Pagkakaisa ng mga Manggagawa sa Triumph International-ULGWF vs. Ferrer-Calleja

The nature of an employee's functions, not the job title, determines whether the employee is managerial, supervisory, or rank-and-file; employees who merely execute ready policies and whose recommendations are subject to review by higher management are rank-and-file. A certification election petition is barred by an existing collective bargaining agreement unless filed within 60 days before its expiry, and a separate bargaining unit is disallowed absent compelling reasons showing suppression of the right to self-organization or substantial distinctions among rank-and-file employees.

Triumph International Philippines, Inc. had an existing collective bargaining agreement with petitioner PMTI-ULGWF, the recognized bargaining agent of its rank-and-file employees. Respondent Progressive Employees Union (PEU-TIPI) sought to represent the company's monthly-paid administrative, technical, confidential, and supervisory employees. The dispute implicated the Labor Code's definitions of managerial, supervisory, and rank-and-file employees, as amended by Republic Act No. 6715, and the contract-bar rule governing certification elections.

Triumph International Philippines, Inc. employed rank-and-file employees represented by petitioner Pagkakaisa ng mga Manggagawa sa Triumph International-United Lumber and General Workers of the Philippines (PMTI-ULGWF), the recognized collective bargaining agent with a valid and existing collective bargaining agreement effective up to September 24, 1989. Respondent Progressive Employees Union (PEU-TIPI) sought to represent the company's monthly-paid administrative, technical, confidential, and supervisory employees.

On November 25, 1987, PEU-TIPI filed a petition for certification election with the Department of Labor and Employment. On January 30, 1988, Triumph International moved to dismiss the petition on the grounds that the respondent union could not lawfully represent managerial employees and that the petition could not prosper under the contract-bar rule. On February 18, 1988, petitioner, as intervenor, filed its opposition on the same grounds.

On April 13, 1988, the Labor Arbiter granted the petition and directed a certification election to determine the sole and exclusive bargaining representative of all monthly-paid administrative, technical, confidential, and supervisory employees of Triumph International. On appeal, the Bureau of Labor Relations Director affirmed the Labor Arbiter's order on August 24, 1988, with the modification that the employees sought to be represented were given the option to join the existing bargaining unit composed of daily-paid rank-and-file employees; if they opted to join, the pertinent provision of the existing CBA would be amended to include them in its coverage. Triumph International filed a motion for reconsideration on September 5, 1988, which the Bureau of Labor Relations Director denied on October 28, 1988. Petitioner then filed the present petition for certiorari with prayer for preliminary injunction, and the Supreme Court issued a restraining order on January 11, 1989.

The Med-Arbiter found that while the functions and titles of the personnel sought to be organized appeared on paper to involve an apparent exercise of managerial authority, none of them actually discharged said functions. The Bureau of Labor Relations found that the employees did not have the power to lay down and execute management policies, as they were given ready policies merely to execute and standard practices to observe; they did not have the power to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees, but could only recommend such actions, with the power resting upon the personnel manager; and they did not have the power to effectively recommend managerial actions, because their recommendations had to pass through the department manager for review, the personnel manager for attestation, and the general manager or president for final action. The records showed no evidence sufficiently distinguishing and clearly separating the employees into managerial and supervisory groups on one hand, or supervisory and rank-and-file groups on the other.

• Managerial Status: Petitioner argued that the members of respondent union are managerial employees expressly excluded from joining, assisting, or forming any labor organization under Article 245 of the Labor Code.
• Contract-Bar Rule: Petitioner, as intervenor, opposed the petition on the ground that it could not prosper by virtue of the contract-bar rule, given the valid and existing CBA effective up to September 24, 1989.
• Grave Abuse of Discretion: Petitioner maintained that the public respondent gravely abused its discretion in ordering the immediate holding of a certification election among the workers sought to be represented by respondent union.
• Existing Bargaining Unit: Petitioner further argued that employees occupying the positions of Assistant Manager, Section Chief, Head Supervisor, and Supervisor, although recognized as managerial employees under the existing CBA, if declared rank-and-file, are not precluded from joining and should join petitioner, the certified bargaining unit.

