lab rel (2nd round case)

8/13/2019 Lab Rel (2nd Round Case)

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FIRST DIVISION[G.R. No. 108855. February 28, 1996]

METROLAB INDUSTRIES, INC., peti t ioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, inher capacity as Secretary of the Department of Labor and Employment and METRO DRUGCORPORATION EMPLOYEES ASSOCIATION-FEDERATION OF FREEWORKERS, respondents.

SYLLABUS1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE AGENCIES; RULE;

CASE AT BAR. - We reaffirm the doctrine that considering their expertise in their respective fields,factual findings of administrative agencies supported by substantial evidence are accorded greatrespect and binds this Court. The Secretary of Labor ruled, thus: x x x Any act committed during thependency of the dispute that tends to give rise to further contentious issues or increase the tensionsbetween the parties should be considered an act of exacerbation. One must look at the act itself, noton speculative reactions. A misplaced recourse is not needed to prove that a dispute has beenexacerbated. For instance, the Union could not be expected to file another notice of strike. For thiswould depart from its theory of the case that the layoff is subsumed under the instant dispute, forwhich a notice of strike had already been filed. On the other hand, to expect violent reactions, unrulybehavior, and any other chaotic or drastic action from the Union is to expect it to commit acts

disruptive of public order or acts that may be illegal. Under a regime of laws, legal remedies take theplace of violent ones. x xx Protest against the subject layoffs need not be in the form of violent actionor any other drastic measure. In the instant case the Union registered their dissent by swiftly filing amotion for a cease and desist order. Contrary to petitioners allegations, the Union stronglycondemned the layoffs and threatened mass action if the Secretary of Labor fails to timely intervene:x x x 3. This unilateral action of management is a blatant violation of the injunction of this Officeagainst committing acts which would exacerbate the dispute. Unless such act is enjoined the Unionwill be compelled to resort to its legal right to mass actions and concerted activities to protest andstop the said management action. This mass layoff is clearly one which would result in a veryserious dispute unless this Office swiftly intervenes. x x x Metrolab and the Union were still in theprocess of resolving their CBA deadlock when petitioner implemented the subject layoffs. As aresult, motions and oppositions were filed diverting the parties attention, delaying resolution of thebargaining deadlock and postponing the signing of their new CBA, thereby aggravating the whole

conflict.2. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; EXERCISE OF

MANAGEMENT PREROGATIVES; NOT ABSOLUTE; SUBJECT TO EXCEPTIONS IMPOSED BYLAW. - This Court recognizes the exercise of management prerogatives and often declines tointerfere with the legitimate business decisions of the employer. However, this privilege is notabsolute but subject to limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), weissued this reminder: ... the exercise of management prerogatives was never consideredboundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that managementsprerogatives must be without abuse of discretion ...All this points to the conclusion that the exerciseof managerial prerogatives is not unlimited. It is circumscribed by limi(ations found in law, acollective bargaining agreement, or the general principles of fair play and justice (University of Sto.Tomas v. NLRC, 190 SCRA 758 [1990]).

3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes one of the

exceptions. The Secretary of Labor is expressly given the power under the Labor Code to assumejurisdiction and resolve labor disputes involving industries indispensable to national interest. Thedisputed injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Codespecifically provides that: x x x (g) When, in his opinion, there exists a labor dispute causing or likelyto cause a strike or lockout in an industry indispensable to the national interest, the Secretary ofLabor and Employment may assume jurisdiction over the dispute and decide it or certify the same tothe Commission for compulsory arbitration. Such assumption or certification shall have the effect ofautomatically enjoining the intended or impending strike or lockout as specified in the assumption orcertification order. If one has already taken place at the time of assumption or certification, allstriking or locked out employees shall immediately return to work and the employer shall immediately


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resume operations and readmit all workers under the same terms and conditions prevailing beforethe strike or lockout. The Secretary of Labor and Employment or the Commission may seek theassistance of law enforcement agencies to ensure compliance with this provision as well as withsuch orders as he may issue to enforce the same. . . . That Metrolabs business is of national interestis not disputed. Metrolab is one of the leading manufacturers and suppliers of medical andpharmaceutical products to the country. Metrolabs management prerogatives, therefore, are notbeing unjustly curtailed but duly balanced with and tempered by the limitations set by law, taking intoaccount its special character and the particular circumstances in the case at bench.

4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM ANDASSIST ANY LABOR ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIALEMPLOYEES. -Although Article 245 of the Labor Code limits the ineligibility to join, form and assistany labor organization to managerial employees, jurisprudence has extended this prohibition toconfidential employees or those who by reason of their positions or nature of work are required toassist or act in a fiduciary manner to managerial employees and hence, are likewise privy tosensitive and highly confidential records.

5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILEBARGAINING UNIT; NOT TANTAMOUNT TO DISCRIMINATION. - Confidential employees cannotbe classified as rank and file. As previously discussed, the nature of employment of confidentialemployees is quite distinct from the rank and file, thus, warranting a separate category. Excludingconfidential employees from the rank and file bargaining unit, therefore, is not tantamount to

discrimination.APPEARANCES OF COUNSEL

Bautista Picazo Buyco Tan & Fider for petitioner.The Solicitor General for public respondent.Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug Corporation.

D E C I S I O NKAPUNAN, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment ofthe Resolution and Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992and 25 January 1993, respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91) on grounds that these were issued with grave abuse of discretion and in excess of jurisdiction.

Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers(hereinafter referred to as the Union) is a labor organization representing the rank and file employees ofpetitioner Metrolab Industries, Inc. (hereinafter referred to as Metrolab/MII) and also of Metro Drug, Inc.

