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Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 96189 July 14, 1992

The case 3 was initiated in the Bureau of Labor Relations by a


petition filed on March 2, 1990 by a registered labor union, the
"Organization
of
Non-Academic
Personnel
of
UP"
4
(ONAPUP). Claiming to have a membership of 3,236 members
comprising more than 33% of the 9,617 persons constituting the
non-academic personnel of UP-Diliman, Los Baos, Manila, and
Visayas, it sought the holding of a certification election among all
said non-academic employees of the University of the Philippines.
At a conference thereafter held on March 22, 1990 in the Bureau,
the University stated that it had no objection to the election.

UNIVERSITY OF THE PHILIPPINES, petitioner,

vs.

HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor


Relations, Department of Labor and Employment, and THE ALL
U.P. WORKERS' UNION, represented by its President, Rosario del
Rosario,respondent.

NARVASA, C.J.:
In this special civil action of certiorari the University of the
Philippines seeks the nullification of the Order dated October 30,
1990 of Director Pura Ferrer-Calleja of the Bureau of Labor
Relations holding that "professors, associate professors and
assistant professors (of the University of the Philippines) are . .
rank-and-file employees . . ;" consequently, they should, together
with the so-called non-academic, non-teaching, and all other
employees of the University, be represented by only one labor
organization. 1 The University is joined in this undertaking by the
Solicitor General who "has taken a position not contrary to that of
petitioner and, in fact, has manifested . . that he is not opposing
the petition . . ." 2

On April 18, 1990, another registered labor union, the "All UP


Workers' Union," 5 filed a comment, as intervenor in the
certification election proceeding. Alleging that its membership
covers both academic and non-academic personnel, and that it
aims to unite all UP rank-and-file employees in one union, it
declared its assent to the holding of the election provided the
appropriate organizational unit was first clearly defined. It
observed in this connection that the Research, Extension and
Professional Staff (REPS), who are academic non-teaching
personnel, should not be deemed part of the organizational unit.
For its part, the University, through its General Counsel, 6 made of
record its view that there should be two (2) unions: one for
academic, the other for non-academic or administrative,
personnel considering the dichotomy of interests, conditions and
rules governing these employee groups.
Director Calleja ruled on the matter on August 7, 1990. 7 She
declared that "the appropriate organizational unit . . should
embrace all the regular rank-and-file employees, teaching and
non-teaching, of the University of the Philippines, including all its
branches" and that there was no sufficient evidence "to justify
the grouping of the non-academic or administrative personnel
into an organization unit apart and distinct from that of the
academic or teaching personnel." Director Calleja adverted to
Section 9 of Executive Order No. 180, viz.:

Sec. 9. The appropriate organizational unit shall


be the employer unit consisting of rank-and-file
employees, unless circumstances otherwise
require.
and Section 1, Rule IV of the Rules Implementing said EO
180 (as amended by SEC. 2, Resolution of Public Sector
Labor Management Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate
organizational unit may refer to:

At the pre-election conference held on March 22, 1990 at the


Labor Organizational Division of the DOLE, 8 the University
sought further clarification of the coverage of the term, "rankand-file" personnel, asserting that not every employee could
properly be embraced within both teaching and non-teaching
categories since there are those whose positions are in truth
managerial and policy-determining, and hence, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed
a Manifestation seeking the exclusion from the organizational
unit of those employees holding supervisory positions among
non-academic personnel, and those in teaching staff with the rank
of Assistant Professor or higher, submitting the following as
grounds therefor:

xxx xxx xxx


d. State universities or colleges, governmentowned or controlled corporations with original
charters.

1) Certain "high-level employees" with policy-making, managerial,


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

She went on to say that the general intent of EO 180 was


"not to fragmentize the employer unit, as "can be gleaned
from the definition of the term "accredited employees'
organization," which refers to:

Sec. 3. High-level employees whose functions are


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

. . a registered organization of the rank-and-file


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

2) In the University hierarchy, not all teaching and non-teaching


personnel belong the rank-and file: just as there are those
occupying managerial positions within the non-teaching roster,
there is also a dichotomy between various levels of the teaching
or academic staff;

The Director thus commanded that a certification election be


"conducted among rank-and-file employees, teaching and nonteaching" in all four autonomous campuses of the UP, and that
management appear and bring copies of the corresponding
payrolls for January, June, and July, 1990 at the "usual preelection conference . . ."

