Southern Philippines Federation of Labor vs. Calleja

Only managerial employees are ineligible to join, assist, or form a labor organization; employees designated as supervisors or placed on confidential payrolls, and employees not paying union dues, are eligible to vote in a certification election if the nature of their jobs does not fall under the Labor Code definition of managerial employee, and a collective bargaining agreement cannot curtail that right.

Apex Mining Company, Inc. employed rank-and-file workers at its mining operations. Two labor unions, the Southern Philippines Federation of Labor (SPFL) and the Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), competed to represent those workers for collective bargaining. The dispute implicated the Labor Code's definition of managerial employees and the existing collective bargaining agreement's exclusions and union shop clause.

Apex Mining Company, Inc. operated a mining enterprise and employed rank-and-file workers. Two labor unions, the Southern Philippines Federation of Labor (SPFL) and the Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), sought to represent those employees. On December 29, 1986, SPFL filed a petition for certification election among Apex's rank-and-file employees with the Department of Labor in Region XI, Davao City. On February 6, 1987, Med-Arbiter Conrado O. Macasa, Sr. issued an Order calling for a certification election on February 23, 1987, with the choices SPFL, MMEU-Sandigan, and No Union.

On February 9, 1987, a pre-election conference was conducted among SPFL, MMEU-Sandigan, and Apex to settle the venue and the list of employees qualified to vote. The parties agreed to delete from Apex's list of 1,716 workers the names of 19 managerial employees and 73 probationary employees, who were statutorily disqualified. SPFL objected to the inclusion of (a) employees occupying the positions of Supervisor I, II, and III; (b) employees under confidential or special payrolls; and (c) employees who were not paying union dues. SPFL contended that the supervisors were managerial employees, while the confidential-payroll and non-dues-paying employees were disqualified by their non-membership in the union and their exclusion from the benefits of the collective bargaining agreement. Because the parties could not agree on the list of qualified voters, Med-Arbiter Macasa issued an Order on February 20, 1987, declaring that 19 managerial employees, 73 probationary employees, and 19 Supervisors I should not be included in the list of qualified voters, and that all other workers would be allowed to vote.

On February 23, 1987, the certification election was conducted. SPFL filed a Motion for Reconsideration of Macasa's February 20, 1987 Order on the same day. The results were: SPFL, 614 votes; MMEU-Sandigan, 528 votes; No Union, 9 votes; challenged ballots, 197; spoiled ballots, 25; total votes cast, 1,373. On the basis of these results, MMEU-Sandigan filed an Urgent Motion to Open the Challenged Ballots, praying that the ballots be opened and counted to determine the winner and thereafter certify the sole and exclusive collective bargaining representative. On March 11, 1987, Apex filed a Manifestation and Motion manifesting its interest in the speedy resolution of the case and its primary concern for the restoration of normalcy and the preservation of industrial peace in the mining area. On March 19, 1987, Med-Arbiter Macasa issued an Order directing that the challenged ballots be opened and inventoried on March 26, 1987 at 3:00 p.m., before the entire records were indorsed to the Bureau of Labor Relations for review.

SPFL appealed Macasa's March 19, 1987 Order to the Bureau of Labor Relations. On April 14, 1987, BLR Director Pura Ferrer-Calleja dismissed SPFL's appeal for lack of merit and affirmed the March 19, 1987 Order with the modification that the 197 ballots be opened and canvassed by Labor Regional Office XI, Davao City; the records were remanded for immediate implementation. SPFL moved for reconsideration. On May 21, 1987, Med-Arbiter Macasa opened and canvassed the 197 challenged ballots, with the following results: SPFL, 12 votes; SANDIGAN, 178 votes; No Union, 2 votes; spoiled, 4 votes; and one envelope with no ballots. The outcome of the certification election then became: SPFL, 626 votes; SANDIGAN, 706 votes; No Union, 11 votes; total, 1,343 votes. MMEU-Sandigan filed a Manifestation with the BLR praying for the issuance of a Certification Order. On June 23, 1987, Director Calleja issued an Order denying SPFL's Motion for Reconsideration for lack of merit and certifying MMEU-Sandigan as the sole and exclusive bargaining representative of Apex's rank-and-file employees; Apex was directed to negotiate with MMEU-Sandigan for the conclusion of a collective bargaining agreement. This led SPFL to file the present petition.

The job descriptions submitted for the questioned positions stated that Supervisor II assists the Foreman in the effective dispatching or distribution of manpower and equipment to carry out approved work, while Supervisor III executes and coordinates work plans emanating from his supervisors. As to the employees on the confidential payroll, no showing was made that the nature of their jobs was classified as managerial; the only allegation was that management considered them as occupying managerial positions and highly confidential. These factual circumstances bore on the Supreme Court's determination of whether the challenged employees were eligible to vote in the certification election.

