Labor law II: Coverage
Republic of the Philippines WHEREFORE, premises considered, judgment is hereby rendered declaring the
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 131235 November 16, 1999
UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS,
IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA
OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA,
HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND
LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA
ALAVA and LEONCIO CASAL, petitioners,
vs.
Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter
TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and
Employment (DOLE), EDUARDO J. MARIÑO JR., MA. MELVYN ALAMIS, NORMA
COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY
CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA,
NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents.
PANGANIBAN, J.:
There is a right way to do the right thing at the right time for the right reasons, 1 and in the present
case, in the right forum by the right parties. While grievances against union leaders constitute
legitimate complaints deserving appropriate redress, action thereon should be made in the proper
forum at the proper time and after observance of proper procedures. Similarly, the election of
union officers should be conducted in accordance with the provisions of the union's constitution
and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all
legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective
bargaining unit may take part in a duly convened certification election, only bona fide members of
the UST Faculty Union (USTFU) may participate and vote in a legally called election for union
officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law.
The Case
The Petition for Certiorari before us assails the August 15, 1997 Resolution 2 of Director Benedicto
Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which
affirmed the February 11, 1997 Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiters
Decision disposed as follows:
election of USTFU officers conducted on October 4, 1996 and its election results
as null and void ab initio.
Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and
desist from acting and performing the duties and functions of the legitimate
officers of [the] University of Santo Tomas Faculty Union (USTFU) pursuant to
[the] union's constitution and by-laws (CBL).
The Temporary Restraining Order (TRO) issued by this Office on December 11,
1996 in connection with the instant petition, is hereby made and declared
permanent. 3
Likewise challenged is the October 30, 1997 Resolution 4 of Director Bitonio, which denied
petitioners' Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized in the assailed Resolution as follows:
Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are
duly elected officers of the UST Faculty Union (USTFU). The union has a
subsisting five-year Collective Bargaining Agreement with its employer, the
University of Santo Tomas (UST). The CBA was registered with the Industrial
Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31
May 1998.
On 21 September 1996, appellee Collantes, in her capacity as Secretary General
of USTFU, posted a notice addressed to all USTFU members announcing a
general assembly to be held on 05 October 1996. Among others, the general
assembly was called to elect USTFU's next set of officers. Through the notice,
the members were also informed of the constitution of a Committee on Elections
(COMELEC) to oversee the elections. (Annex "B", petition)
On 01 October 1996, some of herein appellants filed a separate petition with the
Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of
the COMELEC. Docketed as Case No. NCR-OD-M-9610-001, the petition
alleged that the COMELEC was not constituted in accordance with USTFU's
constitution and by-laws (CBL) and that no rules had been issued to govern the
conduct of the 05 October 1996 election.
On 02 October 1996, the secretary general of UST, upon the request of the
various UST faculty club presidents (See paragraph VI, Respondents' Comment
and Motion to Dismiss), issued notices allowing all faculty members to hold a
convocation on 04 October 1996 (See Annex "C" Petition; Annexes "4" to "10",
Labor law II: Coverage
Appeal). Denominated as [a] general faculty assembly, the convocation was
supposed to discuss the "state of the unratified UST-USTFU CBA" and "status
and election of USTFU officers" (Annex "11", Appeal)
On 04 October 1996, the med-arbiter in Case No. NCR-OD-M-9610-001 issued a
temporary restraining order against herein appellees enjoining them from
conducting the election scheduled on 05 October 1996.
Also on 04 October 1996, and as earlier announced by the UST secretary
general, the general faculty assembly was held as scheduled. The general
assembly was attended by members of the USTFU and, as admitted by the
appellants, also by "non-USTFU members [who] are members in good standing
of the UST Academic Community Collective Bargaining Unit" (See paragraph XI,
Respondents' Comment and Motion to Dismiss). On this occasion, appellants
were elected as USTFU's new set of officers by acclamation and clapping of
hands (See paragraphs 40 to 50, Annex "12", Appeal).
The election of the appellants came about upon a motion of one Atty. Lopez,
admittedly not a member of USTFU, that the USTFU CBL and "the rules of the
election be suspended and that the election be held [on] that day" (See —
paragraph 39, Idem.)
On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs
and the nullification of the results of the 04 October 1996 election. Appellees
alleged that the holding of the same violated the temporary restraining order
issued in Case No. NCR-OD-M-9610-001. Accusing appellants of usurpation,
appellees characterized the election as spurious for being violative of USTFU's
CBL, specifically because the general assembly resulting in the election of
appellants was not called by the Board of Officers of the USTFU; there was no
compliance with the ten-day notice rule required by Section 1, Article VIII of the
CBL; the supposed elections were conducted without a COMELEC being
constituted by the Board of Officers in accordance with Section 1, Article IX of the
CBL; the elections were not by secret balloting as required by Section 1, Article V
and Section 6, Article IX of the CBL, and, the general assembly was convened by
faculty members some of whom were not members of USTFU, so much so that
non-USTFU members were allowed to vote in violation of Section 1, Article V of
the CBL.
On 24 October 1996, appellees filed another urgent ex-parte motion for a
temporary restraining order, this time alleging that appellants had served the
former a notice to vacate the union office. For their part, appellants moved to
dismiss the original petition and the subsequent motion on jurisdictional grounds.
Both the petition and the motion were captioned to be for "Prohibition, Injunction
with Prayer for Preliminary Injunction and Temporary Restraining Order."
According to the appellants, the med-arbiter has no jurisdiction over petitions for
prohibition, "including the ancillary remedies of restraining order and/or
preliminary injunction, which are merely incidental to the main petition for
PROHIBITION" (Paragraph XVIII3, Respondents' Comment and Motion to
Dismiss). Appellants also averred that they now constituted the new set of union
officers having been elected in accordance with law after the term of office of
appellees had expired. They further maintained that appellees' scheduling of the
5 October 1996 elections was illegal because no rules and regulations governing
the elections were promulgated as required by USTFU's CBL and that one of the
members of the COMELEC was not a registered member of USTFU. Appellants
likewise noted that the elections called by the appellees should have been
postponed to allow the promulgation of rules and regulations and to "insure a
free, clean, honest and orderly elections and to afford at the same time the
greater majority of the general membership to participate" (See paragraph V,
Idem). Finally, appellants contended that the holding of the general faculty
assembly on 04 October 1996 was under the control of the Council of
College/Faculty Club Presidents in cooperation with the USTFU Reformist
Alliance and that they received the Temporary Restraining Order issued in Case
No. NCR-OD-M-9610-001 only on 07 October 1996 and were not aware of the
same on 04 October 1996.
On 03 December 1996, appellants and UST allegedly entered into another CBA
covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants'
Rejoinder to the Reply and Opposition).
Consequently, appellees again moved for the issuance of a temporary restraining
order to prevent appellants from making further representations that [they] had
entered into a new agreement with UST. Appellees also reiterated their earlier
stand that appellants were usurping the former's duties and functions and should
be stopped from continuing such acts.
On 11 December 1996, over appellants' insistence that the issue of jurisdiction
should first be resolved, the med-arbiter issued a temporary restraining order
directing the respondents to cease and desist from performing any and all acts
pertaining to the duties and functions of the officers and directors of USTFU.
In the meantime, appellants claimed that the new CBA was purportedly ratified
by an overwhelming majority of UST's academic community on 12 December
1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the
dismissal of what it denominated as appellees' petition for prohibition on the
ground that this had become moot and academic. 5
Petitioners appealed the med-arbiter's Decision to the labor secretary, 6 who transmitted the
records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was
authorized to resolve appeals of intra-union cases, consistent with the last paragraph of Article
241 of the Labor Code. 7
The Assailed Ruling
Labor law II: Coverage
Agreeing with the med-arbiter that the USTFU officers' purported election held on October 4, 1994
was void for having been conducted in violation of the union's Constitution and Bylaws (CBL),
Public Respondent Bitonio rejected petitioners' contention that it was a legitimate exercise of their
right to self-organization. He ruled that the CBL, which constituted the covenant between the union
and its members, could not be suspended during the October 4, 1996 general assembly of all
faculty members, since that assembly had not been convened or authorized by the USTFU.
Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the
recognition of the newly "elected" set of officers by UST or by the alleged ratification of the new
CBA by the general membership of the USTFU. Ruled Respondent Bitonio:
This submission is flawed. The issue at hand is not collective bargaining
representation but union leadership, a matter that should concern only the
members of USTFU. As pointed out by the appellees, the privilege of determining
who the union officers will be belongs exclusively to the members of the union.
Said privilege is exercised in an election proceeding in accordance with the
union's CBL and applicable law.
To accept appellants' claim to legitimacy on the foregoing grounds is to invest in
appellants the position, duties, responsibilities, rights and privileges of USTFU
officers without the benefit of a lawful electoral exercise as defined in USTFU's
CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws
prohibit the employer from interfering with the employees in the latter' exercise of
their right to self-organization. To allow appellants to become USTFU officers on
the strength of management's recognition of them is to concede to the employer
the power of determining who should be USTFU's leaders. This is a clear case of
interference in the exercise by USTFU members of their right to self-
organization. 8
Hence, this Petition. 9
The Issues
The main issue in this case is whether the public respondent committed grave abuse of discretion
in refusing to recognize the officers "elected" during the October 4, 1996 general assembly.
Specifically, petitioners in their Memorandum urge the Court to resolve the following questions: 10
(1) Whether the Collective Bargaining Unit of all the faculty members in that
General Faculty Assembly had the right in that General Faculty Assembly to
suspend the provisions of the Constitution and By-Laws of the USTFU regarding
the elections of officers of the union[.]
(2) Whether the suspension of the provisions of the Constitution and By-Laws of
the USTFU in that General Faculty Assembly is valid pursuant to the
constitutional right of the Collective Bargaining Unit to engage in "peaceful
concerted activities" for the purpose of ousting the corrupt regime of the private
respondents[.]
(3) Whether the overwhelming ratification of the Collective Bargaining Agreement
executed by the petitioners in behalf of the USTFU with the University of Santo
Tomas has rendered moot and academic the issue as to the validity of the
suspension of the Constitution and By-Laws and the elections of October 4, 1996
in the General Faculty Assembly[.]
The Court’s Ruling
The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely
abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of
the October 4, 1996 general assembly called by the UST administration.
First Issue:
Right to Self-Organization
and Union Membership
At the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma 11 has held
that challenges against rulings of the labor secretary and those acting on his behalf, like the
director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent
jurisdiction with this Court over petitions for certiorari. However, inasmuch as the memoranda in
the instant case have been filed prior to the promulgation and finality of our Decision in NFL, we
deem it proper to resolve the present controversy directly, instead of remanding it to the Court of
Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in the
present case seriatim.
Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor
Code. Employees have the right to form, join or assist labor organizations for the purpose of
collective bargaining or for their mutual aid and protection. 12 Whether employed for a definite
period or not, any employee shall be considered as such, beginning on his first day of service, for
purposes of membership in a labor union. 13
Corollary to this right is the prerogative not to join, affiliate with or assist a labor
union. 14 Therefore, to become a union member, an employee must, as a rule, not only signify the
intent to become one, but also take some positive steps to realize that intent. The procedure for
union membership is usually embodied in the union's constitution and bylaws. 15 An employee who
becomes a union member acquires the rights and the concomitant obligations that go with this
new status and becomes bound by the union's rules and regulations.
When a man joins a labor union (or almost any other democratically controlled
group), necessarily a portion of his individual freedom is surrendered for the
Labor law II: Coverage
benefit of all members. He accepts the will of the majority of the members in
order that he may derive the advantages to be gained from the concerted action
of all. Just as the enactments of the legislature bind all of us, to the constitution
and by-laws of the union (unless contrary to good morals or public policy, or
otherwise illegal), which are duly enacted through democratic processes, bind all
of the members. If a member of a union dislikes the provisions of the by-laws, he
may seek to have them amended or may withdraw from the union; otherwise, he
must abide by them. It is not the function of courts to decide the wisdom or
propriety of legitimate by-laws of a trade union.
On joining a labor union, the constitution and by-laws become a part of the
member's contract of membership under which he agrees to become bound by
the constitution and governing rules of the union so far as it is not inconsistent
with controlling principles of law. The constitution and by-laws of an
unincorporated trade union express the terms of a contract, which define the
privileges and rights secured to, and duties assumed by, those who have
become members. The agreement of a member on joining a union to abide by its
laws and comply with the will of the lawfully constituted majority does not require
a member to submit to the determination of the union any question involving his
personal rights. 16
Petitioners claim that the numerous anomalies allegedly committed by the private respondents
during the latter's incumbency impelled the October 4, 1996 election of the new set of USTFU
officers. They assert that such exercise was pursuant to their right to self-organization.
Petitioners' frustration over the performance of private respondents, as well as their fears of a
"fraudulent" election to be held under the latter's supervision, could not justify the method they
chose to impose their will on the union. Director Bitonio aptly elucidated: 17
The constitutional right to self-organization is better understood in the context of
ILO Convention No. 87 (Freedom of Association and Protection of Right to
Organize), to which the Philippines is signatory. Article 3 of the Convention
provides that workers' organizations shall have the right to draw up their
constitution and rules and to elect their representatives in full freedom, free from
any interference from public authorities. The freedom conferred by the provision
is expansive; the responsibility imposed on union members to respect the
constitution and rules they themselves draw up equally so. The point to be
stressed is that the union's CBL is the fundamental law that governs the
relationship between and among the members of the union. It is where the rights,
duties and obligations, powers, functions and authority of the officers as well as
the members are defined. It is the organic law that determines the validity of acts
done by any officer or member of the union. Without respect for the CBL, a union
as a democratic institution degenerates into nothing more than a group of
individuals governed by mob rule.
Union Election vs.
Certification Election
A union election is held pursuant to the union's constitution and bylaws, and the right to vote in it is
enjoyed only by union members. A union election should be distinguished from a certification
election, which is the process of determining, through secret ballot, the sole and exclusive
bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective
bargaining. 18 Specifically, the purpose of a certification election is to ascertain whether or not a
majority of the employees wish to be represented by a labor organization and, in the affirmative
case, by which particular labor organization. 19
In a certification election, all employees belonging to the appropriate bargaining unit can
vote. 20 Therefore, a union member who likewise belongs to the appropriate bargaining unit is
entitled to vote in said election. However, the reverse is not always true; an employee belonging to
the appropriate bargaining unit but who is not a member of the union cannot vote in the union
election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union
affairs and elections cannot be decided in a non-union activity.
In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot
properly be called a union election, because the procedure laid down in the USTFU's CBL for the
election of officers was not followed. It could not have been a certification election either, because
representation was not the issue, and the proper procedure for such election was not followed.
The participation of non-union members in the election aggravated its irregularity.
Second Issue:
USTFU's Constitution and
By Laws Violated
The importance of a union's constitution and bylaws cannot be overemphasized. They embody a
covenant between a union and its members and constitute the fundamental law governing the
members' rights and obligations. 21 As such, the union's constitution and bylaws should be upheld,
as long as they are not contrary to law, good morals or public policy.
We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996
election was tainted with irregularities because of the following reasons.
First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of
faculty clubs, as indicated in the memorandum sent to all faculty members by Fr. Rodel Aligan,
OP, the secretary general of the University of Santo Tomas. 22 It was not convened in accordance
with the provision on general membership meetings as found in the USTFU's CBL, which reads:
ARTICLE VIII-MEETINGS OF THE UNION
Labor law II: Coverage
Sec. 1. The Union shall hold regular general membership meetings at least once
every three (3) months. Notices of the meeting shall be sent out by the
Secretary-General at least ten (10) days prior to such meetings by posting in
conspicuous places, preferably inside Company premises, said notices. The
date, time and place for the meetings shall be determined by the Board of
Officers. 23
Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called
and participated in by management and non-union members. By no legal fiat was such assembly
transformed into a union activity by the participation of some union members.
Second, there was no commission on elections to oversee the election, as mandated by Sections
1 and 2 of Article IX of the USTFU's CBL, which provide:
ARTICLE IX - UNION ELECTION
Sec. 1. There shall be a Committee on Election (COMELEC) to
be created by the Board of Officers at least thirty (30) days
before any regular or special election. The functions of the
COMELEC include the following:
a) Adopt and promulgate rules and regulations that will ensure a
free, clean, honest and orderly election, whether regular or
special;
b) Pass upon qualifications of candidates;
c) Rule on any question or protest regarding the conduct of the
election subject to the procedure that may be promulgated by
the Board of Officers; and
d) Proclaim duly elected officers.
Sec. 2. The COMELEC shall be composed of a chairman and
two members all of whom shall be appointed by the Board of
Officers.
xxx xxx xxx 24
Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX
of the USTFU's CBL, as well as Article 241 (c) of the Labor Code.
The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director
Bitonio's finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations, 25 we
invalidated the local union elections held at the wrong date without prior notice to members and
conducted without regard for duly prescribed ground rules. We held that the proceedings were
rendered void by the lack of due process — undue haste, lack of adequate safeguards to ensure
integrity of the voting, and the absence of the notice of the dates of balloting.
Third Issue:
Suspension of USTFU's CBL
Petitioners contend that the October 4, 1996 assembly "suspended" the union's CBL. They aver
that the suspension and the election that followed were in accordance with their "constituent and
residual powers as members of the collective bargaining unit to choose their representatives for
purposes of collective bargaining." Again they cite the numerous anomalies allegedly committed
by the private respondents as USTFU officers. This argument does not persuade.
First, as has been discussed, the general faculty assembly was not the proper forum to conduct
the election of USTFU officers. Not all who attended the assembly were members of the union;
some, apparently, were even disqualified from becoming union members, since they represented
management. Thus, Director Bitonio correctly observed:
Further, appellants cannot be heard to say that the CBL was effectively
suspended during the 04 October 1996 general assembly. A union CBL is a
covenant between the union and its members and among members (Johnson
and Johnson Labor Union-FFW, et al. v. Director of Labor Relations, 170 SCRA
469). Where ILO Convention No. 87 speaks of a union's full freedom to draw up
its constitution and rules, it includes freedom from interference by persons who
are not members of the union. The democratic principle that governance is a
matter for the governed to decide upon applies to the labor movement which, by
law and constitutional mandate, must be assiduously insulated against intrusions
coming from both the employer and complete strangers if the "protection to labor
clause" of the constitution is to be guaranteed. By appellant's own evidence, the
general faculty assembly of 04 October 1996 was not a meeting of USTFU. It
was attended by members and non-members alike, and therefore was not a
forum appropriate for transacting union matters. The person who moved for the
suspension of USTFU's CBL was not a member of USTFU. Allowing a non-union
member to initiate the suspension of a union's CBL, and non-union members to
participate in a union election on the premise that the union's CBL had been
suspended in the meantime, is incompatible with the freedom of association and
protection of the right to organize.
If there are members of the so-called "academic community collective bargaining
unit" who are not USTFU members but who would nevertheless want to have a
hand in USTFU's affairs, the appropriate procedure would have been for them to
become members of USTFU first. The procedure for membership is very clearly
spelled out in Article IV of USTFU's CBL. Having become members, they could
then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang
Labor law II: Coverage
Tibay, 103 Phil. 669. Therein the Supreme Court held that "if a member of the
union dislikes the provisions of the by-laws he may seek to have them amended
or may withdraw from the union; otherwise he must abide by them." Under Article
XVII of USTFU's CBL, there is also a specific provision for constitutional
amendments. What is clear therefore is that USTFU's CBL provides for orderly
procedures and remedies which appellants could have easily availed
[themselves] of instead of resorting to an exercise of their so-called "residual
power". 26

Second, the grievances of the petitioners could have been brought up and resolved in accordance
with the procedure laid down by the union's CBL 27 and by the Labor Code. 28 They contend that
their sense of desperation and helplessness led to the October 4, 1996 election. However, we
cannot agree with the method they used to rectify years of inaction on their part and thereby ease
bottled-up frustrations, as such method was in total disregard of the USTFU's CBL and of due
process. The end never justifies the means.

