PALACOL vs. PURA FERRER-CALLEJAFACTS: 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 Ratificationwas obtained by the Union through a secret referendum held in separate local membership meetings on various dates 800 members. 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.ISSUE:WON the 10% special assessment could be levied upon their salaryRULINGNo. It was concluded that the 10% deduction was not made in accordance with the law and failed to comply with requirement. It is then settled that All doubts in the implementation and interpretation of the provisions of the Labor Code shall be resolved in favor of labor. The Court ordered the remittance of P1,267,863.39 to members from whom the said amount was withheld. convinced that the deduction of the 10% special assessmentby 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 andconsent 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. Substantialcompliance 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.VICTORIANO VS. ELIZALDEUNIONNOVEMBER 17, 2013 ~ VBDIAZBENJAMIN VICTORIANO, plaintiff-appellee, vs. ELIZALDE ROPE WORKERS UNION and ELIZALDE ROPE FACTORY, INC., defendants, ELIZALDE ROPE WORKERS UNION, defendant-appellant.GRN L-25246 September 12, 1974FACTS:Benjamin Victoriano (Appellee), a member of the religious sect known as the Iglesia ni Cristo, had been in the employ of the Elizalde Rope Factory, Inc. (Company) since 1958. He was a member of the Elizalde Rope Workers Union (Union) which had with the Company a CBA containing a closed shop provision which reads as follows: Membership in the Union shall be required as a condition of employment for all permanent employees workers covered by this Agreement.Under Sec 4(a), par 4, of RA 975, prior to its amendment by RA 3350, the employer was not precluded from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees. On June 18, 1961, however, RA 3350 was enacted, introducing an amendment to par 4 subsection (a) of sec 4 of RA 875, as follows: xxx but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization.Being a member of a religious sect that prohibits the affiliation of its members with any labor organization, Appellee presented his resignation to appellant Union. The Union wrote a formal letter to the Company asking the latter to separate Appellee from the service because he was resigning from the Union as a member. The Company in turn notified Appellee and his counsel that unless the Appellee could achieve a satisfactory arrangement with the Union, the Company would be constrained to dismiss him from the service.Appellee filed an action for injunction to enjoin the Company and the Union from dismissing Appellee. The Union invoked the union security clause of the CBA and assailed the constitutionality of RA 3350 and contends it discriminatorily favors those religious sects which ban their members from joining labor unions.ISSUE:Whether Appellee has the freedom of choice in joining the union or not.RULING:YES. The Constitution and RA 875 recognize freedom of association. Sec 1 (6) of Art III of the Constitution of 1935, as well as Sec 7 of Art IV of the Constitution of 1973, provide that the right to form associations or societies for purposes not contrary to law shall not be abridged. Section 3 of RA 875 provides that employees shall have the right to self-organization and to form, join of assist labor organizations of their own choosing for the purpose of collective bargaining and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. What the Constitution and the Industrial Peace Act recognize and guarantee is the right to form or join associations. A right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is, therefore, the employee who should decide for himself whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which association he would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time. The right to join a union includes the right to abstain from joining any union. The law does not enjoin an employee to sign up with any association.The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. By virtue of a closed shop agreement, before the enactment of RA 3350, if any person, regardless of his religious beliefs, wishes to be employed or to keep his employment he must become a member of the collective bargaining union. Hence, the right of said employee not to join the labor union is curtailed and withdrawn.To that all-embracing coverage of the closed shop arrangement, RA No.3350 introduced an exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso: but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization. Republic Act No. 3350 merely excludes ipso jure from the application and coverage of the closed shop agreement the employees belonging to any religious sects which prohibit affiliation of their members with any labor organization. What the exception provides is that members of said religious sects cannot be compelled or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. It does not prohibit the members of said religious sects from affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of said religious wets prefer to sign up with the labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign up, they can do so; the law does not coerce them to join; neither does the law prohibit them from joining, and neither may the employer or labor union compel them to join.The Company was partly absolved by law from the contractual obligation it had with the Union of employing only Union members in permanent positions. It cannot be denied, therefore, that there was indeed an impairment of said union security clause.The prohibition to impair the obligation of contracts is not absolute and unqualified. The prohibition is general. The prohibition is not to be read with literal exactness, for it prohibits unreasonable impairment only. In spite of the constitutional prohibition, the State continues to possess authority to safeguard the vital interests of its people. Legislation appropriate to safeguarding said interests may modify or abrogate contracts already in effect. For not only are existing laws read into contracts in order to fix the obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. The contract clause of the Constitution. must be not only in harmony with, but also in subordination to, in appropriate instances, the reserved power of the state to safeguard the vital interests of the people. This has special application to contracts regulating relations between capital and labor which are not merely contractual, and said labor contracts, for being impressed with public interest, must yield to the common good.The purpose to be achieved by RA 3350 is to insure freedom of belief and religion, and to promote the general welfare by preventing discrimination against those members of religious sects which prohibit their members from joining labor unions, confirming thereby their natural, statutory and constitutional right to work, the fruits of which work are usually the only means whereby they can maintain their own life and the life of their dependents.The individual employee, at various times in his working life, is confronted by two aggregates of power collective labor, directed by a union, and collective capital, directed by management. The union, an institution developed to organize labor into a collective force and thus protect the individual employee from the power of collective capital, is, paradoxically, both the champion of employee rights, and a new source of their frustration. Moreover, when the Union interacts with management, it produces yet a third aggregate of group strength from which the individual also needs protection the collective bargaining relationship.The free exercise of religious profession or belief is superior to contract rights. In case of conflict, the latter must yield to the former.The purpose of RA 3350 is to serve the secular purpose of advancing the constitutional right to the free exercise of religion, by averting that certain persons be refused work, or be dismissed from work, or be dispossessed of their right to work and of being impeded to pursue a modest means of livelihood, by reason of union security agreements. To help its citizens to find gainful employment whereby they can make a living to support themselves and their families is a valid objective of the state. The Constitution even mandated that the State shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relation between workers