Case #4

G.R. No. 121084 February 19, 1997

TOYOTA MOTOR PHILIPPINES CORPORATION , petitioner,

vs.
TOYOTA MOTOR PHILIPPINES CORPORATION LABOR UNION AND THE
SECRETARY OF LABOR AND EMPLOYMENT, respondents.

Topics: Certificate of Elections, Mixed membership, Fundamental test

Facts:

Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a petition for
certification election with the Department of Labor, National Capital Region, for all rank-and-file
employees of the Toyota Motor Corporation. However petitioner, filed in their position paper
seeking the denial of such petition on two grounds; first, that the respondent union, being "in the
process of registration" had no legal personality to file the same as it was not a legitimate labor
organization as of the date of the filing of the petition; and second, that the union was composed
of both rank-and-file and supervisory employees in violation of law.

The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for certification
election for lack of merit. the Med-Arbiter found that the labor organization's membership was
composed of supervisory and rank-and-file employees in violation of Article 245 of the Labor
Code,4 and that at the time of the filing of its petition, respondent union had not even acquired
legal personality yet. Sec. of Labor on appeal reversed the decision of the Med-Arbiter and directed
the holding of a certification election among the regular rank.-and-file employees. Petitions
Motion for Reconsideration was denied by the Sec. of Labor hence, they have file a civil action
for certiorari to the SC.

Issue:

1. WON supervisory employees can join labor organization

2. WON respondent union had legal standing at the time of the filing of its petition for
certification election

Held:

According to Rothenberg, an appropriate bargaining unit is a group of employees of a given

employer, composed of all or less than the entire body of employees, which the collective interests
of all the employees, consistent with equity to the employer indicate to be best suited to serve
reciprocal rights and duties of the parties under the collective bargaining provisions of law.
In Belyca Corporation v. Ferrer Calleja, 18 we defined the bargaining unit as "the legal collectivity
for collective bargaining purposes whose members have substantially mutual bargaining interests
in terms and conditions of employment as will assure to all employees their collective bargaining
rights." This in mind, the Labor Code has made it a clear statutory policy to prevent supervisory

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employees from joining labor organizations consisting of rank-and-file employees as the concerns
which involve members of either group are normally disparate and contradictory. Article 245
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.

Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-
file and supervisory employees cannot possess any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of collective
bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status
of the labor organization is challenged on the basis of Article 245 of the Labor Code.

In requiring separate unions among rank-and-file employees on one hand, and supervisory
employees on the other, seeks to avoid. The rationale behind the Code's exclusion of supervisors
from unions of rank-and-file employees is that such employees, while in the performance of
supervisory functions, become the alter ego of management in the making and the implementing
of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory
employees. And this is so because the fundamental test of a bargaining unit's acceptability is
whether or not such a unit will best advance to all employees within the unit the proper exercise
of their collective bargaining rights. 22 The Code itself has recognized this, in preventing
supervisory employees from joining unions of rank-and-file employees.

The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised
as to whether or not respondent union was in possession of the status of a legitimate labor
organization at the time of filing, when, as petitioner vigorously claims, the former was still at the
stage of processing of its application for recognition as a legitimate labor organization. The union's
composition being in violation of the Labor Code's Prohibition of unions composed of supervisory
and rank-and-file employees, it could not possess the requisite personality to file for recognition
as a legitimate labor organization.

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Case # 6
G. R. No.101738. April 12, 2000
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner,
vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment, HON.
HENRY PABEL, Director of the Department of Labor and Employment Regional Office No.
XI and/or the Representation Officer of the Industrial Relations Division who will act for
and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF
EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE
WORKERS, respondents.

