Note: The decision cites the definition of "managerial employee" as "paragraph K, Article 212" and "Section 212 (K)" of the Labor Code, now Article 219(m) under DOLE Department Advisory No. 01, s. 2015; and cites the rule on ineligibility of managerial employees as "Art. 247, Labor Code," a provision now carried at Article 255. The article numbers are reproduced as published.
Facts
- On December 29, 1986 SPFL petitioned for a certification election among the rank-and-file of Apex Mining Company, Inc., Region XI, Davao City. On February 6, 1987 Med-Arbiter Conrado O. Macasa, Sr. set the election for February 23, 1987 with three choices — SPFL, MMEU-Sandigan, and "No union."
- At the February 9, 1987 pre-election conference the parties agreed to delete from Apex's list of 1,716 workers the names of nineteen managerial and seventy-three probationary employees as statutorily disqualified.
- SPFL further objected to the inclusion of Supervisors I, II and III, employees on "confidential/special payrolls," and employees not paying union dues — the supervisors being managerial, the rest being disqualified by non-membership and by the CBA's exclusionary clause.
- On February 20, 1987 Macasa ordered only the nineteen managerial, seventy-three probationary and nineteen Supervisors I excluded: "[a]ll other workers except the foregoing will be allowed to vote."
- The election yielded SPFL 614, MMEU-Sandigan 528, No Union 9, challenged 197, spoiled 25 out of 1,373 cast. The 197 challenged ballots are the whole case.
- On March 19, 1987 Macasa directed the challenged ballots opened; on April 14, 1987 BLR Director Pura Ferrer-Calleja dismissed SPFL's appeal and affirmed with a modification that they be opened and canvassed.
- On May 21, 1987 they were opened — SPFL 12, Sandigan 178, No Union 2, spoiled 4 — reversing the outcome: final count SPFL 626, Sandigan 706, No Union 11.
- The job descriptions SPFL itself put in the record showed Supervisor II "[a]ssists the Foreman in the effective dispatching/distribution of manpower and equipment to carry out approved work," and Supervisor III "[e]xecutes and coordinates work plans emanating from his supervisors."
- On June 23, 1987 Director Calleja denied reconsideration and certified MMEU-Sandigan. SPFL brought certiorari; decided April 24, 1989.
Issue
Where a CBA excludes from the bargaining unit those "performing supervisory functions" and those "holding confidential positions as determined by the company," may such employees be disqualified from the unit and from voting — or does eligibility turn solely on whether the nature of their work makes them managerial within the Labor Code's definition, which no CBA may enlarge?
Secondary issues. Whether Supervisor II and III are managerial in nature; and whether employees on the confidential payroll were shown to be managerial.
Ancillary issue. Whether non-payment of union dues, under a CBA union shop provision, disqualifies an employee from the unit and from voting.
Ruling
NO disqualification. "[A]lthough we have upheld the validity of the CBA as the law among the parties … its provisions cannot override what is expressly provided by law that only managerial employees are ineligible to join, assist or form any labor organization"; the right to self-organization "cannot be curtailed by a collective bargaining agreement."
Secondary issues. NOT managerial. The functions of Supervisor II and III "are not managerial in nature because they only execute approved and established policies leaving little or no discretion at all"; and as to the confidential payroll, SPFL "has not shown that the nature of their jobs is classified as managerial."
Ancillary issue. NO. The union shop provision "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," so "it is … not impossible for employees to be members of the bargaining unit even though they are non-union members or not paying union dues."
"WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the petitioner. SO ORDERED."
Ratio
- The Court began with the hierarchy of sources: the CBA is the law between the parties, but "its provisions cannot override what is expressly provided by law."
- From this it drew the operative rule — the sentence the case exists for: "regardless of the challenged employees' designations, whether they are employed as Supervisors or in the confidential payrolls, if the nature of their job does not fall under the definition of 'managerial' as defined in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election. Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It cannot be curtailed by a collective bargaining agreement."