3) Among the non-teaching employees composed of


Administrative Staff and Research personnel, only those holding
positions below Grade 18 should be regarded as rank-and-file,
considering that those holding higher grade positions, like Chiefs
of Sections, perform supervisory functions including that of

effectively recommending termination of appointments or


initiating appointments and promotions; and
4) Not all teaching personnel may be deemed included in the
term, "rank-and-file;" only those holding appointments at the
instructor level may be so considered, because those holding
appointments from Assistant Professor to Associate Professor to
full Professor take part, as members of the University Council, a
policy-making body, in the initiation of policies and rules with
respect to faculty tenure and promotion. 9
The ONAPUP quite categorically made of record its position; that
it was not opposing the University's proferred classification of
rank-and file employees. On the other hand, the "All UP Workers'
Union" opposed the University's view, in a Position Paper
presented by it under date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated
October 30, 1990, resolving the "sole issue" of "whether or not
professors, associate professors and assistant professors are
included in the definition of high-level employee(s)" in light of
Rule I, Section (1) of the Implementing Guidelines of Executive
Order No. 180, defining "high level employee" as follows:
1. High Level Employee is one whose functions
are normally considered policy determining,
managerial or one whose duties are highly
confidential in nature. A managerial function
refers to the exercise of powers such as:
1. To effectively recommend such
managerial actions;
2. To formulate or execute
management
policies
and
decisions; or

3. To hire, transfer, suspend, layoff, recall, dismiss, assign or


discipline employees.
The Director adjudged that said teachers are rank-and-file
employees "qualified to join unions and vote in certification
elections." According to her
A careful perusal of the University Code . . shows
that the policy-making powers of the Council are
limited to academic matters, namely, prescribing
courses of study and rules of discipline, fixing
student admission and graduation requirements,
recommending to the Board of Regents the
conferment of degrees, and disciplinary power
over students. The policy-determining functions
contemplated in the definition of a high-level
employee pertain to managerial, executive, or
organization policies, such as hiring, firing, and
disciplining
of
employees,
salaries,
teaching/working hours, other monetary and nonmonetary benefits, and other terms and
conditions of employment. They are the usual
issues in collective bargaining negotiations so that
whoever wields these powers would be placed in
a situation of conflicting interests if he were
allowed to join the union of rank-and-file
employees.
The University seasonably moved for reconsideration, seeking to
make the following points, to wit:
1) UP professors do "wield the most potent managerial powers:
the power to rule on tenure, on the creation of new programs
and new jobs, and conversely, the abolition of old programs and
the attendant re-assignment of employees.

2) To say that the Council is "limited to (acting on) academic


matters" is error, since academic decisions "are the most
important decisions made in a University . . (being, as it were) the
heart, the core of the University as a workplace.
3) Considering that the law regards as a "high level" employee,
one who performs either policy-determining, managerial, or
confidential functions, the Director erred in applying only the
"managerial functions" test, ignoring the "policy-determining
functions" test.
4) The Director's interpretation of the law would lead to absurd
results, e.g.: "an administrative officer of the College of Law is a
high level employee, while a full Professor who has published
several treatises and who has distinguished himself in argument
before the Supreme Court is a mere rank-and-file employee. A
dormitory manager is classified as a high level employee, while a
full Professor or Political Science with a Ph. D. and several
Honorary doctorates is classified as rank-and-file." 10
The motion for reconsideration was denied by Director Calleja, by
Order dated November 20, 1990.
The University would now have this Court declare void the
Director's Order of October 30, 1990 as well as that of November
20, 1990. 11 A temporary restraining order was issued by the Court,
by Resolution dated December 5, 1990 conformably to the
University's application therefor.
Two issues arise from these undisputed facts. One is whether or
not professors, associate professors and assistant professors are
"high-level employees" "whose functions are normally considered
policy determining, managerial or . . highly confidential in nature."
The other is whether or not, they, and other employees
performing academic functions, 12 should comprise a collective
bargaining unit distinct and different from that consisting of the
non-academic employees of the University, 13 considering the

dichotomy of interests, conditions and rules existing between


them.
As regards the first issue, the Court is satisfied that it has been
correctly resolved by the respondent Director of Bureau
Relations. In light of Executive Order No. 180 and its
implementing rules, as well as the University's charter and
relevant regulations, the professors, associate professors and
assistant professors (hereafter simply referred to as professors)
cannot be considered as exercising such managerial or highly
confidential functions as would justify their being categorized as
"high-level employees" of the institution.
The Academic Personnel Committees, through which the
professors supposedly exercise managerial functions, were
constituted "in order to foster greater involvement of the faculty
and other academic personnel in appointments, promotions, and
other personnel matters that directly affect them." 14 Academic
Personnel Committees at the departmental and college levels
were organized "consistent with, and demonstrative of the very
idea of consulting the faculty and other academic personnel on
matters directly affecting them" and to allow "flexibility in the
determination of guidelines peculiar to a particular department or
college." 15
Personnel actions affecting the faculty and other academic
personnel should, however, "be considered under uniform
guidelines and consistent with the Resolution of the Board (of
Regents) adopted during its 789th Meeting (11-26-69) creating the
University Academic Personnel Board." 16 Thus, the Departmental
Academic Personnel Committee is given the function of
"assist(ing) in the review of the recommendations initiated by the
Department Chairman with regard to recruitment, selection,
performance evaluation, tenure and staff development, in
accordance with the general guidelines formulated by the
University Academic Personnel Board and the implementing
details laid down by the College Academic Personnel

