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THE RIGHT TO SELF ORGANIZATION

1. Principle of distributive and social justice; rights of workers

Article II, Section 9 of the 1987 Constitution

SECTION 9. The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising
standard of living, and an improved quality of life for all.

Article III, Sections 1 and 8 of the 1987 Constitution

SECTION 1. No person shall be deprived of life, liberty, or property without due process
of law, nor shall any person be denied the equal protection of the laws.

SECTION 8. The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to law shall
not be abridged.

Article XII, Sections 1, 6 & 12 of the 1987 Constitution

SECTION 1. The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the underprivileged.

The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective organizations, shall be encouraged to
broaden the base of their ownership.

SECTION 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to own, establish,
and operate economic enterprises, subject to the duty of the State to promote
distributive justice and to intervene when the common good so demands.
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SECTION 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.

Article XIII, Sections 1 & 3 of the 1987 Constitution

SECTION 1. The Congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities by equitably diffusing
wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.

SECTION 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial
peace.

The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and growth.

Section 3 of the Labor Code of the Philippines

Art. 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed and
regulate the relations between workers and employers. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure, and just and
humane conditions of work.
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2. Who cannot unionize for purposes of collective bargaining?

2.1 Government Employees

2.2 Employees of GOCCs

2.3 Members of Cooperative

Benguet Electric Cooperative vs. Caleja:

The issue of whether or not employees of a cooperative are qualified to form or
join a labor organization for purposes of collective bargaining had already been
resolved and clarified in the case
of Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, et al. [G.R. No.
77951, September 26, 1988] and reiterated in the cases of Batangas-
I Electric Cooperative Labor Union v. Young, et al. [G.R. Nos. 62386, 70880 and
74560, November 9, 1988]
and San Jose City Electric Service Cooperative, Inc. v. Ministry of Labor and Em
ployment, et al. [G.R. No. 77231, May 31, 1989] wherein the Court had stated
that the right to collective bargaining is not available to an employee of a
cooperative who at the same time is a member and co-owner thereof. With
respect, however, to employees who are neither members nor co-owners of the
cooperative they are entitled to exercise the rights to self-organization, collective
bargaining and negotiation as mandated by the 1987 Constitution and applicable
statutes.

Contrary to respondents' claim, the fact that the members-employees of

petitioner do not participate in the actual management of the cooperative does
not make them eligible to form, assist or join a labor organization for the purpose
of collective bargaining with petitioner. The Court's ruling in the Davao City case
that members of cooperative cannot join a labor union for purposes of collective
bargaining was based on the fact that as members of the cooperative they are
co-owners thereof. As such, they cannot invoke the right to collective bargaining
for "certainly an owner cannot bargain with himself or his co-
owners." [Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, et
al., supra.] It is the fact of ownership of the cooperative, and not involvement in
the management thereof, which disqualifies a member from joining any labor
organization within the cooperative. Thus, irrespective of the degree of their
participation in the actual management of the cooperative, all members thereof
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cannot form, assist or join a labor organization for the purpose of collective
bargaining.

But in the case of Republic of the Philippines represented by SSS vs. Caleja,
members of the cooperative are employees thereof, thus:

The following elements are considered: (1) the selection and engagement of the
workers; (2) the payment of wages by whatever means; (3) the power of
dismissal; and (4) the power to control the worker‘s conduct, with the latter
assuming primacy in the overall consideration. All the aforesaid elements are
present in this case.

First. It is expressly provided in the Service Contracts that it is the respondent

cooperative which has the exclusive discretion in the selection and engagement
of the owners-members as well as its team leaders who will be assigned at
Stanfilco.

Second. It cannot be doubted then that those stipends or shares in the service
surplus are indeed wages, because these are given to the owners-members as
compensation in rendering services to respondent cooperative‘s client, Stanfilco.

Third. It is also stated in the above-mentioned Service Contracts that it is the

respondent cooperative which has the power to investigate, discipline and
remove the owners-members and its team leaders who were rendering services
at Stanfilco.

