, spies of either party to a collective bargainingagreement. This is
specially true in the present case where the petitioning Union is already the
bargaining agent of the rank-and-file employees in the establishment. To allow
the confidential employees to join the existing Union of the rank-and-file would
be in violation of the terms of the Collective Bargaining Agreement wherein this
kind of employees by the nature of their functions/ positions are expressly
excluded.
As regards the service engineers and the sales representatives, two (2) points which respondent
NLRC likewise arbitrarily and erroneously ruled upon agreed to be discussed. Firstly, in holding
that they are included in the bargaining unit for the rank and file employees of PIDI, the NLRC
practically forced them to become members of PEO-FFW or to be subject to its sphere of
influence, it being the certified bargaining agent for the subject bargaining unit. This violates,
obstructs, impairs and impedes the service engineers' and the sales representatives' constitutional
right to form unions or associations 15 and to self-organization. 16 In Victoriano vs. Elizalde Rope
Workers Union, 17 this Court already ruled:
. . . 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. 18 It is clear, therefore,
that the right to join a union includes the right to abstain from joining any
union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act
have recognized, 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 decision then of the Executive Labor Arbiter in merely directing the holding of a referendum
"to determine the will of the service engineers, sales representatives as to their inclusion or
exclusion in (sic) the bargaining unit" is the most appropriate procedure that conforms with their
right to form, assist or join in labor union or organization. However, since this decision was
rendered before the effectivity of R.A. No. 6715, it must now be stressed that its future
application to the private parties in this case should, insofar as service engineers and sales
representatives holding supervisory positions or functions are concerned, take into account the
present Article 245 20 of the Labor Code which, as amended by R.A. No. 6715, now reads:
ARTICLE 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.
(emphasis supplied)
The foregoing disquisitions render unnecessary a discussion on the second ground on the alleged
grave abuse of discretion on the part of the NLRC in not applying the "Globe Doctrine". Suffice
it to state here that since the only issue is the subject employees' inclusion in or exclusion from
the bargaining unit in question, and PIDI never questioned the decision of the Executive Labor
Arbiter, the Globe Doctrine finds no application. Besides, this doctrine applies only in instances
of evenly balanced claims by competitive groups for the right to be established as the bargaining
unit, 21 which do not obtain in this case.
WHEREFORE, the petition is hereby GRANTED. The Decision of public respondent National
Labor Relations Commission in Case No. NLRC-NCR-00-11-03936-87, promulgated on 16
January 1989, is hereby SET ASIDE while the Decision of the Executive Labor Arbiter in said
case dated 17 March 1988 is hereby REINSTATED, subject to the modifications above
indicated. Costs against private respondent.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 110854 February 13, 1995
PIER 8 ARRASTRE & STEVEDORING SERVICES, INC., petitioner,

vs.
HON. MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of Labor and
Employment, and GENERAL MARITIME & STEVEDORES UNION
(GMSU), respondents.
PUNO, J.:
Petitioner corporation and private respondent labor union entered into a three-year Collective
Bargaining Agreement (CBA) with expiry date on November 27, 1991. During the freedom
period the National Federation of Labor Unions (NAFLU) questioned the majority status of
Private respondent through a petition for certification election. The election conducted on
February 27, 1992 was won by private respondent. On March 19, 1992, private respondent was
certified as the sole and exclusive bargaining agent of petitioner's rank-and-file employees.
On June 22, 1992, private respondent's CBA proposals were received by petitioner. Counter-
proposals were made by petitioner. Negotiations collapsed, and on August 24, 1992, private-
respondent filed a Notice of Strike with the National Conciliation and Mediation Board
(NCMB). The NCMB tried but failed to settle the parties' controversy.
On September 30, 1992, public respondent Secretary of Labor assumed jurisdiction over the
dispute. She resolved the bargaining deadlock between the parties through an Order, dated
March 4, 1993, which reads, in part:
xxx xxx xxx
A. The non-economic issues
1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:
The Company recognizes the Union as the sole and exclusive

collective bargaining representative of all the stevedores,
dockworkers, gang bosses, foremen, rank and file employees
working at Pier 8, North Harbor and its offices and said positions
are [sic] listed in ANNEX "A" hereof.
As such representative the UNION is designated as the collective

bargaining agent with respect to and concerning the terms and
conditions of employment and the interpretations and
implementation of the provisions and conditions of this
Agreement.
Annex "A" of the CBA is the listing of positions covered thereby. These are:
1. Foremen;
2. Gang bosses;
3. Winchmen;
4. Signalmen;
5. Stevedores;
6. Dockworkers;
7. Tallymen;
8. Checkers;
9. Forklift and crane operators;
10. Sweepers;
11. Mechanics;
12. Utilitymen;
13. Carpenters; and
14. Other rank and file employees;
The company argues in the first instance that under Article 212(m) in relation to
Article 245 of the Labor Code, supervisors are ineligible for. membership in a
labor organization of rank and file. Being supervisors, foremen should be
excluded from the bargaining unit.
The Company likewise seeks the exclusion on the ground of lack of community
of interest and divergence in functions, mode of compensation and working
conditions of the following:
1. Accounting clerk;
2. Audit clerk;
3. Collector;
4. Payroll clerk;
5. Nurse;
6. Chief biller;
7. Biller;
8. Teller/biller;
9. Personnel clerk;
10. Timekeeper;
11. Asst. timekeeper;
12. Legal secretary;
13. Telephone operator;
14. Janitor/Utility; and
15. Clerk
These positions, the Company argues, cannot be lumped together with the
stevedores or dockworkers who mostly comprise the bargaining unit. Further,
notwithstanding the check-off provisions of the CBA, the incumbents in these
positions have never paid union dues. Finally, some of them occupy confidential
positions and therefore ought to be excluded from the bargaining unit.
The Union generally argues that the Company's proposed exclusions

retrogressive. . . .
We see no compelling justification to order the modification of Article I of the

1988 CBA as worded. For by lumping together stevedores and other rank and file
employees, the obvious intent of the parties was to treat all employees not
disqualified from union membership as members of one bargaining unit. This is
regardless of working conditions, mode of compensation, place of work, or other
considerations. In the absence of mutual agreement of the parties or evidence that
the present compositions of the bargaining unit is detrimental to the individual
and organizational rights either of the employees or of the Company, this
expressed intent cannot be set aside.
It may well be that as a consequence of Republic Act No. 6715, foremen are
ineligible to join the union of the rank and file. But this provision can be invoked
only upon proof that the foremen sought to be excluded from the bargaining unit
are cloaked with effective recommendatory powers such as to qualify them under
the legal definitions of supervisors.
xxx xxx xxx
7. Effectivity of the CBA. The Union demands that the CBA should be fully
retroactive to 28 November 1991. The Company is opposed on the ground that
under Article 253-A of the labor code, the six-month period within which the
parties must come to an agreement so that the same will be automatically
retroactive is long past.
The Union's demand for full retroactivity, we note, will result in undue financial
burden to the Company. On the other hand, the Company's reliance on Article
253-A is misplaced as this applies only to the renegotiated terms of an existing
CBA. Here, the deadlock arose from negotiations for a new CBA.
These considered, the CBA shall be effective from the time we assumed
jurisdiction over the dispute, that is, on 22 September 1992, and shall remain e
effective for five (5) years thereafter. It shall be understood that except for the
representation aspect all other provisions thereof shall be renegotiated not later
than three (3) years after its effectivity, consistently with Article 253-A of the
Labor Code.
B. The economic issues
The comparative positions of the parties are:
COMPANY UNION
xxx xxx xxx
5
. Vacation and sick leave 17 days vacation and sick leave i) For all covered employees
17 days sick leave per year and 17 days sick than gang
for employment with at least gang bosses:
five years of service.
15 working days vacation and
15 working days sick leave
for those with at least 1 year
of service

for those with more than one
year of service up to 5 years
of service

for those with more than 5
years of service up to 10
years of service

for those with more than 10
years of service
Provided that in the case Provided that in the case of a

of a rotation worker, he rotation worker, he must have
must have work for at worked for 140 days in a
least 160 days in a year calendar year as a condition
for availment for availment.
Provided, further that in the

event a rotation worker fails
to complete 140 days work in
a calendar year, he shall still
be entitled to vacation and
sick leave with pay, as follows:
139 - 120 days worked: 90%
119 - 110 days worked: 50%
ii) For Gang bosses:

Same as the above schedule
except that:
1) the condition that a gang

bosses must have worked for at
least 120 days in a calendar
year shall be reduced to 110
days; and
2) where the above number of

days worked is not met, the
gang boss shall still be entitled
to vacation and sick leave with
pay, as follows:
109 - 90 days worked: 90%
89 - 75 days worked: 50%
xxx xxx xxx
7
. Death aid P1,500.00 to heirs P10,000.00 to heirs of covered
of covered employees employees
P5,000.00 assistance for death

of immediate member of
covered employee's family
xxx xxx xxx
12
. Emergency loan
a) amount of P700.00 but damage 30 days salary payable through
entitlement to dwelling by fire payroll deduction in twelve
shall
be included monthly installments
b) cash bond None The company shall put up a

cash
for loss, damage bond of not less than
P40,000.00
or accident for winchmen, crane and
forklift
operators.
xxx xxx xxx
Balancing the right of the Company to remain viable and to just returns to its
investments with right of the Union members to just rewards for their labors, we
find the following award to be fair and reasonable:
xxx xxx xxx
6
. Vacation and Sick Leave
a) Non-rotation workers 17 days vacation/17 days sick
leave
for those with at least 1 year of
service
b) Rotation workers other 17 days vacation/17 days sick

leave,
than gang boss provided that the covered
worker
must have worked for at least
155 days
in a calendar year
c) Gang bosses 17 days vacation/17 days sick

leave,
provided that the gang boss
must have
worked for at least 115 days in
a
calendar year
xxx xxx xxx
8. Death aid P3,000.00 to the heirs of each covered employee
xxx xxx xxx
12. Emergency loan 30 days pay, payable through payroll deductions of 1/12 of
monthly salary
WHEREFORE, the Pier 8 Arrastre and Stevedoring Services and the General
Maritime Services Union are hereby ordered to execute new collective bargaining
agreement the incorporating the dispositions herein contained. These shall be in
addition to all other existing terms, conditions and benefits of employment, except
those specifically deleted herein, which have previously governed the relations of
the parties. All other disputed items not specifically touched upon herein are
deemed denied, without prejudice to such other agreements as the parties may
have reached in the meantime. The collective bargaining agreement so executed
shall be effective from 22 September 1992 and up to five years thereafter, subject
to renegotiation on the third year of its effectivity pursuant to Article 253-A of the
Labor Code.1
Petitioner sought partial reconsideration of the Order. On June 8, 1993, public respondent
affirmed her findings, except for the date of effectivity of the Collective Bargaining Agreement
which was changed to September 30, 1992. This is the date when she assumed jurisdiction over
the deadlock.
Petitioner now assails the Order as follows:
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE

ABUSE OF DISCRETION IN NOT EXCLUDING CERTAIN POSITIONS
FROM THE BARGAINING AGREEMENT UNIT
II

ABUSE OF DISCRETION IN MAKING THE CBA EFFECTIVE ON
SEPTEMBER 30, 1992 WHEN SHE ASSUMED JURISDICTION OVER THE
LABOR DISPUTE AND NOT MARCH 4, 1993 WHEN SHE RENDERED
JUDGMENT OVER THE DISPUTE
III

ABUSE OF DISCRETION IN REDUCING THE NUMBER OF DAYS AN
EMPLOYEE SHOULD ACTUALLY WORK TO BE ENTITLED TO
VACATION AND SICK LEAVE BENEFITS
IV