Committee;" 17 while the College Academic Personnel Committee


is entrusted with the following functions: 18
1. Assist the Dean in setting up the details for the
implementation of policies, rules, standards or
general guidelines as formulated by the University
Academic Personnel Board;
2. Review the recommendation submitted by the
DAPCs with regard to recruitment, selection,
performance
evaluation,
tenure,
staff
development, and promotion of the faculty and
other academic personnel of the College;
3. Establish departmental priorities in
allocation of available funds for promotion;

the

4. Act on cases of disagreement between the


Chairman and the members of the DAPC
particularly on personnel matters covered by this
Order;
5. Act on complaints and/or protests against
personnel actions made by the Department
Chairman and/or the DAPC.
The University Academic Personnel Board, on the other hand,
performs the following functions: 19
1. Assist the Chancellor in the review of the
recommendations of the CAPC'S.
2. Act on cases of disagreement between the
Dean and the CAPC.
3. Formulate policies, rules, and standards with
respect to the selection, compensation, and
promotion of members of the academic staff.

4. Assist the Chancellor in the review of


recommendations on academic promotions and
on other matters affecting faculty status and
welfare.
From the foregoing, it is evident that it is the University Academic
Personnel Committee, composed of deans, the assistant for
academic affairs and the chief of personnel, which formulates the
policies, rules and standards respecting selection, compensation
and promotion of members of the academic staff. The
departmental and college academic personnel committees'
functions are purely recommendatory in nature, subject to review
and evaluation by the University Academic Personnel Board.
In Franklin Baker Company of the Philippines vs. Trajano,20 this
Court reiterated the principle laid down in National Merchandising
Corp. vs. Court of Industrial Relations, 21 that the power to
recommend, in order to qualify an employee as a supervisor or
managerial employee "must not only be effective but the exercise
of such authority should not be merely of a routinary or clerical
nature but should require the use of independent judgment."
Where such recommendatory powers, as in the case at bar, are
subject to evaluation, review and final action by the department
heads and other higher executives of the company, the same,
although present, are not effective and not an exercise of
independent judgment as required by law.
Significantly, the personnel actions that may be recommended by
the departmental and college academic personnel committees
must conform with the general guidelines drawn up by the
university personnel academic committee. This being the case,
the members of the departmental and college academic
personnel committees are not unlike the chiefs of divisions and
sections of the National Waterworks and Sewerage Authority
whom this Court considered as rank-and-file employees
in National Waterworks & Sewerage Authority vs. NWSA
Consolidated Unions, 22 because "given ready policies to execute
and standard practices to observe for their execution, . . . they

have little freedom of action, as their main function is merely to


carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to
effectively recommend such managerial actions, to formulate or
execute management policies or decisions and/or to hire,
transfer, suspend, lay-off, recall, dismiss, assign or discipline
employees" 23 is exercised to a certain degree by the university
academic personnel board/committees and ultimately by the
Board of Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the
President of the University, professors,
instructors, lecturers and other employees of the
University; to fix their compensation, hours of
service, and such other duties and conditions as it
may deem proper; to grant them in its discretion
leave of absence under such regulations as it may
promulgate, any other provision of law to the
contrary notwithstanding, and to remove them
for cause after investigation and hearing shall
have been had.
Another factor that militates against petitioner's espousal of
managerial employment status for all its professors through
membership in the departmental and college academic personnel
committees is that not all professors are members thereof.
Membership and the number of members in the committees are
provided as follows: 25
Sec. 2. Membership in Committees. Membership
in committees may be made either through
appointment, election, or by some other means as
may be determined by the faculty and other
academic personnel of a particular department or
college.

Sec. 3. Number of Members. In addition to the


Chairman, in the case of a department, and the
Dean in the case of a college, there shall be such
number of members representing the faculty and
academic personnel as will afford a fairly
representative, deliberative and manageable
group that can handle evaluation of personnel
actions.
Neither can membership in the University Council elevate the
professors to the status of high-level employees. Section 6 (f) and
9 of the UP Charter respectively provide: 26
Sec. 6. The Board of Regents shall have the
following powers and duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of
discipline drawn up by the University Council as
hereinafter provided; . . .
Sec. 9. There shall be a University Council
consisting of the President of the University and
of all instructors in the university holding the rank
of professor, associate professor, or assistant
professor. The Council shall have the power to
prescribe the courses of study and rules of
discipline, subject to the approval of the Board of
Regents. It shall fix the requirements for admission
to any college of the university, as well as for
graduation and the receiving of a degree. The
Council alone shall have the power to recommend
students or others to be recipients of degrees.
Through its president or committees, it shall have
disciplinary power over the students within the
limits prescribed by the rules of discipline approved
by the Board of Regents. The powers and duties of

