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G.R. No.

96189 July 14, 1992

UNIVERSITY OF THE PHILIPPINES, petitioner, 


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

NARVASA, C.J.:

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

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" (ONAPUP). 4 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 Baños, Manila, and Visayas, it sought the holding of a certification
election among all said non-academic employees of the University of the Philippines. At a conference thereafter
held on March 22, 1990 in the Bureau, the University stated that it had no objection to the election.

On April 18, 1990, another registered labor union, the "All UP Workers' Union," 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:

xxx xxx xxx

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


charters.

She went on to say that the general intent of EO 180 was "not to fragmentize the employer unit, as "can
be gleaned from the definition of the term "accredited employees' organization," which refers to:
. . a registered organization of the rank-and-file employees as defined in these rules recognized to
negotiate for the employees in an organizational unit headed by an officer with sufficient
authority to bind the agency, such as . . . . . . state colleges and universities.

The Director thus commanded that a certification election be "conducted among rank-and-file employees,
teaching and non-teaching" in all four autonomous campuses of the UP, and that management appear and bring
copies of the corresponding payrolls for January, June, and July, 1990 at the "usual pre-election conference . . ."

At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the DOLE, 8 the
University sought further clarification of the coverage of the term, "rank-and-file" personnel, asserting that not
every employee could properly be embraced within both teaching and non-teaching categories since there are
those whose positions are in truth managerial and policy-determining, and hence, excluded by law.

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

1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are ineligible to
join rank-and-file employee organizations under Section 3, EO 180:

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


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

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

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

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

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

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

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

1. To effectively recommend such managerial actions;

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

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


employees.

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

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

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

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

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

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

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

The University would now have this Court declare void the Director's Order of October 30, 1990 as well as that
of November 20, 1990. 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 the allocation of available funds for promotion;

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

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

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

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

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

3. Formulate policies, rules, and standards with respect to the selection, compensation, and
promotion of members of the academic staff.

4. Assist the Chancellor in the review of recommendations on academic promotions and on other
matters affecting faculty status and welfare.

From the foregoing, it is evident that it is the University Academic Personnel Committee, composed of deans,
the assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards
respecting selection, compensation and promotion of members of the academic staff. The departmental and
college academic personnel committees' functions are purely recommendatory in nature, subject to review and
evaluation by the University Academic Personnel Board. In Franklin Baker Company of the Philippines vs.
Trajano, 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, 22because "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 policy-determining functions through the University


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

The policy-determining functions of the University Council refer to academic matters, i.e. those governing the
relationship between the University and its students, and not the University as an employer and the professors as
employees. It is thus evident that no conflict of interest results in the professors being members of the
University Council and being classified as rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all rank-and-file employees of the
university are to be organized into a single collective bargaining unit?

A "bargaining unit" has been defined as a group of employees of a given employer, comprised of all or less than
all of the entire body of employees, which the collective interest of all the employees, consistent with equity to
the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law. 28

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

Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. — The labor
organization designated or selected for the purpose of collective bargaining by the majority of
the employees in an appropriate collective bargaining unit shall be the exclusive representative
of all the employees in such unit for the purpose of collective bargaining in respect to rates of
pay, wages, hours of employment, or other conditions of employment; Provided, That any
individual employee or group of employees shall have the right at any time to present grievances
to their employer.

Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor Code with
minor changes, no guidelines were included in said Code for determination of an appropriate bargaining unit in
a given case. 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 rank-and-file employees, unless
circumstances otherwise require." Case law fortunately furnishes some guidelines.

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

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

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

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

In the case at bar, the University employees may, as already suggested, quite easily be categorized into two
general classes: one, the group composed of employees whose functions are non-academic, i.e., janitors,
messengers, typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics,
plumbers; 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 non-academic employees as regards responsibilities and functions,
working conditions, compensation rates, social life and interests, skills and intellectual pursuits, cultural
activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the nature of the work and duties
as well as in the compensation and working conditions of the academic and non-academic personnel dictate the
separation of these two categories of employees for purposes of collective bargaining. The formation of two
separate bargaining units, the first consisting of the rank-and-file non-academic personnel, and the second, of
the rank-and-file academic employees, is the set-up that will best assure to all the employees the exercise of
their collective bargaining rights. These special circumstances, i.e., the dichotomy of interests and concerns as
well as the dissimilarity in the nature and conditions of work, wages and compensation between the academic
and non-academic personnel, bring the case at bar within the exception contemplated in Section 9 of Executive
Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to have ruled
otherwise, ignoring plain and patent realities.

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

SO ORDERED.
[G.R. No. 110399. August 15, 1997]

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE,
President, petitioners, vs. HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS
UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L.
REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL
CORPORATION, respondents.

DECISION
ROMERO, J.:

This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse
and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment,
Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91[1] entitled In Re: Petition for
Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia
Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union,
Petitioner. The Order excluded the employees under supervisory levels 3 and 4 and the so-called exempt
employees from the proposed bargaining unit and ruled out their participation in the certification election.
The antecedent facts are undisputed:
On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a
Petition for District Certification or Certification Election among the supervisors and exempt employees of the
SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of
certification among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of
Cabuyao, San Fernando and Otis as one bargaining unit.
On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on
Appeal, pointing out, among others, the Med-Arbiters error in grouping together all three (3) separate plants,
Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above
whose positions are confidential in nature.
On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent companys Appeal
and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of
each of the employees sought to be included in the appropriate bargaining unit.
Upon petitioner-unions motion dated August 7, 1991, Undersecretary Laguesma granted the
reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections
among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the
three plants at Cabuyao, San Fernando and Otis.
On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration
with Motion to suspend proceedings.
On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine
enunciated in Philips Industrial Development, Inc. v. NLRC[2] case. Said Order reads in part:

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

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

WHEREFORE, the motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby
modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt
employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who
could participate in the certification election.[3]
Hence this petition.

For resolution in this case are the following issues:


1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered
confidential employees, hence ineligible from joining a union.
2. If they are not confidential employees, do the employees of the three plants constitute an appropriate
single bargaining unit.
On the first issue, this Court rules that said employees do not fall within the term confidential employees
who may be prohibited from joining a union.
There is no question that the said employees, supervisors and the exempt employees, are not vested with
the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend,
layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial
employees who, under Article 245[4] of the Labor Code, are not eligible to join, assist or form any labor
organization. In the very same provision, they are not allowed membership in a labor organization of the rank-
and-file employees but may join, assist or form separate labor organizations of their own. The only question
that need be addressed is whether these employees are properly classified as confidential employees or not.
Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations.[5] The two criteria are
cumulative, and both must be met if an employee is to be considered a confidential employee that is, the
confidential relationship must exist between the employees and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations.[6]
The exclusion from bargaining units of employees who, in the normal course of their duties, become aware
of management policies relating to labor relations is a principal objective sought to be accomplished by the
confidential employee rule. The broad rationale behind this rule is that employees should not be placed in a
position involving a potential conflict of interests.[7] Management should not be required to handle labor
relations matters through employees who are represented by the union with the company is required to deal and
who in the normal performance of their duties may obtain advance information of the companys position with
regard to contract negotiations, the disposition of grievances, or other labor relations matters.[8]
There have been ample precedents in this regard, thus in Bulletin Publishing Company v. Hon. Augusto
Sanchez,[9] the Court held that if these managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can
also become company-dominated with the presence of managerial employees in Union membership. The same
rationale was applied to confidential employees in Golden Farms, Inc. v. Ferrer-Calleja[10] and in the more
recent case of Philips Industrial Development, Inc. v. NLRC[11] which held that confidential employees, by the
very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters
of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them.
[12]
An important element of the confidential employee rule is the employees need to use labor relations
information. Thus, in determining the confidentiality of certain employees, a key questions frequently
considered is the employees necessary access to confidential labor relations information.[13]
It is the contention of respondent corporation that Supervisory employees 3 and 4 and the exempt
employees come within the meaning of the term confidential employees primarily because they answered in the
affirmative when asked Do you handle confidential data or documents? in the Position Questionnaires
submitted by the Union.[14] In the same questionnaire, however, it was also stated that the confidential
information handled by questioned employees relate to product formulation, product standards and product
specification which by no means relate to labor relations.[15]
Granting arguendo that an employee has access to confidential labor relations information but such is
merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said
access does not render the employee a confidential employee.[16] If access to confidential labor relations
information is to be a factor in the determination of an employees confidential status, such information must
relate to the employers labor relations policies. Thus, an employee of a labor union, or of a management
association, must have access to confidential labor information with respect to his employer, the union, or the
association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to
the companies with which the union deals, or which the association represents, will not clause an employee to
be excluded from the bargaining unit representing employees of the union or association.[17] Access to
information which is regarded by the employer to be confidential from the business standpoint, such as financial
information[18] or technical trade secrets, will not render an employee a confidential employee.[19]
Herein listed are the functions of supervisors 3 and higher:
1. To undertake decisions to discontinue/temporarily stop shift operations when situations require.
2. To effectively oversee the quality control function at the processing lines in the storage of chicken
and other products.
3. To administer efficient system of evaluation of products in the outlets.
4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials.
5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the
plant.[20]
It is evident that whatever confidential data the questioned employees may handle will have to relate to
their functions. From the foregoing functions, it can be gleaned that the confidential information said employees
have access to concern the employers internal business operations. As held in Westinghouse Electric
Corporation v. National Labor Relations Board,[21] an employee may not be excluded from appropriate
bargaining unit merely because he has access to confidential information concerning employers internal
business operations and which is not related to the field of labor relations.
It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to
guarantee to all workers the right to self-organization. Hence, confidential employees who may be excluded
from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right
bargain collectively through representatives of their choosing.[22]
In the case at bar, supervisors 3 and above may not be considered confidential employees merely because
they handle confidential data as such must first be strictly classified as pertaining to labor relations for them to
fall under said restrictions. The information they handle are properly classifiable as technical and internal
business operations data which, to our mind, has no relevance to negotiations and settlement of grievances
wherein the interests of a union and the management are invariably adversarial. Since the employees are not
classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for
purposes of collective bargaining. Furthermore, even assuming that they are confidential employees,
jurisprudence has established that there is no legal prohibition against confidential employees who are not
performing managerial functions to form and join a union.[23]
In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry
Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to be threshed out.
It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each
for Cabuyao Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company,
one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a
similarity or a community of interests.
This Court finds the contention of the petitioner meritorious.
An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of
all or less than all of the entire body of employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law.[24]
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.[25]
It is readily seen that the employees in the instant case have community or mutuality of interest, which is
the standard in determining the proper constituency of a collective bargaining unit.[26] It is undisputed that they
all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong
to three different plants, they perform work of the same nature, receive the same wages and compensation, and
most importantly, share a common stake in concerted activities.
In light of these considerations, the Solicitor General has opined that separate bargaining units in the three
different plants of the division will fragmentize the employees of the said division, thus greatly diminishing
their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in
one bargaining unit will, in all probability, not create much impact on the operations of the private
respondent. The two other plants still in operation can well step up their production and make up for the slack
caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the
provisions of the Labor Code and the Mandate of the Constitution.[27]
The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis,
Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial.Geographical location can be
completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated
in UP v. Calleja-Ferrer where all non-academic rank and file employees of the University of the Philippines
inDiliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in
a certification election. We rule that the distance among the three plants is not productive of insurmountable
difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede
the operations of a single bargaining representative.
WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the Med-
Arbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors
(level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of
Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.
SO ORDERED.
SAN MIGUEL FOODS, G.R. No. 146206
INCORPORATED,  
Petitioner, Present:
   
  CARPIO,* J.,
  VELASCO, J., Chairperson,
  PERALTA,
-versus- ABAD, and
  SERENO,**JJ.
   