Fourth. In the case at bar, it is the respondent cooperative which has the sole
control over the manner and means of performing the services under the Service
Contracts with Stanfilco as well as the means and methods of work. Also, the
respondent cooperative is solely and entirely responsible for its owners-
members, team leaders and other representatives at Stanfilco. All these clearly
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prove that, indeed, there is an employer-employee relationship between the

respondent cooperative and its owners-members.

2.4 Managerial employees

DOLE DO No. 9-97, Rule II, Section 2

Section 2.Who may join labor organizations. All persons employed in

commercial, industrial and agricultural enterprises, including employees of
government-owned or controlled corporations without original charters
established under the Corporation Code, as well as employees of religious,
charitable, medical or educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join or assist labor
organizations for purposes of collective bargaining; provided, however, that
supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may form, join or assist separate
labor organizations of their own. Managerial employees shall not be eligible to
form, join or assist any labor organization for purposes of collective bargaining.
Alien employees with valid working permits issued by the Department may
exercise the right to self-organization and join or assist labor organizations for
purposes of collective bargaining if they are nationals of a country which grants
the same or similar rights to Filipino workers, as certified by the Department of
Foreign Affairs.

For the purpose of this Section, any employee, whether employed for a definite
period or not, shall, beginning on the first day of his service, be eligible for
membership in any labor organization.

Department Order No. 40-03 (Series of 2003) Amending the Implementing Rules
of Book V Of The Labor Code Of The Philippines:

(hh) "Managerial Employee" refers to an employee who is vested with powers or

prerogatives to lay down and execute management policies or to hire, transfer,
suspend, layoff, recall, discharge, assign or discipline employees.

Higher Standards required for managers:

Sim vs. NLRC:

Complainant, as General Manager, is an employee whom the respondent
company reposed its trust and confidence. In other words, she held a position of
trust. It is well-settled doctrine that the basic premise for dismissal on the ground
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of loss of confidence is that the employee concerned holds a position of trust and
confidence. (National Sugar Refineries Corporation vs. NLRC, 286 SCRA 478.)

The mere existence of a basis for believing that a managerial employee has
breached the trust of the employer would suffice for his/her dismissal.

[w]hen an employee accepts a promotion to a managerial position or to an

office requiring full trust and confidence, she gives up some of the rigid
guaranties available to ordinary workers. Infractions which if committed by
others would be overlooked or condoned or penalties mitigated may be
visited with more severe disciplinary action. A company’s resort to acts of
self-defense would be more easily justified.

2.5 Confidential Employees: Doctrine of Necessary Implication

Philips Industrial Development vs. NLRC:

In the main issue raised before Us, it is 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."

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. 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, 13 this Court elaborated
on this rationale, thus:

. . . The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union, the latter
might not be assured of their loyalty, to the Union in view of evident conflict of
interests. The Union can also become company-dominated with the presence of
managerial employees in Union membership.
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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 bargainingagreement. 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.

Sugbuanon vs. NLRC:

Now may the said bank personnel be deemed confidential employees?

Confidential employees are those who (1) assist or act in a confidential capacity,
in regard (2) to persons who formulate, determine, and effectuate management
policies [specifically in the field of labor relations].9 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 superior officer; and that officer must handle the prescribed
responsibilities relating to labor relations.10

Art. 245 of the Labor Code11 does not directly prohibit confidential employees
from engaging in union activities. However, under the doctrine of necessary
implication, the disqualification of managerial employees equally applies to
confidential employees.12 The confidential-employee rule justifies exclusion of
confidential employees because in the normal course of their duties they become
aware of management policies relating to labor relations. 13 It must be stressed,
however, that when the employee does not have access to confidential labor
relations information, there is no legal prohibition against confidential employees
from forming, assisting, or joining a union.14

Tunay na Pagkakaisa ng Mangagawa sa Aisa Brewey vs. Asia Brewey:

Although Article 245 of the Labor Code 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.[14] Confidential employees are thus excluded from the rank-
and-file bargaining unit. The rationale for their separate category and
disqualification to join any labor organization is similar to the inhibition for
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managerial employees because if allowed to be affiliated with a Union, the latter

might not be assured of their loyalty in view of evident conflict of interests and the
Union can also become company-denominated with the presence of managerial
employees in the Union membership.[15] Having access to confidential
information, confidential employees may also become the source of undue
advantage. Said employees may act as a spy or spies of either party to a
collective bargaining agreement.[16]

In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners
division secretaries, all Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial Systems are
confidential employees not included within the rank-and-file bargaining
unit.[18] Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-
Confesor,[19] we declared that legal secretaries who 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, fall under the
category of confidential employees and hence excluded from the bargaining unit
composed of rank-and-file employees.[20]

Also considered having access to vital labor information are the 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. [21]

In the present case, the CBA expressly excluded Confidential and Executive
Secretaries from the rank-and-file bargaining unit,

CONTRA

Dela Salle University vs. DLSU Employees’ Association:

On the first issue involving the classification of the computer operators assigned
at the University’s Computer Services Center and discipline officers, the
University argues that they are confidential employees and that the Union has
already recognized the confidential nature of their functions when the latter
agreed in the parties 1986 collective bargaining agreement to exclude the said
employees from the bargaining unit of rank-and-file employees. As far as the said
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computer operators are concerned, the University contends that "the parties have
already previously agreed to exclude all positions in the Universitys Computer
Services Center (CSC), which include the positions of computer operators, from
the collective bargaining unit. xxx xxx."[46] The University further contends that
"the nature of the work done by these Computer Operators is enough justification
for their exclusion from the coverage of the bargaining unit of the University’s
rank-and-file employees. xxx xxx."[47] According to the University, the Computer
Services Center, where these computer operators work, "processes data that are
needed by management for strategic planning and evaluation of systems. It also
houses the University’s confidential records and information [e.g. student
records, faculty records, faculty and staff payroll data, and budget allocation and
expenditure related data] which are contained in computer files and computer-
generated reports. xxx xxx. Moreover, the Computer Operators are in fact the
repository of the University’s confidential information and data, including those
involving and/or pertinent to labor relations. xxx xxx." [48]

As to the discipline officers, the University maintains that "they are likewise
excluded from the bargaining unit of the rank-and-file employees under the
parties 1986 CBA. The Discipline Officers are clearly alter egos of management
as they perform tasks which are inherent in management [e.g. enforce discipline,
act as peace officers, secure peace and safety of the students inside the
campus, conduct investigations on violations of University regulations, or of
existing criminal laws, committed within the University or by University
employees] xxx xxx."[49] The University also alleges that "the Discipline Officers
are privy to highly confidential information ordinarily accessible only to
management."[50]

With regard to the employees of the College of St. Benilde, the Union, supported
by the Solicitor General at this point, asserts that the veil of corporate fiction
should be pierced, thus, according to the Union, the University and the College of
St. Benilde should be considered as only one entity because the latter is but a
mere integral part of the University.[51]

The Universitys arguments on the first issue fail to impress us. The Court agrees
with the Solicitor General that the express exclusion of the computer operators and
discipline officers from the bargaining unit of rank-and-file employees in the 1986
collective bargaining agreement does not bar any re-negotiation for the future
inclusion of the said employees in the bargaining unit. During the freedom period,
the parties may not only renew the existing collective bargaining agreement but may
also propose and discuss modifications or amendments thereto. With regard to the
alleged confidential nature of the said employees functions, after a careful
consideration of the pleadings filed before this Court, we rule that the said computer
operators and discipline officers are not confidential employees. As carefully
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examined by the Solicitor General, the service record of a computer operator

reveals that his duties are basically clerical and non-confidential in nature.[52] As to
the discipline officers, we agree with the voluntary arbitrator that based on the
nature of their duties, they are not confidential employees and should therefore be
included in the bargaining unit of rank-and-file employees.

