PALACOLvs.

PURAFERRERCALLEJA
FACTS:October12,1987,therespondentManilaCCBPISalesForceUnion(hereinafter
referredtoastheUnion),asthecollectivebargainingagentofallregularsalesmen,
regularhelpers,andreliefhelpersoftheManilaPlantandMetroManilaSalesOfficeof
therespondentCocaColaBottlers(Philippines),Inc.(hereinafterreferredtoasthe
Company)concludedanewcollectivebargainingagreementwiththelatter.Salary
increasegiveninlumpsum.presidentoftheUnionsubmittedtotheCompanythe
ratificationbytheunionmembersofthenewCBAandauthorizationfortheCompanyto
deductunionduesequivalenttoP10.00everypaydayorP20.00everymonthand,in
addition,10%bywayofspecialassessment,fromtheCBAlumpsumpaygrantedtothe
unionmembers.BoardResolutionoftheUniondatedSeptember29,1987,thepurposeof
thespecialassessmentsoughttobeleviedistoputupacooperativeandcreditunion;
purchasevehiclesandotheritemsneededforthebenefitoftheofficersandthegeneral
membership;andforthepaymentforservicesrenderedbyunionofficers,consultantsand
others.Therewasalsoanadditionalprovisostatingthatthematterofallocation
shallbeatthediscretionofourincumbentUnionPresident.AuthorizationandCBA
RatificationwasobtainedbytheUnionthroughasecretreferendumheldinseparate
localmembershipmeetingsonvariousdates800members.672membersoriginally
authorizedthe10%specialassessment,while173opposedthesame.170)membersof
theUnionsubmitteddocumentstotheCompanystatingthatalthoughtheyhaveratified
thenewCBA,theyarewithdrawingordisauthorizingthedeductionofanyamountfrom
theirCBAlumpsum.Later,185otherunionmemberssubmittedsimilardocuments
expressingthesameintent.Thesemembers,numbering355inall(170+185),addedto
theoriginaloppositorsof173,turnedthetideinfavorofdisauthorizationforthespecial
assessment,withatotalof528objectorsandaremainderof272supporters.
ThecompanyfiledanactionforinterpleaderwiththeBureauofLaborRelationsinorder
toresolvetheconflictingclaimsofthepartiesconcerned.Petitioners,whoareregular
rankandfileemployeesoftheCompanyandbonafidemembersoftheUnion,fileda
motion/complaintforinterventionthereinintwogroupsof161and94,respectively.
Theyclaimedtobeamongthoseunionmemberswhoeitherdidnotsignanyindividual
writtenauthorization,orhavingsignedone,subsequentlywithdreworretractedtheir
signaturestherefrom.
Unioncounteredthatthedeductionsnotonlyhavethepopularindorsementandapproval
ofthegeneralmembership,butlikewisecompliedwiththelegalrequirementsofArticle
241(n)and(o)oftheLaborCodeinthattheboardresolutionoftheUnionimposingthe
questionedspecialassessmenthadbeendulyapprovedinageneralmembershipmeeting
andthatthecollectionofaspecialfundforlaboreducationandresearchismandated.

MedArbiterManasesT.CruzruledinfavorofpetitionersinanorderdatedFebruary15,
1988wherebyhedirectedtheCompanytoremittheamountithadkeptintrustdirectlyto
therankandfilepersonnelwithoutdelay.AppealedtoBLR,reversed.
ISSUE:
WON the 10% special assessment could be levied upon their salary
RULING
No. It was concluded that the 10% deduction was not made in accordance with
the law and failed to comply with requirement. It is then settled that All doubts in
the implementation and interpretation of the provisions of the Labor Code shall
be resolved in favor of labor. The Court ordered the remittance of P1,267,863.39
to members from whom the said amount was withheld. convincedthatthededuction
ofthe10%specialassessmentbytheUnionwasnotmadeinaccordancewiththe
requirementsprovidedbylaw.Theprinciplethatemployeesareprotectedbylawfrom
unwarrantedpracticesthatdiminishtheircompensationwithouttheirknownedge
andconsentisinaccordwiththeconstitutionalprincipleoftheStateaffordingfull
protectiontolabor.thefailureoftheUniontocomplystrictlywiththerequirementsset
outbythelawinvalidatesthequestionedspecialassessment.Substantialcomplianceis
notenoughinviewofthefactthatthespecialassessmentwilldiminishthecompensation
oftheunionmembers.Theirexpressconsentisrequired,andthisconsentmustbe
obtainedinaccordancewiththestepsoutlinedbylaw,whichmustbefollowedtothe
letter.Noshortcutsareallowed.heldlocalmembershipmeetingsonseparateoccasions,
ondifferentdatesandatvariousvenues,contrarytotheexpressrequirementthatthere
mustbeageneralmembershipmeeting.ThecontentionoftheUnionthatthelocal
membershipmeetingsarepreciselytheverygeneralmeetingsrequiredbylawis
untenablebecausethelawwouldnothavespecifiedageneralmembershipmeetinghad
thelegislativeintentbeentoallowlocalmeetingsinlieuofthelatter.Submittedonly
minutesofthelocalmembershipmeetingswhenwhatisrequiredisawrittenresolution
adoptedatthegeneralmeeting.TheminutessubmittedtotheCompanycontainednolist
ofthememberspresentandnorecordofthevotescast.Handwrittenauthorizationwhich
compliedwiththelawisvalid.However,itswithdrawalmeansnoauthorizationwas
given.
VICTORIANOVS.ELIZALDEUNION
NOVEMBER17,2013 ~VBDIAZ