   
SAN MIGUEL CORPORATION Promulgated:
SUPERVISORS and EXEMPT UNION,  
Respondent.  
August 1, 2011
x---------------------------------------------------------------------------------x
 
 
DECISION
 
PERALTA, J.:
 
The issues in the present case, relating to the inclusion of employees in supervisor levels 3 and 4 and the exempt
employees in the proposed bargaining unit, thereby allowing their participation in the certification election; the
application of the community or mutuality of interests test; and the determination of the employees who belong
to the category of confidential employees, are not novel.
In G.R. No. 110399, entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma,
[1] the Court held that even if they handle confidential data regarding technical and internal business
operations, supervisory employees 3 and 4 and the exempt employees of petitioner San Miguel Foods, Inc.
(SMFI) are not to be considered confidential employees, because the same do not pertain to labor relations,
particularly, negotiation and settlement of grievances. Consequently, they were allowed to form an appropriate
bargaining unit for the purpose of collective bargaining. The Court also declared that the employees belonging
to the three different plants of San Miguel Corporation Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis, having community or mutuality of interests, constitute a single bargaining unit. They
perform work of the same nature, receive the same wages and compensation, and most importantly, share a
common stake in concerted activities. It was immaterial that the three plants have different locations as they did
not impede the operations of a single bargaining representative.[2]
Pursuant to the Court's decision in G.R. No. 110399, the Department of Labor and Employment National
Capital Region (DOLE-NCR) conducted pre-election conferences.[3]However, there was a discrepancy in the
list of eligible voters, i.e., petitioner submitted a list of 23 employees for the San Fernando plant and 33 for the
Cabuyao plant, while respondent listed 60 and 82, respectively.[4]
 
On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued an Order[5] directing Election
Officer Cynthia Tolentino to proceed with the conduct of certification election in accordance with Section 2,
Rule XII of Department Order No. 9.
 
On September 30, 1998, a certification election was conducted and it yielded the following results,[6] thus:
 
Cabuyao San Fernando Total
Plant Plant
Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
Segregated 41 35 76
Total Votes
Cast 66 58 124
 
 
On the date of the election, September 30, 1998, petitioner filed the Omnibus Objections and Challenge to
Voters,[7] questioning the eligibility to vote by some of its employees on the grounds that some employees do
not belong to the bargaining unit which respondent seeks to represent or that there is no existence of employer-
employee relationship with petitioner. Specifically, it argued that certain employees should not be allowed to
vote as they are: (1) confidential employees; (2) employees assigned to the live chicken operations, which are
not covered by the bargaining unit; (3) employees whose job grade is level 4, but are performing managerial
work and scheduled to be promoted; (4) employees who belong to the Barrio Ugong plant; (5) non-SMFI
employees; and (6) employees who are members of other unions.
On October 21, 1998, the Med-Arbiter issued an Order directing respondent to submit proof showing
that the employees in the submitted list are covered by the original petition for certification election and belong
to the bargaining unit it seeks to represent and, likewise, directing petitioner to substantiate the allegations
contained in its Omnibus Objections and Challenge to Voters.[8]
 
In compliance thereto, respondent averred that (1) the bargaining unit contemplated in the original petition is
the Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it covered the
operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in Cabuyao, Laguna or San
Fernando, Pampanga; and (3) it submitted individual and separate declarations of the employees whose votes
were challenged in the election.[9]
Adding the results to the number of votes canvassed during the September 30, 1998 certification election, the
final tally showed that: number of eligible voters 149; number of valid votes cast 121; number of spoiled ballots
- 3; total number of votes cast 124, with 118 (i.e., 46 + 72 = 118 ) Yes votes and 3 No votes.[10]
 
The Med-Arbiter issued the Resolution[11] dated February 17, 1999 directing the parties to appear
before the Election Officer of the Labor Relations Division on March 9, 1999, 10:00 a.m., for the opening of the
segregated ballots. Thereafter, on April 12, 1999, the segregated ballots were opened, showing that out of the 76
segregated
votes, 72 were cast for Yes and 3 for No, with one spoiled ballot.[12]
 
Based on the results, the Med-Arbiter issued the Order[13] dated April 13, 1999, stating that since the Yes vote
received 97% of the valid votes cast, respondent is certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando,
and Otis.
 
On appeal, the then Acting DOLE Undersecretary, in the Resolution[14] dated July 30, 1999, in OS-A-2-70-91
(NCR-OD-M-9010-017), affirmed the Order dated April 13, 1999, with modification that George C. Matias,
Alma Maria M. Lozano, Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from the bargaining
unit which respondent seeks to represent. She opined that the challenged voters should be excluded from the
bargaining unit, because Matias and Lozano are members of Magnolia Poultry Processing Plants Monthly
Employees Union, while Delos Reyes and Pajaron are employees of San Miguel Corporation, which is a
separate and distinct entity from petitioner.
 
Petitioners Partial Motion for Reconsideration[15] dated August 14, 1999 was denied by the then Acting
DOLE Undersecretary in the Order[16] dated August 27, 1999.
 
In the Decision[17] dated April 28, 2000, in CA-G.R. SP No. 55510, entitled San Miguel Foods, Inc. v.
The Honorable Office of the Secretary of Labor, Bureau of Labor Relations, and San Miguel Corporation
Supervisors and Exempt Union, the Court of Appeals (CA) affirmed with modification the Resolution dated
July 30, 1999 of the DOLE Undersecretary, stating that those holding the positions of Human Resource
Assistant and Personnel Assistant are excluded from the bargaining unit.
Petitioners Motion for Partial Reconsideration[18] dated May 23, 2000 was denied by the CA in the
Resolution[19] dated November 28, 2000.
 
Hence, petitioner filed this present petition raising the following issues:
 
I.
WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE WHEN IT
EXPANDED THE SCOPE OF THE BARGAINING UNIT DEFINED BY THIS COURT'S
RULING IN G.R. NO. 110399.
 
II.
WHETHER THE COURT OF APPEALS DEPARTED FROM JURISPRUDENCE -
SPECIFICALLY, THIS COURT'S DEFINITION OF A CONFIDENTIAL EMPLOYEE -
WHEN IT RULED FOR THE INCLUSION OF THE PAYROLL MASTER POSITION IN
THE BARGAINING UNIT.
 
 
III.
WHETHER THIS PETITION IS A REHASH OR A RESURRECTION OF THE ISSUES
RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE RESPONDENT.
 
Petitioner contends that with the Court's ruling in G.R. No. 110399[20] identifying the specific
employees who can participate in the certification election, i.e., the supervisors (levels 1 to 4) and exempt
employees of San Miguel Poultry Products Plants in Cabuyao, San Fernando, and Otis, the CA erred in
expanding the scope of the bargaining unit so as to include employees who do not belong to or who are not
based in its Cabuyao or San Fernando plants. It also alleges that the employees of the Cabuyao, San Fernando,
and Otis plants of petitioners predecessor, San Miguel Corporation, as stated in G.R. No. 110399, were engaged
in dressed chicken processing, i.e., handling and packaging of chicken meat, while the new bargaining unit, as
defined by the CA in the present case, includes employees engaged in live chicken operations, i.e., those who
breed chicks and grow chickens.
 
Respondent counters that petitioners proposed exclusion of certain employees from the bargaining unit
was a rehashed issue which was already settled in G.R. No. 110399.It maintains that the issue of union
membership coverage should no longer be raised as a certification election already took place on September 30,
1998, wherein respondent won with 97% votes.
 
Petitioners contentions are erroneous. In G.R. No. 110399, the Court explained that the employees of
San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a
single bargaining unit, which is not contrary to the one-company, one-union policy. An appropriate bargaining
unit is defined as a group of employees of a given employer, comprised of all or less than all of the entire body
of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate
to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions
of the law.[21]
 
In National Association of Free Trade Unions v. Mainit Lumber Development Company Workers
Union  United Lumber and General Workers of the Phils,[22] the Court, taking into account the community or
mutuality of interests test, 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 [Del] Norte of the Mainit
Lumber Development Company. It held that while the existence of a bargaining history is a factor that may be
reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other
factors must be considered. The test of grouping is community or mutuality of interest. This is so because the
basic test of an asserted bargaining units acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their collective bargaining rights.[23] 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 differences as to the nature of their individual assignments, but the distinctions are not enough to
warrant the formation of a separate bargaining unit.[24]
 
Thus, applying the ruling to the present case, the Court affirms the finding of the CA that there should
be only one bargaining unit for
the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia Poultry Products Plant involved in dressed
chicken processing and Magnolia Poultry Farms engaged in live chicken operations. Certain factors, such as
specific line of work, working conditions, location of work, mode of compensation, and other relevant
conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from
each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests
which warrants the formation of a single bargaining unit.
 
Petitioner asserts that the CA erred in not excluding the position of Payroll Master in the definition of a
confidential employee and, thus, prays that the said position and all other positions with access to salary and
compensation data be excluded from the bargaining unit.
 
This argument must fail. Confidential employees are defined as those who (1) assist or act in a
confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in
the field of labor relations.[26] The two criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee - that is, the confidential relationship must exist between the employee and
his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The
exclusion from bargaining units of employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought to be accomplished by the
confidential employee rule.[27]
 
A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or
care and protection of the employers property.[28] Confidential employees, such as accounting personnel,
should be excluded from the bargaining unit, as their access to confidential information may become the source
of undue advantage.[29] However, such fact does not apply to the position of Payroll Master and the whole
gamut of employees who, as perceived by petitioner, has access to salary and compensation data. The CA
correctly held that the position of Payroll Master does not involve dealing with confidential labor relations
information in the course of the performance of his functions. Since the nature of his work does not pertain to
company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the
subject bargaining unit.
 
Corollarily, although Article 245[30] 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.[31] 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.[32] 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.[33]
 
In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel
Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit,
considering their respective positions and job descriptions. As Human Resource Assistant,[34] the scope of ones
work necessarily involves labor relations, recruitment and selection of employees, access to employees'
personal files and compensation package, and human resource management. As regards a Personnel Assistant,
[35] one's work includes the recording of minutes for management during collective bargaining negotiations,
assistance to management during grievance meetings and administrative investigations, and securing legal
advice for labor issues from the petitioners team of lawyers, and implementation of company
programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information
which outrightly disqualifies them from union membership.
The proceedings for certification election are quasi-judicial in nature and, therefore, decisions rendered
in such proceedings can attain finality.[36] Applying the doctrine of res judicata, the issue in the
 
present case pertaining to the coverage of the employees who would constitute the bargaining unit is now a
foregone conclusion.
 
It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks
the personality to dispute the same. The general rule is that an employer has no standing to question the process
of certification election, since this is the sole concern of the workers.[37] Law and policy demand that
employers take a strict, hands-off stance in certification elections. The bargaining representative of employees
should be chosen free from any extraneous influence of management. A labor bargaining representative, to be
effective, must owe its loyalty to the employees alone and to no other.[38] The only exception is where the
employer itself has to file the petition pursuant to Article 258[39] of the Labor Code because of a request to
bargain collectively.[40]
 
With the foregoing disquisition, the Court writes finis  to the issues raised so as to forestall future suits of
similar nature.
 
WHEREFORE, the petition is DENIED. The Decision dated April 28, 2000 and Resolution dated November
28, 2000 of the Court of Appeals, in CA-G.R. SP No. 55510, which affirmed with modification the Resolutions
dated July 30, 1999 and August 27, 1999 of the Secretary of Labor, are AFFIRMED.
 
SO ORDERED.
G.R. No. L-28223           August 30, 1968

MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL


RAILWAYS, petitioner, 
vs.
COURT OF INDUSTRIAL RELATIONS and SAMAHAN NG MGA MANGGAGAWA SA
CALOOCAN SHOPS,respondents.

Sisenando Villaluz for petitioner. 


Gregorio E. Fajardo for respondent Samahan ng mga Manggagawa sa Caloocan Shops.

