Workers With No Right of Self-Organization

D.
WORKERS WITH NO RIGHT OF SELF-ORGANIZATION
1. MANAGERIAL AND CONFIDENTIAL EMPLOYEES ART. (245) 255
ART. 82
SOUTHERN PHILIPPINE FEDERATION OF LABOR vs. CALLEJA

This petition for certiorari seeks to annul and set aside the Order issued by public respondent Director
Pura Ferrer Calleja of the Bureau of Labor Relations dated June 23, 1987 which certified the respondent
union, Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), as
the sole and exclusive bargaining representative of the rank-and-file employees of respondent Apex
Mining Company (Apex) after the said public respondent denied the motion of herein petitioner to
exclude one hundred ninety-seven (197) employees from voting in the certification election. The denial
is based on the ground that they are rank-and-file employees.
As summarized by the Solicitor General in his Comment, the facts are as follows:
On December 29, 1986, petitioner Southern Philippines Federation of Labor filed a petition for
certification election among the rank-and-file employees of private respondent Apex Mining Company,
Incorporated with the Department of Labor in Region XI, Davao City.
On February 6, 1987, Med-Arbiter Conrado 0. Macasa, Sr. issued an Order calling for the holding of the
certification election on February 23, 1987 among the rank-and-file employees of APEX with the
following choices:
l. Southern Philippines Federation of Labor (SPFL)
2. Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan) and
3. No union.
On February 9, 1987, a pre-election conference was conducted among the petitioner Union; private
respondent Union, MMEU-Sandigan; and APEX to settle details in the conduct of the election such as the
venue of the election and the list of employees qualified to vote in the election.
During the pre-election conference, the parties agreed to delete from the list of workers prepared and
submitted by APEX numbering One Thousand Seven Hundred Sixteen (1,716), the names of nineteen (1
9) managerial employees and seventy-three probationary employees who were statutorily disqualified
from voting. Petitioner Union objected to the inclusion in said list of the following: (1) employees
occupying the positions of Supervisor I, II, and III; (2) employees under confidential/special payrolls; and
(3) employees who were not paying Union dues. The petitioner Union contends that the
aforementioned employees were disqualified from participating in the certification election since the
Supervisors were managerial employees while the last two were disqualified by virtue of their non-
membership in the Union and their exclusion from the benefits of the collective bargaining agreement.
In view of the lack of agreement among the parties on the list of qualified voters, Med-Arbiter Macasa
issued an Order on February 20, 1987, the dispositive portion of which reads:
"Wherefore, premises considered it is hereby declared that the following groups of workers be not
included in the list of employees qualified to vote in the consent election on February 23, 1987, as
follows:
1 Nineteen (19) managerial employees;
2 Seventy-three (73) probationary employees; and
3 Nineteen (19) Supervisors 1;
All other workers except the foregoing will be allowed to vote."

On February 23, 1987, the day of the certification election, petitioner Union filed a Motion for
Reconsideration of Macasa's Order dated February 20, 1987. The certification election was nonetheless
conducted, with the result as follows:
On the basis of the foregoing results, respondent Union filed an Urgent Motion to Open the Challenged
Ballots, with the prayer, to wit:
"Wherefore, premises considered, it is most respectfully prayed of this Honorable office that this instant
motion be given due course and that an order be issued to open and count the challenged ballots in
order to determine, once and for all, the winner in the certification and/or consent election and
thereafter certify the sole and exclusive collective bargaining representative of all rank-and-file
employees and workers of Apex Mining Company, Incorporated."
xxx xxx xxx
On March 11, 1987, APEX filed a Manifestation and Motion manifesting its interest in the speedy
resolution of the case and primary concern for "the restoration of normalcy and the preservation of
industrial peace in the already explosive situation in the mining area."
xxx xxx xxx
On March 19, 1987, Med-Arbiter Macasa issued an Order, the dispositive portion of which reads:
"Wherefore, the interest of industrial peace considered, it is hereby directed that the challenged ballots
be opened and inventoried on 26 March 1987 at 3:00 p.m., before the entire records of the case be
indorsed to the BLR for review."
xxx xxx xxx

Petitioner Union appealed Macasa's Order dated March 19, 1987 to the Bureau of Labor Relations. On
April 14, 1987, BLR Director Pura Ferrer-Calleja issued an Order, the dispositive portion of which reads:
"WHEREFORE, the Appeal of petitioner Southern Philippines Federation of Labor (SPFL) is hereby
dismissed for lack of merit and the Med- Arbiter's Order dated 19 March 1987 is affirmed with
modification that the 197 ballots should be opened and canvassed by Labor Regional Office XI, Davao
City. Let, therefore, the records of this case be immediately remanded to the said office, for the
immediate implementation of this Resolution."
Petitioner Union moved for a reconsideration of the resolution dated April 14, 1987. Meanwhile, on May
21, 1987, Med-Arbiter Macasa opened and canvassed the 197 challenged ballots with the result as
follows:
SPFL 12 votes
SANDIGAN 178 votes
No Union 2 votes
Spoiled 4 votes
Envelop with
no ballots 1 vote
__________
TOTAL 197 votes
As a consequence of the opening and canvass of the challenged ballots, the outcome of the certification
election became:
SPFL 626 votes
SANDIGAN 706 votes
No Union 11 votes
___________
TOTAL 1,343 votes
Based on the aforementioned results, respondent Union filed a Manifestation with the BLR with prayer
for the issuance of Certification Order certifying it as the sole and exclusive bargaining representative of
the rank-and-file employees of APEX. On June 23, 1987, Director Calleja issued an Order, the dispositive
portion of which reads:
"WHEREFORE, the Motion for reconsideration of Petitioner SPFL is hereby denied for lack of merit.
Meanwhile, intervenor Mindanao Employees Union-Sandigan Ng Manggagawang Pilipino (MMEU-
SANDIGAN) is hereby certified as the sole and exclusive bargaining representative of the rank-and-file
employees of respondent Apex Mining Company, Inc. Accordingly, the management of Apex Mining
Company, Inc., is directed to negotiate with (MMEU-SANDIGAN) for the conclusion of a collective
bargaining agreement (CBA)."
Hence, this petition.
The issue raised in this petition is whether or not the public respondent committed grave abuse of
discretion in allowing the 197 employees to vote in the certification election when, as alleged by the
petitioner, they are disqualified by express provision of law or under the existing collective bargaining
agreement.
It is maintained by the petitioner that under the Labor Code, managerial employees are excluded from
forming or joining a collective bargaining unit; and under the collective bargaining agreement executed
between Apex and respondent union, among those who are excluded from the bargaining unit are: a)
managerial employees as defined in paragraph K, Article 212 of the Labor Code; b) those performing
supervisory functions; and c) those holding confidential positions as determined by the company.
Therefore, the employees holding the positions of Supervisors II and III and those in the confidential
payrolls should be excluded from joining the bargaining unit and from voting in the certification election.
Likewise, those employees who are not paying union dues should be excluded from the same since the
existing CBA contains a Union shop provision.
The contentions have no merit.
Although we have upheld the validity of the CBA as the law among the parties, (see Planters Products,
Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989), its provisions cannot override what is expressly
provided by law that only managerial employees are ineligible to join, assist or form any labor
organization (See Art. 247, Labor Code). Therefore, regardless of the challenged employees'
designations, whether they are employed as Supervisors or in the confidential payrolls, if the nature of
their job does not fall under the definition of "managerial" as defined in the Labor Code, they are eligible
to be members of the bargaining unit and to vote in the certification election. Their right to self-
organization must be upheld in the absence of an express provision of law to the contrary. It cannot be
curtailed by a collective bargaining agreement.
Hence, it is important to determine whether the positions of Supervisors II and III are considered
"managerial" under the law.
As defined in the Labor Code and as we have held in the case of Franklin Baker Company of the Phils. v.
Trajano, (1 57 SCRA 416, 421-423, [1988]):
A managerial employee is defined as one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or to effectively recommend such managerial actions. (Reynolds Phil. Corp. v.
Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.)
xxxxxxxxx
The test of "supervisory" or "managerial status" depends on whether a person possesses authority to
act in the interest of his employer in the matter specified in Article 212 (k) of the Labor Code and Section
1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical in nature,
but requires the use of independent judgment. Thus, where such recommendatory powers as in the
case at bar, are subject to evaluation, review and final action by the department heads and other higher
executives of the company, the same, although present, are not effective and not an exercise of
independent judgment as required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963]).
Furthermore, in line with the ruling of this Court, subject employees are not managerial employees
because as borne by the records, they do not participate in policy making but are given ready policies to
execute and standard practices to observe, thus having little freedom of action (National Waterworks
and Sewerage Authority v. NWSA Consolidated, L-18938, 11 SCRA 766 [1964]).
The petitioner's motion for reconsideration before the public respondent outlined the job description of
Supervisors. In the category of Supervisory II, the "General Summary" provides:
GENERAL SUMMARY:
Assists the Foreman in the effective dispatching/distribution of manpower and equipment to carry out
approved work. (p. 30, Rollo)
while the first duty enumerated in the position of Supervisor III states:
1. Executes and coordinates work plans emanating from his supervisors. (p. 32, Rollo)
Thus, it is clear from the above provisions that the functions of the questioned positions are not
managerial in nature because they only execute approved and established policies leaving little or no
discretion at all whether to implement the said policies or not. The respondent Director, therefore, did
not commit grave abuse of discretion in dismissing the petitioner's appeal from the Med-Arbiter's Order
to open and count the challenged ballots in denying the petitioner's motion for reconsideration and in
certifying the respondent Union as the sole and exclusive bargaining representative of the rank-and-file
employees of respondent Apex .
As regards the employees in the confidential payroll, the petitioner has not shown that the nature of
their jobs is classified as managerial except for its allegation that they are considered by management as
occupying managerial positions and highly confidential. Neither can payment or non-payment of union
dues be the determining factor of whether the challenged employees should be excluded from the
bargaining unit since the union shop provision in the CBA applies only to newly hired employees but not
to members of the bargaining unit who were not members of the union at the time of the signing of the
CBA. It is, therefore, not impossible for employees to be members of the bargaining unit even though
they are non-union members or not paying union dues.
WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the petitioner.
SO ORDERED.
PHILTRANCO SERVICE ENTERPRISES vs. BLR

In this petition for certiorari, the petitioner assails the order of the Bureau of Labor Relations (BLR)
dated September 5, 1988. The dispositive portion of the order reads:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 4 April 1988 is hereby set aside
and vacated and a new one entered ordering the conduct of a certification election among regular rank-
and-file professional, technical, administrative and confidential employees of respondent company, with
the following choices:
1. Kapisanan ng mga Kawani, Assistant Manggagawa at Konpidensyal sa Philtranco (KASAMA KO)
2. No Union.
Let, therefore the records of the case be remanded to the Office of origin for the immediate conduct of
the election.
SO ORDERED. (Rollo, p. 33)
The antecedent facts are as follows:
Petitioner Philtranco Service Enterprises, Inc. is a land transportation company engaged in the business
of carrying passengers and freight. The company employees included field workers consisting of drivers,
conductors, coach drivers, coach stewards and mechanics and office employees like clerks, cashiers,
programmers, telephone operators, etc.
On February 15, 1988, the Kapisanan ng mga Kawani, Assistant, Manggagawa at Konpidensyal sa
Philtranco (KASAMA KO), a registered labor organization filed a petition for certification election with
the Department of Labor and Employment, alleging among others that:
xxx xxx xxx
3. Petitioner desires to represent all professional, technical, administrative, and confidential

employees personnel of respondent at its establishments in Luzon, Visayas and Mindanao for purposes
of collective bargaining;
4. The aforementioned employees were always expressly excluded from participating in the
certification election conducted among the rank and file employees (drivers, conductors, coach drivers,
coach stewards, and mechanics) of respondent and are excluded from the bargaining unit covered by
the CBA between respondent and its rank and file employees. In addition, there exist substantial
differences in the terms and conditions of employment between the above-mentioned employees,
hence, the former are covered by another appropriate bargaining unit which is separate and distinct
from that of the rank and file employees of respondent and; which has been recognized by the Bureau
of Labor Relations and upheld by the Honorable Supreme Court. Attached hereto as Annex 'A' and
Annex 'B' are copies of the decision of the BLR and the Supreme Court in support thereof;
xxx xxx xxx
6. The petition is supported by the signatures of more than twenty percent (20%) of all covered
employees as provided for by law and which shall be presented during the initial hearing;
xxx xxx xxx

