[79] SAN MIGUEL CORPORATION v. LAGUESMA
GR No. 100485; Sep 21, 1994; Puno, J.
TOPIC: Determination of Appropriate Bargaining Unit > Factors in Unit Determination
SUMMARY: Union filed for a petition for certification election among all the regular sales
personnel of Magnolia Dairy Products in the North Luzon Area. This was opposed by SMC and
questioned the appropriateness of the bargaining unit to be represented by the union. It claimed
that its bargaining history in its sales offices, plants, and warehouses is to have a separate
bargaining unit for each sales office. During the hearing of the petition, the substitute lawyer of
the petitioner withdrew its opposition and agreed to consider one bargaining unit in the
mentioned sales office. Upon the order of the MA certifying the union as the sole and exclusive
bargaining agent for all the regular sales personnel in the North Luzon area, the petitioner
appealed to the Sec. of Labor contending a mistake in the decision brought by its substitute
lawyer. In a petition for certiorari, the petitioner contends that the prior collective bargaining is
the most pervasive criterion in determining the appropriateness of the CBA. SC held that the
Union represents an appropriate bargaining unit.
DOCTRINE
A bargaining unit is a “group of employees of a given employer, comprised of all or less than all
of the entire body of 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.”
The fundamental factors in determining the appropriate collective bargaining unit are:
1. The will of the employees (Globe Doctrine);
2. Affinity and unity of the employees’ interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule);
3. Prior collective bargaining history; and
4. Similarity of employment status.
RELEVANT PROVISION(S)
FACTS
 North Luzon Magnolia Sales Labor Union (Union) filed with the DOLE a petition for
certification election among all the regular sales personnel of Magnolia Dairy Products
in the North Luzon Sales Area.
o San Miguel Corporation (SMC) opposed the petition and questioned the
appropriateness of the bargaining unit sought to be represented by the
Union.
o SMC claimed that its bargaining history in its sales offices, plants and
warehouses is to have a separate bargaining unit for each sales office.
 After the hearing, Atty. Batalla, the representative of SMC from Siguion Reyna law
office, withdrew the opposition and agreed to consider all the sales offices in northern
Luzon as one bargaining unit.
 The Union won the election held on Nov. 24, 1990.
o Then, Mediator-Arbiter Galang certified the Union as the sole and executive
bargaining agent for all the regular sales personnel in all the sales offices of
Magnolia Dairy Products in the North Luzon Sales Area.
 SMC appealed to the Secretary of Labor.
o It claimed that Atty. Batalla was only authorized to agree to the holding of
certification elections subject to the following conditions:
a. there would only be one general election; and
b. in this general election, the individual sales offices shall still
comprise separate bargaining units.
 Sec. of Labor denied the appeal. Hence, this petition for certiorari.
o SMC argues that its prior collective bargaining history is the most
persuasive criterion in determining the appropriateness of the collective
bargaining unit; and that Atty. Batalla was merely a substitute lawyer for
Atty. Ona who got stranded in Legaspi City, thus, SMC should not be bound
by the mistake the substitute committed.
ISSUE(S)/HELD
[RELEVANT] WON the Union represents an appropriate bargaining unit. – YES
 A bargaining unit is a “group of employees of a given employer, comprised of all or
less than all of the entire body of 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.”
 The fundamental factors in determining the appropriate collective bargaining unit are:
o The will of the employees (Globe Doctrine);
o Affinity and unity of the employees’ interest, such as substantial similarity of
work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule);
o Prior collective bargaining history; and
o Similarity of employment status.
 Court held that the existence of a prior collective bargaining history is neither
decisive nor conclusive in the determination of what constitutes an appropriate
bargaining unit.
o Indeed, the test of grouping is mutuality or commonality of interests. The
employees sought to be represented must have substantial mutual
interests in terms of employment and working conditions as evinced by the
type of work they perform.
 In this case, the Union sought to represent the sales personnel in the various
Magnolia sales offices in northern Luzon.
o There is similarity of employment status for only the regular sales personnel
in the north Luzon are covered.
o They have the same duties and responsibility and substantially similar
compensation and working conditions.
o As to the commonality of interst, the employees concerned accepted the
Union as their exclusive bargaining agent, thus, they have expressed their
desire to be one.
 Also, the meager number of sales personnel in each of the Magnolia sales offices in
northern Luzon militate against SMC’s contention.
o Even the bargaining unit sought to be represented by the Union only has 55
employees.
o Thus, it would not be for the best interest of the employees if they were
further fractionalized.
o The adage “there is strength in number” is the very rationale underlying the
formation of a labor union.
[2] WON SMC is bound by its lawyer’s act of agreeing to consider the sales personnel in
the north Luzon sales area as 1 bargaining unit. – YES
 The supervisors of Atty. Ona should have adequately briefed the substitute lawyer as
to the matters involved in the case and the specific limits of his authority.
o Unfortunately, it was not done in this case. The negligence of its lawyers
binds SMC.
DISPOSITIVE: WHEREFORE, premises considered, the challenged Resolution
and Order of public respondent are hereby AFFIRMED in toto, there being no
showing of grave abuse of discretion or lack of jurisdiction.