- On classification it applied Franklin Baker Company of the Phils. v. Trajano: a managerial employee is "one who 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 turning on whether authority under Article 212(k) "is not merely routinary or clerical in nature, but requires the use of independent judgment."
- Critically: "where such recommendatory powers … are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law."
- From National Waterworks and Sewerage Authority v. NWSA Consolidated the Court added that employees are not managerial where "they do not participate in policy making but are given ready policies to execute and standard practices to observe, thus having little freedom of action."
- Applied to the job descriptions SPFL itself had filed, the positions "only execute approved and established policies leaving little or no discretion at all whether to implement the said policies or not."
- As to the confidential payroll the burden simply failed — SPFL offered only "its allegation that they are considered by management as occupying managerial positions and highly confidential."
- And union dues could not be "the determining factor," the union shop clause reaching only newly hired employees.
Doctrine
Only managerial employees are ineligible. "[O]nly managerial employees are ineligible to join, assist or form any labor organization," and "regardless of the challenged employees' designations … if the nature of their job does not fall under the definition of 'managerial' … they are eligible to be members of the bargaining unit and to vote." The right cannot be contracted away: it "cannot be curtailed by a collective bargaining agreement." Function, not title: recommendatory authority "subject to evaluation, review and final action by the department heads and other higher executives" is "not effective and not an exercise of independent judgment"; and employees who "do not participate in policy making but are given ready policies to execute" are not managerial. Union shop clauses apply "only to newly hired employees," so non-payment of dues does not exclude one from the bargaining unit.
Limits. The decision predates the full working-out of the confidential-employee doctrine. It disposes of the confidential-payroll objection on failure of proof that those jobs were managerial — the Court expressly notes SPFL "has not shown that the nature of their jobs is classified as managerial" — not by holding that confidential employees are always eligible. The separate line excluding confidential employees by necessary implication is developed in San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, Sugbuanon Rural Bank v. Laguesma and San Miguel Foods. The decision also predates R.A. No. 6715, when supervisory employees' own right to organise was unsettled; the current rule — that they may form their own separate unions but may not join rank-and-file unions — is stated in Article 255. Read with PICOP v. Laguesma, the pair fixes both halves of the rule: eligibility cannot be contracted away (SPFL) and cannot be engineered away by redesignation (PICOP). Renumbering: the decision's "Article 212(K)" is now Article 219(m), and its "Art. 247" is carried at Article 255.
Full Digest — Recitation Format
Gist
In a certification election among the rank-and-file of Apex Mining Company, petitioner SPFL sought to disqualify 197 voters — employees holding the positions of Supervisor II and III, employees on "confidential/special payrolls," and employees not paying union dues — invoking both the Labor Code's exclusion of managerial employees and the exclusionary clause of the existing CBA; the Med-Arbiter and the BLR Director allowed them to vote, and the opened ballots reversed the outcome, giving the election to the rival union. The Supreme Court dismissed the petition. Central to the Topic/Subtopic, the Court held that only managerial employees are ineligible to join, assist, or form a labor organization, that this eligibility is determined by the nature of the work actually performed and not by the employee's designation, and — decisively — that the statutory right to self-organization "cannot be curtailed by a collective bargaining agreement," so a CBA clause excluding supervisory and confidential personnel from the bargaining unit "cannot override what is expressly provided by law."
Facts
- On December 29, 1986, SPFL filed a petition for certification election among the rank-and-file employees of Apex Mining Company, Inc. with the Department of Labor in Region XI, Davao City.
- On February 6, 1987, Med-Arbiter Conrado O. Macasa, Sr. ordered a certification election for February 23, 1987, with SPFL, Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), and "No union" as the choices.
- At the February 9, 1987 pre-election conference the parties agreed to delete from Apex's list of 1,716 workers the names of nineteen managerial employees and seventy-three probationary employees as statutorily disqualified.