8. There has been no Consent Election or Certification Election held and conducted by this
Honorable Office for the past three (3) years prior to the filing of this petition in the bargaining unit
petitioner sought to represent, the last Certification Election having been held last November 27, 1984.
Attached hereto as Annex "C" is a copy of the Order issued by this Honorable Office relative to the result
of the last certification election. (Rollo, pp. 4-5)
On February 24, 1988, the National Mines and Allied Workers Union (NAMAWU-MIF) filed a motion for
intervention alleging that it is the bargaining agent of the workers at Philtranco and as such it has a
substantial interest in the outcome of the petition.
On February 26, 1988, Arbiter Paterno Adap called the parties to a hearing. Philtranco and NAMAWU
were ordered to submit their respective position papers and KASAMA KO was given the opportunity to
submit a reply.
On April 4, 1988, a resolution was rendered with the following dispositive portion:
WHEREFORE, in the light of the foregoing premises, this petition is, as it is hereby ordered DISMISSED. If
there are still individual members of the herein petitioner eligible to join a labor organization, it is
hereby directed that all should be included/incorporated in the existing bargaining unit.
Parties are further directed/enjoined to device a mechanism for the implementation of the matter
herein treated. (Rollo, pp. 29-30)
KASAMA KO appealed to the Bureau of Labor Relations (BLR) On September 5, 1988 the BLR reversed
the resolution of the Med-Arbiter. A motion for reconsideration was denied in an order dated October
10, 1988.
As prayed for by the petitioner, a temporary restraining order was issued by this Court on November 7,
1988 restraining the BLR from enforcing and/or carrying out the decision dated September 5, 1988 and
the order dated October 10, 1988.
The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank
and file groups. Thus, Art. 212 (k) of the Code provides:
xxx xxx xxx
(k) Managerial employee' is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or to effectively recommend such managerial actions. All employees not falling
within this definition are considered rank and file employees for purposes of this Book.
In implementation of the aforequoted provision of the law, Section 11 of Rule II, Book V of the Omnibus
Rules implementing the Labor Code did away with existing supervisors' unions classifying the members
either as managerial or rank and file employees depending on the work they perform. If they discharge
managerial functions, supervisors are prohibited from forming or joining any labor organization. If they
do not perform managerial work, they may join the rank and file union and if none exists, they may form
one such rank and file organization. This rule was emphasized in the case of Bulletin Publishing Corp. v.
Sanchez, (144 SCRA 628 [1986]).
It, therefore, follows that the members of the KASAMA KO who are professional, technical,
administrative and confidential personnel of PHILTRANCO performing managerial functions are not
qualified to join, much less form a union. This rationalizes the exclusion of managers and confidential
employees exercising managerial functions from the ambit of the collective bargaining unit. As correctly
observed by Med-Arbiter Adap:
... managerial and confidential employees were expressly excluded within the operational ambit of the
bargaining unit for the simple reason that under the law, managers are disqualified to be members of a
labor organization.
On the other hand, confidential workers were not included because either they were performing
managerial functions and/or their duties and responsibilities were considered or may be categorized as
part and parcel of management as the primary reason for their exclusion in the bargaining unit. The
other categorized employees were likewise not included because parties have agreed on the fact that
the aforementioned group of workers are not qualified to join a labor organization at the time the
agreement was executed and that they were classified as outside the parameter of the bargaining unit.
(Rollo, pp. 28-29)
The respondents, on the other hand, aver that the members of the respondent union are rank and file
employees qualified to form a union. In fact their status as rank and file employees was allegedly
recognized by this Court in the case of Pantranco South Express, Inc. v. NAMAWU, (G.R. No. 67475, July
30, 1984).
The reliance on the Pantranco South Express, Inc. case is misplaced. The petition filed by Pantranco
South Express Inc. simply asked for a ruling that certain employees were performing managerial
functions. We denied the petition for lack of merit in a minute resolution. There was absolutely no
discussion on the recognition of another separate rank and file union in addition to the existing
bargaining unit.
There is no conflict. The employees of Philtranco have been appraised and their functions evaluated.
Managers by any name may not join the rank and file union. On the other hand, those who are rank and
file workers may join the existing bargaining unit instead of organizing another bargaining unit and
compelling the employer to deal with it.
We are constrained to disallow the formation of another union. There is no dispute that there exists a
labor union in the company, herein intervenor, the NAMAWU-MIF which is the collective bargaining
agent of the rank and file employees in PHILTRANCO.
Article 2 of the Collective Bargaining Agreement between PHILTRANCO and NAMAWU-MIF under the
sub-title Appropriate Bargaining Unit provides:
Section 1 -The appropriate bargaining unit covered by this agreement consists of all regular rank- and
file employees of the company. Managerial, confidential, casuals, temporary, probationary and
contractual employees as well as trainees, apprentices, security personnel and foreman are excluded
from the bargaining unit and therefore, not covered by this AGREEMENT. The job description outside
the bargaining unit are enumerated in the list hereto attached as Annex '1' and made an integral part
hereof (Emphasis supplied; Rollo, p. 27)
We see no need for the formation of another union in PHILTRANCO. The qualified members of the
KASAMA KO may join the NAMAWU-MIF if they want to be union members, and to be consistent with
the one-union, one-company policy of the Department of Labor and Employment, and the laws it
enforces. As held in the case of General Rubber and Footwear Corp. v. Bureau of Labor Relations (155
SCRA 283 [1987]):
... 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. (Emphasis supplied).
There are no compelling reasons in this case such as a denial to the KASAMA KO group of the right to
join the certified bargaining unit or substantial distinctions warranting the recognition of a separate
group of rank and file workers. Precisely, NAMAWU-MIF intervened to make it clear it has no objections
to qualified rank and file workers joining its union.
It is natural in almost all fairly sized companies to have groups of workers discharging different
functions. No company could possibly have all employees performing exactly the same work. Variety of
tasks is to be expected. It would not be in the interest of sound labor-management relations if each
group of employees assigned to a specialized function or section would decide to break away from their
fellow-workers and form their own separate bargaining unit. We cannot allow one unit for typists and
clerks, one unit for accountants, another unit for messengers and drivers, and so on in needless
profusion. Where shall the line be drawn? The questioned decision of the public respondent can only
lead to confusion, discord and labor strife.
The respondents state that this case is an exception to the general rule considering that substantial
differences exist between the office employees or professional, technical, administrative and
confidential employees vis-a-vis the field workers or drivers, conductors and mechanics of the
petitioner. Against this contention, we find that the "substantial differences" in the terms and conditions
of employment between the private respondent's members and the rest of the company's rank and file
employees are more imagined than real. We agree with the petitioner that the differences alleged are
not substantial or significant enough to merit the formation of another union.
PHILTRANCO is a large bus company engaged in the business of carrying passengers and freight,
servicing Luzon, Visayas and Mindanao. Certainly there is a commonality of interest among filing clerks,
dispatchers, drivers, typists, and field men. They are all interested in the progress of their company and
in each worker sharing in the fruits of their endeavors equitably and generously. Their functions mesh
with one another. One group needs the other in the same way that the company needs them all. The
drivers, mechanics and conductors are necessary for the company but technical, administrative and
office personnel are also needed and equally important for the smooth operation of the business. There
may be differences as to the nature of their individual assignments but the distinctions are not enough
to warrant the formation of separate unions. The private respondent has not even shown that a
separate bargaining unit would be beneficial to the employees concerned. Office employees also belong
to the rank and file. There is an existing employer wide unit in the company represented by NAMAWU-
MIF. And as earlier stated, the fact that NAMAWU-MIF moved to intervene in the petition for
certification election filed by KASAMA KO negates the allegations that "substantial differences" exist
between the employees concerned. We find a commonality of interest among them. There are no
compelling reasons for the formation of another union.
We quote with favor Med-Arbiter Adap's rationale, to wit:
... It is against the policy of the Department of Labor to dismember the already wide existing bargaining
unit because of its well established goal towards a single employer wide unit which is more to the
broader and greater benefit of the employees working force.
The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees
bargaining power with the management. To do otherwise, would be contrary, inimical and repugnant to
the objectives of a strong and dynamic unionism. Let there be a unified whole rather than a divisive one,
let them speak as one in a clear resonant voice unmarred by dissension towards progressive unionism.
(Rollo, p. 29)
WHEREFORE, the decision of the Bureau of Labor Relations, dated September 5, 1988 and the Order
dated October 10, 1988 are hereby SET ASIDE. The resolution of the Med-Arbiter dated April 4, 1988 is
REINSTATED. The restraining order issued by the Court on November 7, 1988 is made permanent.
SO ORDERED.
GOLDEN FARMS vs. CALLEJA
Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent Department of Labor and
Employment Director Pura Ferrer-Calleja in BLR Case No. A-2-56-87 which affirmed on appeal the decision of Labor
Arbiter Conrado O. Macasa, Sr., in NLRC Case No. R-418-ROXI-MED-UR-8886, issuing a directive as follows:
In view of the foregoing, the herein petition for certification election filed by the National Federation
of Labor (NFL) is hereby DISMISSED; whereas, its resultant and relevant consequence of its
recognized representation of the entire rank-and-file employees of the bargaining unit should be
given life and meaning, as it is hereby directed, and Employer Golden Farms, Incorporated likewise
enjoined to negotiate for a supplementary collective bargaining agreement, or for the inclusion of
the herein monthly paid rank-and- file employees at Luna, Kapalong, Davao del Norte, and Lanang,
Davao City in the still existing negotiated contract, whichever the parties may consider just and
appropriate under the circumstances.
SO ORDERED. (p. 29, Rollo)
The case originated as a Petition for Direct Certification Election or Recognition filed by herein private respondent in
behalf of certain office employees and foremen before Regional Office No. XI, Davao City of the Ministry of Labor and
Employment. Petitioner herein opposed said petition on the ground among others that a perusal of the names
allegedly supporting the said petition showed that said persons by the nature of their jobs are performing managerial
functions and/or occupying confidential positions such that they cannot validly constitute a separate or distinct group
from the existing collective bargaining unit also represented by private respondent.
Petitioner is a corporation engaged in the production of bananas for export. Private respondent Union represents the
employees/workers of petitioner corporation, who were the same signatories to an earlier Petition for Certification
Election filed in 1984 before the Ministry of Labor known as ROXI Case No. UR-70-84, which was dismissed by a
Resolution issued by Med-Arbiter Conchita Martinez when it was established that a collective bargaining unit (NFL)
between the Corporation and the rank-and-file employees was and is in existence at the time of the filing of the said
petition for certification election until the present filing. However, in the order of dismissal, it was stated:
After taking into consideration the functions exercised by the foremen as contained in their joint
affidavits (Annexes "A-1", "A-2" & "A-3", Petitioner's Position Paper) apparently, they fall within the
classification of rank-and-file employees. For, as consistently ruled in a long line of decisions, mere
supervisory designations in the position titles, do not make the holders of such positions any less
rank and filers, without the convincing proof that such supervisory designations are coupled with
actual performance of managerial functions. In the cases at bar, what was submitted by the
respondent companies are only lists of employees holding the positions of foremen and confidential
positions and as such are not covered by the bargaining unit. Such piece of evidence alone does
not constitute convincing proof for us to adapt respondents' stance (Annexes "A", "B", "C", & "D").
Comment on Petition). (p. 13, Rollo)
Having had no opportunity to contest the abovementioned statement in the order of dismissal, petitioner herein as
private respondent therein, filed a "Manifestation" stating among others:
2. That since the petitions were dismissed the herein employees make clear for the record that said
view would run counter to the provision of the pertinent Collective Bargaining Agreement whereby
the foremen were already acknowledged and agreed upon to be managerial employees and
accordingly excluded from the coverage of the said CBA;
3. That with respect to those employees holding confidential positions, it is a basic principle that
they cannot be included in any bargaining unit, the fact being that having access to confidential
informations, said employees may be the source of undue advantage. Said employees may act as
spies for either parties to collective bargaining agreement. This is especially true in this case where
the petitioning union is already the bargaining agent of the rank-and-file employees in the
establishment. To allow confidential employees to join existing bargaining unit will defeat the very
purpose for which an employee holding confidential position was in the first place excluded. (p. 68,
Rollo)
Private respondent herein as petitioner therein appealed the order of dismissal which was accordingly opposed
(Annex "L" p. 69, Rollo) by Golden Farms, Inc., reiterating the grounds and arguments set forth in its Manifestation
filed earlier. The appeal was dismissed and subsequently the National Federation of Labor Union refiled the Petition
for Certification in NLRC Case No. R-418- ROX-MED-UR-88-86 which was also dismissed. Said order of dismissal is
now the subject of this review for containing directives not within the power of a Med-Arbiter to issue. Petitioner
Golden Farms, Inc., now poses the following questions:
I HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT

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

CONFIDENTIAL/MANAGERIAL FUNCTION COMPEL MANAGEMENT TO
ENTER INTO A COLLECTIVE BARGAINING AGREEMENT WITH THEM. (p.
14, Rollo)
The petition merits Our consideration.
Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees who were signatories
to the petition for certification election and represented by respondent Union are actually rank-and-file workers not
disqualified from entering into a collective bargaining agreement with management. In said findings of fact, Med-
Arbiter Martinez singled out in her classification as rank-and-file employees the foremen of Petitioner Corporation
considered from their joint affidavits and for lack of convincing proof that their supervisory designations are coupled
with the actual performance of managerial functions.
Whether or not such finding is supported by the evidence is beside the point. Respondents herein do not dispute that
the signatories (listed in Annex "A", page 30, Rollo) to the Petition for certification election subject of this case, were
holding the positions of cashier, purchasers, personnel officers, foremen and employees having access to
confidential information such as accounting personnel, radio and telegraph operators and head of various sections. It
is also a fact that respondent Union is the exclusive bargaining Unit of the rank-and-file employees of petitioner
corporation and that an existing CBA between petitioner corporation and the Union representing these rank-and-file
employees was still enforced at the time the Union filed a petition for certification election in behalf of the
aforementioned signatories. Under the terms of said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:
Section 1. The COMPANY and the UNION hereby agree that the recognized bargaining unit for
purposes of this agreement shall consist of regular rank-and-file workers employed by the
COMPANY at the plantation presently situated at Alejal, Carmen, Davao. Consequently, all
managerial personnel like, superintendents, supervisor, foremen, administrative, professional and
confidential employees, and those temporary, casual, contractual, and seasonal workers are
excluded from the bargaining unit and therefore, not covered by this agreement.
(p. 41, Rollo)
Respondents do not dispute the existence of said collective bargaining agreement. We must therefore respect this
CBA which was freely and voluntarily entered into as the law between the parties for the duration of the period agreed
upon. Until then no one can be compelled to accept changes in the terms of the collective bargaining agreement.
Furthermore, the signatories to the petition for certification election are the very type of employees by the nature of
their positions and functions which We have decreed as disqualified from bargaining with management in case
of Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for
such ruling as follows: if these managerial employees would belong to or be affiliated with a Union, the latter might
not be assured of their loyalty to the Union in view of evident conflict of interests or that the Union can be company-
dominated with the presence of managerial employees in Union membership. A managerial employee is defined
under Art. 212 (k) of the new Labor Code as "one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to
effectively recommend such managerial actions. All employees not falling within this definitions are considered rank-
and-file employees for purposes of this Book."
This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph
operators, who having access to confidential information, may become the source of undue advantage. Said
employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in
the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the
establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation
of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.
As to the company foremen, while in the performance of supervisory functions, they may be the extension or alter
ego of the management. Adversely, the foremen, by their actuation, may influence the workers under their
supervision to engage in slow down commercial activities or similar activities detrimental to the policy, interest or
business objectives of the company or corporation, hence they also cannot join.
WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr. which was affirmed by Director
Pura Ferrer-Calleja reiterating the directive of Med- Arbiter Conchita Martinez "to negotiate for a supplementary
collective bargaining agreement, or for the inclusion of the herein monthly paid rank-and- file employees" to be
erroneous as it is in complete disregard of the terms of the collective bargaining agreement, the same is hereby
DECLARED to be without force and effect.
SO ORDERED.
PIER 8 ARRASTRE vs. ROLDAN – CONFESSOR
Petitioner corporation and private respondent labor union entered into a three-year Collective Bargaining Agreement
(CBA) with expiry date on November 27, 1991. During the freedom period the National Federation of Labor Unions
(NAFLU) questioned the majority status of Private respondent through a petition for certification election. The election
conducted on February 27, 1992 was won by private respondent. On March 19, 1992, private respondent was
certified as the sole and exclusive bargaining agent of petitioner's rank-and-file employees.
On June 22, 1992, private respondent's CBA proposals were received by petitioner. Counter-proposals were made by
petitioner. Negotiations collapsed, and on August 24, 1992, private-respondent filed a Notice of Strike with the
National Conciliation and Mediation Board (NCMB). The NCMB tried but failed to settle the parties' controversy.
On September 30, 1992, public respondent Secretary of Labor assumed jurisdiction over the dispute. She resolved
the bargaining deadlock between the parties through an Order, dated March 4, 1993, which reads, in part:
xxx xxx xxx
A. The non-economic issues
1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:
The Company recognizes the Union as the sole and exclusive collective
bargaining representative of all the stevedores, dockworkers, gang bosses,
foremen, rank and file employees working at Pier 8, North Harbor and its offices
and said positions are [sic] listed in ANNEX "A" hereof.
As such representative the UNION is designated as the collective bargaining

agent with respect to and concerning the terms and conditions of employment
and the interpretations and implementation of the provisions and conditions of
this Agreement.
Annex "A" of the CBA is the listing of positions covered thereby. These are:
1. Foremen;
2. Gang bosses;
3. Winchmen;
4. Signalmen;
5. Stevedores;
6. Dockworkers;
7. Tallymen;
8. Checkers;
9. Forklift and crane operators;
10. Sweepers;
11. Mechanics;
12. Utilitymen;
13. Carpenters; and
14. Other rank and file employees;
The company argues in the first instance that under Article 212(m) in relation to Article 245 of the
Labor Code, supervisors are ineligible for. membership in a labor organization of rank and file.
Being supervisors, foremen should be excluded from the bargaining unit.
The Company likewise seeks the exclusion on the ground of lack of community of interest and
divergence in functions, mode of compensation and working conditions of the following:
1. Accounting clerk;
2. Audit clerk;
3. Collector;
4. Payroll clerk;
5. Nurse;
6. Chief biller;
7. Biller;
8. Teller/biller;
9. Personnel clerk;
10. Timekeeper;
11. Asst. timekeeper;
12. Legal secretary;
13. Telephone operator;
14. Janitor/Utility; and
15. Clerk
These positions, the Company argues, cannot be lumped together with the stevedores or
dockworkers who mostly comprise the bargaining unit. Further, notwithstanding the check-off
provisions of the CBA, the incumbents in these positions have never paid union dues. Finally, some
of them occupy confidential positions and therefore ought to be excluded from the bargaining unit.
The Union generally argues that the Company's proposed exclusions retrogressive. . . .
We see no compelling justification to order the modification of Article I of the 1988 CBA as worded.
For by lumping together stevedores and other rank and file employees, the obvious intent of the
parties was to treat all employees not disqualified from union membership as members of one
bargaining unit. This is regardless of working conditions, mode of compensation, place of work, or
other considerations. In the absence of mutual agreement of the parties or evidence that the
present compositions of the bargaining unit is detrimental to the individual and organizational rights
either of the employees or of the Company, this expressed intent cannot be set aside.
It may well be that as a consequence of Republic Act No. 6715, foremen are ineligible to join the
union of the rank and file. But this provision can be invoked only upon proof that the foremen
sought to be excluded from the bargaining unit are cloaked with effective recommendatory powers
such as to qualify them under the legal definitions of supervisors.
xxx xxx xxx
7. Effectivity of the CBA. The Union demands that the CBA should be fully retroactive to 28
November 1991. The Company is opposed on the ground that under Article 253-A of the labor
code, the six-month period within which the parties must come to an agreement so that the same
will be automatically retroactive is long past.
The Union's demand for full retroactivity, we note, will result in undue financial burden to the
Company. On the other hand, the Company's reliance on Article 253-A is misplaced as this applies
only to the renegotiated terms of an existing CBA. Here, the deadlock arose from negotiations for a
new CBA.
These considered, the CBA shall be effective from the time we assumed jurisdiction over the
dispute, that is, on 22 September 1992, and shall remain e effective for five (5) years thereafter. It
shall be understood that except for the representation aspect all other provisions thereof shall be
renegotiated not later than three (3) years after its effectivity, consistently with Article 253-A of the
Labor Code.
B. The economic issues
The comparative positions of the parties are:
COMPANY UNION
xxx xxx xxx
. Vacation and sick leave

5
17 days vacation and sick leave i) For all covered employees
17 days sick leave per year and 17 days sick than gang
for employment with at least gang bosses:
five years of service.
15 working days vacation and
15 working days sick leave
for those with at least 1 year
of service

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

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

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

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

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

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

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

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

of immediate member of
covered employee's family
xxx xxx xxx
. Emergency loan
12
a) amount of P700.00 but damage 30 days salary payable through

entitlement to dwelling by fire shall payroll deduction in twelve
be included monthly installments
b) cash bond None The company shall put up a cash

for loss, damage bond of not less than P40,000.00
or accident for winchmen, crane and forklift
operators.
xxx xxx xxx
Balancing the right of the Company to remain viable and to just returns to its investments with right
of the Union members to just rewards for their labors, we find the following award to be fair and
reasonable:
xxx xxx xxx
. Vacation and Sick Leave

6
a) Non-rotation workers 17 days vacation/17 days sick leave

for those with at least 1 year of
service
b) Rotation workers other 17 days vacation/17 days sick leave,

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

provided that the gang boss must
have
worked for at least 115 days in a
calendar year
xxx xxx xxx
8. Death aid P3,000.00 to the heirs of each covered employee
xxx xxx xxx