We agree with the solicitor general's observation that "the act of suspending the constitution when
the questioned election was held is an implied admission that the election held on that date
[October 4, 1996] could not be considered valid under the existing USTFU constitution . . .." 29

The ratification of the new CBA executed between the petitioners and the University of Santo
Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of
the new CBA, not the issue of union leadership — a matter that should be decided only by union
members in the proper forum at the proper time and after observance of proper procedures.

Epilogue

In dismissing this Petition, we are not passing upon the merits of the mismanagement allegations
imputed by the petitioners to the private respondents; these are not at issue in the present case.
Petitioners can bring their grievances and resolve their differences with private respondents in
timely and appropriate proceedings. Courts will not tolerate the unfair treatment of union members
by their own leaders. When the latter abuse and violate the rights of the former, they shall be dealt
with accordingly in the proper forum after the observance of due process.

WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED.
Costs against petitioners.

SO ORDERED.
Labor law II: Coverage
In its motion petitioner TMPCLU outlined the antecedent events prior to the TMPCEWU's filing of
its Petition for Certification Election on 24 April 1997 thus -
SECOND DIVISION
G.R. No. 135806 August 8, 2002
TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION, petitioner,
vs.
TOYOTA MOTOR PHILIPPINES CORPORATION EMPLOYEES AND WORKERS UNION,
TOYOTA MOTOR PHILIPPINES CORPORATION, and THE SECRETARY OF LABOR AND
EMPLOYMENT, respondents.
BELLOSILLO, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court, as amended, seeking to set
aside the Resolution of 5 June 1998 and the Order of 10 August 1998 both issued by respondent
Secretary of Labor and Employment in OS-A-5-58-98 (NCR-OD-M-9704-0311) which affirmed the
decision of the Med-Arbiter dated 24 February 1998. The assailed decision dismissed both
the Petition for Certification Election filed by respondent Toyota Motor Philippines Corp.
Employees and Workers Union (TMPCEWU) and the Petition-in-Intervention filed by petitioner
Toyota Motor Philippines Corp. Labor Union (TMPCLU).1âwphi1.nêt
On 24 April 1997 respondent TMPCEWU filed a Petition for Certification Election before the Med-
Arbitration Unit of the DOLE-National Capital Region (DOLE-NCR) seeking to represent the rank-
and-file employees of the manufacturing division from Levels 1 to 4 of Toyota Motor Philippines
Corp. (TMPC).
On 13 May 1997, while the case was pending hearing, petitioner TMPCLU claiming to be the
legitimate labor organization, filed a Motion to Intervene with Opposition to the Certification
Election praying that it be allowed to intervene and, thereafter, the petition by TMPCEWU be
denied for lack of merit. It claimed that the petition was premature due to an earlier resolution by
the Secretary of Labor ordering the conduct of a certification election among the rank-and-file
employees of TMPC represented by petitioner which was the subject of certiorari proceedings
before the Supreme Court and still awaiting final resolution at the time; and, that the collective
bargaining unit which respondent TMPCEWU sought to represent violated the "single or employer"
unit policy since it excluded the rank-and-file employees in the other divisions and departments in
respondent TMPC.1
1. On 26 November 1992 it (TMPCLU) filed a petition for certification election before Med-
Arbiter Paterno D. Adap, docketed as NCR-OD-M-9211-053;
2. On 8 March 1993 Med-Arbiter Adap dismissed TMPCLU's petition on the ground that
the labor organization's membership was composed of supervisory and rank-and-file
employees in violation of Art. 245 of the Labor Code, and that at the time of the filing of its
petition, TMCPLU had not even acquired legal personality yet;
3. On appeal, the Secretary of Labor, in a Resolution dated 9 November 1993 signed by
Undersecretary Bienvenido E. Laguesma, set aside the Med-Arbiter's Order and directed
the holding of a certification election among the regular rank-and-file employees of TMPC.
In setting aside the assailed order, the Office of the Secretary argued that:
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was
already a legitimate labor organization at the time of the filing of the petition on
26 November 1992. Records show that on 24 November 1992 or two (2) days
before the filing of the said petition, it was issued a certificate of registration.
4. Acting on TMPC's motion for reconsideration the Secretary of Labor set aside his
earlier resolution and ordered the remand of the case to the Med-Arbiter concluding that
the issues raised by TMPC both on appeal and its motion for reconsideration were factual
issues requiring further hearing and production of evidence;
5. Pursuant to the order above-mentioned, the Med-Arbiter on 28 September 1994
dismissed TMPCLU's petition for certification election for failure of petitioner to acquire
legal personality at the time of the filing of the said petition;
6. The motion for reconsideration filed by TMPCLU before the Secretary of Labor, which
was treated as an appeal from the order of the Med-Arbiter dated 28 September 1994,
was granted and the said order was set aside. In lieu thereof, a new order was issued
giving due course to the petition and directing the conduct of a certification election
among the rank-and-file employees of TMPC;
7. The Secretary of Labor, in his order dated 14 July 1995, denied for lack of merit the
motion for reconsideration filed by TMPC;
8. On 20 April 1996 the Secretary of Labor issued a new resolution directing the conduct
of a certification election among the rank-and-file employees of TMPC; and
9. TMPC lodged a special civil action for certiorari before the Supreme Court assailing the
20 April 1996 Resolution of the Secretary of Labor; and on 19 February 1997, the
Supreme Court2 set aside the assailed Resolution of the Secretary of Labor and
Labor law II: Coverage
reinstated the Order of the Med-Arbiter dated 28 September 1994. In its decision, the
Supreme Court ruled that since TMPCLU's membership list contained the names of at
least twenty-seven (27) supervisory employees in Level Five positions, "the union could
not, prior to purging itself of its supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot possess the requisite personality to
file a petition for certification election."
At the time respondent TMPCEWU filed its Petition for Certification Election on 24 April 1997 the
decision of the Supreme Court had not ripened into a final and executory judgment. Thus
petitioner invoked as among the grounds for opposition thereto in its Motion to Intervene with
Opposition to the Petition for Certification Election that the "pending proceeding before the
Supreme Court may be said to be a pre-judicial question which should be resolved first before the
instant petition can prosper."3
TMPC also filed a similar comment on 9 June 1997. Hence, on 2 July 1997, the Med-Arbiter
ordered the provisional dismissal of TMPCEWU's Petition for Certification Election pending a final
ruling by the Supreme Court on the Petition for Certification Election.
On 3 June 1997 the decision of the Supreme Court dated 19 February 1997 became final and
executory.
In view of respondent TMPCEWU's revival of its Petition for Certification Election, petitioner also
filed on 30 October 1997 its Petition-in-Intervention4 alleging that (a) it was representing only the
rank-and-file employees; (b) it enjoys the support of the regular rank-and-file workers at large in
TMPC, an unorganized establishment, and not only among the rank-and-file employees in the
manufacturing division thereof; (c) while respondent TMPCEWU professed itself as a legitimate
labor organization, there was serious doubt on such claim inasmuch as there was a pending
petition for the cancellation of its certification of registration on the ground of fraud; (d) respondent
TMPCEWU's representation of the rank-and-file employees, Levels 1 to 4, within the
manufacturing division only to the exclusion of those in the other departments and divisions
violated the "single or employer" unit policy; and, (e) the establishment of the proposed bargaining
unit in the manufacturing division composed of employees from Levels 1 to 4, should respondent's
petition be allowed, would induce the proliferation of unions in a single employer.5
On 24 February 1998 the Med-Arbiter rendered a decision dismissing for lack of merit
TMPCEWU's Petition for Certification Election, since it failed to include all rank-and-file employees
from Levels 1 to 4 in other departments of TMPC in violation of the "one-union in one-company"
policy and likewise dismissing TMPCLU's Petition-in-Intervention for lack of legal
personality.6 Anent the issue on whether TMPCLU has the legal personality to file the Petition-in-
Intervention, the Med-Arbiter explained thus -
The uncontroverted fact in this case is that at the time intervenor TMPCLU filed its
application for registration and subsequently thereafter was issued a certificate of
registration on November 24, 1992 (Annex "A," Intervenor's petition-in-intervention), its
union membership is (sic) composed of supervisory and rank-and-file employees.
From this we could infer that the registration certificate issued by the Department of Labor
and Employment is void ab initio because at the time of the issuance the constitution of
intervenor union TMPCLU is (sic) a mixture of supervisory and rank-and-file employees
as per finding of fact of Med-Arbiter Paterno Adap in his Order dated March 8, 1993
(Annex "A," respondent's Answer to Petition-in-Intervention).
On 14 March 1998, dissatisfied with the unfavorable decision, petitioner appealed to the Secretary
of Labor contending that contrary to the finding of the Med-Arbiter it had the legal personality to
intervene in the certification election proceedings as shown by its Certificate of Registration No.
NCR-UR-11-996-92.
In a Resolution dated 5 June 1998, the Secretary of Labor justified his affirmance of the Med-
Arbiter's decision in this wise -7
On the first ground raised on appeal, it is true that the employer is a mere by-stander
during the conduct of a certification election. Prior to the election, however, the employer
is not precluded from ascertaining the legitimacy of the union in order that it can be
assured that the union it will be dealing with is a duly registered labor organization which
legally represents the bargaining unit sought to be represented. There is therefore no
error in allowing the employer to question the status of appellant as in the case at bar.
On the second issue, it had earlier been finally ruled by the Supreme Court (G.R. No
121084) involving herein employer and appellant that since the bargaining unit of the
rank-in-file which TMPCLU is seeking to represent is a mixture of supervisory employees
which is prohibited under Article 245 of the Labor Code, as amended, the union prior to
purging itself of supervisory employees-members, had not attained the status of a
legitimate labor organization. Appellant now simply asserts that it has purged its
membership of supervisory employees and therefore is now a legitimate labor
organization of the rank-and-file employees. Appellant has not however shown that it
registered anew because admittedly some of its officers are supervisory employees. The
need to register anew is necessary and the purging by itself of its officers who are holding
supervisory position is imperative. One of the requirements for registration is the
submission of the list of officers. Under the circumstances obtaining, appellant has not as
yet attained the status of a legitimate labor organization. It has therefore no legal authority
to oppose the instant petition.
On 10 August 1998 the Secretary issued an Order denying petitioner's motion for reconsideration;
hence, petitioner now comes to us assailing the aforementioned Resolution and Order of the
Secretary of Labor arguing that -
First. At the time it filed its Petition-in-Intervention on 30 October 1997 it was clothed with legal
personality as a bona fide labor union. Petitioner contended that when it filed the Motion to
Intervene with Opposition to the Petition for Certification Election filed by TMPCEWU and
its Petition-in-Intervention, it did have a Certificate of Registration No. NCR-UR-1199692 which
was based on its compliance with the requisites for union registration. Hence, it had the legal
personality when it filed the Petition-in-Intervention and had all the rights as well as obligations of
Labor law II: Coverage
a legitimate labor organization. There was therefore no necessity for petitioner to register anew
when it was already a registered labor organization.
Second. The Med-Arbiter had no authority to declare that petitioner's certificate of registration
was void ab initio in a certification election proceeding; neither was the representation proceedings
before the Med-Arbiter the appropriate remedy to ventilate such issue.
To buttress its stance, petitioner drew attention to the fact that the Implementing Rules of the
Labor Code of the Philippines, particularly Book V, Rule 1, Sec. 1 (kk) thereof, and the Med-
Arbiter's authority were limited to hearing, conciliating, mediating and deciding representation
cases, internal union and intra-union disputes. Considering that the case before the Med-Arbiter
was a Petition for Certification Election by respondent TMPCEWU, the only task of the Med-Arbiter
was to determine the employees' choice of their bargaining representative, and nothing more.
Third. The Supreme Court in Toyota Motor Philippines v. Toyota Motor Corporation Philippines
Labor Union and Secretary of Labor,8 limited the finding of petitioner's lack of personality only to
the time when it filed its Petition for Certification Election.
In this regard, petitioner decries the decision of the Secretary of Labor affirming that of the Med-
Arbiter on the basis of the ruling in the aforecited case. It must be stressed, according to
petitioner, that contrary to the interpretation given by the Med-Arbiter as affirmed by the Secretary
of Labor, the Supreme Court's ruling that it did not have legal personality was limited to the time
when it filed its Petition for Certification Election on 26 November 1992. Neither did the Supreme
Court, in that case, rule on the validity of the certificate of registration.
More importantly, according to petitioner, it was erroneous for the Secretary to assume that
inasmuch as petitioner failed to purge itself of its supervisory employee-members when it filed its
previous Petition for Certification Election on 26 November 1992, it could not have possessed the
appropriate legal personality when it filed its Petition-in-Intervention on 30 October 1997. The truth
of the matter is that with the purging completed, absent any finding of the Supreme Court or any
other court or tribunal declaring the invalidity of the certificate of registration, petitioner possessed
the legal personality when it filed its Petition-in-Intervention.
This Court is called upon to resolve the issue of whether petitioner had legal personality on 30
October 1997 when it filed its Petition-in-Intervention. Corollary thereto, should petitioner register
anew despite its alleged purging of the supervisory employee-members as directed by this Court
in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union 9 and
the issuance in its favor of a certificate of registration after it was found to have violated Art. 245 of
the Labor Code?
To find solution to the question in the instant case, we need only refer to the earlier case of Toyota
Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the
Secretary of Labor and Employment,10 which sprang from a Petition for Certification Election filed
by TMPCLU among the rank-and-file employees of TMPC. On 8 March 1993, however, its petition
was dismissed by the Med-Arbiter for the reason that the labor organization's membership was
composed of supervisory and rank-and-file employee-members. On appeal, the Secretary of
Labor remanded the case to the Med-Arbiter upon his finding that factual issues remained
unresolved. Pursuant to the order of the Secretary of Labor, the Med-Arbiter, in his decision dated
28 September 1994, dismissed TMPCLU's Petition for Certification Election on the basis of the
following factual findings:
(T)he (in)controvertible fact is that petitioner could not have been issued its Certificate of
Registration on November 24, 1992 when it applied for registration only on November 23,
1992 as shown by the official receipt of payment of filing fee. As Enrique Nalus, Chief
LEO, this office, would attest in his letter dated September 8, 1994 addressed to Mr.
Porfirio T. Reyes, Industrial Relations Officer of Respondent company, in response to a
query posed by the latter, "it is unlikely that an application for registration is approved on
the date that it is filed or the day thereafter as the processing course had to pass through
routing, screening, and assignment, evaluation, review and initialing, and
approval/disapproval procedure, among others, that a 30-day period is provided for under
the Labor Code for this purpose, let alone opposition thereto by interested parties which
must be also given due course."
Another evidence which petitioner presented is the "Union Registration 1992 Logbook of IRD" and
the entry date 25 November 1992 as allegedly the date of the release of its registration certificate.
On the other hand, respondent company presented a certified true copy of an entry on page 265
of the Union Registration Logbook showing the pertinent facts about petitioner but which did not
show that petitioner's registration was issued on or before 26 November 1992.
The Med-Arbiter also found that TMPCLU had not acquired legal personality for the reason that its
composition, being a mixture of supervisory and rank-and-file employees, was in direct violation of
Art. 245 of the Labor Code.11
Although there is a divergence of factual backdrops between Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation Labor Union and the Secretary of Labor and
Employment12 and the instant petition in the sense that in the former the filing of a Petition for
Certification Election by petitioner gave rise to the controversy while the present case arose from
the filing of a Petition-in-Intervention, the bottom-line issue in both cases nonetheless involves the
legitimacy of petitioner TMPCLU to file petitions.
We recall that in the first Toyota case, although there was no categorical pronouncement on the
validity of petitioner's certificate of registration considering that we deemed it entirely irrelevant in
the light of the finding that petitioner was not entirely a rank-and-file labor organization, we
sustained however in the same decision the entire factual findings of the Med-Arbiter when we
observed -
The foregoing discussion, therefore, renders entirely irrelevant the technical issue raised
as to whether or not respondent union was in possession of the status of a legitimate
labor organization at the time of filing, when, as petitioner vigorously claims, the former
was still at the stage of processing of its application for recognition as a legitimate labor
organization. The union's composition being in violation of the Labor Code's prohibition of
unions composed of supervisory and rank-and-file employees, it could not possess the
Labor law II: Coverage
requisite personality to file for recognition as a legitimate labor organization. In any case,
the factual issue, albeit ignored by the public respondent’s assailed Resolution, was
adequately threshed out in the Med-Arbiter’s September 28, 1994 Order (underscoring
supplied).