ABUSE OF DISCRETION IN INCREASING WITHOUT FACTUAL BASIS
THE DEATH AID AND EMERGENCY LOAN 2
The petition is partially meritorious.
Firstly, petitioner questions public respondent for not excluding four (4) foremen, a legal
secretary, a timekeeper and an assistant timekeeper from the bargaining unit composed of rank-
and-file employees represented by private respondent. Petitioner argues that: (1) the failure of
private respondent to object when the foremen and legal secretary were prohibited from voting in
the certification election constitutes an admission that such employees
holdsupervisory/confidential positions; and (2) the primary duty and responsibility of the
timekeeper and assistant timekeeper is "to enforce company rules and regulations by reporting to
petitioner . . . those workers who committed infractions, such as those caught abandoning their
posts." and hence, they should not be considered as rank-and-file employees.
The applicable law governing the proper composition of bargaining unit is Article 245 of the
labor Code, as amended, which provides as follows:
Art. 245. Ineligibility of managerial employees to join any labor

organization; 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.
Article 212(m) of the same Code, as well as Book V, Rule 1, Section 1(o) of the Omnibus Rules
Implementing the Labor Code, as amended by the Rules and Regulations Implementing R.A..
6715, differentiate managerial, supervisory, and rank-and-file employees, thus:
"Managerial Employee" is one who is vested with powers or prerogatives to lay

down and execute management policies and/or to hire, transfer, suspend, layoff
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment. All employees not falling
within any of the above definitions are considered rank-and-file employees for
purposes of the Book.
This Court has ruled on numerous occasions that the test of supervisory or managerial status is
whether an employee possesses authority to act in the interest of his employer which authority is
not merely routinary or clerical in nature but requires use of independent judgment. 3 What
governs the determination of the nature of employment is not the employee's title, but his job
description. If the nature of the employee's job does not fall under the definition of "managerial"
or "supervisory" in the Labor Code, he is eligible to be a member of the rank-and-file bargaining
unit. 4
Foremen are chief and often especially-trained workmen who work with and commonly are in
charge of a group of employees in an industrial plant or in construction work. 5 They are the
persons designated by the employer-management to direct the work of employees and to
superintend and oversee them. 6 They are representatives of the employer-management with
authority over particular groups of workers, processes, operations, or sections of a plant or an
entire organization. In the modern industrial plant, they are at once a link in the chain of
command and the bridge between the management and labor. 7 In the performance their work,
foremen definitely use their independent judgment and are empowered to make
recommendations for managerial action with respect to those employees under their control.
Foremen fall squarely under the category of supervisory employees, and cannot be part of rank-
and-file unions.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is
basically routinary and clerical. However, they should be differentiated from rank-and-file
employees because they, are tasked with, among others, the typing of legal documents,
memoranda and correspondence, the keeping of records and files, the giving of and receiving
notices and such other duties as required by the legal personnel of the corporation. 8 Legal
secretaries therefore fall under the category of confidential employees. Thus, to them applies our
holding in the case of Philips Industrial Development, Inv., v. NLRC, 210 SCRA 339 (1992),
that:
. . . By the very functions, they assist confidential capacity to, or have access to
confidential. matters of, persons to, exercise managerial functions in the field of
labor relations. As such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc., vs. Hon. Augusto Sanchez, this Court elaborated
on this rationale, thus:
. . . The rationale, for this inhibition has been stated to be, because
if these managerial employees would belong to or be affiliated
with Union the latter might not, be assured of their loyalty to the
Union in view of evident conflict of interests. The Union can also
become company-dominated with the presence of managerial
employees in Union membership.
In Golden Farms, Inc., vs. Ferrer-Calleja, 9 this court explicitly made this
rationale applicable to confidential employees:
This rationale holds true also for confidential employees . . ., who

having access to confidential information, may become the source
of undue advantage. Said employee(s) may act as a spy or spies of
either party to a collective bargaining agreement. . . .
We thus hold that public respondent acted with grave abuse of discretion in not excluding the
four foremen and legal secretary from the bargaining unit composed of rank-and-file employees.
As for the timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that
they are, neither managerial nor supervisory employees. They are merely tasked to report those
who commit infractions against company rules and regulations. This reportorial function is
routinary and clerical. They do not determine the fate of those who violate company policy rules
and regulations function. It follows that they cannot be excluded from the subject bargaining
unit.
The next issue is the date when the new CBA of the parties should be given effect. Public
respondent fixed the effectivity date on September 30, 1992. when she assumed jurisdiction over
the dispute. Petitioner maintains it should be March 4. 1993, when public respondent rendered
judgment over the dispute.
The applicable laws are Articles 253 and 253- A of the Labor Code, thus:
Art. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. — When there is a collective bargaining agreement, the duty to
bargain collectively shall also mean that neither party shall terminate nor modify
such agreement during its lifetime. However, either party can serve a written
notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by
the parties.
and;
Art. 253-A. Terms of a collective bargaining agreement. — Any Collective

Bargaining Agreement that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be
entertained and no certification election shall be conducted by the Department of
Labor and Employment outside the sixty-day period immediately before the date
of expiry of such five year term of the Collective Bargaining Agreement. All
other provisions of the Collective Bargaining Agreement shall be renegotiated not
later than three (3) years after its execution. Any agreement on such other
provisions of the Collective Bargaining Agreement entered into within six (6)
months from the date of expiry of the term of such other provisions as fixed in
such Collective Bargaining Agreement, shall retroact to the day immediately
following such date. If any such agreement is entered into beyond six months, the
parties shall agree on the duration of collective bargaining agreement, the parties
may exercise their rights under this Code.
In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above
law as follows:
In light of the foregoing, this Court upholds the pronouncement of the NLRC
holding the CBA to be signed by the parties effective upon the promulgation of
the assailed resolution. It is clear and explicit from Article 253-A that any
agreement on such other provisions of the CBA shall be given retroactive effect
only when it is entered into within six (6) months from its expiry date. If the
agreement was entered into outside the six (6) month period, then the parties shall
agree on the duration of the retroactivity thereof.
The assailed resolution which incorporated the CBA to be signed by the parties
was promulgated June 5, 1989, the expiry date of the past CBA. Based on the
provision of Section 253-A, its retroactivity should be agreed upon. by the parties.
But since no agreement to that effect was made, public respondent did not abuse
its discretion in giving the said CBA a prospective effect. The action of the public
respondent is within the ambit of its authority vested by existing law.
In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991),
this Court reiterated the rule that although a CBA has expired, it continues to have legal effects
as between the parties until a new CBA has been entered into. It is the duty of both parties to the
to keep the status quo, and to continue in full force and effect the terms and conditions of the
existing agreement during the 60-day freedom period and/or until a new agreement is reached by
the parties. 10 Applied to the case at bench, the legal effects of the immediate past CBA between
petitioner and private respondent terminated, and the effectivity of the new CBA began, only on
March 4, 1993 when public respondent resolved their dispute.
Finally, we find no need to discuss at length the merits of the third and fourth assignments of
error. The questioned Order relevantly states:
In the resolution of the economic issues, the Company urges us to consider among
others, present costs of living, its financial capacity, the present wages being paid
by the other cargo handlers at the North Harbor, and the fact that the present
average wage of its workers is P127.75 a day, which is higher than the statutory
minimum wage of P118.00 a day. The Company's evidence, consisting of its
financial statements for the past three years, shows that its net income was
P743,423.45 for 1989, P2,108,569.03 for 1990, and P1,479,671.84 for 1991, or an
average of P1,443,885.10 over the three-year period. It argues that for just the
first year of effectivity of the CBA, the Company's proposals on wages, effect
thereof on overtime, 13th month pay, and vacation and sick leave commutation,
will cost about P520,723,44, or 35.19% of its net income for 1991. The Company
likewise urges us to consider the multiplier effect of its proposals on the second
and third years of the CBA. As additional argument, the Company manifests that
a portion of its pier will undergo a six-month to one-year renovation starting
January 1993.
On the other hand, the Union's main line of argument — that is, aside from being
within the financial capacity of the Company to grant, its demands are fair and
reasonable — is not supported by evidence controverting the Company's own
presentation of its financial capacity. The Union in fact uses statements of the
Company for 1989-1991, although it interprets these data as sufficient
justification for its own proposals. It also draws our attention to the bargaining
history of the parties, particularly the 1988 negotiations during which the
company was able to grant wage increases despite operational losses.
Balancing the right of the Company to remain viable and to just returns to its
investments with right of the Union members to just
rewards for their labors, we find the following award to be fair and reasonable . . .
. 11
It is evident that the above portion of the impugned Order is based on well-studied evidence. The
conclusions reached by public respondent in the discharge of her statutory duty as compulsory
arbitrator, demand the high respect of this Court. The study and settlement of these disputes fall
within public respondent's distinct administrative expertise. She is especially trained for this
delicate task, and she has within her cognizance such data and information as will assist her in
striking the equitable balance between the needs of management, labor and the public. Unless
there is clear showing of grave abuse of discretion, this Court cannot and will not interfere with
the labor expertise of public respondent Secretary of Labor.
IN VIEW WHEREOF, public respondents Order, dated March 4, 1993, and Resolution, dated
June 8, 1993, are hereby MODIFIED to exclude foremen and legal secretaries from the rank-
and-file bargaining unit represented by private respondent union, and to fix the date of effectivity
of the five-year collective bargaining agreement between petitioner corporation and private
respondent union on March 4, 1993. No costs.
SO ORDERED.
6. [G.R. No. 108855. February 28, 1996]
METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-