BENJAMINVICTORIANO,plaintiffappellee,vs.ELIZALDEROPEWORKERS
UNIONandELIZALDEROPEFACTORY,INC.,defendants,ELIZALDEROPE
WORKERSUNION,defendantappellant.GRNL25246September12,1974
FACTS:
BenjaminVictoriano(Appellee),amemberofthereligioussectknownastheIglesiani
Cristo,hadbeenintheemployoftheElizaldeRopeFactory,Inc.(Company)since
1958.HewasamemberoftheElizaldeRopeWorkersUnion(Union)whichhadwith
theCompanyaCBAcontainingaclosedshopprovisionwhichreadsasfollows:
MembershipintheUnionshallberequiredasaconditionofemploymentforall
permanentemployeesworkerscoveredbythisAgreement.
UnderSec4(a),par4,ofRA975,priortoitsamendmentbyRA3350,theemployerwas
notprecludedfrommakinganagreementwithalabororganizationtorequireasa
conditionofemploymentmembershiptherein,ifsuchlabororganizationisthe
representativeoftheemployees.OnJune18,1961,however,RA3350wasenacted,
introducinganamendmenttopar4subsection(a)ofsec4ofRA875,asfollows:xxx
butsuchagreementshallnotcovermembersofanyreligioussectswhichprohibit
affiliationoftheirmembersinanysuchlabororganization.
Beingamemberofareligioussectthatprohibitstheaffiliationofitsmemberswithany
labororganization,AppelleepresentedhisresignationtoappellantUnion.TheUnion
wroteaformallettertotheCompanyaskingthelattertoseparateAppelleefromthe
servicebecausehewasresigningfromtheUnionasamember.TheCompanyinturn
notifiedAppelleeandhiscounselthatunlesstheAppelleecouldachieveasatisfactory
arrangementwiththeUnion,theCompanywouldbeconstrainedtodismisshimfromthe
service.
AppelleefiledanactionforinjunctiontoenjointheCompanyandtheUnionfrom
dismissingAppellee.TheUnioninvokedtheunionsecurityclauseoftheCBAand
assailedtheconstitutionalityofRA3350andcontendsitdiscriminatorilyfavorsthose
religioussectswhichbantheirmembersfromjoininglaborunions.
ISSUE:WhetherAppelleehasthefreedomofchoiceinjoiningtheunionornot.
RULING:
YES.TheConstitutionandRA875recognizefreedomofassociation.Sec1(6)ofArtIII

oftheConstitutionof1935,aswellasSec7ofArtIVoftheConstitutionof1973,
providethattherighttoformassociationsorsocietiesforpurposesnotcontrarytolaw
shallnotbeabridged.Section3ofRA875providesthatemployeesshallhavetherightto
selforganizationandtoform,joinofassistlabororganizationsoftheirownchoosingfor
thepurposeofcollectivebargainingandtoengageinconcertedactivitiesforthepurpose
ofcollectivebargainingandothermutualaidorprotection.WhattheConstitutionandthe
IndustrialPeaceActrecognizeandguaranteeistherighttoformorjoinassociations.A
rightcomprehendsatleasttwobroadnotions,namely:first,libertyorfreedom,i.e.,the
absenceoflegalrestraint,wherebyanemployeemayactforhimselfwithoutbeing
preventedbylaw;andsecond,power,wherebyanemployeemay,ashepleases,joinor
refrainfromjoininganassociation.Itis,therefore,theemployeewhoshoulddecidefor
himselfwhetherheshouldjoinornotanassociation;andshouldhechoosetojoin,he
himselfmakesuphismindastowhichassociationhewouldjoin;andevenafterhehas
joined,hestillretainsthelibertyandthepowertoleaveandcancelhismembershipwith
saidorganizationatanytime.Therighttojoinaunionincludestherighttoabstainfrom
joininganyunion.Thelawdoesnotenjoinanemployeetosignupwithanyassociation.
TherighttorefrainfromjoininglabororganizationsrecognizedbySection3ofthe
IndustrialPeaceActis,however,limited.Thelegalprotectiongrantedtosuchrightto
refrainfromjoiningiswithdrawnbyoperationoflaw,wherealaborunionandan
employerhaveagreedonaclosedshop,byvirtueofwhichtheemployermayemploy
onlymembersofthecollectivebargainingunion,andtheemployeesmustcontinuetobe
membersoftheunionforthedurationofthecontractinordertokeeptheirjobs.By
virtueofaclosedshopagreement,beforetheenactmentofRA3350,ifanyperson,
regardlessofhisreligiousbeliefs,wishestobeemployedortokeephisemploymenthe
mustbecomeamemberofthecollectivebargainingunion.Hence,therightofsaid
employeenottojointhelaborunioniscurtailedandwithdrawn.
Tothatallembracingcoverageoftheclosedshoparrangement,RANo.3350introduced
anexception,whenitaddedtoSection4(a)(4)oftheIndustrialPeaceActthefollowing
proviso:butsuchagreementshallnotcovermembersofanyreligioussectswhich
prohibitaffiliationoftheirmembersinanysuchlabororganization.RepublicActNo.
3350merelyexcludesipsojurefromtheapplicationandcoverageoftheclosedshop
agreementtheemployeesbelongingtoanyreligioussectswhichprohibitaffiliationof
theirmemberswithanylabororganization.Whattheexceptionprovidesisthatmembers
ofsaidreligioussectscannotbecompelledorcoercedtojoinlaborunionsevenwhen
saidunionshaveclosedshopagreementswiththeemployers;thatinspiteofanyclosed
shopagreement,membersofsaidreligioussectscannotberefusedemploymentor
dismissedfromtheirjobsonthesolegroundthattheyarenotmembersofthecollective
bargainingunion.Itdoesnotprohibitthemembersofsaidreligioussectsfromaffiliating
withlaborunions.Itstillleavestosaidmembersthelibertyandthepowertoaffiliate,or
nottoaffiliate,withlaborunions.If,notwithstandingtheirreligiousbeliefs,themembers
ofsaidreligiouswetsprefertosignupwiththelaborunion,theycandoso.Ifin

deferenceandfealtytotheirreligiousfaith,theyrefusetosignup,theycandoso;thelaw
doesnotcoercethemtojoin;neitherdoesthelawprohibitthemfromjoining,andneither
maytheemployerorlaborunioncompelthemtojoin.
TheCompanywaspartlyabsolvedbylawfromthecontractualobligationithadwiththe
UnionofemployingonlyUnionmembersinpermanentpositions.Itcannotbedenied,
therefore,thattherewasindeedanimpairmentofsaidunionsecurityclause.
Theprohibitiontoimpairtheobligationofcontractsisnotabsoluteandunqualified.The
prohibitionisgeneral.Theprohibitionisnottobereadwithliteralexactness,forit
prohibitsunreasonableimpairmentonly.Inspiteoftheconstitutionalprohibition,the
Statecontinuestopossessauthoritytosafeguardthevitalinterestsofitspeople.
Legislationappropriatetosafeguardingsaidinterestsmaymodifyorabrogatecontracts
alreadyineffect.Fornotonlyareexistinglawsreadintocontractsinordertofixthe
obligationsasbetweentheparties,butthereservationofessentialattributesofsovereign
powerisalsoreadintocontractsasapostulateofthelegalorder.Thecontractclauseof
theConstitution.mustbenotonlyinharmonywith,butalsoinsubordinationto,in
appropriateinstances,thereservedpowerofthestatetosafeguardthevitalinterestsof
thepeople.Thishasspecialapplicationtocontractsregulatingrelationsbetweencapital
andlaborwhicharenotmerelycontractual,andsaidlaborcontracts,forbeingimpressed
withpublicinterest,mustyieldtothecommongood.
ThepurposetobeachievedbyRA3350istoinsurefreedomofbeliefandreligion,andto
promotethegeneralwelfarebypreventingdiscriminationagainstthosemembersof
religioussectswhichprohibittheirmembersfromjoininglaborunions,confirming
therebytheirnatural,statutoryandconstitutionalrighttowork,thefruitsofwhichwork
areusuallytheonlymeanswherebytheycanmaintaintheirownlifeandthelifeoftheir
dependents.
Theindividualemployee,atvarioustimesinhisworkinglife,isconfrontedbytwo
aggregatesofpowercollectivelabor,directedbyaunion,andcollectivecapital,directed
bymanagement.Theunion,aninstitutiondevelopedtoorganizelaborintoacollective
forceandthusprotecttheindividualemployeefromthepowerofcollectivecapital,is,
paradoxically,boththechampionofemployeerights,andanewsourceoftheir
frustration.Moreover,whentheUnioninteractswithmanagement,itproducesyetathird
aggregateofgroupstrengthfromwhichtheindividualalsoneedsprotectionthe
collectivebargainingrelationship.
Thefreeexerciseofreligiousprofessionorbeliefissuperiortocontractrights.Incaseof
conflict,thelattermustyieldtotheformer.