and employers.The primary effects of the exemption from closed shop agreements in favor of members of religious sects that prohibit their members from affiliating with a labor organization, is the protection of said employees against the aggregate force of the collective bargaining agreement, and relieving certain citizens of a burden on their religious beliefs; and by eliminating to a certain extent economic insecurity due to unemployment, which is a serious menace to the health, morals, and welfare of the people of the State, the Act also promotes the well-being of society. It is our view that the exemption from the effects of closed shop agreement does not directly advance, or diminish, the interests of any particular religion. Although the exemption may benefit those who are members of religious sects that prohibit their members from joining labor unions, the benefit upon the religious sects is merely incidental and indirect.The purpose of RA 3350 was not to grant rights to labor unions. The rights of labor unions are amply provided for in Republic Act No. 875 and the new Labor Code.The Act does not require as a qualification, or condition, for joining any lawful association membership in any particular religion or in any religious sect; neither does the Act require affiliation with a religious sect that prohibits its members from joining a labor union as a condition or qualification for withdrawing from a labor union. Joining or withdrawing from a labor union requires a positive act Republic Act No. 3350 only exempts members with such religious affiliation from the coverage of closed shop agreements. So, under this Act, a religious objector is not required to do a positive act-to exercise the right to join or to resign from the union. He is exempted ipso jure without need of any positive act on his part.Ebralinag vs. Division Superintendent of School ofCebuFACTS:Two special civil actions for certiorari, Mandamus and Prohibition were filed and consolidated raising the same issue whether school children who are members or a religious sect known as Jehovahs Witnesses may be expelled from school (both public and private), for refusing, on account of their religious beliefs, to take part in the flag ceremony which includes playing (by a band) or singing the Philippine national anthem, saluting the Philippine flag and reciting the patriotic pledge.All of the petitioners in both (consolidated) cases were expelled from their classes by the public school authorities in Cebu for refusing to salute the flag, sing the national anthem and recite the patriotic pledge as required by Republic Act No. 1265 (An Act making flagceremony compulsory in all educational institutions) of July 11, 1955 , and by Department Order No. 8 (Rules and Regulations for Conducting the Flag Ceremony in All Educational Institutions)dated July 21, 1955 of the Department of Education, Culture and Sports (DECS) making the flag ceremony compulsory in all educational institutions.Petitioners are Jehovahs Witnesses believing that by doing these is religious worship/devotion akin to idolatry against their teachings. They contend that to compel transcends constitutional limits and invades protection against official control and religious freedom. The respondents relied on the precedence of Gerona et al v. Secretary of Education where the Court upheld the explulsions. Gerona doctrine provides that we are a system of separation of the church and state and the flag is devoid of religious significance and it doesnt involve any religious ceremony. The children of Jehovahs Witnesses cannot be exempted from participation in the flag ceremony. They have no valid right to such exemption. Moreover, exemption to the requirement will disrupt school discipline and demoralize the rest of the school population which by far constitutes the great majority. The freedom of religious belief guaranteed by the Constitution does not and cannot mean exemption from or non-compliance with reasonable and non-discriminatory laws, rules and regulations promulgated by competent authority.ISSUE: Whether or not the expulsion of petitioners violated their freedom of religion?HELD:YES. The Court held that the expulsion of the petitioners from the school was not justified.Religious freedom is a fundamental right of highest priority and the amplest protection among human rights, for it involves the relationship of man to his Creator. The right to religious profession and worship has a two-fold aspect, vis., freedom to believe and freedom to act on ones belief. The first is absolute as long as the belief is confined within the realm of thought. The second is subject to regulation where the belief is translated into external acts that affect the public welfare. The only limitation to religious freedom is the existence of grave and present danger to public safety, morals, health and interests where State has right to prevent.Petitioners stress that while they do not take part in the compulsory flag ceremony, they do not engage in external acts or behavior that would offend their countrymen who believe in expressing their love of country through the observance of the flag ceremony. They quietly stand at attention during the flag ceremony to show their respect for the right of those who choose to participate in the solemn proceedings. Since they do not engage in disruptive behavior, there is no warrant for their expulsion.PABLO ARIZALA, SERGIO MARIBAO, LEONARDO JOVEN, and FELINO BULANDUSvs.THE COURT OF APPEALSFACTS:Under the Industrial Peace Act, government-owned or controlled corporations had the duty tobargain collectively and were otherwise subject to the obligations and duties of employers in the privatesector The Act also prohibited supervisors to become, or continue to be, members of labor organizationscomposed of rank-and-file employees, and prescribed criminal sanctions for breach of the prohibition.Under the regime of said Industrial Peace Act that the Government Service Insurance System (GSIS, forshort) became bound by a collective bargaining agreement executed between it and the labor organizationrepresenting the majority of its employees, the GSIS Employees Association. The agreement contained a"maintenance-of-membership" clause The petitioners occupied supervisory positions in the GSIS. Pablo Arizala and Sergio Maribao were, respectively, the Chief of the Accounting Division, and the Chief of the Billing Section of said Division, in the Central Visayas Regional Office of the GSIS. Leonardo Joven and Felino Bulandus were, respectively, the Assistant Chief of the Accounting Division (sometimes Acting Chief in the absence of the Chief) and the Assistant Chief of the Field Service and Non-Life Insurance Division (and Acting Division Chief in the absence of the Chief), of the same Central Visayas Regional Office of the GSIS. Demands were made onall four of them to resign from the GSIS Employees Association, in view of their supervisory positions.They refused to do so. Consequently, two (2) criminal cases for violation of the Industrial Peace Act werelodged against them in the City Court of Cebu: one involving Arizala and Maribao and the other, Jovenand Bulandus. Which resulted to their conviction.They argued that when the so called "1973 Constitution" took effect on January 17, 1973 pursuant to Proclamation No. 1104, the case of Arizala and Maribao was still pending in the Court of Appeals and that of Joven and Bulandus, pending decision in the City Court of Cebu; that since the provisions of that constitution and of the Labor Code subsequently promulgated (eff., November 1, 1974), repealing the Industrial Peace Act-placed employees of all categories in government-owned or controlled corporations without distinction within the Civil Service, and provided that the terms and conditions of their employment were to be "governed by the Civil Service Law, rules and regulations" and hence, no longer subject of collective bargaining, the appellants ceased to fall within the coverage of the Industrial Peace Act and should thus no longer continue to be prosecuted and exposed to punishment for a violation thereof.They pointed out further that the criminal sanction in the Industrial Peace Act no longer appeared in theLabor CodeISSUE: whether or not the petitioners' criminal liability for a violation of the Industrial Peace Act may bedeemed to have been obliterated in virtue of subsequent legislation and the provisions of the 1973 and 1987Constitutions.