On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Unionexpired. The negotiations for a new CBA, however, ended in a deadlock.

Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro DrugInc. The parties failed to settle their dispute despite the conciliation efforts of the National Conciliationand Mediation Board.

To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres,issued an assumption order dated 20 September 1991, the dispositive portion of which reads, thus:WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, asamended, this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. - MetroDrug Distribution Division and Metrolab Industries Inc.

Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp.Employees Association - FFW are likewise directed to cease and desist from committing any and all actsthat might exacerbate the situation.Finally, the parties are directed to submit their position papers and evidence on the aforequoteddeadlocked issues to this office within twenty (20) days from receipt hereof.SO ORDERED.

[1](Italics ours.)

On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed itemsin the CBA and ordered the parties involved to execute a new CBA.

Thereafter, the Union filed a motion for reconsideration.
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On 27 January 1992, during the pendency of the abovementioned motion for reconsideration,Metrolab laid off 94 of its rank and file employees.

On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab fromimplementing the mass layoff, alleging that such act violated the prohibition against committing acts thatwould exacerbate the dispute as specifically directed in the assumption order.

[2]

On the other hand, Metrolab contended that the layoff was temporary and in the exercise of itsmanagement prerogative. It maintained that the company would suffer a yearly gross revenue loss ofapproximately sixty-six (66) million pesos due to the withdrawal of its principals in the Toll and ContractManufacturing Department. Metrolab further asserted that with the automation of the manufacture of itsproduct Eskinol, the number of workers required its production is significantly reduced.

[3]

Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basisdue to availability of work in the production lines.

On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff ofMetrolabs 94 rank and file workers illegal and ordered their reinstatement with full backwages. Thedispositive portion reads as follows:WHEREFORE, the Unions motion for reconsideration is granted in part, and our order of 28 December1991 is affirmed subject to the modifications in allowances and in the close shop provision. The layoff ofthe 94 employees at MII is hereby declared illegal for the failure of the latter to comply with our injunctionagainst committing any act which may exacerbate the dispute and with the 30-day noticerequirement. Accordingly, MII is hereby ordered to reinstate the 94 employees, except those who have

already been recalled, to their former positions or substantially equivalent, positions with full backwagesfrom the date they were illegally laid off on 27 January 1992 until actually reinstated without loss ofseniority rights and other benefits. Issues relative to the CBA agreed upon by the parties and notembodied in our earlier order are hereby ordered adopted for incorporation in the CBA. Further, thedispositions and directives contained in all previous orders and resolutions relative to the instant dispute,insofar as not inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and desist fromcommitting any act which may tend to circumvent this resolution.SO RESOLVED.

[4]

On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did notaggravate the dispute since no untoward incident occurred as a result thereof. It, likewise, filed a motionfor clarification regarding the constitution of the bargaining unit covered by the CBA.

On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution,however, was without prejudice to the outcome of the issues raised in the reconsideration and clarification

motions submitted for decision to the Secretary of Labor.[5]

Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its

employees on grounds of redundancy due to lack of work which the Union again promptly opposedon 5 October 1992.

On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolabmoved for a reconsideration.

[6]

On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containingthe following orders:

xxx xxx xxx.1. MIIs motion for partial reconsideration of our 14 April 1992 resolution specifically that portion thereofassailing our ruling that the layoff of the 94 employees is illegal, is hereby denied. MII is hereby orderedto pay such employees their full backwages computed from the time of actual layoff to the time of actualrecall;

2. For the parties to incorporate in their respective collective bargaining agreements the clarificationsherein contained; and3. MIIs motion for reconsideration with respect to the consequences of the second wave of layoffaffecting 73 employees, to the extent of assailing our ruling that such layoff tended to exacerbate thedispute, is hereby denied. But inasmuch as the legality of the layoff was not submitted for our resolutionand no evidence had been adduced upon which a categorical finding thereon can be based, the same ishereby referred to the NLRC for its appropriate action.Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute arehereby lifted.SO RESOLVED.

[7]
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Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shopprovision of the CBA, not from the bargaining unit.

On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the presentpetition for certiorari with application for issuance of a Temporary Restraining Order.

On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor fromenforcing and implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25January 1993, respectively.

In its petition, Metrolab assigns the following errors:A

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTEDGRAVE ABUSE OF DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THETEMPORARY LAYOFF ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OFBACKWAGES TO THE AFFECTED EMPLOYEES.

*B

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSEDHER DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNITOF RANK AND FILE EMPLOYEES.

[8]

Anent the first issue, we are asked to determine whether or not public respondent Labor Secretarycommitted grave abuse of discretion and exceeded her jurisdiction in declaring the subject layoffsinstituted by Metrolab illegal on grounds that these unilateral actions aggravated the conflict between

Metrolab and the Union who were, then, locked in a stalemate in CBA negotiations.Metrolab argues that the Labor Secretarys order enjoining the parties from committing any act that

might exacerbate the dispute is overly broad, sweeping and vague and should not be used to curtail theemployers right to manage his business and ensure its viability.

We cannot give credence to Metrolabs contention.This Court recognizes the exercise of management prerogatives and often declines to interfere with

the legitimate business decisions of the employer. However, this privilege is not absolute but subject tolimitations imposed by law.