• Grave Abuse of Discretion: Whether the public respondent gravely abused its discretion in ordering the immediate holding of a certification election among the workers sought to be represented by respondent union.
• Managerial Status: Whether the members of respondent union are managerial employees expressly excluded from joining, assisting, or forming any labor organization under Article 245 of the Labor Code.
• Appropriate Bargaining Unit: Whether the employees declared rank-and-file may form a separate bargaining unit or must instead join the existing rank-and-file bargaining unit represented by petitioner.
• Contract-Bar Rule: Whether the contract-bar rule bars the petition for certification election filed by respondent union during the existence of a valid collective bargaining agreement.

• Grave Abuse of Discretion: Yes, insofar as the certification election was ordered. The assailed resolutions were set aside because the existing CBA barred the petition and no compelling reasons justified a separate bargaining unit; the Bureau's factual finding on rank-and-file status was respected.
• Managerial Status: No. The employees sought to be represented are rank-and-file, not managerial, because they do not lay down or execute management policies or effectively recommend managerial actions requiring independent judgment.
• Appropriate Bargaining Unit: No separate bargaining unit. The employees must join the existing rank-and-file bargaining unit represented by petitioner, there being no evidence of substantial distinctions or suppression of the right to self-organization.
• Contract-Bar Rule: Yes. The petition was filed on November 25, 1987, during the CBA effective up to September 24, 1989; under Rule V, Section 3, Book V, a certification election petition may be entertained only within 60 days before the CBA's expiry.

• Grave Abuse of Discretion: The Court sustained the Bureau of Labor Relations' factual findings on the employees' status because findings of fact of quasi-judicial agencies supported by substantial evidence are binding and entitled to great respect. Nevertheless, the order for a certification election was set aside. The employees were rank-and-file, but the law required them to join the existing bargaining unit rather than form another one. No evidence ruled out commonality of interests among the rank-and-file members of petitioner and the employees declared rank-and-file, and there was no proof that their right to self-organization was being suppressed. The proliferation of unions is discouraged unless compelling reasons exist. The contract-bar rule also barred the petition. Thus the immediate certification election could not be ordered.
• Managerial Status: Under Article 212(k) and (m) of the Labor Code, managerial employees are vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees, or to effectively recommend such managerial actions. Supervisory employees are those who, in the interest of the employer, effectively recommend such management actions if the exercise of such authority is not merely routinary or clerical but requires the use of independent judgment. All employees not falling within these definitions are rank-and-file. The test depends on the nature of the functions performed, not the job title. The Bureau found that the employees did not have the power to lay down and execute management policies; they merely executed ready policies and observed standard practices. They had no power to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees; they could only recommend, and the power rested with the personnel manager. Their recommendations had to pass through the department manager for review, the personnel manager for attestation, and the general manager or president for final action. Their recommendatory powers were therefore not effective and did not involve independent judgment. The Court adopted these findings absent grave abuse of discretion. The fact that their work designations were managers or supervisors was of no moment.
• Appropriate Bargaining Unit: Petitioner was the exclusive bargaining representative of the rank-and-file employees of Triumph International. The employees declared rank-and-file were members of respondent union. The records showed no evidence that ruled out commonality of interests among the rank-and-file members of petitioner and the employees declared rank-and-file. Instead of forming another bargaining unit, the law requires them to be members of the existing one. The ends of unionism are better served if all rank-and-file employees with substantially the same interests and who invoke their right to self-organization are part of a single unit so that they can deal with the employer with one potent voice. Their bargaining power with management is strengthened thereby. The Court disallowed the certification election for want of proof that the right of the workers to self-organization was being suppressed. The proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to self-organization for purposes of collective bargaining. No such compelling reasons were shown.
• Contract-Bar Rule: Rule V, Section 3, Book V of the Implementing Rules and Regulations of the Labor Code provides that if a valid collective bargaining agreement exists, a petition for certification election can only be entertained within 60 days prior to the expiry date of the agreement. Respondent union filed its petition on November 25, 1987. At that time, a valid and existing CBA was present between petitioner and Triumph International, effective up to September 24, 1989. The petition was filed well before the 60-day period. Thus the CBA constituted a bar to the holding of the certification election. The members of respondent union should wait for the proper time. The CBA expired on September 24, 1989; if a new CBA with the same provisions as the old one had been executed, its terms should be amended to conform to the tenor of the decision.

