KENNETH A.

SISON

DIGESTED CASES IN LABOR LAW REVIEW

METROLAB INDUSTRIES, INC., v. ROLDAN-CONFESOR

G.R. No. 108855 / 254 SCRA 182

FACTS:

Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers

(hereinafter referred to as the Union) is a labor organization representing the rank and file employees of
petitioner Metrolab Industries, Inc. (hereinafter referred to as Metrolab/MII) and also of Metro Drug,
Inc.
The Collective Bargaining Agreement (CBA) between Metrolab and the Union expired. The negotiations
for a new CBA, however, ended in a deadlock.

The Union filed a notice of strike against Metrolab and Metro Drug Inc. 

The parties failed to settle their dispute despite the conciliation efforts of the National Conciliation and
Mediation Board.

SECRETARY OF LABOR Ruben D. Torres: issued an assumption order of jurisdiction over the entire labor
dispute at Metro Drug, Inc. - Metro Drug Distribution Division and Metrolab Industries Inc.

SECRETARY OF LABOR: issued an order resolving all the disputed items in the CBA and ordered the
parties involved to execute a new CBA.

The Union filed a Motion for Reconsideration (MR).

During the pendency of the MR, Metrolab laid off 94 of its rank and file employees.

The Union filed a motion for a cease and desist order to enjoin Metrolab from implementing the mass
layoff, alleging that such act violated the prohibition against committing acts that would exacerbate the
dispute as specifically directed in the assumption order.
Metrolab contended that the layoff was temporary and in the exercise of its management prerogative.

Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to
availability of work in the production lines.

ACTING SEC. OF LABOR Nieves Confesor: a resolution declaring the layoff of Metrolabs 94 rank and file
workers illegal and ordered their reinstatement with full backwages.

After exhaustive negotiations, the parties entered into a new CBA. The execution, however, was without
prejudice to the outcome of the issues raised in the reconsideration and clarification motions submitted
for decision to the Secretary of Labor.

The Union filed a motion for execution. Metrolab opposed.  Hence, the present petition for certiorari
with application for issuance of a Temporary Restraining Order.

ISSUES:

1. Whether or not public respondent Labor Secretary committed grave abuse of discretion and exceeded
her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal on grounds that these
unilateral actions aggravated the conflict between Metrolab and the Union who were, then, locked in a
stalemate in CBA negotiations.

2. Whether or not the Public Respondent Secretary of DOLE gravely abused her discretion in including
executive secretaries as part of the bargaining unit of the rank and file employees

RULING:

1.     NO, because the Secretary of Labor is expressly given the power under the Labor Code to assume
jurisdiction and resolve labor disputes involving industries indispensable to national interest.  The
disputed injunction is subsumed under this special grant of authority.

 Art. 263 (g) of the Labor Code specifically provides that:

xxx xxx xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If one has
already taken place at the time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may issue to enforce the same.

2. NO, because Article I (b) of the 1988-1990 CBA provides:

b)Close Shop. - All Qualified Employees must join the Association immediately upon regularization as a
condition for continued employment. This provision shall not apply to: (i) managerial employees who
are excluded from the scope of the bargaining unit; (ii) the auditors and executive secretaries of senior
executive officers, such as, the President, Executive Vice-President, Vice-President for Finance, Head of
Legal, Vice-President for Sales, who are excluded from membership in the Association; and (iii) those
employees who are referred to in Attachment I hereof, subject, however, to the application of the
provision of Article II, par. (b) hereof. Consequently, the above-specified employees are not required to
join the Association as a condition for their continued employment.

On the other hand, Attachment I provides:

Exclusion from the Scope of the Close Shop Provision

The following positions in the Bargaining Unit are not covered by the Close Shop provision of the CBA
(Article I, par. b):

1. Executive Secretaries of Vice-Presidents, or equivalent positions.

2. Executive Secretary of the Personnel Manager, or equivalent positions.

3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.

4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head Office,
Accounting Department at Head Office, and Budget Staff, who because of the nature of their duties and
responsibilities need not join the Association as a condition for their employment.

5. Newly-hired secretaries of Branch Managers and Regional Managers.

Both Metro Drug and Metrolab read the exclusion of managerial employees and executive secretaries as
exclusion from the bargaining unit. They point out that managerial employees are lumped under one
classification with executive secretaries, so that since the former are excluded from the bargaining unit,
so must the latter are likewise excluded.

