San Miguel Corporation Supervisors v. Laguesma
San Miguel Corporation Supervisors and Exempt Union v. Laguesma, G.R. No. 110399, August 15, 1997
- Labor Law
- confidential employees
- managerial employees
- right to self-organization
- bargaining unit
- certification election
- supervisory employees
- exempt employees
- community of interests
- Article 245 Labor Code
- San Miguel Corporation
I. Facts of the Case
The San Miguel Corporation Supervisors and Exempt Union sought a certification election among supervisors and exempt employees of the SMC Magnolia Poultry Products Plants in Cabuyao, San Fernando and Otis. The Undersecretary of Labor, citing Philips Industrial Development v. NLRC, excluded supervisory levels 3 and 4 (S3 and S4) and exempt employees as confidential employees barred from unionizing. The union challenged this exclusion before the Supreme Court.
October 5, 1990
The petitioner union filed with the DOLE a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.
December 19, 1990
Med-Arbiter Danilo L. Reynante ordered a certification election among the supervisors and exempt employees of the three plants, treating them as one bargaining unit.
January 18, 1991
San Miguel Corporation appealed to the Secretary of Labor. It argued that the Med-Arbiter erred in grouping the three separate plants into one bargaining unit and in including supervisory levels 3 and above, whose positions are confidential in nature.
July 23, 1991
Undersecretary Laguesma granted the company's appeal. He remanded the case to the Med-Arbiter of origin to determine the true classification of each employee sought to be included in the bargaining unit.
September 3, 1991
On the union's motion for reconsideration dated August 7, 1991, Undersecretary Laguesma granted reconsideration. He directed separate certification elections among supervisors levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants.
September 21, 1991
San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings.
March 11, 1993
Undersecretary Laguesma granted the company's motion, relying on Philips Industrial Development, Inc. v. NLRC. He held that S3 and S4 supervisors and the exempt employees are admittedly confidential employees who, like managerial employees, cannot form, join or assist a union. He therefore excluded them from the proposed bargaining unit and the certification election.
The union and its president filed a Petition for Certiorari with Prayer for Preliminary Injunction before the Supreme Court. They argued that the employees are not confidential employees and may validly form a union, and that the employees of the three plants form a single appropriate bargaining unit.
II. Issues
Whether or not Supervisory employees 3 and 4 and the exempt employees of the company are confidential employees who are ineligible to join a union.
Whether or not the employees of the Cabuyao, San Fernando and Otis plants constitute an appropriate single bargaining unit.
III. Ruling
Whether or not Supervisory employees 3 and 4 and the exempt employees of the company are confidential employees who are ineligible to join a union.
Supervisors 3 and 4 and the exempt employees are not confidential employees, so they are not barred from joining a union. Even if they were confidential employees, the law does not bar those who do no managerial work from unionizing.
How the Court reasoned
- Article 245 of the Labor Code bars managerial employees from joining unions. The Constitution guarantees workers the right to self-organize, so exclusions from this right must be strictly defined.
- Supervisors 3 and 4 and the exempt employees are not managerial employees. They have no power to lay down and execute management policies, or to hire, transfer, suspend, lay off, recall, discharge or dismiss employees.
- Confidential employee status needs two cumulative criteria. The employee must assist or act in a confidential capacity, and must do so for persons who formulate, determine and effectuate management policies in the field of labor relations.
- The confidential data these employees handle concerns product formulation, standards and specifications, and internal business operations. It does not concern labor relations, so the second criterion is not met.
- The Undersecretary's reliance on Philips Industrial Development was therefore misplaced, because the facts did not show access to labor relations policy information.
- Even assuming they were confidential employees, no law prohibits confidential employees who do not perform managerial functions from forming or joining a union. They may therefore form a bargaining unit.
“On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union.”
Rule applied
Article 245 of the Labor Code; Section 3, Article XIII of the 1987 Constitution (right to self-organization); the confidential employee doctrine as distinguished in Philips Industrial Development, Inc. v. NLRC
Whether or not the employees of the Cabuyao, San Fernando and Otis plants constitute an appropriate single bargaining unit.
The employees of the three plants share a community of interest and form one appropriate bargaining unit. The distance between the plants does not matter.
How the Court reasoned
- An appropriate bargaining unit is determined mainly by the community or mutuality of interests among the employees.
- The employees of the Cabuyao, San Fernando and Otis plants work for the same employer in the same line of business and share common employment interests.
- Geographical separation of the plants is immaterial, and the distance is not productive of insurmountable difficulties in running union affairs.
- Splitting them into separate units would fragmentize the employees and weaken their bargaining leverage.
- The Court therefore set aside the March 11, 1993 Order and reinstated the Med-Arbiter's December 19, 1990 Order for one certification election.
“We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs.”
Rule applied
Community or mutuality of interests test for determining an appropriate bargaining unit; Article 245 of the Labor Code and Section 3, Article XIII of the 1987 Constitution
Doctrines
A confidential employee, for purposes of exclusion from a bargaining unit, must meet two cumulative criteria: (1) access to confidential information, and (2) acting in a confidential capacity to persons who formulate, determine and effectuate management policies in the field of labor relations. Access to business data such as product formulation and standards is not enough.
Exclusions of confidential employees from the right to self-organize must be strictly defined, in light of the constitutional guarantee of the right to self-organization in Section 3, Article XIII of the 1987 Constitution.
No legal prohibition prevents confidential employees who do not perform managerial functions from forming or joining a union.
An appropriate bargaining unit is determined by the community or mutuality of interests among employees. Geographical separation of plants is immaterial where the employees share such common interests, and fragmenting them would diminish their bargaining leverage.
Final Disposition
WHEREFORE, the petition is GRANTED. The Order of Undersecretary Laguesma dated March 11, 1993 is SET ASIDE, and the Order of Med-Arbiter Danilo L. Reynante dated December 19, 1990 ordering a certification election among the supervisors and exempt employees of the three plants as one bargaining unit is REINSTATED.
Notes
The Court distinguished Philips Industrial Development, Inc. v. NLRC, which the Undersecretary had relied on to bar S3, S4 and exempt employees.