RULING: YES. the right of self-organization and collective bargaining had been withdrawn by the LaborCode from government employees including those in government-owned and controlled corporations-chiefly for the reason that the terms and conditions of government employment, all embraced in civil service, may not be modified by collective bargaining because set by law. It is therefore immaterial, they say, whether supervisors are members of rank-and-file unions or not; after all, the possibility of the employer's control of the members of the union thru supervisors thus rendering collective bargaining illusory, which is the main reason for the prohibition, is no longer of any consequence. the disappearance from the law of the prohibition on supervisors being members of labor organizationscomposed of employees under their supervision. The Labor Code (PD 442) allowed supervisors (if not managerial) to join rank-and-file unions. And under the Implementing Rules of RA 6715, supervisors who were members of existing labor organizations on the effectivity of said RA 6715 were explicitly authorized to "remain therein." that the maintenance by supervisors of membership in a rank-and-file labor organization even after the enactment of a statute imposing a prohibition on such membership, is not only not a crime, but is explicitly allowed, under present law. The repeal of a penal law deprives the courts of jurisdiction to punish persons charged with a violation of the old penal law prior to its repeal.

Franklin Baker V. Trajano157 SCRA 416Facts:This is a petition for certiorari seeking the annulment of the order of Mediator-Arbiter ConchitaMartinez of Ministry of Labor and Employment and Dir Cresencio Trajano of MOLE. On April 23, 1984 Franklin Baker Brotherhood Association filed a petition for certification election among the office and technical employees of the petitioner company with the Ministry of Labor and Employment Davao. It alleges that 90 employees in the Davao plant which is distinct from the regular rank and file employees is excluded from the coverage of the existing CBA. Petitioner company did not object on the election but manifested that out of 90 employees 74 are managerial employees and 2 are confidential employees. Med-Arbiter Martinez issued an order dated Sept. 17, 1984 granting the petition and certification election among the office and technical employees of the Davao plant. The petitioner company appealed to the Bureau of Labor Relations for the order be set aside and declare the 74employees as managerial employees. During the pendency of the appeal, 61 employees involved filed aMotion to Withdraw the petition for certification election praying for their exclusion from the bargainingunit because they are managerial employees as they are performing managerial functions. April 7, 1986Cresencio Trajano of Bureau of Labor Relations issued a resolution affirming the order of Med-ArbiterConchita Martinez.Issue: Whether or Not the subject employees are managerial employees under the purview of theLabor Code and it's Implementing Rules.Held:A managerial employee is defined as one "who is vested with powers or prerogative to lay downand execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign, ordiscipline employees or to effectively recommend such managerial actions."It will be noted that in the performance of their duties and functions and in the exercise of theirrecommendatory powers, subject employees may only recommend, as the ultimate power to hire, fireor suspend as the case maybe rests upon the plant manager. The test of "supervisory" or managerial status" depends on whether a person possesses authority to act in the interest of his employer in thematter specified in Art. 212(k) of the Labor Code and Sec. 1(m) of its Implementing Rules and whethersuch authority is not merely routinary or clerical in nature, but requires the use of independentjudgement. The subject employees are not managerial employees because as borne by the records, theydo not participate in the policy making but given ready policies to execute and standard practice toobserve, thus having little freedom of action.Premises Considered, the petition is dismissed, and the assailed resolution and orders areAffirmed. So Ordered.LAGUNA COLLEGE VS. CIR25 scra 167FACTS:On the appropriate bargaining unit, petitioner Laguna College, changing its original stand,proposed two separate units, namely, college unit composed of the professors and instructors in the College, and high school unit comprising the high school teachers. On the other hand, LACTA (the union) proposed only one unit the employer unit composing of all the teachers in the entire Laguna College.ISSUE:WON there can be two bargaining units in this case.HOLDING:No. From the evidence adduced, it is believed that the factors in favor of employer unit faroutweigh the reasons for the establishment of two separate bargaining units as proposed by petitioner.It is not denied that college teachers are governed by rules and regulations of the Bureau ofPrivate Education (CHED, kun sa yana pa), which are different from the rules and regulations for high school teachers; that the high school department of petitioner was organized at a different time from the college department; that the set-up in the two departments are different; and that the high school teachers are paid per period or subject, while the college teachers are paid on the hourly basis. But it is not also denied that these two departments are under the control of only one board of trustees; that they are housed in one and the same building; that there is but one cashier and only one registrar who himself is the administrative officer of the whole Laguna College. As a matter of fact, the function of the Administrative Officer extends even to the high school department. It is a fact that there are some teachers involved in this case who are teaching both in the college and high school departments which is a decisive proof of community of interest of these teachers and which negates the establishment of two bargaining units. Besides, in the proposed two separate bargaining units, the elementary teachers of the petitioner will be left out without a bargaining representative.