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

NOT EXCLUDING CERTAIN POSITIONS FROM THE BARGAINING AGREEMENT UNIT
II

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

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

INCREASING WITHOUT FACTUAL BASIS THE DEATH AID AND EMERGENCY LOAN 2
The petition is partially meritorious.
Firstly, petitioner questions public respondent for not excluding four (4) foremen, a legal secretary, a timekeeper and
an assistant timekeeper from the bargaining unit composed of rank-and-file employees represented by private
respondent. Petitioner argues that: (1) the failure of private respondent to object when the foremen and legal
secretary were prohibited from voting in the certification election constitutes an admission that such employees
holdsupervisory/confidential positions; and (2) the primary duty and responsibility of the timekeeper and assistant timekeeper is "to enforce
company rules and regulations by reporting to petitioner . . . those workers who committed infractions, such as those caught abandoning
their posts." and hence, they should not be considered as rank-and-file employees.
The applicable law governing the proper composition of bargaining unit is Article 245 of the labor Code, as amended,
which provides as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization; employees to join any
labor organization; right of supervisory employees. — Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
Article 212(m) of the same Code, as well as Book V, Rule 1, Section 1(o) of the Omnibus Rules Implementing the
Labor Code, as amended by the Rules and Regulations Implementing R.A.. 6715, differentiate managerial,
supervisory, and rank-and-file employees, thus:
"Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All employees not falling within any
of the above definitions are considered rank-and-file employees for purposes of the Book.
This Court has ruled on numerous occasions that the test of supervisory or managerial status is whether an
employee possesses authority to act in the interest of his employer which authority is not merely routinary or clerical
in nature but requires use of independent judgment. 3 What governs the determination of the nature of employment is
not the employee's title, but his job description. If the nature of the employee's job does not fall under the definition of
"managerial" or "supervisory" in the Labor Code, he is eligible to be a member of the rank-and-file bargaining unit. 4
Foremen are chief and often especially-trained workmen who work with and commonly are in charge of a group of
employees in an industrial plant or in construction work. 5 They are the persons designated by the employer-
management to direct the work of employees and to superintend and oversee them. 6 They are representatives of the
employer-management with authority over particular groups of workers, processes, operations, or sections of a plant
or an entire organization. In the modern industrial plant, they are at once a link in the chain of command and the
bridge between the management and labor. 7 In the performance their work, foremen definitely use their independent
judgment and are empowered to make recommendations for managerial action with respect to those employees
under their control. Foremen fall squarely under the category of supervisory employees, and cannot be part of rank-
and-file unions.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and
clerical. However, they should be differentiated from rank-and-file employees because they, are tasked with, among
others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving
of and receiving notices and such other duties as required by the legal personnel of the corporation. 8 Legal
secretaries therefore fall under the category of confidential employees. Thus, to them applies our holding in the case
of Philips Industrial Development, Inv., v. NLRC, 210 SCRA 339 (1992), that:
. . . By the very functions, they assist confidential capacity to, or have access to confidential.
matters of, persons to, exercise managerial functions in the field of labor relations. As such, the
rationale behind the ineligibility of managerial employees to form, assist or join a labor union
equally applies to them.
In Bulletin Publishing Co., Inc., vs. Hon. Augusto Sanchez, this Court elaborated on this rationale,
thus:
. . . The rationale, for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with Union the latter might
not, be assured of their loyalty to the Union in view of evident conflict of interests.
The Union can also become company-dominated with the presence of
managerial employees in Union membership.
In Golden Farms, Inc., vs. Ferrer-Calleja, 9 this court explicitly made this rationale applicable to
confidential employees:
This rationale holds true also for confidential employees . . ., who having access
to confidential information, may become the source of undue advantage. Said
employee(s) may act as a spy or spies of either party to a collective bargaining
agreement. . . .
We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal
secretary from the bargaining unit composed of rank-and-file employees.
As for the timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that they are, neither
managerial nor supervisory employees. They are merely tasked to report those who commit infractions against
company rules and regulations. This reportorial function is routinary and clerical. They do not determine the fate of
those who violate company policy rules and regulations function. It follows that they cannot be excluded from the
subject bargaining unit.
The next issue is the date when the new CBA of the parties should be given effect. Public respondent fixed the
effectivity date on September 30, 1992. when she assumed jurisdiction over the dispute. Petitioner maintains it
should be March 4. 1993, when public respondent rendered judgment over the dispute.
The applicable laws are Articles 253 and 253- A of the Labor Code, thus:
Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. — When
there is a collective bargaining agreement, the duty to bargain collectively shall also mean that
neither party shall terminate nor modify such agreement during its lifetime. However, either party
can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the 60-day period and/or
until a new agreement is reached by the parties.
and;
Art. 253-A. Terms of a collective bargaining agreement. — Any Collective Bargaining Agreement
that the parties may enter into shall, insofar as the representation aspect is concerned, be for a
term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent
shall be entertained and no certification election shall be conducted by the Department of Labor
and Employment outside the sixty-day period immediately before the date of expiry of such five
year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement
on such other provisions of the Collective Bargaining Agreement entered into within six (6) months
from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such agreement is
entered into beyond six months, the parties shall agree on the duration of collective bargaining
agreement, the parties may exercise their rights under this Code.
In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above law as follows:
In light of the foregoing, this Court upholds the pronouncement of the NLRC holding the CBA to be
signed by the parties effective upon the promulgation of the assailed resolution. It is clear and
explicit from Article 253-A that any agreement on such other provisions of the CBA shall be given
retroactive effect only when it is entered into within six (6) months from its expiry date. If the
agreement was entered into outside the six (6) month period, then the parties shall agree on the
duration of the retroactivity thereof.
The assailed resolution which incorporated the CBA to be signed by the parties was promulgated
June 5, 1989, the expiry date of the past CBA. Based on the provision of Section 253-A, its
retroactivity should be agreed upon. by the parties. But since no agreement to that effect was
made, public respondent did not abuse its discretion in giving the said CBA a prospective effect.
The action of the public respondent is within the ambit of its authority vested by existing law.
In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this Court reiterated
the rule that although a CBA has expired, it continues to have legal effects as between the parties until a new CBA
has been entered into. It is the duty of both parties to the to keep the status quo, and to continue in full force and
effect the terms and conditions of the existing agreement during the 60-day freedom period and/or until a new
agreement is reached by the parties. 10 Applied to the case at bench, the legal effects of the immediate past CBA
between petitioner and private respondent terminated, and the effectivity of the new CBA began, only on March 4,
1993 when public respondent resolved their dispute.
Finally, we find no need to discuss at length the merits of the third and fourth assignments of error. The questioned
Order relevantly states:
In the resolution of the economic issues, the Company urges us to consider among others, present
costs of living, its financial capacity, the present wages being paid by the other cargo handlers at
the North Harbor, and the fact that the present average wage of its workers is P127.75 a day,
which is higher than the statutory minimum wage of P118.00 a day. The Company's evidence,
consisting of its financial statements for the past three years, shows that its net income was
P743,423.45 for 1989, P2,108,569.03 for 1990, and P1,479,671.84 for 1991, or an average of
P1,443,885.10 over the three-year period. It argues that for just the first year of effectivity of the
CBA, the Company's proposals on wages, effect thereof on overtime, 13th month pay, and vacation
and sick leave commutation, will cost about P520,723,44, or 35.19% of its net income for 1991.
The Company likewise urges us to consider the multiplier effect of its proposals on the second and
third years of the CBA. As additional argument, the Company manifests that a portion of its pier will
undergo a six-month to one-year renovation starting January 1993.
On the other hand, the Union's main line of argument — that is, aside from being within the
financial capacity of the Company to grant, its demands are fair and reasonable — is not supported
by evidence controverting the Company's own presentation of its financial capacity. The Union in
fact uses statements of the Company for 1989-1991, although it interprets these data as sufficient
justification for its own proposals. It also draws our attention to the bargaining history of the parties,
particularly the 1988 negotiations during which the company was able to grant wage increases
despite operational losses.
Balancing the right of the Company to remain viable and to just returns to its investments with right
of the Union members to just
rewards for their labors, we find the following award to be fair and reasonable . . . . 11
It is evident that the above portion of the impugned Order is based on well-studied evidence. The conclusions
reached by public respondent in the discharge of her statutory duty as compulsory arbitrator, demand the high
respect of this Court. The study and settlement of these disputes fall within public respondent's distinct administrative
expertise. She is especially trained for this delicate task, and she has within her cognizance such data and
information as will assist her in striking the equitable balance between the needs of management, labor and the
public. Unless there is clear showing of grave abuse of discretion, this Court cannot and will not interfere with the
labor expertise of public respondent Secretary of Labor.
IN VIEW WHEREOF, public respondents Order, dated March 4, 1993, and Resolution, dated June 8, 1993, are
hereby MODIFIED to exclude foremen and legal secretaries from the rank-and-file bargaining unit represented by
private respondent union, and to fix the date of effectivity of the five-year collective bargaining agreement between
petitioner corporation and private respondent union on March 4, 1993. No costs.
SO ORDERED.
SAN MIGUEL CORPORATION SUPERVISORS vs. LAGUESMA
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.
UNITED PEPSI COLA SUPERVISORS UNION vs. LAGUESMA
Petitioner is a union of supervisory employees. It appears that on March 20, 1995

the union filed a petition for certification election on behalf of the route managers at
Pepsi-Cola Products Philippines, Inc. However, its petition was denied by the med-
arbiter and, on appeal, by the Secretary of Labor and Employment, on the ground that
the route managers are managerial employees and, therefore, ineligible for union
membership under the first sentence of Art. 245 of the Labor Code, which provides:
Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist
or form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their own.
Petitioner brought this suit challenging the validity of the order dated August 31,
1995, as reiterated in the order dated September 22, 1995, of the Secretary of Labor
and Employment.Its petition was dismissed by the Third Division for lack of showing that
respondent committed grave abuse of discretion. But petitioner filed a motion for
reconsideration, pressing for resolution its contention that the first sentence of Art. 245
of the Labor Code, so far as it declares managerial employees to be ineligible to form,
assist or join unions, contravenes Art. III 8 of the Constitution which provides:
The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for the purposes not
contrary to law shall not be abridged.
For this reason, the petition was referred to the Court en banc.
The Issues in this Case
Two question are presented by the petition: (1) whether the route managers at
Pepsi-Cola Products Philippines, Inc. are managerial employees and (2) whether Art.
245, insofar as it prohibits managerial employees from forming, joining or assisting labor
unions, violates Art. III, 8 of the Constitution.
In resolving these issues it would be useful to begin by defining who are managerial
employees and considering the types of managerial employees.
Types of Managerial Employees
The term manager generally refers to anyone who is responsible for subordinates
and other organization resources.[1] As a class, managers constitute three levels of a
pyramid:
Top Management
_________________
Middle Management
_________________
First Line
Management
(also called Supervisor)
____________________
____________________
Operatives
Or Operating Employees
FIRST-LINE MANAGERS The lowest level in an organization at which

individuals are responsible for the work of others is called first-line or first-level
management. First-line managers direct operating employees only; they do
not supervise other managers. Example of first-line managers are the foreman
or production supervisor in a manufacturing plant, the technical supervisor in a
research department, and the clerical supervisor in a large office. First-level
managers are often called supervisors.
MIDDLE MANAGERS The term middle management can refer to more than
one level in an organization. Middle managers direct the activities of other
managers and sometimes also those of operating employees. Middle
managers principal responsibilities are to direct the activities that implement
their organizations policies and to balance the demands of their superiors with
the capacities of their subordinates. A plant manager in an electronics firm is
an example of a middle manager.
TOP MANAGERS Composed of a comparatively small group of

executives, top management is responsible for the overall management of the
organization. It establishes operating policies and guides the organizations
interactions with its environment. Typical titles of top managers are chief
executive officer, president, and senior vice-president. Actual titles vary from
one organization to another and are not always a reliable guide to
membership in the highest management classification.[2]
As can be seen from this description, a distinction exist between those who have
the authority to devise, implement and control strategic and operational policies (top and
middle managers) and those whose task is simply to ensure that such polices are
carried out by the rank-and-file employees of an organization (first-level
managers/supervisors). What distinguishes them from the rank-and file employees is
that they act in the interest of the employer in supervising such rank-and-file employees.
Managerial employees may therefore be said to fall into two distinct categories: the
managers per se, who compose the former group described above, and the supervisors
who form the latter group. Whether they belong to the first or second category,
managers, vis--vis employers, are, likewise, employees.[3]
The first question is whether route managers are managers are managerial
employees or supervisors.
Previous Administrative Determinations of the Question Whether Route Managers are Managerial Employees
It appears that this question was the subject of two previous determinations by the
Secretary of Labor and Employment, in accordance with which this case was decided
by the med-arbiter.
In Case No. OS-MA-10318-91, entitled Workerss Alliance Trade Union (WATU) v.
Pepsi-Cola Products Philippines, Inc., decided on November 13, 1991, the Secretary of
Labor found:
We examined carefully the pertinent job description of the subject employees

and other documentary evidence on record vis--vis paragraph (m), Article 212
of the Labor Code, as amended, and we find that only those employees
occupying the position of route manager and accounting manager are
managerial employees. The rest i.e. quality control manager, yard/transport
manager and warehouse operations manager are supervisory employees.
To qualify as managerial employee, there must be a clear showing of the

exercise of managerial attributes under paragraph (m), Article 212 of the
Labor Code as amended. Designations or titles of positions are not
controlling. In the instant case, nothing on record will support the claim that
the quality control manager, yard/transport manager and warehouse
operations manager are vested with said attributes. The warehouse
operations manager, for example, merely assists the plant finance manager in
planning, organizing, directing and controlling all activities relative to
development and implementation of an effective management control
information system at the sale offices. The exercise of authority of the quality
control manager, on the other hand, needs the concurrence of the
manufacturing manager
As to the route managers and accounting manager, we are convinced that

