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RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
G.R.No.91902May20,1991
MANILAELECTRICCOMPANY,petitioner,
vs.
THEHON.SECRETARYOFLABORANDEMPLOYMENT,STAFFANDTECHNICALEMPLOYEES
ASSOCIATIONOFMERALCO,andFIRSTLINEASSOCIATIONOFMERALCOSUPERVISORYEMPLOYEES,
respondents.
RolandoR.Arbues,AtilanoS.Guevarra,Jr.andGilS.SanDiegoforpetitioner.
TheSolicitorGeneralforpublicrespondent.
FelipeGojarforSTEAMPCWF.
Wakay&WakayLegalServicesforFirstLineAssociationofMeralcoSupervisoryEmployees.

MEDIALDEA,J.:
ThispetitionseekstoreviewtheResolutionofrespondentSecretaryofLaborandEmploymentFranklinM.Drilon
datedNovember3,1989whichaffirmedanOrderofMedArbiterRenatoP.Parungo(CaseNo.NCRODM1
70), directing the holding of a certification election among certain employees of petitioner Manila Electric
Company (hereafter "MERALCO") as well as the Order dated January 16, 1990 which denied the Motion for
ReconsiderationofMERALCO.
Thefactsareasfollows:
On November 22, 1988, the Staff and Technical Employees Association of MERALCO (hereafter "STEAM
PCWF") a labor organization of staff and technical employees of MERALCO, filed a petition for certification
election,seekingtorepresentregularemployeesofMERALCOwhoare:(a)nonmanagerialemployeeswithPay
GradesVIIandabove(b)nonmanagerialemployeesinthePatrolDivision,TreasurySecurityServicesSection,
Secretarieswhoareautomaticallyremovedfromthebargainingunitand(c)employeeswithintherankandfile
unit who are automatically disqualified from becoming union members of any organization within the same
bargainingunit.
Amongothers,thepetitionallegedthat"whilethereexistsadulyorganizedunionforrankandfileemployeesin
PayGradeIVI,whichistheMERALCOEmployeesandWorker'sAssociation(MEWA)whichholdsavalidCBAfor
therankandfileemployees,1thereisnootherlabororganizationexceptSTEAMPCWFclaimingtorepresentthe
MERALCOemployees.
The petition was premised on the exclusion/disqualification of certain MERALCO employees pursuant to Art. I,
Secs.2and3oftheexistingMEWACBAasfollows:
ARTICLEI
SCOPE
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Sec.2.ExcludedfromtheappropriatebargainingunitandthereforeoutsidethescopeofthisAgreement
are:
(a)EmployeesinPatrolDivision
(b)EmployeesinTreasurySecurityServicesSection
(c)ManagerialEmployeesand
(d)Secretaries.
Any member of the Union who may now or hereafter be assigned or transferred to Patrol Division or
TreasurySecurityServicesSection,orbecomesManagerialEmployeeoraSecretary,shallbeconsidered
automatically removed from the bargaining unit and excluded from the coverage of this agreement. He