PHILIPS INDUSTRIAL DEVT. INC. (PIDI) VS. NLRC AND PHILIPS EMPLOYEES ORG. (PEO-FFW)G.R. No. 88957FACTS:The Executive Labor Arbiter rendered a decision declaring that PIDIs Division Secretaries and all Staff of general management, personnel and industrial relations department, secretaries of audit, EDP,financial system, are confidential employees and as such are hereby deemed excluded in the bargaining unit for the rank and file employees of PIDI. Respondent union PEO-FFW appealed from the decision to the NLRC. A decision was rendered by the latter, reversing the ruling of the Executive Labor Arbiter to the effect that the aforementioned positions excluded among the rank and file group is now being included and regarded as rank and file and as such they can be part of the bargaining unit for rank and file employees.ISSUE:WON the subject employees may be part of the bargaining unit for rank and file employees.HOLDING:No. It is quite obvious that respondent NLRC committed grave abuse of discretion inreversing the decision of the Executive Labor Arbiter and in decreeing that PIDIs Service Engineers,Sales Force, division secretaries, and all Staff of general management, personnel and industrial relations department, secretaries of audit, EDP, financial systems are included within the rank and file bargaining unit.In the first place, all these employees, with the exception of the service engineers and the salesforce personnel, are confidential employees. Their classification as such is not seriously disputed by respondent union because 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 join a labor union equally applies to them.

PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and PHILIPS EMPLOYEES ORGANIZATION (FFW), respondents. [G.R. No. 88957. June 25, 1992.]FACTS:Philips Industrial Development, Inc. (PIDI) seeks to set aside the Decision and Resolution, respectively, of the National Labor Relations Commission (NLRC) on the ground that it committed grave abuse of discretion amounting to lack of jurisdiction in holding that service engineers, sales representatives and confidential employees of PIDI are qualified to be included in the existing bargaining unit.PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products. Since 1971, it had a total of six (6) collective bargaining agreements (CBAs) with private respondent Philips Employees Organization-FFW (PEO-FFW), registered labor union and the certified bargaining agent of all the rank and file employees of PIDI. In the first CBA (1971-1974), the supervisors referred to in R.A. No. 875, confidential employees, security guards, temporary employees and sales representatives were excluded from the bargaining unit. In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 1984-1986), the sales force, confidential employees and heads of small units, together with the managerial employees, temporary employees and security personnel, were specifically excluded from the bargaining unit. 1 The confidential employees are the division secretaries of light/telecom/data and consumer electronics, marketing managers, secretaries of the corporate planning and business manager, fiscal and financial system manager and audit and EDP manager, and the staff of both the General Management and the Personnel Department. 2 In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among others, that the subject of inclusion or exclusion of service engineers, sales personnel and confidential employees in the coverage of the bargaining unit would be submitted for arbitration. As the parties failed to agree on a voluntary arbitrator, the BLR endorsed the petition to the Executive Labor Arbiter of the National Capital Region for compulsory arbitration pursuant to Article 228 of the Labor Code. the case was assigned to Executive Labor Arbiter Arthur Amansec.It is hereby declared that the Division Secretaries and all Staff of general management, personnel and industrial relations department, secretaries of audit, EDP, financial system are confidential employees and as such are hereby deemed excluded in the bargaining unit.appealed decision of the Executive Labor Arbiter is hereby SET ASIDE and a new one entered declaring respondent company's Service Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and file bargaining unit.The reversal is anchored on the respondent NLRC's conclusion that based on Section 1, 3 Rule II, Book V of the Omnibus Rules Implementing the Labor Code, as amended by Section 3, Implementing Rules of E.O. No. 111; paragraph (c), Section 2, Rule V of the same Code, as amended by Section 6 4 of the Implementing Rules of E.O. No. 111; and Article 245 5 of the Labor Code, as amended:". . . all workers, except managerial employees and security personnel, are qualified to join or be a part of the bargaining unit . . .""The Executive Labor Arbiter's directive that the service engineers and sales representatives to (sic) conduct a referendum among themselves is erroneous inasmuch as it arrogates unto said employees the right to define what the law means. It would not be amiss to state at this point that there would be no one more interested in excluding the subject employees from the bargaining unit than management and that it would not be improbable for the latter to lobby and/or exert pressure on the employees concerned, thus agitating unrest among the rank-and-file. Likewise, the Executive Labor Arbiter's declaration that the Division Secretaries and all Staff of general management, personnel and industrial relations department, secretaries of audit, EDP and financial system 'are confidential employees and as such are hereby deemed excluded in (sic) the bargaining unit' is contrary to law for the simple reason that the law, as earlier quoted, does not mention them as among those to be excluded from the bargaining unit only (sic) managerial employees and security guards. As a matter of fact, supervisory unions have already been dissolved and their members who do not fall within the definition of managerial employees have become eligible to join or assist the rank-and-file organization." ISSUE:whether the NLRC committed grave abuse of discretion in holding that service engineers, sales representatives and confidential employees (division secretaries, staff of general management, personnel and industrial relations department, secretaries of audit, EDP and financial system) are qualified to be included in the existing bargaining unit. Petitioner maintains that it did, and in support of its stand that said employees should not be absorbed by the existing bargaining unit, it urges this Court to consider these points:The rationale for such exclusion is that these employees hold positions which are highly sensitive, confidential and of a highly fiduciary nature; to include them in the bargaining unit may subject the company to breaches in security and the possible revelation of highly sensitive and confidential matters. It would cripple the company's bargaining position and would give undue advantage to the union.2)The absence of mutuality of interests between this group of employees and the regular rank and file militates against such inclusion. A table prepared by the petitioner shows the disparity of interests between the said groups:The Office of the Solicitor General supports the decision of the Executive Labor Arbiter and refuses to uphold the position of the NLRC. It holds the view that the division secretaries; the staff members of General Management, Personnel and the Industrial Relations Department; and the secretaries of Audit, EDP and Financial Systems, are disqualified from joining the PEO-FFW as they are confidential employees. They cannot even form a union of their own for, as held in Golden Farms, Inc. vs. Ferrer-Calleja, 8 the rationale for the disqualification of managerial employees from joining unions holds true also for confidential employees. Sales representatives and service engineers, however, there is no doubt that they are entitled to join or form a union, as they are not disqualified by law from doing so. Considering that they have interests dissimilar to those of the rank and file employees comprising the existing bargaining unit, and following the Globe Doctrine enunciated in In Re: Globe Machine and Stamping Company 9 to the effect that in determining the proper bargaining unit the express will or desire of the employees shall be considered, they should be allowed to determine for themselves what union to join or form. The best way to determine their preference is through a referendum As shown by the records, such a referendum was decreed by the Executive Labor Arbiter. We express Our agreement with the petitioner's view that respondent NLRC did not quite accurately comprehend the issue raised before it. Indeed, the issue is not whether the subject employees may join or form a union, but rather, whether or not they may be part of the existing bargaining unit for the rank and file employees of PIDI.At the time Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security personnel were no longer disqualified from joining or forming a union. Section 6 of E.O No. 111, enacted on 24 December 1986, repealed the original provisions of Article 245 of the Labor Code, reading as follows:"ARTICLE 245.Ineligibility of security personnel to join any labor organization. Security guards and other personnel employed for the protection and security of the person, properties and premises of the employer shall not be eligible for membership in any labor organization."and substituted it with the following provision:

"ARTICLE 245.Right of employees in the public service. " By virtue of such repeal and substitution, security guards became eligible for membership in any labor organization.

quite obvious that respondent NLRC committed grave abuse of discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and file bargaining unit."all these employees, with the exception of the service engineers and the sales force personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. 12 As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, 13 this Court elaborated on this rationale, thus:". . . The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership."In Golden Farms, Inc. vs. Ferrer-Calleja, 14 this Court explicitly made this rationale applicable to confidential employees:"This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded."NLRC practically forced them to become members of PEO-FFW or to be subject to its sphere of influence, it being the certified bargaining agent for the subject bargaining unit. This violates, obstructs, impairs and impedes the service engineers' and the sales representatives' constitutional right to form unions or associations 15 and to self-organization. In Victoriano vs. Elizalde Rope Workers' Union, ". . . Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a 'right', it can be safely said that whatever theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is, therefore, the employee who should decide for himself whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which association he would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any, time. 18 It is clear, therefore, that the right to join a union includes the right to abstain from joining any union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the employee, is the 'right' to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any association."Article 245 20 of the Labor Code which, as amended by R.A. No. 6715, now reads:"ARTICLE 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." (emphasis supplied)The foregoing disquisitions render unnecessary a discussion on the second ground on the alleged grave abuse of discretion on the part of the NLRC in not applying the "Globe Doctrine". Suffice it to state here that since the only issue is the subject employees' inclusion in or exclusion from the bargaining unit in question, and PIDI never questioned the decision of the Executive Labor Arbiter, the Globe Doctrine finds no application. Besides, this doctrine applies only in instances of evenly balanced claims by competitive groups for the right to be established as the bargaining unit, 21 which do not obtain in this case. LexLibWHEREFORE, the petition is hereby GRANTED. The Decision of public respondent National Labor Relations Commission in Case No. NLRC-NCR-00-11-03936-87, promulgated on 16 January 1989, is hereby SET ASIDE while the Decision of the Executive Labor Arbiter in said case dated 17 March 1988 is hereby REINSTATED, subject to the modifications above indicated.

METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of the Department of Labor and Employment and METRO DRUG CORPORATION EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS, respondents. [G.R. No. 108855. February 28, 1996.]

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the Resolution and Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and 25 January 1993, respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-91; NCMB-NCR-NS-09-678-91) on grounds that these were issued with grave abuse of discretion and in excess of jurisdiction.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.On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union expired. The negotiations for a new CBA, however, ended in a deadlock.Consequently, on 23 August 1991, 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.To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued an assumption order dated 20 September 1991, the dispositive portion of which reads, thus:pursuant to Article 263 (g) of the Labor Code, as amended, this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. Metro Drug Distribution Division and Metrolab Industries Inc.Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp. Employees Association FFW are likewise directed to cease and desist from committing any and all acts that might exacerbate the situation.then Labor Secretary Torres issued an order resolving all the disputed items in the CBA and ordered the parties involved to execute a new CBA. Union filed a motion for reconsideration.On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab laid off 94 of its rank and file employees.On the same date, 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. It maintained that the company would suffer a yearly gross revenue loss of approximately sixty-six (66) million pesos due to the withdrawal of its principals in the Toll and Contract Manufacturing Department. Metrolab further asserted that with the automation of the manufacture of its product "Eskinol," the number of workers required its production is significantly reduced. Metrolab recalled some of the laid off workers on a temporary basis due to availability of work in the production lines.Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of Metrolab's 94 rank and file workers illegal and ordered their reinstatement with full backwages.