REYES, J.B.L., J.:

Petition by the "Mechanical Department Labor Union sa PNR" for a review of an order of the Court of
Industrial Relations, in its Case No. 1475-MC, directing the holding of a plebiscite election to determine
whether the employees at the Caloocan Shops desire the respondent union, "Samahan ng mga Manggagawa sa
Caloocan Shops", to be separated from the Mechanical Department Labor Union, with a view to the former
being recognized as a separate bargaining unit.

The case began on 13 February 1965 by a petition of the respondent "Samahan ng mga Manggagawa, etc."
calling attention to the fact that there were three unions in the Caloocan shops of the Philippine National
Railways: the "Samahan", the "Kapisanan ng Manggagawa sa Manila Railroad Company", and the Mechanical
Department Labor Union; that no certification election had been held in the last 12 months in the Caloocan
shops; that both the "Samahan" and the Mechanical Department Labor Union had submitted different labor
demands upon the management for which reason a certification election was needed to determine the proper
collective bargaining agency for the Caloocan shop workers.

The petition was opposed by the management as well as by the Mechanical Department Labor Union, the latter
averring that it had been previously certified in two cases as sole and exclusive bargaining agent of the
employees and laborers of the PNR'S mechanical department, and had negotiated two bargaining agreements
with management in 1961 and 1963; that before the expiration of the latter, a renewal thereof had been
negotiated and the contract remained to be signed; that the "Samahan" had been organized only in 21 January
1965; that the Caloocan shops unit was not established nor separated from the Mechanical Department unit; that
the "Samahan" is composed mainly of supervisors who had filed a pending case to be declared non-supervisors;
and that the purpose of the petition was to disturb the present smooth working labor management relations.

By an order of 18 August 1967, Judge Arsenio Martinez, after receiving the evidence, made the following
findings:.1äwphï1.ñët

The Court, after a cursory examination of the evidence presented made the following findings: That
petitioner union is composed of workers exclusively at the Caloocan shops of the Philippine National
Railways charged with the maintenance of rolling stocks for repairs; major repairs of locomotive,
engines, etc. are done in the Caloocan shops while minor ones in the Manila sheds; workers in the
Caloocan shops do not leave their station unlike Manila shop workers who go out along the routes and
lines for repairs; workers both in the Caloocan shops and Manila sheds are exposed to hazards
occasioned by the nature of their work; that with respect to wages and salaries of employees, categories
under the Job Classification and Evaluation Plan of the company apply to all workers both in the
Caloocan Shops and Manila sheds; administration over employees, members of petitioner union as well
as oppositor is under the Administrative Division of the company; that from the very nature of their
work, members of petitioner union and other workers of the Mechanical Department have been under
the coverage of the current collective bargaining agreement which was a result of a certification by this
Court of the Mechanical Department Labor union, first in 1960 and later in 1963. Subsequently, when
the latter contract expired, negotiations for its renewal were had and at the time of the filing of this
petition was already consummated, the only act remaining to be done was to affix the signatures of the
parties thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid collective
bargaining agreement was signed between the Philippine National Railways and the Mechanical
Department Labor Union sa Philippine National Railways (Manila Railroad Company).

The main issue involved herein is: Whether or not a new unit should be established, the Caloocan shops,
separate and distinct from the rest of the workers under the Mechanical Department now represented by
the Mechanical Department Labor Union.
The Caloocan Shops, all located at Caloocan City have 360 workers more or less. It is part and parcel of
the whole Mechanical Department of the Philippine National Railways. The department is composed of
four main divisions or units, namely: Operations, Manila Area and Lines; Locomotive Crew; Motor Car
Crew; and the Shops Rolling Stocks Maintenance. (Exhibits "D" and "D-1").

The Locomotive crew and Motor Car Crew, though part of the Mechanical Department, is a separate
unit, and is represented by the Union de Maquinistas, Fogoneros Y Motormen. The workers under the
other two main units of the departments are represented by the Mechanical Department Labor Union.
The workers of the Shops Rolling Stocks Maintenance Division or the Caloocan Shops now seek to be
separated from the rest of the workers of the department and to be represented by the "Samahan Ng Mga
Manggagawa sa Caloocan Shops." .

There is certainly a community of interest among the workers of the Caloocan Shops. They are grouped
in one place. They work under one or same working condition, same working time or schedule and are
exposed to same occupational risk.

Though evidence on record shows that workers at the Caloocan Shops perform the same nature of work
as their counterparts in the Manila Shed, the difference lies in the fact that workers at the Caloocan
Shops perform major repairs of locomotives, rolling stocks, engines, etc., while those in the Manila
Shed, works on minor repairs. Heavy equipment and machineries are found in the Caloocan Shops.

The trial judge then reviewed the collective bargaining history of the Philippine National Railways, as
follows: 1äwphï1.ñët

On several similar instances, this Court allowed the establishment of new and separate bargaining unit in
one company, even in one department of the same company, despite the existence of the same facts and
circumstances as obtaining in the case at bar.

The history of the collective bargaining in the Manila Railroad Company, now the Philippine National
Railways shows that originally, there was only one bargaining unit in the company, represented by the
Kapisanan Ng Manggagawa sa MRR. Under Case No. 237-MC, this Court ordered the establishment of
two additional units, the engine crew and the train crew to be represented by the Union de Maquinistas,
Fogoneros, Ayudante Y Motormen and Union de Empleados de Trenes, respectively. Then in 1961,
under Cases Nos. 491-MC, 494-MC and 507-MC three new separate units were established, namely, the
yard crew unit, station employees unit and engineering department employees unit, respectively, after
the employees concerned voted in a plebiscite conducted by the court for the separation from existing
bargaining units in the company. Then again, under Case No. 763-MC, a new unit, composed of the
Mechanical Department employees, was established to be represented by the Mechanical Department
Labor Union. Incidentally, the first attempt of the employees of the Mechanical Department to be
separated as a unit was dismissed by this Court of Case No. 488-MC.

In the case of the yard crew, station employees and the Engineering Department employees, the
Supreme Court sustained the order of this Court in giving the employees concerned the right to vote and
decide whether or not they desire to be separate units (See G.R. Nos. L-16292-94, L-16309 and L-
16317-18, November, 1965).

In view of its findings and the history of "union representation" in the railway company, indicating that
bargaining units had been formed through separation of new units from existing ones whenever plebiscites had
shown the workers' desire to have their own representatives, and relying on the "Globe doctrine" (Globe
Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union vs. Cebu Stevedoring Co., L-
10321, 28 February 1958, Judge Martinez held that the employees in the Caloocan Shops should be given a
chance to vote on whether their group should be separated from that represented by the Mechanical Department
Labor Union, and ordered a plebiscite held for the purpose. The ruling was sustained by the Court en
banc; wherefore, the Mechanical Department Labor Union appealed to this Court questioning the applicability
under the circumstances of the "Globe doctrine" of considering the will of the employees in determining what
union should represent them.

Technically, this appeal is premature, since the result of the ordered plebiscite among the workers of the
Caloocan shops may be adverse to the formation of a separate unit, in which event, as stated in the appealed
order, all questions raised in this case would be rendered moot and academic. Apparently, however, the
appellant Mechanical Department Labor Union takes it for granted that the plebiscite would favor separation.
We find no grave abuse of discretion in the issuance of the ruling under appeal as would justify our interfering
with it. Republic Act No. 875 has primarily entrusted the prosecution of its policies to the Court of Industrial
Relations, and, in view of its intimate knowledge concerning the facts and circumstances surrounding the cases
brought before it, this Court has repeatedly upheld the exercise of discretion of the Court of Industrial Relations
in matters concerning the representation of employee groups (Manila Paper Mills Employees & Workers'
Association vs. C.I.R. 104 Phil. 10; Benguet Consolidated vs. Bobok Lumber Jack Association, 103 Phil. 1150).

Appellant contends that the application of the "Globe doctrine" is not warranted because the workers of the
Caloocan shops do not require different skills from the rest of the workers in the Mechanical Department of the
Railway Company. This question is primarily one of facts. The Industrial Court has found that there is a basic
difference, in that those in the Caloocan shops not only have a community of interest and working conditions
but perform major repairs of railway rolling stock, using heavy equipment and machineries found in said shops,
while the others only perform minor repairs. It is easy to understand, therefore, that the workers in the Caloocan
shops require special skill in the use of heavy equipment and machinery sufficient to set them apart from the
rest of the workers. In addition, the record shows that the collective bargaining agreements negotiated by the
appellant union have been in existence for more than two (2) years; hence, such agreements can not constitute a
bar to the determination, by proper elections, of a new bargaining representative (PLDT Employees' Union vs.
Philippine Long Distance Telephone Co., 51 Off. Gaz., 4519).

As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are actually
supervisors, it appears that the question of the status of such members is still pending final decision; hence, it
would not constitute a legal obstacle to the holding of the plebiscite. At any rate, the appellant may later
question whether the votes of those ultimately declared to be supervisors should be counted.

Whether or not the agreement negotiated by the appellant union with the employer, during the pendency of the
original petition in the Court of Industrial Relations, should be considered valid and binding on the workers of
the Caloocan shops is a question that should be first passed upon by the Industrial Court.

IN VIEW OF THE FOREGOING, the order appealed from is affirmed, with costs against appellant Mechanical
Department Labor Union sa Philippine National Railways.
G.R. Nos. L-16292-94, L-16309 and L-16317-18            October 31, 1960

KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY, petitioner, 


vs.
YARD CREW UNION, STATION EMPLOYEES UNION, RAILROAD ENGINEERING
DEPARTMENT UNION, MANILA RAILROAD COMPANY, and COURT OF INDUSTRIAL
RELATIONS, respondents.

MANILA RAILROAD COMPANY, petitioner, 


vs.
COURT OF INDUSTRIAL RELATIONS, MANILA RAILROAD CREW UNION, STATION
EMPLOYEES UNION and KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD
COMPANY, respondents.

L-16292-94.
Jose Espinas for petitioner.
F.A. Sambajon for respondent CIR.
Government Corporate Counsel Simeon M. Gopengco and F.A. Umali for respondent MRR.
Carlos E. Santiago for respondent Unions.
F. Da. Bondoc for respondents (REDU).

L-16309 and L-16217-18.


Government Corporate Counsel Simeon M. Gopengco and F.A. Umali for petitioner.
V.C. Magbanua for respondent CIR.
F. Da. Bondoc for respondent (REDU).
Jose R. Espinas for respondent Kap. Ng Manggagawa sa MRR.
Carlos C. Santiago for the other respondent Unions.

PAREDES, J.:

In the Court of Industrial Relations, three separate petitions were registered: Case No. 491-MC, by Yard Crew
Union, Case No. 494-MC, by Station Employees' Union; and Case No. 507-MC, by Railroad Engineering
Department Union. The Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company, intervened. They were
treated jointly by the respondent Court because they involved identical questions. On appeal, three separate
petitions for certiorari were presented by the Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company
(G.R. Nos. L-16292-94) and three separate petitions for certiorari by the Manila Railroad Company (G.R. No.
L-16309, L-16317 and L-16318.).

We glean from the record the following facts:

On March 7, 1955, the Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company, hereinafter called
Kapisanan, filed a petition (Case No. 237-MC), praying that it be certified as the exclusive bargaining agent in
the Manila Railroad Company, hereinafter called Company. A decision was promulgated on September 29,
1956, affirmed by the Court en banc on January 16, 1957, in which the respondent Court found three unions
appropriate for purposes of collective bargaining, to wit: (1) The unit of locomotive drivers, firemen, assistant
firemen and motormen-otherwise known as the engine crew unit: (2) the unit of conductors, assistant
conductors, unit agents, assistant route agents and train posters, otherwise known as the train crew unit, and (3)
the unit of all the rest of the company personnel, except the supervisors, temporary employees, the members of
the Auditing Department, the members of the security guard and professional and technical employees, referred
to by the respondent court as the unit of the rest of the employees. To these 3 units, the following unions were
respectively certified as the exclusive bargaining agents: (1) The Union de Maquinistas, Fogoneros, Ayudantes
y Motormen; (2) Union de Empleados de Trenes (conductors); and (3) the Kapisanan Ng Mga Manggagawa Sa
Manila Railroad Company.

