93. Golden Farms vs.
Secretary of Labor Held:
Facts:
Petitioner Golden Farms, Inc., is a corporation engaged in
the production and marketing of bananas for export. On February 27,
1992, private respondent Progressive Federation of Labor (PFL) filed
a petition before the Med-Arbiter praying for the holding of a
certification election among the monthly paid office and technical
rank-and-file employees of petitioner Golden Farms.
Petitioner moved to dismiss the petition on three (3)
grounds. First, respondent PFL failed to show that it was organized
as a chapter within petitioner’s establishment. Second, there was
already an existing collective bargaining agreement between the
rank-and- file employees represented by the National Federation of
Labor (NFL) and petitioner. And third, the employees represented by
PFL had allegedly been disqualified by this Court from bargaining
with management in Golden Farms, Inc. vs. Honorable Director
Pura Ferrer-Calleja.
Respondent PFL opposed petitioner’s Motion to Dismiss. It
countered that the monthly paid office and technical employees
should be allowed to form a separate bargaining unit because they
were expressly excluded from coverage in the Collective Bargaining
Agreement (CBA) between petitioner and NFL. It also contended
that the case invoked by petitioner was inapplicable to the present
case.
Med-Arbiter: granted the petition and ordered that a certification
election be conducted.
Secretary of labor: denied appeal. Motion for reconsideration denied
Issue: Whether or not the private respondent is allowed to form a
separate bargaining unit
Yes. The monthly paid office and technical rank-and-file
employees of petitioner Golden Farms enjoy the constitutional right
to self-organization and collective bargaining. A “bargaining unit”
has been 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 the best suited to serve the
reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.
In the case at bench, the evidence established that the
monthly paid rank-and-file employees of petitioner primarily
perform administrative or clerical work. In contradistinction, the
petitioner’s daily paid rank-and-file employees mainly work in the
cultivation of bananas in the fields. It is crystal clear the monthly
paid rank-and-file employees of petitioner have very little in
common with its daily paid rank-and-file employees in terms of
duties and obligations, working conditions, salary rates, and skills.
To be sure, the said monthly paid rank-and-file employees have even
been excluded from the bargaining unit of the daily paid rank-and-
file employees. This dissimilarity of interests warrants the formation
of a separate and distinct bargaining unit for the monthly paid rank-
and-file employees of the petitioner. To rule otherwise would deny
this distinct class of employees the right to self-organization for
purposes of collective bargaining. Without the shield of an
organization, it will also expose them to the exploitations of
management.
The Court’s decision in Golden Farms, Inc. vs. Honorable
Pura Ferrer-Calleja, op. cit., does not pose any obstacle in holding a
certification election among petitioner’s monthly paid rank-and-file
employees. The issue brought to fore in that case was totally
different, i.e., whether or not petitioner’s confidential employees,
considering the nature of their work, should be included in the
bargaining unit of the daily paid rank-and-file employees. In the case
at bench, the monthly paid rank-and-file employees of petitioner are
being separated as a bargaining unit from its daily paid rank-and-file
employees, on the ground that they have different interest to protect.
The principle of res judicata is, therefore, inapplicable.
94. Philtranco Services Enterprises vs. BLR
Facts:
Petitioner Philtranco Service Enterprises, Inc. is a land
transportation company engaged in the business of carrying
passengers and freight. The company employees included field
workers consisting of drivers, conductors, coach drivers, coach
stewards and mechanics and office employees like clerks, cashiers,
programmers, telephone operators, etc.
On February 15, 1988, the Kapisanan ng mga Kawani,
Assistant, Manggagawa at Konpidensyal sa Philtranco (KASAMA
KO), a registered labor organization filed a petition for certification
election with the Department of Labor and Employment.
On February 24, 1988, the National Mines and Allied
Workers Union (NAMAWU-MIF) filed a motion for intervention
alleging that it is the bargaining agent of the workers at Philtranco
and as such it has a substantial interest in the outcome of the petition.
Arbiter Paterno Adap: petition is dismissed. Individual members
of the herein petitioner eligible to join a labor organization, if any,
are hereby directed to be included/incorporated in the existing
bargaining unit.
Bureau of Labor relations: reversed
Issue: Whether or not the private respondents may form a separate
union
Held:
No. The Labor Code recognizes two (2) principal groups of
employees, namely, the managerial and the rank and file groups.