The layoff of the 94 employees at MII is hereby declared illegal for the failure of the latter to comply with our injunction against committing any act which may exacerbate the dispute and with the 30-day notice requirement. Accordingly, MII is hereby ordered to reinstate the 94 employees, except those who have already been recalled, to their former positions or substantially equivalent, positions with full backwages from the date they were illegally laid off on 27 January 1992 until actually reinstated without loss of seniority rights and other benefits. Issues relative to the CBA agreed upon by the parties and not embodied in our earlier order are hereby ordered adopted for incorporation in the CBA. Further, the dispositions and directives contained in all previous orders and resolutions relative to the instant dispute, insofar as not inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and desist from committing any act which may tend to circumvent this resolution.

Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not aggravate the dispute since no untoward incident occurred as a result thereof. It, likewise, filed a motion for clarification regarding the constitution of the bargaining unit covered by the CBA.On 29 June 1992, 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. 5 Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its employees on grounds of redundancy due to lack of work which the Union again promptly opposed Labor Secretary Confesor again issued a cease and desist order. Metrolab moved for a reconsideration. 6 On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the following orders:MII's motion for reconsideration with respect to the consequences of the second wave of layoff affecting 73 employees, to the extent of assailing our ruling that such layoff tended to exacerbate the dispute, is hereby denied. But inasmuch as the legality of the layoff was not submitted for our resolution and no evidence had been adduced upon which a categorical finding thereon can be based, the same is hereby referred to the NLRC for its appropriate action.Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute are hereby lifted.SO RESOLVED. 7 Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop provision of the CBA, not from the bargaining unit.On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the present petition for certiorari with application for issuance of a Temporary Restraining Order.ATHE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE OF DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF ILLEGAL AND ORDERING THE REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE AFFECTED EMPLOYEES. * BTHE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED HER DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK AND FILE EMPLOYEES. 8 Metrolab argues that the Labor Secretary's order enjoining the parties from committing any act that might exacerbate the dispute is overly broad, sweeping and vague and should not be used to curtail the employer's right to manage his business and ensure its viability.This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate business decisions of the employer. However, this privilege is not absolute but subject to limitations imposed by law. 9 In PAL v. NLRC, 10 we issued this reminder: was held that management's prerogatives must be without abuse of discretion It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice The case at bench constitutes one of the exceptions. 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: (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 That Metrolab's business is of national interest is not disputed. Metrolab is one of the leading manufacturers and suppliers of medical and pharmaceutical products to the country.Metrolab's management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered by the limitations set by law, taking into account its special character and the particular circumstances in the case at bench.MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of management prerogatives such as layoffs. But it may nevertheless be appropriate to mention here that one of the substantive evils which Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a labor dispute to the further detriment of the national interest. When a labor dispute has in fact occurred and a general injunction has been issued restraining the commission of disruptive acts, management prerogatives must always be exercised consistently with the statutory objective. 11 We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative agencies supported by substantial evidence are accorded great respect and binds this Court. Any act committed during the pendency of the dispute that tends to give rise to further contentious issues or increase the tensions between the parties should be considered an act of exacerbation. One must look at the act itself, not on speculative reactions. A misplaced recourse is not needed to prove that a dispute has been exacerbated. For instance, the Union could not be expected to file another notice of strike. For this would depart from its theory of the case that the layoff is subsumed under the instant dispute, for which a notice of strike had already been filed. On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic action from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal. Under a regime of laws, legal remedies take the place of violent ones. 14 Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner implemented the subject layoffs. As a result, motions and oppositions were filed diverting the parties' attention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.there is no circumstance at all from which we can infer an intention from MII not to sever the employment relationship permanently. If there was such an intention, MII could have made it very clear in the notices of layoff. But as it were, the notices are couched in a language so uncertain that the only conclusion possible is the permanent termination, not the continuation, of the employment relationship.second issue raised by petitioner merits our consideration.This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing the expanded scope of the right to self-organization, our intent was to delimit the types of employees excluded from the close shop provision, not from the bargaining unit, to executive secretaries only. Otherwise, the conversion of the exclusionary provision to one that refers to the bargaining unit from one that merely refers to the close shop provision would effectively curtail all the organizational rights of executive secretaries.The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification, MII points out that it has done away with the positions of Executive Vice-President, Vice-President for Sales, and Director for Corporate Planning. Thus, the foregoing group of exclusions is no longer appropriate in its present organizational structure. Nevertheless, there remain MII officer positions for which there may be executive secretaries. These include the General Manager and members of the Management Committee, specifically i) the Quality Assurance Manager; ii) the Product Development Manager; iii) the Finance Director; iv) the Management System Manager; v) the Human Resources Manager; vi) the Marketing Director; vii) the Engineering Manager; viii) the Materials Manager; and ix) the Production Manager.Metrolab, however, maintains 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." We concur with Metrolab.Although Article 245 of the Labor Code 20 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.The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file employees and their disqualification to join any labor organization was succinctly discussed in Philips Industrial Development v. NLRC : 21 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 join a labor union equally applies to them.Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential employees:This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded." Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v. Torres 22 we declared:As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential employees, having control, custody and/or access to confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, this claim is not even disputed by petitioner. A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer's property. While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary, implication, confidential employees are similarly disqualified. . . .. . . (I)n 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 interest 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 Art. 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. . . .Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor, 23 we ruled that:Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and clerical. However, they should be differentiated from rank-and-file employees because they are tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving notices, and such other duties as required by the legal personnel of the corporation. Legal secretaries therefore fall under the category of confidential employees. . . . There would be no danger of company domination of the Union since the confidential employees would not be members of and would not participate in the decision making processes of the Union. Neither would there be a danger of espionage since the confidential employees would not have any conflict of interest, not being members of the Union. In any case, there is always the danger that any employee would leak management secrets to the Union out of sympathy for his fellow rank and filer even if he were not a member of the union nor the bargaining unit.