After the decision had become final, Case No. 491-MC was filled on September 20, 1957, amended on August
13, 1958, by the Manila Railroad Yard Crew Union, praying that it be defined as a separate unit; Case No. 494-
MC, on September 25, 1957, amended on August 13, 1958, by the Station Employees' Union, praying that it be
constituted as a separate bargaining unit, and Case No. 507- MC, on November 30, 1957, by the Railroad
Engineering Department Union, praying that it be defined as a separate bargaining unit. All asked that they be
certified in the units sought to be separated. The respondent unions are legitimate labor organizations with
certificates of registration in the Department of Labor.
The Kapisanan and the Company opposed the separation of the said three units on the following grounds:

(1) That the Kapisanan had been duly certified as the collective bargaining agent in the unit of all of the rest of
the employees and it had entered into a collective bargaining agreement on November 4, 1957, and this
agreement bars certification of a unit at least during the first 12 months after the finality of Case No. 237-MC
(contract bar rule).

(2) That the Court had denied similar petitions for separation of unit as was ordered in Case No. 488-MC,
wherein the petition for the separation of Mechanical Department Labor Union was dismissed by the respondent
Court on April 25, 1958 and in the case of the Benguet Auto Lines Union, Case No. 4-MC-PANG) dismissed
on July 18, 1958.

(3) That the three unions in question are barred from petitioning for separate units because they are bound by
the decision in Case No. 237-MC, for having been represented therein by the Kapisanan.

After due hearing, the respondent Court, through the Hon. Arsenio Martinez, Associate Judge, handed down an
order, dated June 8, 1959, the dispositive portion of which recites as follows:

Wherefore, all the foregoing considered, and without passing upon the basic questions raised herein and
as part of its fact finding investigations, the Court orders a plebiscite to be conducted among the
employees in the three proposed groups, namely: the Engineering Department, the Station Employees
and the Yard Crew Personnel. The employee in the proposed groups minus the supervisors, temporary
employees, members of the Auditing Department, members of the security group, professionals and
technical employees, shall vote, in a secret ballot to be conducted by this Court, on the question of
whether or not they desire to be separated from the unit of the rest of the employees being represented by
the Kapisanan. In this connection, the Court requests the cooperation of the Manila Railroad Company
to extend its facilities for the holding of this plebiscite, particularly the payrolls for the month to be
agreed upon by the parties. . . .

The respondent Court also declared that the collective bargaining agreement could not be a bar to another
certification election because one of its signatories, the Kapisanan President, Vicente K. Olazo, was
a supervisor:

In considering however such existing contract between the Kapisanan and the Company, the Court
cannot close its eyes and fail to observe that among the signatories thereto, on the part of the Kapisanan,
is the President of the Union, Vicente K. Olazo.

In case No. 237-MC. one of the important and fundamental questions raised was whether or not Vicente
K. Olazo is a supervisor within the meaning of Section 2(k) of Republic Act 875. The Trial Court, as
well as the majority of the Court en banc, reached the conclusion in same Case No. 237-MC that he is a
supervisor.

. . . For this reason, the Court believes that his existing contract, through embodying terms and
conditions of employment and with a reasonable period to run, would not be a bar to a certification
proceeding.

A motion for reconsideration of the order of June 8, 1959, was presented by the Kapisanan, and same was
denied on August 20, 1959, in an order, concurred in by three Judges of the Court, with two Judges dissenting,
against which the Kapisanan on November 28, 1959, filed its notice of appeal. Appeals by certiorari were filed
by the Kapisanan and the Company. In this Court, respondents presented motion to dismiss the petitions, on the
ground that the order of the respondent court on June 8, 1959 and the resolution of the respondent court en
banc dated August 20, 1959, to hold a plebiscite, were interlocutory, not subject to appeal. They also allege the
same in their answers, as one of the defenses. The case, therefore, poses three questions, to wit:

1. Are the appealed orders interlocutory in nature?

2. Is the order of the respondent court, granting groups of employees to choose whether or not they desire to be
separated from the certified unit to which they belong, during the existence of a valid bargaining contract
entered into by a union close to the heels of its certification, contrary to law?
3. Is it legal error for the respondent court to hold that the bargaining agreement in question does not bar
certification proceedings, only because one of the signatories for the union was adjudged by the majority of
such court to be supervisor, in a previous case?

Wherefore, all the foregoing considered, and without passing upon the basic question raised herein and
as part of its fact finding investigation, the Court orders a plebiscite to be conducted among the
employees in the three proposed groups, namely: the Engineering Department, the Station Employees
and the Yard Crew Personnel.

The resolution en banc, dated August 20, 1959, partially states:

It will be further noted that it is just a part of the investigatory power of the Court to determine by secret
ballot the desire of the employees concerned. What has been ordered is merely a plebiscite and not the
certification election itself. . . . Proceedings may still continue and an order whether denying the petition
or not would necessarily ensue. In a word, something else has to be done within the premises and the
order does not deny or grant petition in the above entitled case.

In the case of Democratic Labor Association vs. Cebu Stevedoring Co., G.R. No. L-10321, February 28, 1958,
we stated that because of the modern complexity of the relation between both employer and union structure, it
becomes difficult to determine from the evidence alone which of the several claimant groups forms a proper
bargaining unit; that it becomes necessary to give consideration to the express will or desire of the employees
— a practice designated as the "Globe doctrine," which sanctions the holding of a series of elections, not for the
purpose of allowing the group receiving an over all majority of votes to represent all employees, but for the
specific purpose of permitting the employees in each of the several categories to select the group which each
chooses as a bargaining unit; that the factors which may be considered and weighed in fixing appropriate units
are: 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, and the test in determining the appropriate bargaining unit is that a
unit must effect a grouping of employees who have substantial, mutual interests in wages, hours, working
conditions and other subjects of collective bargaining.

It is manifest, therefore, that "the desires of the employees" is one of the factors in determining the appropriate
bargaining unit. The respondent Court was simply interested "in the verification of the evidence already placed
on record and submitted wherein the workers have signed manifestations and resolutions of their desire to be
separated from Kapisanan." Certainly, no one would deny the respondent court's right of full investigation in
arriving at a correct and conclusive finding of fact in order to deny or grant the conclusive findings of fact in
order to deny or grant the petitions for certification election. On the contrary, all respondent court, or any court
for that matter, to investigate before acting, to do justice to the parties concerned. And one way of determining
the will or desire of the employees is what the respondent court had suggested: a plebiscite — carried by secret
ballot. A plebiscite not to be conducted by the Department of Labor, as contemplated in a certification election
under Sec. 12 of the Magna Charter of Labor, R.A. No. 875, but by the respondent court itself. As well as
observed by the respondent court, "the votes of workers one way or the other, in these cases will not by any
chance choose the agent or unit which will represent them anew, for precisely that is a matter that is within the
issues raised in these petitions for certification".

The test in determining whether an order or judgment is interlocutory or final is "Does it leave something to be
done in the trial court with respect to the merits of the case? If it does, it is interlocutory; if it does not, it is
final" (Moran's Comments on the Rules of Court, 1952 Ed., Vol. I, p. 41). Having in view the avowed purpose
of the orders in question, as heretofore exposed, one should not stretch his imagination far to see that they are
clearly interlocutory, as they leave something more to be done in the trial court and do not decide one way or
the other the petitions of the respondent unions. We are, therefore, constrained to hold, as we do hereby hold,
that the present appeals or petitions for review by certiorari, are not authorized by law and should be dismissed
(Section 2, Rule 44, Rules of Court). There is, moreover, nothing, under the facts obtaining in these cases and
the law on the subject, which would warrant this Court to declare the orders under consideration, illegal.

The herein petitioners contend that the collective bargaining agreement, executed on November 4, 1957 (Case
No. 237-MC), is a bar to the certification proceedings under consideration. The respondents counter that it is not
so, because one of the signatories in the said agreement for the Kapisanan, Vicente K. Olazo, was found to be a
supervisor under section 2(k) R.A. 875, in Kapisanan, etc. vs. CIR, etc., 106 Phil., 607; 57 Off. Gaz. (2) 254.
Having, however, reached the conclusion that the orders in question are not appealable and that the respondent
court has not as yet decided on whether the said collective bargaining agreement is a bar or not to the petitions
for separate units and for certification election, which could properly be determined after the result of the
plebiscite shall have been known by the respondent court, the consideration of this issue is premature.

In view hereof, the petitions or appeals for review by certiorari are dismissed, without costs.
G.R. No. L-26736 August 18, 1972

FILOIL REFINERY CORPORATION, petitioner, 


vs.
FILOIL SUPERVISORY & CONFIDENTIAL EMPLOYEES ASSOCIATION AND COURT OF
INDUSTRIAL RELATIONS, respondents.

Beltran, Lacson & Associates for petitioner.

Lanting, Morabe Law Offices for private respondent.

TEEHANKEE, J.:p

The present appeal questions the right of supervisors and confidential employees to organize the respondent
labor association and to bargain collectively with their employer, petitioner corporation herein, as upheld by
respondent court of industrial relations in its appealed orders and resolution.

Respondent association is a labor organization duly registered with the Department of Labor. It is composed
exclusively of the supervisory and confidential employees of petitioner corporation. There exists another
entirely distinct labor association com posed of the corporation's rank-and-file employees, the Filoil Employees
& Workers Association (FEWA) with which petitioner executed a collective bargaining agreement. This
collective bargaining agreement expressly excluded from its coverage petitioner's supervisory and confidential
employees, who in turn organized their own labor association, respondent herein.

Respondent association filed on February 18, 1965 with the industrial court its petition for certification as the
sole and exclusive collective bargaining agent of all of petitioner's supervisory and confidential employees
working at its refinery in Rosario, Cavite.

Petitioner corporation filed a motion to dismiss the petition on the grounds of lack of cause of action and of
respondent court's lack of jurisdiction over the subject-matter, under its claim that supervisors are not
employees within the meaning of Republic Act 875, the Industrial Peace Act, and that since they are part of
management, they do not have the right to bargain collectively although they may organize an organization of
their own.

Respondent court in its order of May 26, 1965 denied the dismissal motion. It ruled that under the express
provisions of section 3 of the Industrial Peace Act, "(I)ndividuals employed as supervisors shall not be eligible
for membership in a labor organization of employees under their supervision but may form separate
organizations their own."1

It rejected petitioner's claim against respondent association's right to bargain collectively, holding that such was
expressly granted under section 24 of the Industrial Peace Act, and asserting that "if Congress deemed it wise
for supervisors not to have the right to strike, then it should have been so expressly stated as in the case of
government employees. Section 11 of the Industrial Peace Act gives government employees the right to belong
to any labor organization provided no obligation to strike or join a strike is imposed by such labor organization.
The denial to government employees of the right to strike is significant in the controversy before this Court
because it manifests to all that Congress in enacting Republic Act No. 875 was aware of the implications that
when supervisors were given the right to organize themselves into a labor organization, they have correlative
right to declare a strike. In the case of supervisors, they were enfranchised by Congress to organize themselves
into a labor organization and were denied the right to strike. This means that the right to strike was not denied
them since no special reason obtains among the supervisors as it does obtain among government employees."2

The industrial court likewise dismissed petitioner's objection against the composition of respondent association
in that it included as members technical men and confidential employees in this wise: "(A)t this point, it may be
stressed that supervisors as a general rule should form an association of their own and should exclude all other
types of personnel unless a special consideration exists, like example, that they are so few in number and that
there are other technical men or confidential men equally few in number. In the latter case, the supervisors,
technical men and confidential employees may be constituted into one unit."3
Petitioner's motion for reconsideration of said order of May 26, 1965 was denied by respondent court en
banc per its resolution dated September 7, 1965 which affirmed the said order. No appeal having been taken
from the resolution, the petition was accordingly set for hearing and the parties submitted their stipulation of
facts, stipulating  inter aliathat respondent association "has forty-seven (47) members among the supervisory,
technical men and confidential employees of the company" and that "all the forty seven (47) members of the
(respondent association) are being checked-off by the company for union dues pursuant to the individual check-
off authorization submitted to the company."

