TOYOTA MOTOR PHILIPPINES CORPORATION LABOR

CORPORATION

vs.

TOYOTA

MOTOR

PHILIPPINES

Facts: Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a petition for certification election with the Department of Labor, National Capital Region, for all rank-and-file employees of the Toyota Motor Corporation. In response, petitioner filed a Position Paper seeking the denial of the issuance of an Order directing the holding of a certification election on two grounds: first, that the respondent union, being "in the process of registration" had no legal personality to file the same as it was not a legitimate labor organization as of the date of the filing of the petition; and second, that the union was composed of both rank-and-file and supervisory employees in violation of law. Attached to the position paper was a list of union members and their respective job classifications, indicating that many of the signatories to the petition for certification election occupied supervisory positions and were not in fact rank-and-file employees. MED-ARBITER: dismissed; that the labor organization's membership was composed of supervisory and rank-andfile employees in violation of Article 245 of the Labor Code, and that at the time of the filing of its petition, respondent union had not even acquired legal personality yet. SECRETARY OF LABOR: set aside; directed the holding of a certification election among the regular rank.-andfile employees of Toyota Motor Corporation; was already a legitimate labor organization at the time of the filing of the petition having been issued a certificate of registration; that what the former really seeks to represent are the regular rank-and-file employees in the company numbering about 1,800 more or less, a unit which is obviously appropriate for bargaining purposes. This being the case, the mere allegation of respondent-appellee that there are about 42 supervisoy employees in the proposed bargaining unit should have not caused the dismissal of the instant petition. Said issue could very well be taken cared of during the pre-election conference where inclusion/exclusion proceedings will be conducted to determine the list of eligible voters. MR: remanded the case to the Med-Arbiter concluding that the issues raised by petitioner both on appeal and in its motion for reconsideration were factual issues requiring further hearing and production of evidence; that movant correctly pointed out that petitioner submitted a copy of its certificate of registration for the first time on appeal; that what was actually issued two (2) days before the filing of the petition was an official receipt of payment for the application fee. MED-ARBITER: that petitioner could not have been issued its Certificate of Registration on November 24, 1992 when it applied for registration only on November 23, 1992 as shown by the official receipt of payment of filing fee. SECRETARY OF LABOR: directing the conduct of a certification election among the regular rank-and-file employees of the Toyota Motor Philippines Corporation. Issue/Held/Ratio: WON respondent is legitimate labor organization with the right to file a petition for certification election? NO. The purpose of every certification election is to determine the exclusive representative of employees in an appropriate bargaining unit for the purpose of collective bargaining. A certification election for the collective bargaining process is one of the fairest and most effective ways of determining which labor organization can truly represent the working force. In determining the labor organization which represents the interests of the workforce, those interests must be, as far as reasonably possible, homogeneous, so as to genuinely reach the concerns of the individual members of a labor organization. According to Rothenberg, an appropriate bargaining unit is a group of employees of a given employer, composed of all or less than the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of law. In Belyca Corporation v. Ferrer Calleja, we defined the bargaining unit as "the legal collectivity for collective bargaining purposes whose members have substantially mutual bargaining interests in terms and conditions of employment as will assure to all employees their collective bargaining rights." This in mind, the Labor Code has made it a clear statutory policy to prevent supervisory employees from joining labor organizations consisting of rank-and-file employees as the concerns which involve members of either group are normally disparate and contradictory. Article 245. Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the

purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. It is the petitioner's contention that forty-two (42) of the respondent union's members, including three of its officers, occupy supervisory positions In its position paper, petitioner identified fourteen (14) union members occupying the position of Junior Group Chief 11 and twenty-seven (27) members in level five positions. While there may be a genuine divergence of opinion as to whether or not union members occupying Level 4 positions are supervisory employees, it is fairly obvious, from a reading of the Labor Code's definition of the term that those occupying Level 5 positions are unquestionably supervisory employees. Supervisory employees, as defined above, are those who, in the interest of the employer, effectively recommend managerial actions if the exercise of such authority is not merely routinary or clerical in nature but require the use of independent judgment. Under the job description for level five employees, such personnel all engineers having a number of personnel under them, not only oversee production of new models but also determine manpower requirements, thereby influencing important hiring decisions at the highest levels. This determination is neither routine nor clerical but involves the independent assessment of factors affecting production, which in turn affect decisions to hire or transfer workers. The use of independent judgment in making the decision to hire, fire or transfer in the identification of manpower requirements would be greatly impaired if the employee's loyalties are torn between the interests of the union and the interests of management. A supervisory employee occupying a level five position would therefore find it difficult to objectively identify the exact manpower requirements dictated by production demands. This is precisely what the Labor Code, in requiring separate unions among rank-and-file employees on one hand, and supervisory employees on the other, seeks to avoid. The rationale behind the Code's exclusion of supervisors from unions of rank-and-file employees is that such employees, while in the performance of supervisory functions, become the alter ego of management in the making and the implementing of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory employees. And this is so because the fundamental test of a bargaining unit's acceptability is whether or not such a unit will best advance to all employees within the unit the proper exercise of their collective bargaining rights. The Code itself has recognized this, in preventing supervisory employees from joining unions of rank-and-file employees. The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised as to whether or not respondent union was in possession of the status of a legitimate labor organization at the time of filing, when, as petitioner vigorously claims, the former was still at the stage of processing of its application for recognition as a legitimate labor organization.

TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION vs. TOYOTA MOTOR PHILIPPINES CORPORATION EMPLOYEES AND WORKERS UNION Facts: FIRST PETITION BY TMPCLU: TMPCLU filed a petition for certification election. Med-Arbiter dismissed on the ground that the labor organization's membership was composed of supervisory and rank-and-file employees in violation of Art. 245 of the Labor Code, and that at the time of the filing of its petition, TMCPLU had not even acquired legal personality yet. Secretary of Labor set aside the Med-Arbiter's Order. On MR, the Secretary of Labor set aside his earlier resolution and ordered the remand of the case to the Med-Arbiter concluding that the issues raised by TMPC both on appeal and its motion for reconsideration were factual issues requiring further hearing and production of evidence. MedArbiter dismissed TMPCLU's petition for certification election for failure of petitioner to acquire legal personality at the time of the filing of the said petition. Secretary of Labor reversed. TMPC lodged a special civil action for certiorari before the Supreme Court; the Supreme Court ruled that since TMPCLU's membership list contained the names of at least twenty-seven (27) supervisory employees in Level Five positions, hence, it cannot possess the requisite personality to file a petition for certification election." SECOND PETITION FILED BY TMPCEWU: At the time respondent TMPCEWU filed its Petition for Certification Election, the decision of the Supreme Court had not ripened into a final and executory judgment. Thus petitioner invoked as among the grounds for opposition thereto in its Motion to Intervene with Opposition to the Petition for Certification Election that the "pending proceeding before the Supreme Court may be said to be a pre-judicial question which should be resolved first before the instant petition can prosper." Med-Arbiter ordered the provisional dismissal of TMPCEWU's Petition for Certification Election pending a final ruling by the Supreme Court on the Petition for Certification Election. Then, the decision of the Supreme Court became final and executory. In view of respondent TMPCEWU's revival of its Petition for Certification Election, petitioner also filed its Petition-in-Intervention alleging that (a) it was representing only the rank-and-file employees; (b) it enjoys the support of the regular rank-and-file workers at large in TMPC; (c) while respondent TMPCEWU professed itself as a legitimate labor organization, there was serious doubt on such claim inasmuch as there was a pending petition for the cancellation of its certification of registration on the ground of fraud; (d) respondent TMPCEWU's representation of the rank-and-file employees, Levels 1 to 4, within the manufacturing division only to the exclusion of those in the other departments and divisions violated the "single or employer" unit policy; and, (e) the establishment of the proposed bargaining unit in the manufacturing division composed of employees from Levels 1 to 4, should respondent's petition be allowed, would induce the proliferation of unions in a single employer. MED-ARBITER: dismissing for lack of merit TMPCEWU's Petition for Certification Election, since it failed to include all rank-and-file employees from Levels 1 to 4 in other departments of TMPC in violation of the "one-union in one-company" policy and likewise dismissing TMPCLU's Petition-in-Intervention for lack of legal personality. Anent the issue on whether TMPCLU has the legal personality to file the Petition-in-Intervention, the Med-Arbiter explained thus that the registration certificate issued by the Department of Labor and Employment is void ab initio because at the time of the issuance the constitution of intervenor union TMPCLU is (sic) a mixture of supervisory and rank-and-file employees. SECRETARY OF LABOR: affirmed. Issue: Whether petitioner had legal personality on 30 October 1997 when it filed its Petition-in-Intervention. Corollary thereto, should petitioner register anew despite its alleged purging of the supervisory employee-members as directed by this Court in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the issuance in its favor of a certificate of registration after it was found to have violated Art. 245 of the Labor Code? Held: Ratio: Although there is a divergence of factual backdrops between Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the Secretary of Labor and Employment and the instant petition in the sense that in the former the filing of a Petition for Certification Election by petitioner gave rise to the