shalltherebylikewisebedeemedautomaticallytohaveceasedtobememberoftheunion,andshalldesist
fromfurtherengaginginunionactivityofanykind.
Sec.3.Regularrankandfileemployeesintheorganizationelementshereinbelowlistedshallbecovered
withinthebargainingunit,butshallbeautomaticallydisqualifiedfrombecomingunionmembers:
1.OfficeoftheCorporateSecretary
2.CorporateStaffServicesDepartment
3.ManagerialPayrollOffice
4.LegalServiceDepartment
5.LaborRelationsDivision
6.PersonnelAdministrationDivision
7.ManpowerPlanning&ResearchDivision
8.ComputerServicesDepartment
9.FinancialPlanning&ControlDepartment
10.TreasuryDepartment,exceptCashSection
11.GeneralAccountingSection
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(p.19,Rollo)
MERALCOmovedforthedismissalofthepetitiononthefollowinggrounds:
I
Theemployeessoughttoberepresentedbypetitionerareeither1)managerialwhoareprohibitedbylaw
fromformingorjoiningsupervisoryunion2)securityservicespersonnelwhoareprohibitedfromjoiningor
assistingtherankandfileunion3)secretarieswhodonotconsenttothepetitioner'srepresentationand
whom petitioner can not represent and 4) rankandfile employees represented by the certified or duly
recognizedbargainingrepresentativeoftheonlyrankandfilebargainingunitinthecompany,theMeralco
EmployeesWorkersAssociation(MEWA),inaccordancewiththeexistingCollectiveBargainingAgreement
withthelatter.
II
The petition for certification election will disturb the administration of the existing Collective Bargaining
AgreementinviolationofArt.232oftheLaborCode.
III
Thepetitionitselfshowsthatitisnotsupportedbythewrittenconsentofatleasttwentypercent(20%)of
thealleged2,500employeessoughttoberepresented.(Resolution,Sec.ofLabor,pp.223224,Rollo)
Before MedArbiter R. Parungo, MERALCO contended that employees from Pay Grades VII and above are
classifiedasmanagerialemployeeswho,underthelaw,areprohibitedfromforming,joiningorassistingalabor
organizationoftherankandfile.AsregardsthoseinthePatrolDivisionandTreasurySecurityServiceSection,
MERALCOmaintainsthatsincetheseemployeesaretaskedwithprovidingsecuritytothecompany,theyarenot
eligibletojointherankandfilebargainingunit,pursuanttoSec.2(c),RuleV,BookVofthethenImplementing
RulesandRegulationsoftheLaborCode(1988)whichreadsasfollows:
Sec.2.Whomayfilepetition.Theemployeroranylegitimatelabororganizationmayfilethepetition.
Thepetition,whenfiledbyalegitimatelabororganization,shallcontain,amongothers:
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(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise
require,andprovided,further:thattheappropriatebargainingunitoftherankandfileemployeesshallnot
includesecurityguards(AsamendedbySec.6,ImplementingRulesofEO111)
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(p.111,LaborCode,1988Ed.)
AsregardsthoserankandfileemployeesenumeratedinSec.3,Art.I,MERALCOcontendsthatsincetheyare

already beneficiaries of the MEWACBA, they may not be treated as a separate and distinct appropriate
bargainingunit.
MERALCO raised the same argument with respect to employees sought to be represented by STEAMPCWF,
claimingthatthesewerealreadycoveredbytheMEWACBA.
On March 15, 1989, the MedArbiter ruled that having been excluded from the existing Collective Bargaining
Agreementforrankandfileemployees,theseemployeeshavetherighttoformaunionoftheirown,exceptthose
employees performing managerial functions. With respect to those employees who had resented their alleged
involuntary membership in the existing CBA, the MedArbiter stated that the holding of a certification election
would allow them to fully translate their sentiment on the matter, and thus directed the holding of a certification
election.ThedispositiveportionoftheResolutionprovidesasfollows:
WHEREFORE, premises considered, a certification election is hereby ordered conducted among the
regularrankandfileemployeesofMERALCOtowit:
1.NonmanagerialemployeeswithPayGradesVIIandabove
2.NonmanagerialemployeesofPatrolDivision,TreasurySecurityServicesSectionandSecretariesand
3.Employeesprohibitedfromactivelyparticipatingasmembersoftheunion.
within20daysfromreceipthereof,subjecttotheusualpreelectionconferencewiththefollowingchoices:
1.StaffandTechnical,EmployeesAssociationofMERALCO(STEAMPCWF)
2.NoUnion.
SOORDERED.(p.222,Rollo)
OnApril4,1989,MERALCOappealed,contendingthat"untilsuchtimethatajudicialfindingismadetotheeffect
that they are not managerial employee, STEAMPCWF cannot represent employees from Pay Grades VII and
above,additionallyreiteratingthesamereasonstheyhadadvancedfordisqualifyingrespondentSTEAMPCWF.
OnApril7,1989,MEWAfiledanappealinintervention,submittingasfollows:
A.TheOrderoftheMedArbiterisnullandvoidforbeinginviolationofArticle245oftheLaborCode
B.TheOrderoftheMedArbiterviolatesArticle232oftheLaborCodeand
C.TheOrderisinvalidbecausethebargainingunititdelineatedisnotanappropriated(sic)bargainingunit.
OnMay4,1989,STEAMPCWFopposedtheappealinintervention.
WiththeenactmentofRA6715andtherulesandregulationsimplementingthesame,STEAMPCWFrenounced
its representation of the employees in Patrol Division, Treasury Security Services Section and rankandfile
employeesinPayGradesIVI.
OnSeptember13,1989,theFirstLineAssociationofMeralco
SupervisoryEmployees.(hereafterFLAMES)filedasimilarpetition(NCRODM973189)seekingtorepresent
thoseemployeeswithPayGradesVIItoXIV,since"thereisnoothersupervisoryunionatMERALCO."(p.266,
Rollo).ThepetitionwasconsolidatedwiththatofSTEAMPCWF.
OnNovember3,1989,theSecretaryofLaboraffirmedwithmodification,theassailedorderoftheMedArbiter,
disposingasfollows:
WHEREFORE,premisesconsidered,theOrderappealedfromisherebyaffirmedbutmodifiedasfarasthe
employeescoveredbySection3,ArticleIoftheexistCBAintheCompanyareconcerned.Saidemployees
shallremainintheunitoftherankandfilealreadyexistingandmayexercisetheirrighttoselforganization
asaboveenunciated.
Further,theFirstLineAssociationofMeralcoSupervisoryEmployees(FLAMES)isincludedasamongthe
choicesinthecertificationelection.
Let, therefore, the pertinent records of the case be immediately forwarded to the Office of origin for the
conductofthecertificationelection.
SOORDERED.(p.7,Rollo)
MERALCO'smotionforreconsiderationwasdeniedonJanuary16,1990.
OnFebruary9,1990,MERALCOfiledthispetition,premisedonthefollowingground:
RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN EXCESS OF
JURISDICTIONAMOUNTINGTOLACKOFJURISDICTIONINRULINGTHAT:

I.ANOTHERRANKANDFILEBARGAININGUNITCANBEESTABLISHEDINDEPENDENT,DISTINCTAND
SEPARATEFROMTHEEXISTINGRANKANDFILEBARGAININGUNIT.
II.THEEMPLOYEESFROMPAYGRADESVIIANDABOVEARERANKANDFILEEMPLOYEES.
III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE RANKAND
FILEUNIONAND/ORTHESUPERVISORYUNION.(p.8,Rollo)
On February 26, 1990, We issued a temporary restraining order (TRO) against the implementation of the
disputedresolution.
In its petition, MERALCO has relented and recognized respondents STEAMPCWF and FLAMES' desired
representationofsupervisoryemployees from Grades VII up. However, it believes that all that the Secretary of
Laborhastodoistoestablishademarcationlinebetweensupervisoryandmanagerialrank,andnottoclassify
outrightthegroupofemployeesrepresentedbySTEAMPCWFandFLAMESasrankandfileemployees.
InquestioningtheSecretaryofLabor'sdirectiveallowingsecurityguards(Treasury/PatrolServicesSection)tobe
representedbyrespondents,MERALCOcontendsthatthiscontravenestheprovisionsoftherecentlypassedRA
6715 and its implementing rules (specifically par. 2, Sec. 1, Rule II, Book V) which disqualifies supervisory
employeesandsecurityguardsfrommembershipinalabororganizationoftherankandfile(p.11,Rollo).
The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212, then par. (k), of the
1988LaborCodedefining"managerial"and"rankandfile"employees,thelawtheninforcewhenthecomplaint
was filed. At the time, only two groups of employees were recognized, the managerial and rank and file. This
explains the absence of evidence on job descriptions on who would be classified managerial employees. It is
perhaps also for this reason why the Secretary of Labor limited his classification of the Meralco employees
belongingtoPayGradesVIIandup,toonlytwogroups,themanagerialandrankandfile.
However,pursuanttotheDepartmentofLabor'sgoalofstrenghtheningtheconstitutionalrightofworkerstoself
organization, RA 6715 was subsequently passed which reorganized the employeeranks by including a third
group,orthesupervisoryemployees,andlayingdownthedistinctionbetweensupervisoryemployeesandthose
of managerial ranks in Art. 212, renumbered par. [m], depending on whether the employee concerned has the
power to lay down and execute management policies, in the case of managerial employees, or merely to
recommendthem,incaseofsupervisoryemployees.
Inthispetition,MERALCOhasadmittedthattheemployeesbelongingtoPayGradesVIIanduparesupervisory
(p.10,Rollo).TherecordsalsoshowthatSTEAMPCWFhad"renounceditsrepresentationoftheemployeesin
PatrolDivision,TreasurySecurityServiceSectionandrankandfileemployeesinPayGradesIVI"(p.6,Rollo)
whileFLAMES,ontheotherhand,hadlimiteditsrepresentationtoemployeesbelongingtoPayGradesVIIXIV,
generallyacceptedassupervisoryemployees,asfollows:
It must be emphasized that private respondent First Line Association of Meralco Supervisory Employees
seekstorepresentonlytheSupervisoryEmployeeswithPayGradesVIItoXIV.
SupervisoryEmployeeswithPayGradesVIItoXIVarenotmanagerialemployees.Infactthepetitionitself
ofpetitionerManilaElectricCompanyonpage9,paragraph3ofthepetitionstatedasfollows,towit:
Therewasnoneedforpetitionertoprovethattheseemployeesarenotrankandfile.Asadvertedto
above, the private respondents admit that these are not the rankandfile but the supervisory
employees, whom they seek to represent. What needs to be established is the rank where
supervisoryendsandmanagerialbegins.
andFirstLineAssociationofMeralcoSupervisoryEmployeeshereinstatesthatPayGradesVIItoXIVare
notmanagerialemployees.Infact,althoughemployeeswithPayGradeXVcarrytheRankofDepartment
Managers, these employees only enjoys (sic) the Rank Manager but their recommendatory powers are
subjecttoevaluation,reviewandfinalactionbythedepartmentheadsandotherhigherexecutivesofthe
company.(FLAMES'Memorandum,p.305,Rollo)
Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been recognized and
accepted as supervisory. On the other hand, those employees who have been automatically disqualified have
been directed by the Secretary of Labor to remain in the existing labor organization for the rank and file, (the
conditionintheCBAdeemedasnothavingbeenwrittenintothecontract,asundulyrestrictiveofanemployee's
exercise of the right to selforganization). We shall discuss the rights of the excluded employees (or those
coveredbySec.2,Art.I,MEWACBAlater.
Anent the instant petition therefore, STEAMPCWF, and FLAMES would therefore represent supervisory
employees only. In this regard, the authority given by the Secretary of Labor for the establishment of two labor
organizationsfortherankandfilewillhavetobedisregardedsinceWeherebyupholdcertificationelectionsonly
forsupervisoryemployeesfromPayGradeVIIandup,withSTEAMPCWFandFLAMESaschoices.
AstotheallegedfailureoftheSecretaryofLabortoestablishademarcationlineforpurposesofsegregatingthe
supervisoryfromthemanagerialemployees,therequiredparameterisreallynotnecessarysincethelawitself,
Art.212m,(asamendedbySec.4ofRA6715)hasalreadylaiddownthecorrespondingguidelines:

Art.212.Definitions....
(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline
employees.Supervisoryemployeesarethosewho,intheinterestoftheemployer,effectivelyrecommend
such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but
requirestheuseofindependentjudgment.Allemployeesnotfallingwithinanyoftheabovedefinitionsare
consideredrankandfileemployeesforpurposesoftoBook.
Inhisresolution,theSecretaryofLaborfurtherelaborated:
...Thus,thedeterminativefactorinclassifyinganemployeeasmanagerial,supervisoryorrankandfileis
thenatureoftheworkoftheemployeeconcerned.
In National Waterworks and Sewerage Authority vs. National Waterworks and Sewerage Authority
ConsolidatedUnions(11SCRA766)theSupremeCourthadtheoccasiontocomeoutwithanenlightening
dissertationofthenatureoftheworkofamanagerialemployeesasfollows:
. . . that the employee's primary duty consists of the management of the establishment or of a
customarily recognized department or subdivision thereof, that he customarily and regularly directs
theworkofotheremployeestherein,thathehastheauthoritytohireordischargeotheremployees
or that his suggestions and recommendations as to the hiring and discharging and or to the
advancementandpromotionoranyotherchangeofstatusofotheremployeesaregivenparticular
weight,thathecustomarilyandregularlyexercisesdiscretionarypowers...(56CJS,pp.666668.
(p.226,Rollo)
We shall now discuss the rights of the security guards to selforganize. MERALCO has questioned the
legality of allowing them to join either the rank and file or the supervisory union, claiming that this is a
violationofpar.2,Sec.1,RuleII,BookVoftheImplementingRulesofRA6715,whichstatesasfollows:
Sec1.Whomayjoinunions....
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Supervisory employees and security guards shall not be eligible for membership in a labor
organizationoftherankandfileemployeesbutmayjoin,assistorformseparatelabororganizations
oftheirown...
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(emphasisours)
Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of the implementing
rulesofRA6715:
RuleV.
REPRESENTATIONCASESAND
INTERNALUNIONCONFLICTS
Sec.1....
Sec.2.Whomayfile.Anylegitimatelabororganizationortheemployer,whenrequestedtobargain
collectively,mayfilethepetition.
Thepetition,whenfiledbyalegitimatelabororganizationshallcontain,amongothers:
(a)...
(b)...
(c)descriptionofthebargainingunitwhichshallbetheemployerunitunlesscircumstancesotherwise
require and provided further, that the appropriate bargaining unit of the rankandfile employees
shallnotincludesupervisoryemployeesand/orsecurityguards
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(emphasisours)
Both rules, barring security guards from joining a rank and file organization, appear to have been carried over
fromtheoldruleswhichimplementedthenArt.245oftheLaborCode,andwhichprovidedthus:
Art. 245. Ineligibility of security personnel to join any labor organization.Security guards and other
personnelemployedfortheprotectionandsecurityoftheperson,propertiesandpremisesoftheemployer
shallnotbeeligibleformembershipinanylabororganization.