The parties could not agree, however, on the composition of the appropriate bargaining unit with petitioner
corporation proposing that the 47 members of respondent association should be broken up into five (5) separate
collective bargaining units, viz, the supervisors should form a distinct unit separate from the rest of the
personnel who in turn would be divided into separate and independent units or confidential employees,
professional personnel, "fringe" employees consisting of five firemen, and twelve (12) office and clerical
employees.

Evidence was received by respondent court and it was satisfied that executive personnel handling personnel
matters for the employer were duly excluded from respondent association. Thus, per respondent court's order of
July 23, 1966, it is noted that "not one of the employees listed under Groups I and II including (their supervisor)
Leonardo R. Santos under Group III, is a member of (respondent association)", since "(I)t appears that the
personnel listed under Groups I and Group II ... are in the category of executives who have supervision over the
supervisors who are members of (respondent association) and that Marcelo Bernardo handles personnel matters
of the employer ... All of them should, therefore, be excluded from the appropriate bargaining unit.4

Respondent court in its said order of July 23, 1966 consequently cast aside petitioner's sedulous objections
against the inclusion of the confidential employees in the supervisors respondent association, thus: "(F)rom the
memorandum and manifestation of the company, a persistent assault against the inclusion of the confidential
emloyees with supervisors under one bargaining unit would seem to be evident. Although this inclusion has
already been raised in the motion to dismiss filed by the company and has already been resolved by the Court en
banc, with no appeal to the Supreme Court having been taken by the company, we shall try once more to show
why such inclusion. It is admitted by the company that confidential employees are outside the coverage of the
existing collective bargaining agreement between the respondent company and the rank and file union (FEWA)
by specific agreement. Since the confidential employees are very few and are, by practice and tradition,
identified with management, the NLRB, because of such "identity of interest" (Wilson & Co., 68 NLRB
84), has allowed their inclusion in the bargaining unit of supervisors who are likewise identified with
management. This Court, a counterpart of the NLRB, for same reason, should also allow the inclusion of the
confedential employees in the bargaining unit of supervisor except of course Marcelo Bernardo who, pursuant
to Order of May 26, 1965, as affirmed by the Court en banc, should be excluded because he handles personnel
matters for the employer."5

Respondent court pointed out that "in fact, out of forty-three (43), excluding the twelve (12) executive
personnel under Groups I and II, the company proposes five (5) bargaining units or eight (8) employees per
unit. This Court will be creating fragmentary units which would not serve the interest of industrial peace, much
less in an industry indispensable to the national interest like the one at bar, as is now obtaining in the
Philippine National Railways, also an industry indispensable to the national interest (Union de Maquinistas,
Fogoneros y Motormen vs. Philippine National Railways, Case No. 67-IPA), with thirteen (13) unions, if it
breaks up the petitioner union into five (5) bargaining units. The Court is likewise aware of the ineffectiveness
of a small union with a scanty members as bargaining unit. The breaking up of bargaining agents into tiny units
will greatly impair their organizational value. It has always been the policy of the United States National Labor
Relations Board that, in deciding upon whether to include or exclude a group of employees from a bargaining
unit, the Board has always allowed itself to be guided by the determination as to whether its action "will insure
to the employees of the Company the full benefit of their right to self-organization and to collective bargaining
and otherwise effectuate the policies of the Act" (20 NLRB 705). We see no reason why this Tribunal whose
basic functions are the same as that of the NLRB, should do less or otherwise depart from this sound policy."6

Since respondent association "clearly represents the majority of the employees in the appropriate bargaining
unit," respondent court therefore certified it as the sole and exclusive bargaining agent for all the employees in
the unit.

Respondent court per its resolution en banc dated September 15, 1966 dismissed petitioner's motion for
reconsideration, holding that "as to the question of the right of supervisors and confidential employees to
compel their employer to bargain collectively, this has already been passed upon by the Trial Court in its Order
dated May 26, 1965 which Order was affirmed by the Court en banc  in a resolution dated September 7, 1965.
The Company did not appeal this resolution to the Supreme Court. Hence, this matter, as far as we are
concerned, has already been resolved. We find it, therefore, unnecessary to pass upon the same again," and that
it found no sufficient justification to alter or modify the trial court's order upholding the appropriateness of the
bargaining unit. On this latter point, Judge Salvador, while concurring with the supervisors' right of self-
organization and collective bargaining, cast a dissenting vote on the ground that the Industrial Peace Act did not
contemplate nor provide for supervisors and confidential employees to be under one bargaining unit and as to
"executive personnel" who have supervision over the supervisors being excluded from any representation, urged
that "another supervisors' unit must be created for these executive personnel." The second point is not in
contention at bar since the "executive personnel" concerned have not appealed their exclusion.

In this appeal, petitioner pursues anew its contention that supervisors form part of management and are not
considered as employees entitled to bargain collectively, arguing that "as supervisors form part and parcel of
management, it is absurd for management to bargain collectively with itself." Petitioner further argues that
under the American concept, supervisors are not considered employees and that since our Congress copied
verbatim the Taft-Hartley Act's definition of supervisor,7 its act of "incorporating the definition in the Taft-
Hartley Act" must be deemed an expression of its intention "to follow the intendment of said Act."

Petitioner's contentions are untenable, prescinding from the fact of its failure to appeal in due course respondent
court's en banc resolution of September 7, 1965 upholding the right of the supervisors and confidential
employees to organize respondent association and to compel petitioner to negotiate and bargain collectively
with it. Petitioner's argument that since supervisors form part of management, to allow them to bargain
collectively would be tantamount to management bargaining with itself may be a well-turned phrase but ignores
the dual status of a supervisor as a representative of management and as an employee.

If indeed the supervisor is absolutely undistinguishable from management, then he would be beyond removal or
dismissal, for as respondent association counters, "how can management remove or dismiss itself?"

As stated for the Court by the now Chief Justice in AG & P Co. of Manila, Inc. vs. C.I.R.,8 section 3 of the
Industrial Peace Act "explicitly provides that "employees" — and this term includes supervisors — "shall have
the right to self-organization, and to form, join or assist labor organizations of their own choosing for the
purpose of collective bargaining through representations of their own choosing and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or protection" and that "individuals
employed as supervisors ... may form separate organizations of their own". Indeed, it is well settled that "in
relation to his employer," a foreman or supervisor "is an employee within the meaning of the Act" ... For this
reason, supervisors are entitled to engage in union activities and any discrimination against them by reason
thereof constitutes an unfair labor practice."

Petitioner's arguments go in reality to the wisdom and policy of the Industrial Peace Act which expressly grants
supervisors the right to organize and bargain collectively, which are beyond the Court's power of review. Thus,
the argument that "it is axiomatic in the law of self-interest that an employer must give a "better deal" to those
who act in his interest and in whom he has trust and confidence. These are the supervisors and confidential
employees"9 and that "In the United States there was a move to have a part of the supervisory group to be
aligned with labor. But the enactment of the Taft-Hartley Act put an end to this move." 10

So with petitioner's thesis that "(T)o then give supervisors the right to compel employers to bargain would in
effect align labor and management together against stockholders and bondholders (capital) and inexorably tilt
the balance of power in favor of these hitherto confliction forces. This is contrary to the nature and philosophy
of free enterprise." 11 This further serves to point up the validity and rationale of the Industrial Peace Act's
provision, since the supervisors and confidential employees, even though they may exercise the prerogatives of
management as regards the rank and file employees are indeed employees in relation to their employer, the
company which is owned by the "stockholders and bondholders (capital)" in petitioner's own words, and should
therefore be entitled under the law to bargain collectively with the top management with respect to their terms
and conditions of employment.

Petitioner's argument that the express provisions of section 3 of our Industrial Peace Act must give way to the
intendment of the Taft-Hartley Act which exempts employers from the legal obligation to recognize and
negotiate with supervisors is tenuous and groundless. The language of our own statute is plain and unambiguous
and admits of no other interpretation.

The other principal ground of petitioner's appeal questioning the confidential employees' inclusion in the
supevisors bargaining unit is equally untenable. Respondent court correctly held that since the confidential
employee are very few in number and are by practice and tradition identified with the supervisors in their role
as representives of management vis-a-vis the rank and file employee such identity of interest has allowed their
inclusion in the bargaining unit of supervisors-managers for purposes of collective bargaining in turn as
employees in relation to the company as their employer.

No arbitrariness or grave abuse of discretion can be attributed against respondent court's allowing the inclusion
of the confidential employees in the supervisors' association for as admitted by petitioner itself, supra, the
supervisors and confidential emplyees enjoy its trust and confidence. Thisidentity of interest logically calls for
their inclusion in the same bargaining unit and at the same time fulfills the law's objective of insuring to them
the full benefit of their right to self-organization and to collective bargaining, which could hardly be
accomplished if the respondent association's membership were to be broken up into five separate ineffective
tiny units, as urged by petitioner.

Respondent court's action not being vulnerable to challenge as being arbitrary or capricious is therefore
sustained, in line with the Court's consistent rulings that the industrial court "enjoys a wide discretion in
determining the procedure necessary to insure the fair and free choice of bargaining representations by
employees," and that its action "in deciding upon an appropriate unit for collective bargaining purposes is
discretionary ... and (that) its judgment in this respect is entitled to almost complete finality, unless its action is
arbitrary or capricious" 12 and that absent any grave abuse of discretion as to justify the Court's intervention,
"this Court has repeatedly upheld the exercise of the Court of Industrial Relations in matters concerning the
representation of employee groups." 13

ACCORDINGLY, the orders and resolution appealed from are hereby affirmed and the petition at bar is
dismissed. No pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Barredo, Makasiar, Antonio and Esguerra,
JJ., concur.

Castro, J., concurs in the result.


FARLEY FULACHE, MANOLO G.R. No. 183810
JABONERO, DAVID CASTILLO,  
JEFFREY LAGUNZAD,  
MAGDALENA MALIG-ON BIGNO, Present:
FRANCISCO CABAS, JR., HARVEY  
PONCE and ALAN C. ALMENDRAS, CARPIO, J., Chairperson,
Petitioners, BRION,
  DEL CASTILLO,
  ABAD, and
  PEREZ, JJ.
-   versus -  
   
  Promulgated:
   
ABS-CBN BROADCASTING January 21, 2010
CORPORATION,  
Respondent.
 
x--------------------------------------------------------------------------------------x
D E C I S I O N
 
BRION, J.:
 
The petition for review on certiorari[1] now before us seeks to set aside the decision[2] and resolution[3] of the
Court of Appeals, Nineteenth Division (CA) promulgated on March 25, 2008 and July 8, 2008, respectively, in
CA- G.R. SP No. 01838.[4]
 
 
The Antecedents
 
 
The Regularization Case.
 