the President of the University, in addition to


those specifically provided in this Act shall be
those usually pertaining to the office of president
of a university.
It is readily apparent that the policy-determining functions of the
University Council are subject to review, evaluation and final
approval by the Board of Regents. The Council's power of
discipline is likewise circumscribed by the limits imposed by the
Board of Regents. What has been said about the
recommendatory powers of the departmental and college
academic personnel committees applies with equal force to the
alleged policy-determining functions of the University Council.
Even assuming arguendo that UP professors discharge policydetermining functions through the University Council, still such
exercise would not qualify them as high-level employees within
the context of E.O. 180. As correctly observed by private
respondent, "Executive Order No. 180 is a law concerning public
sector unionism. It must therefore be construed within that
context. Within that context, the University of the Philippines
represents the government as an employer. 'Policy-determining'
refers to policy-determination in university mattes that affect
those same matters that may be the subject of negotiation
between public sector management and labor. The reason why
'policy-determining' has been laid down as a test in segregating
rank-and-file from management is to ensure that those who lay
down policies in areas that are still negotiable in public sector
collective bargaining do not themselves become part of those
employees who seek to change these policies for their collective
welfare." 27
The policy-determining functions of the University Council refer to
academic matters, i.e. those governing the relationship between
the University and its students, and not the University as an
employer and the professors as employees. It is thus evident that
no conflict of interest results in the professors being members of

the University Council and being classified as rank-and-file


employees.
Be that as it may, does it follow, as public respondent would
propose, that all rank-and-file employees of the university are to
be organized into a single collective bargaining unit?
A "bargaining unit" has been defined as a group of employees of
a given employer, comprised of all or less than all of the entire
body of employees, which the collective interest of all the
employees, consistent with equity to the employer, indicate to be
the best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law. 28
Our labor laws do not however provide the criteria for
determining the proper collective bargaining unit. Section 12 of
the old law, Republic Act No. 875 otherwise known as the
Industrial Peace Act, simply reads as follows: 29
Sec.
12.
Exclusive
Collective
Bargaining
Representation for Labor Organizations. The
labor organization designated or selected for the
purpose of collective bargaining by the majority of
the employees in an appropriate collective
bargaining unit shall be the exclusive
representative of all the employees in such unit
for the purpose of collective bargaining in respect
to rates of pay, wages, hours of employment, or
other conditions of employment; Provided, That
any individual employee or group of employees
shall have the right at any time to present
grievances to their employer.
Although said Section 12 of the Industrial Peace Act was
subsequently incorporated into the Labor Code with minor
changes, no guidelines were included in said Code for
determination of an appropriate bargaining unit in a given
case. 30 Thus, apart from the single descriptive word

"appropriate," no specific guide for determining the proper


collective bargaining unit can be found in the statutes.
Even Executive Order No. 180 already adverted to is not much
help. All it says, in its Section 9, is that "(t)he appropriate
organizational unit shall be the employer unit consisting of rankand-file employees, unless circumstances otherwise require."
Case law fortunately furnishes some guidelines.
When first confronted with the task of determining the proper
collective bargaining unit in a particular controversy, the Court
had perforce to rely on American jurisprudence. In Democratic
Labor Association vs. Cebu Stevedoring Company, Inc., decided on
February 28, 1958, 31 the Court observed that "the issue of how to
determine the proper collective bargaining unit and what unit
would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American
precedents on the matter abound . . (to which resort may be had)
considering that our present Magna Carta has been patterned
after the American law on the subject." Said the Court:
. . . Under these precedents, there are various
factors which must be satisfied and considered in
determining the proper constituency of a
bargaining unit. No one particular factor is itself
decisive of the determination. The weight
accorded to any particular factor varies in
accordance with the particular question or
questions that may arise in a given case. What are
these factors? Rothenberg mentions a good
number, but the most pertinent to our case are:
(1) will of the employees (Globe Doctrine); (2)
affinity and unit of employees' interest, such as
substantial similarity of work and duties, or
similarity of compensation and working
conditions; (3) prior collective bargaining history;
and (4) employment status, such as temporary,
seasonal probationary employees. . . .

xxx xxx xxx


An enlightening appraisal of the problem of
defining an appropriate bargaining unit is given in
the 10th Annual Report of the National Labor
Relations Board wherein it is emphasized that the
factors which said board may consider and weigh
in fixing appropriate units are: the history, extent
and type of organization of employees; the
history of their collective bargaining; the history,
extent and type of organization of employees in
other plants of the same employer, or other
employers in the same industry; the skill, wages,
work, and working conditions of the employees;
the desires of the employees; the eligibility of the
employees for membership in the union or unions
involved; and the relationship between the unit or
units proposed and the employer's organization,
management, and operation. . . .
. . In said report, it is likewise emphasized that the
basic test in determining the appropriate
bargaining unit is that a unit, to be appropriate,
must affect a grouping of employees who have
substantial, mutual interests in wages, hours,
working conditions and other subjects of
collective bargaining (citing Smith on Labor Laws,
316-317; Francisco, Labor Laws, 162). . . .
The Court further explained that "(t)he test of the grouping is
community or mutuality of interests. And this is so because 'the
basic test of an asserted bargaining unit's acceptability is whether
or not it is fundamentally the combination which will best assure
to all employees the exercise of their collective bargaining rights'
(Rothenberg on Labor Relations, 490)." Hence, in that case, the
Court upheld the trial court's conclusion that two separate
bargaining units should be formed, one consisting of regular and

permanent employees and another consisting of casual laborers


or stevedores.

enough to warrant the formation of a separate


bargaining unit.