[9]

In PAL v. NLRC,[10]

we issued this reminder:xxx xxx xxx

. . .the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs.Medina ( 177 SCRA 565 [1989]), it was held that managements prerogatives must be without abuse ofdiscretion....

xxx xxx xxxAll this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It iscircumscribed by limitations found in law, a collective bargaining agreement, or the general principles offair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)

xxx xxx xxx.The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the

power under the Labor Code to assume jurisdiction and resolve labor disputes involving industriesindispensable to national interest. The disputed injunction is subsumed under this special grant ofauthority. Art. 263 (g) of the Labor Code specifically provides that:

xxx xxx xxx(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in anindustry indispensable to the national interest, the Secretary of Labor and Employment may assumejurisdiction over the dispute and decide it or certify the same to the Commission for compulsory

arbitration. Such assumption or certification shall have the effect of automatically enjoining the intendedor impending strike or lockout as specified in the assumption or certification order. If one has alreadytaken place at the time of assumption or certification, all striking or locked out employees shallimmediately return to work and the employer shall immediately resume operations and readmit allworkers under the same terms and conditions prevailing before the strike or lockout. The Secretary ofLabor and Employment or the Commission may seek the assistance of law enforcement agencies toensure compliance with this provision as well as with such orders as he may issue to enforce the same. .. (Italics ours.)

xxx xxx xxx.
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That Metrolabs business is of national interest is not disputed. Metrolab is one of the leadingmanufacturers and suppliers of medical and pharmaceutical products to the country.

Metro labs management prerogatives, therefore, are not being unjustly curtailed but duly balancedwith and tempered by the limitations set by law, taking into account its special character and the particularcircumstances in the case at bench.

As aptly declared by public respondent Secretary of Labor in its assailed resolution:xxx xxx xxx.

MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of managementprerogatives such as layoffs. But it may nevertheless be appropriate to mention here that one of thesubstantive evils which Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a labordispute to the further detriment of the national interest. When a labor dispute has in fact occurred and ageneral injunction has been issued restraining the commission of disruptive acts, managementprerogatives must always be exercised consistently with the statutory objective.

[11]

xxx xxx xxx.Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no

untoward incident occurred after the layoffs were implemented. There were no work disruptions orstoppages and no mass actions were threatened or undertaken. Instead, petitioner asserts, the affectedemployees calmly accepted their fate as this was a matter which they had been previously advisedwould be inevitable.

[12]

After a judicious review of the record, we find no compelling reason to overturn the findings of the

Secretary of Labor.We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of

administrative agencies supported by substantial evidence are accorded great respect and binds thisCourt.

[13]

The Secretary of Labor ruled, thus:xxx xxx xxx.

Any act committed during the pendency of the dispute that tends to give rise to further contentious issuesor increase the tensions between the parties should be considered an act of exacerbation. One mustlook at the act itself, not on speculative reactions. A misplaced recourse is not needed to prove that adispute has been exacerbated. For instance, the Union could not be expected to file another notice ofstrike. For this would depart from its theory of the case that the layoff is subsumed under the instantdispute, for which a notice of strike had already been filed. On the other hand, to expect violent reactions,unruly behavior, and any other chaotic or drastic action from the Union is to expect it to commit acts

disruptive of public order or acts that may be illegal. Under a regime of laws, legal remedies take theplace of violent ones.

[14]xxx xxx xxx.

Protest against the subject layoffs need not be in the form of violent action or any other drasticmeasure. In the instant case the Union registered their dissent by swiftly filing a motion for a cease anddesist order. Contrary to petitioners allegations, the Union strongly condemned the layoffs andthreatened mass action if the Secretary of Labor fails to timely intervene:

xxx xxx xxx.3. This unilateral action of management is a blatant violation of the injunction of this Office againstcommitting acts which would exacerbate the dispute. Unless such act is enjoined the Union will becompelled to resort to its legal right to mass actions and concerted activities to protest and stop the saidmanagement action. This mass layoff is clearly one which would result in a very serious labor disputeunless this Office swiftly intervenes.

[15]

xxx xxx xxx.Metrolab and the Union were still in the process of resolving their CBA deadlock when petitionerimplemented the subject layoffs. As a result, motions and oppositions were filed diverting the partiesattention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA,thereby aggravating the whole conflict.

We, likewise, find untenable Metrolabs contention that the layoff of the 94 rank-and-file employeeswas temporary, despite the recall of some of the laid off workers.

If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so inthe notices it sent to the affected employees and the Department of Labor and Employment. Consider thetenor of the pertinent portions of the layoff notice to the affected employees:
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xxx xxx xxx.Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng lay -off ng mga empleyadosa Rank & File dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa atin ang kasama salay-offdahil wala nang trabaho para sa kanila. Mahirap tanggapin ang mga bagay na ito subalitkailangan nating gawin dahil hindi kaya ng kumpanya ang magbayad ng suweldo kung ang empleyado aywalang trabaho. Kung tayo ay patuloy na magbabayad ng suweldo, mas hihina ang ating kumpanya atmas marami ang maaring maapektuhan.Sa pagpapatupad ng lay-off susundin natin ang LAST IN-FIRST OUT policy. Ang mga empleyadongmay pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan. Ito ay batay na rin sa nakasaadsa ating CBA na ang mga huling pumasok sa kumpanya ang unang masasama sa lay -off kapagnagkaroon ng ganitong mga kalagayan.Ang mga empleyado na kasama sa lay-off ay nakalista sa sulat na ito. Ang umpisa ng lay -off ay saLunes, Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero30, 1992.Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming tingin ay matatagalan bagomagkaroon ng dagdag na trabaho. Dahil dito, sinimulan na namin ang isang Redundancy Program samga supervisors. Nabawasan ang mga puwesto para sa kanila, kaya sila ay mawawalan ng trabaho atbibigyan na ng redundancy pay.