 
In June 2001, petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey Lagunzad, Magdalena
Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan C. Almendras (petitioners) and Cresente Atinen
(Atinen) filed two separate complaints for regularization, unfair labor practice and several money claims
(regularization case) against ABS-CBN Broadcasting Corporation-Cebu (ABS-CBN). Fulache and Castillo were
drivers/cameramen; Atinen, Lagunzad and Jabonero were drivers; Ponce and Almendras were
cameramen/editors; Bigno was a PA/Teleprompter Operator-Editing, and Cabas was a VTR man/editor. The
complaints (RAB VII Case Nos. 06-1100-01 and 06-1176-01) were consolidated and were assigned to Labor
Arbiter Julie C. Rendoque.
The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File Employees
Union (Union) executed a collective bargaining agreement (CBA) effective December 11, 1999 to December
10, 2002; they only became aware of the CBA when they obtained copies of the agreement; they learned that
they had been excluded from its coverage as ABS-CBN considered them temporary and not regular employees,
in violation of the Labor Code. They claimed they had already rendered more than a year of service in the
company and, therefore, should have been recognized as regular employees entitled to security of tenure and to
the privileges and benefits enjoyed by regular employees. They asked that they be paid overtime, night shift
differential, holiday, rest day and service incentive leave pay. They also prayed for an award of moral damages
and attorneys fees.
 
ABS-CBN explained the nature of the petitioners employment within the framework of its operations. It
claimed that: it operates in several divisions, one of which is the Regional Network Group (RNG). The RNG
exercises control and supervision over all the ABS-CBN local stations to ensure that ABS-CBN programs are
extended to the provinces. A local station, like the Cebu station, can resort to cost-effective and cost-saving
measures to remain viable; local stations produced shows and programs that were constantly changing because
of the competitive nature of the industry, the changing public demand or preference, and the seasonal nature of
media broadcasting programs. ABS-CBN claimed, too, that the production of programs per se is not necessary
or desirable in its business because it could generate profits by selling airtime to block-timers or through
advertising.
 
ABS-CBN further claimed that to cope with fluctuating business conditions, it contracts on a case-to-case basis
the services of persons who possess the necessary talent, skills, training, expertise or qualifications to meet the
requirements of its programs and productions. These contracted persons are called talents and are considered
independent contractors who offer their services to broadcasting companies.
 
Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called talent
fee taken from the budget of a particular program and subject to a ten percent (10%) withholding tax. Talents do
not undergo probation. Their services are engaged for a specific program or production, or a segment
thereof. Their contracts are terminated once the program, production or segment is completed.
 
ABS-CBN alleged that the petitioners services were contracted on various dates by its Cebu station as
independent contractors/off camera talents, and they were not entitled to regularization in these capacities.
 
On January 17, 2002, Labor Arbiter Rendoque rendered his decision[5] holding that the petitioners were
regular employees of ABS-CBN, not independent contractors, and are entitled to the benefits and privileges of
regular employees.
 
ABS-CBN appealed the ruling to the National Labor Relations Commission (NLRC) Fourth Division, mainly
contending that the petitioners were independent contractors, not regular employees.[6]
 
The Illegal Dismissal Case.
 
While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache, Jabonero, Castillo,
Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of employment with service contractor
Able Services. The four drivers and Atinen responded by filing a complaint for illegal dismissal (illegal
dismissal case). The case (RAB VII Case No. 07-1300-2002) was likewise handled by Labor Arbiter Rendoque.
 
In defense, ABS-CBN alleged that even before the labor arbiter rendered his decision of January 17, 2002 in the
regularization case, it had already undertaken a comprehensive review of its existing organizational structure to
address its operational requirements. It then decided to course through legitimate service contractors all driving,
messengerial, janitorial, utility, make-up, wardrobe and security services for both the Metro Manila and
provincial stations, to improve its operations and to make them more economically viable. Fulache, Jabonero,
Castillo, Lagunzad and Atinen were not singled out for dismissal; as drivers, they were dismissed because they
belonged to a job category that had already been contracted out. It argued that even if the petitioners had been
found to have been illegally dismissed, their reinstatement had become a physical impossibility because their
employer-employee relationships had been strained and that Atinen had executed a quitclaim and release.
 
In her April 21, 2003 decision in the illegal dismissal case,[7] Labor Arbiter Rendoque upheld the validity of
ABS-CBN's contracting out of certain work or services in its operations. The labor arbiter found that petitioners
Fulache, Jabonero, Castillo, Lagunzad and Atinen had been dismissed due to redundancy, an authorized cause
under the law.[8] He awarded them separation pay of one (1) months salary for every year of service.
 
Again, ABS-CBN appealed to the NLRC which rendered on December 15, 2004 a joint decision on the
regularization and illegal dismissal cases.[9] The NLRC ruled that there was an employer-employee
relationship between the petitioners and ABS-CBN as the company exercised control over the petitioners in the
performance of their work; the petitioners were regular employees because they were engaged to perform
activities usually necessary or desirable in ABS-CBN's trade or business; they cannot be considered contractual
employees since they were not paid for the result of their work, but on a monthly basis and were required to do
their work in accordance with the companys schedule. The NLRC thus affirmed with modification the labor
arbiter's regularization decision of January 17, 2002, additionally granting the petitioners CBA benefits and
privileges.
 
The NLRC reversed the labor arbiters ruling in the illegal dismissal case; it found that petitioners
Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed and awarded them backwages
and separation pay in lieu of reinstatement. Under both cases, the petitioners were awarded CBA benefits and
privileges from the time they became regular employees up to the time of their dismissal.
 
The petitioners moved for reconsideration, contending that Fulache, Jabonero, Castillo and Lagunzad are
entitled to reinstatement and full backwages, salary increases and other CBA benefits as well as 13th month
pay, cash conversion of sick and vacation leaves, medical and dental allowances, educational benefits and
service awards. Atinen appeared to have been excluded from the motion and there was no showing that he
sought reconsideration on his own.
 
ABS-CBN likewise moved for the reconsideration of the decision, reiterating that Fulache, Jabonero, Castillo
and Lagunzad were independent contractors, whose services had been terminated due to redundancy; thus, no
backwages should have been awarded. It further argued that the petitioners were not entitled to the CBA
benefits because they never claimed these benefits in their position paper before the labor arbiter while the
NLRC failed to make a clear and positive finding that that they were part of the bargaining unit; neither was
there evidence to support this finding.
 
The NLRC resolved the motions for reconsideration on March 24, 2006[10] by reinstating the two separate
decisions of the labor arbiter dated January 17, 2002,[11] and April 21, 2003,[12] respectively. Thus, on the
regularization issue, the NLRC stood by the ruling that the petitioners were regular employees entitled to the
benefits and privileges of regular employees. On the illegal dismissal case, the petitioners, while recognized as
regular employees, were declared dismissed due to redundancy. The NLRC denied the petitioners second
motion for reconsideration in its order of May 31, 2006 for being a prohibited pleading. [13]
 

The CA Petition and Decision


The petitioners went to the CA through a petition for certiorari under Rule 65 of the Rules of Court.
[14] They charged the NLRC with grave abuse of discretion in: (1) denying them the benefits under the CBA;
(2) finding no evidence that they are part of the companys bargaining unit; (3) not reinstating and awarding
backwages to Fulache, Jabonero, Castillo and Lagunzad; and (4) ruling that they are not entitled to damages and
attorneys fees.
 
ABS-CBN, on the other hand, questioned the propriety of the petitioners use of a certiorari petition. It argued
that the proper remedy for the petitioners was an appeal from the reinstated decisions of the labor arbiter.
 
In its decision of March 25, 2008,[15] the appellate court brushed aside ABS-CBNs procedural
question, holding that the petition was justified because there is no plain, speedy or adequate remedy from a
final decision, order or resolution of the NLRC; the reinstatement of the labor arbiters decisions did not mean
that the proceedings reverted back to the level of the arbiter. It likewise affirmed the NLRC ruling that the
petitioners second motion for reconsideration is a prohibited pleading under the NLRC rules.[16]
On the merits of the case, the CA ruled that the petitioners failed to prove their claim to CBA benefits since
they never raised the issue in the compulsory arbitration proceedings, and did not appeal the labor arbiters
decision which was silent on their entitlement to CBA benefits. The CA found that the petitioners failed to
show with specificity how Section 1 (Appropriate Bargaining Unit) and the other provisions of the CBA applied
to them.
On the illegal dismissal issue, the CA upheld the NLRC decision reinstating the labor arbiters April 21,
2003 ruling.[17] Thus, the drivers Fulache, Jabonero, Castillo and Lagunzad were not illegally dismissed as
their separation from the service was due to redundancy; they had not presented any evidence that ABS-CBN
abused its prerogative in contracting out the services of drivers. Except for separation pay, the CA denied the
petitioners claim for backwages, moral and exemplary damages, and attorneys fees.
 
The petitioners moved for reconsideration, but the CA denied the motion in a resolution promulgated on July 8,
2008.[18] Hence, the present petition.
 
The Petition
 
 
The petitioners challenge the CA ruling on both procedural and substantive grounds. As procedural questions,
they submit that the CA erred in: (1) affirming the NLRC resolution which reversed its own decision; (2)
sustaining the NLRC ruling that their second motion for reconsideration is a prohibited pleading; (3) not ruling
that ABS-CBN admitted in its position paper before the labor arbiter that they were members of the bargaining
unit as the matter was not raised in its appeal to the NLRC; and, (4) not ruling that notwithstanding their failure
to appeal from the first decision of the Labor Arbiter, they can still participate in the appeal filed by ABS-CBN
regarding their employment status.
 
On the substantive aspect, the petitioners contend that the CA gravely erred in: (1) not considering the evidence
submitted to the NLRC on appeal to bolster their claim that they were members of the bargaining unit and
therefore entitled to the CBA benefits; (2) not ordering ABS-CBN to pay the petitioners salaries, allowances
and CBA benefits after the NLRC has declared that they were regular employees of ABS-CBN; (3) not ruling
that under existing jurisprudence, the position of driver cannot be declared redundant, and that the petitioners-
drivers were illegally dismissed; and, (4) not ruling that the petitioners were entitled to damages and attorneys
fees.
 
The petitioners argue that the NLRC resolution of March 24, 2006[19] which set aside its joint decision
of December 15, 2004[20] and reinstated the twin decisions of the labor arbiter,[21] had the effect of
promulgating a new decision based on issues that were not raised in ABS-CBNs partial appeal to the
NLRC. They submit that the NLRC should have allowed their second motion for reconsideration so that it may
be able to equitably evaluate the parties conflicting versions of the facts instead of denying the motion on a
mere technicality.
 
On the question of their CBA coverage, the petitioners contend that the CA erred in not considering that ABS-
CBN admitted their membership in the bargaining unit, for nowhere in its partial appeal from the labor arbiters
decision in the regularization case did it allege that the petitioners failed to prove that they are members of the
bargaining unit; instead, the company stood by its position that the petitioners were not entitled to the CBA
benefits since they were independent contractors/program employees.
 
The petitioners submit that while they did not appeal the labor arbiters decision in the regularization case, ABS-
CBN raised the employment status issue in its own appeal to the NLRC; this appeal laid this issue open for
review. They argue that they could still participate in the appeal proceedings at the NLRC; pursue their position
on the issue; and introduce evidence as they did in their reply to the companys appeal.[22] They bewail the
appellate courts failure to consider the evidence they presented to the NLRC (consisting of documents and
sworn statements enumerating the activities they are performing) clearly indicating that they are part of the
rank-and-file bargaining unit at ABS-CBN.
 
The petitioners then proceeded to describe the work they render for the company. Collectively, they claim that
they work as assistants in the production of the Cebuano news program broadcast daily over ABS-CBN
Channel 3, as follows: Fulache, Jabonero, Castillo and Lagunzad as production assistants to drive the news
team; Ponce and Almendras, to shoot scenes and events with the use of cameras owned by ABS-CBN; Malig-
on Bigno, as studio production assistant and assistant editor/teleprompter operator; and Cabas, Jr., as production
assistant for video editing and operating the VTR machine recorder. As production assistants, the petitioners
submit that they are rank-and-file employees (citing in support of their position the Courts ruling in ABS-CBN
Broadcasting Corp. v. Nazareno[23]) who are entitled to salary increases and other benefits under the
CBA. Relying on the Courts ruling in New Pacific Timber and Supply Company, Inc. v. NLRC,[24] they posit
that to exclude them from the CBA would constitute undue discrimination and would deprive them of monetary
benefits they would otherwise be entitled to.
 