In effect therefore, we already impressed our stamp of approval on the factual findings of the Med-
Arbiter in his 28 September 1994 decision, i.e., that petitioner had no valid certificate of
registration and therefore no legal personality to file the Petition for Certification Election and in the
absence of any attempt on its part to rectify the legal infirmity, likewise the disputed Petition-in-
Intervention.

It is thus fatuous on petitioner's part to resurrect the issue of legitimacy in the instant case
notwithstanding our earlier ruling sustaining the factual findings of the Med-Arbiter.

We cannot also accede to petitioner's submission that the issuance of a certificate of registration
in its favor is an adequate and unassailable proof that it possesses the requisite legal personality
to file a Petition for Certification Election. Not necessarily. As we emphasized in Progressive
Development Corp. - Pizza Hut v. Laguesma,13 if a labor organization’s application for registration
is vitiated by falsification and serious irregularities, a labor organization should be denied
recognition as a legitimate labor organization. And if a certificate of registration has been issued,
the propriety of its registration could be assailed directly through cancellation of registration
proceedings in accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging
its petition for the issuance of an order for certification election. We believe the procedural
requirements to impugn the registration by petitioner were more than adequately complied with as
shown in the 1997 case of Toyota Motor Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union.14

There is no reason to belabor the primordial importance of strictly complying with the registration
requirements of the Labor Code. As we have explained in a long line of cases, the activities of
labor organizations, associations and unions are impressed with public interest, hence, must be
protected.

WHEREFORE the petition is DISMISSED for lack of merit. Accordingly, the assailed Resolution
dated 5 June 1998 and Order dated 10 August 1998 of the Secretary of Labor and Employment
affirming the decision of the Med-Arbiter dated 24 February 1998 which dismissed both
the Petition for Certification Election filed by respondent Toyota Motor Philippines Corp.
Employees and Workers Union (TMPCEWU) and the Petition-in-Intervention of petitioner Toyota
Motor Philippines Corp. Labor Union (TMPCLU) are AFFIRMED.1âwphi1.nêt

SO ORDERED.
Labor law II: Coverage
Republic of the Philippines The Issues in this Case
SUPREME COURT
Manila Two questions are presented by the petition: (1) whether the route managers at Pepsi-Cola
Products Philippines, Inc. are managerial employees and (2) whether Art. 245, insofar as it
EN BANC prohibits managerial employees from forming, joining or assisting labor unions, violates Art. III, §8
of the Constitution.

In resolving these issues it would be useful to begin by defining who are "managerial employees"
G.R. No. 122226 March 25, 1998 and considering the types of "managerial employees."

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, Types of Managerial Employees

vs.
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES, The term "manager" generally refers to "anyone who is responsible for subordinates and other
INC. respondents. organizational resources."1 As a class, managers constitute three levels of a pyramid:

Top management

MENDOZA, J.: ————————

Petitioner is a union of supervisory employees. It appears that on March 20, 1995 the union filed a Middle
petition for certification election on behalf of the route managers at Pepsi-Cola Products
Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal, by the Management
Secretary of Labor and Employment, on the ground that the route managers are managerial
employees and, therefore, ineligible for union membership under the first sentence of Art. 245 of
——————————
the Labor Code, which provides:

Ineligibility of managerial employees to join any labor organization; right of supervisory First-Line
employees. — Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor Management
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own. (also called