- SPFL further objected to the inclusion of employees occupying the positions of Supervisor I, II, and III, employees under confidential/special payrolls, and employees not paying union dues, contending the supervisors were managerial and the rest were disqualified by non-membership in the union and exclusion from the CBA's benefits.
- For lack of agreement on the voters' list, Macasa ordered on February 20, 1987 that only the nineteen managerial employees, seventy-three probationary employees, and nineteen Supervisors I be excluded, "[a]ll other workers except the foregoing will be allowed to vote."
- On election day, February 23, 1987, SPFL moved for reconsideration.
- The election proceeded, yielding SPFL 614, MMEU-Sandigan 528, No Union 9, challenged ballots 197, and spoiled 25, out of 1,373 votes cast.
- MMEU-Sandigan moved urgently to open the challenged ballots; Apex filed a Manifestation and Motion on March 11, 1987 citing "the restoration of normalcy and the preservation of industrial peace in the already explosive situation in the mining area."
- On March 19, 1987, Macasa directed that the challenged ballots be opened and inventoried.
- SPFL appealed to the Bureau of Labor Relations; on April 14, 1987, Director Pura Ferrer-Calleja dismissed the appeal and affirmed with the modification that the 197 ballots be opened and canvassed by Regional Office XI.
- SPFL moved for reconsideration, but on May 21, 1987 Macasa opened and canvassed the challenged ballots — SPFL 12, Sandigan 178, No Union 2, spoiled 4, and one envelope with no ballot — making the final count SPFL 626, Sandigan 706, and No Union 11, out of 1,343 votes.
- On June 23, 1987, Director Calleja denied SPFL's motion for reconsideration and certified MMEU-Sandigan as the sole and exclusive bargaining representative of Apex's rank-and-file, directing Apex to negotiate a CBA.
- SPFL filed this petition for certiorari, decided April 24, 1989.
Arguments of the Parties
A. Petitioner SPFL argued that under the Labor Code managerial employees are excluded from forming or joining a collective bargaining unit, and that under the CBA between Apex and the respondent union those excluded from the unit include managerial employees as defined in paragraph K, Article 212, "those performing supervisory functions," and "those holding confidential positions as determined by the company" — so employees holding the positions of Supervisor II and III and those on the confidential payrolls should have been barred from the unit and from voting. It further argued that employees not paying union dues should be excluded because the existing CBA contained a union shop provision.
B. Respondents Director Calleja, MMEU-Sandigan, and Apex maintained that the 197 challenged voters were rank-and-file employees entitled to vote, and pressed for the opening and canvass of their ballots to settle the representation question.
C. Common Ground. The parties agreed at the pre-election conference to exclude nineteen managerial employees and seventy-three probationary employees from the voters' list, and did not dispute the election returns or the job descriptions of Supervisor II and III submitted in SPFL's motion for reconsideration below.
Issue
A. Main Issue (Topic/Subtopic-Centered). Where a collective bargaining agreement excludes from the bargaining unit those "performing supervisory functions" and those "holding confidential positions as determined by the company," may such employees be disqualified from membership in the unit and from voting in a certification election — or does eligibility turn solely on whether the nature of their work makes them managerial within the Labor Code's definition, which no CBA may enlarge?
B. Secondary Issues. Whether the positions of Supervisor II and III are managerial in nature; whether employees on the confidential payroll were shown to be managerial.
C. Ancillary/Incidental Issues. Whether non-payment of union dues, under a CBA union shop provision, disqualifies an employee from the bargaining unit and from voting.
Ruling
Main Issue: NO disqualification — "[a]lthough we have upheld the validity of the CBA as the law among the parties... its provisions cannot override what is expressly provided by law that only managerial employees are ineligible to join, assist or form any labor organization"; the right to self-organization "cannot be curtailed by a collective bargaining agreement." Secondary Issues: NOT managerial — the functions of Supervisor II and III "are not managerial in nature because they only execute approved and established policies leaving little or no discretion at all"; as to the confidential payroll, SPFL "has not shown that the nature of their jobs is classified as managerial." Ancillary Issue: NO — the union shop provision "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," so "it is... not impossible for employees to be members of the bargaining unit even though they are non-union members or not paying union dues."