CONFESOR, in her capacity as Secretary of the Department of Labor and
Employment and METRO DRUG CORPORATION EMPLOYEES
ASSOCIATION-FEDERATION OF FREE WORKERS, respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE
AGENCIES; RULE; CASE AT BAR. - We reaffirm the doctrine that considering their
expertise in their respective fields, factual findings of administrative agencies supported by
substantial evidence are accorded great respect and binds this Court. The Secretary of Labor
ruled, thus: x x x Any act committed during the pendency of the dispute that tends to give
rise to further contentious issues or increase the tensions between the parties should be
considered an act of exacerbation. One must look at the act itself, not on speculative
reactions. A misplaced recourse is not needed to prove that a dispute has been exacerbated.
For instance, the Union could not be expected to file another notice of strike. For this would
depart from its theory of the case that the layoff is subsumed under the instant dispute, for
which a notice of strike had already been filed. On the other hand, to expect violent
reactions, unruly behavior, and any other chaotic or drastic action from the Union is to
expect it to commit acts disruptive of public order or acts that may be illegal. Under a
regime of laws, legal remedies take the place of violent ones. x xx Protest against the subject
layoffs need not be in the form of violent action or any other drastic measure. In the instant
case the Union registered their dissent by swiftly filing a motion for a cease and desist
order. Contrary to petitioners allegations, the Union strongly condemned the layoffs and
threatened mass action if the Secretary of Labor fails to timely intervene: x x x 3. This
unilateral action of management is a blatant violation of the injunction of this Office against
committing acts which would exacerbate the dispute. Unless such act is enjoined the Union
will be compelled to resort to its legal right to mass actions and concerted activities to
protest and stop the said management action. This mass layoff is clearly one which would
result in a very serious dispute unless this Office swiftly intervenes. x x x Metrolab and the
Union were still in the process of resolving their CBA deadlock when petitioner
implemented the subject layoffs. As a result, motions and oppositions were filed diverting
the parties attention, delaying resolution of the bargaining deadlock and postponing the
signing of their new CBA, thereby aggravating the whole conflict.
2. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;
EXERCISE OF MANAGEMENT PREROGATIVES; NOT ABSOLUTE; SUBJECT
TO EXCEPTIONS IMPOSED BY LAW. - This Court recognizes the exercise of
management prerogatives and often declines to interfere with the legitimate business
decisions of the employer. However, this privilege is not absolute but subject to limitations
imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we issued this reminder: ... the
exercise of management prerogatives was never considered boundless. Thus, in Cruz vs.
Medina (177 SCRA 565 [1989]), it was held that managements prerogatives must be
without abuse of discretion ...All this points to the conclusion that the exercise of managerial
prerogatives is not unlimited. It is circumscribed by limi(ations found in law, a collective
bargaining agreement, or the general principles of fair play and justice (University of Sto.
Tomas v. NLRC, 190 SCRA 758 [1990]).
3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes
one of the exceptions. The Secretary of Labor is expressly given the power under the Labor
Code to assume jurisdiction and resolve labor disputes involving industries indispensable to
national interest. The disputed injunction is subsumed under this special grant of
authority. Art. 263 (g) of the Labor Code specifically provides that: x x x (g) When, in his
opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout. The Secretary of Labor and
Employment or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may issue to enforce
the same. . . . That Metrolabs business is of national interest is not disputed. Metrolab is one
of the leading manufacturers and suppliers of medical and pharmaceutical products to the
country. Metrolabs management prerogatives, therefore, are not being unjustly curtailed but
duly balanced with and tempered by the limitations set by law, taking into account its
special character and the particular circumstances in the case at bench.
4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO
JOIN, FORM AND ASSIST ANY LABOR ORGANIZATION; PROHIBITION
EXTENDED TO CONFIDENTIAL EMPLOYEES. - Although Article 245 of the Labor
Code limits the ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential employees or those
who by reason of their positions or nature of work are required to assist or act in a fiduciary
manner to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.
5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND
FILE BARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. -
Confidential employees cannot be classified as rank and file. As previously discussed, the
nature of employment of confidential employees is quite distinct from the rank and file,
thus, warranting a separate category. Excluding confidential employees from the rank and
file bargaining unit, therefore, is not tantamount to discrimination.
APPEARANCES OF COUNSEL
Bautista Picazo Buyco Tan & Fider for petitioner.
The Solicitor General for public respondent.
Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug
Corporation.
DECISION
KAPUNAN, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the
annulment of the Resolution and Omnibus Resolution of the Secretary of Labor and Employment
dated 14 April 1992 and 25 January 1993, respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-
08-595-9 1; NCMB-NCR-NS-09-678-91) on grounds that these were issued with grave abuse of
discretion and in excess of jurisdiction.
Private respondent Metro Drug Corporation Employees Association-Federation of Free
Workers (hereinafter referred to as the Union) is a labor organization representing the rank and
file employees of petitioner Metrolab Industries, Inc. (hereinafter referred to as Metrolab/MII)
and also of Metro Drug, Inc.
On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and
the Union expired. The negotiations for a new CBA, however, ended in a deadlock.
Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and
Metro Drug Inc. The parties failed to settle their dispute despite the conciliation efforts of the
National Conciliation and Mediation Board.
To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D.
Torres, issued an assumption order dated 20 September 1991, the dispositive portion of which
reads, thus:
WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code,
as amended, this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug,
Inc. - Metro Drug Distribution Division and Metrolab Industries Inc.
Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro
Drug Corp. Employees Association - FFW are likewise directed to cease and desist from
committing any and all acts that might exacerbate the situation.
Finally, the parties are directed to submit their position papers and evidence on the aforequoted
deadlocked issues to this office within twenty (20) days from receipt hereof.
SO ORDERED.[1] (Italics ours.)
On 27 December 1991, then Labor Secretary Torres issued an order resolving all the
disputed items in the CBA and ordered the parties involved to execute a new CBA.
Thereafter, the Union filed a motion for reconsideration.
On 27 January 1992, during the pendency of the abovementioned motion for
reconsideration, Metrolab laid off 94 of its rank and file employees.
On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab
from implementing the mass layoff, alleging that such act violated the prohibition against
committing acts that would exacerbate the dispute as specifically directed in the assumption
order.[2]
On the other hand, Metrolab contended that the layoff was temporary and in the exercise of
its management prerogative. It maintained that the company would suffer a yearly gross revenue
loss of approximately sixty-six (66) million pesos due to the withdrawal of its principals in the
Toll and Contract Manufacturing Department. Metrolab further asserted that with the automation
of the manufacture of its product Eskinol, the number of workers required its production is
significantly reduced.[3]
Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary
basis due to availability of work in the production lines.
On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the
layoff of Metrolabs 94 rank and file workers illegal and ordered their reinstatement with full
backwages. The dispositive portion reads as follows:
WHEREFORE, the Unions motion for reconsideration is granted in part, and our order of 28
December 1991 is affirmed subject to the modifications in allowances and in the close shop
provision. The layoff of the 94 employees at MII is hereby declared illegal for the failure of the
latter to comply with our injunction against committing any act which may exacerbate the
dispute and with the 30-day notice requirement. Accordingly, MII is hereby ordered to reinstate
the 94 employees, except those who have already been recalled, to their former positions or
substantially equivalent, positions with full backwages from the date they were illegally laid off
on 27 January 1992 until actually reinstated without loss of seniority rights and other benefits.
Issues relative to the CBA agreed upon by the parties and not embodied in our earlier order are
hereby ordered adopted for incorporation in the CBA. Further, the dispositions and directives
contained in all previous orders and resolutions relative to the instant dispute, insofar as not
inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and desist from
committing any act which may tend to circumvent this resolution.
SO RESOLVED.[4]
On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the
layoff did not aggravate the dispute since no untoward incident occurred as a result thereof. It,
likewise, filed a motion for clarification regarding the constitution of the bargaining unit covered
by the CBA.
On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The
execution, however, was without prejudice to the outcome of the issues raised in the
reconsideration and clarification motions submitted for decision to the Secretary of Labor.[5]
Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73
of its employees on grounds of redundancy due to lack of work which the Union again promptly
opposed on 5 October 1992.
On 15 October 1992, Labor Secretary Confesor again issued a cease and desist
order. Metrolab moved for a reconsideration.[6]
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution
containing the following orders:
xxx xxx xxx.
1. MIIs motion for partial reconsideration of our 14 April 1992 resolution specifically that
portion thereof assailing our ruling that the layoff of the 94 employees is illegal, is hereby
denied. MII is hereby ordered to pay such employees their full backwages computed from the
time of actual layoff to the time of actual recall;
2. For the parties to incorporate in their respective collective bargaining agreements the
clarifications herein contained; and
3. MIIs motion for reconsideration with respect to the consequences of the second wave of layoff
affecting 73 employees, to the extent of assailing our ruling that such layoff tended to exacerbate
the dispute, is hereby denied. But inasmuch as the legality of the layoff was not submitted for our
resolution and no evidence had been adduced upon which a categorical finding thereon can be
based, the same is hereby referred to the NLRC for its appropriate action.
Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this
dispute are hereby lifted.
SO RESOLVED.[7]
Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-
shop provision of the CBA, not from the bargaining unit.
On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the
present petition for certiorari with application for issuance of a Temporary Restraining Order.
On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of
Labor from enforcing and implementing the assailed Resolution and Omnibus Resolution dated
14 April 1992 and 25 January 1993, respectively.
In its petition, Metrolab assigns the following errors:
A
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT

COMMITTED GRAVE ABUSE OF DISCRETION AND EXCEEDED HER JURISDICTION
IN DECLARING THE TEMPORARY LAYOFF ILLEGAL AND ORDERING THE
REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE AFFECTED
EMPLOYEES.*
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT

GRAVELY ABUSED HER DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS
PART OF THE BARGAINING UNIT OF RANK AND FILE EMPLOYEES.[8]
Anent the first issue, we are asked to determine whether or not public respondent Labor
Secretary committed grave abuse of discretion and exceeded her jurisdiction in declaring the
subject layoffs instituted by Metrolab illegal on grounds that these unilateral actions aggravated
the conflict between Metrolab and the Union who were, then, locked in a stalemate in CBA
negotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties from committing any
act that might exacerbate the dispute is overly broad, sweeping and vague and should not be used
to curtail the employers right to manage his business and ensure its viability.
We cannot give credence to Metrolabs contention.
This Court recognizes the exercise of management prerogatives and often declines to
interfere with the legitimate business decisions of the employer. However, this privilege is not
absolute but subject to limitations imposed by law.[9]
In PAL v. NLRC,[10] we issued this reminder:
xxx xxx xxx
. . .the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs.
Medina ( 177 SCRA 565 [1989]), it was held that managements prerogatives must be without
abuse of discretion....
xxx xxx xxx
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It
is circumscribed by limitations found in law, a collective bargaining agreement, or the general
principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . .
. (Italics ours.)
xxx xxx xxx.
The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly
given the power under the Labor Code to assume jurisdiction and resolve labor disputes
involving industries indispensable to national interest. The disputed injunction is subsumed
under this special grant of authority. Art. 263 (g) of the Labor Code specifically provides that:
xxx xxx xxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout
in an industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or certification, all
striking or locked out employees shall immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies to ensure compliance with this
provision as well as with such orders as he may issue to enforce the same. . . (Italics ours.)
xxx xxx xxx.

That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading
manufacturers and suppliers of medical and pharmaceutical products to the country.
Metro labs management prerogatives, therefore, are not being unjustly curtailed but duly
balanced with and tempered by the limitations set by law, taking into account its special
character and the particular circumstances in the case at bench.
As aptly declared by public respondent Secretary of Labor in its assailed resolution:
xxx xxx xxx.
MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of
management prerogatives such as layoffs. But it may nevertheless be appropriate to mention here
that one of the substantive evils which Article 263 (g) of the Labor Code seeks to curb is the
exacerbation of a labor dispute to the further detriment of the national interest. When a labor
dispute has in fact occurred and a general injunction has been issued restraining the commission
of disruptive acts, management prerogatives must always be exercised consistently with the
statutory objective.[11]
xxx xxx xxx.

Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since
no untoward incident occurred after the layoffs were implemented. There were no work
disruptions or stoppages and no mass actions were threatened or undertaken. Instead, petitioner
asserts, the affected employees calmly accepted their fate as this was a matter which they had
been previously advised would be inevitable.[12]
After a judicious review of the record, we find no compelling reason to overturn the findings
of the Secretary of Labor.
We reaffirm the doctrine that considering their expertise in their respective fields, factual
findings of administrative agencies supported by substantial evidence are accorded great respect
and binds this Court.[13]
The Secretary of Labor ruled, thus:
xxx xxx xxx.
Any act committed during the pendency of the dispute that tends to give rise to further
contentious issues or increase the tensions between the parties should be considered an act of
exacerbation. One must look at the act itself, not on speculative reactions. A misplaced recourse
is not needed to prove that a dispute has been exacerbated. For instance, the Union could not be
expected to file another notice of strike. For this would depart from its theory of the case that the
layoff is subsumed under the instant dispute, for which a notice of strike had already been
filed. On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or
drastic action from the Union is to expect it to commit acts disruptive of public order or acts that
may be illegal. Under a regime of laws, legal remedies take the place of violent ones.[14]
xxx xxx xxx.
Protest against the subject layoffs need not be in the form of violent action or any other drastic
measure. In the instant case the Union registered their dissent by swiftly filing a motion for a
cease and desist order. Contrary to petitioners allegations, the Union strongly condemned the
layoffs and threatened mass action if the Secretary of Labor fails to timely intervene:
xxx xxx xxx.
3. This unilateral action of management is a blatant violation of the injunction of this Office
against committing acts which would exacerbate the dispute. Unless such act is enjoined the
Union will be compelled to resort to its legal right to mass actions and concerted activities to
protest and stop the said management action. This mass layoff is clearly one which would result
in a very serious labor dispute unless this Office swiftly intervenes.[15]
xxx xxx xxx.