controversy while the present case arose from the filing of a Petition-in-Intervention, the bottom-line issue in both cases nonetheless involves the legitimacy of petitioner TMPCLU to file petitions. We recall that in the first Toyota case, although there was no categorical pronouncement on the validity of petitioner's certificate of registration considering that we deemed it entirely irrelevant in the light of the finding that petitioner was not entirely a rank-and-file labor organization, we sustained however in the same decision the entire factual findings of the Med-Arbiter when we observed The foregoing discussion, therefore, renders entirely irrelevant the technical issue raised as to whether or not respondent union was in possession of the status of a legitimate labor organization at the time of filing, when, as petitioner vigorously claims, the former was still at the stage of processing of its application for recognition as a legitimate labor organization. The union's composition being in violation of the Labor Code's prohibition of unions composed of supervisory and rank-and-file employees, it could not possess the requisite personality to file for recognition as a legitimate labor organization. In any case, the factual issue, albeit ignored by the public respondents assailed Resolution, was adequately threshed out in the MedArbiters September 28, 1994 Order (underscoring supplied). In effect therefore, we already impressed our stamp of approval on the factual findings of the Med-Arbiter, i.e., that petitioner had no valid certificate of registration and therefore no legal personality to file the Petition for Certification Election and in the absence of any attempt on its part to rectify the legal infirmity, likewise the disputed Petition-in-Intervention. It is thus fatuous on petitioner's part to resurrect the issue of legitimacy in the instant case notwithstanding our earlier ruling sustaining the factual findings of the Med-Arbiter. We cannot also accede to petitioner's submission that the issuance of a certificate of registration in its favor is an adequate and unassailable proof that it possesses the requisite legal personality to file a Petition for Certification Election. Not necessarily. As we emphasized in Progressive Development Corp. - Pizza Hut v. Laguesma, if a labor organizations application for registration is vitiated by falsification and serious irregularities, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of registration has been issued, the propriety of its registration could be assailed directly through cancellation of registration proceedings in accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election. We believe the procedural requirements to impugn the registration by petitioner were more than adequately complied with as shown in the 1997 case of Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union. There is no reason to belabor the primordial importance of strictly complying with the registration requirements of the Labor Code. As we have explained in a long line of cases, the activities of labor organizations, associations and unions are impressed with public interest, hence, must be protected.

SPI TECHNOLOGIES, INC. vs. DOLE, et al. Facts: The present controversy stemmed from a petition for certification filed by private respondent labor union which petitioner opposed, alleging that private respondent is not a legitimate labor organization as it represents both supervisory and rank and file employees, and submitting the names of 19 alleged supervisory employees. MED-ARBITER: dismissing the petition for certification election on the ground that petitioner has not attained the status of legitimate labor organization. DOLE: reversed and ordered that the certification election be conducted but excluding the supervisory employees from the bargaining unit and from participation in the certification election considering that there were only 15 of them as against more than 300 rank and file employees who wish to have the conduct of certification election. Issue: Is the union a legitimate labor organization? Held: YES Ratio: The record shows that private respondent is a legitimate labor organization having been issued a certificate of registration. Under prevailing rules, once a union acquires legitimate status as a labor organization, it continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation. It is worth noting too that Article 245 of the Labor Code relied upon by petitioner merely prescribes the requirements for eligibility in joining a union and does not prescribe the grounds for the cancellation of union registration. Section 5, Rule V of the New Rules Implementing Book V of the Labor Code provides: Section 5. Effect of registration.- The labor organization or workers' association shall be deemed registered as vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for certification election. In the absence of any independent petition for cancellation of registration filed against private respondent labor union, it continues to be possessed with legal personality of a legitimate labor organization. Thus, this Court finds no abuse, much less grave abuse of discretion, committed by the Department of Labor and Employment in ordering the conduct of certification election, the same being in harmony with the fundamental right to self organization and bargaining representation.