[16](Italics ours.)

xxx xxx xxx.We agree with the ruling of the Secretary of Labor, thus:

xxx xxx xxx.. . .MII insists that the layoff in question is temporary not permanent. It then cites International Hardware,Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held that the 30-day notice required underArticle 283 of the Labor Code need not be complied with if the employer has no intention to permanentlysevere (sic) the employment relationship.We are not convinced by this argument. International Hardware involves a case where there had been areduction of workload. Precisely to avoid laying off the employees, the employer therein opted to givethem work on a rotating basis. Though on a limited scale, work was available. This was the SupremeCourts basis for holding that there was no intention to permanently severe (sic) the employmentrelationship.Here, there is no circumstance at all from which we can infer an intention from MII not to sever theemployment relationship permanently. If there was such an intention, MII could have made it very clear inthe notices of layoff. But as it were, the notices are couched in a language so uncertain that the only

conclusion possible is the permanent termination, not the continuation, of the employment relationship.MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While insistingthat there is really no best time to announce a bad news, (sic) it also claims that it broke the bad newsonly on 27 January 1992 because had it complied with the 30-day notice, it could have broken the badnews on 02 January 1992, the first working day of the year. If there is really no best time to announce abad news (sic), it wouldnt have mattered if the same was announced at the first working day of theyear. That way, MII could have at least complied with the requirement of the law.

[17]

The second issue raised by petitioner merits our consideration.In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on

closed-shop and the scope of the bargaining unit in this wise:xxx xxx xxx.

Appropriateness of the bargaining unit.xxx xxx xxx.

Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:These aside, we reconsider our denial of the modifications which the Union proposes to introduce on theclose shop provision. While we note that the provision as presently worded has served the relationshipof the parties well under previous CBAs, theshift in constitutional policy toward expanding the right of allworkers to self-organization should now be formally recognized by the parties, subject to the followingexclusions only:1. Managerial employees; and2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice Presidentfor Sales, Personnel Manager, and Director for Corporate Planning who may have access to vital labor
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relations information or who may otherwise act in a confidential capacity to persons who determine orformulate management policies.The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified consistentlywith the foregoing.

Article I (b) of the 1988-1990 CBA provides:b)Close Shop. - All Qualified Employees must join the Association immediately upon regularization as acondition for continued employment. This provision shall not apply to: (i) managerial employees who areexcluded from the scope of the bargaining unit; (ii) the auditors and executive secretaries of seniorexecutive officers, such as, the President, Executive Vice-President, Vice-President for Finance, Head ofLegal, Vice-President for Sales, who are excluded from membership in the Association; and (iii) thoseemployees who are referred to in Attachment I hereof, subject, however, to the application of theprovision of Article II, par. (b) hereof. Consequently, the above-specified employees are not required tojoin the Association as a condition for their continued employment.

On the other hand, Attachment I provides:Exclusion from the Scope of the Close Shop ProvisionThe following positions in the Bargaining Unit are not covered by the Close Shop provision of the

CBA (Article I, par. b):1. Executive Secretaries of Vice-Presidents, or equivalent positions.2. Executive Secretary of the Personnel Manager, or equivalent positions.3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.

4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head Office,Accounting Department at Head Off ice, and Budget Staff, who because of the nature of their duties andresponsibilities need not join the Association as a condition for their employment.5. Newly-hired secretaries of Branch Managers and Regional Managers.

Both MDD and MII read the exclusion of managerial employees and executive secretaries in our 14April 1992 resolution as exclusion from the bargaining unit. They point out that managerial employeesare lumped under one classification with executive secretaries, so that since the former are excluded fromthe bargaining unit, so must the latter be likewise excluded.

This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing theexpanded scope of the right to self-organization, our intent was to delimit the types of employeesexcluded from the close shop provision, not from the bargaining unit, to executive secretariesonly. Otherwise, the conversion of the exclusionary provision to one that refers to the bargaining unitfrom one that merely refers to the close shop provision would effectively curtail all the organizational

rights of executive secretaries.The exclusion of managerial employees, in accordance with law, must therefore still carry the

qualifying phrase from the bargaining unit in Article I (b)(i) of the 1988 -1990 CBA. In the same manner,the exclusion of executive secretaries should be read together with the qualifying phrase are excludedfrom membership in the Association of the same Article and with the heading of Attachment I. The latterrefers to Exclusions from Scope of Close Shop Provision and provides that [t]he following positions inBargaining Unit are not covered by the close shop provis ion of the CBA.

The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification,MII points out that it has done away with the positions of Executive Vice-President, Vice-President forSales, and Director for Corporate Planning. Thus, the foregoing group of exclusions is no longerappropriate in its present organizational structure. Nevertheless, there remain MII officer positions forwhich there may be executive secretaries. These include the General Manager and members of theManagement Committee, specifically i) the Quality Assurance Manager; ii) the Product Development

Manager; iii) the Finance Director; iv) the Management System Manager; v) the Human ResourcesManager; vi) the Marketing Director; vii) the Engineering Manager; viii) the Materials Manager; and ix) theProduction Manager.

xxx xxx xxxThe basis for the questioned exclusions, it should be noted, is no other than the previous CBA

between MII and the Union. If MII had undergone an organizational restructuring since then, this is a factto which we have never been made privy. In any event, had this been otherwise the result would havebeen the same. To repeat, we limited the exclusions to recognize the expanded scope of the right to self-organization as embodied in the Constitution.

[18]
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Metrolab, however, maintains that executive secretaries of the General Manager and the executivesecretaries of the Quality Assurance Manager, Product Development Manager, Finance Director,Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager,Materials Manager and Production Manager, who are all members of the companys ManagementCommittee should not only be exempted from the closed-shop provision but should be excluded frommembership in the bargaining unit of the rank and file employees as well on grounds that their executivesecretaries are confidential employees, having access to vital labor information.

[19]

We concur with Metrolab.Although Article 245 of the Labor Code

[20]limits the ineligibility to join, form and assist any labor

organization to managerial employees, jurisprudence has extended this prohibition to confidentialemployees or those who by reason of their positions or nature of work are required to assist or act in afiduciary manner to managerial employees and hence, are likewise privy to sensitive and highlyconfidential records.

The rationale behind the exclusion of confidential employees from the bargaining unit of the rank andfile employees and their disqualification to join any labor organization was succinctly discussed in PhilipsIndustrial Development v. NLRC:

[21]

xxx xxx xxx.On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse ofdiscretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDIs ServiceEngineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial

Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank andfile bargaining unit.In the first place, all these employees, with the exception of the service engineers and the sales forcepersonnel, 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 confidentialemployees. By the very nature of their functions, they assist and act in a confidential capacity to, or haveaccess to confidential matters of, persons who exercise managerial functions in the field of laborrelations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join alabor union equally applies to them.

In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale,thus:x x x The rationale for this inhibition has been stated to be, because if these managerial employees wouldbelong 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 ofmanagerial employees in Union membership.

In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable toconfidential employees:This rationale holds true also for confidential employees such as accounting personnel, radio andtelegraph operators, who having access to confidential information, may become the source of undueadvantage. Said employee(s) may act as a spy or spies of either party to a collective bargainingagreement. This is specially true in the present case where the petitioning Union is already thebargaining agent of the rank-and-file employees in the establishment. To allow the confidentialemployees to join the existing Union of the rank-and-file would be in violation of the terms of theCollective Bargaining Agreement wherein this kind of employees by the nature of their functions/positionsare expressly excluded.

xxx xxx xxx.

Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v.Torres[22]

we declared:xxx xxx xxx.

. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllersare confidential employees, having control, custody and/ or access to confidential matters, e.g., thebranchs cash position, statements of financial condition, vault combination, cash codes for telegraphictransfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central BankManual regarding joint custody, this claim is not even disputed by petitioner. A confidential employee isone entrusted with confidence on delicate matters, or with the custody, handling, or care and protection ofthe employers property. While Art. 245 of the Labor Code singles out managerial employees as ineligible
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to join, assist or form any labor organization, under the doctrine of necessary, implication, confidentialemployees are similarly disqualified. . . .

xxx xxx xxx.. . .(I)n the collective bargaining process, managerial employees are supposed to be on the side of theemployer, to act as its representatives, and to see to it that its interest are well protected. The employeris not assured of such protection if these employees themselves are union members. Collectivebargaining in such a situation can become one-sided. It is the same reason that impelled this Court toconsider the position of confidential employees as included in the disqualification found in Art. 245 as ifthe disqualification of confidential employees were written in the provision. If confidential employeescould unionize in order to bargain for advantages for themselves, then they could be governed by theirown motives rather than the interest of the employers. Moreover, unionization of confidential employeesfor the purpose of collective bargaining would mean the extension of the law to persons or individualswho are supposed to act in the interest of the employers. It is not farfetched that in the course ofcollective bargaining, they might jeopardize that interest which they are duty-bound to protect. . . .

xxx xxx xxx.And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor,

[23]we

ruled that:xxx xxx xxx.

Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basicallyroutinary 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, thekeeping of records and files, the giving of and receiving notices, and such other duties as required by thelegal personnel of the corporation. Legal secretaries therefore fall under the category of confidentialemployees. . . .

xxx xxx xxx.We thus hold that public respondent acted with grave abuse of discretion in not excluding the fourforemen and legal secretary from the bargaining unit composed of rank-and-file employees.

xxx xxx xxx.In the case at bench, the Union does not disagree with petitioner that the executive secretaries areconfidential employees. It however, makes the following contentions:

xxx xxx xxx.There would be no danger of company domination of the Union since the confidential employees wouldnot be members of and would not participate in the decision making processes of the Union.

Neither would there be a danger of espionage since the confidential employees would not have anyconflict of interest, not being members of the Union. In any case, there is always the danger that anyemployee would leak management secrets to the Union out of sympathy for his fellow rank and filer evenif he were not a member of the union nor the bargaining unit.Confidential employees are rank and file employees and they, like all the other rank and file employees,should be granted the benefits of the Collective Bargaining Agreement. There is no valid basis fordiscriminating against them. The mandate of the Constitution and the Labor Code, primarily of protectionto Labor, compels such conclusion.

[24]

xxx xxx xxx.The Unions assurances fail to convince. The dangers sought to be prevented, particularly the threat

of conflict of interest and espionage, are not eliminated by non-membership of Metrolabs executivesecretaries or confidential employees in the Union. Forming part of the bargaining unit, the executivesecretaries stand to benefit from any agreement executed between the Union and Metrolab. Such a

scenario, thus, gives rise to a potential conflict between personal interests and their duty as confidentialemployees to act for and in behalf of Metrolab. They do not have to be union members to affect orinfluence either side.

Finally, confidential employees cannot be classified as rank and file. As previously discussed, thenature of employment of confidential employees is quite distinct from the rank and file, thus, warranting aseparate category. Excluding confidential employees from the rank and file bargaining unit, therefore, isnot tantamount to discrimination.

WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of publicrespondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to theextent that executive secretaries of petitioner Metrolabs General Manager and the executive secretaries
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of the members of its Management Committee are excluded from the bargaining unit of petitioners rankand file employees.

SO ORDERED.Padilla, Bellosillo, Vitug, andHermosisima, Jr., JJ., concur.

SECOND DIVISION

[G.R. No. 115949. March 16, 2000]

EVANGELINE J. GABRIEL, peti t ioners, vs. THE HONORABLE SECRETARY OF LABOR ANDEMPLOYMENT et. Al., respondents.C alrsc

D E C I S I O N

QUISUMBING, J.:

Before us is a special civil action for certiorariseeking to reverse partially the Order[1]of public respondentdated June 3, 1994, in Case No. OS-MA-A-8-170-92, which ruled that the workers through their unionshould be made to shoulder the expenses incurred for the professional services of a lawyer in connectionwith the collective bargaining negotiations and that the reimbursement for the deductions from theworkers should be charged to the unions general fund or account.

The records show the following factual antecedents:

Petitioners comprise the Executive Board of the SolidBank Union, the duly recognized collectivebargaining agent for the rank and file employees of Solid Bank Corporation. Private respondents aremembers of said union.

Sometime in October 1991, the unions Executive Board decided to retain anew the service of Atty.Ignacio P. Lacsina (now deceased) as union counsel in connection with the negotiations for a newCollective Bargaining Agreement (CBA). Accordingly, on October 19, 1991, the board called a generalmembership meeting for the purpose. At the said meeting, the majority of all union members approvedand signed a resolution confirming the decision of the executive board to engage the services of Atty.Lacsina as union counsel.

As approved, the resolution provided that ten percent (10%) of the total economic benefits that may besecured through the negotiations be given to Atty. Lacsina as attorneys fees. It also contained anauthorization for SolidBank Corporation to check-off said attorneys fees from the first lump sum paymentof benefits to the employees under the new CBA and to turn over said amount to Atty. Lacsina and/or hisduly authorized representative.

[2]

The new CBA was signed on February 21, 1992. The bank then, on request of the union, made payrolldeductions for attorneys fees from the CBA benefits paid to the union members in accordance with theabovementioned resolution.

On October 2, 1992, private respondents instituted a complaint against the petitioners and the unioncounsel before the Department of Labor and Employment (DOLE) for illegal deduction of attorneys feesas well as for quantification of the benefits in the 1992 CBA.

[3]Petitioners, in response, moved for the

dismissal of the complaint citing litis pendentia, forum shopping and failure to state a cause of action astheir grounds.

[4]Sccal r
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On April 22, 1993, Med-Arbiter Paterno Adap of the DOLE- NCR issued the following Order:

"WHEREFORE, premises considered, the Respondents Union Officers and Counsel arehereby directed to immediately return or refund to the Complainants the illegally deductedamount of attorneys fees from the package of benefits due herein complainants underthe aforesaid new CBA.

"Furthermore, Complainants are directed to pay five percent (5%) of the total amount tobe refunded or returned by the Respondent Union Officers and Counsel to them in favorof Atty. Armando D. Morales, as attorneys fees, in accordance with Section II, Rule VIIIof Book II (sic) of the Omnibus Rules Implementing the Labor Code."

[5]

On appeal, the Secretary of Labor rendered a Resolution[6]

dated December 27, 1993, stating:

"WHEREFORE,the appeal of respondents Evangeline Gabriel, et. al., is hereby partiallygranted and the Order of the Med-Arbiter dated 22 April 1993 is hereby modified asfollows: (1) that the ordered refund shall be limited to those union members who have notsignified their conformity to the check-off of attorneys fees; and (2) the directive on thepayment of 5% attorneys fees should be deleted for lack of basis.

SO ORDERED."[7]

On Motion for Reconsideration, public respondent affirmed the said Order with modification that theunions counsel be dropped as a party litigant and that the workers through their union should be made toshoulder the expenses incurred for the attorneys services. Accordingly, the reimbursement should becharged to the unions general fund/account.

[8]

Hence, the present petition seeking to partially annul the above-cited order of the public respondent forbeing allegedly tainted with grave abuse of discretion amounting to lack of jurisdiction.

The sole issue for consideration is, did the public respondent act with grave abuse of discretion in issuing

the challenged order?Calrsp ped

Petitioners argue that the General Membership Resolution authorizing the bank to check-off attorneysfee from the first lump sum payment of the benefits to the employees under the new CBA satisfies thelegal requirements for such assessment.

[9]Private respondents, on the other hand, claim that the check-

off provision in question is illegal because it was never submitted for approval at a general membershipmeeting called for the purpose and that it failed to meet the formalities mandated by the Labor Code.

[10]

In check-off, the employer, on agreement with the Union, or on prior authorization from employees,deducts union dues or agency fees from the latters wages and remits them directly to the union.

[11]It

assures continuous funding for the labor organization. As this Court has acknowledged, the system ofcheck-off is primarily for the benefit of the union and only indirectly for the individual employees.

[12]

The pertinent legal provisions on check-offs are found in Article 222 (b) and Article 241 (o) of the LaborCode.