Petitioner brought this suit challenging the validity of the order dated August 31, 1995, as Supervisor)
reiterated in the order dated September 22, 1995, of the Secretary of Labor and Employment. Its
petition was dismissed by the Third Division for lack of showing that respondent committed grave ====================
abuse of discretion. But petitioner filed a motion for reconsideration, pressing for resolution its
contention that the first sentence of Art. 245 of the Labor Code, so far as it declares managerial
employees to be ineligible to form, assist or join unions, contravenes Art. III, §8 of the Constitution Operatives
which provides:
or
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 Operating
abridged.
Employees
For this reason, the petition was referred to the Court en banc.
Labor law II: Coverage
FIRST-LINE MANAGERS — The lowest level in an organization at which individuals are
responsible for the work of others is called first-line or first-level management. First-line
managers direct operating employees only; they do not supervise other
managers. Examples of first-line managers are the "foreman" or production supervisor in
a manufacturing plant, the technical supervisor in a research department, and the clerical
supervisor in a large office. First-level managers are often called supervisors.
MIDDLE MANAGERS — The term middle management can refer to more than one level
in an organization. Middle managers direct the activities of other managers and
sometimes also those of operating employees. Middle managers' principal responsibilities
are to direct the activities that implement their organizations' policies and to balance the
demands of their superiors with the capacities of their subordinates. A plant manager in
an electronics firm is an example of a middle manager.
TOP MANAGERS — Composed of a comparatively small group of executives, top
management is responsible for the overall management of the organization. It establishes
operating policies and guides the organization's interactions with its environment. Typical
titles of top managers are "chief executive officer," "president," and "senior vice-
president." Actual titles vary from one organization to another and are not always a
reliable guide to membership in the highest management classification.2
As can be seen from this description, a distinction exists between those who have the authority to
devise, implement and control strategic and operational policies (top and middle managers) and
those whose task is simply to ensure that such policies are carried out by the rank-and-file
employees of an organization (first-level managers/supervisors). What distinguishes them from the
rank-and-file employees is that they act in the interest of the employer in supervising such rank-
and-file employees.
"Managerial employees" may therefore be said to fall into two distinct categories: the
"managers" per se, who compose the former group described above, and the "supervisors" who
form the latter group. Whether they belong to the first or the second category, managers, vis-a-
vis employers, are, likewise, employees.3
The first question is whether route managers are managerial employees or supervisors.
Previous Administrative Determinations of
the Question Whether Route Managers
are Managerial Employees
It appears that this question was the subject of two previous determinations by the Secretary of
Labor and Employment, in accordance with which this case was decided by the med-arbiter.
In Case No. OS-MA-10-318-91, entitled Worker's Alliance Trade Union (WATU) v. Pepsi-Cola
Products Philippines, Inc., decided on November 13, 1991, the Secretary of Labor found:
We examined carefully the pertinent job descriptions of the subject employees and other
documentary evidence on record vis-a-vis paragraph (m), Article 212 of the Labor Code,
as amended, and we find that only those employees occupying the position of route
manager and accounting manager are managerial employees. The rest i.e. quality control
manager, yard/transport manager and warehouse operations manager are supervisory
employees.
To qualify as managerial employee, there must be a clear showing of the exercise of
managerial attributes under paragraph (m), Article 212 of the Labor Code as amended.
Designations or titles of positions are not controlling. In the instant case, nothing on
record will support the claim that the quality control manager, yard/transport manager and
warehouse operations manager are vested with said attributes. The warehouse
operations manager, for example, merely assists the plant finance manager in planning,
organizing, directing and controlling all activities relative to development and
implementation of an effective management control information system at the sale offices.
The exercise of authority of the quality control manager, on the other hand, needs the
concurrence of the manufacturing manager.
As to the route managers and accounting manager, we are convinced that they are
managerial employees. Their job descriptions clearly reveal so.
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92. entitled In Re: Petition for
Direct Certification and/or Certification Election-Route Managers/Supervisory Employees of Pepsi-
Cola Products Phils. Inc., as follows:
The issue brought before us is not of first impression. At one time, we had the occasion to
rule upon the status of route manager in the same company vis a vis the issue as to
whether or not it is supervisory employee or a managerial employee. In the case
of Workers Alliance Trade Unions (WATU) vs. Pepsi Cola Products, Phils., Inc. (OS-MA-
A-10-318-91 ), 15 November 1991, we ruled that a route manager is a managerial
employee within the context of the definition of the law, and hence, ineligible to join, form
or assist a union. We have once more passed upon the logic of our Decision aforecited in
the light of the issues raised in the instant appeal, as well as the available documentary
evidence on hand, and have come to the view that there is no cogent reason to depart
from our earlier holding. Route Managers are, by the very nature of their functions and the
authority they wield over their subordinates, managerial employees. The prescription
found in Art. 245 of the Labor Code, as amended therefore, clearly applies to them.4
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations Commission,5 however,
petitioner argues that these previous administrative determinations do not have the effect of res
judicata in this case, because "labor relations proceedings" are "non-litigious and summary in
nature without regard to legal technicalities."6 Nasipit Lumber Co. involved a clearance to dismiss
an employee issued by the Department of Labor. The question was whether in a subsequent
proceeding for illegal dismissal, the clearance was res judicata. In holding it was not, this Court
made it clear that it was referring to labor relations proceedings of a non-adversary character,
thus:
Labor law II: Coverage
The requirement of a clearance to terminate employment was a creation of the The Court now finds that the job evaluation made by the Secretary of Labor is indeed supported
Department of labor to carry out the Labor Code provisions on security of tenure and by substantial evidence. The nature of the job of route managers is given in a four-page pamphlet,
termination of employment. The proceeding subsequent to the filing of an application for prepared by the company, called "Route Manager Position Description," the pertinent parts of
clearance to terminate employment was outlined in Book V, Rule XIV of the Rules and which read:
Regulations Implementing the Labor Code. The fact that said rule allowed a procedure for
the approval of the clearance with or without the opposition of the employee concerned A. BASIC PURPOSE
(Secs. 7 & 8), demonstrates the non-litigious and summary nature of the proceeding. The
clearance requirement was therefore necessary only as an expeditious shield against
A Manager achieves objectives through others.
arbitrary dismissal without the knowledge and supervision of the Department of Labor.
Hence, a duly approved clearance implied that the dismissal was legal or for cause (Sec.
2).7 As a Route Manager, your purpose is to meet the sales plan; and you
achieve this objective through the skillful MANAGEMENT OF YOUR
But the doctrine of res judicata certainly applies to adversary administrative proceedings. As early JOB AND THE MANAGEMENT OF YOUR PEOPLE.
as 1956, in Brillantes v. Castro,8 we sustained the dismissal of an action by a trial court on the
basis of a prior administrative determination of the same case by the Wage Administration These then are your functions as Pepsi-Cola Route Manager. Within
Service, applying the principle of res judicata. Recently, in Abad v. NLRC9 we applied the related these functions — managing your job and managing your people — you
doctrine of stare decisis in holding that the prior determination that certain jobs at the Atlantic Gulf are accountable to your District Manager for the execution and
and Pacific Co., were project employments was binding in another case involving another group of completion of various tasks and activities which will make it possible for
employees of the same company. Indeed, in Nasipit Lumber Co., this Court clarified toward the you to achieve your sales objectives.
end of its opinion that "the doctrine of res judicata applies . . . to judicial or quasi
judicial proceedings and not to the exercise of administrative powers."10 Now proceedings for B. PRINCIPAL ACCOUNTABILITIES
certification election, such as those involved in Case No. OS-M-A-10-318-91 and Case No. OS-A-
3-71-92, are quasi judicial in nature and, therefore, decisions rendered in such proceedings can 1.0 MANAGING YOUR JOB
attain finality.11
The Route Manager is accountable for the following:
Thus, we have in this case an expert's view that the employees concerned are managerial
employees within the purview of Art. 212 which provides:
1.1 SALES DEVELOPMENT
(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, lay off, recall, 1.1.1 Achieve the sales plan.
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise of 1.1.2 Achieve all distribution and new
such authority is not merely routinary or clerical in nature but requires the use of account objectives.
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book. 1.1.3 Develop new business
opportunities thru personal contacts
At the very least, the principle of finality of administrative determination compels respect for the with dealers.
finding of the Secretary of Labor that route managers are managerial employees as defined by law
in the absence of anything to show that such determination is without substantial evidence to 1.1.4 Inspect and ensure that all
support it. Nonetheless, the Court, concerned that employees who are otherwise supervisors may merchandizing [sic] objectives are
wittingly or unwittingly be classified as managerial personnel and thus denied the right of self- achieved in all outlets.
organization, has decided to review the record of this case.
1.1.5 maintain and improve
DOLE's Finding that Route Managers are productivity of all cooling equipment
Managerial Employees Supported by and kiosks.
Substantial Evidence in the Record
Labor law II: Coverage
1.1.6 Execute and control all
authorized promotions.
1.1.7 Develop and maintain dealer
goodwill.
1.1.8 Ensure all accounts comply with
company suggested retail pricing.
1.1.9 Study from time to time
individual route coverage and
productivity for possible adjustments
to maximize utilization of resources.
1.2 Administration
1.2.1 Ensure the proper loading of
route trucks before check-out and the
proper sorting of bottles before check-
in.
1.2.2 Ensure the upkeep of all route
sales reports and all other related
reports and forms required on an
accurate and timely basis.
1.2.3 Ensure proper implementation of
the various company policies and
procedures incl. but not limited to
shakedown; route shortage;
progressive discipline; sorting;
spoilages; credit/collection; accident;
attendance.
1.2.4 Ensure collection of receivables
and delinquent accounts.
2.0 MANAGING YOUR PEOPLE
The Route Manager is accountable for the following:
2.1 Route Sales Team Development
2.1.2 Conduct route rides to train,
evaluate and develop all assigned
route salesmen and helpers at least 3
days a week, to be supported by
required route ride documents/reports
& back check/spot check at least 2
days a week to be supported by
required documents/reports.
2.1.2 Conduct sales meetings and
morning huddles. Training should
focus on the enhancement of effective
sales and merchandizing [sic]
techniques of the salesmen and
helpers. Conduct group training at
least 1 hour each week on a
designated day and of specific topic.
2.2 Code of Conduct
2.2.1 Maintain the company's
reputation through strict adherence to
PCPPI's code of conduct and the
universal standards of unquestioned
business
ethics.12
Earlier in this opinion, reference was made to the distinction between managers per se (top
managers and middle managers) and supervisors (first-line managers). That distinction is evident
in the work of the route managers which sets them apart from supervisors in general. Unlike
supervisors who basically merely direct operating employees in line with set tasks assigned to
them, route managers are responsible for the success of the company's main line of business
through management of their respective sales teams. Such management necessarily involves the
planning, direction, operation and evaluation of their individual teams and areas which the work of
supervisors does not entail.
The route managers cannot thus possibly be classified as mere supervisors because their work
does not only involve, but goes far beyond, the simple direction or supervision of operating
employees to accomplish objectives set by those above them. They are not mere functionaries
with simple oversight functions but business administrators in their own right. An idea of the role of
route managers as managers per se can be gotten from a memo sent by the director of metro
sales operations of respondent company to one of the route managers. It reads:13
03 April 1995
To : CESAR T . REOLADA
Labor law II: Coverage
From : REGGIE M. SANTOS
Subj : SALARY INCREASE
Effective 01 April 1995, your basic monthly salary of P11,710 will be increased
to P12,881 or an increase of 10%. This represents the added managerial responsibilities
you will assume due to the recent restructuring and streamlining of Metro Sales
Operations brought about by the continuous losses for the last nine (9) months.
Let me remind you that for our operations to be profitable, we have to sustain the intensity
and momentum that your group and yourself have shown last March. You just have
to deliver the desired volume targets, better negotiated concessions, rationalized
sustaining deals, eliminate or reduced overdues, improved collections, more cash
accounts, controlled operating expenses, etc. Also, based on the agreed set targets, your
monthly performance will be closely monitored.
You have proven in the past that your capable of achieving your targets thru better
planning, managing your group as a fighting team, and thru aggressive selling. I am
looking forward to your success and I expect that you just have to exert your doubly best
in turning around our operations from a losing to a profitable one!
Happy Selling!!
The plasticized card given to route managers, quoted in the separate opinion of Justice Vitug,
although entitled "RM's Job Description," is only a summary of performance standards. It does not
show whether route managers are managers per se or supervisors. Obviously, these performance
standards have to be related to the specific tasks given to route managers in the four-page "Route
Manager Position Description," and, when this is done, the managerial nature of their jobs is fully
revealed. Indeed, if any, the card indicates the great latitude and discretion given to route
managers — from servicing and enhancing company goodwill to supervising and auditing
accounts, from trade (new business) development to the discipline, training and monitoring of
performance of their respective sales teams, and so forth, — if they are to fulfill the company's
expectations in the "key result areas."
Article 212(m) says that "supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment." Thus, their only
power is to recommend. Certainly, the route managers in this case more than merely recommend
effective management action. They perform operational, human resource, financial and marketing
functions for the company, all of which involve the laying down of operating policies for themselves
and their teams. For example, with respect to marketing, route managers, in accordance with
B.1.1.1 to B.1.1.9 of the Route Managers Job Description, are charged, among other things, with
expanding the dealership base of their respective sales areas, maintaining the goodwill of current
dealers, and distributing the company's various promotional items as they see fit. It is difficult to
see how supervisors can be given such responsibility when this involves not just the routine
supervision of operating employees but the protection and expansion of the company's
business vis-a-vis its competitors.
While route managers do not appear to have the power to hire and fire people (the evidence
shows that they only "recommended" or "endorsed" the taking of disciplinary action against certain
employees), this is because this
is a function
( of the Human Resources or Personnel Department of the company.14 And neither
should
S it be presumed that just because they are given set benchmarks to observe, they are ipso
factogsupervisors. Adequate control methods (as embodied in such concepts as "Management by
Objectives
d [MBO]" and "performance appraisals") which require a delineation of the functions and
responsibilities
. of managers by means of ready reference cards as here, have long been
recognized
) in management as effective tools for keeping businesses competitive.
ThisRbrings us to the second question, whether the first sentence of Art. 245 of the Labor Code,
.
prohibiting managerial employees from forming, assisting or joining any labor organization, is
M
constitutional in light of Art. III, §8 of the Constitution which provides:
.
The right of the people, including those employed in the public and private sectors, to
S form unions, associations, or societies for purposes not contrary to law shall not be
A abridged.
N
T
As already
O stated, whether they belong to the first category (managers per se) or the second
category
S (supervisors), managers are employees. Nonetheless, in the United States, as Justice
Puno's separate opinion notes, supervisors have no right to form unions. They are excluded from
the definition of the term "employee" in §2(3) of the Labor-Management Relations Act of 1947.15 In
the Philippines, the question whether managerial employees have a right of self-organization has
arisen with respect to first-level managers or supervisors, as shown by a review of the course of
labor legislation in this country.
Labor law II: Coverage
Right of Self-Organization of Managerial
Employees under Pre-Labor Code Laws
Before the promulgation of the Labor Code in 1974, the field of labor relations was governed by
the Industrial Peace Act (R.A. No. 875).
In accordance with the general definition above, this law defined "supervisor" as follows:
Sec. 2. . . .
(k) "Supervisor" means any person having authority in the interest of an employer, to hire,
transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other
employees, or responsibly to direct them, and to adjust their grievances, or effectively to
recommend such acts, if, in connection with the foregoing, the exercise of such authority
is not of a merely routinary or clerical nature but requires the use of independent
judgment.16
The right of supervisors to form their own organizations was affirmed:
Sec. 3. Employees' Right to Self-Organization. — Employees shall have the right to self-
organization and to form, join or assist labor organizations of their own choosing for the
purpose of collective bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective bargaining and other mutual
aid and protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but may form
separate organizations of their own.17
For its part, the Supreme Court upheld in several of its decisions the right of supervisors to
organize for purposes of labor relations.18
Although it had a definition of the term "supervisor," the Industrial Peace Act did not define the
term "manager." But, using the commonly-understood concept of "manager," as above stated, it is
apparent that the law used the term "supervisors" to refer to the sub-group of "managerial
employees" known as front-line managers. The other sub-group of "managerial employees,"
known as managers per se, was not covered.
However, in Caltex Filipino Managers and Supervisors Association v. Court of Industrial
Relations,19 the right of all managerial employees to self-organization was upheld as a general
proposition, thus:
It would be going too far to dismiss summarily the point raised by respondent Company
— that of the alleged identity of interest between the managerial staff and the employing
firm. That should ordinarily be the case, especially so where the dispute is between
management and the rank and file. It does not necessarily follow though that what binds
the managerial staff to the corporation forecloses the possibility of conflict between them.
There could be a real difference between what the welfare of such group requires and the
concessions the firm is willing to grant. Their needs might not be attended to then in the
absence of any organization of their own. Nor is this to indulge in empty theorizing. The
record of respondent Company, even the very case cited by it, is proof enough of their
uneasy and troubled relationship. Certainly the impression is difficult to erase that an alien
firm failed to manifest sympathy for the claims of its Filipino executives. To predicate
under such circumstances that agreement inevitably marks their relationship, ignoring that
discord would not be unusual, is to fly in the face of reality.
. . . The basic question is whether the managerial personnel can organize. What
respondent Company failed to take into account is that the right to self-organization is not
merely a statutory creation. It is fortified by our Constitution. All are free to exercise such
right unless their purpose is contrary to law. Certainly it would be to attach unorthodoxy
to, not to say an emasculation of, the concept of law if managers as such were precluded
from organizing. Having done so and having been duly registered, as did occur in this
case, their union is entitled to all the rights under Republic Act No. 875. Considering what
is denominated as unfair labor practice under Section 4 of such Act and the facts set forth
in our decision, there can be only one answer to the objection raised that no unfair labor
practice could be committed by respondent Company insofar as managerial personnel is
concerned. It is, as is quite obvious, in the negative.20
Actually, the case involved front-line managers or supervisors only, as the plantilla of employees,
quoted in the main opinion,21 clearly indicates:
CAFIMSA members holding the following Supervisory Payroll Position Title are
Recognized by the Company
Payroll Position Title
Assistant to Mgr. — National Acct. Sales
Jr. Sales Engineer
Retail Development Asst.
Staff Asst. — 0 Marketing
Sales Supervisor
Supervisory Assistant
Jr. Supervisory Assistant
Credit Assistant
Labor law II: Coverage
Lab. Supvr. — Pandacan
Jr. Sales Engineer B
Operations Assistant B
Field Engineer
Sr. Opers. Supvr. — MIA A/S
Purchasing Assistant
Jr. Construction Engineer
Sr. Sales Supervisor
Deport Supervisor A
Terminal Accountant B
Merchandiser
Dist. Sales Prom. Supvr.
Instr. — Merchandising
Asst. Dist. Accountant B
Sr. Opers. Supervisor
Jr. Sales Engineer A
Asst. Bulk Ter. Supt.
Sr. Opers. Supvr.
Credit Supervisor A
Asst. Stores Supvr. A
Ref. Supervisory Draftsman
Refinery Shift Supvr. B
Asst. Supvr. A — Operations (Refinery)
Refinery Shift Supvr. B
Asst. Lab. Supvr. A (Refinery)
St. Process Engineer B (Refinery)
Asst. Supvr. A — Maintenance (Refinery)
Asst. Supvr. B — Maintenance (Refinery)
Supervisory Accountant (Refinery)
Communications Supervisor (Refinery)
Finally, also deemed included are all other employees excluded from the rank and file
unions but not classified as managerial or otherwise excludable by law or applicable
judicial precedents.
Right of Self-Organization of Managerial
Employees under the Labor Code
Thus, the dictum in the Caltex case which allowed at least for the theoretical unionization of top
and middle managers by assimilating them with the supervisory group under the broad phrase
"managerial personnel," provided the lynchpin for later laws denying the right of self-organization
not only to top and middle management employees but to front line managers or supervisors as
well. Following the Caltex case, the Labor Code, promulgated in 1974 under martial law, dropped
the distinction between the first and second sub-groups of managerial employees. Instead of
treating the terms "supervisor" and "manager" separately, the law lumped them together and
called them "managerial employees," as follows:
Art. 212. Definitions . . . .
(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.22
The definition shows that it is actually a combination of the commonly understood definitions of
both groups of managerial employees, grammatically joined by the phrase "and/or."
Labor law II: Coverage
This general definition was perhaps legally necessary at that time for two reasons. First, the 1974
Code denied supervisors their right to self-organize as theretofore guaranteed to them by the
Industrial Peace Act. Second, it stood the dictum in the Caltex case on its head by prohibiting all
types of managers from forming unions. The explicit general prohibition was contained in the then
Art. 246 of the Labor Code.
The practical effect of this synthesis of legal concepts was made apparent in the Omnibus Rules
Implementing the Labor Code which the Department of Labor promulgated on January 19, 1975.
Book V, Rule II, §11 of the Rules provided:
Supervisory unions and unions of security guards to cease operation. — All existing
supervisory unions and unions of security guards shall, upon the effectivity of the Code,
cease to operate as such and their registration certificates shall be deemed automatically
canceled. However, existing collective agreements with such unions, the life of which
extends beyond the date of effectivity of the Code, shall be respected until their expiry
date insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file labor organization, and
if none exists, to form or assist in the forming of such rank and file organization. The
determination of who are managerial employees and who are not shall be the subject of
negotiation between representatives of the supervisory union and the employer. If no
agreement is reached between the parties, either or both of them may bring the issue to
the nearest Regional Office for determination.
The Department of Labor continued to use the term "supervisory unions" despite the demise of the
legal definition of "supervisor" apparently because these were the unions of front line managers
which were then allowed as a result of the statutory grant of the right of self-organization under the
Industrial Peace Act. Had the Department of Labor seen fit to similarly ban unions of top and
middle managers which may have been formed following the dictum in Caltex, it obviously would
have done so. Yet it did not, apparently because no such unions of top and middle managers
really then existed.
Real Intent of the 1986 Constitutional Commission
This was the law as it stood at the time the Constitutional Commission considered the draft of Art.
III, §8. Commissioner Lerum sought to amend the draft of what was later to become Art. III, §8 of
the present Constitution:
MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to insert between
the words "people" and "to" the following: WHETHER EMPLOYED BY THE STATE OR
PRIVATE ESTABLISHMENTS. In other words, the section will now read as follows: "The
right of the people WHETHER EMPLOYED BY THE STATE OR PRIVATE
ESTABLISHMENTS to form associations, unions, or societies for purposes not contrary
to law shall not be abridged."23
Explaining his proposed amendment, he stated:
MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is granted to all
persons whether or not they are employed in the government. Under that provision, we
allow unions in the government, in government-owned and controlled corporations and in
other industries in the private sector, such as the Philippine Government Employees'
Association, unions in the GSIS, the SSS, the DBP and other government-owned and
controlled corporations. Also, we have unions of supervisory employees and of security
guards. But what is tragic about this is that after the 1973 Constitution was approved and
in spite of an express recognition of the right to organize in P.D. No. 442, known as the
Labor Code, the right of government workers, supervisory employees and security guards
to form unions was abolished.
And we have been fighting against this abolition. In every tripartite conference attended
by the government, management and workers, we have always been insisting on the
return of these rights. However, both the government and employers opposed our
proposal, so nothing came out of this until this week when we approved a provision which
states:
Notwithstanding any provision of this article, the right to self-organization
shall not be denied to government employees.
We are afraid that without any corresponding provision covering the private sector, the
security guards, the supervisory employees or majority employees [sic] will still be
excluded, and that is the purpose of this amendment.
I will be very glad to accept any kind of wording as long as it will amount to absolute
recognition of private sector employees, without exception, to organize.
THE PRESIDENT. What does the Committee say?
FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by
Commissioner Rodrigo is well-taken. Perhaps, we can lengthen this a little bit more to
read: "The right of the people WHETHER UNEMPLOYED OR EMPLOYED BY STATE
OR PRIVATE ESTABLISHMENTS.
I want to avoid also the possibility of having this interpreted as applicable only to the
employed.
MR. DE LOS REYES. Will the proponent accept an amendment to the amendment,
Madam President?
MR. LERUM. Yes, as long as it will carry the idea that the right of the employees in the
private sector is recognized.24
Labor law II: Coverage
Lerum thus anchored his proposal on the fact that (1) government employees, supervisory
employees, and security guards, who had the right to organize under the Industrial Peace Act, had
been denied this right by the Labor Code, and (2) there was a need to reinstate the right of these
employees. In consonance with his objective to reinstate the right of government, security, and
supervisory employees to organize, Lerum then made his proposal:
MR. LERUM. Mr. Presiding Officer, after a consultation with several Members of this
Commission, my amendment will now read as follows: "The right of the people
INCLUDING THOSE EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS to form
associations, unions, or societies for purposes not contrary to law shall not be
abridged. In proposing that amendment I ask to make of record that I want the following
provisions of the Labor Code to be automatically abolished, which read:
Art. 245. Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employers shall not be eligible for membership in a labor organization.
Art. 246. Managerial employees are not eligible to join, assist, and form
any labor organization.
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say?
FR. BERNAS. The Committee accepts.
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted the
amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment, as amended, is
approved.25
The question is what Commissioner Lerum meant in seeking to "automatically abolish" the then
Art. 246 of the Labor Code. Did he simply want "any kind of wording as long as it will amount to
absolute recognition of private sector employees, without exception, to organize"? 26 Or, did he
instead intend to have his words taken in the context of the cause which moved him to propose
the amendment in the first place, namely, the denial of the right of supervisory employees to
organize, because he said, "We are afraid that without any corresponding provision covering the
private sector, security guards, supervisory employees or majority [of] employees will still be
excluded, and that is the purpose of this amendment"?27
It would seem that Commissioner Lerum simply meant to restore the right of supervisory
employees to organize. For even though he spoke of the need to "abolish" Art. 246 of the Labor
Code which, as already stated, prohibited "managerial employees" in general from forming unions,
the fact was that in explaining his proposal, he repeatedly referred to "supervisory employees"
whose right under the Industrial Peace Act to organize had been taken away by Art. 246. It is
noteworthy that Commissioner Lerum never referred to the then definition of "managerial
employees" in Art. 212(m) of the Labor Code which put together, under the broad phrase
"managerial employees," top and middle managers and supervisors. Instead, his repeated use of
the term "supervisory employees," when such term then was no longer in the statute books,
suggests a frame of mind that remained grounded in the language of the Industrial Peace Act.
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all managerial employees
to organize, despite the fact that the Industrial Peace Act did not expressly provide for the right of
top and middle managers to organize. If Lerum was aware of the Caltex dictum, then his
insistence on the use of the term "supervisory employees" could only mean that he was excluding
other managerial employees from his proposal. If, on the other hand, he was not aware of the
Caltex statement sustaining the right to organize to top and middle managers, then the more
should his repeated use of the term "supervisory employees" be taken at face value, as it had
been defined in the then Industrial Peace Act.
At all events, that the rest of the Commissioners understood his proposal to refer solely to
supervisors and not to other managerial employees is clear from the following account of
Commissioner Joaquin G. Bernas, who writes:
In presenting the modification on the 1935 and 1973 texts, Commissioner Eulogio R.
Lerum explained that the modification included three categories of workers: (1)
government employees, (2) supervisory employees, and (3) security guards. Lerum made
of record the explicit intent to repeal provisions of P.D. 442, the Labor Code. The
provisions referred to were:
Art. 245. Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employers shall not be eligible for membership in a labor organization.
Art. 246. Managerial employees are not eligible to join, assist, and form
any labor organization.28
Implications of the Lerum Proposal
In sum, Lerum's proposal to amend Art. III, §8 of the draft Constitution by including labor unions in
the guarantee of organizational right should be taken in the context of statements that his aim was