Dispositive portion (verbatim):
"WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the petitioner.SO ORDERED."
Ratio
- The Court began with the hierarchy of sources: the CBA is the law between the parties, but "its provisions cannot override what is expressly provided by law that only managerial employees are ineligible to join, assist or form any labor organization."
- From this it drew the operative rule: "regardless of the challenged employees' designations, whether they are employed as Supervisors or in the confidential payrolls, if the nature of their job does not fall under the definition of 'managerial' as defined in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election. Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It cannot be curtailed by a collective bargaining agreement."
- Turning to the classification itself, the Court applied Franklin Baker Company of the Phils. v. Trajano: a managerial employee is "one who 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," and "[t]he 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)... and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment."
- Critically, "where such recommendatory powers... are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law."
- The Court added, from National Waterworks and Sewerage Authority v. NWSA Consolidated, that employees are not managerial where "they do not participate in policy making but are given ready policies to execute and standard practices to observe, thus having little freedom of action."
- Applying this to the job descriptions SPFL itself had put in the record — Supervisor II "[a]ssists the Foreman in the effective dispatching/distribution of manpower and equipment to carry out approved work," and Supervisor III "[e]xecutes and coordinates work plans emanating from his supervisors" — the Court concluded 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."
- As to the confidential payroll, the burden failed: SPFL offered only "its allegation that they are considered by management as occupying managerial positions and highly confidential."
- And union dues could not be "the determining factor," because the union shop clause reached only newly hired employees.
Doctrine
B. Doctrines/Rules/Principles. "[O]nly managerial employees are ineligible to join, assist or form any labor organization." "[R]egardless of the challenged employees' designations... if the nature of their job does not fall under the definition of 'managerial' as defined in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election." The right to self-organization "cannot be curtailed by a collective bargaining agreement." Recommendatory authority "subject to evaluation, review and final action by the department heads and other higher executives" is "not effective and not an exercise of independent judgment as required by law." Employees who "do not participate in policy making but are given ready policies to execute" are not managerial. A union shop clause "applies only to newly hired employees," so non-payment of dues does not exclude one from the bargaining unit.
C. Distinctions/Limitations/Qualifications. The decision predates the full working-out of the confidential employee doctrine: it disposes of the confidential-payroll objection on failure of proof that those jobs were managerial, not by holding that confidential employees are always eligible. The Court expressly notes SPFL "has not shown that the nature of their jobs is classified as managerial." The separate line of authority excluding confidential employees by necessary implication — because they assist and act in a confidential capacity to persons who formulate, determine, and effectuate management policies in labor relations — is developed in San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, Sugbuanon Rural Bank v. Laguesma, and San Miguel Foods v. SMC Supervisors and Exempt Union, digested separately under that subtopic. Note also that the decision was rendered against the pre-R.A. No. 6715 background in which supervisory employees' own right to organize was unsettled; the current rule, that supervisory employees may form their own separate unions but may not join rank-and-file unions, is stated in Article 255.
D. Topic/Subtopic Integration (Mandatory). As classified in Section I, this case is DIRECT: the Court applies the statutory exclusion of managerial employees from self-organization — the exception the Topic's Articles 253-255 carve out of the general rule of coverage — and settles two propositions the subtopic requires. First, eligibility is a question of function, not of title or payroll designation. Second, and more far-reaching, the exception is exclusively statutory: parties cannot contract additional classes of employees out of the right to self-organize, because a CBA "cannot override what is expressly provided by law."
Separate Opinions
None. The Decision, penned by Justice Gutierrez, Jr., was concurred in by Chief Justice Fernan and Justices Feliciano, Bidin, and Cortes.