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED vs. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO Facts: Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV. THIGCI opposed THEUs petition on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-andfile employees of THIGCI. THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed to its Comment to the petition for certification election. THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition. Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion; and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. MED-ARBITER: granted; the accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and other supporting documents to bolster its claim that they are disqualified from joining THEU. DOLE SECRETARY: set aside on the ground that there is a "clear absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining units (supervisory employees and rankand-file employees) as well as employees of two separate and distinct corporate entities. MR: reversed; remanded to the Office of the Med-Arbiter for the conduct of certification election. THIGCI filed a petition for certiorari before this Court which referred it to the Court of Appeals. COURT OF APPEALS: denied; that while a petition for certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship, petitioner failed to adduce substantial evidence to support its allegations. Issues/Held/Ratio: 1. Is it a legitimate labor organization? YES After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement the Labor Code". The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows: Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; (b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself; (e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by law; (f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; (g) Asking for or

accepting attorneys fees or negotiation fees from employers; (h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members; (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and (j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied), while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. 2. WON some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation? The proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election. 3. WON there was withdrawal of union members from participating in the certification election? "[T]he best forum for determining whether there were indeed retractions from some of the laborers is in thecertification election itself wherein the workers can freely express their choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such representation and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer." 4. WON there was lack of mutuality of interest argument of petitioner? Petitioner failed to present substantial evidence that the assailed employees are actually occupying supervisory positions. While petitioner submitted a list of its employees with their corresponding job titles and ranks, there is nothing mentioned about the supervisors respective duties, powers and prerogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment. As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor: Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. In the case of National Steel Corporation vs. Laguesma, it was stressed that: What is essential is the nature of the employees function and not the nomenclature or title given to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee. Petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the MediationArbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the usual pre-election conference.

ATLAS LITHOGRAPHIC SERVICES, INC v. LAGUESMA Facts: The supervisory, administrative personnel, production, accounting and confidential employees of the petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng Manggagawang Pilipino, a national labor organization. The local union adopted the name Atlas Lithographic Services, Inc. Supervisory, Administrative, Personnel, Production, Accounting and Confidential Employees Association or ALSISAPPACEA-KAMPIL in short and which we shall hereafter refer to as the "supervisors" union. Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the "supervisors" union a petition for certification election so that it could be the sole and exclusive bargaining agent of the supervisory employees. The petitioners opposed the private respondent's petition claiming that under Article 245 of the Labor bode the private respondent cannot represent the supervisory employees for collective bargaining purposeless because the private respondent also represents the rank-and-file employees' union. MED-ARBITER: granted. DOLE: affirmed. Issue: WON under Article 245 of the Labor Code, a local union of supervisory employees may be allowed to affiliate with a national federation of labor organizations of rank-and-file employees and which national federation actively represents its affiliates in collective bargaining negotiations with the same employer of the supervisors and in the implementation of resulting collective bargaining agreements. Held: NO Ratio: 1. EVOLUTION OF LAWS. Under the Industrial Peace Act of 1953, employees were classified into three groups, namely: (1) managerial employees; (2) supervisors; and (3) rank-and file employees. Supervisors, who were considered employees in relation to their employer could join a union but not a union of rank-and-file employees. With the enactment in 1974 of the Labor Code (Pres Decree No. 442), employees were classified into managerial and rank-and-file employees. Neither the category of supervisors nor their right to organize under the old statute were recognized. So that, in Bulletin Publishing Corporation v. Sanchez, the Court interpreted the superseding labor law to have removed from supervisors the right to unionize among themselves. In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree No. 442, the supervisory unions existing since the effectivity of the New Code in January 1, 1975 ceased to operate as such and the members who did not qualify as managerial employees under this definition in Article 212 (k) therein became eligible to form, to join or assist a rank-and-file union. A revision of the Labor Code undertaken by the bicameral Congress brought about the enactment of Rep. Act No. 6715 in which employees were reclassified into three groups, namely: (1) the managerial employees; (2) supervisors; and (3) the rank and file employees. Under the present law, the category of supervisory employees is once again recognized. Hence, Art. 212 (m) states: (m) . . . Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. . . . The interests of supervisors on the one hand, and the rank-and-file employees on the other, are separate and distinct. The functions of supervisors, being recommendatory in nature, are more identified with the interests of the employer. The performance of those functions may, thus, run counter to the interests of the rank-and-file. We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective bargaining and strikes. Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-file employees. In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the other. Moreover, in the event of a strike, the national federation might influence the supervisors' union to conduct a sympathy strike on the sole basis of affiliation. 2. IN CONTRAST WITH THE ADAMSON CASE. More important, the factual issues in the Adamson case are different from the present case. First, the rank-and-file employees in the Adamson case are not directly under the supervisors who comprise the supervisors' union. In the case at bar, the rank-and file employees are directly under the supervisors organized by one and the same federation. Second, the national union in the Adamson case did not actively represent its local chapters. In the present case, the local union is actively represented by the national federation. In fact, it was the national federation, the KAMPILKATIPUNAN, which initially filed a petition for certification in behalf of the respondent union.