• Grave Abuse of Discretion: Petitioner maintained that public respondent committed grave abuse of discretion in allowing the 197 employees to vote in the certification election when they were allegedly disqualified by express provision of law or under the existing collective bargaining agreement.
• Supervisors II and III as Managerial: Petitioner argued that under the Labor Code, managerial employees are excluded from forming or joining a collective bargaining unit, and that employees occupying the positions of Supervisor II and III should be excluded from the bargaining unit and from voting in the certification election.
• Confidential Payroll Employees: Petitioner contended that under the CBA between Apex and respondent union, employees holding confidential positions as determined by the company are excluded from the bargaining unit, so those in the confidential or special payrolls should likewise be excluded.
• Non-Payment of Union Dues: Petitioner maintained that employees who were not paying union dues should be excluded from the bargaining unit and from voting because the existing CBA contains a union shop provision.
• CBA Exclusions: Petitioner argued that the CBA excluded from the bargaining unit (a) managerial employees as defined in paragraph K, Article 212 of the Labor Code; (b) those performing supervisory functions; and (c) those holding confidential positions as determined by the company.

• Grave Abuse of Discretion: Whether the public respondent committed grave abuse of discretion in allowing the 197 employees to vote in the certification election when, as alleged by petitioner, they are disqualified by express provision of law or under the existing collective bargaining agreement.
• Supervisors II and III: Whether employees occupying the positions of Supervisor II and III are managerial employees who are ineligible to join the bargaining unit and to vote in the certification election.
• Confidential Payroll Employees: Whether employees under confidential or special payrolls are disqualified from the bargaining unit and from voting in the certification election under the CBA.
• Non-Payment of Union Dues: Whether employees who are not paying union dues are disqualified from the bargaining unit and from voting in the certification election because of the union shop provision in the CBA.

• Grave Abuse of Discretion: No. The public respondent did not commit grave abuse of discretion; the challenged employees were eligible to vote because only managerial employees are ineligible under the Labor Code, and the CBA could not override that statutory limitation.
• Supervisors II and III: No. Supervisors II and III are not managerial employees; their functions only execute approved and established policies and involve little or no discretion, so they are eligible to vote.
• Confidential Payroll Employees: No. Employees on the confidential payroll were not shown to be managerial; petitioner merely alleged that management considered them managerial and highly confidential.
• Non-Payment of Union Dues: No. Non-payment of union dues does not disqualify employees from the bargaining unit; the union shop provision applies only to newly hired employees, not to members of the bargaining unit who were non-union members at the time of the CBA's signing.

• Grave Abuse of Discretion: The petition rested on whether public respondent committed grave abuse of discretion in allowing the 197 employees to vote. The Court found no merit. Although the CBA is valid as law between the parties, its provisions cannot override the Labor Code, which expressly makes only managerial employees ineligible to join, assist, or form any labor organization. Thus, regardless of designations—whether Supervisor or confidential payroll—if the nature of the job does not fall under the Labor Code definition of managerial, the employees are eligible to be members of the bargaining unit and to vote. Their right to self-organization must be upheld absent express law to the contrary and cannot be curtailed by a CBA. The Director therefore did not commit grave abuse of discretion in dismissing SPFL's appeal, denying reconsideration, and certifying MMEU-Sandigan.

• Supervisors II and III: The Court applied the definition in Article 212(k) and the test from Franklin Baker Company of the Phils. vs. Trajano: a managerial employee is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. The test of supervisory or managerial status depends on whether the person possesses authority to act in the employer's interest in the matters specified in Article 212(k) and Section 1(m) of the Implementing Rules, and whether such authority is not merely routinary or clerical but requires independent judgment. Where recommendatory powers are subject to evaluation, review, and final action by department heads and higher executives, they are not effective and not an exercise of independent judgment. The records showed that Supervisor II assists the Foreman in dispatching or distributing manpower and equipment to carry out approved work, while Supervisor III executes and coordinates work plans emanating from his supervisors. These functions only execute approved and established policies, leaving little or no discretion whether to implement them. They do not participate in policy making but are given ready policies to execute and standard practices to observe. Thus, Supervisors II and III are not managerial and are eligible to vote.

• Confidential Payroll Employees: The petitioner failed to show that the nature of the jobs of employees in the confidential payroll was classified as managerial. Its only allegation was that management considered them as occupying managerial positions and highly confidential. Without proof that their actual functions met the Labor Code definition, they could not be excluded from the bargaining unit or from the certification election.

• Non-Payment of Union Dues: Payment or non-payment of union dues is not the determining factor for exclusion from the bargaining unit. The union shop provision in the CBA applies only to newly hired employees, not to members of the bargaining unit who were not union members at the time of the signing of the CBA. It is therefore possible for employees to be members of the bargaining unit even if they are non-union members or not paying union dues. They were properly allowed to vote.