San Miguel Corporation vs. Laguesma:

On the first issue, this Court rules that said employees do not fall within the term
confidential employees who may be prohibited from joining a union.
There is no question that the said employees, supervisors and the exempt
employees, are not vested with the powers and prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, layoff, recall,
discharge or dismiss employees. They are, therefore, not qualified to be classified
as managerial employees who, under Article 245[4] of the Labor Code, are not
eligible to join, assist or form any labor organization. In the very same provision,
they are not allowed membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their
own. The only question that need be addressed is whether these employees are
properly classified as confidential employees or not.
Confidential employees are those who (1) assist or act in a confidential capacity, (2)
to persons who formulate, determine, and effectuate management policies in the
field of labor relations.[5] The two criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee that is, the confidential
relationship must exist between the employees and his supervisor, and the
supervisor must handle the prescribed responsibilities relating to labor relations. [6]
The exclusion from bargaining units of employees who, in the normal course of their
duties, become aware of management policies relating to labor relations is a
principal objective sought to be accomplished by the confidential employee
rule. The broad rationale behind this rule is that employees should not be placed in
a position involving a potential conflict of interests.[7] Management should not be
required to handle labor relations matters through employees who are represented
by the union with the company is required to deal and who in the normal
performance of their duties may obtain advance information of the companys
position with regard to contract negotiations, the disposition of grievances, or other
labor relations matters.[8]
There have been ample precedents in this regard, thus in Bulletin Publishing
Company v. Hon. Augusto Sanchez,[9] the Court held that if these managerial
employees would belong to or be affiliated with a Union, the latter might not be
assured of their loyalty to the Union in view of evident conflict of interest. The Union
can also become company-dominated with the presence of managerial employees
in Union membership. The same rationale was applied to confidential employees in
Golden Farms, Inc. v. Ferrer-Calleja[10] and in the more recent case of Philips
Industrial Development, Inc. v. NLRC[11] which held that confidential employees, by
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the very nature of their functions, assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise managerial functions in the
field of labor relations. Therefore, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union was held equally applicable to
them.[12]
An important element of the confidential employee rule is the employees need to
use labor relations information. Thus, in determining the confidentiality of certain
employees, a key questions frequently considered is the employees necessary
access to confidential labor relations information.[13]
It is the contention of respondent corporation that Supervisory employees 3 and 4
and the exempt employees come within the meaning of the term confidential
employees primarily because they answered in the affirmative when asked Do you
handle confidential data or documents? In the Position Questionnaires submitted by
the Union.[14] In the same questionnaire, however, it was also stated that the
confidential information handled by questioned employees relate to product
formulation, product standards and product specification which by no means relate
to labor relations.[15]
Granting arguendo that an employee has access to confidential labor relations
information but such is merely incidental to his duties and knowledge thereof is not
necessary in the performance of such duties, said access does not render the
employee a confidential employee.[16] If access to confidential labor relations
information is to be a factor in the determination of an employee’s confidential
status, such information must relate to the employers labor relations policies. Thus,
an employee of a labor union, or of a management association, must have access
to confidential labor information with respect to his employer, the union, or the
association, to be regarded a confidential employee, and knowledge of labor
relations information pertaining to the companies with which the union deals, or
which the association represents, will not clause an employee to be excluded from
the bargaining unit representing employees of the union or association. [17] Access to
information which is regarded by the employer to be confidential from the business
standpoint, such as financial information[18] or technical trade secrets, will not render
an employee a confidential employee.[19]

It is evident that whatever confidential data the questioned employees may handle
will have to relate to their functions. From the foregoing functions, it can be gleaned
that the confidential information said employees have access to concern the
employers internal business operations. As held in Westinghouse Electric
Corporation v. National Labor Relations Board,[21] an employee may not be
excluded from appropriate bargaining unit merely because he has access to
confidential information concerning employers internal business operations and
which is not related to the field of labor relations.
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It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution
mandates the State to guarantee to all workers the right to self-organization. Hence,
confidential employees who may be excluded from bargaining unit must be strictly
defined so as not to needlessly deprive many employees of their right bargain
collectively through representatives of their choosing.[22]
In the case at bar, supervisors 3 and above may not be considered confidential
employees merely because they handle confidential data as such must first be
strictly classified as pertaining to labor relations for them to fall under said
restrictions. The information they handle are properly classifiable as technical and
internal business operations data which, to our mind, has no relevance to
negotiations and settlement of grievances wherein the interests of a union and the
management are invariably adversarial. Since the employees are not classifiable
under the confidential type, this Court rules that they may appropriately form a
bargaining unit for purposes of collective bargaining. Furthermore, even assuming
that they are confidential employees, jurisprudence has established that there is no
legal prohibition against confidential employees who are not performing managerial
functions to form and join a union.[23]
2.6 Employees of International Organization or Specialized Agencies which are
registered with the United Nations and enjoys diplomatic immunity
CONTRA

German Agency for Technical Cooperation (GTZ) vs. CA:

The principle of state immunity from suit, whether a local state or a foreign state, is
reflected in Section 9, Article XVI of the Constitution, which states that the State may
not be sued without its consent. Who or what consists of the State? For one, the
doctrine is available to foreign States insofar as they are sought to be sued in the
courts of the local State,[34] necessary as it is to avoid unduly vexing the peace of
nations.

Our ruling in Holy See v. Del Rosario[52] provided a template on how a foreign entity
desiring to invoke State immunity from suit could duly prove such immunity before
our local courts. The principles enunciated in that case were derived from public
international law. We stated then:

In Public International Law, when a state or international agency

wishes to plead sovereign or diplomatic immunity in a foreign court, it
requests the Foreign Office of the state where it is sued to convey to the
court that said defendant is entitled to immunity.
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In the United States, the procedure followed is the process of

"suggestion," where the foreign state or the international organization sued
in an American court requests the Secretary of State to make a
determination as to whether it is entitled to immunity. If the Secretary of
State finds that the defendant is immune from suit, he, in turn, asks the
Attorney General to submit to the court a "suggestion" that the defendant is
entitled to immunity. In England, a similar procedure is followed, only the
Foreign Office issues a certification to that effect instead of submitting a
"suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity
from Suit of Foreign Sovereign Instrumentalities and Obligations, 50 Yale
Law Journal 1088 [1941]).

In the Philippines, the practice is for the foreign government or the

international organization to first secure an executive endorsement of its
claim of sovereign or diplomatic immunity. But how the Philippine Foreign
Office conveys its endorsement to the courts varies. In International
Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990), the
Secretary of Foreign Affairs just sent a letter directly to the Secretary of
Labor and Employment, informing the latter that the respondent-employer
could not be sued because it enjoyed diplomatic immunity. In World Health
Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign
Affairs sent the trial court a telegram to that effect. In Baer v. Tizon, 57
SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs
to request the Solicitor General to make, in behalf of the Commander of the
United States Naval Base at Olongapo City, Zambales, a "suggestion" to
respondent Judge. The Solicitor General embodied the "suggestion" in a
Manifestation and Memorandum as amicus curiae.[53]

The Court is thus holds and so rules that GTZ consistently has been unable to
establish with satisfaction that it enjoys the immunity from suit generally enjoyed
by its parent country, the Federal Republic of Germany. Consequently, both the
Labor Arbiter and the Court of Appeals acted within proper bounds when they
refused to acknowledge that GTZ is so immune by dismissing the complaint
against it. Our finding has additional ramifications on the failure of GTZ to
properly appeal the Labor Arbiters decision to the NLRC. As pointed out by the
OSG, the direct recourse to the Court of Appeals while bypassing the NLRC
could have been sanctioned had the Labor Arbiters decision been a patent
nullity. Since the Labor Arbiter acted properly in deciding the complaint,
notwithstanding GTZs claim of immunity, we cannot see how the decision could
have translated into a patent nullity.
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3. Who can unionize for purpose of collective bargaining?