the removal of the statutory ban against security guards and supervisory employees joining labor
organizations. The approval by the Constitutional Commission of his proposal can only mean,
therefore, that the Commission intended the absolute right to organize of government workers,
supervisory employees, and security guards to be constitutionally guaranteed. By implication, no
similar absolute constitutional right to organize for labor purposes should be deemed to have been
granted to top-level and middle managers. As to them the right of self-organization may be
regulated and even abridged conformably to Art. III, §8.
Constitutionality of Art. 245
Labor law II: Coverage
Finally, the question is whether the present ban against managerial employees, as embodied in
Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This provision reads:
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 a
labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.29
This provision is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715,
otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions of
the Labor Code which it superseded, R.A. No. 6715 provides separate definitions of the terms
"managerial" and "supervisory employees," as follows:
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, lay off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
Although the definition of "supervisory employees" seems to have been unduly restricted to the
last phrase of the definition in the Industrial Peace Act, the legal significance given to the phrase
"effectively recommends" remains the same. In fact, the distinction between top and middle
managers, who set management policy, and front-line supervisors, who are merely responsible for
ensuring that such policies are carried out by the rank and file, is articulated in the present
definition.30 When read in relation to this definition in Art. 212(m), it will be seen that Art. 245
faithfully carries out the intent of the Constitutional Commission in framing Art. III, §8 of the
fundamental law.
Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against managerial
employees forming a union. The right guaranteed in Art. III, §8 is subject to the condition that its
exercise should be for purposes "not contrary to law." In the case of Art. 245, there is a rational
basis for prohibiting managerial employees from forming or joining labor organizations. As Justice
Davide, Jr., himself a constitutional commissioner, said in his ponencia in Philips Industrial
Development, Inc. v. NLRC:31
In the first place, all these employees, with the exception of the service engineers and the
sales force personnel, are confidential employees. Their classification as such is not
seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW
explicitly considered them as confidential employees. By the very nature of their
functions, they assist and act in a confidential capacity to, or have access to confidential
matters of, persons who exercise managerial functions in the field of labor relations. As
such, the rationale behind the ineligibility of managerial employees to form, assist or joint
a labor union equally applies to them.
In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, 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.32
To be sure, the Court in Philips Industrial was dealing with the right of confidential employees to
organize. But the same reason for denying them the right to organize justifies even more the ban
on managerial employees from forming unions. After all, those who qualify as top or middle
managers are executives who receive from their employers information that not only is confidential
but also is not generally available to the public, or to their competitors, or to other employees. It is
hardly necessary to point out that to say that the first sentence of Art. 245 is unconstitutional would
be to contradict the decision in that case.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado, Romero, Bellosillo, Martinez and Purisima, JJ., concur.
Separate Opinions
DAVIDE, JR., J., concurring and dissenting;
I concur with the majority that the "route managers" of private respondent Pepsi-Cola Products
Philippines, Inc. are managerial employees. However, I respectfully submit that contrary to the
majority's holding, Article 245 of the Labor Code is unconstitutional, as it abridges Section 8,
Article III of the Constitution.
Section 8, Article III of the 1987 Constitution was taken from Section 7, Article IV of the 1973
Constitution which, in turn, was lifted from Section 6, Article III of the 1935 Constitution. Section 7
of the 1973 Constitution provided as follows:
Labor law II: Coverage
Sec. 7. The right to form associations or societies for purpose not contrary to law shall not
be abridged.
This Section was adopted in Section 7 of Proposed Resolution No. 486 of the 1986 Constitutional
Commission, entitled Resolution to Incorporate in the New Constitution an Article on the Bill of
Rights,1 submitted by the Committee on Citizenship, Bill of Rights, Political Rights and Obligations,
and Human Rights, with a modification, however, consisting of the insertion of the word union
between the words "associations" and "societies." Thus the proposed Section 7 provided as
follows:
Sec. 7. The right of the people to form associations, unions, or societies for purposes not
contrary to law shall not be abridged (emphasis supplied).
Commissioner Joaquin G. Bernas, in his sponsorship speech on the proposed Article on the Bill of
Rights, expounded on the nature of the proposed provision, in this wise:
Section 7 preserves the old provision not because it is strictly needed but because its
removal might be subject to misinterpretation. It reads:
xxx xxx xxx
It strictly does not prepare the old provision because it adds the word UNION, and in the
explanation we received from Commissioner Lerum, the term envisions not just unions in
private corporations but also in the government. This preserves our link with the Malolos
Constitution as far as the right to form associations or societies for purposes not contrary
to law is concerned.2
During the period of individual amendments, Commissioner Lerum introduced an amendment to
the proposed section consisting of the insertion of the clause "WHETHER EMPLOYED BY THE
STATE OR PRIVATE ESTABLISHMENTS, which, after consulting other Commissioners, he
modified his proposed amendment to read: "INCLUDING THOSE EMPLOYED IN THE PUBLIC
AND PRIVATE SECTORS." At that time, the section read:
Sec. 7. The right of the people including those employed in the public and private sectors
to form associations, unions or societies for purposes not contrary to law shall not be
abridged.
Pertinently to this dispute Commissioner Lerum's intention that the amendment "automatically
abolish" Articles 245 and 246 of the Labor Code. The Committee accepted the amendment, and
there having been no objection from the floor, the Lerum amendment was approved, thus:
MR. LERUM: . . . In proposing that amendment I ask to make of record that I want the
following provisions of the Labor Code to be automatically abolished, which read:
Art. 245. Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employers shall not be eligible for membership in a labor organization.
Art. 246. Managerial employees are not eligible to join, assist, and form
any labor organization.
THE PRESIDING OFFICER (Mr. Bengzon):
What does the Committee say?
FR. BERNAS: The Committee accepts.
THE PRESIDING OFFICER (Mr. Bengzon):
The Committee has accepted the amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment,
as amended, is approved.3
The Committee on Style then recommended that commas be placed after the words people and
sectors, while Commissioner Lerum likewise moved to place the word unions before the word
associations.4 Section 7, which was subsequently renumbered as Section 8 as presently
appearing in the text ratified in the plebiscite of 2 February 1987, then read as follows:
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.
It is then indubitably clear from the foregoing that the intent of the Constitutional Commission was
to abrogate the law prohibiting managerial employees from joining, assisting, or forming unions or
labor organizations. In this regard, there is absolutely no need to decipher the intent of the framers
of the 1987 Constitution vis-a-vis Article 245 (originally 246) of the Labor Code, there being no
ambiguity or vagueness in the wording of the present Section 8, Article III of the 1987 Constitution.
The provision is clear and written in simple language; neither were there any confusing debates
thereon. More importantly, the purpose of Commissioner Lerum's amendments was unequivocal:
he did not merely intend an implied repeal, but an express repeal of the offending article of the
Labor Code. The approval of the amendments left no doubt whatsoever, as faithfully disclosed in
the Records of the Constitutional Commission, that all employees meaning rank-and-file,
supervisory and managerial — whether from the public or the private sectors, have the right to
form unions for purposes not contrary to law.
The Labor Code referred to by Commissioner Lerum was P.D. No. 442, promulgated on 1 May
1974. With the repeal of Article 239 by Executive Order No. 111 issued on 24 December
Labor law II: Coverage
1986,5 Article 246 (as mentioned by Commissioner Lerum) became Article 245. Thereafter, R.A.
No. 6715 6 amended the new Article 245 (originally Article 246) to read, as follows:
Sec. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.7
With the abrogation of the former Article 246 of the Labor Code,8 and the constitutional prohibition
against any law prohibiting managerial employees from joining, assisting or forming unions or
labor organizations, the first sentence then of the present Article 245 of the Labor Code must be
struck down as unconstitutional.9 However, due to an obvious conflict of interest — being closely
identified with the interests of management in view of the inherent nature of their functions, duties
and responsibilities — managerial employees may only be eligible to join, assist or form unions or
labor organizations of their own rank, and not those of the supervisory employees nor the rank-
and-file employees.
In the instant case, the petitioner's name — United Pepsi-Cola Supervisory Union (UPSU) —
indubitably attests that it is a union of supervisory employees. In light of the earlier discussion,
the route managers who are managerial employees, cannot join or assist UPSU. Accordingly, the
Med-Arbiter and public respondent Laguesma committed no error in denying the petition for direct
certification or for certification election.
I thus vote to GRANT, IN PART, the instant petition. That portion of the challenged resolution of
public respondent holding that since the route managers of private respondent Pepsi-Cola
Products Philippines, Inc., are managerial employees, they are "not eligible to assist, join or form a
union or any other organization" should be SET ASIDE for being violative of Section 8 of Article III
of the Constitution, while that portion thereof denying petitioner's appeal from the Med-Arbiter's
decision dismissing the petition for direct certification or for a certification election should be
AFFIRMED.
PUNO, J., separate concurring;
With due respect, it is my submission that Article 245 of the Labor Code was not repealed by
section 8, Article III of the 1987 Constitution for reasons discussed below.
A. Types of Employees.
For purposes of applying the law on labor relations, the Labor Code in Article 212 (m) defines
three (3) categories of employees. They are managerial, supervisory and rank-and-file, thus:
Art. 212 (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, lay-off,
recall, discharge, assign or discipline employees. "Supervisory employees" are those
who, in the interest of the employer, effectively recommended such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the above definitions
are considered rank-and-file employees for purposes of this Book.
The test of "managerial" or "supervisory" status depends on whether a person possesses authority
to act in the interest of his employer and whether such authority is not routinary or clerical in
nature but requires the use of independent judgment.1 The rank-and-file employee performs work
that is routinary and clerical in nature. The distinction between these employees is significant
because supervisory and rank-and-file employees may form, join or assist labor organizations.
Managerial employees cannot.
B. The Exclusion of Managerial Employees: Its Historical Roots in the United States.
The National Labor Relations Act (NLRA), also known as the Wagner Act, enacted by the U.S.
Congress in 1935, was the first law that regulated labor relations in the United States and
embodied its national labor policy.2 The purpose of the NLRA was to eliminate obstructions to the
free flow of commerce through the practice of collective bargaining. The NLRA also sought to
protect the workers' full freedoms of association, self-organization, and designation of
representatives of their own choosing, for the purpose of negotiating the terms and conditions of
their employment or other mutual aid and protection.3 The NLRA established the right of
employees to organize, required employers to bargain with employees collectively through
employee-elected representatives, gave employees the right to engage in concerted activities for
collective bargaining purposes or other mutual aid or protection, and created the National Labor
Relations Board (NLRB) as the regulatory agency in labor-management matters.4
The NLRA was amended in 1947 by the Labor Management Relations Act (LMRA), also known as
the Taft-Hartley Act. This Act sought to lessen industrial disputes and placed employers in a more
nearly equal position with unions in bargaining and labor relations procedures.5
The NLRA did not make any special provision for "managerial employees."6 The privileges and
benefits of the Act were conferred on "employees." Labor organizations thus clamored for the
inclusion of supervisory personnel in the coverage of the Act on the ground that supervisors were
also employees. Although traditionally, supervisors were regarded as part of management, the
NLRB was constrained to recognize supervisors as employees under the coverage of the law.
Supervisors were then granted collective bargaining rights.7 Nonetheless, the NLRB refused to
consider managers as covered by the law.8
The LMRA took away the collective bargaining rights of supervisors. The sponsors of the
amendment feared that their unionization would break down industrial discipline as it would blur
the traditional distinction between management and labor. They felt it necessary to deny
supervisory personnel the right of collective bargaining to preserve their loyalty to the interests of
their employers.9
Several amendments were later made on the NLRA but the exclusion of managers and
supervisors from its coverage was preserved. Until now managers and supervisors are excluded
Labor law II: Coverage
from the law.10 Their exclusion hinges on the theory that the employer is entitled to the full loyalty
of those whom it chooses for positions of responsibility, entailing action on the employers' behalf.
A supervisor's and manager's ability to control the work of others would be compromised by his
sharing of employee status with them.11
C. Historical Development in the Philippines.
Labor-management relations in the Philippines were first regulated under the Industrial Peace
Act12 which took effect in 1953. Hailed as the Magna Carta of Labor, it was modelled after the
NLRA and LMRA of the United States.13 Most of the basic principles of the NLRA have been
carried over to the Industrial Peace Act and the Labor Code.14 This is significant because we have
ruled that where our labor statutes are based on statutes in foreign jurisdiction, the decisions of
the high courts in those jurisdictions construing and interpreting the Act are given persuasive
effects in the application of Philippine law.15
The Industrial Peace Act did not carry any provision prohibiting managerial employees from joining
labor organizations. Section 3 of said law merely provided:
Sec. 3. Employees' Right to Self-Organization. — Employees shall have the right to self-
organization and to form, join or assist labor organizations of their own choosing for the
purpose of collective bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective bargaining and other mutual
aid and protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but may form
separate organizations of their own.
Significantly, the Industrial Peace Act did not define a manager or managerial employee. It defined
a "supervisor" but not a "manager." Thus:
Sec. 2. . . .
(k) "Supervisor" means any person having authority in the interest of an employer, to hire,
transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other
employees, or responsibly to direct them, and to adjust their grievances, or effectively to
recommend such acts, if, in connection with the foregoing, the exercise of such authority
is not of a merely routinary or clerical nature but requires the use of independent
judgment.
In 1972, we interpreted Section 3 of the Industrial Peace Act to give supervisors the right to join
and form labor organizations of their own.16 Soon we grappled with the right of managers to
organize. In a case involving Caltex managers, we recognized their right to organize, viz:
It would be going too far to dismiss summarily the point raised by respondent company,
that of the alleged identity of interest between the managerial staff and the employing
firm. That should ordinarily be the case, especially so where the dispute is between
management and the rank-and-file. It does not necessarily follow though that what binds
the managerial staff to the corporation forecloses the possibility of conflict between them.
There could be a real difference between what the welfare of such group requires and the
concessions the firm is willing to grant. Their needs might not be attended to then in the
absence of any organization of their own. Nor is this to indulge in empty theorizing. The
records of respondent company, even the very case cited by it, is proof enough of their
uneasy and troubled relationship. Certainly the impression is difficult to erase that an alien
firm failed to manifest sympathy for the claims of its Filipino executives.17
The Industrial Peace Act was repealed in 1975 by P.D. 442, the Labor Code of the Philippines.
The Labor Code changed existing jurisprudence when it prohibited supervisory and managerial
employees from joining labor organizations. Supervisory unions were no longer recognized nor
allowed to exist and operate as such.18 We affirmed this statutory change in Bulletin Publishing
Corp. v. Sanchez.19 Similarly, Article 246 of the Labor Code expressly prohibited managerial
employees from forming, assisting and joining labor organizations, to wit:
Art. 246. Ineligibility of managerial employees to join any labor organization. —
Managerial employees are not eligible to join, assist or form any labor organization.
In the same Bulletin case, the Court applied Article 246 and held that managerial employees are
the very type of employees who, by the nature of their positions and functions, have been decreed
disqualified from bargaining with management. This prohibition is based on the rationale that if
managerial employees were to belong or be affiliated with a union, the union might not be assured
of their loyalty in view of evident conflict of interest or that the union can be company-dominated
with the presence of managerial employees in the union membership.20 In the collective
bargaining process, managerial employees are supposed to be on the side of the employer, to act
as its representative, and to see to it that its interests are well protected. The employer is not
assured of such protection if these employees themselves become union members.21
The prohibition on managerial employees to join, assist or form labor organizations was retained in
the Labor Code despite substantial amendments made in 1989 by R.A. 6715, the Herrera-Veloso
Law. R.A. 6715 was passed after the effectivity of the 1987 Constitution and this law did not
abrogate, much less amend the prohibition on managerial employees to join labor
organizations. The express prohibition in Article 246 remained. However, as an addendum to this
same Article, R.A. 6715 restored to supervisory employees the right to join labor organizations of
their own.22 Article 246 now reads:
Art. 246. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.
Article 246 became Article 245 after then Article 244 was repealed by E.O. 111. Article 246 is
presently Article 245 of the Labor Code.
Labor law II: Coverage
Indeed, Article 245 of the Labor Code prohibiting managerial employees from joining labor
organizations has a social and historical significance in our labor relations law. This significance
should be considered in deciphering the intent of the framers of the 1987 Constitution vis-a-vis the
said Article.
With due respect, I do not subscribe to the view that section 8, Article III of the Constitution
abrogated Article 245 of the Labor Code. A textual analysis of section 8, Article III of the
Constitution will not justify this conclusion. With due respect, the resort by Mr. Justice Davide to
the deliberations of the Constitutional Commission does not suffice. It is generally recognized that
debates and other proceedings in a constitutional convention are of limited value and are an
unsafe guide to the intent of the people.23 Judge Cooley has stated that:
When the inquiry is directed to ascertaining the mischief designed to be remedied, or the
purpose sought to be accomplished by a particular provision, it may be proper to examine
the proceedings of the convention which framed the instrument. Where the proceedings
clearly point out the purpose of the provision, the aid will be valuable and satisfactory; but
where the question is one of abstract meaning, it will be difficult to derive from this source
much reliable assistance in interpretation. Every member of such a convention acts upon
such motives and reasons as influence him personally, and the motions and debates do
not necessarily indicate the purpose of a majority of a convention in adopting a particular
clause. It is quite possible for a particular clause to appear so clear and unambiguous to
the members of the convention as to require neither discussion nor illustration; and the
few remarks made concerning it in the convention might have a plain tendency to lead
directly away from the meaning in the minds of the majority. It is equally possible for a
part of the members to accept a clause in one sense and a part in another. And even if
we were certain we had attained to the meaning of the convention, it is by no means to be
allowed a controlling force, especially if that meaning appears not to be the one which the
words would most naturally and obviously convey. For as the constitution does not derive
its force from the convention which framed, but from the people who ratified it, the intent
to be arrived at is that of the people, and it is not to be supposed that they have looked for
any dark and abstruse meaning in the words employed, but rather that they have
accepted them in the sense most obvious to the common understanding, and ratified the
instrument in the belief that was the sense designed to be conveyed.24
It is for this reason that proceedings of constitutional conventions are less conclusive of the proper
construction of the instrument than are legislative proceedings of the proper construction of the
statute.25 In the statutes, it is the intent of the legislature that is being sought, while in constitutions,
it is the intent of the people that is being ascertained through the discussions and deliberations of
their representatives.26 The proper interpretation of constitutional provisions depends more on how
it was understood by the people adopting it than in the framers' understanding thereof.27
Thus, debates and proceedings of the constitutional convention are never of binding force. They
may be valuable but are not necessarily decisive.28 They may shed a useful light upon the purpose
sought to be accomplished or upon the meaning attached to the words employed. And the courts
are free to avail themselves of any light that may be derived from such sources, but they are not
bound to adopt it as the sole ground of their decision.29
Clearly then, a statute cannot be declared void on the sole ground that it is repugnant to a
supposed intent or spirit declared in constitutional convention proceedings.
D. Freedom of Association
The right of association flows from freedom of expression.30 Like the right of expression, the
exercise of the right of association is not absolute. It is subject to certain limitations.
Article 243 of the Labor Code reiterates the right of association of people in the labor sector.
Article 243 provides:
Art. 243. Coverage of employees' right to self-organization. — All persons employed in
commercial, industrial and agricultural enterprises and in 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 of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection.
Article 243 guarantees the right to self-organization and association to "all persons." This
seemingly all-inclusive coverage of "all persons," however, actually admits of exceptions.
Article 24431 of the Labor Code mandates that all employees in the civil service, i.e, those not
employed in government corporations established under the Corporation Code, may only form
associations but may not collectively bargain on terms and conditions fixed by law. An employee
of a cooperative who is a member and co-owner thereof cannot invoke the right of collective
bargaining and negotiation vis-a-vis the cooperative.32 An owner cannot bargain with himself or his
co-owners.33 Employees in foreign embassies or consulates or in foreign international
organizations granted international immunities are also excluded from the right to form labor
organizations. 34 International organizations are organized mainly as a means for conducting
general international business in which the member-states have an interest and the immunities
granted them shield their affairs from political pressure or control by the host country and assure
the unimpeded performance of their functions.35
Confidential employees have also been denied the right to form labor-organizations. Confidential
employees do not constitute a distinct category for purposes of organizational right. Confidentiality
may attach to a managerial or non-managerial position. We have, however, excluded confidential
employees from joining labor organizations following the rationale behind the disqualification of
managerial employees in Article 245. In the case of National Association of Trade Unions-
Republic Planters' Bank Supervisors Chapter v. Torres,36 we held:
In the collective bargaining process, managerial employees are supposed to be on the
side of the employer, to act as its representatives, and to see to it that its interests are
well protected. The employer is not assured of such protection if these employees
themselves are union members. Collective bargaining in such a situation can become
Labor law II: Coverage
one-sided. It is the same reason that impelled this Court to consider the position of
confidential employees as included in the disqualification found in Article 245 as if the
disqualification of confidential employees were written in the provision. If confidential
employees could unionize in order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the interest of the employers.
Moreover, unionization of confidential employees for the purpose of collective bargaining
would mean the extension of the law to persons or individuals who are supposed to act
"in the interest of" the employers. It is not farfetched that in the course of collective
bargaining, they might jeopardize that interest which they are duty-bound to protect.37
E. The disqualification extends only to labor organizations.
It must be noted that Article 245 of the Labor Code deprives managerial employees of their right to
join "labor organizations." A labor organization is defined under the Labor Code as:
Art. 212 (g). "Labor organization" means any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with the
employer concerning terms and conditions of employment.
A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the
employer concerning terms and conditions of employment. To bargain collectively is a right given
to a labor organization once it registers itself with the Department of Labor and Employment
(DOLE). Dealing with the employer, on the other hand, is a generic description of interaction
between employer and employees concerning grievances, wages, work hours and other terms
and conditions of employment, even if the employees' group is not registered with the
DOLE.38 Any labor organization which may or may not be a union may deal with the employer.
This explains why a workers' Organization does not always have to be a labor union and why
employer-employee collective interactions are not always collective bargaining.39
In the instant case, it may be argued that managerial employees' labor organization will merely
"deal with the employer concerning terms and conditions of employment" especially when top
management is composed of aliens, following the circumstances in the Caltex case.
Although the labor organization may exist wholly for the purpose of dealing with the employer
concerning terms and conditions of employment, there is no prohibition in the Labor Code for it to
become a legitimate labor organization and engage in collective bargaining. Once a labor
organization registers with the DOLE and becomes legitimate, it is entitled to the rights accorded
under Articles 242 and 263 (b) of the Labor Code. And these include the right to strike and picket.
Notably, however, Article 245 does not absolutely disqualify managerial employees from
exercising their right of association. What it prohibits is merely the right to join labor organizations.
Managerial employees may form associations or organizations so long as they are not labor
organizations. The freedom of association guaranteed under the Constitution remains and has not
been totally abrogated by Article 245.
To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing industrial life
and will open the floodgates to unionization at all levels of the industrial hierarchy. Such a ruling
will wreak havoc on the existing set-up between management and labor. If all managerial
employees will be allowed to unionize, then all who are in the payroll of the company, starting from
the president, vice-president, general managers and everyone, with the exception of the directors,
may go on strike or picket the
employer.40 Company officers will join forces with the supervisors and rank-and-file. Management
and labor will become a solid phalanx with bargaining rights that could be enforced against the
owner of the company.41 The basic opposing forces in the industry will not be management and
labor but the operating group on the one hand and the stockholder and bondholder group on the
other. The industrial problem defined in the Labor Code comes down to a contest over a fair
division of the gross receipts of industry between these two groups.42 And this will certainly bring
ill-effects on our economy.
The framers of the Constitution could not have intended a major upheaval of our labor and socio-
economic systems. Their intent cannot be made to override substantial policy considerations and
create absurd or impossible situations.43 A constitution must be viewed as a continuously
operative charter of government. It must not be interpreted as demanding the impossible or the
impracticable; or as effecting the unreasonable or absurd.44 Courts should always endeavour to
give such interpretation that would make the constitutional provision and the statute consistent
with reason, justice and the public interest.45
I vote to dismiss the petition.
VITUG, J., separate concurring and dissenting;
The pivotal issues raised in the case at bar, aptly stated by the Office of the Solicitor General, are:
(1) Whether or not public respondent, Undersecretary of the Department of Labor and
Employment ("DOLE") Bienvenido E. Laguesma, gravely abused his discretion in categorizing the
members of petitioner union to be managerial employees and thus ineligible to form or join labor
organizations; and
(2) Whether or not the provision of Article 245 of the Labor Code, disqualifying managerial
employees from joining, assisting or forming any labor organization, violates Section 8, Article III,
of the 1987 Constitution, which expresses that "(t)he right of the people, including those employed
in public and private sectors to form unions, associations or societies for purposes not contrary to
law shall not be abridged."
The case originated from a petition for direct certification or certification election among route
managers/supervisory employees of Pepsi-Cola Products Phils., Inc. ("Pepsi"), filed by the United
Pepsi-Cola Supervisory Union ("Union"), claiming to be a legitimate labor organization duly
registered with the Department of Labor and Employment under Registration Certificate No. NCR-
UR-3-1421-95. Pepsi opposed the petition on the thesis that the case was no more than a mere
duplication of a previous petition for direct certification1 filed by the same route managers through
the Pepsi-Cola Employees Association (PCEA-Supervisory) which petition had already been
Labor law II: Coverage
denied by Undersecretary Laguesma. The holding reiterated a prior decision in Workers Alliance The duties and responsibilities of the members of petitioner union, shown by their "job description"
Trade Unions ("WATU") vs. Pepsi-Cola Products Phils., Inc.,2 that route managers were below —
managerial employees.
PCPPI
In its decision, dated 05 May 1995, Med-Arbiter Brigida C. Fadrigon dismissed for lack of merit the
petition of the Union, stating that the issue on the proper classification and status of route RM's JOB DESCRIPTION
managers had already been ruled with finality in the previous decisions, aforementioned, rendered
by DOLE.
A. GENERAL/OVERALL OBJECTIVE OF THIS POSITION
The union appealed the decision. In his resolution of 31 August 1995, Undersecretary Laguesma
To contribute to the growth and profitability of PCPPI via well-selected,
dismissed the appeal, saying that there was no compelling reason to abandon the ruling in the two
trained and motivated Route Sales Team who sell, collect and
old cases theretofore decided by DOLE. In his order of 22 September 1995, Undersecretary
merchandise, following the Pepsi Way, and consistent with Company
Laguesma denied the Union's motion for reconsideration.
policies and procedures as well as the corporate vision of Customer
Satisfaction.
The Union went to this Court, via a petition for certiorari, assailing the cancellation of its certificate
of registration. The Court, after considering the petition and the comments thereon filed by both
B. SPECIFIC JOB DESCRIPTION:
public and private respondents, as well as the consolidated reply of petitioner, dismissed the case
in its resolution of 08 July 1996 on the premise that no grave abuse of discretion had been
committed by public respondent. KEY RESULT AREAS STANDARD OR PERFORMANCE