Topics: Certificate of Elections / Managerial Employees

Facts:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the
manufacture of paper and timber products, with principal place of operations at Tabon, Bislig,
Surigao del Sur. It has over 9,000 employees, 944 of whom are supervisory and technical staff
employees. More or less 487 of these supervisory and technical staff employees are signatory
members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees
Union (PBSTSEU).
On August 9, 1989, PBSTSEU instituted a Petition for Certification Election to determine
the sole and exclusive bargaining agent of the supervisory and technical staff employees of PICOP
for collective bargaining agreement (CBA) purposes.
PICOP failed to file any comment or position paper. Meanwhile, private respondents
Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective
petitions for intervention. Med-Arbiter Arturo L. Gamolo issued an Order granting the petitions
for interventions of the FFW and ALU and another ordering the holding of a certification election
among PICOP’s supervisory and technical staff employees.
During the pre-election conference PICOP questioned and objected to the inclusion of
some section heads and supervisors in the list of voters whose positions it averred were reclassified
as managerial employees in the light of the reorganization effected by it. Under the Revised
Organizational Structure of the PICOP, section heads and supervisors were now called section
managers and unit managers, and head sections and independent units. PICOP advanced the view
that considering the alleged present authority of these section managers and unit managers to hire
and fire, they are classified as managerial employees, and hence, ineligible to form or join any
labor organization.

ISSUE: WON the subject employees are managerial employees as such are prohibited to join
unions

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HELD:
In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, the Court elucidated on
the term “managerial employees.” Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers have the authority to devise,
implement and control strategic and operational policies while the task of First-Line Managers is
simply to ensure that such policies are carried out by the rank-and- file employees of an
organization. Under this distinction, “managerial employees” therefore fall in two (2) categories,
namely, the “managers” per se composed of Top and Middle Managers, and the “supervisors”
composed of First-Line Managers. Thus, the mere fact that an employee is designated “manager”
does not ipso facto make him one. Designation should be reconciled with the actual job description
of the employee, for it is the job description that determines the nature of employment.
A thorough dissection of the job description of the concerned supervisory employees and
section heads indisputably show that they are not actually managerial but only supervisory
employees since they do not lay down company policies. PICOP’s contention that the subject
section heads and unit managers exercise the authority to hire and fire is ambiguous and quite
misleading for the reason that any authority they exercise is not supreme but merely advisory in
character. Theirs is not a final determination of the company policies in as much as any action
taken by them on matters relative to hiring, promotion, transfer, suspension and termination of
employees is still subject to confirmation and approval by their respective superior. Thus, where
such power, which is in effect recommendatory in character, is subject to evaluation, review and
final action by the department heads and other higher executives of the company, the same,
although present, is not effective and not an exercise of independent judgment as required by law.
Furthermore, considering all the foregoing, the fact that PICOP voiced out its objection to
the holding of certification election, despite numerous opportunities to ventilate the same, only
after respondent Undersecretary of Labor affirmed the holding thereof, simply bolstered the public
respondents’ conclusion that PICOP raised the issue merely to prevent and thwart the concerned
section heads and supervisory employees from exercising a right granted them by law. Needless
to stress, no obstacle must be placed to the holding of certification elections, for it is a statutory
policy that should not be circumvented.

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Case # 7

G.R. No. 122226 March 25, 1998

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner,

vs.
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES,
INC. respondents.

Topics: Excluded Employees/Workers – Managerial Employees

Facts:
The petitioner is a union of supervisory employees. It appears that on March 20, 1995 the
union filed a petition for certification 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 filed a motion for reconsideration, pressing for resolution its contention that
the first sentence of Art. 245 of the Labor Code, so far declares managerial employees to be
ineligible to form, assist or join unions, contravenes Article III, Section 8 of the 1987 Constitution
which provides:
Issue:
1. WON the route managers at Pepsi-Cola Products Philippines, Inc. are managerial
employees and

2. WON Art. 245, insofar as it prohibits managerial employees and security guards from
forming, joining or assisting labor unions, violates Art. III, §8 of the Constitution.

Held:
1.) YES. 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
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

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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 The term "manager"
generally refers to "anyone who is responsible for subordinates and other organizational
resources." Managers constitute three levels of a pyramid:
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
MIDDLE MANAGERS: Middle managers direct the activities of other managers and sometimes
also those of 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
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 organization's interactions with its environment
In the Case, entitled Worker's Alliance Trade Union (WATU) v. Pepsi-Cola Products
Philippines, Inc., decided on November 13, 1991, the Secretary of Labor found: we find that only
those employees occupying the position of route manager and accounting manager are managerial
employees.

2) NO. The real intent of Art. III, 8 is evident in Lerum’s proposal. 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.
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.
Nor is the guarantee of organizational right in Art. III, infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, 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