As their final point, the petitioners argue that even if they were not able to prove that they were members of the
bargaining unit, the CA should not have dismissed their petition.When the CA affirmed the rulings of both the
labor arbiter and the NLRC that they are regular employees, the CA should have ordered ABS-CBN to
recognize their regular employee status and to give them the salaries, allowances and other benefits and
privileges under the CBA.
 
On the dismissal of Fulache, Jabonero, Castillo and Lagunzad, the petitioners impute bad faith on ABS-CBN
when it abolished the positions of drivers claiming that the company failed to comply with the requisites of a
valid redundancy action. They maintain that ABS-CBN did not present any evidence on the new staffing pattern
as approved by the management of the company, and did not even bother to show why it considered the
positions of drivers superfluous and unnecessary; it is not true that the positions of drivers no longer existed
because these positions were contracted out to an agency that, in turn, recruited four drivers to take the place of
Fulache, Jabonero, Castillo and Lagunzad. As further indication that the redundancy action against the four
drivers was done in bad faith, the petitioners call attention to ABS-CBNs abolition of the position of drivers
after the labor arbiter rendered her decision declaring Fulache, Jabonero, Castillo and Lagunzad regular
company employees. The petitioners object to the dismissal of the four drivers when they refused to sign
resignation letters and join Able Services, a contracting agency, contending that the four had no reason to resign
after the labor arbiter declared them regular company employees.
 
Since their dismissal was illegal and attended by bad faith, the petitioners insist that they should be reinstated
with backwages, and should likewise be awarded moral and exemplary damages, and attorney's fees.
 
The Case for ABS-CBN
 
In its Comment filed on January 28, 2009,[25] ABS-CBN presents several grounds which may be synthesized
as follows:
 
1.     The petition raises questions of fact and not of law.
2.     The CA committed no error in affirming the resolution of the NLRC reinstating the decisions of the
labor arbiter.
 
ABS-CBN submits that the petition should be dismissed for having raised questions of fact and not of law in
violation of Rule 45 of the Rules of Court. It argues that the question of whether the petitioners were covered by
the CBA (and therefore entitled to the CBA benefits) and whether the petitioners were illegally dismissed
because of redundancy, are factual questions that cannot be reviewed on certiorari because the Court is not a
trier of facts.
 
ABS-CBN dismisses the petitioners issues and arguments as mere rehash of what they raised in their pleadings
with the CA and as grounds that do not warrant further consideration. It further contends that because the
petitioners did not appeal the labor arbiter decisions, these decisions had lapsed to finality and could no longer
be the subject of a petition for certiorari; the petitioners cannot obtain from the appellate court affirmative relief
other than those granted in the appealed decision. It also argues that the NLRC did not commit any grave abuse
of discretion in reinstating the twin decisions of the labor arbiter, thereby affirming that no CBA benefits can be
awarded to the petitioners; in the absence of any illegal dismissal, the petitioners were not entitled to
reinstatement, backwages, damages, and attorney's fees.
 
The Court's Ruling
 
We first resolve the parties procedural questions.
 
ABS-CBN wants the petition to be dismissed outright for its alleged failure to comply with the requirement of
Rule 45 of the Rules of Court that the petition raises only questions of law.[26]
 
We find no impropriety in the petition from the standpoint of Rule 45. The petitioners do not question the
findings of facts of the assailed decisions. They question the misapplication of the law and jurisprudence on the
facts recognized by the decisions. For example, they question as contrary to law their exclusion from the CBA
after they were recognized as regular rank-and-file employees of ABS-CBN. They also question the basis in
law of the dismissal of the four drivers and the legal propriety of the redundancy action taken against. To
reiterate the established distinctions between questions of law and questions of fact, we quote hereunder our
ruling in New Rural Bank of Guimba (N.E.) Inc. v. Fermina S. Abad and Rafael Susan:[27]
 
We reiterate the distinction between a question of law and a question of fact. A
question of law exists when the doubt or controversy concerns the correct application of
law or jurisprudence to a certain set of facts; or when the issue does not call for an
examination of the probative value of the evidence presented, the truth or falsehood of the
facts being admitted. A question of fact exists when a doubt or difference arises as to the
truth or falsehood of facts or when the query invites calibration of the whole evidence
considering mainly the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each other and to the whole, and the
probability of the situation.
 
We also find no error in the CAs affirmation of the denial of the petitioners second motion for reconsideration
of the March 24, 2006 resolution of the NLRC reinstating the labor arbiters twin decisions. The petitioners
second motion for reconsideration was a prohibited pleading under the NLRC rules of procedure.[28]
 
The parties other procedural questions directly bear on the merits of their positions and are discussed and
resolved below, together with the core substantive issues of: (1) whether the petitioners, as regular employees,
are members of the bargaining unit entitled to CBA benefits; and (2) whether petitioners Fulache, Jabonero,
Castillo and Lagunzad were illegally dismissed.
 
 
The Claim for CBA Benefits
 
We find merit in the petitioners positions.
 
As regular employees, the petitioners fall within the coverage of the bargaining unit and are therefore
entitled to CBA benefits as a matter of law and contract. In the root decision (the labor arbiters decision
of January 17, 2002) that the NLRC and CA affirmed, the labor arbiter declared:
 
WHEREFORE, IN THE LIGHT OF THE FOREGOING, taking into account the factual
scenario and the evidence adduced by both parties, it is declared that complainants in these cases
are REGULAR EMPLOYEES of respondent ABS-CBN and not INDEPENDENT
CONTRACTORS and thus henceforth they are entitled to the benefits and privileges attached to
regular status of their employment.
 
 
This declaration unequivocally settled the petitioners employment status: they are ABS-CBNs regular
employees entitled to the benefits and privileges of regular employees. These benefits and privileges arise from
entitlements under the law (specifically, the Labor Code and its related laws), and from their employment
contract as regular ABS-CBN employees, part of which is the CBA if they fall within the coverage of this
agreement. Thus, what only needs to be resolved as an issue for purposes of implementation of the decision is
whether the petitioners fall within CBA coverage.
 
The parties 1999-2002 CBA provided in its Article I (Scope of the Agreement) that:[29]
 
Section 1. APPROPRIATE BARGAINING UNIT. The parties agree that the appropriate
bargaining unit shall be regular rank-and-file employees of ABS-CBN BROADCASTING
CORPORATION but shall not include:
 
a) Personnel classified as Supervisor and Confidential employees;
 
b) Personnel who are on casual or probationary status as defined in Section 2
hereof;
 
c) Personnel who are on contract status or who are paid for specified units of
work such as writer-producers, talent-artists, and singers.
 
The inclusion or exclusion of new job classifications into the bargaining unit shall
be subject of discussion between the COMPANY and the UNION. [emphasis
supplied]
 
Under these terms, the petitioners are members of the appropriate bargaining unit because they are
regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in
the records shows that they are supervisory or confidential employees; neither are they casual nor probationary
employees. Most importantly, the labor arbiters decision of January 17, 2002 affirmed all the way up to the CA
level ruled against ABS-CBNs submission that they are independent contractors. Thus, as regular rank-and-file
employees, they fall within CBA coverage under the CBAs express terms and are entitled to its benefits.
 
We see no merit in ABS-CBNs arguments that the petitioners are not entitled to CBA benefits because:
(1) they did not claim these benefits in their position paper; (2) the NLRC did not categorically rule that the
petitioners were members of the bargaining unit; and (3) there was no evidence of this membership. To further
clarify what we stated above, CBA coverage is not only a question of fact, but of law and contract. The factual
issue is whether the petitioners are regular rank-and-file employees of ABS-CBN. The tribunals below
uniformly answered this question in the affirmative. From this factual finding flows legal effects touching on
the terms and conditions of the petitioners regular employment. This was what the labor arbiter meant when he
stated in his decision that henceforth they are entitled to the benefits and privileges attached to regular status of
their employment. Significantly, ABS-CBN itself posited before this Court that the Court of Appeals did not
gravely err nor gravely abuse its discretion when it affirmed the resolution of the NLRC dated March 24, 2006
reinstating and adopting in toto the decision of the Labor Arbiter dated January 17, 2002 x x x.[30] This
representation alone fully resolves all the objections procedural or otherwise ABS-CBN raised on the
regularization issue.
 
The Dismissal of Fulache, Jabonero,
Castillo and Lagunzad
 
 
The termination of employment of the four drivers occurred under highly questionable circumstances
and with plain and unadulterated bad faith.
 
The records show that the regularization case was in fact the root of the resulting bad faith as this case
gave rise and led to the dismissal case. First, the regularization case was filed leading to the labor arbiters
decision[31] declaring the petitioners, including Fulache, Jabonero, Castillo and Lagunzad, to be regular
employees. ABS-CBN appealed the decision and maintained its position that the petitioners were independent
contractors.
 
In the course of this appeal, ABS-CBN took matters into its own hands and terminated the petitioners
services, clearly disregarding its own appeal then pending with the NLRC. Notably, this appeal posited that the
petitioners were not employees (whose services therefore could be terminated through dismissal under the
Labor Code); they were independent contractors whose services could be terminated at will, subject only to the
terms of their contracts. To justify the termination of service, the company cited redundancy as its authorized
cause but offered no justificatory supporting evidence. It merely claimed that it was contracting out the
petitioners activities in the exercise of its management prerogative.
 
ABS-CBNs intent, of course, based on the records, was to transfer the petitioners and their activities to a
service contractor without paying any attention to the requirements of our labor laws; hence, ABS-CBN
dismissed the petitioners when they refused to sign up with the service contractor.[32] In this manner, ABS-
CBN fell into a downward spiral of irreconcilable legal positions, all undertaken in the hope of saving itself
from the decision declaring its talents to be regular employees.
By doing all these, ABS-CBN forgot labor law and its realities.
 
It forgot that by claiming redundancy as authorized cause for dismissal, it impliedly admitted that the
petitioners were regular employees whose services, by law, can only be terminated for the just and authorized
causes defined under the Labor Code.
 
Likewise ABS-CBN forgot that it had an existing CBA with a union, which agreement must be
respected in any move affecting the security of tenure of affected employees; otherwise, it ran the risk of
committing unfair labor practice both a criminal and an administrative offense.[33] It similarly forgot that an
exercise of management prerogative can be valid only if it is undertaken in good faith and with no intent to
defeat or circumvent the rights of its employees under the laws or under valid agreements.[34]
 
Lastly, it forgot that there was a standing labor arbiters decision that, while not yet final because of its
own pending appeal, cannot simply be disregarded. By implementing the dismissal action at the time the labor
arbiters ruling was under review, the company unilaterally negated the effects of the labor arbiters ruling while
at the same time appealling the same ruling to the NLRC. This unilateral move is a direct affront to the NLRCs
authority and an abuse of the appeal process.
 
All these go to show that ABS-CBN acted with patent bad faith. A close parallel we can draw to
characterize this bad faith is the prohibition against forum-shopping under the Rules of Court. In forum-
shopping, the Rules characterize as bad faith the act of filing similar and repetitive actions for the same cause
with the intent of somehow finding a favorable ruling in one of the actions filed.[35] ABS-CBNs actions in the
two cases, as described above, are of the same character, since its obvious intent was to defeat and render
useless, in a roundabout way and other than through the appeal it had taken, the labor arbiters decision in the
regularization case. Forum-shopping is penalized by the dismissal of the actions involved. The penalty against
ABS-CBN for its bad faith in the present case should be no less.
 