OnDecember24,1986,Pres.CorazonC.AquinoissuedE.O.No.111whicheliminatedtheabovecitedprovision
on the disqualification of security guards. What was retained was the disqualification of managerial employees,
renumberedasArt.245(previouslyArt.246),asfollows:
Art.245.Ineligibilityofmanagerialemployeestojointanylabororganization.Managerial employees are
noteligibletojoin,assistorformanylabororganization.
Withtheelimination,securityguardswerethusfreetojoinarankandfileorganization.
On March 2, 1989, the present Congress passed RA 6715. 2 Section 18 thereof amended Art. 245, to read as
follows:
Art.245.Ineligibilityofmanagerialemployeestojoinanylabororganizationrightofsupervisoryemployees.
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employeesshallnotbeeligibleformembershipinalabororganizationoftherankandfileemployeesbut
mayjoin,assist,orformseparatelabororganizationsoftheirown.(emphasisours)
Aswillbenoted,thesecondsentenceofArt.245embodiesanamendmentdisqualifyingsupervisoryemployees
frommembershipinalabororganizationoftherankandfileemployees.Itdoesnotincludesecurityguardsinthe
disqualification.
TheimplementingrulesofRA6715,therefore,insofarastheydisqualifysecurityguardsfromjoiningarankand
fileorganizationarenullandvoid,forbeingnotgermanetotheobjectandpurposesofEO111andRA6715upon
which such rules purportedly derive statutory moorings. In Shell Philippines, Inc. vs. Central Bank, G.R. No.
51353,June27,1988,162SCRA628,Westated:
The rulemaking power must be confined to details for regulating the mode or proceeding to carry into
effect the law as it has been enacted. The power cannot be extended to amending or expanding the
statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute
cannotbesanctioned.(citingUniversityofSto.Tomasvs.BoardofTaxAppeals,93Phil.376).
Whilethereforeundertheoldrules,securityguardswerebarredfromjoiningalabororganizationoftherankand
file,underRA6715,theymaynowfreelyjoinalabororganizationoftherankandfileorthatofthesupervisory
union,dependingontheirrank.Byaccommodatingsupervisoryemployees,theSecretaryofLabormustlikewise
applytheprovisionsofRA6715tosecurityguardsbyfavorablyallowingthemfreeaccesstoalabororganization,
whetherrankandfileorsupervisory,inrecognitionoftheirconstitutionalrighttoselforganization.
Weareawarehoweverofpossibleconsequencesintheimplementationofthelawinallowingsecuritypersonnel
to join labor unions within the company they serve. The law is apt to produce divided loyalties in the faithful
performance of their duties. Economic reasons would present the employees concerned with the temptation to
subordinatetheirdutiestotheallegiancetheyowetheunionofwhichtheyaremembers,awareastheyarethatit
isusuallyunionactionthatobtainsforthemincreasedpecuniarybenefits.
Thus,intheeventofastrikedeclaredbytheirunion,securitypersonnelmayneglectoroutrightlyabandontheir
duties,suchasprotectionofpropertyoftheiremployerandthepersonsofitsofficialsandemployees,thecontrol
ofaccesstotheemployer'spremises,andthemaintenanceoforderintheeventofemergenciesanduntoward
incidents.
Itishopedthatthecorrespondingamendatoryand/orsuppletorylawsbepassedbyCongresstoavoidpossible
conflictofinterestinsecuritypersonnel.
1 w p h i1