• One-Union Policy / Proliferation of Unions Disfavored — The proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to self-organization for purposes of collective bargaining. The Court applied this by requiring the employees declared rank-and-file to join the existing bargaining unit instead of forming another one, absent proof of suppression or substantial distinctions.
• Managerial, Supervisory, and Rank-and-File Employee Classification — Under the Labor Code, a managerial employee is vested with powers to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. A supervisory employee effectively recommends such management actions if the exercise of authority is not merely routinary or clerical but requires independent judgment. All employees not falling within these definitions are rank-and-file. The test depends on the nature of the functions performed, not the title. The Court applied this by holding that employees whose recommendations were subject to review by higher management were rank-and-file.
• Contract-Bar Rule — Under Rule V, Section 3, Book V of the Implementing Rules and Regulations of the Labor Code, if a valid collective bargaining agreement exists, a petition for certification election can only be entertained within 60 days prior to the expiry date of the agreement. The Court applied this by holding that the petition filed on November 25, 1987, during the CBA effective up to September 24, 1989, was barred.
• Right of Supervisory Employees to Organize — Under Republic Act No. 6715, supervisory employees shall not be eligible for membership in a labor organization of rank-and-file employees but may join, assist, or form separate labor organizations of their own. The Court discussed this as the present state of the law, although the formation of a supervisors' union was not before the Labor Arbiter, the Bureau of Labor Relations, or the Court.
• Findings of Fact of Quasi-Judicial Agencies — Findings of fact of quasi-judicial agencies like the Bureau of Labor Relations, when supported by substantial evidence, are binding on the Supreme Court and entitled to great respect because of their expertise. The Court applied this by adopting the Bureau's finding that the employees were rank-and-file absent grave abuse of discretion.

• "The test of 'supervisory' or 'managerial status' depends on whether, a person possesses authority to act in the interest of his employer in the matter specified in Article 212 (K) of the Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment." — This states the controlling test for classifying employees as managerial or supervisory, which the Court applied to find the employees rank-and-file.
• "The fact that their work designations are either managers or supervisors is of no moment considering that it is the nature of their functions and not the said nomenclatures or titles of their jobs which determines their statuses" — This articulates the rule that job titles do not control employee status; the Court relied on it to disregard the employees' designations.
• "Instead of forming another bargaining unit, the law requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file employees with substantially the same interests and who invoke their right to self-organization are part of a single unit so that they can deal with their employer with just one and yet potent voice." — This is the ratio for disallowing a separate bargaining unit and requiring the employees to join petitioner's existing unit.
• "Once again we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to self-organization for purposes of collective bargaining." — This states the one-union policy and the exception requiring compelling reasons, which the Court found absent.