THE TERM LABOR ORGANIZATION INCLUDES A FEDERATION CONSIDERING THAT ART. 212 (G) MENTIONS "ANY UNION OR ASSOCIATION OF EMPLOYEES." The Court emphasizes that the limitation is not confined to a case of supervisors wanting to join a rank-and-file local union. The prohibition extends to a supervisors' local union applying for membership in a national federation the members of which include local unions of rank-and-file employees. The intent of the law is clear especially where, as in the case at bar, the supervisors will be co-mingling with those employees whom they directly supervise in their own bargaining unit. *** In a motion it appears that the petitioner has knuckled under to the respondents' pressures and agreed to let the national federation KAMPIL-KATIPUNAN represent its supervisors in negotiating a collective bargaining agreement. Against the advise of its own counsel and on the basis of alleged "industrial peace", the petitioner expressed a loss of interest in pursuing this action. The petitioner is, of course, free to grant whatever concessions it wishes to give to its employees unilaterally or through negotiations but we cannot allow the resulting validation of an erroneous ruling and policy of the Department of Labor and Employment (DOLE) to remain on the basis of the petitioner's loss of interest. The December 14, 1990 order and the November 21, 1990 resolution of DOLE are contrary to law and must be declared as such.

3.

DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE vs. LAGUESMA Facts: Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and medical school at Dasmarias, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the other hand, is a labor organization composed of the supervisory employees of petitioner DLSUMCCM. The Federation of Free Workers (FFW), a national federation of labor unions, issued a certificate to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification election among the supervisory employees of petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees who signed the petition for certification election were managerial employees and that the FFWDLSUMCCMSUC was composed of both supervisory and rank-and-file employees in the company. FFW-DLSUMCCMSUC denied petitioner's allegations. It contended that 2. Herein petition seeks for the holding of a certification election among the supervisory employees of herein respondent. It does not intend to include managerial employees. 6. While it is true that both regular rank-and-file employees and supervisory employees of herein respondent have affiliated with FFW, yet there are two separate unions organized by FFW. The supervisory employees have a separate charter certificate issued by FFW. MED-ARBITER: granted; that the two groups are considered separate bargaining units and local chapters of FFW. They are, for all intents and purposes, separate with each other and their affiliation with FFW would not make them members of the same labor union. DOLE: affirmed. Issue: WON they can be affiliated with the same national federation? Held: YES Ratio: The reason for the segregation of supervisory and rank-and-file employees of a company with respect to the exercise of the right to self-organization is the difference in their interests. Supervisory employees are more closely identified with the employer than with the rank-and-file employees. If supervisory and rank-and-file employees in a company are allowed to form a single union, the conflicting interests of these groups impair their relationship and adversely affect discipline, collective bargaining and strikes. These consequences can obtain not only in cases where supervisory and rank-and-file employees in the same company belong to a single union but also where unions formed independently by supervisory and rank-and-file employees of a company are allowed to affiliate with the same national federation. Consequently, this Court has held in Atlas Lithographic Services Inc. v. Laguesma that To avoid a situation where supervisors would merge with the rank-and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with a national federation of unions of rank-and-file employees where that federation actively participates in union activities in the company. As we explained in that case, however, such a situation would obtain only where two conditions concur: First, the rank-and-file employees are directly under the authority of supervisory employees. Second, the national federation is actively involved in union activities in the company. Indeed, it is the presence of these two conditions which distinguished Atlas Lithographic Services, Inc. v. Laguesma from Adamson & Adamson, Inc. v. CIR where a different conclusion was reached. The affiliation of two local unions in a company with the same national federation is not by itself a negation of their independence since in relation to the employer, the local unions are considered as the principals, while the federation is deemed to be merely their agent. This conclusion is in accord with the policy that any limitation on the exercise by employees of the right to self-organization guaranteed in the Constitution must be construed strictly. Workers should be allowed the practice of this freedom to the extent recognized in the fundamental law. As held in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.: The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of locals into the national union . . . was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, . . . and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it to existence.