• Managerial Employee; Definition — Under the Labor Code, a managerial employee is 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. Only managerial employees are ineligible to join, assist or form any labor organization. In this case, the challenged supervisors and confidential-payroll employees were not shown to fall within this definition, so they remained eligible to vote.
• Supervisory or Managerial Status; Test — The test depends on whether the employee possesses authority to act in the employer's interest in the matters specified in Article 212(k) of the Labor Code and Section 1(m) of its Implementing Rules, and whether that authority is not merely routinary or clerical but requires independent judgment. Recommendatory powers subject to evaluation, review, and final action by higher executives are not effective and do not amount to independent judgment. Applied: Supervisors II and III merely executed approved policies and had little or no discretion.
• CBA Cannot Override Labor Code on Bargaining Unit Eligibility — Although a CBA is valid as the law between the parties, its provisions cannot override the express law that only managerial employees are ineligible to join, assist or form a labor organization. Employees not falling under the managerial definition are eligible for the bargaining unit and certification election, and their right to self-organization cannot be curtailed by a CBA. Applied: the CBA's exclusion of supervisors and confidential employees did not disqualify non-managerial employees.
• Non-Payment of Union Dues Not Determinant of Bargaining Unit Membership — The union shop provision in a CBA applies only to newly hired employees, not to members of the bargaining unit who were non-union members at the time of the CBA's signing. Thus, non-payment of union dues does not disqualify an employee from membership in the bargaining unit or from voting in a certification election. Applied: the 197 challenged employees were not disqualified on this ground.
• Right to Self-Organization — Employees who are not managerial are eligible to be members of the bargaining unit and to vote in a certification election; their right to self-organization must be upheld absent an express provision of law to the contrary. Applied: the challenged employees' eligibility was sustained despite the CBA provisions invoked by petitioner.

• "Although we have upheld the validity of the CBA as the law among the parties, (see Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989), its provisions cannot override what is expressly provided by law that only managerial employees are ineligible to join, assist or form any labor organization (See Art. 247, Labor Code)." — This passage states the ratio decidendi that a CBA, though valid between the parties, cannot override the Labor Code's limitation on ineligibility to join labor organizations.
• "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 passage states the controlling test for determining whether an employee is a supervisory or managerial employee, which the Court applied to Supervisors II and III.
• "Thus, it is clear from the above provisions that the functions of the questioned positions are not managerial in nature because they only execute approved and established policies leaving little or no discretion at all whether to implement the said policies or not." — This passage applies the managerial-status test to the job descriptions of the questioned positions and explains why they were eligible to vote.
• "Neither can payment or non-payment of union dues be the determining factor of whether the challenged employees should be excluded from the bargaining unit since the union shop provision in the CBA applies only to newly hired employees but not to members of the bargaining unit who were not members of the union at the time of the signing of the CBA." — This passage rejects non-payment of union dues as a ground for exclusion from the bargaining unit and certification election.

• Planters Products, Inc. vs. NLRC, et al., G.R. No. 78524, January 20, 1989 — Cited for the rule that a CBA is valid as the law among the parties, but its provisions cannot override the express provisions of law, particularly the Labor Code's rule that only managerial employees are ineligible to join, assist or form a labor organization.
• Franklin Baker Company of the Phils. vs. Trajano, 157 SCRA 416, 421-423 [1988] — Cited for the definition of a managerial employee under the Labor Code and the test for determining managerial or supervisory status.
• Reynolds Phil. Corp. vs. Eslava, 137 SCRA [1985] — Cited within the Franklin Baker discussion as a source of the definition of managerial employee under Section 212(K) of the Labor Code.
• National Warehousing Corp. vs. CIR, 7 SCRA 602-603 [1963] — Cited for the proposition that recommendatory powers subject to evaluation, review, and final action by department heads and higher executives are not effective and do not constitute an exercise of independent judgment.
• National Waterworks and Sewerage Authority vs. NWSA Consolidated, L-18938, 11 SCRA 766 [1964] — Cited for the proposition that employees who do not participate in policy making but are given ready policies to execute and standard practices to observe, with little freedom of action, are not managerial employees.

• Article 247, Labor Code — Only managerial employees are ineligible to join, assist or form any labor organization. The Court applied this to hold that the CBA's broader exclusions could not disqualify non-managerial employees from the bargaining unit and certification election.
• Article 212(k), Labor Code — 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. The Court used this definition to assess Supervisors II and III and the confidential-payroll employees.
• Section 1(m), Implementing Rules of the Labor Code — Cited in the test for supervisory or managerial status, which requires authority to act in the employer's interest and the use of independent judgment, not merely routinary or clerical functions. The Court applied it to find the questioned positions non-managerial.
• Union Shop Provision, Collective Bargaining Agreement — The CBA's union shop clause was held to apply only to newly hired employees, not to members of the bargaining unit who were non-union members at the time of the CBA's signing. It therefore did not disqualify non-dues-paying employees from voting.

Chief Justice Fernan; Justices Feliciano, Bidin, and Cortes.