they are managerial employees. Their job descriptions clearly reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92, entitled In
Re: Petition for Direct Certification and/or Certification Election-Route
Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc., as follows:
The issue brought before us is not of first impression. At one time, we had the
occasion to rule upon the status of route manager in the same company vis a
vis the issue as to whether or not it is supervisory employee or a managerial
employee. In the case of Workers Alliance Trade Unions (NATU) vs. Pepsi
Cola Products, Phils., Inc. (OS-MA-A-10-318-91), 15 November 1991, we
ruled that a route manager is a managerial employee within the context of the
definition of the law, and hence, ineligible to join, form or assist a union. We
have once more passed upon the logic of our Decision aforecited in the light
of the issues raised in the instant appeal, as well as the available
documentary evidence on hand, and have come to the view that there is no
cogent reason to depart from our earlier holding. Route Managers are, by the
very nature of their functions and the authority they wield over their
subordinates, managerial employees. The prescription found in Art. 245 of the
Labor Code, as amended therefore, clearly applies to them.[4]4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations Commission, [5]5
however, petitioner argues that these previous administrative determinations do not
have the effect of res judicata in this case, because "labor relations proceedings" are
"non-litigious and summary in nature without regard to legal technicalities." [6] Nasipit
Lumber Co. involved a clearance to dismiss an employee issued by the Department of
Labor. The question was whether in a subsequent proceeding for illegal dismissal, the
clearance was res judicata. In holding it was not, this Court made it clear that it was
referring to labor relations proceedings of a non-adversary character, thus:
The requirement of a clearance to terminate employment was a creation of

the Department of labor to carry out the Labor Code provisions on security of
tenure and termination of employment. The proceeding subsequent to the
filing of an application for clearance to terminate employment was outlined in
Book V, Rule XIV of the Rules and Regulations Implementing the Labor
Code. The fact that said rule allowed a procedure for the approval of the
clearance with or without the opposition of the employee concerned (Secs. 7
& 8), demonstrates the non-litigious and summary nature of the
proceeding. The clearance requirement was therefore necessary only as an
expeditious shield against arbitrary dismissal without the knowledge and
supervision of the Department of Labor. Hence, a duly approved clearance
implied that the dismissal was legal or for cause (Sec. 2).[7]v. National Labor
Relations Commission, 177 SCRA 93, 100 (1989).7
But the doctrine of res judicata certainly applies to adversary administrative
proceedings. As early as 1956, in Brillantes v. Castro,[8]8 we sustained the dismissal of
an action by a trial court on the basis of a prior administrative determination of the same
case by the Wage Administration Service, applying the principle of res
judicata. Recently, in Abad v. NLRC[9]9 we applied the related doctrine of stare decisis in
holding that the prior determination that certain jobs at the Atlantic Gulf and Pacific Co.
were project employments was binding in another case involving another group of
employees of the same company. Indeed, in Nasipit Lumber Co., this Court clarified
toward the end of its opinion that "the doctrine of res judicata applies . . . to judicial or
quasi judicial proceedings and not to the exercise of administrative
powers."[10]v. National Labor Relations Commission, supra note 7.10 Now proceedings
for certification election, such as those involved in Case No. OS-M-A-10-318-91 and
Case No. OS-A-3-71-92, are quasi judicial in nature and, therefore, decisions rendered
in such proceedings can attain finality.[11]v. B.F. Goodrich (Marikina Factory) Confidential
and Salaries Employees Union-NATU, 49 SCRA 532 (1973).11
Thus, we have in this case an expert's view that the employees concerned are
managerial employees within the purview of Art. 212 which provides:
(m) "managerial employee" is one who is vested with powers or prerogatives

to lay down and execute management policies and/or to hire, transfer,
suspend, lay off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use
of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
At the very least, the principle of finality of administrative determination compels respect
for the finding of the Secretary of Labor that route managers are managerial employees
as defined by law in the absence of anything to show that such determination is without
substantial evidence to support it. Nonetheless, the Court, concerned that employees
who are otherwise supervisors may wittingly or unwittingly be classified as managerial
personnel and thus denied the right of self- organization, has decided to review the
record of this case.
DOLE's Finding that Route Managers are Managerial Employees Supported by Substantial Evidence in the Record
The Court now finds that the job evaluation made by the Secretary of Labor is
indeed supported by substantial evidence. The nature of the job of route managers is
given in a four-page pamphlet, prepared by the company, called "Route Manager
Position Description," the pertinent parts of which read:
A. BASIC PURPOSE
A Manager achieves objectives through others.
As a Route Manager, your purpose is to meet the sales plan; and you
achieve this objective through the skillful MANAGEMENT OF YOUR
JOB AND THE MANAGEMENT OF YOUR PEOPLE.
These then are your functions as Pepsi-Cola Route Manager. Within

these functions - managing your job and managing your people - you
are accountable to your District Manager for the execution and
completion of various tasks and activities which will make it possible
for you to achieve your sales objectives.
B. PRINCIPAL ACCOUNTABILITIES
1.0 MANAGING YOUR JOB
The Route Manager is accountable for the following:
1.1 SALES DEVELOPMENT
1.1.1 Achieve the sales plan.
1.1.2 Achieve all distribution and new account objectives.
1.1.3 Develop new business opportunities thru personal contacts

with dealers.
1.1.4 Inspect and ensure that all merchandizing [sic] objectives are
achieved in all outlets.
1.1.5 maintain and improve productivity of all cooling equipment

and kiosks.
1.1.6 Execute and control all authorized promotions.
1.1.7 Develop and maintain dealer goodwill.
1.1.8 Ensure all accounts comply with company suggested retail

pricing.
1.1.9 Study from time to time individual route coverage and

productivity for possible adjustments to maximize utilization
of resources.
1.2 Administration
1.2.1 Ensure the proper loading of route trucks before check-out

and the proper sorting of bottles before check-in.
1.2.2 Ensure the upkeep of all route sales reports and all other
related reports and forms required on an accurate and
timely basis.
1.2.3 Ensure proper implementation of the various company

policies and procedures incl. but not limited to shakedown;
route shortage; progressive discipline; sorting; spoilages;
credit/collection; accident; attendance.
1.2.4 Ensure collection of receivables and delinquent accounts.
2.0 MANAGING YOUR PEOPLE
The Route Manager is accountable for the following:
2.1 Route Sales Team Development
2.1.1 Conduct route rides to train, evaluate and develop all

assigned route salesmen and helpers at least 3 days a
week, to be supported by required route ride
documents/reports & back check/spot check at least 2 days
a week to be supported by required documents/reports.
2.1.2 Conduct sales meetings and morning huddles. Training

should focus on the enhancement of effective sales and
merchandizing [sic] techniques of the salesmen and
helpers. Conduct group training at least 1 hour each week
on a designated day and of specific topic.
2.2 Code of Conduct
2.2.1 Maintain the company's reputation through strict adherence

to PCPPI's code of conduct and the universal standards of
unquestioned business ethics.[12]12
Earlier in this opinion, reference was made to the distinction between managers per
se (top managers and middle managers) and supervisors (first-line managers). That
distinction is evident in the work of the route managers which sets them apart from
supervisors in general. Unlike supervisors who basically merely direct operating
employees in line with set tasks assigned to them, route managers are responsible for
the success of the company's main line of business through management of their
respective sales teams. Such management necessarily involves the planning, direction,
operation and evaluation of their individual teams and areas which the work of
supervisors does not entail.
The route managers cannot thus possibly be classified as mere supervisors
because their work does not only involve, but goes far beyond, the simple direction or
supervision of operating employees to accomplish objectives set by those above
them. They are not mere functionaries with simple oversight functions but business
administrators in their own right. An idea of the role of route managers as managers per
se can be gotten from a memo sent by the director of metro sales operations of
respondent company to one of the route managers. It reads:[13]
03 April 1995
To : CESAR T. REOLADA
From : REGGIE M. SANTOS
Subj : SALARY INCREASE
Effective 01 April 1995, your basic monthly salary of P11,710 will be

increased to P12,881 or an increase of 10%. This represents the added
managerial responsibilities you will assume due to the recent restructuring
and streamlining of Metro Sales Operations brought about by the
continuous losses for the last nine (9) months.
Let me remind you that for our operations to be profitable, we have to

sustain the intensity and momentum that your group and yourself have
shown last March. You just have to deliver the desired volume targets,
better negotiated concessions, rationalized sustaining deals,
eliminate or reduced overdues, improved collections, more cash
accounts, controlled operating expenses, etc. Also, based on the
agreed set targets, your monthly performance will be closely monitored.
You have proven in the past that your capable of achieving your
targets thru better planning, managing your group as a fighting team,
and thru aggressive selling. I am looking forward to your success
and I expect that you just have to exert your doubly best in turning
around our operations from a losing to a profitable one!
Happy Selling!!
(Sgd.) R.M. SANTOS
The plasticized card given to route managers, quoted in the separate opinion
of Justice Vitug, although entitled "RM's Job Description," is only a summary of
performance standards. It does not show whether route managers are managers per
se or supervisors. Obviously, these performance standards have to be related to the
specific tasks given to route managers in the four-page "Route Manager Position
Description," and, when this is done, the managerial nature of their jobs is fully
revealed. Indeed, if any, the card indicates the great latitude and discretion given to
route managers - from servicing and enhancing company goodwill to supervising and
auditing accounts, from trade (new business) development to the discipline, training and
monitoring of performance of their respective sales teams, and so forth, - if they are to
fulfill the company's expectations in the "key result areas."
Article 212(m) says that "supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of independent
judgment." Thus, their only power is to recommend. Certainly, the route managers in
this case more than merely recommend effective management action. They perform
operational, human resource, financial and marketing functions for the company, all of
which involve the laying down of operating policies for themselves and their teams. For
example, with respect to marketing, route managers, in accordance with B.1.1.1 to
B.1.1.9 of the Route Managers Job Description, are charged, among other things, with
expanding the dealership base of their respective sales areas, maintaining the goodwill
of current dealers, and distributing the company's various promotional items as they see
fit. It is difficult to see how supervisors can be given such responsibility when this
involves not just the routine supervision of operating employees but the protection and
expansion of the company's business vis-a-vis its competitors.
While route managers do not appear to have the power to hire and fire people (the
evidence shows that they only "recommended" or "endorsed" the taking of disciplinary
action against certain employees), this is because this is a function of the Human
Resources or Personnel Department of the company.[14]14 And neither should it be
presumed that just because they are given set benchmarks to observe, they are ipso
facto supervisors. Adequate control methods (as embodied in such concepts as
"Management by Objectives [MBO]" and "performance appraisals") which require
a delineation of the functions and responsibilities of managers by means of ready
reference cards as here, have long been recognized in management as effective tools
for keeping businesses competitive.
This brings us to the second question, whether the first sentence of Art. 245 of the
Labor Code, prohibiting managerial employees from forming, assisting or joining any
labor organization, is constitutional in light of Art. III, 8 of the Constitution which
provides:
The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to
law shall not be abridged.
As already stated, whether they belong to the first category (managers per se) or
the second category (supervisors), managers are employees. Nonetheless, in the
United States, as Justice Puno's separate opinion notes, supervisors have no right to
form unions. They are excluded from the definition of the term "employee" in 2(3) of the
Labor-Management Relations Act of 1947.[15]v. Bell Aerospace Co., 416 U.S. 281, n 11,
40 L.Ed.2d 134, 147, n. 11 (1974), thus:
Supervisors are management people. They have distinguished themselves in their work. They have
demonstrated their ability to take care of themselves without depending upon the pressure of collective
action. No one forced them to become supervisors. They abandoned the "collective security" of the rank
and file voluntarily, because they believed the opportunities thus opened to them to be more valuable to
them than such "security". It seems wrong, and it is wrong, to subject people of this kind, who have
demonstrated their initiative, their ambition and their ability to get ahead, to the leveling processes of
seniority, uniformity and standardization that the Supreme Court recognizes as being fundamental
principles of unionism. (J.I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 88 L.Ed. 762, 64
S. Ct. 576 (1994). It is wrong for the foremen, for it discourages the things in them that made them
foremen in the first place. For the same reason, that it discourages those best qualified to get ahead, it is
wrong for industry, and particularly for the future strength and productivity of our country. 15 In the
Philippines, the question whether managerial employees have a right of self-
organization has arisen with respect to first-level managers or supervisors, as shown by
a review of the course of labor legislation in this country.
Right of Self-Organization of Managerial Employees under Pre-Labor Code Laws
Before the promulgation of the Labor Code in 1974, the field of labor relations was
governed by the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined "supervisor" as
follows:
SECTION 2. . . .
(k) "Supervisor" means any person having authority in the interest of an

employer, to hire, transfer, suspend, lay-off, recall, discharge, assign,
recommend, or discipline other employees, or responsibly to direct them, and
to adjust their grievances, or effectively to recommend such acts, if, in
connection with the foregoing, the exercise of such authority is not of a merely
routinary or clerical nature but requires the use of independent judgment.[16]16
The right of supervisors to form their own organizations was affirmed:

SEC. 3. Employees' Right to Self-Organization. -- Employees 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 representatives
of their own choosing and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid and protection. Individuals
employed as supervisors shall not be eligible for membership in a labor
organization of employees under their supervision but may form separate
organizations of their own.[17]
For its part, the Supreme Court upheld in several of its decisions the right of supervisors
to organize for purposes of labor relations.[18]v. Filoil Supervisory and Confidential
Employees Association, 6 SCRA 522 (1972); Kapisanan ng mga Manggagawa sa
Manila Railroad Co. v. CIR, 106 Phil 607 (1959).18
Although it had a definition of the term "supervisor," the Industrial Peace Act did not
define the term "manager." But, using the commonly-understood concept of "manager,"
as above stated, it is apparent that the law used the term "supervisors" to refer to the
sub-group of "managerial employees" known as front-line managers. The other sub-
group of "managerial employees," known as managers per se, was not covered.
However, in Caltex Filipino Managers and Supervisors Association v. Court of
Industrial Relations,[19]J.)19 the right of all managerial employees to self-organization
was upheld as a general proposition, thus:
It would be going too far to dismiss summarily the point raised by respondent
Company - that of the alleged identity of interest between the managerial staff
and the employing firm. That should ordinarily be the case, especially so
where the dispute is between management and the rank and file. It does not
necessarily follow though that what binds the managerial staff to the
corporation forecloses the possibility of conflict between them. There could be
a real difference between what the welfare of such group requires and the
concessions the firm is willing to grant. Their needs might not be attended to
then in the absence of any organization of their own. Nor is this to indulge in
empty theorizing. The record of respondent Company, even the very case
cited by it, is proof enough of their uneasy and troubled relationship. Certainly
the impression is difficult to erase that an alien firm failed to manifest
sympathy for the claims of its Filipino executives. To predicate under such
circumstances that agreement inevitably marks their relationship, ignoring that
discord would not be unusual, is to fly in the face of reality.
. . . The basic question is whether the managerial personnel can

organize. What respondent Company failed to take into account is that the
right to self-organization is not merely a statutory creation. It is fortified by our
Constitution. All are free to exercise such right unless their purpose is contrary
to law. Certainly it would be to attach unorthodoxy to, not to say an
emasculation of, the concept of law if managers as such were precluded from
organizing. Having done so and having been duly registered, as did occur in
this case, their union is entitled to all the rights under Republic Act
No.875. Considering what is denominated as unfair labor practice under
Section 4 of such Act and the facts set forth in our decision, there can be only
one answer to the objection raised that no unfair labor practice could be
committed by respondent Company insofar as managerial personnel is
concerned. It is, as is quite obvious, in the negative.[20]20
Actually, the case involved front-line managers or supervisors only, as the plantilla
of employees, quoted in the main opinion,[21]J.) (emphasis added).21 clearly indicates:
CAFIMSA members holding the following Supervisory Payroll Position

Title are Recognized by the Company
Payroll Position Title
Assistant to Mgr. - National Acct. Sales
Jr. Sales Engineer
Retail Development Asst.
Staff Asst. - 0 Marketing
Sales Supervisor
Supervisory Assistant
Jr. Supervisory Assistant
Credit Assistant
Lab. Supvr. - Pandacan
Jr. Sales Engineer B
Operations Assistant B
Field Engineer
Sr. Opers. Supvr. - MIA A/S

Purchasing Assistant
Jr. Construction Engineer
St. Sales Supervisor
Deport Supervisor A
Terminal Accountant B
Merchandiser
Dist. Sales Prom. Supvr.
Instr. - Merchandising
Asst. Dist. Accountant B
Sr. Opers. Supervisor
Jr. Sales Engineer A
Asst. Bulk Ter. Supt.
Sr. Opers. Supvr.
Credit Supervisor A
Asst. Stores Supvr. A
Ref. Supervisory Draftsman
Refinery Shift Supvr. B
Asst. Supvr. A - Operations (Refinery)
Refinery Shift Supvr. B
Asst. Lab. Supvr. A (Refinery)
St. Process Engineer B (Refinery)
Asst. Supvr. A - Maintenance (Refinery)

Asst. Supvr. B - Maintenance (Refinery)
Supervisory Accountant (Refinery)
Communications Supervisor (Refinery)
Finally, also deemed included are all other employees excluded from the
rank and file unions but not classified as managerial or otherwise
excludable by law or applicable judicial precedents.
Right of Self-Organization of Managerial Employees under the Labor Code
Thus, the dictum in the Caltex case which allowed at least for the theoretical
unionization of top and middle managers by assimilating them with the supervisory
group under the broad phrase "managerial personnel," provided the lynchpin for later
laws denying the right of self-organization not only to top and middle management
employees but to front line managers or supervisors as well. Following the Caltex case,
the Labor Code, promulgated in 1974 under martial law, dropped the distinction
between the first and second sub-groups of managerial employees. Instead of treating
the terms "supervisor" and "manager" separately, the law lumped them together and
called them "managerial employees," as follows:
ART. 212. Definitions . . . .
(k) "Managerial Employee" is one who is vested with powers or prerogatives

to lay down and execute management policies and/or to hire, transfer,
suspend, lay off, recall, discharge, assign or discipline employees, or to
effectively recommend such managerial actions. All employees not falling
within this definition are considered rank and file employees for purposes of
this Book.[22]22
The definition shows that it is actually a combination of the commonly understood

definitions of both groups of managerial employees, grammatically joined by the phrase
"and/or."
This general definition was perhaps legally necessary at that time for two reasons.
First, the 1974 Code denied supervisors their right to self-organize as theretofore
guaranteed to them by the Industrial Peace Act. Second, it stood the dictum in the
Caltex case on its head by prohibiting all types of managers from forming unions. The
explicit general prohibition was contained in the then Art. 246 of the Labor Code.
The practical effect of this synthesis of legal concepts was made apparent in the
Omnibus Rules Implementing the Labor Code which the Department of Labor
promulgated on January 19, 1975. Book V, Rule II, 11 of the Rules provided:
Supervisory unions and unions of security guards to cease operation. - All
existing supervisory unions and unions of security guards shall, upon the
effectivity of the Code, cease to operate as such and their registration
certificates shall be deemed automatically cancelled. However, existing
collective agreements with such unions, the life of which extends beyond the
date of effectivity of the Code, shall be respected until their expiry date insofar
as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of

managerial employees shall become eligible to join or assist the rank and file
labor organization, and if none exists, to form or assist in the forming of such
rank and file organization. The determination of who are managerial
employees and who are not shall be the subject of negotiation between
representatives of the supervisory union and the employer. If no agreement is
reached between the parties, either or both of them may bring the issue to the
nearest Regional Office for determination.
The Department of Labor continued to use the term "supervisory unions" despite
the demise of the legal definition of "supervisor" apparently because these were the
unions of front line managers which were then allowed as a result of the statutory grant
of the right of self-organization under the Industrial Peace Act. Had the Department of
Labor seen fit to similarly ban unions of top and middle managers which may have been
formed following the dictum in Caltex, it obviously would have done so. Yet it did not,
apparently because no such unions of top and middle managers really then existed.
Real Intent of the 1986 Constitutional Commission
This was the law as it stood at the time the Constitutional Commission considered
the draft of Art. III, 8. Commissioner Lerum sought to amend the draft of what was later
to become Art. III, 8 of the present Constitution:
MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to

insert between the words "people" and "to" the following: WHETHER
EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS. In other
words, the section will now read as follows: "The right of the people
WHETHER EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS
to form associations, unions, or societies for purposes not contrary to law shall
not be abridged."[23]23
Explaining his proposed amendment, he stated:

MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is
granted to all persons whether or not they are employed in the
government. Under that provision, we allow unions in the government, in
government-owned and controlled corporations and in other industries in the
private sector, such as the Philippine Government Employees' Association,
unions in the GSIS, the SSS, the DBP and other government-owned and
controlled corporations. Also, we have unions of supervisory employees and
of security guards. But what is tragic about this is that after the 1973
Constitution was approved and in spite of an express recognition of the right
to organize in P.D. No. 442, known as the Labor Code, the right of
government workers, supervisory employees and security guards to form
unions was abolished.
And we have been fighting against this abolition. In every tripartite conference
attended by the government, management and workers, we have always
been insisting on the return of these rights. However, both the government
and employers opposed our proposal, so nothing came out of this until this
week when we approved a provision which states:
Notwithstanding any provision of this article, the right to self-organization shall

not be denied to government employees.
We are afraid that without any corresponding provision covering the private
sector, the security guards, the supervisory employees or majority employees
[sic] will still be excluded, and that is the purpose of this amendment.
I will be very glad to accept any kind of wording as long as it will amount to
absolute recognition of private sector employees, without exception, to
organize.
THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by
Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a little bit
more to read: "The right of the people WHETHER UNEMPLOYED OR
EMPLOYED BY STATE OR PRIVATE ESTABLISHMENTS."
I want to avoid also the possibility of having this interpreted as applicable only
to the employed.
MR. DE LOS REYES. Will the proponent accept an amendment to the

amendment, Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of the
employees in the private sector is recognized.[24]
Lerum thus anchored his proposal on the fact that (1) government employees,
supervisory employees, and security guards, who had the right to organize under the
Industrial Peace Act, had been denied this right by the Labor Code, and (2) there was a
need to reinstate the right of these employees. In consonance with his objective to
reinstate the right of government, security, and supervisory employees to organize,
Lerum then made his proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with several Members
of this Commission, my amendment will now read as follows: "The right of the
people INCLUDING THOSE EMPLOYED IN THE PUBLIC AND PRIVATE
SECTORS to form associations, unions, or societies for purposes not contrary
to law shall not be abridged. In proposing that amendment I ask to make of
record that I want the following provisions of the Labor Code to be
automatically abolished, which read:
ART. 245. Security guards and other personnel employed for the protection
and security of the person, properties and premises of the employers shall not
be eligible for membership in a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any
labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted the
amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment, as
amended, is approved.[25]
The question is what Commissioner Lerum meant in seeking to "automatically

abolish" the then Art. 246 of the Labor Code. Did he simply want "any kind of wording
as long as it will amount to absolute recognition of private sector employees, without
exception, to organize"?[26] Or, did he instead intend to have his words taken in the
context of the cause which moved him to propose the amendment in the first place,
namely, the denial of the right of supervisory employees to organize, because he said,
"We are afraid that without any corresponding provision covering the private sector,
security guards, supervisory employees or majority [of] employees will still be excluded,
and that is the purpose of this amendment"?[27]
It would seem that Commissioner Lerum simply meant to restore the right of
supervisory employees to organize. For even though he spoke of the need to "abolish"
Art. 246 of the Labor Code which, as already stated, prohibited "managerial employees"
in general from forming unions, the fact was that in explaining his proposal, he
repeatedly referred to "supervisory employees" whose right under the Industrial Peace
Act to organize had been taken away by Art. 246. It is noteworthy that Commissioner
Lerum never referred to the then definition of "managerial employees" in Art. 212(m) of
the Labor Code which put together, under the broad phrase "managerial
employees," top and middle managers and supervisors. Instead, his repeated use of the
term "supervisory employees," when such term then was no longer in the statute books,
suggests a frame of mind that remained grounded in the language of the Industrial
Peace Act.
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all
managerial employees to organize, despite the fact that the Industrial Peace Act did not
expressly provide for the right of top and middle managers to organize. If Lerum was
aware of the Caltex dictum, then his insistence on the use of the term "supervisory
employees" could only mean that he was excluding other managerial employees from
his proposal. If, on the other hand, he was not aware of the Caltex statement sustaining
the right to organize to top and middle managers, then the more should his repeated
use of the term "supervisory employees" be taken at face value, as it had been defined
in the then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal to refer
solely to supervisors and not to other managerial employees is clear from the following
account of Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts, Commissioner