Since then, the "community or mutuality of interests" test has


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

In the case at bar, the University employees may, as already


suggested, quite easily be categorized into two general
classes: one, the group composed of employees whose functions
are non-academic, i.e., janitors, messengers, typists, clerks,
receptionists,
carpenters,
electricians,
grounds-keepers,
chauffeurs, mechanics, plumbers; 32 and two, the group made up
of those performing academic functions, i.e., full professors,
associate professors, assistant professors, instructors who
may be judges or government executives and research,
extension and professorial staff. 33 Not much reflection is needed
to perceive that the community or mutuality of interests which
justifies the formation of a single collective bargaining unit is
wanting between the academic and non-academic personnel of
the university. It would seem obvious that teachers would find
very little in common with the University clerks and other nonacademic employees as regards responsibilities and functions,
working conditions, compensation rates, social life and interests,
skills and intellectual pursuits, cultural activities, etc. On the
contrary, the dichotomy of interests, the dissimilarity in the
nature of the work and duties as well as in the compensation and
working conditions of the academic and non-academic personnel
dictate the separation of these two categories of employees for
purposes of collective bargaining. The formation of two separate
bargaining units, the first consisting of the rank-and-file nonacademic personnel, and the second, of the rank-and-file
academic employees, is the set-up that will best assure to all the
employees the exercise of their collective bargaining rights. These
special circumstances, i.e., the dichotomy of interests and
concerns as well as the dissimilarity in the nature and conditions
of work, wages and compensation between the academic and
non-academic personnel, bring the case at bar within the
exception contemplated in Section 9 of Executive Order No. 180.
It was grave abuse of discretion on the part of the Labor
Relations Director to have ruled otherwise, ignoring plain and
patent realities.

Applying the same "community or mutuality of interests" test,


but resulting in the formation of only one collective bargaining
units is the case of National Association of Free Trade Unions vs.
Mainit Lumber Development Company Workers Union-United
Lumber and General Workers of the Phils., G.R. No. 79526,
December 21, 1990, 192 SCRA 598. In said case, the Court ordered
the formation of a single bargaining unit consisting of the Sawmill
Division in Butuan City and the Logging Division in Zapanta Valley,
Kitcharao, Agusan Norte of the Mainit Lumber Development
Company. The Court reasoned:
Certainly, there is a mutuality of interest among
the employees of the Sawmill Division and the
Logging Division. Their functions mesh with one
another. One group needs the other in the same
way that the company needs them both. There
may be difference as to the nature of their
individual assignments but the distinctions are not

WHEREFORE, the assailed Order of October 30, 1990 is hereby


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

5 Registered on April 8, 1988 per Registration


Certificate No. 048
6 Mr. Demaree Raval.
7 Rollo, pp. 26-31.
8 Presided over by Atty. Johnny Garcia.
9 In the University Charter, (ACT 1870), as
amended, and Chapter 2 (Secs. 1 and 2) of the
University Code, the composition and functions of
the University Council are spelled out insofar as
the policy-determining functions of its members
are concerned, and this was reiterated in a
Resolution of the UP Board of Regents during its
828th Meeting held on Dec. 21, 1972.

Padilla, Regalado and Nocon, JJ., concur.


Paras, J., Retired.

Footnotes
1 A subsequent Order, dated November 20, 1990,
denied reconsideration of the Order of October
30, 1990; SEE footnote 11, infra.
2 Rollo, pp. 105 (Manifestation and Motion), and
222 (Compliance)
3 Docketed as BLR No. 3-08-90.
4 Registered in accordance with Executive Order
No. 180 as evidenced by Registration Certificate
No. 038 dated Nov. 10, 1987.

10 These arguments notwithstanding, the


University proposed that the election might
proceed but that the ballots of the challenged
voters (professors down to assistant professors)
be sealed and segregated pending resolution of
the issue.
11 SEEFootnotes 1 and 2, supra.
12 E.g., Employees engaged in teaching, who may
include judges, government officials, executives
of business, commercial and industrial enterprises,
and research, extension and professorial staff.
13 Including: janitors, messengers, typists,
receptionists, clerks of various types, laboratory
aides or helpers, nurses, medical aides,
carpenters,
grounds-keepers,
chauffeurs,
electricians, mechanics, plumbers.

14 Executive Order No. 6, as amended by


Executive Order No. 9, dated August 31, 1979,
Annex "A", Memorandum for Petitioner, p.
215, Rollo.

28 (Rothenberg on Labor Relations, 482, cited in


Fernandez & Quiazon, The Law of Labor Relations,
1963 ed., p. 281).
29 Emphasis supplied.

15 Whereas Clause, Unnumbered Executive Order,


Series of 1988 on the Constitution of Academic
Personnel Committees, Annex "B," Memorandum
for Petitioner, p. 217, Rollo.

30 Section 12 of the Industrial Peace Act was


incorporated as Art. 256 of the Labor Code of the
Philippines. Renumbered Art. 255 by subsequent
amendments, it now reads:

16 Ibid.
17 Section 7, Ibid., p. 218, Rollo, emphasis supplied.
18 Section 11, Ibid., pp. 218-219, Rollo.
19 Section 12, Ibid., p. 219, Rollo.
20 G.R. No. 75039, January 28, 1988, 157 SCRA 416.
21 G.R. No. 18710, March 30, 1963, 7 SCRA 598.
22 G.R. No. L-18938, August 31, 1964, 11 SCRA 766.
23 Rule 1, Section (1) of the Implementing
Guidelines of Executive Order No. 180.