3.1 Supervisory employees (cannot join with Rank-and-File)

(xx) "Supervisory Employee" refers to an employee who, in the interest of the

employer, effectively recommends managerial actions and the exercise of such
authority is not merely routinary or clerical but requires the use of independent
judgment. [DO40, Rule I, Section I (xx)]

But can they belong to the same federation?

Atlas Litographic vs. Usec. Laguesma

The sole issue to be resolved in this case is whether or not, under Article 245 of
the Labor Code, a local union of supervisory employees may be allowed to
affiliate with a national federation of labor organizations of rank-and-file
employees and which national federation actively represents its affiliates in
collective bargaining negotiations with the same employer of the supervisors and
in the implementation of resulting collective bargaining agreements.

The prohibition against a supervisors' union joining a local union of rank-and-file

is replete with jurisprudence. The Court emphasizes that the limitation is not
confined to a case of supervisors wanting to join a rank-and-file local union. The
prohibition extends to a supervisors' local union applying for membership in a
national federation the members of which include local unions of rank-and-file
employees. The intent of the law is clear especially where, as in the case at bar,
the supervisors will be co-mingling with those employees whom they directly
supervise in their own bargaining unit.

Technicalities should not be allowed to stand in the way of equitably and

completely resolving the rights and obligations of the parties. (Rapid Manpower
Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should be paramount is
the intent behind the law, not its literal construction. Where one interpretation
would result in mischievous consequences while another would bring about
equity, justice, and the promotion of labor peace, there can be no doubt as to
what interpretation shall prevail.

Finally, the respondent contends that the law prohibits the employer from
interfering with the employees' right to self-organization.

There is no question about this intendment of the law. There is, however, in the
present case, no violation of such a guarantee to the employee. Supervisors are
not prohibited from forming their own union. What the law prohibits is their
membership in a labor organization of rank-and-file employees (Art. 245, Labor
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Code) or their joining a national federation of rank-and-file employees that

includes the very local union which they are not allowed to directly join.

Republic Act 9481, section 8 amends Article 245 of the Labor Code.

SEC. 8. Article 245 of the Labor Code is hereby amended to read as follows:

"ART. 245. Ineligibility of Managerial Employees to Join any Labor Organization;

Right of Supervisory Employees. - Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be eligible
for membership in the collective bargaining unit of the rank-and-file employees
but may join, assist or form separate collective bargaining units and/or legitimate
labor organizations of their own. The rank and file union and the supervisors'
union operating within the same establishment may join the same federation or
national union."

3.2 Rank and File Employees (But cannot join supervisory union)

(nn) "Rank-and-File Employee" refers to an employee whose functions are neither

managerial nor supervisory in nature.

3.3 Security Guards

Philips Industrial Development vs. NLRC

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:

Art. 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:

Art. 245. Right of employees in the public service. — 10

xxx xxx xxx

By virtue of such repeal and substitution, security guards became eligible for
membership in any labor organization. 11
Labor Law II Reviewer
TSU School of Law

3.4 Alien employees with valid working permits

DOLE DO No. 9-97, Rule II, Section 2:

Section 2.Who may join labor organizations.-All persons employed in

commercial, industrial and agricultural enterprises, including employees of
government-owned or controlled corporations without original charters
established under the Corporation Code, as well as employees of
religious, charitable, medical or educational institutions whether operating
for profit or not, shall have the right to self-organization and to form, join or
assist labor organizations for purposes of collective bargaining; provided,
however, that supervisory employeesshall not be eligible for membership
in a labor organization of the rank-and-file employees but may form, join or
assist separate labor organizations of their own.Managerial employees
shall not be eligible to form, join or assist any labor organization for
purposes of collective bargaining.Alien employees withvalidworking
permits issued by the Department may exercise the right to self-
organization and join or assist labor organizations for purposes of
collective bargaining if they are nationals of a country which grants the
same or similar rights to Filipino workers, as certified by the Department of
Foreign Affairs.

For the purpose of this Section, any employee, whether employed for a definite
period or not, shall, beginning on the first day of his service, be eligible for
membership in any labor organization.

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