The exclusion of managerial employees, in accordance with law, must therefore still carry the qualifying
phrase from the bargaining unit in Article I (b)(i) of the 1988-1990 CBA.  In the same manner, the
exclusion of executive secretaries should be read together with the qualifying phrase are excluded from
membership in the Association of the same Article and with the heading of Attachment I. The latter
refers to Exclusions from Scope of Close Shop Provision and provides that [t]he following positions in
Bargaining Unit are not covered by the close shop provision of the CBA.
The basis for the questioned exclusions, it should be noted, is no other than the previous CBA between
Metrolab and the Union. If Metrolab had undergone an organizational restructuring since then, this is a
fact to which we have never been made privy. In any event, had this been otherwise the result would
have been the same. To repeat, we limited the exclusions to recognize the expanded scope of the right
to self-organization as embodied in the Constitution.

The Court concurs with Metrolab contention that executive secretaries of the General Manager and the
executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance
Director, Management System Manager, Human Resources Manager, Marketing Director, Engineering
Manager, Materials Manager and Production Manager, who are all members of the company’s
Management Committee should not only be exempted from the closed-shop provision but should be
excluded from membership in the bargaining unit of the rank and file employees as well on grounds that
their executive secretaries are confidential employees, having access to vital labor information.

Confidential employees cannot be classified as rank and file.  The nature of employment of confidential
employees is quite distinct from the rank and file, thus, warranting a separate category. Excluding
confidential employees from the rank and file bargaining unit, therefore, is not tantamount to
discrimination.

DISPOSITIVE: Metrolab Industries Inc. partially won. The executive secretaries of petitioner Metrolabs
General Manager and the executive secretaries of the members of its Management Committee are
excluded from the bargaining unit of petitioners’ rank and file employees.

DOCTRINE: Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any
labor organization to managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.
G.R. No. 110399 August 15, 1997
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND
ERNESTO L. PONCE, President V. HONORABLE BIENVENIDO E. LAGUESMA
IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT,
HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER
AND SAN MIGUEL CORPORATION

FACTS:

Petitioner union filed before DOLE a Petition for Direct Certification or Certification Election among the
supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San
Fernando and Otis.

Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the
abovementioned employees of the different plants as one bargaining unit.

San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among
others, the Med-Arbiter’s error in grouping together all three (3) separate plants, into one bargaining
unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

The public respondent, Undersecretary Laguesma, granted respondent company’s Appeal and ordered
the remand of the case to the Med-Arbiter of origin for determination of the true classification of each
of the employees sought to be included in the appropriate bargaining unit.

Upon petitioner-union’s motion, Undersecretary Laguesma granted the reconsideration prayed for and
directed the conduct of separate certification elections among the supervisors ranked as supervisory
levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando
and Otis.

ISSUE:

1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered
confidential employees, hence ineligible from joining a union.

2. If they are not confidential employees, do the employees of the three plants constitute an
appropriate single bargaining unit.

RULING:

(1) On the first issue, this Court rules that said employees do not fall within the term “confidential
employees” who may be prohibited from joining a union.

They are not qualified to be classified as managerial employees who, under Article 245 of the Labor
Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are
not allowed membership in a labor organization of the rank-and-file employees but may join, assist or
form separate labor organizations of their own.

Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations. The two
criteria are cumulative, and both must be met if an employee is to be considered a confidential
employee — that is, the confidential relationship must exist between the employee and his supervisor,
and the supervisor must handle the prescribed responsibilities relating to labor relations.

The exclusion from bargaining units of employees who, in the normal course of their duties, become
aware of management policies relating to labor relations is a principal objective sought to be
accomplished by the ”confidential employee rule.” The broad rationale behind this rule is that
employees should not be placed in a position involving a potential conflict of interests. “Management
should not be required to handle labor relations matters through employees who are represented by
the union with which the company is required to deal and who in the normal performance of their
duties may obtain advance information of the company’s position with regard to contract negotiations,
the disposition of grievances, or other labor relations matters.”

The Court held that “if these managerial employees would belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union
can also become company-dominated with the presence of managerial employees in Union
membership.”