ThepurposeofRA3350istoservethesecularpurposeofadvancingtheconstitutional
righttothefreeexerciseofreligion,byavertingthatcertainpersonsberefusedwork,or
bedismissedfromwork,orbedispossessedoftheirrighttoworkandofbeingimpeded
topursueamodestmeansoflivelihood,byreasonofunionsecurityagreements.Tohelp
itscitizenstofindgainfulemploymentwherebytheycanmakealivingtosupport
themselvesandtheirfamiliesisavalidobjectiveofthestate.TheConstitutioneven
mandatedthattheStateshallaffordprotectiontolabor,promotefullemploymentand
equalityinemployment,ensureequalworkopportunitiesregardlessofsex,raceorcreed
andregulatetherelationbetweenworkersandemployers.
Theprimaryeffectsoftheexemptionfromclosedshopagreementsinfavorofmembers
ofreligioussectsthatprohibittheirmembersfromaffiliatingwithalabororganization,is
theprotectionofsaidemployeesagainsttheaggregateforceofthecollectivebargaining
agreement,andrelievingcertaincitizensofaburdenontheirreligiousbeliefs;andby
eliminatingtoacertainextenteconomicinsecurityduetounemployment,whichisa
seriousmenacetothehealth,morals,andwelfareofthepeopleoftheState,theActalso
promotesthewellbeingofsociety.Itisourviewthattheexemptionfromtheeffectsof
closedshopagreementdoesnotdirectlyadvance,ordiminish,theinterestsofany
particularreligion.Althoughtheexemptionmaybenefitthosewhoaremembersof
religioussectsthatprohibittheirmembersfromjoininglaborunions,thebenefituponthe
religioussectsismerelyincidentalandindirect.
ThepurposeofRA3350wasnottograntrightstolaborunions.Therightsoflabor
unionsareamplyprovidedforinRepublicActNo.875andthenewLaborCode.
TheActdoesnotrequireasaqualification,orcondition,forjoininganylawful
associationmembershipinanyparticularreligionorinanyreligioussect;neitherdoes
theActrequireaffiliationwithareligioussectthatprohibitsitsmembersfromjoininga
laborunionasaconditionorqualificationforwithdrawingfromalaborunion.Joiningor
withdrawingfromalaborunionrequiresapositiveactRepublicActNo.3350only
exemptsmemberswithsuchreligiousaffiliationfromthecoverageofclosedshop
agreements.So,underthisAct,areligiousobjectorisnotrequiredtodoapositiveactto
exercisetherighttojoinortoresignfromtheunion.Heisexemptedipsojurewithout
needofanypositiveactonhispart.
Ebralinag vs. Division Superintendent of School of Cebu
FACTS:
Two special civil actions for certiorari, Mandamus and Prohibition were filed and

consolidated raising the same issue whether school children who are members
or a religious sect known as Jehovahs Witnesses may be expelled from school
(both public and private), for refusing, on account of their religious beliefs, to take
part in the flag ceremony which includes playing (by a band) or singing the
Philippine national anthem, saluting the Philippine flag and reciting the patriotic
pledge.
All of the petitioners in both (consolidated) cases were expelled from their classes
by the public school authorities in Cebu for refusing to salute the flag, sing the
national anthem and recite the patriotic pledge as required by Republic Act No.
1265 (An Act making flagceremony compulsory in all educational institutions) of
July 11, 1955 , and by Department Order No. 8 (Rules and Regulations for
Conducting the Flag Ceremony in All Educational Institutions)dated July 21, 1955
of the Department of Education, Culture and Sports (DECS) making the flag
ceremony compulsory in all educational institutions.
Petitioners are Jehovahs Witnesses believing that by doing these is religious
worship/devotion akin to idolatry against their teachings. They contend that to
compel transcends constitutional limits and invades protection against official
control and religious freedom. The respondents relied on the precedence of
Gerona et al v. Secretary of Education where the Court upheld the explulsions.
Gerona doctrine provides that we are a system of separation of the church and
state and the flag is devoid of religious significance and it doesnt involve any
religious ceremony. The children of Jehovahs Witnesses cannot be exempted
from participation in the flag ceremony. They have no valid right to such
exemption. Moreover, exemption to the requirement will disrupt school discipline
and demoralize the rest of the school population which by far constitutes the
great majority. The freedom of religious belief guaranteed by the Constitution
does not and cannot mean exemption from or non-compliance with reasonable
and non-discriminatory laws, rules and regulations promulgated by competent
authority.
ISSUE: Whether or not the expulsion of petitioners violated their freedom of
religion?
HELD:

YES. The Court held that the expulsion of the petitioners from the school was not
justified.
Religious freedom is a fundamental right of highest priority and the
amplest protection among human rights, for it involves the relationship of
man to his Creator. The right to religious profession and worship has a twofold aspect, vis., freedom to believe and freedom to act on ones belief. The
first is absolute as long as the belief is confined within the realm of
thought. The second is subject to regulation where the belief is translated
into external acts that affect the public welfare. The only limitation to
religious freedom is the existence of grave and present danger to public
safety, morals, health and interests where State has right to prevent.
Petitioners stress that while they do not take part in the compulsory flag
ceremony, they do not engage in external acts or behavior that would offend
their countrymen who believe in expressing their love of country through the
observance of the flag ceremony. They quietly stand at attention during the flag
ceremony to show their respect for the right of those who choose to participate in
the solemn proceedings. Since they do not engage in disruptive behavior, there is
no warrant for their expulsion.