ACCORDINGLY,thepetitionisherebyDISMISSED.WeAFFIRMwithmodificationtheResolutionoftheSecretary
of Labor dated November 3, 1989 upholding an employee's right to selforganization. A certification election is
herebyorderedconductedamongsupervisoryemployeesofMERALCO,belongingtoPayGradesVIIandabove,
usingasguidelinessanemployee'spowertoeitherrecommendorexecutemanagementpolicies,pursuanttoArt.
212(m),oftheLaborCode,asamendedbySec.4ofRA6715,withrespondentsSTEAMPCWFandFLAMESas
choices.
Employees of the Patrol Division, Treasury Security Services Section and Secretaries may freely join either the
labor organization of the rank and file or that of the supervisory union depending on their employee rank.
Disqualified employees covered by Sec. 3, Art. I of the MEWACBA, shall remain with the existing labor
organizationoftherankandfile,pursuanttotheSecretaryofLabor'sdirective:
By the parties' own agreement, they find the bargaining unit, which includes the positions enumerated in
Section3,ArticleIoftheirCBA,appropriateforpurposesofcollectivebargaining.Thecompositionofthe
bargainingunitshouldbelefttotheagreementoftheparties,andunlesstherearelegalinfirmitiesinsuch
agreement, this Office will not substitute its judgment for that of the parties. Consistent with the story of
collectivebargaininginthecompany,themembershipofsaidgroupofemployeesintheexistingrankand
fileunitshouldcontinue,foritwillenhancestabilityinthatunitalreadywellestablish.However,wecannot
approveoftheconditionsetinSection3,ArticleIoftheCBAthattheemployeescoveredareautomatically
disqualifiedfrombecomingunionmembers.Theconditionundulyrestrictstheexerciseoftherighttoself
organizationbytheemployeesinquestion.Itiscontrarytolawandpublicpolicyand,therefore,shouldbe
consideredtohavenotbeenwrittenintothecontract.Accordingly,theoptiontojoinornottojointheunion
shouldbeleftentirelytotheemployeesthemselves.(p.229,Rollo)

The Temporary Restraining Order (TRO) issued on February 26, 1990 is hereby LIFTED. Costs against
petitioner.
SOORDERED.
Fernan,C.J.,Narvasa,MelencioHerrera,Gutierrez,Jr.,Cruz,Paras,Feliciano,Gancayco,Padilla,Bidin,
Sarmiento,GrioAquino,RegaladoandDavide,Jr.,JJ.,concur.

Footnotes
1

ThisCBAexpiredonNovember30,1989.ThereisanongoingCBAnegotiationwithNationalCapitol
Region,Dole,perCommentofFLAMES,datedMarch6,1990,p.248,Rollo.
2

Publishedintwonewspapers,thelawtookeffectonMarch21,1989.

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