Metrolab and the Union were still in the process of resolving their CBA deadlock when
petitioner implemented the subject layoffs. As a result, motions and oppositions were filed
diverting the parties attention, delaying resolution of the bargaining deadlock and postponing the
signing of their new CBA, thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94 rank-and-file
employees was temporary, despite the recall of some of the laid off workers.
If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly
stated so in the notices it sent to the affected employees and the Department of Labor and
Employment. Consider the tenor of the pertinent portions of the layoff notice to the affected
employees:
xxx xxx xxx.
Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng lay-off ng mga
empleyado sa Rank & File dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa
atin ang kasama sa lay-off dahil wala nang trabaho para sa kanila. Mahirap tanggapin ang mga
bagay na ito subalit kailangan nating gawin dahil hindi kaya ng kumpanya ang magbayad ng
suweldo kung ang empleyado ay walang trabaho. Kung tayo ay patuloy na magbabayad ng
suweldo, mas hihina ang ating kumpanya at mas marami ang maaring maapektuhan.
Sa pagpapatupad ng lay-off susundin natin ang LAST IN-FIRST OUT policy. Ang mga
empleyadong may pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan. Ito ay batay
na rin sa nakasaad sa ating CBA na ang mga huling pumasok sa kumpanya ang unang masasama
sa lay-off kapag nagkaroon ng ganitong mga kalagayan.
Ang mga empleyado na kasama sa lay-off ay nakalista sa sulat na ito. Ang umpisa ng lay-off ay
sa Lunes, Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila
sa Enero 30, 1992.
Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming tingin ay matatagalan
bago magkaroon ng dagdag na trabaho. Dahil dito, sinimulan na namin ang isang Redundancy
Program sa mga supervisors. Nabawasan ang mga puwesto para sa kanila, kaya sila ay
mawawalan ng trabaho at bibigyan na ng redundancy pay.[16] (Italics ours.)
xxx xxx xxx.

We agree with the ruling of the Secretary of Labor, thus:
xxx xxx xxx.
. . .MII insists that the layoff in question is temporary not permanent. It then cites International
Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held that the 30-day
notice required under Article 283 of the Labor Code need not be complied with if the employer
has no intention to permanently severe (sic) the employment relationship.
We are not convinced by this argument. International Hardware involves a case where there had
been a reduction of workload. Precisely to avoid laying off the employees, the employer therein
opted to give them work on a rotating basis. Though on a limited scale, work was available. This
was the Supreme Courts basis for holding that there was no intention to permanently severe (sic)
the employment relationship.
Here, there is no circumstance at all from which we can infer an intention from MII not to sever
the employment relationship permanently. If there was such an intention, MII could have made it
very clear in the notices of layoff. But as it were, the notices are couched in a language so
uncertain that the only conclusion possible is the permanent termination, not the continuation, of
the employment relationship.
MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While
insisting that there is really no best time to announce a bad news, (sic) it also claims that it broke
the bad news only on 27 January 1992 because had it complied with the 30-day notice, it could
have broken the bad news on 02 January 1992, the first working day of the year. If there is really
no best time to announce a bad news (sic), it wouldnt have mattered if the same was announced
at the first working day of the year. That way, MII could have at least complied with the
requirement of the law.[17]
The second issue raised by petitioner merits our consideration.

In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions
on closed-shop and the scope of the bargaining unit in this wise:
xxx xxx xxx.
Appropriateness of the bargaining unit.
xxx xxx xxx.
Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:
These aside, we reconsider our denial of the modifications which the Union proposes to
introduce on the close shop provision. While we note that the provision as presently worded has
served the relationship of the parties well under previous CBAs, the shift in constitutional policy
toward expanding the right of all workers to self-organization should now be formally
recognized by the parties, subject to the following exclusions only:
1. Managerial employees; and
2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice

President for Sales, Personnel Manager, and Director for Corporate Planning who may have
access to vital labor relations information or who may otherwise act in a confidential capacity to
persons who determine or formulate management policies.
The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified
consistently with the foregoing.
Article I (b) of the 1988-1990 CBA provides:
b)Close Shop. - All Qualified Employees must join the Association immediately upon
regularization as a condition for continued employment. This provision shall not apply to: (i)
managerial employees who are excluded from the scope of the bargaining unit; (ii) the auditors
and executive secretaries of senior executive officers, such as, the President, Executive Vice-
President, Vice-President for Finance, Head of Legal, Vice-President for Sales, who are excluded
from membership in the Association; and (iii) those employees who are referred to in Attachment
I hereof, subject, however, to the application of the provision of Article II, par. (b) hereof.
Consequently, the above-specified employees are not required to join the Association as a
condition for their continued employment.
On the other hand, Attachment I provides:
Exclusion from the Scope of the Close Shop Provision
The following positions in the Bargaining Unit are not covered by the Close Shop provision
of the CBA (Article I, par. b):
1. Executive Secretaries of Vice-Presidents, or equivalent positions.
2. Executive Secretary of the Personnel Manager, or equivalent positions.
3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.
4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head
Office, Accounting Department at Head Office, and Budget Staff, who because of the nature of
their duties and responsibilities need not join the Association as a condition for their
employment.
5. Newly-hired secretaries of Branch Managers and Regional Managers.
Both MDD and MII read the exclusion of managerial employees and executive secretaries in
our 14 April 1992 resolution as exclusion from the bargaining unit. They point out that
managerial employees are lumped under one classification with executive secretaries, so that
since the former are excluded from the bargaining unit, so must the latter be likewise excluded.
This reading is obviously contrary to the intent of our 14 April 1992 resolution. By
recognizing the expanded scope of the right to self-organization, our intent was to delimit the
types of employees excluded from the close shop provision, not from the bargaining unit, to
executive secretaries only. Otherwise, the conversion of the exclusionary provision to one that
refers to the bargaining unit from one that merely refers to the close shop provision would
effectively curtail all the organizational rights of executive secretaries.
The exclusion of managerial employees, in accordance with law, must therefore still carry
the qualifying phrase from the bargaining unit in Article I (b)(i) of the 1988-1990 CBA. In the
same manner, the exclusion of executive secretaries should be read together with the qualifying
phrase are excluded from membership in the Association of the same Article and with the
heading of Attachment I. The latter refers to Exclusions from Scope of Close Shop Provision and
provides that [t]he following positions in Bargaining Unit are not covered by the close shop
provision of the CBA.
The issue of exclusion has different dimension in the case of MII. In an earlier motion for
clarification, MII points out that it has done away with the positions of Executive Vice-President,
Vice-President for Sales, and Director for Corporate Planning. Thus, the foregoing group of
exclusions is no longer appropriate in its present organizational structure. Nevertheless, there
remain MII officer positions for which there may be executive secretaries. These include the
General Manager and members of the Management Committee, specifically i) the Quality
Assurance Manager; ii) the Product Development Manager; iii) the Finance Director; iv) the
Management System Manager; v) the Human Resources Manager; vi) the Marketing Director;
vii) the Engineering Manager; viii) the Materials Manager; and ix) the Production Manager.
xxx xxx xxx
The basis for the questioned exclusions, it should be noted, is no other than the previous
CBA between MII and the Union. If MII had undergone an organizational restructuring since
then, this is a fact to which we have never been made privy. In any event, had this been
otherwise the result would have been the same. To repeat, we limited the exclusions to recognize
the expanded scope of the right to self-organization as embodied in the Constitution.[18]
Metrolab, however, maintains that executive secretaries of the General Manager and the
executive secretaries of the Quality Assurance Manager, Product Development Manager,
Finance Director, Management System Manager, Human Resources Manager, Marketing
Director, Engineering Manager, Materials Manager and Production Manager, who are all
members of the companys Management Committee should not only be exempted from the
closed-shop provision but should be excluded from membership in the bargaining unit of the
rank and file employees as well on grounds that their executive secretaries are confidential
employees, having access to vital labor information.[19]
We concur with Metrolab.
Although Article 245 of the Labor Code[20] limits the ineligibility to join, form and assist
any labor organization to managerial employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their positions or nature of work are required
to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.
The rationale behind the exclusion of confidential employees from the bargaining unit of the
rank and file employees and their disqualification to join any labor organization was succinctly
discussed in Philips Industrial Development v. NLRC:[21]
xxx xxx xxx.
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave
abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that
PIDIs Service Engineers, Sales Force, division secretaries, all Staff of General Management,
Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems
are included within the rank and file bargaining unit.
In the first place, all these employees, with the exception of the service engineers and the sales
force personnel, are confidential employees. Their classification as such is not seriously disputed
by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered
them as confidential employees. By the very nature of their functions, they assist and act in a
confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. As such, the rationale behind the ineligibility
of managerial employees to form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this
rationale, thus:
x x x The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of their
loyalty to the Union in view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in Union membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable
to confidential employees:
This rationale holds true also for 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 a spy or spies of either party to a collective
bargaining agreement. This is specially true in the present case where the petitioning Union is
already the bargaining agent of the rank-and-file employees in the establishment. To allow the
confidential employees to join the existing Union of the rank-and-file would be in violation of
the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature
of their functions/positions are expressly excluded.
xxx xxx xxx.

Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors
Chapter v. Torres[22] we declared:
xxx xxx xxx.
. . . 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 branchs cash position, statements of financial condition, vault combination,
cash codes for telegraphic transfers, demand drafts and other negotiable instruments, pursuant to
Sec. 1166.4 of the Central Bank Manual regarding joint custody, this claim is not even disputed
by petitioner. A confidential employee is one entrusted with confidence on delicate matters, or
with the custody, handling, or care and protection of the employers property. While Art. 245 of
the Labor Code singles out managerial employees as ineligible to join, assist or form any labor
organization, under the doctrine of necessary, implication, confidential employees are similarly
disqualified. . . .
xxx xxx xxx.
. . .(I)n 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 interest are well protected. The
employer is not assured of such protection if these employees themselves are union
members. Collective bargaining in such a situation can become one-sided. It is the same reason
that impelled this Court to consider the position of confidential employees as included in the
disqualification found in Art. 245 as if the disqualification of confidential employees were
written in the provision. If confidential employees could unionize in order to bargain for
advantages for themselves, then they could be governed by their own motives rather than the
interest of the employers. Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or individuals who are
supposed to act in the interest of the employers. It is not farfetched that in the course of
collective bargaining, they might jeopardize that interest which they are duty-bound to protect. . .
.
xxx xxx xxx.

And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-
Confesor,[23] we ruled that:
xxx xxx xxx.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is
basically routinary and clerical. However, they should be differentiated from rank-and-file
employees because they are tasked with, among others, the typing of legal documents,
memoranda and correspondence, the keeping of records and files, the giving of and receiving
notices, and such other duties as required by the legal personnel of the corporation. Legal
secretaries therefore fall under the category of confidential employees. . . .
xxx xxx xxx.
We thus hold that public respondent acted with grave abuse of discretion in not excluding the
four foremen and legal secretary from the bargaining unit composed of rank-and-file employees.
xxx xxx xxx.
In the case at bench, the Union does not disagree with petitioner that the executive secretaries are
confidential employees. It however, makes the following contentions:
xxx xxx xxx.
There would be no danger of company domination of the Union since the confidential employees
would not be members of and would not participate in the decision making processes of the
Union.
Neither would there be a danger of espionage since the confidential employees would not have
any conflict of interest, not being members of the Union. In any case, there is always the danger
that any employee would leak management secrets to the Union out of sympathy for his fellow
rank and filer even if he were not a member of the union nor the bargaining unit.
Confidential employees are rank and file employees and they, like all the other rank and file
employees, should be granted the benefits of the Collective Bargaining Agreement. There is no
valid basis for discriminating against them. The mandate of the Constitution and the Labor Code,
primarily of protection to Labor, compels such conclusion.[24]
xxx xxx xxx.