PABLOARIZALA,SERGIOMARIBAO,LEONARDOJOVEN,andFELINO
BULANDUS
vs.
THECOURTOFAPPEALS
FACTS:
UndertheIndustrialPeaceAct,governmentownedorcontrolledcorporationshadthe
dutyto
bargaincollectivelyandwereotherwisesubjecttotheobligationsanddutiesof
employersintheprivate
sectorTheActalsoprohibitedsupervisorstobecome,orcontinuetobe,membersof
labororganizations
composedofrankandfileemployees,andprescribedcriminalsanctionsforbreachofthe
prohibition.
UndertheregimeofsaidIndustrialPeaceActthattheGovernmentServiceInsurance
System(GSIS,for
short)becameboundbyacollectivebargainingagreementexecutedbetweenitandthe
labororganization

representingthemajorityofitsemployees,theGSISEmployeesAssociation.The
agreementcontaineda
"maintenanceofmembership"clauseThepetitionersoccupiedsupervisory
positionsintheGSIS.PabloArizalaandSergioMaribaowere, respectively,
theChiefoftheAccountingDivision,andtheChiefoftheBillingSectionofsaid
Division,intheCentralVisayasRegionalOfficeoftheGSIS.LeonardoJovenandFelino
Bulanduswere,respectively,theAssistantChiefoftheAccountingDivision(sometimes
ActingChiefintheabsenceoftheChief)andtheAssistantChiefoftheFieldServiceand
NonLifeInsuranceDivision(andActingDivisionChiefintheabsenceoftheChief),of
thesameCentralVisayasRegionalOfficeoftheGSIS.Demandsweremadeon
allfourofthemtoresignfromtheGSISEmployeesAssociation,inviewoftheir
supervisorypositions.
Theyrefusedtodoso.Consequently,two(2)criminalcasesforviolationoftheIndustrial
PeaceActwere
lodgedagainstthemintheCityCourtofCebu:oneinvolvingArizalaandMaribaoand
theother,Joven
andBulandus.Whichresultedtotheirconviction.
Theyarguedthatwhenthesocalled"1973Constitution"tookeffecton
January17,1973pursuantto ProclamationNo.1104,thecaseofArizalaand
MaribaowasstillpendingintheCourtofAppealsandthatofJovenandBulandus,
pendingdecisionintheCityCourtofCebu;thatsincetheprovisionsof
thatconstitutionandoftheLaborCodesubsequentlypromulgated(eff.,
November1,1974),repealingthe IndustrialPeaceActplacedemployeesofall
categoriesingovernmentownedorcontrolledcorporationsw i t h o u t d i s t i n c t i o n
withintheCivilService,andprovidedthatthetermsand
c o n d i t i o n s o f t h e i r employmentweretobe"governedbytheCivilServiceLaw,
rulesandregulations"andhence,nolongersubjectofcollectivebargaining,the
appellantsceasedtofallwithinthecoverageoftheIndustrialPeaceActandshould
thusnolongercontinuetobeprosecutedandexposedtopunishmentfora
violationthereof.
TheypointedoutfurtherthatthecriminalsanctionintheIndustrialPeaceActnolonger
appearedinthe
LaborCode
ISSUE:whetherornotthepetitioners'criminalliabilityforaviolationoftheIndustrial
PeaceActmaybe
deemedtohavebeenobliteratedinvirtueofsubsequentlegislationandtheprovisionsof
the1973and1987
Constitutions.
RULING:YES.therightofselforganizationandcollectivebargaininghadbeen
withdrawnbytheLabor
Codefromgovernmentemployeesincludingthoseingovernmentowned
andcontrolledcorporationschieflyforthereasonthatthetermsand
conditionsofgovernmentemployment,allembracedincivil service,maynot

bemodifiedbycollectivebargainingbecausesetbylaw.Itisthereforeimmaterial,they
say,whethersupervisorsaremembersofrankandfileunionsornot;after
all,thepossibilityoftheemployer'scontrolofthemembersoftheunion
thrusupervisorsthusrenderingcollectivebargaining illusory,whichisthe
mainreasonfortheprohibition,isnolongerofanyconsequence.thedisappearance
fromthelawoftheprohibitiononsupervisorsbeingmembersoflabor
organizations
composedofemployeesundertheirsupervision.TheLaborCode(PD442)
allowedsupervisors(ifnot managerial)tojoinrankandfileunions.Andunderthe
ImplementingRulesofRA6715,supervisorswhoweremembersofexistinglabor
organizationsontheeffectivityofsaidRA6715wereexplicitlyauthorizedto"remain
therein."thatthemaintenancebysupervisorsofmembershipinarankand
filelabororganizationevenafterthe enactmentofastatuteimposinga
prohibitiononsuchmembership,isnotonlynotacrime,butisexplicitlyallowed,under
presentlaw.Therepealofapenallawdeprivesthecourtsofjurisdictiontopunish
personschargedwithaviolationoftheoldpenallawpriortoitsrepeal.
FranklinBakerV.Trajano
157SCRA416
Facts:
ThisisapetitionforcertiorariseekingtheannulmentoftheorderofMediatorArbiter
Conchita
MartinezofMinistryofLaborandEmploymentandDirCresencioTrajanoofMOLE.On
April23,1984FranklinBakerBrotherhoodAssociationfiledapetitionforcertification
electionamongtheofficeandtechnicalemployeesofthepetitionercompanywiththe
MinistryofLaborandEmploymentDavao.Itallegesthat90employeesintheDavao
plantwhichisdistinctfromtheregularrankandfileemployeesisexcludedfromthe
coverageoftheexistingCBA.Petitionercompanydidnotobjectontheelectionbut
manifestedthatoutof90employees74aremanagerialemployeesand2areconfidential
employees.MedArbiterMartinezissuedanorderdatedSept.17,1984grantingthe
petitionandcertificationelectionamongtheofficeandtechnicalemployeesoftheDavao
plant.ThepetitionercompanyappealedtotheBureauofLaborRelationsfortheorderbe
setasideanddeclarethe74employeesasmanagerialemployees.Duringthependencyof
theappeal,61employeesinvolvedfileda
MotiontoWithdrawthepetitionforcertificationelectionprayingfortheirexclusionfrom
thebargaining
unitbecausetheyaremanagerialemployeesastheyareperformingmanagerialfunctions.
April7,1986
CresencioTrajanoofBureauofLaborRelationsissuedaresolutionaffirmingtheorderof
MedArbiter
ConchitaMartinez.
Issue:WhetherorNotthesubjectemployeesaremanagerialemployeesunderthe
purviewofthe
LaborCodeandit'sImplementingRules.