Art. 255. Exclusive Bargaining Representation and


Workers Participation in Policy and DecisionMaking. The labor organization designated or
selected by majority of the employees in an
appropriate collective bargaining unit shall be the
exclusive representative of the employees in such
unit for the purpose of collective bargaining.
However, an individual employee or group of
employees shall have the right at any time to
present grievances to their employer.
31 G.R. No. L-10321, an unreported case, cited in
103 Phil. 1103, the decision having been written for
the Court by Justice Felix Bautista Angelo and
concurred in by all the other ten (10) justices
except the Chief Justice, who took no part.

24 Act No. 1870, as amended, Annex "A",


Comment of Public Respondent, p. 149, Rollo.

32 SEE footnote 13, supra.

25 Unnumbered Executive Order, supra.

33 SEE footnote 12, supra.

26 Emphasis supplied.
27 p. 18, Memorandum for respondent U.P. Union,
p. 188, Rollo.

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 92357 July 21, 1993


PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION
AGENCY (PSVSIA), GVM SECURITY AND INVESTIGATION
AGENCY (GVM) and ABAQUIN SECURITY AND DETECTIVE
AGENCY,
INC.
(ASDA),petitioners,
vs.
THE HON. SECRETARY OF LABOR RUBEN D. TORRES AND PGA
BROTHERHOOD
ASSOCIATION-UNION
OF
FILIPINO
WORKERS, respondents.
V.E. Del Rosario & Associates for petitioners.
German N. Pascua, Jr. for private respondent.

NOCON, J.:
The sole issue presented for resolution in this petition
for certiorari with prayer for preliminary injunction is whether
or not a single petition for certification election or for
recognition as the sole and exclusive bargaining agent can
validly or legally be filed by a labor union in three (3)
corporations each of which has a separate and distinct legal
personality instead of filing three (3) separate petitions.
On April 6, 1989, private respondent labor union, PGA
Brotherhood Association - Union of Filipino Workers (UFW),
hereinafter referred to as "the Union " filed a petition for
Direct Certification/Certification Election among the rank and
file employees of Philippine Scout Veterans Security and
Investigation Agency (PSVSIA), GVM Security and

Investigations Agency, Inc. (GVM). and Abaquin Security and


Detective Agency, Inc. (ASDA). These three agencies were
collectively referred to by private respondent Union as the
"PGA Security Agency," which is actually the first letters of the
corporate names of the agencies.
On April 11, 1989, summons was issued to the management of
PSVSIA, GVM, ASDA (PGA Security Agency) at 82 E. Rodriquez
Avenue, Quezon City.
On April 11, 26, 1986, petitioners filed a single comment
alleging therein that the said three security agencies have
separate and distinct corporate personalities while PGA
Security Agency is not a business or corporate entity and does
not possess any personality whatsoever; the petition was
unclear as to whether the rank-and-file employees mentioned
therein refer to those of the three security agencies
collectively and if so, the labor union cannot seek a
certification election in three separate bargaining units in one
petition; the labor union included in their organization
"security supervisors," in violation of R.A. 6715; and though
R.A. 6715 is already in effect, there were still no implementing
rules therefor.
On May 4, 1989, the security agencies filed a Consolidated
Motion to Dismiss on the grounds that the 721 supporting
signatures do not meet the 20% minimum requirement for
certification election as the number of employees totals 2374
and that there are no implementing rules yet of R.A. 6715.
On May 8, 1989, the Union filed an Omnibus Reply to Comment
and Motion to Dismiss alleging that it is clear that it is seeking a
certification election in the three agencies; that the apparent
separate personalities of the three agencies were used merely
to circumvent the prohibition in R.A. 5847, as amended by P.D.
11 and P.D. 100, that a security agency must not have more
than 1,000 guards in its employ; that the three security

agencies' administration, management and operations are so


intertwined that they can be deemed to be a single entity; and
that the security supervisors cannot be deemed part of
management since they do not meet the definition of
"supervisory employees" found in Articles 212(m), Labor Code,
as amended by Section 4, R.A. No. 6715.
On May 18, 1989, the security agencies filed a Rejoinder
claiming that there is no violation of R.A. 5487, as amended by
P.D. 11 and P.D. 100 since the three agencies were incorporated
long before the decrees' issuance; that mere duplication of
incorporators does not prove that the three security agencies
are actually one single entity; and that security guard
supervisors, most especially detachment commanders, fall
within the definition of the term "supervisors."
On July 6, 1989, Med-Arbiter Rasidali C. Abdullah issued an
Order in favor of the labor union finding that PSVSIA, GVM and
ASDA should be deemed as a single entity and bargaining unit
for the purpose of union organizing and the holding of a
certification election. The dispositive portion of the Order
reads as follows:
WHEREFORE, premises considered, let a
certification election be conducted among the
rank and file security guards of PSVSIA, GVM
and ASDA within twenty (20) days from receipt
hereof with the usual pre-election conference
of the parties. The list of eligible voters shall be
based on the security agencies' payroll three (3)
months prior to the filing of this petition with
the following choices:
a) PGA Brotherhood Association-Union of
Filipino Workers (UFW); and
b) No union.