The Unions assurances fail to convince. The dangers sought to be prevented, particularly the
threat of conflict of interest and espionage, are not eliminated by non-membership of Metrolabs
executive secretaries or confidential employees in the Union. Forming part of the bargaining
unit, the executive secretaries stand to benefit from any agreement executed between the Union
and Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal interests
and their duty as confidential employees to act for and in behalf of Metrolab. They do not have
to be union members to affect or influence either side.
Finally, confidential employees cannot be classified as rank and file. As previously
discussed, the nature of employment of confidential employees is quite distinct from the rank
and file, thus, warranting a separate category. Excluding confidential employees from the rank
and file bargaining unit, therefore, is not tantamount to discrimination.
WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions
of public respondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby
MODIFIED to the extent that executive secretaries of petitioner Metrolabs General Manager and
the executive secretaries of the members of its Management Committee are excluded from the
bargaining unit of petitioners rank and file employees.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 80882 April 24, 1989
SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL), petitioner,

vs.
HONORABLE PURA FERRER CALLEJA, Director, Bureau of Labor Relations,
Department of Labor and Employment, public respondent. MINDANAO MINERS
EMPLOYEE UNION SANDIGAN NG MANGGAGAWANG PILIPINO
(SANDIGAN), forced intervenor-private respondent. APEX MINING COMPANY,
INC., employer-private respondent.
Proculo P. Fuentes, Jr. for petitioner.
Valeriano F. Pasquil and Ruben V. Abarquez for respondent Apex Mining Co., Inc.
Raul C. Nengasca and Antonio G. Jolejole for respondent Sandigan.
GUTIERREZ, JR., J.:
This petition for certiorari seeks to annul and set aside the Order issued by public respondent
Director Pura Ferrer Calleja of the Bureau of Labor Relations dated June 23, 1987 which
certified the respondent union, Mindanao Miners Employees Union-Sandigan ng Manggagawang
Pilipino (MMEU-Sandigan), as the sole and exclusive bargaining representative of the rank-and-
file employees of respondent Apex Mining Company (Apex) after the said public respondent
denied the motion of herein petitioner to exclude one hundred ninety-seven (197) employees
from voting in the certification election. The denial is based on the ground that they are rank-
and-file employees.
As summarized by the Solicitor General in his Comment, the facts are as follows:
On December 29, 1986, petitioner Southern Philippines Federation of Labor filed

a petition for certification election among the rank-and-file employees of private
respondent Apex Mining Company, Incorporated with the Department of Labor in
Region XI, Davao City.
On February 6, 1987, Med-Arbiter Conrado 0. Macasa, Sr. issued an Order

calling for the holding of the certification election on February 23, 1987 among
the rank-and-file employees of APEX with the following choices:
l. Southern Philippines Federation of Labor (SPFL)
2. Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino

(MMEU-Sandigan) and
3. No union.
On February 9, 1987, a pre-election conference was conducted among the

petitioner Union; private respondent Union, MMEU-Sandigan; and APEX to
settle details in the conduct of the election such as the venue of the election and
the list of employees qualified to vote in the election.
During the pre-election conference, the parties agreed to delete from the list of
workers prepared and submitted by APEX numbering One Thousand Seven
Hundred Sixteen (1,716), the names of nineteen (1 9) managerial employees and
seventy-three probationary employees who were statutorily disqualified from
voting. Petitioner Union objected to the inclusion in said list of the following: (1)
employees occupying the positions of Supervisor I, II, and III; (2) employees
under confidential/special payrolls; and (3) employees who were not paying
Union dues. The petitioner Union contends that the aforementioned employees
were disqualified from participating in the certification election since the
Supervisors were managerial employees while the last two were disqualified by
virtue of their non-membership in the Union and their exclusion from the benefits
of the collective bargaining agreement.
In view of the lack of agreement among the parties on the list of qualified voters,
Med-Arbiter Macasa issued an Order on February 20, 1987, the dispositive
portion of which reads:
"Wherefore, premises considered it is hereby declared that the
following groups of workers be not included in the list of
employees qualified to vote in the consent election on February 23,
1987, as follows:
1 Nineteen (19) managerial employees;
2 Seventy-three (73) probationary employees; and
3 Nineteen (19) Supervisors 1;
All other workers except the foregoing will be allowed to vote."
On February 23, 1987, the day of the certification election, petitioner Union filed
a Motion for Reconsideration of Macasa's Order dated February 20, 1987. The
certification election was nonetheless conducted, with the result as follows:
l. Southern Philippines Federation of Labor............. 614
2. Mindanao Miners Employees union

(MMEU- Sandigan)...................................................
528
3. No Union......................................................................... 9
4. Challenged Ballots......................................................197
5. Spoiled............................................................................25
TOTAL VOTES CAST............................................................1,373
On the basis of the foregoing results, respondent Union filed an Urgent Motion to
Open the Challenged Ballots, with the prayer, to wit:
"Wherefore, premises considered, it is most respectfully prayed of

this Honorable office that this instant motion be given due course
and that an order be issued to open and count the challenged
ballots in order to determine, once and for all, the winner in the
certification and/or consent election and thereafter certify the sole
and exclusive collective bargaining representative of all rank-and-
file employees and workers of Apex Mining Company,
Incorporated."
xxx xxx xxx

On March 11, 1987, APEX filed a Manifestation and Motion manifesting its
interest in the speedy resolution of the case and primary concern for "the
restoration of normalcy and the preservation of industrial peace in the already
explosive situation in the mining area."
xxx xxx xxx
On March 19, 1987, Med-Arbiter Macasa issued an Order, the dispositive portion
of which reads:
"Wherefore, the interest of industrial peace considered, it is hereby

directed that the challenged ballots be opened and inventoried on
26 March 1987 at 3:00 p.m., before the entire records of the case
be indorsed to the BLR for review."
xxx xxx xxx
Petitioner Union appealed Macasa's Order dated March 19, 1987 to the Bureau of
Labor Relations. On April 14, 1987, BLR Director Pura Ferrer-Calleja issued an
Order, the dispositive portion of which reads:
"WHEREFORE, the Appeal of petitioner Southern Philippines

Federation of Labor (SPFL) is hereby dismissed for lack of merit
and the Med- Arbiter's Order dated 19 March 1987 is affirmed
with modification that the 197 ballots should be opened and
canvassed by Labor Regional Office XI, Davao City. Let,
therefore, the records of this case be immediately remanded to the
said office, for the immediate implementation of this Resolution."
Petitioner Union moved for a reconsideration of the resolution dated April 14,
1987. Meanwhile, on May 21, 1987, Med-Arbiter Macasa opened and canvassed
the 197 challenged ballots with the result as follows:
SPFL 12 votes
SANDIGAN 178 votes
No Union 2 votes
Spoiled 4 votes
Envelop with
no ballots 1 vote
__________
TOTAL 197 votes
As a consequence of the opening and canvass of the challenged ballots, the

outcome of the certification election became:
SPFL 626 votes
SANDIGAN 706 votes
No Union 11 votes
___________
TOTAL 1,343 votes
Based on the aforementioned results, respondent Union filed a Manifestation with

the BLR with prayer for the issuance of Certification Order certifying it as the
sole and exclusive bargaining representative of the rank-and-file employees of
APEX. On June 23, 1987, Director Calleja issued an Order, the dispositive
portion of which reads:
"WHEREFORE, the Motion for reconsideration of Petitioner

SPFL is hereby denied for lack of merit. Meanwhile, intervenor
Mindanao Employees Union-Sandigan Ng Manggagawang
Pilipino (MMEU- SANDIGAN) is hereby certified as the sole and
exclusive bargaining representative of the rank-and-file employees
of respondent Apex Mining Company, Inc. Accordingly, the
management of Apex Mining Company, Inc., is directed to
negotiate with (MMEU-SANDIGAN) for the conclusion of a
collective bargaining agreement (CBA)."
The issue raised in this petition is whether or not the public respondent committed grave abuse of
discretion in allowing the 197 employees to vote in the certification election when, as alleged by
the petitioner, they are disqualified by express provision of law or under the existing collective
bargaining agreement.
It is maintained by the petitioner that under the Labor Code, managerial employees are excluded
from forming or joining a collective bargaining unit; and under the collective bargaining
agreement executed between Apex and respondent union, among those who are excluded from
the bargaining unit are: a) managerial employees as defined in paragraph K, Article 212 of the
Labor Code; b) those performing supervisory functions; and c) those holding confidential
positions as determined by the company. Therefore, the employees holding the positions of
Supervisors II and III and those in the confidential payrolls should be excluded from joining the
bargaining unit and from voting in the certification election. Likewise, those employees who are
not paying union dues should be excluded from the same since the existing CBA contains a
Union shop provision.
The contentions have no merit.
Although we have upheld the validity of the CBA as the law among the parties, (see Planters
Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989), its provisions cannot override
what is expressly provided by law that only managerial employees are ineligible to join, assist or
form any labor organization (See Art. 247, Labor Code). Therefore, regardless of the challenged
employees' designations, whether they are employed as Supervisors or in the confidential
payrolls, if the nature of their job does not fall under the definition of "managerial" as defined in
the Labor Code, they are eligible to be members of the bargaining unit and to vote in the
certification election. Their right to self-organization must be upheld in the absence of an express
provision of law to the contrary. It cannot be curtailed by a collective bargaining agreement.
Hence, it is important to determine whether the positions of Supervisors II and III are considered
"managerial" under the law.
As defined in the Labor Code and as we have held in the case of Franklin Baker Company of the
Phils. v. Trajano, (1 57 SCRA 416, 421-423, [1988]):
A managerial employee is defined as 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. (Reynolds Phil. Corp. v.
Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.)
xxxxxxxxx
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]).
Furthermore, in line with the ruling of this Court, subject employees are not
managerial employees because as borne by the records, they do not participate in
policy making but are given ready policies to execute and standard practices to
observe, thus having little freedom of action (National Waterworks and Sewerage
Authority v. NWSA Consolidated, L-18938, 11 SCRA 766 [1964]).
The petitioner's motion for reconsideration before the public respondent outlined the job
description of Supervisors. In the category of Supervisory II, the "General Summary" provides:
GENERAL SUMMARY:
Assists the Foreman in the effective dispatching/distribution of manpower and

equipment to carry out approved work. (p. 30, Rollo)
while the first duty enumerated in the position of Supervisor III states:
1. Executes and coordinates work plans emanating from his supervisors. (p. 32,
Rollo)
Thus, it is clear from the above provisions that the functions of the questioned positions are not
managerial in nature because they only execute approved and established policies leaving little
or no discretion at all whether to implement the said policies or not. The respondent Director,
therefore, did not commit grave abuse of discretion in dismissing the petitioner's appeal from the
Med-Arbiter's Order to open and count the challenged ballots in denying the petitioner's motion
for reconsideration and in certifying the respondent Union as the sole and exclusive bargaining
representative of the rank-and-file employees of respondent Apex .
As regards the employees in the confidential payroll, the petitioner has not shown that the nature
of their jobs is classified as managerial except for its allegation that they are considered by
management as occupying managerial positions and highly confidential. Neither can payment or
non-payment of union dues be the determining factor of whether the challenged employees
should be excluded from the bargaining unit since the union shop provision in the CBA applies
only to newly hired employees but not to members of the bargaining unit who were not members
of the union at the time of the signing of the CBA. It is, therefore, not impossible for employees
to be members of the bargaining unit even though they are non-union members or not paying
union dues.
WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the
petitioner.
SO ORDERED.
8. G.R. No. 157117 November 20, 2006
COASTAL SUBIC BAY TERMINAL, INC., Petitioner,

vs.
DEPARTMENT OF LABOR and EMPLOYMENT – OFFICE OF THE SECRETARY,
COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and
COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-
TUCP, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Court of Appeals’ Decision1 dated August 31, 2001, in CA-G.R.
SP No. 54128 and the Resolution2 dated February 5, 2003, denying petitioner’s motion for
reconsideration. The Court of Appeals had affirmed the Decision3 dated March 15, 1999 of the
Secretary of the Department of Labor and Employment (DOLE) reversing the Mediator Arbiter’s
dismissal of private respondents’ petitions for certification election.
The facts are as follows:

On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union
(CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed
separate petitions for certification election before Med-Arbiter Eladio de Jesus of the Regional
Office No. III. The rank-and-file union insists that it is a legitimate labor organization having
been issued a charter certificate by the Associated Labor Union (ALU), and the supervisory
union by the Associated Professional, Supervisory, Office and Technical Employees Union
(APSOTEU). Private respondents also alleged that the establishment in which they sought to
operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification
election alleging that the rank-and-file union and supervisory union were not legitimate labor
organizations, and that the proposed bargaining units were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without
prejudice to refiling, both petitions which had been consolidated. The Med-Arbiter held that the
ALU and APSOTEU are one and the same federation having a common set of officers. Thus, the
supervisory and the rank-and-file unions were in effect affiliated with only one federation.4
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant
petitions to be invalid and unwarranted. Consequently, this Office has no recourse but to dismiss
both petitions without prejudice to the refiling of either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby
DISMISSED.
SO ORDERED.5
Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of
the Med-Arbiter. The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and
CSBTI-RFU have separate legal personalities to file their separate petitions for certification
election. The Secretary held that APSOTEU is a legitimate labor organization because it was
properly registered pursuant to the 1989 Revised Rules and Regulations implementing Republic
Act No. 6715, the rule applicable at the time of its registration. It further ruled that ALU and
APSOTEU are separate and distinct labor unions having separate certificates of registration from
the DOLE. They also have different sets of locals. The Secretary declared CSBTI-RFU and
CSBTI-SU as legitimate labor organizations having been chartered respectively by ALU and
APSOTEU after submitting all the requirements with the Bureau of Labor Relations (BLR).
Accordingly, the Secretary ordered the holding of separate certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED.
Let separate certification elections be conducted immediately among the appropriate employees
of CSBTI, after the usual pre-election conference, with the following choices:
I. For all rank and file employees of CSBTI:

1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-
ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES

UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three months immediately
preceding the issuance of this decision, shall be the basis for determining the qualified list of
voters.
SO DECIDED.6
The motion for reconsideration was also denied.7
On appeal, the Court of Appeals affirmed the decision of the Secretary.8 It held that there was no
grave abuse of discretion on the part of the Secretary; its findings are supported by evidence on
record; and thus should be accorded with respect and finality.9
The motion for reconsideration was likewise denied.10 Hence, the instant petition by the
company anchored on the following grounds:
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989

REVISED RULES AND REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO
RECOGNIZE PRIVATE RESPONDENT APSOTEU’S REGISTRATION BY THE
DOLE REGIONAL DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC

RESPONDENT’S APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO
HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH

LAW AND JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENT’S
APPLICATION OF THE "UNION AUTONOMY" THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENT’S FINDING THAT PRIVATE

RESPONDENTS ARE "SEPARATE FEDERATIONS," THE HONORABLE COURT
OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE

OF A MED-ARBITER’S FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL

COMMINGLING."11
Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions
for certification election?; (2) Was the Secretary’s decision based on stare decisis correct?; and
(3) Were private respondents engaged in commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU,
its mother federation.
Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional
Director and not from the BLR; that it is the BLR that is authorized to process applications and
issue certificates of registration in accordance with our ruling in Phil. Association of Free Labor
Unions v. Secretary of Labor;12 that the certificates of registration issued by the DOLE Regional
Director pursuant to the rules are questionable, and possibly even void ab initio for being ultra
vires; and that the Court of Appeals erred when it ruled that the law applicable at the time of
APSOTEU’s registration was the 1989 Revised Implementing Rules and Regulations of Rep.
Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU
cannot attain the status of a legitimate labor organization to file a petition for certification
election. It relies on Villar v. Inciong,13 where we held therein that Amigo Employees Union was
not a duly registered independent union absent any record of its registration with the Bureau.
Pertinent is Article 23514 of the Labor Code which provides that applications for registration
shall be acted upon by the Bureau. "Bureau" as defined under the Labor Code means the
BLR and/or the Labor Relations Division in the Regional Offices of the Department of
Labor.15 Further, Section 2, Rule II, Book V of the 1989 Revised Implementing Rules of the
Labor Code (Implementing Rules) provides that:
Section 2. Where to file application; procedure – Any national labor organization or labor
federation or local union may file an application for registration with the Bureau or the Regional
Office where the applicant’s principal offices is located. The Bureau or the Regional Office shall
immediately process and approve or deny the application. In case of approval, the Bureau or the
Regional Office shall issue the registration certificate within thirty (30) calendar days from
receipt of the application, together with all the requirements for registration as hereinafter
provided. 16
The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department
Order No. 9, thus:
SECTION 1. Where to file applications. – The application for registration of any federation,
national or industry union or trade union center shall be filed with the Bureau. Where the
application is filed with the Regional Office, the same shall be immediately forwarded to the
Bureau within forty-eight (48) hours from filing thereof, together with all the documents
supporting the registration.
The applications for registration of an independent union shall be filed with and acted upon by
the Regional Office where the applicant’s principal office is located ….
xxxx
The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further
amending Book V of the above implementing rules. The new implementing rules explicitly
provide that applications for registration of labor organizations shall be filed either with the
Regional Office or with the BLR.17
Even after the amendments, the rules did not divest the Regional Office and the BLR of their
jurisdiction over applications for registration by labor organizations. The amendments to the
implementing rules merely specified that when the application was filed with the Regional
Office, the application would be acted upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly,
the law applicable at that time was Section 2, Rule II, Book V of the Implementing Rules, and
not Department Order No. 9 which took effect only on June 21, 1997. Thus, considering further
that APSOTEU’s principal office is located in Diliman, Quezon City, and its registration was
filed with the NCR Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong.18 In said case, there was no record in the BLR that
Amigo Employees Union was registered.19
Did the Court of Appeals err in its application of stare decisis when it upheld the Secretary’s
ruling that APSOTEU is a legitimate labor organization and its personality cannot be assailed
unless in an independent action for cancellation of registration certificate?20
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:
Section 5. Effect of registration – The labor organization or workers’ association shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be subject to collateral attack, but maybe
questioned only in an independent petition for cancellation in accordance with these Rules.21
Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its
affiliates.22 It may issue a local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU
is legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because
of the commonalities between them? Are they commingled?
The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate
fiction, APSOTEU and ALU are the same federation. Private respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a legitimate labor
organization, it continues as such until its certificate of registration is cancelled or revoked in an
independent action for cancellation.23 In addition, the legal personality of a labor organization
cannot be collaterally attacked.24 Thus, when the personality of the labor organization is
questioned in the same manner the veil of corporate fiction is pierced, the action partakes the
nature of a collateral attack. Hence, in the absence of any independent action for cancellation of
registration against either APSOTEU or ALU, and unless and until their registrations are
cancelled, each continues to possess a separate legal personality. The CSBTI-RFU and CSBTI-
SU are therefore affiliated with distinct and separate federations, despite the commonalities of
APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union acquires legal personality
through the charter certificate issued by a duly registered federation or national union, and
reported to the Regional Office in accordance with the rules implementing the Labor Code.25 A
local union does not owe its existence to the federation with which it is affiliated. It is a separate
and distinct voluntary association owing its creation to the will of its members. Mere affiliation
does not divest the local union of its own personality, neither does it give the mother federation
the license to act independently of the local union. It only gives rise to a contract of agency,
where the former acts in representation of the latter.26 Hence, local unions are considered
principals while the federation is deemed to be merely their agent.27 As such principals, the
unions are entitled to exercise the rights and privileges of a legitimate labor organization,
including the right to seek certification as the sole and exclusive bargaining agent in the
appropriate employer unit.1âwphi1
A word of caution though, under Article 245 of the Labor Code,28 supervisory employees are not
eligible for membership in a labor union of rank-and-file employees. The supervisory employees
are allowed to form their own union but they are not allowed to join the rank-and-file union
because of potential conflicts of interest.29 Further, to avoid a situation where supervisors would
merge with the rank-and-file or where the supervisors’ labor union would represent conflicting
interests, a local supervisors’ union should not be allowed to affiliate with the national federation
of unions of rank-and-file employees where that federation actively participates in the union
activity within the company.30 Thus, the limitation is not confined to a case of supervisors
wanting to join a rank-and-file union. The prohibition extends to a supervisors’ local union
applying for membership in a national federation the members of which include local unions of
rank-and-file employees.31 In De La Salle University Medical Center and College of Medicine v.
Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are affiliated with a single federation. In addition,
the supervisors must have direct authority over the rank-and-file employees.32
In the instant case, the national federations that exist as separate entities to which the rank-and-
file and supervisory unions are separately affiliated with, do have a common set of officers. In
addition, APSOTEU, the supervisory federation, actively participates in the CSBTI-SU while
ALU, the rank-and-file federation, actively participates in the CSBTI-RFU, giving occasion to
possible conflicts of interest among the common officers of the federation of rank-and-file and
the federation of supervisory unions. For as long as they are affiliated with the APSOTEU and
ALU, the supervisory and rank-and-file unions both do not meet the criteria to attain the status of
legitimate labor organizations, and thus could not separately petition for certification
elections.1âwphi1
The purpose of affiliation of the local unions into a common enterprise is to increase the
collective bargaining power in respect of the terms and conditions of labor.33 When there is
commingling of officers of a rank-and-file union with a supervisory union, the constitutional
policy on labor is circumvented. Labor organizations should ensure the freedom of employees to
organize themselves for the purpose of leveling the bargaining process but also to ensure the
freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for
themselves.
WHEREFORE, the petition is GRANTED. The Court of Appeals’ Decision dated August 31,
2001, in CA-G.R. SP No. 54128 and the Resolution dated February 5, 2003 are SET ASIDE.
The decision of the Med-Arbiter is hereby AFFIRMED.
SO ORDERED.
9. [G.R. No. 142297. June 15, 2004]
HOME DEVELOPMENT MUTUAL FUND, petitioner, vs. COMMISSION ON