Held:
Amanagerialemployeeisdefinedasone"whoisvestedwithpowersorprerogativeto
laydown
andexecutemanagementpoliciesand/ortohire,transfer,suspend,layoff,recall,
discharge,assign,or
disciplineemployeesortoeffectivelyrecommendsuchmanagerialactions."
Itwillbenotedthatintheperformanceoftheirdutiesandfunctionsandintheexerciseof
their
recommendatorypowers,subjectemployeesmayonlyrecommend,astheultimatepower
tohire,fire
orsuspendasthecasemayberestsupontheplantmanager.Thetestof"supervisory"or
managerial
status"dependsonwhetherapersonpossessesauthoritytoactintheinterestofhis
employerinthe
matterspecifiedinArt.212(k)oftheLaborCodeandSec.1(m)ofitsImplementing
Rulesandwhether
suchauthorityisnotmerelyroutinaryorclericalinnature,butrequirestheuseof
independent
judgement.Thesubjectemployeesarenotmanagerialemployeesbecauseasborneby
therecords,they
donotparticipateinthepolicymakingbutgivenreadypoliciestoexecuteandstandard
practiceto
observe,thushavinglittlefreedomofaction.
PremisesConsidered,thepetitionisdismissed,andtheassailedresolutionandordersare
Affirmed.SoOrdered.

LAGUNACOLLEGEVS.CIR
25scra167
FACTS:
Ontheappropriatebargainingunit,petitionerLagunaCollege,changingitsoriginal
stand,
proposedtwoseparateunits,namely,collegeunitcomposedoftheprofessorsand
instructorsintheCollege,andhighschoolunitcomprisingthehighschoolteachers.On
theotherhand,LACTA(theunion)proposedonlyoneunittheemployerunitcomposing
ofalltheteachersintheentireLagunaCollege.
ISSUE:
WONtherecanbetwobargainingunitsinthiscase.
HOLDING:
No.Fromtheevidenceadduced,itisbelievedthatthefactorsinfavorofemployerunit
far
outweighthereasonsfortheestablishmentoftwoseparatebargainingunitsasproposed
bypetitioner.
ItisnotdeniedthatcollegeteachersaregovernedbyrulesandregulationsoftheBureau
of

PrivateEducation(CHED,kunsayanapa),whicharedifferentfromtherulesand
regulationsforhighschoolteachers;thatthehighschooldepartmentofpetitionerwas
organizedatadifferenttimefromthecollegedepartment;thatthesetupinthetwo
departmentsaredifferent;andthatthehighschoolteachersarepaidperperiodorsubject,
whilethecollegeteachersarepaidonthehourlybasis.Butitisnotalsodeniedthatthese
twodepartmentsareunderthecontrolofonlyoneboardoftrustees;thattheyarehoused
inoneandthesamebuilding;thatthereisbutonecashierandonlyoneregistrarwho
himselfistheadministrativeofficerofthewholeLagunaCollege.Asamatteroffact,the
functionoftheAdministrativeOfficerextendseventothehighschooldepartment.Itisa
factthattherearesometeachersinvolvedinthiscasewhoareteachingbothinthe
collegeandhighschooldepartmentswhichisadecisiveproofofcommunityofinterest
oftheseteachersandwhichnegatestheestablishmentoftwobargainingunits.Besides,
intheproposedtwoseparatebargainingunits,theelementaryteachers
ofthepetitionerwillbeleftoutwithoutabargainingrepresentative.
PHILIPSINDUSTRIALDEVT.INC.(PIDI)VS.NLRCANDPHILIPSEMPLOYEESORG.
(PEOFFW)
G.R.No.88957
FACTS:
TheExecutiveLaborArbiterrenderedadecisiondeclaringthatPIDIsDivisionSecretariesandallStaff
ofgeneralmanagement,personnelandindustrialrelationsdepartment,secretariesof
audit,EDP,
financialsystem,areconfidentialemployeesandassuchareherebydeemedexcludedin
thebargainingunitfortherankandfileemployeesofPIDI.RespondentunionPEOFFW
appealedfromthedecisiontotheNLRC.Adecisionwasrenderedbythelatter,
reversingtherulingoftheExecutiveLaborArbitertotheeffectthatthe
aforementionedpositionsexcludedamongtherankandfilegroupisnowbeingincluded
andregardedasrankandfileandassuchtheycanbepartofthebargainingunitforrank
andfileemployees.
ISSUE:
WONthesubjectemployeesmaybepartofthebargainingunitforrankandfile
employees.
HOLDING:
No.ItisquiteobviousthatrespondentNLRCcommittedgraveabuseofdiscretionin
reversingthedecisionoftheExecutiveLaborArbiterandindecreeingthatPIDIsServiceEngineers,
SalesForce,divisionsecretaries,andallStaffofgeneralmanagement,personneland
industrialrelationsdepartment,secretariesofaudit,EDP,financialsystemsareincluded
withintherankandfilebargainingunit.
Inthefirstplace,alltheseemployees,withtheexceptionoftheserviceengineersandthe
sales
forcepersonnel,areconfidentialemployees.Theirclassificationassuchisnotseriously
disputedbyrespondentunionbecausethefive(5)previousCBAsbetweenPIDIand
PEOFFWexplicitlyconsideredthemasconfidentialemployees.Bytheverynatureof

theirfunctions,theyassistandactinaconfidentialcapacityto,orhaveaccessto
confidentialmattersof,personswhoexercisemanagerialfunctionsinthefieldoflabor
relations.Assuch,therationalebehindtheineligibilityofmanagerialemployeestoform,
assistorjoinalaborunionequallyappliestothem.
PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and PHILIPS EMPLOYEES ORGANIZATION
(FFW), respondents. [G.R. No. 88957. June 25, 1992.]
FACTS:
Philips Industrial Development, Inc. (PIDI) seeks to set aside the Decision and
Resolution, respectively, of the National Labor Relations Commission (NLRC) on
the ground that it committed grave abuse of discretion amounting to lack of
jurisdiction in holding that service engineers, sales representatives and
confidential employees of PIDI are qualified to be included in the existing
bargaining unit.
PIDI is a domestic corporation engaged in the manufacturing and marketing of
electronic products. Since 1971, it had a total of six (6) collective bargaining
agreements (CBAs) with private respondent Philips Employees OrganizationFFW (PEO-FFW), registered labor union and the certified bargaining agent of all
the rank and file employees of PIDI. In the first CBA (1971-1974), the supervisors
referred to in R.A. No. 875, confidential employees, security guards, temporary
employees and sales representatives were excluded from the bargaining unit.
In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 19841986), the sales force, confidential employees and heads of small units, together
with the managerial employees, temporary employees and security personnel,
were specifically
excluded from the bargaining unit. 1 The confidential employees are the division
secretaries of light/telecom/data and consumer electronics, marketing managers,
secretaries of the corporate planning and business manager, fiscal and financial
system manager and audit and EDP manager, and the staff of both the General
Management and the Personnel Department. 2
In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among
others, that the subject of inclusion or exclusion of service engineers, sales
personnel and confidential employees in the coverage of the bargaining unit
would be submitted for arbitration. As the parties failed to agree on a voluntary
arbitrator, the BLR endorsed the petition to the Executive Labor Arbiter of the
National Capital Region for compulsory arbitration pursuant to Article 228 of the
Labor Code. the case was assigned to Executive Labor Arbiter Arthur Amansec.
It is hereby declared that the Division Secretaries and all Staff of general
management, personnel and industrial relations department, secretaries of audit,
EDP, financial system are confidential employees and as such are hereby
deemed excluded in the bargaining unit.