SO ORDERED. 1
On July 21, 1989, the security agencies appealed the MedArbiter's Order to the Secretary of Labor and Employment
claiming that said Order was issued with grave abuse of
discretion when it ruled that the three security agencies could
be considered as a single bargaining entity for purposes of the
holding of a certification election.
On December 15, 1989, the Labor Secretary Franklin M. Drilon
denied the appeal for lack of merit while at the same time
affirming the Med-Arbiter's Order of July 6, 1989. He also
ordered the immediate conduct of a certification election. The
dispositive portion of which reads as follows:
WHEREFORE, premises considered, the Appeal
of respondents Security agencies is hereby
denied for lack of merit and the Order dated 6
July affirmed.
Let therefore, the pertinent records of this case
be immediately forwarded to the Regional
Office for he immediate conduct of the
certification election.
SO ORDERED. 2
On January 5, 1990, the three security agencies filed a Motion
for Reconsideration arguing that they were denied their rights
to due process and that jurisdiction was not acquired over
them by the labor authorities.
On January 26, 1990, the succeeding Labor Secretary, Ruben D.
Torres, likewise denied the Motion for Reconsideration for lack
of merit and reiterated the directive that a certification
election be conducted without further delay.

On March 14, 1990, the instant petition was filed by the three
security agencies, raising the following grounds:
I

resulting in a violation of the right to due process of each


corporation as no notice of hearing and other legal processes
were served on each of said corporations. Consequently, no
jurisdiction was acquired on them by the Department of Labor
and Employment.

SERIOUS ERRORS IN THE FINDINGS OF FACTS.


II
GRAVE ABUSE OF DISCRETION ON THE PART OF
THE SECRETARY OF LABOR. 3
Petitioners insist that there are three (3) corporations in this
petition, each of which has a separate and distinct corporate
personality of its own with separate registrations with the
Securities and Exchange Commission (SEC) and different
Articles of Incorporation and By-Laws; with separate sets of
corporate officers and directors; and no common business
address except for GVM and ASDA which are located at 1957
Espaa corner Craig Streets, Sampaloc, Manila.
Petitioners claim that the facts and circumstances of the case
of La Campana Coffee Factory, Inc. v. Kaisahan Ng Mga
Manggagawa sa La Campana 4 which public respondent claims to be
on all fours with the instant case, are very distinct from the facts and
circumstance obtaining in the case at bar. As to form of business
organization, in the La Campana case, only one of two (2) businesses was
a corporation i.e., the La Campana Coffee Factory, Inc. and the other,
the La Campana Gaugau Packing, is a "non-entity," being merely a
business name. In the case at bar, all three (3) agencies are
incorporated. Moreover, the issue involved in the instant case is one of
representation while in the La Campana case, the issue involved is the
validity of a demand for wage increases and other labor standards
benefits.

Petitioners likewise contend that it was error to hold that the


three companies should be treated as one in a single
bargaining unit in one petition for certification elections

Petitioners' arguments deserve scant consideration. The facts


and circumstances extant in the record indicate that the MedArbiter and Secretaries Drilon and Torres were not mistaken in
holding that the three security companies are in reality a single
business entity operating as a single company called the "PGA
Security Group" or "PGA Security Services Group." Factual
findings of labor officials are conclusive and binding on the
Court when supported by substantial evidence. 5
The public repondent noted the following circumstances in the
La Campana case similar to the case at bar, as indicative of the
fact that the La Campana Coffee Factory and La Campana
Gaugau Packing were in reality only one business with two
trade names: (1) the two factories occupied the same address,
wherein they had their principal place of business; (2) their
signboards, advertisements, packages of starch, delivery truck
and delivery forms all use one appellation, "La Campana Starch
and Coffee Factory"; (3) the workers in either company
received their pay from a single cashier, and (4) the workers in
one company could easily transfer to the other company, and
vice-versa. This Court held therein that the veil of corporate
fiction of the coffee factory may be pierced to thwart the
attempt to consider it part from the other business owned by
the same family. Thus, the fact that one of the businesses is
not incorporated was not the decisive factor that led the Court
to consider the two factories as one. Moreover, we do not find
any materiality in the fact that the La Campana case was
instituted to demand wage increases and other labor
standards benefits while this case was filed by the labor union
to seek recognition as the sole bargaining agent in the
establishment. If businesses operating under one management