Eulogio R. Lerum explained that the modification included three categories of
workers: (1) government employees, (2) supervisory employees, and (3)
security guards. Lerum made of record the explicit intent to repeal provisions
of P.D. 442, the Labor Code. The provisions referred to were:
ART. 245. Security guards and other personnel employed for the protection
and security of the person, properties and premises of the employers shall not
be eligible for membership in a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any
labor organization.[28]28
Implications of the Lerum Proposal
In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by including
labor unions in the guarantee of organizational right should be taken in the context of
statements that his aim was the removal of the statutory ban against security guards
and supervisory employees joining labor organizations. The approval by the
Constitutional Commission of his proposal can only mean, therefore, that the
Commission intended the absolute right to organize of government workers, supervisory
employees, and security guards to be constitutionally guaranteed. By implication, no
similar absolute constitutional right to organize for labor purposes should be deemed to
have been granted to top-level and middle managers. As to them the right of self-
organization may be regulated and even abridged conformably to Art. III, 8.
Constitutionality of Art. 245
Finally, the question is whether the present ban against managerial employees, as
embodied in Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This
provision reads:
ART. 245. Ineligibility of managerial employees to join any labor organization;

right of supervisory employees. - Managerial employees are not eligible to
join, assist or form any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their own.[29]29
This provision is the result of the amendment of the Labor Code in 1989 by R.A. No.
6715, otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or
the provisions of the Labor Code which it superseded, R.A. No. 6715 provides separate
definitions of the terms "managerial" and "supervisory employees," as follows:
ART. 212. Definitions. . . .
(m) "managerial employee" is one who is vested with powers or prerogatives

to lay down and execute management policies and/or to hire transfer,
suspend, lay off, recall, discharge, assign or discipline
employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use
of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
Although the definition of "supervisory employees" seems to have been unduly

restricted to the last phrase of the definition in the Industrial Peace Act, the legal
significance given to the phrase "effectively recommends" remains the same. In fact, the
distinction between top and middle managers, who set management policy, and front-
line supervisors, who are merely responsible for ensuring that such policies are carried
out by the rank and file, is articulated in the present definition. [30]30 When read in relation
to this definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out the intent
of the Constitutional Commission in framing Art. III, 8 of the fundamental law.
Nor is the guarantee of organizational right in Art. III, 8 infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, 8 is subject to
the condition that its exercise should be for purposes "not contrary to law." In the case
of Art. 245, there is a rational basis for prohibiting managerial employees from forming
or joining labor organizations. As Justice Davide, Jr., himself a constitutional
commissioner, said in his ponencia in Philips Industrial Development, Inc. v. NLRC:[31]31
In the first place, all these employees, with the exception of the service
engineers and the sales force personnel, are confidential employees. Their
classification as such is not seriously disputed by PEO-FFW; the five (5)
previous CBAs between PIDI and PEO-FFW explicitly considered them as
confidential employees. By the very nature of their functions, they assist and
act in a confidential capacity to, or have access to confidential matters of,
persons who exercise managerial functions in the field of labor relations. As
such, the rationale behind the ineligibility of managerial employees to form,
assist or joint a labor union equally applies to them.
In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court

elaborated on this rationale, thus:
". . . The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter
might not be assured of their loyalty to the Union in view of evident conflict of
interests. The Union can also become company-dominated with the presence
of managerial employees in Union membership."[32]
To be sure, the Court in Philips Industrial was dealing with the right of confidential
employees to organize. But the same reason for denying them the right to organize
justifies even more the ban on managerial employees from forming unions. After all,
those who qualify as top or middle managers are executives who receive from their
employers information that not only is confidential but also is not generally available to
the public, or to their competitors, or to other employees. It is hardly necessary to point
out that to say that the first sentence of Art. 245 is unconstitutional would be to
contradict the decision in that case.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
PEPSI COLA vs. SECRETARY OF LABOR
These are petitions for certiorari relating to three (3) cases filed with the Med-Arbiter, to
wit: MED ARB ROX Case No. R100-9101-RU-002 for Certification Election filed by Pepsi
Cola Supervisors Union-UOEF (Union), MED ARB Case No. R1000-9102-RU-008, Re: Petition
to Set Aside, Cancel and/ or Revoke the Charter Affiliation of the Union, and MED-ARB ROX
Case No. R1000-9104-RU-012, for Cancellation of Registration Certificate No. 11492-LC in
favor of the Union.
G. R. No. 96663
The facts that matter can be culled as follows:

Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union) filed a
petition for certification election with the Med-Arbiter seeking to be the exclusive bargaining
agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI).
On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit statement that it
was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together with two (2)
rank and file unions, Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees Union of the
Philippines (PEUP).
On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to Set Aside,
Cancel and/or Revoke Charter Affiliation of the Union, entitled PCPPI v. PCEU-UOEF and
docketed as Case No. 725-90, on the grounds that (a) the members of the Union were managers
and (b) a supervisors union can not affiliate with a federation whose members include the rank
and file union of the same company.
On August 29,1990, PEPSI presented a motion to re-open the case since it was not furnished
with a copy of the Petition for Certification Election.
On September 4, 1990, PEPSI submitted its position paper to the BLR in Case No. 725-90.
On September 21, 1990, PEPSI received summons to appear at the pre-trial conference set
on September 25, 1990 but which the hearing officer rescheduled on October 21, 1990.
On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of Appeal with the
Secretary of Labor, questioning the setting of the certification election on the said date and five
(5) days after.It also presented an urgent Ex-Parte Motion to Suspend the Certification Election,
which motion was granted on October 18, 1990.
On November 12, 1990, the Secretary of Labor denied the appeal and Motion for
Reconsideration. Even as the Petition to Cancel, Revoke and Suspend Union Charter Certificate
was pending before the BLR, PEPSI found its way to this Court via the present petition
for certiorari.
On February 6, 1991, the Court granted the prayer for temporary restraining order and/or
preliminary injunction.
The pivot of inquiry here is: whether or not a supervisors union can affiliate with the same
Federation of which two (2) rank and file unions are likewise members, without violating Article
245 of the Labor Code (PD 442), as amended, by Republic Act 6715, which provides:
Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees.- Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in
a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own.
In its Comment dated March 19, 1991, the Federation argued that:
The pertinent portion of Article 245 of the Labor Code states that. Supervisory
employees shall not be eligible for membership in a labor organization of the rank and
file employees but may join, assist or form separate labor organization of their own.
This provision of law does not prohibit a local union composed of supervisory
employees from being affiliated to a federation which has local unions with rank-and-
file members as affiliates.
xxx xxx xxx
xxx the Petition to Cancel, Revoke or Set Aside the Charter Certificate of the private
respondent is anchored on the alleged ground that certain managerial employees are
included as members thereof. The grounds for the cancellation of the registration
certificate of a labor organization are provided in Section 7 of Rule II, Book V of the
Omnibus Rules Implementing the Labor Code, and the inclusion of managerial
employees is not one of the grounds. xxx (in this case, the private respondent herein)
remains to be a legitimate labor organization.[1]
On April 8, 1991, the Secretary of Labor and Employment, through the Office of the
Solicitor General, sent in a Comment, alleging inter alia, that:
xxx under Article 259 of the New Labor Code, only orders of the Med-Arbiter can be
appealed through the Secretary of Labor and only on the ground that the rules and
regulations for the conduct of the certification election have been violated. The Order
of the Representation Officer is interlocutory and not appealable. xxx
xxx until and unless there is a final order cancelling its certificate of registration or
charter certificate, a labor organization remains to be a legitimate labor organization
entitled to exercise all the rights and duties accorded to it by the Labor Code including
the right to be certified as a bargaining representative. xxx
xxx Public respondent cannot be deemed to have committed grave abuse of discretion
with respect to an issue that was never presented before it for resolution. xxx
Article 245 of the New Labor Code does not preclude the supervisors union and the
rank-and-file union from being affiliated with the same federation.
xxx xxx xxx
A federation of local union is not the labor organization referred to in Article 245 but
only becomes entitled to all the rights enjoyed by the labor organization (at the
company level) when it has complied with the registration requirements found in
Articles 234 and 237. Hence, what is prohibited by Article 245 is membership of
supervisory employees in a labor union (at the company level) of the rank and
file. xxx
xxx In other words, the affiliation of the supervisory employees union with the same
federation with which the rank and file employees union is affiliated did not make the
supervisory employees members of the rank and file employees union and vice
versa.[2] xxx
PEPSI, in its Reply dated May 7, 1991, asserted:
It is our humble contention that a final determination of the Petition to Set-Aside,

Cancel, Revoke Charter Union Affiliation should first be disposed of before granting
the Petition for the Conduct of Certification Election. To allow the conduct of the
certification election to proceed would make any decision arrived at by the Bureau of
Labor Relations useless inasmuch as the same would necessarily be rendered moot
and academic.[3]
On June 7, 1991, petitioner again filed a Supplemental Reply stressing:
It is likewise stressed that officials of both the PCLU and PEUP are top ranking
officers of UOEF, the federation of supervisors union, to wit:
POSITION IN RANK AND FILE POSITION IN FEDERATION

UNION
1. Rogelio de la Cruz PCLU -President General Vice President

2. Felix Gatela PEUP - President General Treasurer
3. Carlito Epino PCLU Board Member Educational Research
Director
xxx xxx xxx
The respondent supervisory union could do indirectly what it could not do directly as
the simple expedient of affiliating with UOEF would negate the manifest intent and
letter of the law that supervisory employees can only join, assist or form separate
labor organizations of their own and cannot be eligible for membership in a labor
organization of the rank and file employees.[4]
On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder, claiming
thus:
xxx an employer has no legal standing to question the validity of a certification

election.
xxx For this reason, the Supreme Court has consistently held that, as a rule, a
certification election is the sole and exclusive concern of the employees and that the
employer is definitely an intruder or a mere bystander (Consolidated Farms vs. Noriel,
L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation vs. Ople, L-
43861, September 4, 1981, 107 SCRA 211; Trade Unions of the Philippines and
Allied Services (TUPAS) vs. Trajano No. L-61153, January 17, 1983, 120 SCRA 64].
xxx xxx xxx
In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984, 127 SCRA
268, the Supreme Court (then dealing with the interpretation of Section 3 of the
Industrial Peace Act, from which Section 245 of the Labor Code was derived)
grappled with the issue in the case at bar. It held that,
There is nothing in the provisions of the Industrial Peace Act which provides that a
duly registered local union affiliating with a national union or federation loses its legal
personality, or its independence.
xxx xxx xxx
However, there is absolutely nothing in the Labor Code that prohibits a federation
from representing or exercising influence over its affiliates. On the contrary, this is
precisely the reason why federations are formed and are allowed by law to exist.[5]
On November 8, 1991, the Union also filed a Rejoinder.