appealed decision of the Executive Labor Arbiter is hereby SET ASIDE and a
new one entered declaring respondent company's Service Engineers, 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 and file bargaining unit.
The reversal is anchored on the respondent NLRC's conclusion that based on
Section 1, 3 Rule II, Book V of the Omnibus Rules Implementing the Labor
Code, as amended by Section 3, Implementing Rules of E.O. No. 111; paragraph
(c), Section 2, Rule V of the same Code, as amended by Section 6 4 of the
Implementing Rules of E.O. No. 111; and Article 245 5 of the Labor Code, as
amended:
". . . all workers, except managerial employees and security personnel, are
qualified to join or be a part of the bargaining unit . . ."
"The Executive Labor Arbiter's directive that the service engineers and sales
representatives to (sic) conduct a referendum among themselves is erroneous
inasmuch as it arrogates unto said employees the right to define what the law
means. It would not be amiss to state at this point that there would be no one
more interested in excluding the subject employees from the bargaining unit than
management and that it would not be improbable for the latter to lobby and/or
exert pressure on the employees concerned, thus agitating unrest among the
rank-and-file.
Likewise, the Executive Labor Arbiter's declaration that the Division Secretaries
and all Staff of general management, personnel and industrial relations
department, secretaries of audit, EDP and financial system 'are confidential
employees and as such are hereby deemed excluded in (sic) the bargaining unit'
is contrary to law for the simple reason that the law, as earlier quoted, does not
mention them as among those to be excluded from the bargaining unit only (sic)
managerial employees and security guards. As a matter of fact, supervisory
unions have already been dissolved and their members who do not fall within the
definition of managerial employees have become eligible to join or assist the
rank-and-file organization."
ISSUE:
whether the NLRC committed grave abuse of discretion in holding that service
engineers, sales representatives and confidential employees (division
secretaries, staff of general management, personnel and industrial relations
department, secretaries of audit, EDP and financial system) are qualified to be
included in the existing bargaining unit. Petitioner maintains that it did, and in
support of its stand that said employees should not be absorbed by the existing
bargaining unit, it urges this Court to consider these points:
The rationale for such exclusion is that these employees hold positions which are
highly sensitive, confidential and of a highly fiduciary nature; to include them in
the bargaining unit may subject the company to breaches in security and the
possible revelation of highly sensitive and confidential matters. It would cripple
the company's bargaining position and would give undue advantage to the union.

2)
The absence of mutuality of interests between this group of employees
and the regular rank and file militates against such inclusion. A table prepared by
the petitioner shows the disparity of interests between the said groups:
The Office of the Solicitor General supports the decision of the Executive Labor
Arbiter and refuses to uphold the position of the NLRC. It holds the view that the
division secretaries; the staff members of General Management, Personnel and
the Industrial Relations Department; and the secretaries of Audit, EDP and
Financial Systems, are disqualified from joining the PEO-FFW as they are
confidential employees.
They cannot even form a union of their own for, as held in Golden Farms, Inc. vs.
Ferrer-Calleja, 8 the rationale for the disqualification of managerial employees
from joining unions holds true also for confidential employees.
Sales representatives and service engineers, however, there is no doubt that
they are entitled to join or form a union, as they are not disqualified by law from
doing so. Considering that they have interests dissimilar to those of the rank and
file employees comprising the existing bargaining unit, and following the Globe
Doctrine enunciated in In Re: Globe Machine and Stamping Company 9 to the
effect that in determining the proper bargaining unit the express will or desire of
the employees shall be considered, they should be allowed to determine for
themselves what union to join or form. The best way to determine their
preference is through a referendum As shown by the records, such a referendum
was decreed by the Executive Labor Arbiter.
We express Our agreement with the petitioner's view that respondent NLRC did
not quite accurately comprehend the issue raised before it. Indeed, the issue is
not whether the subject employees may join or form a union, but rather, whether
or not they may be part of the existing bargaining unit for the rank and file
employees of PIDI.
At the time Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security
personnel were no longer disqualified from joining or forming a union. Section 6
of E.O No. 111, enacted on 24 December 1986, repealed the original provisions
of Article 245 of the Labor Code, reading as follows:
"ARTICLE 245.
Ineligibility of security personnel to join any labor
organization. Security guards and other personnel employed for the protection
and security of the person, properties and premises of the employer shall not be
eligible for membership in any labor organization."
and substituted it with the following provision:
"ARTICLE 245.

Right of employees in the public service. "

By virtue of such repeal and substitution, security guards became eligible for
membership in any labor organization.

quite obvious that respondent NLRC committed grave abuse of discretion in

reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's
"Service Engineers, 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 and file
bargaining unit."
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. 12 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,
elaborated on this rationale, thus:

13 this Court

". . . 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."
In Golden Farms, Inc. vs. Ferrer-Calleja,
14 this Court explicitly made this
rationale applicable to confidential employees:
"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."
NLRC practically forced them to become members of PEO-FFW or to be subject
to its sphere of influence, it being the certified bargaining agent for the subject
bargaining unit. This violates, obstructs, impairs and impedes the service
engineers' and the sales representatives' constitutional right to form unions or
associations 15 and to self-organization.
In Victoriano vs. Elizalde Rope Workers' Union,
". . . Notwithstanding the different theories propounded by the different schools of
jurisprudence regarding the nature and contents of a 'right', it can be safely said
that whatever theory one subscribes to, a right comprehends at least two broad
notions, namely: first, liberty or freedom, i.e., the absence of legal restraint,
whereby an employee may act for himself without being prevented by law; and

second, power, whereby an employee may, as he pleases, join or refrain from

joining an association. It is, therefore, the employee who should decide for
himself whether he should join or not an association; and should he choose to
join, he himself makes up his mind as to which association he would join; and
even after he has joined, he still retains the liberty and the power to leave and
cancel his membership with said organization at any, time.
18 It is clear,
therefore, that the right to join a union includes the right to abstain from joining
any union. 19 Inasmuch as what both the Constitution and the Industrial Peace
Act have recognized, and guaranteed to the employee, is the 'right' to join
associations of his choice, it would be absurd to say that the law also imposes, in
the same breath, upon the employee the duty to join associations. The law does
not enjoin an employee to sign up with any association."
Article 245
reads:

20 of the Labor Code which, as amended by R.A. No. 6715, now

"ARTICLE 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." (emphasis supplied)
The foregoing disquisitions render unnecessary a discussion on the second
ground on the alleged grave abuse of discretion on the part of the NLRC in not
applying the "Globe Doctrine". Suffice it to state here that since the only issue is
the subject employees' inclusion in or exclusion from the bargaining unit in
question, and PIDI never questioned the decision of the Executive Labor Arbiter,
the Globe Doctrine finds no application. Besides, this doctrine applies only in
instances of evenly balanced claims by competitive groups for the right to be
established as the bargaining unit, 21 which do not obtain in this case. LexLib
WHEREFORE, the petition is hereby GRANTED. The Decision of public
respondent National Labor Relations Commission in Case No. NLRC-NCR-0011-03936-87, promulgated on 16 January 1989, is hereby SET ASIDE while the
Decision of the Executive Labor Arbiter in said case dated 17 March 1988 is
hereby REINSTATED, subject to the modifications above indicated.

METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES

ROLDAN-CONFESOR, in her capacity as Secretary of the Department of Labor
and Employment and METRO DRUG CORPORATION EMPLOYEES
ASSOCIATION-FEDERATION OF FREE WORKERS, respondents. [G.R. No.
108855. February 28, 1996.]
This is a petition for certiorari under Rule 65 of the Revised Rules of Court
seeking the annulment of the Resolution and Omnibus Resolution of the

Secretary of Labor and Employment dated 14 April 1992 and 25 January 1993,
respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-91; NCMB-NCR-NS09-678-91) 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 of petitioner 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 Union expired. 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 Drug Inc. The parties failed to settle their dispute despite the
conciliation efforts of the National Conciliation and 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:
pursuant to Article 263 (g) of the Labor Code, as amended, this Office hereby
assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. Metro
Drug 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 acts that might exacerbate the
situation.
then Labor Secretary Torres issued an order resolving all the disputed items in
the CBA and ordered the parties involved to execute a new CBA. Union filed a
motion for reconsideration.
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 from implementing the mass layoff, alleging that such act violated the
prohibition against committing acts that would exacerbate the dispute as
specifically directed in the assumption order.
Metrolab contended that the layoff was temporary and in the exercise of its
management prerogative. It maintained that the company would suffer a yearly
gross revenue loss of approximately sixty-six (66) million pesos due to the
withdrawal of its principals in the Toll and Contract Manufacturing Department.
Metrolab further asserted that with the automation of the manufacture of its
product "Eskinol," the number of workers required its production is significantly
reduced. Metrolab recalled some of the laid off workers on a temporary basis due
to availability of work in the production lines.

Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff
of Metrolab's 94 rank and file workers illegal and ordered their reinstatement with
full backwages.
The layoff of the 94 employees at MII is hereby declared illegal for the failure of
the latter to comply with our injunction against committing any act which may
exacerbate the dispute and with the 30-day notice requirement. 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 backwages from the date they were illegally laid off on 27 January 1992 until
actually reinstated without loss of seniority rights and other benefits. Issues
relative to the CBA agreed upon by the parties and not embodied in our earlier
order are hereby ordered adopted for incorporation in the CBA. Further, the
dispositions 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 from committing any act
which may tend to circumvent this resolution.
Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not
aggravate the dispute since no untoward incident occurred as a result thereof. It,
likewise, filed a motion for 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 opposed
Labor Secretary Confesor again issued a cease and desist order. Metrolab
moved for a reconsideration. 6
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus
Resolution containing the following orders:
MII's motion for reconsideration with respect to the consequences of the second
wave of layoff affecting 73 employees, to the extent of assailing our ruling that
such layoff tended to exacerbate the dispute, is hereby denied. But inasmuch as
the legality of the layoff was not submitted for our resolution and no evidence had
been adduced upon which a categorical finding thereon can be based, the same
is hereby referred to the NLRC for its appropriate action.
Finally, all prohibitory injunctions issued as a result of our assumption of
jurisdiction over this dispute are hereby lifted.
SO RESOLVED. 7

Labor Secretary Confesor also ruled that executive secretaries are excluded from
the closed-shop provision of the CBA, not from the bargaining unit.
On 4 February 1993, the Union filed a motion for execution. Metrolab opposed.
Hence, the present petition for certiorari with application for issuance of a
Temporary Restraining Order.
A
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND
EMPLOYMENT COMMITTED GRAVE ABUSE OF DISCRETION AND
EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF
ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OF
BACKWAGES TO THE AFFECTED EMPLOYEES. *
B
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND
EMPLOYMENT GRAVELY ABUSED HER DISCRETION IN INCLUDING
EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK
AND FILE EMPLOYEES. 8
Metrolab argues that the Labor Secretary's 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 the employer's right to manage his
business and ensure its viability.
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 to limitations imposed by law. 9
In PAL v. NLRC, 10 we issued this reminder: was held that management's
prerogatives must be without abuse of discretion It is circumscribed by limitations
found in law, a collective bargaining agreement, or the general principles of fair
play and justice
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 industries indispensable to national interest. The
disputed injunction is subsumed under this special grant of authority. Art. 263 (g)
of the Labor Code specifically provides that:
(g)
When, in his opinion, there exists a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction 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 intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work
and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission may seek the assistance

of law enforcement agencies to ensure compliance with this provision as well as

with such orders as he may issue to enforce the same That Metrolab's business
is of national interest is not disputed. Metrolab is one of the leading
manufacturers and suppliers of medical and pharmaceutical products to the
country.
Metrolab's management prerogatives, therefore, are not being unjustly curtailed
but duly balanced with and tempered by the limitations set by law, taking into
account its special character and the particular circumstances in the case at
bench.
MII is right to the extent that as a rule, we may not interfere with the legitimate
exercise of management prerogatives such as layoffs. But it may nevertheless be
appropriate to mention here that one of the substantive evils which Article 263 (g)
of the Labor Code seeks to curb is the exacerbation of a labor dispute to the
further detriment of the national interest. When a labor dispute has in fact
occurred and a general injunction has been issued restraining the commission of
disruptive acts, management prerogatives must always be exercised consistently
with the statutory objective. 11
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 this Court. Any act committed during the
pendency of the dispute that tends to give rise to further contentious issues or
increase the tensions between the parties should be considered an act of
exacerbation. One must look at the act itself, not on speculative reactions. A
misplaced recourse is not needed to prove that a dispute has been exacerbated.
For instance, the Union could not be expected to file another notice of strike. For
this would depart from its theory of the case that the layoff is subsumed under
the instant dispute, 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 the
place of violent ones. 14
Metrolab and the Union were still in the process of resolving their CBA deadlock
when petitioner implemented the subject layoffs. As a result, motions and
oppositions were filed diverting the parties' attention, delaying resolution of the
bargaining deadlock and postponing the signing of their new CBA, thereby
aggravating the whole conflict.
there is no circumstance at all from which we can infer an intention from MII not
to sever the employment relationship permanently. If there was such an intention,
MII could have made it very clear in the 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.
second issue raised by petitioner merits our consideration.

