#5

Facts: On 15 June 1998, respondent, identifying itself as an

affiliate of Federation of Free Workers (FFW), filed a petition
for certification election with the DOLE Regional Office. In the
petition, respondent stated that it sought to be certified and to
represent the permanent rank-and-file monthly paid employees
of the petitioner. A set of documents were attached to the
petition, including a (1) Charter Certificate issued by FFW
certifying that respondent was a duly certified local chapter of
FFW, (2) copy of the constitution of respondent, (3) a list of
respondents officers, (4) a certification signifying that
respondent had just been organized and no amount had yet been
collected from its members and (5) a list of all the rank-and-file
monthly paid employees of the Mandaue Packaging Products
Plants and Mandaue Glass Plant
On 27 July 1998, petitioner filed a motion to dismiss the petition
for certification election on the sole ground that herein
respondent is not listed or included in the roster of legitimate
labor organizations based on the certification issued by the
Officer-In-Charge, Regional Director of the DOLE Regional
Office.
Undersecretary Baldoz concluded that respondent acquired legal
personality as early as 15 June 1998, the date it submitted the
required documents, citing Section 3, Rule VI of the New Rules
Implementing the Labor Code (Implementing Rules) which
deems that a local/chapter acquires legal personality from the
date of filing of the complete documentary requirements as
mandated in the Implementing Rules.

These two conclusions of the DOLE were affirmed in the

assailed Decision of the Court of Appeals
Issue: Whether or not respondent has acquired legal personality
Held: YES. It could be properly said that at the exact moment
respondent was filing the petition for certification, it did not yet
possess any legal personality, since the requisites for acquisition
of legal personality under Section 3, Rule VI of Department
Order No. 9 had not yet been complied with. It could also be
discerned that the intention of the Labor Code and its
Implementing Rules that only those labor organizations that
have acquired legal personality are capacitated to file petitions
for certification elections. Such is the general rule. Yet there are
peculiar circumstances in this case that allow the Court to rule
that respondent acquired the requisite legal personality at the
same time it filed the petition for certification election. In doing
so, the Court acknowledges that the strict letter of the procedural
rule was not complied with. However, labor laws are generally
construed liberally in favor of labor, especially if doing so
affirms the constitutionally guaranteed right to selforganization.
Under Section 3, Rule VI of Department Order No. 9, it is the
submission of these same documents to the Regional Office or
Bureau that operates to vest legal personality on the
local/chapter. There is no doubt that on 15 June 1998, or the date
respondent filed its petition for certification election, attached
thereto were respondents constitution, the names and addresses
of its officers, and the charter certificate issued by the national
union FFW.

However, respondent never submitted a separate by-laws, nor

does it appear that respondent ever intended to prepare a set
thereof. Section 1(c), Rule VI, Book V of Department Order No.
9 provides that the submission of both a constitution and a set of
by-laws is required, or at least an indication that the
local/chapter is adopting the constitution and by-laws of the
federation or national union. A literal reading of the provision
might indicate that the failure to submit a specific set of by-laws
is fatal to the recognition of the local/chapter. However, a
critical examination of respondents constitution reveals that it is
sufficiently comprehensive in establishing the necessary rules
for its operation. These premises considered, there is clearly no
need for a separate set of by-laws to be submitted by respondent.

#6

SAN MIGUEL UNION VS. LAGUESMA

November 13, 2013 ~ vbdiaz
G.R. No. 110399 August 15, 1997
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND
ERNESTO L. PONCE, President V. HONORABLE BIENVENIDO E. LAGUESMA IN
HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT,
HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND
SAN MIGUEL CORPORATION

FACTS: Petitioner union filed before 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.
Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election
among the abovementioned employees of the different plants as one bargaining unit.
San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out,
among others, the Med-Arbiters error in grouping together all three (3) separate plants, into one
bargaining unit, and in including supervisory levels 3 and above whose positions are confidential
in nature.
The public respondent, Undersecretary Laguesma, granted respondent companys Appeal and
ordered the remand of the case to the Med-Arbiter of origin for determination of the true
classification of each of the employees sought to be included in the appropriate bargaining unit.
Upon petitioner-unions motion, Undersecretary Laguesma granted the reconsideration prayed
for and directed the conduct of separate certification elections among the supervisors ranked as
supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at
Cabuyao, San Fernando and Otis.
ISSUE:
1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are
considered confidential employees, hence ineligible from joining a union.
2. If they are not confidential employees, do the employees of the three plants constitute an
appropriate single bargaining unit.
RULING:
(1) 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.
They are not qualified to be classified as managerial employees who, under Article 245 of the
Labor Code, are not eligible to join, assist or form any labor organization. In the very same
provision, they are not allowed membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own.
Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons
who formulate, determine, and effectuate management policies in the field of labor relations. The
two criteria are cumulative, and both must be met if an employee is to be considered a
confidential employee that is, the confidential relationship must exist between the employee
and his supervisor, and the supervisor must handle the prescribed responsibilities relating to
labor relations.

The exclusion from bargaining units of employees who, in the normal course of their duties,
become aware of management policies relating to labor relations is a principal objective sought
to be accomplished by the confidential employee rule. The broad rationale behind this rule is
that employees should not be placed in a position involving a potential conflict of interests.
Management should not be required to handle labor relations matters through employees who
are represented by the union with which the company is required to deal and who in the normal
performance of their duties may obtain advance information of the companys position with
regard to contract negotiations, the disposition of grievances, or other labor relations matters.
The Court held that if these managerial employees would belong to or be affiliated with a
Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of
interest. The Union can also become company-dominated with the presence of managerial
employees in Union membership.
An important element of the confidential employee rule is the employees need to use labor
relations information. Thus, in determining the confidentiality of certain employees, a key
question frequently considered is the employees necessary access to confidential labor relations
information.
(2) The fact that the three plants are located in three different places, namely, in Cabuyao,
Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial.
Geographical location can be completely disregarded if the communal or mutual interests of the
employees are not sacrificed.
An appropriate bargaining unit may be defined as a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interest of
all the employees, consistent with equity to the employer, indicate to be best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining provisions of the law.
A unit to be appropriate must effect a grouping of employees who have substantial, mutual
interests in wages, hours, working conditions and other subjects of collective bargaining.