The errors and omissions do not belong to ABS-CBN alone. The labor arbiter himself who handled both
cases did not see the totality of the companys actions for what they were. He appeared to have blindly allowed
what he granted the petitioners with his left hand, to be taken away with his right hand, unmindful that the
company already exhibited a badge of bad faith in seeking to terminate the services of the petitioners whose
regular status had just been recognized. He should have recognized the bad faith from the timing alone of ABS-
CBNs conscious and purposeful moves to secure the ultimate aim of avoiding the regularization of its so-called
talents.
 
The NLRC, for its part, initially recognized the presence of bad faith when it originally ruled that:
While notice has been made to the employees whose positions were declared redundant,
the element of good faith in abolishing the positions of the complainants appear to be wanting.In
fact, it remains undisputed that herein complainants were terminated when they refused to sign
an employment contract with Able Services which would make them appear as employees of the
agency and not of ABS-CBN. Such act by itself clearly demonstrates bad faith on the part of the
respondent in carrying out the companys redundancy program x x x.[36]
 
On motion for reconsideration by both parties, the NLRC reiterated its pronouncement that complainants were
illegally terminated as extensively discussed in our Joint Decision dated December 15, 2004.[37] Yet, in an
inexplicable turnaround, it reconsidered its joint decision and reinstated not only the labor arbiters decision
of January 17, 2002 in the regularization case, but also his illegal dismissal decision of April 21, 2003.
[38] Thus, the NLRC joined the labor arbiter in his error that we cannot but characterize as grave abuse of
discretion.
 
The Court cannot leave unchecked the labor tribunals patent grave abuse of discretion that resulted, without
doubt, in a grave injustice to the petitioners who were claiming regular employment status and were
unceremoniously deprived of their employment soon after their regular status was recognized. Unfortunately,
the CA failed to detect the labor tribunals gross errors in the disposition of the dismissal issue. Thus, the CA
itself joined the same errors the labor tribunals committed.
 
The injustice committed on the petitioners/drivers requires rectification. Their dismissal was not only
unjust and in bad faith as the above discussions abundantly show. The bad faith in ABS-CBNs move toward its
illegitimate goal was not even hidden; it dismissed the petitioners already recognized as regular employees for
refusing to sign up with its service contractor. Thus, from every perspective, the petitioners were illegally
dismissed.
 
 
By law,[39] illegally dismissed employees are entitled to reinstatement without loss of seniority rights
and other privileges and to full backwages, inclusive of allowances, and to other benefits or their monetary
equivalent from the time their compensation was withheld from them up to the time of their actual
reinstatement. The four dismissed drivers deserve no less.
 
Moreover, they are also entitled to moral damages since their dismissal was attended by bad faith.
[40] For having been compelled to litigate and to incur expenses to protect their rights and interest, the
petitioners are likewise entitled to attorneys fees.[41]
 
WHEREFORE, premises considered, we hereby GRANT the petition. The decision dated March 25,
2008 and the resolution dated July 8, 2008 of the Court of Appeals in CA-G.R. SP No. 01838 are
hereby REVERSED and SET ASIDE. Accordingly, judgment is hereby rendered as follows:
 
1. Confirming that petitioners FARLEY FULACHE, MANOLO JABONERO, DAVID
CASTILLO, JEFFREY LAGUNZAD, MAGDALENA MALIG-ON BIGNO, FRANCISCO
CABAS, JR., HARVEY PONCE and ALAN C. ALMENDRAS are regular employees of ABS-
CBN BROADCASTING CORPORATION, and declaring them entitled to all the rights, benefits
and privileges, including CBA benefits, from the time they became regular employees in
accordance with existing company practice and the Labor Code;
 
2. Declaring illegal the dismissal of Fulache, Jabonero, Castillo and Lagunzad, and ordering ABS-
CBN to immediately reinstate them to their former positions without loss of seniority rights with
full backwages and all other monetary benefits, from the time they were dismissed up to the date
of their actual reinstatement;
 
3. Awarding moral damages of P100,000.00 each to Fulache, Jabonero, Castillo and
Lagunzad; and,
 
4. Awarding attorneys fees of 10% of the total monetary award decreed in this Decision.
 
Costs against the respondent.
 
SO ORDERED.
G.R. No. 74262 October 29, 1987

GENERAL RUBBER and FOOTWEAR CORPORATION, petitioner, 


vs.
BUREAU OF LABOR RELATIONS, NATIONAL ASSOCIATION OF TRADE UNION OF
MONTHLY PAID EMPLOYEES-NATU, respondents.

PARAS, J.:

Petitioner is a corporation engaged in the business of manufacturing rubber sandals and oilier rubber products.
In 1985, the Samahang Manggagawa sa General Rubber Corporation — ANGLO was formed by the daily paid
— rank and file employees as their union for collective bargaining, after the expiration on October 15, 1985 of
the collective bargaining agreement previously executed by petitioner with General Rubber Workers Union
(Independent) on October 15, 1982. Be it noted however that on July 17, 1985, the monthly — paid employees
of the petitioner-corporation, after forming their own collective bargaining unit the National Association of
Trade Unions of Monthly Paid Employees-NATU, filed a petition for direct certification with tile Bureau of
Labor Relations which petition was opposed by herein petitioner. On September 2, 1985, the Med-Arbiter
issued an Order for the holding of a certification election after finding that a certification election is in order in
this case and observing that it is the fairest remedy to determine whether employees of petitioner desire to have
a union or not. On appeal, the Bureau of Labor Relations denied both the appeal and motion for reconsideration
interposed by petitioner and affirmed the ruling of the Med-Arbiter. Hence, the present petition, imputing
serious error's of law and grave abuse of discretion on the part of the Bureau of Labor Relations in issuing the
assailed order which sanctioned the creation of two (2) bargaining units within petitioner-corporation with the
following:

GROUNDS FOR REVIEW

The Bureau of Labor Relations committed serious error of law and grave abuse of discretion in
ordering the creation of a new bargaining unit at petitioner, notwithstanding that there is already
an existing bargaining unit, whose members are represented for collective bargaining purposes
by Samahang Manggagawa sa General Rubber Corporation- ANGLO.

II

The Bureau of Labor Relations committed serious error of law in holding that managerial
employees or those employees exercising managerial functions can legally form and join a labor
organization and be members of the new bargaining unit.

III

The Bureau of Labor Relations committed grave abuse of discretion in holding that supervisors,
employees perform- ing managerial, confidential and technical functions and office personnel,
who are negotiated by petitioner to be excluded from the existing bargaining unit because they
are performing vital functions to management, can form and join a labor organization and be
members of the new bargaining unit.

Expounding on its position, petitioner argues that:

1. The order violates the thrust of the Labor Code insofar as formation of a bargaining unit is concerned. A
policy is in favor of a larger unit and not the creation of smaller units in one establishment which might lead to
formation, thus impractical.

2. Article 246 of the Labor Code explicitly provides that managerial employees are ineligible to join or form
any labor organization. Since it has been shown by the petitioners that 30% of the monthly-paid employees are
managers or employees exercising managerial functions, it was grave error for the Bureau of Labor Relations to
allow these monthly paid employees to form a union and/or a bargaining unit.
3. The Bureau of Labor Relations overlooked the fact that these monthly-paid-employees are excluded from the
first existing bargaining unit of the daily-paid rank and file employees because in the year 1963, when the
employees of petitioner initially started to exercise their right to self-organization, herein petitioner bargained
for the exclusion of the monthly-paid employees from the existing bargaining unit because they are performing
vital functions of management. In view of this exclusion, petitioner took upon itself to take care of them and
directly gave them the benefits or privileges without having to bargain for them or without the aid of the
bargaining arm or force of a union.

Petitioner's contentions are devoid of merit.

Among other issues answered in the assailed order are the following findings of fact:

Regarding the second issue, we deem it necessary to examine the respective functions of the
employees. It appears therefrom that they perform supervisory functions. Verily they make
recommendation petitions as to what Managerial actions to take in disciplinary cases. However,
that fact alone does not make them managerial employees already, It is more a question of how
effective are those recommendations which aspect has not been clearly established in this case.
As defined in the Labor Code, a "managerial employee is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees, or to effectively recommend such
managerial actions." Thus, employees who do not fall within this definition are considered rank-
and-file employees.

Lastly, we find that the third issue has been raised for the first time on appeal. It has been the
policy of the Bureau to encourage the formation of an employer unit "unless circumstances
otherwise require. The proliferation of unions in an employer unit is discouraged as a matter of
policy unless there are compelling reasons which would deny a certain class of employees the
right to self-organization for purposes of collective bargaining, This case does not fall squarely
within the exception. It is undisputed that the monthlies who are rank-and-file have been
historically excluded from the bargaining unit composed of daily-paid rank-and-filers that is,
since 1963 when the existing rank- and- file union was recognized. In fact, the collective
bargaining agreement (CBA) which expired last 15 October 1985 provides as follows:

ARTICLE I

SCOPE

Section 1. Appropriate bargaining unit. — This Agreement covers all regular


employees and workers employed by the company at its factory in Malabon,
Metro Manila. The words "employee," "laborer" and "workers" when used in this
Agreement shall be deemed to refer to those employees within the bargaining
unit. Employees who occupy managerial, confidential or technical positions,
supervisors, contract employees, monthly-paid employees, security as wen as
office personnel are excluded from the appropriate bargaining unit (emphasis
supplied).

In view of the above, the monthly-paid rank-and-file employees ran form a union of their own,
separate and distinct from the existing rank-and-file union composed of daily-paid workers.
(Rollo, pp. 1920)

Thus, it can be readily seen from the above findings of the Bureau of labor Relations that the members of
private respondent are not managerial employees as claimed by petitioners but merely considered as rank-and-
file employees who have every right to self-organization or to be heard through a duly certified collective
bargaining union. The Supervisory power of the members of private respondent union consists merely in
recommending as to what managerial actions to take in disciplinary cases. These members of private respondent
union do not fit the definition of managerial employees which We laid down in the case of Bulletin Publishing
Corporation v. Sanchez (144 SCRA 628). These members of private respondent union are therefore not
prohibited from forming their own collective bargaining unit since it has not been shown by petitioner that "the
responsibilities (of these monthly-paid-employees) inherently require the exercise of discretion and independent
judgment as supervisors" or that "they possess the power and authority to lay down or exercise management
policies." Similarly, he held in the same case that "Members of supervisory unions who do not fall within the
definition of managerial employees shall become eligible to loin or assist the rank-and-file labor organization,
and if none exists, to form or assist in the forming of such rank-and-file organizations.

Perhaps it is unusual for the petitioner to have to deal with two (2) collective bargaining unions but there is no
one to blame except petitioner itself for creating the situation it is in. From the beginning of the existence in
1963 of a bargaining limit for the employees up to the present, petitioner had sought to indiscriminately
suppress the members of the private respondent"s right to self-organization provided for by law. Petitioner, in
justification of its action, maintained that the exclusion of the members of the private respondent from the
bargaining union of the rank-and-file or from forming their own union was agreed upon by petitioner
corporation with the previous bargaining representatives namely: the General "Rubber Workers Union PTGWO
the General Workers Union — NAFLU and the General Rubber Workers Union (independent). Such posture
has no leg to stand on. It has not been shown that private respondent was privy to this agreement. And even if it
were so, it can never bind subsequent federations and unions particularly private respondent-union because it is
a curtailment of the right to self-organization guaranteed by the labor laws. However, to prevent any difficulty.
and to avoid confusion to all concerned and, more importantly, to fulfill the policy of the New Labor Code as
well as to be consistent with Our ruling in the Bulletin case, supra, the monthly-paid rank-and-file employees
should be allowed to join the union of the daily-paid-rank-and-file employees of petitioner so that they can also
avail of the CBA benefits or to form their own rank-and-file union, without prejudice to the certification
election that has been ordered.

WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit.

SO ORDERED.