An important element of the “confidential employee rule” is the employee’s need to use labor relations
information. Thus, in determining the confidentiality of certain employees, a key question frequently
considered is the employee’s necessary access to confidential labor relations information.

(2) The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in
Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can
be completely disregarded if the communal or mutual interests of the employees are not sacrificed.

An appropriate bargaining unit may be defined as “a group of employees of a given employer,

comprised of all or less than all of the entire body of employees, which the collective interest of all the
employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of the law.”

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects of collective bargaining.
CARMELITO L. PALACOL, ET AL., Petitioners, v. PURA FERRER-CALLEJA,
Director of the Bureau of Labor Relations, MANILA CCBPI SALES FORCE
UNION, and COCA-COLA BOTTLERS (PHILIPPINES), INC., Respondents.

FACTS:

October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the
Union), as the collective bargaining agent of all regular salesmen, regular helpers, and relief helpers of
the Manila Plant and Metro Manila Sales Office of the respondent Coca-Cola Bottlers (Philippines), Inc.
(hereinafter referred to as the Company) concluded a new collective bargaining agreement with the
latter. Salary increase given in lump sum.

president of the Union submitted to the Company the ratification by the union members of the new CBA
and authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00
every month and, in addition, 10% by way of special assessment, from the CBA lump-sum pay granted to
the union members.

Board Resolution of the Union dated September 29, 1987, the purpose of the special assessment sought
to be levied is “to put up a cooperative and credit union; purchase vehicles and other items needed for
the benefit of the officers and the general membership; and for the payment for services rendered by
union officers, consultants and others.” There was also an additional proviso stating that the “matter of
allocation … shall be at the discretion of our incumbent Union President. Authorization and CBA
Ratification” was obtained by the Union through a secret referendum held in separate local membership
meetings on various dates

800members. 672 members originally authorized the 10% special assessment, while 173 opposed the
same. 170) members of the Union submitted documents to the Company stating that although they
have ratified the new CBA, they are withdrawing or disauthorizing the deduction of any amount from
their CBA lump sum. Later, 185 other union members submitted similar documents expressing the same
intent. These members, numbering 355 in all (170 + 185), added to the original oppositors of 173,
turned the tide in favor of disauthorization for the special assessment, with a total of 528 objectors and
a remainder of 272 supporters.

The company filed an action for interpleader with the Bureau of Labor Relations in order to resolve the
conflicting claims of the parties concerned. Petitioners, who are regular rank-and-file employees of the
Company and bona fide members of the Union, filed a motion/complaint for intervention therein in two
groups of 161 and 94, respectively. They claimed to be among those union members who either did not
sign any individual written authorization, or having signed one, subsequently withdrew or retracted their
signatures therefrom.

Union countered that the deductions not only have the popular indorsement and approval of the
general membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the
Labor Code in that the board resolution of the Union imposing the questioned special assessment had
been duly approved in a general membership meeting and that the collection of a special fund for labor
education and research is mandated.

Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988 whereby
he directed the Company to remit the amount it had kept in trust directly to the rank-and-file personnel
without delay. Appealed to BLR, reversed.

RULING:

Convinced that the deduction of the 10% special assessment by the Union was not made in accordance
with the requirements provided by law.

The principle “that employees are protected by law from unwarranted practices that diminish their
compensation without their known edge and consent” is in accord with the constitutional principle of
the State affording full protection to labor.

The failure of the Union to comply strictly with the requirements set out by the law invalidates the
questioned special assessment. Substantial compliance is not enough in view of the fact that the special
assessment will diminish the compensation of the union members. Their express consent is required,
and this consent must be obtained in accordance with the steps outlined by law, which must be
followed to the letter. No shortcuts are allowed.

Held local membership meetings on separate occasions, on different dates and at various venues,
contrary to the express requirement that there must be a general membership meeting. The contention
of the Union that “the local membership meetings are precisely the very general meetings required by
law” is untenable because the law would not have specified a general membership meeting had the
legislative intent been to allow local meetings in lieu of the latter.

Submitted only minutes of the local membership meetings when what is required is a written resolution
adopted at the general meeting.

The minutes submitted to the Company contained no list of the members present and no record of the
votes cast.

Handwritten authorization which complied with the law is valid. However, its withdrawal means no
authorization was given.