• Philtranco Service Enterprises vs. Bureau of Labor Relations, G.R. No. 85343, June 28, 1989 — Cited for the Labor Code's recognition of two principal groups, managerial and rank-and-file, and the classification of supervisors according to the work they perform.
• Franklin Barker Company of the Philippines vs. Trajano, 157 SCRA 416 [1988] — Cited for the test of supervisory or managerial status and the rule that recommendatory powers subject to evaluation, review, and final action by higher executives are not effective and do not involve independent judgment.
• Bulletin Publishing Corp. vs. Sanchez, 144 SCRA 628 [1986] — Cited for the classification of supervisors as either managerial or rank-and-file depending on their functions and for the prohibition on managerial employees joining labor organizations.
• Engineering Equipment, Inc. vs. National Labor Relations Commission, 133 SCRA 752 [1984] — Cited for the rule that the nature of functions, not job titles or nomenclatures, determines employee status.
• National Warehousing Corp. vs. CIR, 7 SCRA 602-603 [1963] — Cited in Franklin Barker for the principle that recommendatory powers subject to evaluation and review are not effective and not an exercise of independent judgment.
• General Rubber & Footwear Corporation vs. Bureau of Labor Relations, 155 SCRA 283 [1987] — Cited for the policy discouraging the proliferation of unions in an employer unit unless compelling reasons exist.
• Associated Trade Unions (ATU) vs. Trajano, 162 SCRA 318 [1988] — Cited for the contract-bar rule barring a certification election petition during the existence of a valid CBA.
• Federation of Democratic Trade Union vs. Pambansang Kilusan ng Paggawa, 156 SCRA 482 [1987] — Cited for the contract-bar rule.
• Tanduay Distillery Labor Union vs. National Labor Relations Commission, 149 SCRA 470 [1987] — Cited for the contract-bar rule.
• Adamson & Adamson Inc. vs. Court of Industrial Relations, 127 SCRA 268 [1984] — Cited for the recognition of the right of supervisory employees to organize under the Industrial Peace Act, revived under the amendments to the Labor Code.
• Phil. Airlines Employees Asso. (PALEA) vs. Ferrer-Calleja, 162 SCRA 426 [1988] — Cited for the rule that findings of fact of quasi-judicial agencies supported by substantial evidence are binding and entitled to great respect.

• Article 212(k), Labor Code (Presidential Decree No. 442) — Defines a managerial employee as one vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions; all employees not falling within this definition are considered rank-and-file. The Court used this definition to assess the status of the employees sought to be represented.
• Article 212(m), Labor Code as amended by Republic Act No. 6715 — Provides separate definitions for managerial and supervisory employees: managerial employees are vested with powers to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees; supervisory employees are those who, in the interest of the employer, effectively recommend such management actions if the exercise of authority is not merely routinary or clerical but requires independent judgment; all employees not falling within these definitions are rank-and-file. The Court applied this to find the employees rank-and-file.
• Article 245, Labor Code — Prohibits managerial employees from joining, assisting, or forming any labor organization. Petitioner invoked this provision, but the Court found the employees were not managerial, so the prohibition did not apply.
• Section 18, Republic Act No. 6715 — Retains the ineligibility of managerial employees to join any labor organization and provides that supervisory employees shall not be eligible for membership in a labor organization of rank-and-file employees but may join, assist, or form separate labor organizations of their own. The Court discussed this in explaining the current organizing rights of supervisory employees.
• Rule V, Section 3, Book V, Implementing Rules and Regulations of the Labor Code — Provides that if a valid collective bargaining agreement exists, a petition for certification election can only be entertained within 60 days prior to the expiry date of the agreement. The Court applied this to bar the petition filed on November 25, 1987, during the CBA effective up to September 24, 1989.
• Section II, Rule 11, Book V, Omnibus Rules Implementing the Labor Code — Did away with existing supervisory unions by classifying members either as managerial or rank-and-file employees depending on the work they perform. The Court cited this in tracing the classification of supervisors under the Labor Code.
• Section 2(k), Republic Act No. 875 (Industrial Peace Act) — Defined a supervisor as any person having authority in the interest of an employer to hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other employees, or responsibly to direct them, and to adjust their grievances, or effectively to recommend such acts if the exercise of such authority is not merely routinary or clerical but requires the use of independent judgment. The Court cited this as the historical definition replaced by the term managerial employee under the Labor Code.
• Section 3, Republic Act No. 875 (Industrial Peace Act) — Provided that supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own. The Court cited this as the historical basis for supervisory employees' separate organizing right, later revived under Republic Act No. 6715.

Fernan, C.J.; Bidin, J.; and Cortés, J., concurred. Feliciano, J., took no part. No notable concurring opinions.