Article 222 (b) states:

"No attorneys fees, negotiation fees or similar charges of any kind arising from anycollective bargaining negotiations or conclusions of the collective agreement shall beimposed on any individual member of the contracting union: Provided, however, thatattorneys fees may be charged againstunion funds in an amount to be agreed upon by
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the parties.Any contract, agreement or arrangement of any sort to the contrary shall benull and void." (Underscoring ours)

Article 241 (o) provides:

"Other than for mandatory activities under the Code, no special assessment, attorneys

fees, negotiation fees or any other extraordinary fees may be checked off from anyamount due to an employee without an individual written authorization duly signedby the employee. The authorization should specifically state the amount, purposeand beneficiary of the deduction." (Emphasis ours.)

Article 241 has three (3) requisites for the validity of the special assessment for unions incidentalexpenses, attorneys fees and representation expenses. These are: 1) authorization by a writtenresolution of the majority of all the members at the general membership meeting called for the purpose;(2) secretarys record of the minutes of the meeting; and (3) individual written authorization for check offduly signed by the employees concerned.Sce dp

Clearly, attorneys fees may not be deducted or checked off from any amount due to an employee wi thouthis written consent.

After a thorough review of the records, we find that the General Membership Resolution of October 19,1991 of the SolidBank Union did not satisfy the requirements laid down by law and jurisprudence for thevalidity of the ten percent (10%) special assessment for unions incidental expenses, attorneys fees andrepresentation expenses. There were no individual written check off authorizations by the employeesconcerned and so the assessment cannot be legally deducted by their employer.

Even as early as February 1990, in the case of Palacol vs. Ferrer-Calleja[13]

we said that the expressconsent of employees is required, and this consent must be obtained in accordance with the stepsoutlined by law, which must be followed to the letter. No shortcuts are allowed. In Stellar IndustrialServices, Inc. vs. NLRC

[14]we reiterated that a written individual authorization duly signed by the

employee concerned is a conditionsine qua nonfor such deduction.

These pronouncements are also in accord with the recent ruling of this Court in the case ofABS-CBNSupervisors Employees Union Members vs. ABS-CBN Broadcasting Corporation, et. al.,

[15]which

provides:

"Premises studiedly considered, we are of the irresistible conclusion and, so find that theruling in BPIEU-ALU vs. NLRCthat (1)the prohibition against attorneys fees inArticle 222, paragraph (b) of the Labor Code applies only when the payment ofattorneys fees is effected through forced contribu tions from the workers; and (2)that no deduction must be take from the workers who did not sign the check-offauthorization,applies to the case under consideration." (Emphasis ours.)

We likewise ruled in Bank of the Philippine Island Employees Union-Association Labor Union (BPIEU-

ALU) vs. NLRC,

[16]

" the afore-cited provision (Article 222 (b) of the Labor Code) as prohibiting thepayment of attorneys feesonly when it is effected through forced contributionsfromworkers from their own funds as distinguished from the union funds. The purpose of theprovision is to prevent impositionon the workers of the duty to individually contribute theirrespective shares in the fee to be paid the attorney for his services on behalf of the unionin its negotiations with management. The obligation to pay the attorneys feesbelongs to the union and cannot be shunted to the workers as their directresponsibility. Neither the lawyer nor the union itself may require the individual
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worker to assume the obligation to pay attorneys fees from their own pockets. Socategorical is this intent that the law makes it clear that any agreement to the contraryshall be null and void ab initio." (Emphasis ours.)Edp sc

From all the foregoing, we are of the considered view that public respondent did not act with grave abuseof discretion in ruling that the workers through their union should be made to shoulder the expenses

incurred for the services of a lawyer. And accordingly the reimbursement should be charged to theunions general fund or account. No deduction can be made from the salaries of the concernedemployees other than those mandated by law.

WHEREFORE, the petition is DENIED. The assailed Order dated June 3, 1994, of respondent Secretaryof Labor signed by Undersecretary Bienvenido E. Laguesma is AFFIRMED. No pronouncement as tocosts.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, andDe Leon, Jr., JJ., concur.Ed p

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

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE,President,peti t ioners, vs.HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY ASUNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTEIN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents.

D E C I S I O N

ROMERO, J.:

This is a Petition for Certiorariwith Prayer for the Issuance of Preliminary Injunction seeking toreverse and set aside the Order of public respondent, Undersecretary of the Department of Labor andEmployment, 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 SanMiguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel CorporationSupervisors and Exempt Union, Petitioner. The Order excluded the employees under supervisory levels3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out theirparticipation 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 ofcertification among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plantsof Cabuyao, San Fernando and Otis as one bargaining unit.

On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal withMemorandum on Appeal, pointing out, among others, the Med-Arbiters error in grouping together allthree (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in includingsupervisory levels 3 and above whose positions are confidential in nature.
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On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent companysAppeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the trueclassification 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 thereconsideration prayed for on September 3, 1991 and directed the conduct of separate certificationelections 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 forReconsideration with Motion to suspend proceedings.

On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing thedoctrine 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 laborunion for purposes of collective bargaining.

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

WHEREFORE, the motion is hereby granted and the Decision of this Office dated 03 September 1991 ishereby 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 excludedfrom 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 areconsidered confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute anappropriate 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 notvested 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 beclassified 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 alabor organization of the rank-and-file employees bu tmay join, assist or form separate labororganizations 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 whoformulate, 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 thatis, the confidential relationship must exist between the employees and his supervisor, and the supervisormust handle the prescribed responsibilities relating to labor relations.