On December 9, 1991, the Court resolved to DISMISS the case for failure to sufficiently
show that the questioned judgment is tainted with grave abuse of discretion.
In a Resolution dated March 2, 1992, the Second Division of the Court resolved to grant the
motion for reconsideration interposed on January 28, 1992.
G.R. No. 103300
What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the Decision
and Order of the Secretary of Labor and Employment, dated October 4, 1991 and December 12,
1991, respectively.
The decretal portion of the Med-Arbiter Order under attack, reads:
WHEREFORE, premises considered, an order is hereby issued:
1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102-

RU-008 for lack of merit; and
2. Ordering the conduct of a Certification Election to be participated by and among

the supervisory workers of the respondent company, Pepsi-Cola Products Philippines,
Inc. at its plant at Tin-ao, Cagayan de Oro City, including all the satellite warehouse
within the territorial coverage and control of the Cagayan de Oro Pepsi-Cola
Plant. The choices are as follows:
1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.)
2. No union
The parties are directed to attend a pre-election conference on June 10, 1991, 2:30
p.m. at the Regional Office to determine the qualification of the voters and to thresh
out the mechanics of the election. Respondent/employer is directed to submit five (5)
copies of the names of the rank and file workers taken from the payroll on October 1-
31, 1991, alphabetically arranged (sic) indicating their names and positions and dates
of employment and to bring the aforementioned payroll during the pre-election
conference for verification purposes.[6] xxx
The supervisory employees of the Union are:
POSITION
1. Felipe Valdehueza Route Manager
2. Gerberto Vertudazo C & C Manager
3. Paul Mendoza Sales Service Department Manager

4. Gilberto Emano, Jr. Route Manager
5. Jaime Huliganga Chief Checker
6. Elias Edgama, Sr. Accounting Manager
7. Romanico Ramos Route Manager
8. Raul Yacapin Route Manager
9. Jovenal Albaque Route Manager
10. Fulvio Narciso Route Manager
11. Apolinario Opiniano Route Manager
12. Alfredo Panas Route Manager
13. Simplicio Nelie Route Manager
14. Arthur Rodriguez Route Manager
15. Marco Ilano Warehouse Operations Manager and
16. Deodoro Ramos Maintenance Manager
On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and Employment
on the ground of grave abuse of discretion, docketed as Case No. OS-A-232-91.
On October 4, 1991, the Secretary modified the appealed decision, ruling thus:
WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is hereby modified
to the effect that MED ARB ROX Case No. R1000-9104-RU-012 and R1000-9102-
RU-008 are hereby referred to the Office of the Regional Director which has
jurisdiction over these cases. The call for certification election among the supervisory
workers of the Pepsi-Cola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de
Oro City is hereby sustained.[7]
On October 19, 1991, PEPSI presented a motion for reconsideration of the aforesaid Order
but the same was denied on December 12, 1991.
Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the
Union. Dissatisfied therewith, PEPSI brought the instant petition for certiorari, contending that:
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN
RULING THAT PRIVATE RESPONDENTS OFFICERS AND MEMBERS
ARE NOT MANAGERIAL EMPLOYEES;
PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF

WITH A FEDERATION ALREADY AFFILIATED WITH THE RANK AND
FILE UNION;
PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF

DISCRETION IN RULING THAT THE INSTITUTION OF A PETITION FOR
CANCELLATION OF UNION REGISTRATION DOES NOT CONSTITUTE A
PREJUDICIAL QUESTION TO A PETITION CERTIFICATION
ELECTION.[8]
The petitions must fail for want of merit.

At the outset, it must be stressed that on September 1, 1992, there was a Resolution of the
Union withdrawing from the Federation, to wit:
BE IT RESOLVED, as it is hereby RESOLVED, that this UNION WITHDRAW, as it

hereby WITHDRAWS its affiliation from the Union de Obreros Estivadores de
Filipinas, and at the same time, give our thanks to the said federation for its help and
guidance rendered to this Union in the past.[9]
The issue in G.R. No. 96663, whether or not the supervisors union can be affiliated with a
Federation with two (2) rank and file unions directly under the supervision of the former, has
thus become moot and academic in view of the Unions withdrawal from the federation.
In a long line of cases (Narciso Nakpil, et. al., vs. Hon. Crisanto Aragon, et. al.,, G. R. No. L
- 24087, January 22, 1980, 95 SCRA 85; Toribio v. Bidin, et. al., G.R. No. L-37960, February
28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L- 36188 - 37586 February 29, 1980, 96
SCRA 402), the Court dismissed the petition for being moot and academic. In the case of F. C.
Fisher v. Yangco Steamship Co., March 31, 1915, the Court held:
It is unnecessary, however to indulge in academic discussion of a moot question. xxx
xxx The action would have been dismissed at any time on a showing of the facts as
they were . The question left for the court was a moot one. Its Resolution would have
been useless. Its judgment would have been impossible of execution xxx.
However, in the case of University of San Agustin, Inc., et al. vs. Court of Appeals, et al.,
the court resolved the case, ruling that even if a case were moot and academic, a statement of the
governing principle is appropriate in the resolution of dismissal for the guidance not only of the
parties but of others similarly situated. xxx[10]
In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992] decided by the
Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano, Bidin, Romero and now Chief
Justice Davide, Jr., as members it was ratiocinated:
xxx xxx xxx
Thus, if the intent of the law is to avoid a situation where supervisors would merge
with the rank-and-file or where the supervisors labor organization would represent
conflicting interests, then a local supervisors union should not be allowed to affiliate
with the national federation of union of rank-and-file employees where that federation
actively participates in union activity in the company.
xxx xxx xxx
The prohibition against a supervisors union joining a local union of rank and file is
replete with jurisprudence. The Court emphasizes that the limitation is not confined to
a case of supervisors wanting to join a rank-and-file union. The prohibition extends to
a supervisors local union applying for membership in a national federation the
members of which include local unions of rank and file employees. The intent of the
law is clear especially where, as in this case at bar, the supervisors will be co-
mingling with those employees whom they directly supervise in their own bargaining
unit.
Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial
question to the petition for certification election, the following ruling in the case of Association
of the Court of Appeals Employees (ACAE) vs. Hon. Pura Ferrer-Calleja, in her capacity as
Director, Bureau of Labor Relations et. Al., 203 ACRA 597, 598, [1991], is in point, to wit:
xxx It is a well-settled rule that a certification proceedings is not a litigation in the

sense that the term is ordinarily understood, but an investigation of a non-adversarial
and fact finding character. (Associated Labor Unions (ALU) v. Ferrer-Calleja, 179
SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183
SCRA 451 [1990]. Thus, the technical rules of evidence do not apply if the decision to
grant it proceeds from an examination of the sufficiency of the petition as well as a
careful look into the arguments contained in the position papers and other documents.
At any rate, the Court applies the established rule correctly followed by the public
respondent that an order to hold a certification election is proper despite the pendency
of the petition for cancellation of the registration certificate of the respondent
union. The rationale for this is that at the time the respondent union filed its petition, it
still had the legal personality to perform such act absent an order directing the
cancellation.
xxx xxx xxx

As regards the issue of whether or not confidential employees can join the labor union of the
rank and file, what was held in the case of National Association of Trade Unions (NATU) -
Republic Planters Bank Supervisors Chapter vs. Hon. R. D. Torres, et. al., G.R. No. 93468,
December 29, 1994, applies to this case. Citing Bulletin Publishing Corporation vs. Sanchez, 144
SCRA 628,635, Golden Farms vs. NLRC, 175 SCRA 471, and Pier 8 Arrastre and Stevedoring
Services, Inc. vs. Hon. Nieves Roldan-Confessor et al., G.R. No. 110854, February 14, 1995, the
Court ruled:
xxx A confidential employee is one entrusted with confidence on delicate matters, or

with the custody, handling, or care and protection of the employers property. While
Art. 245 of the Labor Code singles out managerial employee as ineligible to join,
assist or form any labor organization, under the doctrine of necessary implication,
confidential employees are similarly disqualified. This doctrine states that what is
implied in a statute is as much a part thereof as that which is expressed, as elucidated
in several case; the latest of which is Chua v. Civil Service Commission where we
said:
No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular
situation. What is thought, at the time of the enactment, to be an all embracing
legislation maybe inadequate to provide for the unfolding events of the future. So-
called gaps in the law develop as the law is enforced. One of the rules of statutory
construction used to fill in the gap is the doctrine of necessary implication xxx, Every
statute is understood, by implication, to contain all such provisions as may be
necessary to effectuate its object and purpose, or to make effective rights, powers,
privileges or jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its terms. Ex necessitate
legis xxx
In applying the doctrine of necessary implication, we took into consideration the

rationale behind the disqualification of managerial employees expressed in Bulletin
Publishing Corporation v. Sanchez, thus xxx if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured of their loyalty
to the Union in view of evident conflict of interests. The Union can also become
company dominated with the presence of managerial employees in Union
membership. Stated differently, in the collective bargaining process, managerial
employees are supposed to be on the side of the employer, to act as its representatives,
and to see to it that its interest are well protected. The employer is not assured of such
protection if these employees themselves are union members. Collective bargaining in
such a situation can become one-sided. It is the same reason that impelled this Court
to consider the position of confidential employees as included in the disqualification
found in Art. 245 as if the disqualification of confidential employees were written in
the provision. If confidential employees could unionize in order to bargain for
advantages for themselves, then they could be governed by their own motives rather
than the interest of the employers. Moreover, unionization of confidential employees
for the purpose of collective bargaining would mean the extension of the law to
persons or individuals who are supposed to act in the interest of the employers. It is
not farfetched that in the course of collective bargaining, they might jeopardize that
interest which they are duty bound to protect. Along the same line of reasoning we
held in Golden Farms, Inc. vs. Ferrer-Calleja reiterated in Philips Industrial
Development, Inc., NLRC, that confidential employees such as accounting personnel,
radio and telegraph operators who, having access to confidential information, may
become the source of undue advantage. Said employee(s) may act as spy or spies of
either party to a collective bargaining agreement.
The Court finds merit in the submission of the OSG that Route Managers, Chief Checkers
and Warehouse Operations Managers are supervisors while Credit & Collection Managers and
Accounting Managers are highly confidential employees. Designation should be reconciled with
the actual job description of subject employees. A careful scrutiny of their job description
indicates that they dont lay down company policies. Theirs is not a final determination of the
company policies since they have to report to their respective superior. The mere fact that an
employee is designated manager does not necessarily make him one. Otherwise, there would be
an absurd situation where one can be given the title just to be deprived of the right to be a
member of a union. In the case of National Steel Corporation v. Laguesma, G. R. No. 103743,
January 29,1996, it was stressed that:
What is essential is the nature of the employees function and not the nomenclature or
title given to the job which determines whether the employee has rank and file or
managerial status, or whether he is a supervisory employee.
WHEREFORE, the petitions under consideration are DISMISSED but subject Decision,
dated October 4, 1991, of the Secretary of Labor and Employment is MODIFIED in that Credit
and Collection Managers and Accounting Managers are highly confidential employees not
eligible for membership in a supervisors union. No pronouncement as to costs.
SO ORDERED.

Workers With No Right of Self-Organization

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D.

WORKERS WITH NO RIGHT OF SELF-ORGANIZATION

1. MANAGERIAL AND CONFIDENTIAL EMPLOYEES ART. (245) 255

SOUTHERN PHILIPPINE FEDERATION OF LABOR vs. CALLEJA

l. Southern Philippines Federation of Labor (SPFL)

2. Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan) and

1 Nineteen (19) managerial employees;

2 Seventy-three (73) probationary employees; and

3 Nineteen (19) Supervisors 1;

All other workers except the foregoing will be allowed to vote."

xxx xxx xxx

xxx xxx xxx

xxx xxx xxx

SANDIGAN 178 votes

TOTAL 197 votes

SPFL 626 votes

SANDIGAN 706 votes

TOTAL 1,343 votes

Hence, this petition.

PHILTRANCO SERVICE ENTERPRISES vs. BLR

1. Kapisanan ng mga Kawani, Assistant Manggagawa at Konpidensyal sa Philtranco (KASAMA KO)

SO ORDERED. (Rollo, p. 33)

The antecedent facts are as follows:

xxx xxx xxx

3. Petitioner desires to represent all professional, technical, administrative, and confidential

xxx xxx xxx

xxx xxx xxx

xxx xxx xxx

We quote with favor Med-Arbiter Adap's rationale, to wit:

SO ORDERED. (p. 29, Rollo)

I HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT

II MAY SUPERVISORS, CASHIERS, FOREMEN, AND EMPLOYEES HOLDING

The petition merits Our consideration.

(p. 41, Rollo)

PIER 8 ARRASTRE vs. ROLDAN – CONFESSOR

xxx xxx xxx

A. The non-economic issues

1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:

As such representative the UNION is designated as the collective bargaining

B. The economic issues

The comparative positions of the parties are:

xxx xxx xxx

. Vacation and sick leave

20 working days vacation and

25 working days vacation and

30 working days vacation and

Provided that in the case Provided that in the case of a

Provided, further that in the

ii) For Gang bosses:

1) the condition that a gang

2) where the above number of

xxx xxx xxx

P5,000.00 assistance for death

xxx xxx xxx

a) amount of P700.00 but damage 30 days salary payable through

b) cash bond None The company shall put up a cash

xxx xxx xxx

xxx xxx xxx

. Vacation and Sick Leave

a) Non-rotation workers 17 days vacation/17 days sick leave

b) Rotation workers other 17 days vacation/17 days sick leave,

c) Gang bosses 17 days vacation/17 days sick leave,

xxx xxx xxx

8. Death aid P3,000.00 to the heirs of each covered employee