Undaunted, the Union moved, with leave, for the reconsideration of the dismissal of its petition by SALES VOLUME *100% Vs. NRC Target
the Court En Banc. In its resolution of 16 June 1997, the case was referred to the Court En
Banc en consulta with the movant's invocation of unconstitutionality of Article 245 of the Labor _____% NTG
Code vis-a-vis Section 8, Article III, of the 1987 Constitution.
DISTRIBUTION * Product Availability
There is merit, in my view, in petitioner's motion for reconsideration but not on constitutional
grounds. 70% Pepsi

There are, in the hierarchy of management, those who fall below the level of key officers of an 80% Seven-Up
enterprise whose terms and conditions of employment can well be, indeed are not infrequently,
provided for in collective bargaining agreements. To this group belong the supervisory employees.
The "managerial employees," upon the other hand, and relating the matter particularly to the Labor 40% Mirinda
Code, are those "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" 65% Mt. Dew
as distinguished from the supervisory employees whose duties in these areas are so designed as
to verily be implementary to the policies or rules and regulations already outstanding and priorly 5% Out of Stock
taken up and passed upon by management. The managerial level is the source, as well as
prescribes the compliance, of broad mandates which, in the field of labor relations, are to be
ACCOUNTS RECEIVABLE 65% Current (Incl. Legal & Col.)
carried out through the next rank of employees charged with actually seeing to the specific
personnel action required. In fine, the real authority, such as in hiring or firing of employees,
comes from management and exercised by means of instructions, given in general terms, by the MANAGEMENT 80:20 Cash to Credit Ratio
"managerial employees;" the supervisory employees, although ostensibly holding that power, in
truth, however, only act in obedience to the directives handed down to them. The latter unit, unlike DSO — assigned Std. to Division
the former, cannot be considered the alter ego of the owner of enterprise.
by the District
Labor law II: Coverage
ASSET MANAGEMENT 30 cases for ice-coolers Week using SLM's Training Log

80 cases for electric coolers ADMINISTRATIVE — Complete, timely and accurate

BLOWAGA on Division Vehicles MANAGEMENT reports.

60 cases on Rolling/Permanent PCPPI

Kiosks RM's BASIC DAILY ACTIVITIES

TRADE DEVELOPMENT 100% Buying Customers Based A. AT THE SALES OFFICE

on master list that bought once 1. PRACTICES BLOWAGA ON SERVICE VEHICLE (AT HOME)

5 months payback on concessions 2. REPORTS FOR WORK ON OR BEFORE 6:15 A.M.

4 CED's/Rte. 3. REPORTS IN CLEAN AND NEAT UNIFORM (GOOD GROOMING)

EXPENSE MANAGEMENT a). 5% Absentism rate Excl. VL 4. DAILY BRIEFING WITH THE DM

b). 280 cases/route/day 5. CONDUCTS SKILLS ENHANCEMENT OR HUDDLES WITH RST's

c). 15% cost-to-sales ratio a). ATTENDANCE/GROOMING

ROUTE MANAGEMENT 3 Days on RR/Wk b). OPERATIONAL DIRECTIONS & PRIORITIES

— Days on BC-SC- Financial & c). ANNOUNCEMENT

Co. Assets 6. RM's PRESENCE DURING CHECK-OUT

— Days on TD a). SLM PRACTICES BLOWAGA ON ROUTE TRUCK

75% Load Factor b). PRIVATE COUNSELING WITH RST (AM & PM IF
NECESSARY)
18 Productive Calls
c). PROPER HANDLING OF SELLING/MDSG.
CUSTOMER SATISFACTION Customer Complaint attended to within MATERIALS
the next working day
d). YESTERDAY's FINAL SETTLEMENT REVIEW
HUMAN RESOURCE 5% Absentism Excl. VL
7. UPDATE REPORTS, MONITORS, DOCUMENTS & TELEPHONE
MANAGEMENT (approved) 3 Documented RR/ CONMATION
Labor law II: Coverage
8. ATTENDS TO PRODUCT COMPLAINTS (GFM) 4. FOLLOW-UP ACTION

9. CONDUCTS ADMINISTRATIVE INVESTIGATION OR ATTENDS C. AT CLOSE OF DAY

DM's MEETING (on Saturdays)
1. MAINTAINS & UPDATES CORRECT & ACCURATE RECORDS &
B. FIELD WORK REPORTS

ROUTE RIDE 2. RM-SLM DEBRIEFING

1. CHECKS SLMS. TRAINING LOG (PROGRESS & DEV'T.) 3. SLR DISCUSSION (BASED ON A.M. SLR)

2. SALESMAN's CPC 4. COORDINATES WITH DM ON PLANS & PROGRAMS

3. ROUTE COVERAGE EVALUATION 5. PREPARATIONS FOR NEXT DAY's ACTIVITIES3

4. LOAD FACTOR — convey no more than those that are aptly consigned to the "supervisory" group by the relatively
small unit of "managerial" employees. Certain portions of a pamphlet, the so-called "Route
5. SALESMAN's ROUTING SYSTEM EVALUATION Manager Position Description" referred to by Mr. Justice Vicente Mendoza, in his ponencia,
hereunder reproduced for easy reference, thus —
BC/SC
A. BASIC PURPOSE
1. FINANCIAL & ASSET VERIFICATION, CONFIRMATION & AUDIT
A Manager achieves objectives through others.
2. BACKCHECKS FIRST 5 CUSTOMERS SERVED FOR THE DAY
As a Route Manager, your purpose is to meet the sales plan; and you
achieve this objective through the skillful management of your job and
a). MERCHANDISING the management of your people.

b). SERVICING These then are your functions as Pepsi-Cola Route Manager. Within
these functions — managing your job and managing your people — you
c). RM's TERRITORY FAMILIARITY are accountable to your District Manager for the execution and
completion of various tasks and activities which will make it possible for
d). KEY ACCOUNTS GOODWILL you to achieve your sales objectives.