IN THIS CASE, Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-andfile employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees composing the other union are directly under the authority of the supervisory employees. Mention has already been made of the fact that the petition for certification election in this case was filed by the FFW on behalf of the local union. This circumstance, while showing active involvement by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation of Art. 245 since there is no proof that the supervisors who compose the local union have direct authority over the rank-and-file employees composing the other local union which is also affiliated with the FFW.

STANDARD CHARTERED CHARTERED BANK

BANK

EMPLOYEES

UNION

(SCBEU-NUBE)

VS.

STANDARD

Facts: Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective Bargaining Agreement (CBA) as their 1998-2000 CBA already expired. Due to a deadlock in the negotiations, petitioner filed a Notice of Strike prompting the Secretary of Labor and Employment to assume jurisdiction over the labor dispute. DOLE SEC: directed parties to execute their collective bargaining agreement effective 01 April 2001 until 30 March 2003 incorporating therein the foregoing dispositions and the agreements they reached in the course of negotiations and conciliation. All other submitted issues that were not passed upon are dismissed. The charge of unfair labor practice for bargaining in bad faith and the claim for damages relating thereto and the charge of unfair labor practice for gross violation of the economic provisions of the CBA are hereby dismissed. CA: affirmed. ***The resolution of this case has been overtaken by the execution of the parties' 2003-2005 CBA. While this would render the case moot and academic, nevertheless, the likelihood that the same issues will come up in the parties' future CBA negotiations is not far-fetched, thus compelling its resolution. Courts will decide a question otherwise moot if it is capable of repetition yet evading review. Issue/Held/Ratio: Whether the Bank's Chief Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are confidential employees, such that they should be excluded The disqualification of managerial and confidential employees from joining a bargaining unit for rank and file employees is already well-entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records. As regards the qualification of bank cashiers as confidential employees, National Association of Trade Unions (NATU) - Republic Planters Bank Supervisors Chapter v. Torres declared that they 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, and therefore, disqualified from joining or assisting a union; or joining, assisting or forming any other labor organization. Golden Farms, Inc. v. Ferrer-Calleja meanwhile stated that "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 spy or spies of either party to a collective bargaining agreement." Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission, the Court designated personnel staff, in which human resources staff may be qualified, as confidential employees because 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. Petitioner insists that the foregoing employees are not confidential employees; however, it failed to buttress its claim. Aside from its generalized arguments, and despite the Secretary's finding that there was no evidence to support it, petitioner still failed to substantiate its claim. Petitioner did not even bother to state the nature of the duties and functions of these employees, depriving the Court of any basis on which it may be concluded that they are indeed confidential employees. As aptly stated by the CA: While We agree that petitioner's proposed revision is in accordance with the law, this does not necessarily mean that the list of exclusions enumerated in the 1998-2000 CBA is contrary to law. As found by public respondent, petitioner failed to show that the employees sought to be removed from the list of exclusions are actually rank and file employees who are not managerial or confidential in status and should, accordingly, be included in the appropriate bargaining unit. Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and one (1) HR Staff have mutuality of interest with the other rank and file employees, then they are rightfully excluded from the appropriate bargaining unit. x x x (Emphasis supplied) Petitioner cannot simply rely on jurisprudence without explaining how and why it should apply to this case. Allegations must be supported by evidence. In this case, there is barely any at all. There is likewise no reason for the Court to disturb the conclusion of the Secretary and the CA that the additional remuneration should be given to employees placed in an acting capacity for one month. Such order of the public respondent is not in violation of the "equal pay for equal work" principle, considering that after one (1) month, the employee performing the job in an acting capacity will be entitled to salary corresponding to such position.