AUDIT, respondent.
DECISION
AZCUNA, J.:
Before us is a petition for certiorari under Rule 65 of the Rules of Court alleging that the
Commission on Audit acted in excess of its jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in issuing Resolution No. 2000-086 dated March 7, 2000,
which affirmed COA Decision No. 98-245 dated June 16, 1998. COA Decision No. 98-245
affirmed the audit disallowance of payment of productivity incentive bonus by petitioner Home
Development Mutual Fund (HDMF) to its personnel pursuant to Republic Act No. 6971,
otherwise known as the Productivity Incentives Act of 1990.
The facts are as follows:
Republic Act No. 6971, An Act to Encourage Productivity and Maintain Industrial Peace by
Providing Incentives to Both Labor and Capital, was approved on November 22, 1990, and took
effect on December 9, 1990.
Section 3 of said Act states:
Sec. 3. Coverage.-- This Act shall apply to all business enterprises with or without existing and
duly recognized or certified labor organizations, including government-owned and controlled
corporations performing proprietary functions. It shall cover all employees and workers
including casual, regular, supervisory and managerial employees.
The Secretary of Labor and Employment and the Secretary of Finance promulgated the
Rules Implementing Republic Act No. 6971[1] on June 4, 1991. Rule II of said implementing
rules provides:
Section 1. Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly recognized or certified labor
organizations, including government-owned and controlled corporations
performing proprietary functions;
(b) All employees and workers including casual, regular, rank-and-file, supervisory and
managerial employees.
On November 21, 1991, petitioner HDMF granted Productivity Incentive Bonus equivalent
to one month salary plus allowance to all its personnel pursuant to Republic Act No. 6971, and
its Implementing Rules.[2]
The HDMF granted said bonus despite the advice on August 26, 1991 of Undersecretary
Salvador Enriquez of the Department of Budget and Management (DBM) to all government-
owned and controlled corporations (GOCCs) and government financial institutions (GFIs) with
original charters performing proprietary functions to defer payment of the productivity incentive
bonus to their employees, pending the issuance of a definite ruling by the Office of the President
on the matter.[3]
On December 27, 1991, the Department of Labor and Employment and the Department of
Finance issued the Supplemental Rules Implementing Republic Act No. 6971, which provides,
thus:
Section 1.Paragraph (a) Section 1, Rule II of the Rules Implementing RA 6971, shall be amended
to read as follows:
Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly certified labor organizations including
government-owned and controlled corporations performing proprietary functions which are
established solely for business or profit or gain and accordingly excluding those created,
maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or
by law, and those whose officers and employees are covered by the Civil Service. (Emphasis
supplied.)
On November 29, 1996, the grant of productivity incentive bonus to the HDMF personnel in
the total amount of P5,136,710.91 was disallowed in audit under Notice of Disallowance No. 96-
006-101 (91).[4] The disallowance was based on COA Decision No. 96-288, dated June 4, 1996,
stating that Republic Act No. 6971 does not apply to government-owned or controlled
corporations or to government financial institutions with original charters performing proprietary
functions, such as the HDMF.[5]
In a letter-request dated May 28, 1997, HDMF, through its President and Chief Executive
Officer, Zorayda Amelia C. Alonzo, requested for the lifting of the disallowance.[6] Alonzo
argued that Republic Act No. 6971 applies to the employees of HDMF since the coverage of the
said law includes government-owned and controlled corporations performing proprietary
functions, and the supplemental rules excluding it from coverage was issued after the HDMF had
already granted the productivity incentive bonus to its employees.
In its Decision No. 98-245[7] dated June 16, 1998, the Commission on Audit affirmed the
audit disallowance. It ruled, thus:
xxxxxxxxx
Appellant (petitioner herein) further averred that while the Supplemental Rules Implementing
R.A. No. 6971 issued by the Department of Labor and Employment and the Department of
Finance dated December 27, 1991, exclude from the coverage of R.A. No. 6971 GOCCs whose
officers and employees are covered by the Civil Service Law (like the HDMF), payment of the
incentive bonus have been effected prior to the issuance of the said supplemental rules. Simply
stated, it is the position of the appellant that the supplemental rules should not be given
retroactive effect.
The Commission finds the appellants arguments untenable. It must be noted that the grant of the
Productivity Incentive Bonus was made on November 21, 1991 or after receipt of the advice of
the Department of Budget and Management Undersecretary dated August 26, 1991 to defer
payment of Productivity Incentive Bonus to all GOCCs/GFIs with original charters performing
proprietary functions, pending definite ruling of the Office of the President. Despite the said
notice, management proceeded with the payment.
Likewise, the issue as to whether or not GOCCs/GFIs with original charters which are
performing proprietary functions are covered by R.A. No. 6971 had been resolved by the
Secretary of Justice in his letter dated November 8, 1995, stating that GOCCs with original
charter, being covered by the Civil Service Law, and not by the labor laws, are clearly outside
the ambit of R.A. No. 6971.
Verily, the grant of the incentive bonus is contrary to the Supplemental Rules Implementing R.A.
No. 6971 issued by the Department of Labor and Employment and the Department of Finance
dated December 27, 1991, portion of which pertinently reads as follows:
All business enterprises x x x established solely for business of profit or gain and
accordingly, excluding those created, maintained or acquired in pursuance of a policy of the
state, enunciated in the constitution or by law, and those whose officers and employees are
covered by the Civil Service (underscoring supplied).
Moreover, the issue raised by the appellant that the supplemental rules excluding GOCCs/GFIs
from the coverage of R.A. No. 6971 should not be given retroactive effect is not tenable since the
HDMF from the very beginning is not covered by the aforesaid law.
Premises considered, the audit disallowance is hereby affirmed, and the refund of the amount
of P5,136,710.91 granted as Productivity Incentive Bonus to HDMF personnel based on the
provisions of R.A. No. 6971 shall be enforced accordingly.
HDMF filed a motion for reconsideration that was denied by the Commission on Audit in
Resolution No. 2000-086 dated March 7, 2000. [8]
Petitioner raises three issues:[9]
1. What is the applicable rule at the time of the grant of the Productivity Incentive
Bonus?
2. Whether the Memorandum from the Department of Finance signed by Secretary
Jesus P. Estanislao dated January 16, 1992 constitutes appropriate authorization for
the grant of Productivity Incentive Allowance for 1991.
3. Whether the Supplemental Implementing Rules are valid? If so, whether it may be
given retroactive effect?
Petitioner contends that when it granted the productivity incentive bonus to its personnel on
November 21, 1991, no other rule but the Implementing Rules of Republic Act No. 6971 dated
June 4, 1991 was in existence. Said Rule includes in its coverage government-owned and
controlled corporations performing proprietary functions, without any qualification. The
Supplementary Rules, which excluded petitioner from coverage, was issued only after it had
already granted the productivity incentive bonus to its personnel. Hence, the employees already
acquired a vested right over the productivity incentive bonus.
The contention is without merit.
Association of Dedicated Employees of the Philippine Tourism Authority (ADEPT) v.
Commission on Audit,[10] held that the legislature intended Republic Act No. 6971 to cover only
government-owned and controlled corporations incorporated under the general corporation law,
thus:
Petitioner cites an entry in the journal of the House of Representatives to buttress its submission
that PTA is within the coverage of RA 6971, to wit:
Chairman Veloso: The intent of including government-owned and controlled corporations within
the coverage of the Act is the recognition of the principle that when government goes into
business, it (divests) itself of its immunity from suit and goes down to the level of ordinary
private enterprises and subjects itself to the ordinary laws of the land just like ordinary private
enterprises. Now, when people work therefore in government-owned or controlled corporations,
it is as if they are also, just like in the private sector, entitled to all the benefits of all laws that
apply to workers in the private sector. In my view, even including the right to organize, bargain
VELOSO (Bicameral Conference committee on Labor and Employment, pp. 15-16).
After a careful study, the Court is of the view, and so holds, that contrary to petitioners
interpretation, the government-owned and controlled corporations Mr. Chairman Veloso had
in mind were government-owned and controlled corporations incorporated under the general
corporation law. This is so because only workers in private corporations and government-owned
and controlled corporations, incorporated under the general corporation law, have the right to
bargain (collectively). Those in government corporations with special charter, which are subject
to Civil Service Laws, have no right to bargain (collectively), except where the terms and
conditions of employment are not fixed by law. Their rights and duties are not comparable with
those in the private sector. (Emphasis supplied.)
xxxxxxxxx
The legislative intent to place only government-owned and controlled corporations performing
proprietary functions under the coverage of RA 6971 is gleanable from the other provisions of
the law. For instance, section 2 of said law envisions industrial peace and harmony and to
provide corresponding incentives to both labor and capital; section 4 refers to representatives of
labor and management, section 5 mentions of collective bargaining agent(s) of the bargaining
unit(s); section 6 relates to existing collective bargaining agreements, and labor and
management; section 7 speaks of strike or lockout; and section 9 purports to seek the assistance
of the National Conciliation and Mediation Board of the Department of Labor and Employment
and include the name(s) of the voluntary arbitrator or panel of voluntary arbitrators. All the
aforecited provisions of law apply only to private corporations and government-owned and
controlled corporations organized under the general corporation law. Only they have
collective bargaining agents, collective bargaining units, collective bargaining agreements, and
the right to strike or lockout. (Emphasis supplied.)
To repeat, employees of government corporations created by special charters have neither the
right to strike nor the right to bargain collectively, as defined in the Labor Code. The case
of Social Security System Employees Association indicates the following remedy of government
workers not allowed to strike or bargain collectively, to wit:
Government employees may, therefore, through their unions or associations, either petition the
Congress for the betterment of the terms and conditions of employment which are within the
ambit of legislation or negotiate with the appropriate government agencies for the improvement
of those which are not fixed by law. If there be any unresolved grievances, the dispute may be
referred to the Public Sector Labor-Management Council for appropriate action. But employees
in the civil service may not resort to strikes, walkouts and other temporary work stoppages, like
workers in the private sector, to pressure the Government to accede to their demands. (supra,
footnote 14, p. 698; italics ours)
It is a rule in statutory construction that every part of the statute must be interpreted with
reference to the context, i.e., that every part of the statute must be considered together with the
other parts, and kept subservient to the general intent of the whole enactment. The provisions of
RA 6971, taken together, reveal the legislative intent to include only government-owned and
controlled corporations performing proprietary functions within its coverage.
Petitioner is a government-owned and controlled corporation performing proprietary

functions with original charter or created by special law, specifically Presidential Decree (PD)
No. 1752,[11] amending PD No. 1530. As such, petitioner HDMF is covered by the Civil Service
pursuant to Article IX, Section 2(1)[12] of the 1987 Constitution, and, therefore, excluded from
the coverage of Republic Act No. 6971.
Since Republic Act No. 6971 intended to cover only government-owned and controlled
corporations incorporated under the general corporation law, the power of administrative
officials to promulgate rules in the implementation of the statute is necessarily limited to what is
intended and provided for in the legislative enactment.[13] Hence, the Supplemental Rules
clarified that government-owned and controlled corporations performing proprietary functions
which are created, maintained or acquired in pursuance of a policy of the state, enunciated in the
constitution or by law, and those whose officers and employees are covered by the Civil Service
are excluded from the coverage of Republic Act No. 6971.
Therefore, even if petitioner HDMF granted the Productivity Incentive Bonus before the
Supplemental Rules were issued clarifying that petitioner was excluded from the coverage of
Republic Act No. 6971, the employees of HDMF did not acquire a vested right over said bonus
because they were not entitled to it under Republic Act No. 6971.
Moreover, the DBM advised petitioner herein, HDMF, on August 26, 1991, to defer
payment of the productivity incentive bonus to their employees, pending the issuance of a
definite ruling by the Office of the President on the matter. Despite said advice, the Board of
Trustees of HDMF opted to grant the said bonus on a voluntary basis as stated in its Resolution
No. 91-549, Series of 1991.[14] It expressed its concern over the welfare of the officers and
employees of the Fund rather than adhering to the stringent technicality of the law. The Board,
therefore, was aware that possibly HDMF may not be covered by Republic Act No. 6971. It
should have exercised prudence by awaiting the definite ruling on the coverage to prevent legal
problems.
Regarding the validity of the Supplemental Rules Implementing Republic Act No.
6971, ADEPT v. Commission on Audit held that said rules issued by the Secretary of Labor and
Employment and the Secretary of Finance were in accord with the intendment and provisions of
Republic Act No. 6971.[15]
Petitioner further claims that it is covered by a memorandum,[16] dated January 16, 1992,
which was allegedly issued by Secretary Jesus P. Estanislao, Department of Finance, stating that
[a]s authorized by the President, the GFIs are to pay the traditional PIA at the year-end 1991,
following the standard formulas that have been observed by the GFIs over the years. Petitioner
raises as an issue whether or not said memorandum constitutes appropriate authorization for its
grant of productivity incentive allowance for 1991.
Parenthetically, the decision of the Commission on Audit subject of the petition herein,
never discussed the aforesaid memorandum. The same, in any case, cannot prevail over the law.
Petitioner finally asserts that its payment of the productivity incentive bonus to its personnel
and the latters acceptance of the same was in good faith and cites ADEPT v. Commission on
Audit as precedent against a refund of said bonus.
In ADEPT v. Commission on Audit, docketed as G.R. No. 119597, the Court sustained the
decision of the Commission on Audit affirming the disallowance by the Corporate Auditor of the
productivity incentive bonus granted to ADEPT (an association of employees of the Philippine
Tourism Authority) for calendar year 1992 pursuant to Republic Act No. 6971. ADEPT v.
Commission on Audit was consolidated with four other cases, which did not involve the
application of Republic Act No. 6971. It was in the other cases, docketed as G.R. Nos. 109406,
110642, 111494 and 112056, that the Court enjoined further deductions from the salaries and
allowances of petitioners therein.
In view of the foregoing, the respondent Commission on Audit did not commit grave abuse
of discretion amounting to lack of jurisdiction in affirming the audit disallowance.
WHEREFORE, the petition is DISMISSED. Respondent Commission on Audits
Resolution No. 2000-086, dated March 7, 2000, which affirmed COA Decision No. 98-245,
dated June 16, 1998, is hereby AFFIRMED.
Costs de oficio.
SO ORDERED.
10. [G.R. No. 131248. December 11, 1998]
DUNLOP SLAZENGER (PHILS.), INC., petitioner, vs. HON. SECRETARY OF LABOR

AND EMPLOYMENT and DUNLOP SLAZENGER STAFF ASSOCIATION -
APSOTEU, respondents.
DECISION
PUNO, J.:
In this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner
seeks the annulment of the Resolution and Order, dated July 19, 1997 and October 16, 1997,[1] of
the public respondent Secretary of Labor and Employment calling for a certification election in
its company.
It appears that on September 15, 1995, the respondent union filed a Petition for Certification
Election among the supervisory, office and technical employees of the petitioner company before
the Department of Labor and Employment, Regional Office No. III, San Fernando, Pampanga. It
alleged that it is a legitimate labor organization, a duly chartered local of the Associated
Professional, Supervisory, Office & Technical Employees Union (APSOTEU); that petitioner is
a domestic corporation engaged in the manufacture of tennis balls and other allied products; that
petitioner is an unorganized establishment and there is no certified bargaining agreement that
will bar the filing of its petition for certification election; and that no certification election has
been conducted within one (1) year prior to the filing of its petition for certification election.
On October 9, 1995, the petitioner company filed its Answer with Motion to Dismiss based
on three (3) grounds, namely: (1) that the respondent union is comprised of supervisory and
rank-and-file employees and cannot act as bargaining agent for the proposed unit; (2) that a
single certification election cannot be conducted jointly among supervisory and rank-and-file
employees; and (3) that the respondent union lacks legal standing since it failed to submit its
books of accounts.[2]
In its Reply filed on December 5, 1995, the respondent union alleged that its members are
supervisors and not rank-and-file employees. It averred that all its members are paid monthly by
the petitioner company. It alleged that the bargaining unit it seeks to represent is made up of the
monthly paid supervisory employees and other personnel who cannot be classified as belonging
to the rank-and-file. It further contended that it has no obligation to attach its books of accounts
since it is a legitimate labor organization. It urged that the certification election proceeding
cannot be used to question the legal personality of a labor organization.[3] On March 4, 1996,
however, respondent union submitted its new books of accounts consisting of the Cash Receipts
Journal, Cash Disbursements Journal and two (2) ledgers.[4]
On July 15, 1996, Mediator Arbiter Ma. Carmen A. Espinosa granted the petition for
certification election. Respondent Secretary of Labor and Employment affirmed the Arbiter's
decision ruling as follows:
"x x x
"The order of the Med-Arbiter directing the conduct of a certification elections is well and
proper.
"A perusal of the records shows that the bargaining unit that the petitioner seeks to represent has
been properly defined and this is composed of all the supervisory employees of the respondent
company. We wish to emphasize that the right of supervisory employees to form their own labor
organization separate from that of the rank-and-file union has been recognized by law. This is
quite clear from the provisions of Article 245 of the Labor Code, as amended, which states:
`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.'
"As to the contention of the respondent that the petitioning union is composed of both
supervisory and rank and file employees, suffice it to stress that the same is not a sufficient
reason that would warrant the dismissal of the present petition. The same can be taken care (sic)
of during the pre-election conference thru the exclusion-inclusion proceedings wherein those
employees who are occupying rank and file positions will be excluded from the list of eligible
voters.
"Anent the issue on the legitimacy of the petitioner, we agree with the findings of the Med-
Arbiter that the petitioner has acquired the requisite legal personality to file the present petition
for certification elections. This is shown by the fact that the petitioner has sufficiently complied
with the mandatory reportorial requirements provided for under Section 3, Rule II, Book V of the
Rules and Regulations Implementing the Labor Code, as amended and as enunciated by the
Supreme Court in the cases of Progressive Development Corporation vs. Secretary of Labor, et
al., 205 SCRA 802 and Protection Technology Inc. vs. Secretary of Labor, G.R. 11711, March 1,
1995."[5]
Respondent Secretary of Labor denied petitioner's motion for reconsideration; hence, this
petition.
It is petitioner's submission that:
"I
"Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or
excess of jurisdiction in holding that the respondent union is composed of all the supervisory
employees of the [petitioner] company.
"II
"Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or
excess of jurisdiction in finding that even if the respondent union is composed of both
supervisory and rank-and-file employees such can be taken cared of during the pre-election
conference thru the exclusion-inclusion proceedings.
"III
"Respondent Secretary acted contrary to law and with grave abuse of discretion amounting to
lack or excess of jurisdiction in upholding the findings of the Med-Arbiter that the respondent
union has complied with all the requirements for it to attain the legal personality to file the
petition for certification election."[6]
The petition is meritorious.

We agree with the public respondent that supervisors can be an appropriate bargaining
unit. This is in accord with our repeated ruling that "[a]n appropriate bargaining unit is a group
of employees of a given 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. Otherwise stated, it is a legal collectivity for collective 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. A unit to be
appropriate must effect a grouping of employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects of collective bargaining."[7]
The critical issue, however, is whether or not the respondent union can file a petition for
certification election to represent the supervisory employees of the petitioner company. The
resolution of this issue depends on whether the respondent union is composed solely of
supervisory employees or of both supervisory and rank-and-file employees. Article 245 of the
Labor Code clearly provides that "supervisory employees shall not be eligible for membership in
a labor organization of the rank-and-file employees x x x."
To determine who are supervisory and rank-and-file employees reference has to be made to
Article 212 (m) of the Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the
Omnibus Rules Implementing the Labor Code, as amended, viz:
'''Managerial employee is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or
discipline employees. Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of this Book [these Rules].'"
Determining the status of supervisory and rank-and-file employees is not a hard row to hoe
in labor law. The test of supervisory status as we have repeatedly ruled is whether an employee
possesses authority to act in the interest of his employer, which authority should not be merely
routinary or clerical in nature but requires the use of independent judgment. Corrollarily, what
determines the nature ofemployment is not the employee's title, but his job description.[8]
In the instant case, the list of monthly paid employees submitted by the petitioner company
contains the names of about twenty seven (27) supervisory employees, six (6) managerial
employees, one (1) confidential employee and twenty six (26) office and technical employees
holding various positions. The list reveals that the positions occupied by the twenty six (26)
office and technical employees are in fact rank-and-file positions, i.e., A/C mechanic,
draftsmen, storemen, motorpool mechanic, secretaries, accounts clerk, company nurses,
industrial mechanic, boiler men, laboratory technicians, payroll clerk, welder, purchasing
clerk, company drivers and electricians. It is fairly obvious that these positions cannot be
considered as supervisory positions for they do not carry the authority to act in the interest of the
employer or to recommend managerial actions. It is not decisive that these employees are
monthly paid employees. Their mode of compensation is usually a matter of convenience and
does not necessarily determine the nature and character of their job.
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity
in the membership of the respondent union can be remedied in "the pre-election conference thru
the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file
positions will be excluded from the list of eligible voters." Public respondent gravely
misappreciates the basic antipathy between the interest of supervisors and the interest of rank-
and-file employees. Due to the irreconcilability of their interests we held in Toyota Motor
Philippines v. Toyota Motors Philippines Corporation Labor Union,[9] viz:
"x x x
"Clearly, based on this provision [Article 245, Labor Code], 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."
Needless to stress, the respondent union has no legal right to file a certification election to
represent a bargaining unit composed of supervisors for so long as it counts rank-and-file
employees among its members.
IN VIEW WHEREOF, the Resolution and Order dated July 19, 1997 and October 16,
1997, in OS-A-10-171-96 of the public respondent are annulled and set aside. No costs.
SO ORDERED.

Labrel 1-10

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Labrel 1-10

Uploaded by

Copyright:

Available Formats

1.

[G. R. No.101738. April 12, 2000]

PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON.

DE LEON, JR., J.: Miso

The facts of the case are the following:

Hence, this petition.

PICOP anchors its petition on two (2) grounds, to wit: Maniks

THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA,

THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA,

TUNAY NA PAGKAKAISA NG G.R. No. 162025

CARPIO MORALES, J.,

ASIA BREWERY, INC., Promulgated:

VILLARAMA, JR., J.:

The facts are:

Section 1. Recognition. The COMPANY recognizes the UNION as the

Section 2. Bargaining Unit. The bargaining unit shall be comprised of all

On appeal, the CA reversed the Voluntary Arbitrator, ruling that:

WHEREFORE, foregoing premises considered, the questioned decision of

b) the 81 employees cannot validly become members of

c) petitioner has not committed any act that restrained or tended to

BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification

The petition is anchored on the following grounds:

1. Angeles, Cristina C. Transportation Mr. Melito K. Tan

1. Abalos, Andrea A. Materials Mr. Andres G. Co

1. Laloon, Daisy S. Brewhouse Mr. William Tan

1. Arabit, Myrna F. Bottling Production Mr. Julius Palmares

1. Bordamonte, Rhumela D. Bottled Water Mr. Faustino Tetonche

1. Alcoran, Simeon A. Full Goods Mr. Tsoi Wah Tung

1. Magbag, Ma. Corazon C. Tank Farm/ Mr. Manuel Yu Liat

1. Capiroso, Francisca A. Quality Assurance Ms. Regina Mirasol

1. Alconaba, Elvira C. Engineering Mr. Clemente Wong

1. Alvarez, Ma. Luningning L. GP Administration Ms. Susan Bella

G.R. No. 78755 July 19, 1989

GOLDEN FARMS, INC., petitioner,

J. V. Yap Law Office for petitioner.

Beethoven L. Orcullo for private respondent.

SO ORDERED. (p. 29, Rollo)

After taking into consideration the functions exercised by the foremen as

3. That with respect to those employees holding confidential positions, it is a

I HAS A MED-ARBITER THE POWER OR AUTHORITY TO

II MAY SUPERVISORS, CASHIERS, FOREMEN, AND

The petition merits Our consideration.

(p. 41, Rollo)

G.R. No. 88957 June 25, 1992

PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner,

DAVIDE, JR., J.:

PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic

In view of the foregoing, a decision is hereby rendered, ordering the respondent to

PEO-FFW appealed from the decision to the NLRC.

WHEREFORE, the foregoing premises considered, the appealed decision of the

. . . all workers, except managerial employees and security personnel, are

It further ruled that:

THE NLRC COMMITTED ABUSE OF DISCRETION AMOUNTING TO

THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING

SERVICE ENGINEERS SERVICE

Qualifications Professional Employees High School/

The petition is impressed with merit.

Art. 245. Ineligibility of security personnel to join any labor organization. —

and substituted it with the following provision:

Art. 245. Right of employees in the public service. — 10

xxx xxx xxx

. . . Notwithstanding the different theories propounded by the different schools of

5. Republic of the Philippines