TRADE DEVELOPMENT B. PRINCIPAL ACCOUNTABILITIES

1. PREPARATION PRIOR TO CALL 1.0 MANAGING YOUR JOB

2. ACTUAL CALL The Route Manager is accountable for the following:

3. POST CALL ANALYSIS 1.1 SALES DEVELOPMENT

(HOW DID I FARE? WHY? WHAT ACTIONS TO TAKE) 1.1.1 Achieve the sales plan.
Labor law II: Coverage
1.1.2 Achieve all distribution and new
account objectives.
1.1.3 Develop new business
opportunities thru personal contacts
with dealers.
1.1.4 Inspect and ensure that all
merchandising objectives are
achieved in all outlets.
1.1.5 Maintain and improve
productivity of all cooling equipment
and kiosks.
1.1.6 Execute and control all
authorized promotions.
1.1.7 Develop and maintain dealer
goodwill.
1.1.8 Ensure all accounts comply with
company suggested retail pricing.
1.1.9 Study from time to time
individual route coverage and
productivity for possible adjustments
to maximize utilization of resources.
1.2 Administration
1.2.1 Ensure the proper loading of
route trucks before check-out and the
proper sorting of bottles before check-
in.
1.2.2 Ensure the upkeep of all route
sales reports and all other related
reports and forms required on an
accurate and timely basis.
1.2.3 Ensure proper implementation of
the various company policies and
procedures include but not limited to
shakedown; route shortage;
progressive discipline; sorting;
spoilages; credit/collection; accident;
attendance.
1.2.4 Ensure collection of receivables
and delinquent accounts.
2.0 MANAGING YOUR PEOPLE
The Route Manager is accountable for the following:
2.1 Route Sales Team Development
2.1.1 Conduct route rides to train,
evaluate and develop all assigned
route salesmen and helpers at least 3
days a week, to be supported by
required route ride documents/reports
& back check/spot check at least 2
days a week to be supported by
required documents/reports.
2.1.2 Conduct sales meetings and
morning huddles. Training should
focus on the enhancement of effective
sales and merchandising techniques
of the salesmen and helpers. Conduct
group training at least 1 hour each
week on a designated day and of
specific topic.
2.2 Code of Conduct
2.2.1 Maintain the company's
reputation through strict adherence to
PCPPI's code of conduct and the
universal standards of unquestioned
business ethics. —
offer nothing at all that can approximate the authority and functions of those who actually and
genuinely hold the reins of management.
I submit, with due respect, that the members of petitioning union, not really being "managerial
employees" in the true sense of the term, are not disqualified from forming or joining labor
organizations under Article 245 of the Labor Code.
Labor law II: Coverage
I shall now briefly touch base on the constitutional question raised by the parties on Article 245 of
the Labor Code.
The Constitution acknowledges "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 . . .
."4 Perforce, petitioner claims, that part of Article 245 5 of the Labor Code which states:
"Managerial employees are not eligible to join, assist or form any labor organization," being in
direct collision with the Constitutional provision, must now be declared abrogated in the law.
Frankly, I do not see such a "direct collision." The Constitution did not obviously grant a limitless
right "to form unions, associations or societies" for it has clearly seen it fit to subject its exercise to
possible legislative judgment such as may be appropriate or, to put it in the language of the
Constitution itself, to "purposes not contrary to law."
Freedom of association, like freedom of expression, truly occupies a choice position in the
hierarchy of constitutional values. Even while the Constitution itself recognizes the State's
prerogative to qualify this right, heretofore discussed, any limitation, nevertheless, must still be
predicated on the existence of a substantive evil sought to be addressed.6 Indeed, in the exercise
of police power, the State may, by law, prescribe proscriptions, provided reasonable and legitimate
of course, against even the most basic rights of individuals.
The restriction embodied in Article 245 of the Labor Code is not without proper rationale.
Concededly, the prohibition to form labor organizations on the part of managerial employees
narrows down their freedom of association. The very nature of managerial functions, however,
should preclude those who exercise them from taking a position adverse to the interest they are
bound to serve and protect. The mere opportunity to undermine that interest can validly be
restrained. To say that the right of managerial employees to form a "labor organization" within the
context and ambit of the Labor Code should be deemed totally separable from the right to bargain
collectively is not justified by related provisions of the Code. For instance —
Art. 212. Definitions.7 — . . .
(g) "Labor organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
xxx xxx xxx
(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, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinely or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
Art. 263. . . .
(b) Workers shall have the right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection. The right of legitimate labor
organizations to strike and picket and of employers to lockout, consistent with the national
interest, shall continue to be recognized and respected.
The maxim "ut res magis quam pereat" requires not merely that a statute should be given such a
consequence as to be deemed whole but that each of its express provisions equally should be
given the intended effect.
I find it hard to believe that the fundamental law could have envisioned the use by managerial
employees of coercive means against their own employers over matters entrusted by the latter to
the former. Whenever trust and confidence is a major aspect of any relationship, a conflict of
interest on the part of the person to whom that trust and confidence is reposed must be avoided
and when, unfortunately, it does still arise its containment can rightly be decreed.
Article 245 of the Labor Code indeed aligns itself to the Corporation Code, the basic law on by far
the most commonly used business vehicle — the corporation — which prescribes the tenure of
office, as well as the duties and functions, including terms of employment (governed in most part
by the Articles of Incorporation, the By-laws of the Corporation, or resolutions of the Board of
Directors), of corporate officers for both the statutory officers, i.e., the president, the treasurer and
the corporate secretary, and the non-statutory officers, i.e., those who occupy positions created by
the corporate by-laws who are deemed essential for effective management of the enterprise. I
cannot imagine these officers as being legally and morally capable of associating themselves into
a labor organization and asserting collective bargaining rights against the very entity in whose
behalf they act and are supposed to act.
I submit, accordingly, that, firstly, the members of petitioner union or the so-called route managers,
being no more than supervisory employees, can lawfully organize themselves into a labor union
within the meaning of the Labor Code, and that, secondly, the questioned provision of Article 245
of the Labor Code has not been revoked by the 1987 Constitution.
WHEREFORE, I vote, given all the foregoing, for the reversal of the resolution of 31 August 1995,
and the order of 22 September 1995, of public respondent.
Kapunan, Panganiban and Quisumbing, JJ., concur and dissent.
Separate Opinions
DAVIDE, JR., J., concurring and dissenting;
Labor law II: Coverage
I concur with the majority that the "route managers" of private respondent Pepsi-Cola Products
Philippines, Inc. are managerial employees. However, I respectfully submit that contrary to the
majority's holding, Article 245 of the Labor Code is unconstitutional, as it abridges Section 8,
Article III of the Constitution.
Section 8, Article III of the 1987 Constitution was taken from Section 7, Article IV of the 1973
Constitution which, in turn, was lifted from Section 6, Article III of the 1935 Constitution. Section 7
of the 1973 Constitution provided as follows:
Sec. 7. The right to form associations or societies for purpose not contrary to law shall not
be abridged.
This Section was adopted in Section 7 of Proposed Resolution No. 486 of the 1986 Constitutional
Commission, entitled Resolution to Incorporate in the New Constitution an Article on the Bill of
Rights,1 submitted by the Committee on Citizenship, Bill of Rights, Political Rights and Obligations,
and Human Rights, with a modification, however, consisting of the insertion of the word union
between the words "associations" and "societies." Thus the proposed Section 7 provided as
follows:
Sec. 7. The right of the people to form associations, unions, or societies for purposes not
contrary to law shall not be abridged (emphasis supplied).
Commissioner Joaquin G. Bernas, in his sponsorship speech on the proposed Article on the Bill of
Rights, expounded on the nature of the proposed provision, in this wise:
Section 7 preserves the old provision not because it is strictly needed but because its
removal might be subject to misinterpretation. It reads:
xxx xxx xxx
It strictly does not prepare the old provision because it adds the word UNION, and in the
explanation we received from Commissioner Lerum, the term envisions not just unions in
private corporations but also in the government. This preserves our link with the Malolos
Constitution as far as the right to form associations or societies for purposes not contrary
to law is concerned.2
During the period of individual amendments, Commissioner Lerum introduced an amendment to
the proposed section consisting of the insertion of the clause "WHETHER EMPLOYED BY THE
STATE OR PRIVATE ESTABLISHMENTS, which, after consulting other Commissioners, he
modified his proposed amendment to read: "INCLUDING THOSE EMPLOYED IN THE PUBLIC
AND PRIVATE SECTORS." At that time, the section read:
Sec. 7. The right of the people including those employed in the public and private sectors
to form associations, unions or societies for purposes not contrary to law shall not be
abridged.
Pertinently to this dispute Commissioner Lerum's intention that the amendment "automatically
abolish" Articles 245 and 246 of the Labor Code. The Committee accepted the amendment, and
there having been no objection from the floor, the Lerum amendment was approved, thus:
MR. LERUM: . . . In proposing that amendment I ask to make of record that I want the
following provisions of the Labor Code to be automatically abolished, which read:
Art. 245. Security guards and other personnel employed for the
protection and security of the person, properties and premises of the
employers shall not be eligible for membership in a labor organization.
Art. 246. Managerial employees are not eligible to join, assist, and form
any labor organization.
THE PRESIDING OFFICER (Mr. Bengzon):
What does the Committee say?
FR. BERNAS: The Committee accepts.
THE PRESIDING OFFICER (Mr. Bengzon):
The Committee has accepted the amendment, as amended.
Is there any objection? (Silence) The Chair hears none; the amendment,
as amended, is approved.3
The Committee on Style then recommended that commas be placed after the words people and
sectors, while Commissioner Lerum likewise moved to place the word unions before the word
associations.4 Section 7, which was subsequently renumbered as Section 8 as presently
appearing in the text ratified in the plebiscite of 2 February 1987, then read as follows:
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.
It is then indubitably clear from the foregoing that the intent of the Constitutional Commission was
to abrogate the law prohibiting managerial employees from joining, assisting, or forming unions or
labor organizations. In this regard, there is absolutely no need to decipher the intent of the framers
of the 1987 Constitution vis-a-vis Article 245 (originally 246) of the Labor Code, there being no
ambiguity or vagueness in the wording of the present Section 8, Article III of the 1987 Constitution.
The provision is clear and written in simple language; neither were there any confusing debates
thereon. More importantly, the purpose of Commissioner Lerum's amendments was unequivocal:
he did not merely intend an implied repeal, but an express repeal of the offending article of the
Labor law II: Coverage
Labor Code. The approval of the amendments left no doubt whatsoever, as faithfully disclosed in
the Records of the Constitutional Commission, that all employees meaning rank-and-file,
supervisory and managerial — whether from the public or the private sectors, have the right to
form unions for purposes not contrary to law.
The Labor Code referred to by Commissioner Lerum was P.D. No. 442, promulgated on 1 May
1974. With the repeal of Article 239 by Executive Order No. 111 issued on 24 December
1986,5 Article 246 (as mentioned by Commissioner Lerum) became Article 245. Thereafter, R.A.
No. 6715 6 amended the new Article 245 (originally Article 246) to read, as follows:
Sec. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.7
With the abrogation of the former Article 246 of the Labor Code,8 and the constitutional prohibition
against any law prohibiting managerial employees from joining, assisting or forming unions or
labor organizations, the first sentence then of the present Article 245 of the Labor Code must be
struck down as unconstitutional.9 However, due to an obvious conflict of interest — being closely
identified with the interests of management in view of the inherent nature of their functions, duties
and responsibilities — managerial employees may only be eligible to join, assist or form unions or
labor organizations of their own rank, and not those of the supervisory employees nor the rank-
and-file employees.
In the instant case, the petitioner's name — United Pepsi-Cola Supervisory Union (UPSU) —
indubitably attests that it is a union of supervisory employees. In light of the earlier discussion,
the route managers who are managerial employees, cannot join or assist UPSU. Accordingly, the
Med-Arbiter and public respondent Laguesma committed no error in denying the petition for direct
certification or for certification election.
I thus vote to GRANT, IN PART, the instant petition. That portion of the challenged resolution of
public respondent holding that since the route managers of private respondent Pepsi-Cola
Products Philippines, Inc., are managerial employees, they are "not eligible to assist, join or form a
union or any other organization" should be SET ASIDE for being violative of Section 8 of Article III
of the Constitution, while that portion thereof denying petitioner's appeal from the Med-Arbiter's
decision dismissing the petition for direct certification or for a certification election should be
AFFIRMED.
PUNO, J., separate concurring;
With due respect, it is my submission that Article 245 of the Labor Code was not repealed by
section 8, Article III of the 1987 Constitution for reasons discussed below.
A. Types of Employees.
For purposes of applying the law on labor relations, the Labor Code in Article 212 (m) defines
three (3) categories of employees. They are managerial, supervisory and rank-and-file, thus:
Art. 212 (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, lay-off,
recall, discharge, assign or discipline employees. "Supervisory employees" are those
who, in the interest of the employer, effectively recommended such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires the
use of independent judgment. All employees not falling within any of the above definitions
are considered rank-and-file employees for purposes of this Book.
The test of "managerial" or "supervisory" status depends on whether a person possesses authority
to act in the interest of his employer and whether such authority is not routinary or clerical in
nature but requires the use of independent judgment.1 The rank-and-file employee performs work
that is routinary and clerical in nature. The distinction between these employees is significant
because supervisory and rank-and-file employees may form, join or assist labor organizations.
Managerial employees cannot.
B. The Exclusion of Managerial Employees: Its Historical Roots in the United States.
The National Labor Relations Act (NLRA), also known as the Wagner Act, enacted by the U.S.
Congress in 1935, was the first law that regulated labor relations in the United States and
embodied its national labor policy.2 The purpose of the NLRA was to eliminate obstructions to the
free flow of commerce through the practice of collective bargaining. The NLRA also sought to
protect the workers' full freedoms of association, self-organization, and designation of
representatives of their own choosing, for the purpose of negotiating the terms and conditions of
their employment or other mutual aid and protection.3 The NLRA established the right of
employees to organize, required employers to bargain with employees collectively through
employee-elected representatives, gave employees the right to engage in concerted activities for
collective bargaining purposes or other mutual aid or protection, and created the National Labor
Relations Board (NLRB) as the regulatory agency in labor-management matters.4
The NLRA was amended in 1947 by the Labor Management Relations Act (LMRA), also known as
the Taft-Hartley Act. This Act sought to lessen industrial disputes and placed employers in a more
nearly equal position with unions in bargaining and labor relations procedures.5
The NLRA did not make any special provision for "managerial employees."6 The privileges and
benefits of the Act were conferred on "employees." Labor organizations thus clamored for the
inclusion of supervisory personnel in the coverage of the Act on the ground that supervisors were
also employees. Although traditionally, supervisors were regarded as part of management, the
NLRB was constrained to recognize supervisors as employees under the coverage of the law.
Supervisors were then granted collective bargaining rights.7 Nonetheless, the NLRB refused to
consider managers as covered by the law.8
The LMRA took away the collective bargaining rights of supervisors. The sponsors of the
amendment feared that their unionization would break down industrial discipline as it would blur
Labor law II: Coverage
the traditional distinction between management and labor. They felt it necessary to deny
supervisory personnel the right of collective bargaining to preserve their loyalty to the interests of
their employers.9
Several amendments were later made on the NLRA but the exclusion of managers and
supervisors from its coverage was preserved. Until now managers and supervisors are excluded
from the law.10 Their exclusion hinges on the theory that the employer is entitled to the full loyalty
of those whom it chooses for positions of responsibility, entailing action on the employers' behalf.
A supervisor's and manager's ability to control the work of others would be compromised by his
sharing of employee status with them.11
C. Historical Development in the Philippines.
Labor-management relations in the Philippines were first regulated under the Industrial Peace
Act12 which took effect in 1953. Hailed as the Magna Carta of Labor, it was modelled after the
NLRA and LMRA of the United States.13 Most of the basic principles of the NLRA have been
carried over to the Industrial Peace Act and the Labor Code.14 This is significant because we have
ruled that where our labor statutes are based on statutes in foreign jurisdiction, the decisions of
the high courts in those jurisdictions construing and interpreting the Act are given persuasive
effects in the application of Philippine law.15
The Industrial Peace Act did not carry any provision prohibiting managerial employees from joining
labor organizations. Section 3 of said law merely provided:
Sec. 3. Employees' Right to Self-Organization. — Employees shall have the right to self-
organization and to form, join or assist labor organizations of their own choosing for the
purpose of collective bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective bargaining and other mutual
aid and protection. Individuals employed as supervisors shall not be eligible for
membership in a labor organization of employees under their supervision but may form
separate organizations of their own.
Significantly, the Industrial Peace Act did not define a manager or managerial employee. It defined
a "supervisor" but not a "manager." Thus:
Sec. 2. . . .
(k) "Supervisor" means any person having authority in the interest of an employer, to hire,
transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other
employees, or responsibly to direct them, and to adjust their grievances, or effectively to
recommend such acts, if, in connection with the foregoing, the exercise of such authority
is not of a merely routinary or clerical nature but requires the use of independent
judgment.
In 1972, we interpreted Section 3 of the Industrial Peace Act to give supervisors the right to join
and form labor organizations of their own.16 Soon we grappled with the right of managers to
organize. In a case involving Caltex managers, we recognized their right to organize, viz:
It would be going too far to dismiss summarily the point raised by respondent company,
that of the alleged identity of interest between the managerial staff and the employing
firm. That should ordinarily be the case, especially so where the dispute is between
management and the rank-and-file. It does not necessarily follow though that what binds
the managerial staff to the corporation forecloses the possibility of conflict between them.
There could be a real difference between what the welfare of such group requires and the
concessions the firm is willing to grant. Their needs might not be attended to then in the
absence of any organization of their own. Nor is this to indulge in empty theorizing. The
records of respondent company, even the very case cited by it, is proof enough of their
uneasy and troubled relationship. Certainly the impression is difficult to erase that an alien
firm failed to manifest sympathy for the claims of its Filipino executives.17
The Industrial Peace Act was repealed in 1975 by P.D. 442, the Labor Code of the Philippines.
The Labor Code changed existing jurisprudence when it prohibited supervisory and managerial
employees from joining labor organizations. Supervisory unions were no longer recognized nor
allowed to exist and operate as such.18 We affirmed this statutory change in Bulletin Publishing
Corp. v. Sanchez.19 Similarly, Article 246 of the Labor Code expressly prohibited managerial
employees from forming, assisting and joining labor organizations, to wit:
Art. 246. Ineligibility of managerial employees to join any labor organization. —
Managerial employees are not eligible to join, assist or form any labor organization.
In the same Bulletin case, the Court applied Article 246 and held that managerial employees are
the very type of employees who, by the nature of their positions and functions, have been decreed
disqualified from bargaining with management. This prohibition is based on the rationale that if
managerial employees were to belong or be affiliated with a union, the union might not be assured
of their loyalty in view of evident conflict of interest or that the union can be company-dominated
with the presence of managerial employees in the union membership.20 In the collective
bargaining process, managerial employees are supposed to be on the side of the employer, to act
as its representative, and to see to it that its interests are well protected. The employer is not
assured of such protection if these employees themselves become union members.21
The prohibition on managerial employees to join, assist or form labor organizations was retained in
the Labor Code despite substantial amendments made in 1989 by R.A. 6715, the Herrera-Veloso
Law. R.A. 6715 was passed after the effectivity of the 1987 Constitution and this law did not
abrogate, much less amend the prohibition on managerial employees to join labor
organizations. The express prohibition in Article 246 remained. However, as an addendum to this
same Article, R.A. 6715 restored to supervisory employees the right to join labor organizations of
their own.22 Article 246 now reads:
Art. 246. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form
Labor law II: Coverage
any labor organization. Supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees but may join, assist or form separate
labor organizations of their own.
Article 246 became Article 245 after then Article 244 was repealed by E.O. 111. Article 246 is
presently Article 245 of the Labor Code.
Indeed, Article 245 of the Labor Code prohibiting managerial employees from joining labor
organizations has a social and historical significance in our labor relations law. This significance
should be considered in deciphering the intent of the framers of the 1987 Constitution vis-a-vis the
said Article.
With due respect, I do not subscribe to the view that section 8, Article III of the Constitution
abrogated Article 245 of the Labor Code. A textual analysis of section 8, Article III of the
Constitution will not justify this conclusion. With due respect, the resort by Mr. Justice Davide to
the deliberations of the Constitutional Commission does not suffice. It is generally recognized that
debates and other proceedings in a constitutional convention are of limited value and are an
unsafe guide to the intent of the people.23 Judge Cooley has stated that:
When the inquiry is directed to ascertaining the mischief designed to be remedied, or the
purpose sought to be accomplished by a particular provision, it may be proper to examine
the proceedings of the convention which framed the instrument. Where the proceedings
clearly point out the purpose of the provision, the aid will be valuable and satisfactory; but
where the question is one of abstract meaning, it will be difficult to derive from this source
much reliable assistance in interpretation. Every member of such a convention acts upon
such motives and reasons as influence him personally, and the motions and debates do
not necessarily indicate the purpose of a majority of a convention in adopting a particular
clause. It is quite possible for a particular clause to appear so clear and unambiguous to
the members of the convention as to require neither discussion nor illustration; and the
few remarks made concerning it in the convention might have a plain tendency to lead
directly away from the meaning in the minds of the majority. It is equally possible for a
part of the members to accept a clause in one sense and a part in another. And even if
we were certain we had attained to the meaning of the convention, it is by no means to be
allowed a controlling force, especially if that meaning appears not to be the one which the
words would most naturally and obviously convey. For as the constitution does not derive
its force from the convention which framed, but from the people who ratified it, the intent
to be arrived at is that of the people, and it is not to be supposed that they have looked for
any dark and abstruse meaning in the words employed, but rather that they have
accepted them in the sense most obvious to the common understanding, and ratified the
instrument in the belief that was the sense designed to be conveyed.24
It is for this reason that proceedings of constitutional conventions are less conclusive of the proper
construction of the instrument than are legislative proceedings of the proper construction of the
statute.25 In the statutes, it is the intent of the legislature that is being sought, while in constitutions,
it is the intent of the people that is being ascertained through the discussions and deliberations of
their representatives.26 The proper interpretation of constitutional provisions depends more on how
it was understood by the people adopting it than in the framers' understanding thereof.27
Thus, debates and proceedings of the constitutional convention are never of binding force. They
may be valuable but are not necessarily decisive.28 They may shed a useful light upon the purpose
sought to be accomplished or upon the meaning attached to the words employed. And the courts
are free to avail themselves of any light that may be derived from such sources, but they are not
bound to adopt it as the sole ground of their decision.29
Clearly then, a statute cannot be declared void on the sole ground that it is repugnant to a
supposed intent or spirit declared in constitutional convention proceedings.
D. Freedom of Association
The right of association flows from freedom of expression.30 Like the right of expression, the
exercise of the right of association is not absolute. It is subject to certain limitations.
Article 243 of the Labor Code reiterates the right of association of people in the labor sector.
Article 243 provides:
Art. 243. Coverage of employees' right to self-organization. — All persons employed in
commercial, industrial and agricultural enterprises and in 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 of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection.
Article 243 guarantees the right to self-organization and association to "all persons." This
seemingly all-inclusive coverage of "all persons," however, actually admits of exceptions.
Article 24431 of the Labor Code mandates that all employees in the civil service, i.e, those not
employed in government corporations established under the Corporation Code, may only form
associations but may not collectively bargain on terms and conditions fixed by law. An employee
of a cooperative who is a member and co-owner thereof cannot invoke the right of collective
bargaining and negotiation vis-a-vis the cooperative.32 An owner cannot bargain with himself or his
co-owners.33 Employees in foreign embassies or consulates or in foreign international
organizations granted international immunities are also excluded from the right to form labor
organizations. 34 International organizations are organized mainly as a means for conducting
general international business in which the member-states have an interest and the immunities
granted them shield their affairs from political pressure or control by the host country and assure
the unimpeded performance of their functions.35
Confidential employees have also been denied the right to form labor-organizations. Confidential
employees do not constitute a distinct category for purposes of organizational right. Confidentiality
Labor law II: Coverage
may attach to a managerial or non-managerial position. We have, however, excluded confidential
employees from joining labor organizations following the rationale behind the disqualification of
managerial employees in Article 245. In the case of National Association of Trade Unions-
Republic Planters' Bank Supervisors Chapter v. Torres,36 we held:
In the collective bargaining process, managerial employees are supposed to be on the
side of the employer, to act as its representatives, and to see to it that its interests are
well protected. The employer is not assured of such protection if these employees
themselves are union members. Collective bargaining in such a situation can become
one-sided. It is the same reason that impelled this Court to consider the position of
confidential employees as included in the disqualification found in Article 245 as if the
disqualification of confidential employees were written in the provision. If confidential
employees could unionize in order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the interest of the employers.
Moreover, unionization of confidential employees for the purpose of collective bargaining
would mean the extension of the law to persons or individuals who are supposed to act
"in the interest of" the employers. It is not farfetched that in the course of collective
bargaining, they might jeopardize that interest which they are duty-bound to protect.37
E. The disqualification extends only to labor organizations.
It must be noted that Article 245 of the Labor Code deprives managerial employees of their right to
join "labor organizations." A labor organization is defined under the Labor Code as:
Art. 212 (g). "Labor organization" means any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of dealing with the
employer concerning terms and conditions of employment.
A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the
employer concerning terms and conditions of employment. To bargain collectively is a right given
to a labor organization once it registers itself with the Department of Labor and Employment
(DOLE). Dealing with the employer, on the other hand, is a generic description of interaction
between employer and employees concerning grievances, wages, work hours and other terms
and conditions of employment, even if the employees' group is not registered with the
DOLE.38 Any labor organization which may or may not be a union may deal with the employer.
This explains why a workers' Organization does not always have to be a labor union and why
employer-employee collective interactions are not always collective bargaining.39
In the instant case, it may be argued that managerial employees' labor organization will merely
"deal with the employer concerning terms and conditions of employment" especially when top
management is composed of aliens, following the circumstances in the Caltex case.
Although the labor organization may exist wholly for the purpose of dealing with the employer
concerning terms and conditions of employment, there is no prohibition in the Labor Code for it to
become a legitimate labor organization and engage in collective bargaining. Once a labor
organization registers with the DOLE and becomes legitimate, it is entitled to the rights accorded
under Articles 242 and 263 (b) of the Labor Code. And these include the right to strike and picket.
Notably, however, Article 245 does not absolutely disqualify managerial employees from
exercising their right of association. What it prohibits is merely the right to join labor organizations.
Managerial employees may form associations or organizations so long as they are not labor
organizations. The freedom of association guaranteed under the Constitution remains and has not
been totally abrogated by Article 245.
To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing industrial life
and will open the floodgates to unionization at all levels of the industrial hierarchy. Such a ruling
will wreak havoc on the existing set-up between management and labor. If all managerial
employees will be allowed to unionize, then all who are in the payroll of the company, starting from
the president, vice-president, general managers and everyone, with the exception of the directors,
may go on strike or picket the
employer.40 Company officers will join forces with the supervisors and rank-and-file. Management
and labor will become a solid phalanx with bargaining rights that could be enforced against the
owner of the company.41 The basic opposing forces in the industry will not be management and
labor but the operating group on the one hand and the stockholder and bondholder group on the
other. The industrial problem defined in the Labor Code comes down to a contest over a fair
division of the gross receipts of industry between these two groups.42 And this will certainly bring
ill-effects on our economy.
The framers of the Constitution could not have intended a major upheaval of our labor and socio-
economic systems. Their intent cannot be made to override substantial policy considerations and
create absurd or impossible situations.43 A constitution must be viewed as a continuously
operative charter of government. It must not be interpreted as demanding the impossible or the
impracticable; or as effecting the unreasonable or absurd.44 Courts should always endeavour to
give such interpretation that would make the constitutional provision and the statute consistent
with reason, justice and the public interest.45
I vote to dismiss the petition.
VITUG, J., separate concurring and dissenting;
The pivotal issues raised in the case at bar, aptly stated by the Office of the Solicitor General, are:
(1) Whether or not public respondent, Undersecretary of the Department of Labor and
Employment ("DOLE") Bienvenido E. Laguesma, gravely abused his discretion in categorizing the
members of petitioner union to be managerial employees and thus ineligible to form or join labor
organizations; and
(2) Whether or not the provision of Article 245 of the Labor Code, disqualifying managerial
employees from joining, assisting or forming any labor organization, violates Section 8, Article III,
of the 1987 Constitution, which expresses that "(t)he right of the people, including those employed
Labor law II: Coverage
in public and private sectors to form unions, associations or societies for purposes not contrary to
law shall not be abridged."
The case originated from a petition for direct certification or certification election among route
managers/supervisory employees of Pepsi-Cola Products Phils., Inc. ("Pepsi"), filed by the United
Pepsi-Cola Supervisory Union ("Union"), claiming to be a legitimate labor organization duly
registered with the Department of Labor and Employment under Registration Certificate No. NCR-
UR-3-1421-95. Pepsi opposed the petition on the thesis that the case was no more than a mere
duplication of a previous petition for direct certification1 filed by the same route managers through
the Pepsi-Cola Employees Association (PCEA-Supervisory) which petition had already been
denied by Undersecretary Laguesma. The holding reiterated a prior decision in Workers Alliance
Trade Unions ("WATU") vs. Pepsi-Cola Products Phils., Inc.,2 that route managers were
managerial employees.
taken up and passed upon by management. The managerial level is the source, as well as
prescribes the compliance, of broad mandates which, in the field of labor relations, are to be
carried out through the next rank of employees charged with actually seeing to the specific
personnel action required. In fine, the real authority, such as in hiring or firing of employees,
comes from management and exercised by means of instructions, given in general terms, by the
"managerial employees;" the supervisory employees, although ostensibly holding that power, in
truth, however, only act in obedience to the directives handed down to them. The latter unit, unlike
the former, cannot be considered the alter ego of the owner of enterprise.
The duties and responsibilities of the members of petitioner union, shown by their "job description"
below —
PCPPI