This reading is obviously contrary to the intent of our 14 April 1992 resolution. By
recognizing the expanded scope of the right to self-organization, our intent was
to delimit the types of employees excluded from the close shop provision, not
from the bargaining unit, to executive secretaries only. Otherwise, the conversion
of the exclusionary provision to one that refers to the bargaining unit from one
that merely refers to the close shop provision would effectively curtail all the
organizational rights of executive secretaries.
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 for Sales, and Director for Corporate
Planning. Thus, the foregoing group of exclusions is no longer appropriate in its
present organizational structure. Nevertheless, there remain MII officer positions
for which there may be executive secretaries. These include the General
Manager and members of the Management Committee, specifically i) the Quality
Assurance Manager; ii) the Product Development Manager; iii) the Finance
Director; iv) the Management System Manager; v) the Human Resources
Manager; vi) the Marketing Director; vii) the Engineering Manager; viii) the
Materials Manager; and ix) the Production Manager.
Metrolab, however, maintains that executive secretaries of the General Manager
and the executive secretaries 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 company's
Management Committee should not only be exempted from the closed-shop
provision but should be excluded from membership in the bargaining unit of the
rank and file employees as well on grounds that their executive secretaries are
confidential employees, having access to "vital labor information."
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 confidential employees or those who by reason of
their positions or nature of work are required to assist or act in a fiduciary manner
to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.
The rationale behind the exclusion of confidential employees from the bargaining
unit of the rank and file employees and their disqualification to join any labor
organization was succinctly discussed in Philips Industrial Development v.
NLRC : 21
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 join a labor union equally
applies to them.
Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale
applicable to confidential employees:
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."
Similarly, in National Association of Trade Union - Republic Planters Bank
Supervisors Chapter v. Torres 22 we declared:As regards the other claim of
respondent Bank that Branch Managers/OICs, Cashiers and Controllers are
confidential employees, having control, custody and/or access to confidential
matters, e.g., the branch's cash position, statements of financial condition, vault
combination, cash codes for telegraphic transfers, demand drafts and other
negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual
regarding joint custody, this claim is not even disputed by petitioner. A
confidential employee is one entrusted with confidence on delicate matters, or
with the custody, handling, or care and protection of the employer's property.
While Art. 245 of the Labor Code singles out managerial employees as ineligible
to join, assist or form any labor organization, under the doctrine of necessary,
implication, confidential employees are similarly disqualified. . . .
. . . (I)n 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 dutybound to protect. . . .
Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor, 23 we ruled
that:

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. Legal secretaries
therefore fall under the category of confidential employees. . . .
There would be no danger of company domination of the Union since the
confidential employees would not 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 any conflict of interest, not being members of the Union. In any
case, there is always the danger that any employee would leak management
secrets to the Union out of sympathy for his fellow rank and filer even if 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 for discriminating against them.
The mandate of the Constitution and the Labor Code, primarily of protection to
Labor, compels such conclusion.
The dangers sought to be prevented, particularly the threat of conflict of interest
and espionage, are not eliminated by non-membership of Metrolab's executive
secretaries or confidential employees in the Union. Forming part of the
bargaining unit, the executive secretaries 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 confidential
employees to act for and in behalf of Metrolab. They do not have to be union
members to affect or influence either side.
Finally, confidential employees cannot be classified as rank and file. As
previously discussed, the nature of employment of confidential employees is
quite distinct from the rank and file, thus, warranting a separate category.
Excluding confidential employees from the rank and file bargaining unit,
therefore, is not tantamount to discrimination.
WHEREFORE, premises considered, the petition is partially GRANTED. The
resolutions of public respondent Secretary of Labor dated 14 April 1992 and 25
January 1993 are hereby MODIFIED to the extent that executive secretaries of
petitioner Metrolab's General Manager and the executive secretaries of the
members of its Management Committee are excluded from the bargaining unit of
petitioner's rank and file employees.
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND
ERNESTO L. PONCE, President, petitioners, vs. HONORABLE BIENVENIDO E.
LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND
EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS

MED-ARBITER AND SAN MIGUEL CORPORATION, respondents. [G.R. No.

110399. August 15, 1997.]
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 Products Plants of Cabuyao, San Fernando
and Otis, San Miguel Corporation Supervisors and Exempt Union
FACTS:
On October 5, 1990, petitioner union filed before the Department of Labor and
Employment (DOLE) a Petition for Direct 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 election among the supervisors and exempt
employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San
Fernando and Otis as one bargaining unit.
respondent San Miguel Corporation filed a Notice of Appeal with Memorandum
on Appeal, pointing out, among others, the Med-Arbiter's 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.
Undersecretary Laguesma, granted respondent company's 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-union's 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.
S3 and S4 Supervisors 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 court's
ruling. Consequently, they are not allowed to participate in the certification
election.

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 rankand-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.
The two criteria are cumulative, and both must be met if an employee is to be
considered a confidential employee that is, the confidential relationship must
exist between the employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations. 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 which the company is required to deal and who in
the normal performance of their duties may obtain advance information of the
company's 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, person
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 employee's need
to use labor relations information. Thus, in determining the confidentiality of
certain employees, a key question frequently considered is the employees'
necessary access to confidential labor relations information.
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
If access to confidential labor relations information is to be a factor in the
determination of an employee's confidential status, such information must relate
to the employer's labor relations policies.
Thus, an employee of a labor union, or of a management association, must have
access to confidential labor relations 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 cause an employee to be
excluded from the bargaining unit representing employees of the union or
association."
"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 employer's 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 employer's 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
to bargain collectively through representatives of their choosing.
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
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.
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."
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
employees in the instant case have "community or mutuality of interests," 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.
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. 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 in
Diliman, 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