Thus, Art. 212 (k) of the Code provides: xxx xxx xxx “k)
‘Managerial employee’ is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions. All
employees not falling within this definition are considered rank and
file employees for purposes of this Book.” In implementation of the
aforequoted provision of the law, Section 11 of Rule II, Book V of
the Omnibus Rules implementing the Labor Code did away with
existing supervisors’ unions “classifying the members either as
managerial or rank and file employees depending on the work they
perform. If they discharge managerial functions, supervisors are
prohibited from forming or joining any labor organization. If they do
not perform managerial work, they may join the rank and file union
and if none exists, they may form one such rank and file
organization. This rule was emphasized in the case of Bulletin
Publishing Corp. v. Sanchez
It, therefore, follows that the members of the KASAMA KO
who are professional, technical, administrative and confidential
personnel of PHILTRANCO performing managerial functions are
not qualified to join, much less form a union. This rationalizes the
exclusion of managers and confidential employees exercising
managerial functions from the ambit of the collective bargaining
unit. As correctly observed by Med-Arbiter Adap: “x x x managerial
and confidential employees were expressly excluded within the
operational ambit of the bargaining unit for the simple reason that
under the law, managers are disqualified to be members of a labor
organization. On the other hand, confidential workers were not
included because either they were performing managerial functions
and/or their duties and responsibilities were considered or may be
categorized as part and parcel of management as the primary reason
for their exclusion in the bargaining unit. The other categorized
employees were likewise not included because parties have agreed
on the fact that the aforementioned group of workers are not
qualified to join a labor organization at the time the agreement was
executed and that they were classified as outside the parameter of the
bargaining unit.”
The Court is constrained to disallow the formation of another
union. There is no dispute that there exists a labor union in the
company, herein intervenor, the NAMAWU-MIF which is the
collective bargaining agent of the rank and file employees in
PHILTRANCO. x x x The Court sees no need for the formation of
another union in PHILTRANCO. The qualified members of the
KASAMA KO may join the NAMAWU-MIF if they want to be
union members, and to be consistent with the one union, one-
company policy of the Department of Labor and Employment, and
the laws it enforces. As held in the case of General Rubber and
Footwear Corp. v. Bureau of Labor Relations(155 SCRA 283
[1987]): “x x x It has been the policy of the Bureau to encourage the
formation of an employer unit ‘unless circumstances otherwise
require.’ The proliferation of unions in an employer unit is
discouraged as a matter of policy unless there are compelling reasons
which would deny a certain class of employees the right to self-
organization for purposes of collective bargaining. This case does
not fall squarely within the exception.” (Emphasis supplied). There
are no compelling reasons in this case such as a denial to the
KASAMA KO group of the right to join the certified bargaining unit
or substantial distinctions warranting the recognition of a separate
group of rank and file workers. Precisely, NAMAWU-MIF
intervened to make it clear it has no objections to qualified rank and
file workers joining its union.
The respondents state that this case is an exception to the
general rule considering that substantial differences exist between
the office employees or professional, technical, administrative and
confidential employees vis-a-vis the field workers or drivers,
conductors and mechanics of the petitioner. Against this contention,
the Court finds that the “substantial differences” in the terms and
conditions of employment between the private respondent’s
members and the rest of the company’s rank and file employees are
more imagined than real. The Court agrees with the petitioner that
the differences alleged are not substantial or significant enough to
merit the formation of another union, x x x There may be differences
as to the nature of their individual assignments but the distinctions
are not enough to warrant the formation of separate unions. The
private respondent has not even shown that a separate bargaining
unit would be beneficial to the employees concerned. Office
employees also belong to the rank and file. There is an existing
employer wide unit in the company represented by NAMAWU-MIF.
And as earlier stated, the fact that NAMAWU-MIF moved to
intervene in the petition for certification election filed by KASAMA
KO negates the allegation that “substantial differences” exist
between the employees concerned. The Court finds a commonality
of interest among them. There are no compelling reasons for the
formation of another union.
95. SMC Supervisors vs. Laguesma
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.
 On January 18, 1991, 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.
On July 23, 1991, the public respondent, 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. Said Order reads in part:
“x x x Confidential employees, like managerial employees, are not
allowed to form, join or assist a labor union for purposes of collective
bargaining.
In this 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.
Issues:
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.
Held:
1) 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.
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.
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. “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.”
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 employee’s necessary access to
confidential labor relations information.
 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, “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. 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.”
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.
2) It is readily seen that the 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.
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. In light of these considerations, the
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. Any concerted activity held against the private respondent
for a labor grievance in one bargaining unit will, in all probability,
not create much impact on the operations of the private respondent.
The two other plants still in operation can well step up their
production and make up for the slack caused by the bargaining unit
engaged in the concerted activity. This situation will clearly frustrate
the provisions of the Labor Code and the mandate of the
Constitution.