[6]

The exclusion from bargaining units of employees who, in the normal course of their duties, becomeaware of management policies relating to labor relations is a principal objective sought to be
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accomplished by the confidential employee rule. The broad rationale behind this rule is that employeesshould 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 thecompany is required to deal and who in the normal performance of their duties may obtain advanceinformation 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 affi liated

with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict ofinterest. The Union can also become company-dominated with the presence of managerial employees inUnion 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 confidentialcapacity to, or have access to confidential matters of, persons who exercise managerial functions in thefield 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 laborrelations information. Thus, in determining the confidentiality of certain employees, a key questionsfrequently 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 exemptemployees come within the meaning of the term confidential employees primarily because theyanswered in the affirmative when asked Do you handle confidential data or documents? in the PositionQuestionnaires 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, productstandards and product specification which by no means relate to labor relations.

[15]

Granting arguendothat an employee has access to confidential labor relations information but suchis merely incidental to his duties and knowledge thereof is not necessary in the performance of suchduties, 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, suchinformation must relate to the employers labor relations policies. Thus, an employee of a labor union, orof a management association, must have access to confidential labor information with respect to hisemployer, the union, or the association, to be regarded a confidential employee, and knowledge of laborrelations information pertaining to the companies with which the union deals, or which the associationrepresents, will not clause an employee to be excluded from the bargaining unit representing employeesof 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, willnot 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 situationsrequire.

2. To effectively oversee the quality control function at the processing lines in the storage ofchicken 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 manufacturingmaterials.

5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughoutthe plant.

[20]

It is evident that whatever confidential data the questioned employees may handle will have to relateto their functions. From the foregoing functions, it can be gleaned that the confidential information said
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employees have access to concern the employers internal business operations. As heldin 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 informationconcerning 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 toguarantee 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 oftheir right bargain collectively through representatives of their choosing.

[22]

In the case at bar, supervisors 3 and above may not be considered confidential employees merelybecause they handle confidential data as such must first be s trictly classified as pertaining to laborrelations for them to fall under said restrictions. The information they handle are properly classifiable astechnical and internal business operations data which, to our mind, has no relevance to negotiations andsettlement of grievances wherein the interests of a union and the management are invariablyadversarial. Since the employees are not classifiable under the confidential type, this Court rules thatthey may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, evenassuming that they are confidential employees, jurisprudence has established that there is no legalprohibition against confidential employees who are not performing managerial functions to form and join aunion.

[23]

In this connection, the issue of whether the employees of San Miguel Corporation Magnolia PoultryProducts Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit needs to bethreshed out.

It is the contention of the petitioner union that the creation of three (3) separate bargaining units, oneeach for Cabuyao Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to theone-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the threeplants 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 theemployees, 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 meansthat, although they belong to three different plants, they perform work of the same nature, receive thesame 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 thethree different plants of the division will fragmentize the employees of the said division, thus greatlydiminishing their bargaining leverage. Any concerted activity held against the private respondent for alabor 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 makeup for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearlyfrustrate 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, inOtis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location canbe completely disregarded if the communal or mutual interests of the employees are not sacrificed asdemonstrated in UP v. Calleja-Ferrer where all non-academic rank and file employees of the University ofthe Philippines inDiliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas wereallowed to participate in a certification election. We rule that the distance among the three plants is not
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productive of insurmountable difficulties in the administration of union affairs. Neither are there regionaldifferences 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 theMed-Arbiter on December 19, 1990 is REINSTATED under which a certification election among thesupervisors (level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia PoultryProducts Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.

SO ORDERED.

Regalado, (Chairman), Puno, Mendoza, andTorres, Jr., JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-38178 October 3, 1985

ERNESTO G. GONZALES, AGUEDO GUILLERMO, JOSE MERCADO, RODOLFO C.TOLENTINO, FRISCO IBARRA, MELCHOR DIZON, GAVINO LOPEZ, MAXIMO FELICIANO,CATALINO MUOZ, DOMINGO CAPILI, MAGNO MANALANG, HONORIO DOMINGO, DONATOESPIRITU, JUAN SANTOS, VICTORINO MERCADO and E. DE GUZMAN, plaintiffs-appellees,vs.CENTRAL AZUCARERA DE TARLAC LABOR UNION, represented by PACIFICO P. MILLO,President, and CENTRAL AZUCARERA DE TARLAC, INC., defendants-appellants.

MAKASIAR, C.J.:

This is a petition for review on certiorari to set aside the decision of the Court of First Instance ofTarlac (now Regional Trial Court) in Civil Case No. 4017 dated October 29, 1964, the dispositiveportion of which reads as follows:

IN VIEW THEREOF, the defendant Tarlac Development Corporation is enjoined fromdismissing the plaintiffs upon demand of its co-defendant, the Central Azucarera deTarlac Labor Union, for their dismissal. Likewise, the Central Azucarera de TarlacLabor Union is enjoined from demanding from its co-defendant Tarlac DevelopmentCorporation, the dismissal of the plaintiffs under threat of strikes, walkouts,stoppages or slowdown of work, boycotts, secondary boycotts, refusal to handle anymerchandise, picketting, sit-down strikes of any kind, sympathetic or general strikes,or any other interference with any of the operations of the Central, nor from callingstrikes, walkouts, stoppages or slowdown of work, boycotts, secondary boycotts,refusal to handle any merchandise, picketting. sit-down strikes of any kind,sympathetic or general strikes or any other interference with any of the operations ofthe Central (pp 58-59, ROA; p. 14, rec.).

The facts as found by the lower court are quoted as follows:


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The plaintiffs are members of the Iglesia ni Kristo, a religious sect that prohibits itsmembers from joining a labor organization. All. except Jose Mercado and VictorianoMercado, have been seasonal employees or laborers of the defendant TarlacDevelopment Corporation since prior to October 19, 1962. The Central Azucarera deTarlac Labor Union is a labor organizat

lab rel (2nd round case)

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