In its decision, dated 05 May 1995, Med-Arbiter Brigida C. Fadrigon dismissed for lack of merit the RM's JOB DESCRIPTION
petition of the Union, stating that the issue on the proper classification and status of route
managers had already been ruled with finality in the previous decisions, aforementioned, rendered
by DOLE. A. GENERAL/OVERALL OBJECTIVE OF THIS POSITION

The union appealed the decision. In his resolution of 31 August 1995, Undersecretary Laguesma To contribute to the growth and profitability of PCPPI via well-selected,
dismissed the appeal, saying that there was no compelling reason to abandon the ruling in the two trained and motivated Route Sales Team who sell, collect and
merchandise, following the Pepsi Way, and consistent with Company
old cases theretofore decided by DOLE. In his order of 22 September 1995, Undersecretary
policies and procedures as well as the corporate vision of Customer
Laguesma denied the Union's motion for reconsideration.
Satisfaction.
The Union went to this Court, via a petition for certiorari, assailing the cancellation of its certificate
B. SPECIFIC JOB DESCRIPTION:
of registration. The Court, after considering the petition and the comments thereon filed by both
public and private respondents, as well as the consolidated reply of petitioner, dismissed the case
in its resolution of 08 July 1996 on the premise that no grave abuse of discretion had been KEY RESULT AREAS STANDARD OR PERFORMANCE
committed by public respondent.
SALES VOLUME *100% Vs. NRC Target
Undaunted, the Union moved, with leave, for the reconsideration of the dismissal of its petition by
the Court En Banc. In its resolution of 16 June 1997, the case was referred to the Court En _____% NTG
Banc en consulta with the movant's invocation of unconstitutionality of Article 245 of the Labor
Code vis-a-vis Section 8, Article III, of the 1987 Constitution. DISTRIBUTION * Product Availability

There is merit, in my view, in petitioner's motion for reconsideration but not on constitutional 70% Pepsi
grounds.
80% Seven-Up
There are, in the hierarchy of management, those who fall below the level of key officers of an
enterprise whose terms and conditions of employment can well be, indeed are not infrequently,
provided for in collective bargaining agreements. To this group belong the supervisory employees. 40% Mirinda
The "managerial employees," upon the other hand, and relating the matter particularly to the Labor
Code, are those "vested with powers or prerogatives to lay down and execute management 65% Mt. Dew
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees"
as distinguished from the supervisory employees whose duties in these areas are so designed as 5% Out of Stock
to verily be implementary to the policies or rules and regulations already outstanding and priorly
Labor law II: Coverage
ACCOUNTS RECEIVABLE 65% Current (Incl. Legal & Col.) 18 Productive Calls

MANAGEMENT 80:20 Cash to Credit Ratio CUSTOMER SATISFACTION Customer Complaint attended to within
the next working day
DSO — assigned Std. to Division
HUMAN RESOURCE 5% Absentism Excl. VL
by the District
MANAGEMENT (approved) 3 Documented RR/
ASSET MANAGEMENT 30 cases for ice-coolers
Week using SLM's Training Log
80 cases for electric coolers
ADMINISTRATIVE — Complete, timely and accurate
BLOWAGA on Division Vehicles
MANAGEMENT reports.
60 cases on Rolling/Permanent
PCPPI
Kiosks
RM's BASIC DAILY ACTIVITIES
TRADE DEVELOPMENT 100% Buying Customers Based
A. AT THE SALES OFFICE
on master list that bought once
1. PRACTICES BLOWAGA ON SERVICE VEHICLE (AT HOME)
5 months payback on concessions
2. REPORTS FOR WORK ON OR BEFORE 6:15 A.M.
4 CED's/Rte.
3. REPORTS IN CLEAN AND NEAT UNIFORM (GOOD GROOMING)
EXPENSE MANAGEMENT a). 5% Absentism rate Excl. VL
4. DAILY BRIEFING WITH THE DM
b). 280 cases/route/day
5. CONDUCTS SKILLS ENHANCEMENT OR HUDDLES WITH RST's
c). 15% cost-to-sales ratio
a). ATTENDANCE/GROOMING
ROUTE MANAGEMENT 3 Days on RR/Wk
b). OPERATIONAL DIRECTIONS & PRIORITIES
— Days on BC-SC- Financial &
c). ANNOUNCEMENT
Co. Assets
6. RM's PRESENCE DURING CHECK-OUT
— Days on TD
a). SLM PRACTICES BLOWAGA ON ROUTE TRUCK
75% Load Factor
Labor law II: Coverage
b). PRIVATE COUNSELING WITH RST (AM & PM IF d). KEY ACCOUNTS GOODWILL
NECESSARY)
TRADE DEVELOPMENT
c). PROPER HANDLING OF SELLING/MDSG.
MATERIALS 1. PREPARATION PRIOR TO CALL

d). YESTERDAY's FINAL SETTLEMENT REVIEW 2. ACTUAL CALL

7. UPDATE REPORTS, MONITORS, DOCUMENTS & TELEPHONE 3. POST CALL ANALYSIS

CONMATION
(HOW DID I FARE? WHY? WHAT ACTIONS TO TAKE)
8. ATTENDS TO PRODUCT COMPLAINTS (GFM)
4. FOLLOW-UP ACTION
9. CONDUCTS ADMINISTRATIVE INVESTIGATION OR ATTENDS
DM's MEETING (on Saturdays)
C. AT CLOSE OF DAY
B. FIELD WORK
1. MAINTAINS & UPDATES CORRECT & ACCURATE RECORDS &
REPORTS
ROUTE RIDE
2. RM-SLM DEBRIEFING
1. CHECKS SLMS. TRAINING LOG (PROGRESS & DEV'T.)
3. SLR DISCUSSION (BASED ON A.M. SLR)
2. SALESMAN's CPC
4. COORDINATES WITH DM ON PLANS & PROGRAMS
3. ROUTE COVERAGE EVALUATION
5. PREPARATIONS FOR NEXT DAY's ACTIVITIES3
4. LOAD FACTOR
— convey no more than those that are aptly consigned to the "supervisory" group by the relatively
5. SALESMAN's ROUTING SYSTEM EVALUATION small unit of "managerial" employees. Certain portions of a pamphlet, the so-called "Route
Manager Position Description" referred to by Mr. Justice Vicente Mendoza, in his ponencia,
BC/SC hereunder reproduced for easy reference, thus —

1. FINANCIAL & ASSET VERIFICATION, CONFIRMATION & AUDIT A. BASIC PURPOSE

2. BACKCHECKS FIRST 5 CUSTOMERS SERVED FOR THE DAY A Manager achieves objectives through others.

a). MERCHANDISING As a Route Manager, your purpose is to meet the sales plan; and you
achieve this objective through the skillful management of your job and
b). SERVICING the management of your people.

c). RM's TERRITORY FAMILIARITY These then are your functions as Pepsi-Cola Route Manager. Within
these functions — managing your job and managing your people — you
are accountable to your District Manager for the execution and
Labor law II: Coverage
completion of various tasks and activities which will make it possible for 1.2.1 Ensure the proper loading of
you to achieve your sales objectives. route trucks before check-out and the
proper sorting of bottles before check-
B. PRINCIPAL ACCOUNTABILITIES in.

1.0 MANAGING YOUR JOB 1.2.2 Ensure the upkeep of all route
sales reports and all other related
reports and forms required on an
The Route Manager is accountable for the following: accurate and timely basis.

1.1 SALES DEVELOPMENT

1.2.3 Ensure proper implementation of
the various company policies and
1.1.1 Achieve the sales plan. procedures include but not limited to
shakedown; route shortage;
1.1.2 Achieve all distribution and new progressive discipline; sorting;
account objectives. spoilages; credit/collection; accident;
attendance.
1.1.3 Develop new business
opportunities thru personal contacts 1.2.4 Ensure collection of receivables
with dealers. and delinquent accounts.

1.1.4 Inspect and ensure that all 2.0 MANAGING YOUR PEOPLE
merchandising objectives are
achieved in all outlets. The Route Manager is accountable for the following:

1.1.5 Maintain and improve 2.1 Route Sales Team Development

productivity of all cooling equipment
and kiosks.
2.1.1 Conduct route rides to train,
evaluate and develop all assigned
1.1.6 Execute and control all route salesmen and helpers at least 3
authorized promotions. days a week, to be supported by
required route ride documents/reports
1.1.7 Develop and maintain dealer & back check/spot check at least 2
goodwill. days a week to be supported by
required documents/reports.
1.1.8 Ensure all accounts comply with
company suggested retail pricing. 2.1.2 Conduct sales meetings and
morning huddles. Training should
1.1.9 Study from time to time focus on the enhancement of effective
individual route coverage and sales and merchandising techniques
productivity for possible adjustments of the salesmen and helpers. Conduct
to maximize utilization of resources. group training at least 1 hour each
week on a designated day and of
specific topic.
1.2 Administration
Labor law II: Coverage
2.2 Code of Conduct
2.2.1 Maintain the company's
reputation through strict adherence to
PCPPI's code of conduct and the
universal standards of unquestioned
business ethics. —
offer nothing at all that can approximate the authority and functions of those who actually and
genuinely hold the reins of management.
I submit, with due respect, that the members of petitioning union, not really being "managerial
employees" in the true sense of the term, are not disqualified from forming or joining labor
organizations under Article 245 of the Labor Code.
I shall now briefly touch base on the constitutional question raised by the parties on Article 245 of
the Labor Code.
The Constitution acknowledges "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 . . .
."4 Perforce, petitioner claims, that part of Article 245 5 of the Labor Code which states:
"Managerial employees are not eligible to join, assist or form any labor organization," being in
direct collision with the Constitutional provision, must now be declared abrogated in the law.
Frankly, I do not see such a "direct collision." The Constitution did not obviously grant a limitless
right "to form unions, associations or societies" for it has clearly seen it fit to subject its exercise to
possible legislative judgment such as may be appropriate or, to put it in the language of the
Constitution itself, to "purposes not contrary to law."
Freedom of association, like freedom of expression, truly occupies a choice position in the
hierarchy of constitutional values. Even while the Constitution itself recognizes the State's
prerogative to qualify this right, heretofore discussed, any limitation, nevertheless, must still be
predicated on the existence of a substantive evil sought to be addressed.6 Indeed, in the exercise
of police power, the State may, by law, prescribe proscriptions, provided reasonable and legitimate
of course, against even the most basic rights of individuals.
The restriction embodied in Article 245 of the Labor Code is not without proper rationale.
Concededly, the prohibition to form labor organizations on the part of managerial employees
narrows down their freedom of association. The very nature of managerial functions, however,
should preclude those who exercise them from taking a position adverse to the interest they are
bound to serve and protect. The mere opportunity to undermine that interest can validly be
restrained. To say that the right of managerial employees to form a "labor organization" within the
context and ambit of the Labor Code should be deemed totally separable from the right to bargain
collectively is not justified by related provisions of the Code. For instance —
Art. 212. Definitions.7 — . . .
(g) "Labor organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
xxx xxx xxx
(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, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinely or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
Art. 263. . . .
(b) Workers shall have the right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection. The right of legitimate labor
organizations to strike and picket and of employers to lockout, consistent with the national
interest, shall continue to be recognized and respected.
The maxim "ut res magis quam pereat" requires not merely that a statute should be given such a
consequence as to be deemed whole but that each of its express provisions equally should be
given the intended effect.
I find it hard to believe that the fundamental law could have envisioned the use by managerial
employees of coercive means against their own employers over matters entrusted by the latter to
the former. Whenever trust and confidence is a major aspect of any relationship, a conflict of
interest on the part of the person to whom that trust and confidence is reposed must be avoided
and when, unfortunately, it does still arise its containment can rightly be decreed.
Article 245 of the Labor Code indeed aligns itself to the Corporation Code, the basic law on by far
the most commonly used business vehicle — the corporation — which prescribes the tenure of
office, as well as the duties and functions, including terms of employment (governed in most part
by the Articles of Incorporation, the By-laws of the Corporation, or resolutions of the Board of
Directors), of corporate officers for both the statutory officers, i.e., the president, the treasurer and
the corporate secretary, and the non-statutory officers, i.e., those who occupy positions created by
the corporate by-laws who are deemed essential for effective management of the enterprise. I
cannot imagine these officers as being legally and morally capable of associating themselves into
a labor organization and asserting collective bargaining rights against the very entity in whose
behalf they act and are supposed to act.
Labor law II: Coverage
I submit, accordingly, that, firstly, the members of petitioner union or the so-called route managers,
being no more than supervisory employees, can lawfully organize themselves into a labor union
within the meaning of the Labor Code, and that, secondly, the questioned provision of Article 245
of the Labor Code has not been revoked by the 1987 Constitution.

WHEREFORE, I vote, given all the foregoing, for the reversal of the resolution of 31 August 1995,
and the order of 22 September 1995, of public respondent.