are treated as one for bargaining purposes, there is not much


difference in treating such businesses also as one for the
preliminary purpose of labor organizing.
Indeed, the three agencies in the case at bar failed to rebut the
fact that they are managed through the Utilities Management
Corporation with all of their employees drawing their salaries
and wages from said entity; that the agencies have common
and interlocking incorporators and officers; and that the
PSVSIA, GVM and ASDA employees have a single Mutual
Benefit System and followed a single system of compulsory
retirement.
No explanation was also given by petitioners why the security
guards of one agency could easily transfer from one agency to
another and then back again by simply filling-up a common pro
forma slip called "Request for Transfer". Records also shows
that the PSVSIA, GVM and ASDA always hold joint yearly
ceremonies such as the "PGA Annual Awards Ceremony". In
emergencies, all PSVSIA Detachment Commanders were
instructed in a memorandum dated November 10, 1988 to get
in touch with the officers not only of PSVSIA but also of GVM
and ASDA. All of these goes to show that the security agencies
concerned do not exist and operate separately and distinctly
from each other with different corporate directions and goals.
On the contrary, all the cross-linking of the three agencies'
command, control and communication systems indicate their
unitary corporate personality. Accordingly, the veil of
corporate fiction of the three agencies should be lifted for the
purpose of allowing the employees of the three agencies to
form a single labor union. As a single bargaining unit, the
employees therein need not file three separate petitions for
certification election. All of these could be covered in a single
petition.
Petitioners' claim of alleged defect in the petition for
certification election which although addressed to the three

security agencies merely alleged that there are only 1,000


employees when the total number of employees in said
security agencies is about 2,374 (PSVSIA - 1252; GVM - 807; and
ASDA - 315) thereby failing to comply with the legal
requirement that at least twenty percent (20%) of the
employees in the bargaining unit must support the petition,
betrays lack of knowledge of the amendments introduced by
R.A 6715 which became effective on March 21, 1989, prior to
the filing of the petition for certification election on April 6,
1989. Under the amendments, there is no need for the labor
union to prove that at least 20% of the security guards in the
three agencies supported the petition. When a duly organized
union files a petition for certification election, the Med-Arbiter
has the duty to automatically conduct an election. He has no
discretion on the matter. This is clearly the mandate of Article
257 of the Labor Code, as amended by Section 24 of R.A. 6715,
which now reads:
Art.
257.
Petitions
in
unorganized
establishments. In any establishment where
there is no certified bargaining agent, a
certification election shall automatically be
conducted by the Med-Arbiter upon the filing of
a petition by a legitimate labor organization.
The designation of the three agencies collectively as "PGA
Security Agency" and the service of summons to the
management thereof at 82 E. Rodriguez Avenue, Quezon City
did not render the petition defective. Labor Secretary Franklin
Drilon correctly noted the fact that the affidavits executed
separately and under oath by the three managers of the three
security agencies indicated their office address to be at PSVSIA
Center II, E. Rodriguez Sr. Blvd., Quezon City. Besides, even if
there was improper service of summons by the Med-Arbiter,
the three (3) security agencies voluntarily submitted
themselves to the jurisdiction of the labor authorities. The
summons were clearly sent to and received by their lawyer

who filed motions and pleadings on behalf of the three


security agencies and who always appeared as their legal
counsel. It puzzles this Court why petitioners, who claim to be
separate entities, continue to be represented by one counsel
even in this instant petition.
Finally, except where the employer has to file a petition for
certification election pursuant to Article 258 of the Labor Code
because of a request to bargain collectively, it has nothing to
do with a certification election which is the sole concern of the
workers. Its role in a certification election has aptly been
described in Trade Unions of the Philippines and Allied Services
(TUPAS) v. Trajano, 6 as that of a mere by-stander. It has no legal
standing in a certification election as it cannot oppose the petition or
appeal the Med-Arbiter's orders related thereto. An employer that
involves itself in a certification election lends suspicion to the fact that it
wants to create a company union.

This Court's disapprobation of management interference in


certification elections is even more forceful inConsolidated
Farms, Inc. v. Noriel, 7 where we held:
On a matter that should be the exclusive
concern of labor, the choice of a collective
bargaining representative, the employer is
definitely an intruder. His participation, to say
the least, deserves no encouragement. This
Court should be the last agency to lend support
to such an attempt at interference with a purely
internal affair of labor.
Indeed, the three security agencies should not even be adverse
parties in the certification election itself. We note with
disapproval the title given to the petition for certification
election of the Union by the Med-Arbiter and the Secretary of
Labor naming the three security agencies as respondents. Such
is clearly an error. While employers may rightfully be notified

or informed of petitions of such nature, they should not,


however, be considered parties thereto with concomitant right
to oppose it. Sound policy dictates that they should maintain a
strictly hands-off policy.
WHEREFORE, finding no reversible error in the questioned
decision of the Secretary of Labor, the instant petition
for certiorari is hereby DISMISSED for utter lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla and Regalado, JJ., concur.
Puno, J., took no part.
# Footnotes
1 Rollo, p. 36.
2 Ibid., p. 20.
3 Ibid., p. 9.
4 93 Phil. 160 (1968).
5 Aboitiz Shipping Corporation v. De la Serna, G.R.
No. 88538, 199 SCRA 568 (1991).
6 G.R. 61153, 120 SCRA 64 (1983).
7 L-47752, 84 SCRA 469 (1978).