96. Belyca Corporation vs. Ferrer Calleja
Facts:
On June 3, 1986, private respondent Associated Labor Union
(ALU)-TUCP, a legitimate labor organization duly registered with
the Ministry of Labor and Employment, filed with the Regional
Office No. 10, Ministry of Labor and Employment at Cagayan de
Oro City, a petition for direct certification as the sole and exclusive
bargaining agent of all the rank and file employees/workers of
Belyca Corporation (Livestock and Agro-Division), a duly
organized, registered and existing corporation engaged in the
business of poultry raising, piggery and planting of agricultural crops
such as corn, coffee and various vegetables, employing
approximately 205 rank and file employees/workers, the collective
bargaining unit sought in the petition, or in case of doubt of the
union’s majority representation, for the issuance of an order
authorizing the immediate holding of a certification election.
Although the case was scheduled for hearing at least three times, no
amicable settlement was reached by the parties. During the
scheduled hearing of July 31, 1986 they, however, agreed to submit
simultaneously their respective position papers on or before August
11, 1986.
Petitioner ALU-TUCP, private respondent herein, in its
petition and position paper alleged, among others, (1) that there is no
existing collective bargaining agreement between the respondent
employer, petitioner herein, and any other existing legitimate labor
unions; (2) that there had neither been a certification election
conducted in the proposed bargaining unit within the last twelve (12)
months prior to the filing of the petition nor a contending union
requesting for certification as the sole and exclusive bargaining
representative in the proposed bargaining unit; (3) that more than a
majority of respondent employer’s rank-and-file employees/workers
in the proposed bargaining unit or one hundred thirty-eight (138) as
of the date of the filing of the petition, have signed membership with
the ALU-TUCP and have expressed their written consent and
authorization to the filing of the petition; and etc.
The Labor Arbiter granted the certification election sought
for by petitioner union.
Petitioner contends that the bargaining unit must include all
the workers in its integrated business concerns ranging from piggery,
poultry, to supermarts and cinemas so as not to split an otherwise
single bargaining unit into fragmented bargaining units.
Issue: Whether or not the proposed bargaining unit is an appropriate
bargaining unit
Held:
Yes. The Labor Code does not specifically define what
constitutes an appropriate collective bargaining unit. Article 256 of
the Code provides:
“Art. 256. Exclusive bargaining representative.—The labor organization
designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be exclusive representative of the
employees in such unit for the purpose of collective bargaining. However, an
individual employee or group of employees shall have the right at any time to
present grievances to their employer.”
According to Rothenberg, a proper bargaining unit maybe
said to be a group of employees of a given employer, comprised of
all or less than all of the entire body of employees, which the
collective interests of all the employees, consistent with equity to the
employer, indicate to be best suited to serve reciprocal rights and
duties of the parties under the collective bargaining provisions of the
law
This Court has already taken cognizance of the crucial issue
of determining the proper constituency of a collective bargaining
unit. Among the factors considered in Democratic Labor Association
v. Cebu Stevedoring Co. Inc. are: “(1) will of employees (Glove
Doctrine); (2) afinity and unity of employee’s interest, such as
substantial similarity of work and duties or similarity of
compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and
probationary employees”.
Under the circumstance of that case, the Court stressed the
importance of the fourth factor and sustained the trial court’s
conclusion that two separate bargaining units should be formed in
dealing with respondent company, one consisting of regular and
permanent employees and another consisting of casual laborers or
stevedores. Otherwise stated, temporary employees should be treated
separately from permanent employees. But more importantly, this
Court laid down the test of proper grouping, which is community and
mutuality of interest.

In any event, whether importance is focused on the

employment status or the mutuality of interest of the employees
concerned “the basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their
collective bargaining rights.

Coming back to the case at bar, it is beyond question that the

employees of the livestock and agro division of petitioner
corporation perform work entirely different from those performed by
employees in the supermarts and cinema. Among others, the noted
difference are: their working conditions, hours of work, rates of pay,
including the categories of their positions and employment status. As
stated by petitioner corporation in its position paper, due to the
nature of the business in which its livestock-agro division is engaged
very few of its employees in the division are permanent, the
overwhelming majority of which are seasonal and casual and not
regular employees. Definitely, they have very little in common with
the employees of the supermarts and cinemas. To lump all the
employees of petitioner in its integrated business concerns cannot
result in an efficacious bargaining unit comprised of constituents
enjoying a community or mutuality of interest. Undeniably, the rank
and file employees of the livestock agro division fully constitute a
bargaining unit that satisfies both requirements of classification
according to employment status and of the substantial similarity of
work and duties which will ultimately assure its members the
exercise of their collective bargaining rights.