Confidential employees are rank and file employees and they, like all the other rank and file employees, should be granted the benefits of the Collective Bargaining Agreement. There is no valid basis for discriminating against them. The mandate of the Constitution and the Labor Code, primarily of protection to Labor, compels such conclusion. The dangers sought to be prevented, particularly the threat of conflict of interest and espionage, are not eliminated by non-membership of Metrolab's executive secretaries or confidential employees in the Union. Forming part of the bargaining unit, the executive secretaries stand to benefit from any agreement executed between the Union and Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal interests and their duty as confidential employees to act for and in behalf of Metrolab. They do not have to be union members to affect or influence either side.Finally, confidential employees cannot be classified as rank and file. As previously discussed, 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.WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of public respondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the extent that executive secretaries of petitioner Metrolab's General Manager and the executive secretaries of the members of its Management Committee are excluded from the bargaining unit of petitioner's rank and file employees.SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. 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, respondents. [G.R. No. 110399. August 15, 1997.]Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the Order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, dated March 11, 1993, in Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt UnionFACTS:On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter's error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.Undersecretary Laguesma, granted respondent company's Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit.Upon petitioner-union's motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings.On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC 2 case. S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election.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.On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union.There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245 4 of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not.Confidential employees are those who (1) assist or act in a confidential capacity (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. 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. 6 The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the "confidential employee rule." The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests. 7 "Management should not be required to handle labor relations matters through employees who are represented by the union with 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." 8 There have been ample precedents in this regard, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez, 9 the Court held that "if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated with the presence of managerial employees in Union membership." The same rationale was applied to confidential employees in "Golden Farms, Inc. v. Ferrer-Calleja" 10 and in the more recent case of "Philips Industrial Development, Inc. v. NLRC " 11 which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, person who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union was held equally applicable to them. 12

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

it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to "labor relations." 15 If access to confidential labor relations information is to be a factor in the determination of an employee's confidential status, such information must relate to the employer's labor relations policies.

Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit representing employees of the union or association." "Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information 18 or technical trade secrets, will not render an employee a confidential employee." 19 Herein listed are the functions of supervisors 3 and higher:1.To undertake decisions to discontinue/temporarily stop shift operations when situations require.2.To effectively oversee the quality control function at the processing lines in the storage of chicken and other products.3.To administer efficient system of evaluation of products in the outlets.4.To be directly responsible for the recall, holding and rejection of direct manufacturing materials.5.To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. 20

It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employer's internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board, 21 "an employee may not be excluded from appropriate bargaining unit merely because he has access to confidential information concerning employer's internal business operations and which is not related to the field of labor relations." It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to "all" workers the right to self-organization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right to bargain collectively through representatives of their choosing. In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 23 It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests.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. 25 employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective bargaining unit. 26 It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. 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 as demonstrated in UP v. Calleja-Ferrer where all non-academic rank and file employees of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative