Labor Relations: Factors That Determine Appropriate Bargaining Unit

FACTORS THAT DETERMINE APPROPRIATE BARGAINING UNIT 1. INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS VS. QUISUMBING G.R. NO. 128845, JUNE 1, 2000 FACTS: International School (IS) pays its teachers who are hired from abroad, or foreign-hires, a higher salary than its local-hires, whether the latter are Filipino or not (most are Filipino, but some are American). It justifies this under the ‘dislocation factor’ – that foreigners must be given a higher salary both to attract them to teach here, and to compensate them for the “significant economic disadvantages” involved in coming here. When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" of the School, contested the difference in salary rates between foreign and local-hires. On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this Court. It claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination. ISSUES: 1. Whether or not there is salary discrimination between the foreign-hires and local-hires? 2. Whether or not foreign-hires belong to the same bargaining unit as the local-hires? HELD: 1. Yes. The Constitution specifically provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the physical workplace - the factory, the office or the field - but include as well the manner by which employers treat their employees. The Constitution also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor Code provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment

opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, prohibits and penalizes the payment of lesser compensation to a female employee as against a male employee for work of equal value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor organization. 2. No. A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights. It does not appear that foreign-hires have indicated their intention to be grouped together with localhires for purposes of collective bargaining. The collective bargaining history in the School also shows that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective collective bargaining rights. Hence, the SC granted the petition and reversed and set aside the decision of the Secretary of Labor. 2. BELYCA CORPORATION VS. FERRER-CALLEJA 168

SCRA 184 FACTS: Belyca Corporation, the petitioner herein, is a duly organized, registered and existing corporation engaged in the business of poultry raising, piggery and planting of agricultural crops such as corn, coffee and various

vegetables which employs approximately 205 rank and file employees/workers, On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly registered with the Ministry of Labor and Employment, filed with the Regional Office of the Ministry of Labor and Employment at Cagayan de Oro City, a petition for direct certification as the sole and exclusive bargaining agent of all the rank and file employees/workers of Belyca. The collective bargaining unit sought in the petition, or in case of doubt of the union's majority representation, for the issuance of an order authorizing the immediate holding of a certification election. Although the case was scheduled for hearing at least three times, no amicable settlement was reached by the parties. During the scheduled hearing of July 31, 1986 they, however, agreed to submit simultaneously their respective position papers on or before August 11, 1986. But petitioner contends that the bargaining unit must include all the workers in its integrated business concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented bargaining units. The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986. On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the Bureau of Labor Relations in Manila which denied the appeal and the motion for reconsideration. Thus, the instant petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of the Bureau of Labor Relations dated November 24, 1986 and denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's motion for reconsideration. ISSUES: 1. Whether or not the proposed bargaining unit is an appropriate bargaining unit? 2. Whether or not the statutory requirement of 30% (now 20%) of the employees in the proposed bargaining unit, asking for a certification election had been strictly complied with? HELD: 1. No. The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of the Code provides: Art. 256. Exclusive bargaining representative.—The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employee shall have the

right at any time to present grievances to their employer. Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of employees (Globe Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees". Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court laid down the test of proper grouping, which is community and mutuality of interest. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including the categories of their positions and employment status. As stated by petitioner corporation in its position paper, due to the nature of the business in which its livestock-agro division is engaged very few of its employees in the division are permanent, the overwhelming majority of which are seasonal and casual and not regular employees. Definitely, they have very little in common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. Undeniably, the rank and file employees of the livestock-agro division fully constitute a bargaining unit that satisfies both requirements of classification according to employment status and of the substantial similarity of work and duties which will ultimately assure its members the exercise of their collective bargaining rights. 2. Yes. Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice but to call a certification election (Atlas Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code "Mandatory for the Bureau to conduct a certification election for the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining representative of all employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no existing collective bargaining agreement.

(Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company for the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case. It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their written consent to the certification election or more than a majority of the rank and file employees and workers; much more than the required 30% and over and above the present requirement of 20% by Executive Order No. 111 issued on December 24, 1980 and applicable only to unorganized establishments under Art. 257, of the Labor Code, to which the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter was requested to bargain collectively. But thereafter the role of the employer in the certification process ceases. The employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64 [1983]). There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that petitioner corporation from the outset has actively participated and consistently taken the position of adversary in the petition for direct certification as the sole and exclusive bargaining representative and/or certification election filed by respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this Court. Considering that a petition for certification election is not a litigation but a mere investigation of a non-adversary character to determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine Musicians Guild). Hence, the petition before the SC is DISMISSED for lack of merit, the resolution of the Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining order issued by the Court on March 4, 1987 is LIFTED permanently.

3. SAN MIGUEL CORPORATION EMPLOYEES UNION VS. CONFESOR G.R. NO. 111262, SEPT. 19, 1996 FACTS: On June 28, 1990, petitioner-union San Miguel Corporation Employees Union — PTGWO entered into a CBA with private respondent San Miguel Corporation (SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989. This CBA provided, among others, that:

ARTICLE XIV DURATION OF AGREEMENT Sec. 1. This Agreement which shall be binding upon the parties hereto and their respective successors-in-interest, shall become effective and shall remain in force and effect until June 30, 1992. Sec. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this Agreement insofar as the representation aspect is concerned, shall be for five (5) years from July 1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such representation shall be sixty (60) days prior to June 30, 1994. Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all provisions of this Agreement, except insofar as the representation aspect is concerned. If no agreement is reached in such negotiations, this Agreement shall nevertheless remain in force up to the time a subsequent agreement is reached by the parties. Meanwhile, effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and became two separate and distinct corporations: Magnolia Corporation (Magnolia) and San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained in force and effect. After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and Article 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two parties submitting their respective proposals and counterproposals. During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still include the employees of the spun-off corporations: Magnolia and SMFI; and that the renegotiated terms of the CBA shall be effective only for the remaining period of two years or until June 30, 1994. SMC, on the other hand, contended that the members/employees who had moved to Magnolia and SMFI, automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the CBA should be effective for three years in accordance with Art. 253-A of the Labor Code. Unable to agree on these issues with respect to the bargaining unit and duration of the CBA, petitioner-union declared a deadlock on September 29, 1990. (Notice of strike…Secretary assumed jurisdiction) Secretary’s decision: the CBA shall be effective for the period of 3 years from June 30, 1992; and that such CBA shall cover only the employees of SMC and not of Magnolia and SMFI. ISSUES: 1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for three years of for only two

years; and 2) Whether or not the bargaining unit of SMC includes also the employees of the Magnolia and SMFI. HELD: We agree with the Secretary of Labor. Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads: Art. 253-A. Terms of a CBA. — Any CBA that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of 5 years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the CBA. All other provisions of the CBA shall be renegotiated not later than 3 years after its execution. Any agreement on such other provisions of the CBA entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such CBA, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the CBA, the parties may exercise their rights under this Code. (Emphasis supplied.) The “representation aspect” refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit concerned. “All other provisions” simply refers to the rest of the CBA, economic as well as noneconomic provisions, except representation. The law is clear and definite on the duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the CBA. It is a cardinal principle of statutory construction that the Court must ascertain the legislative intent for the purpose of giving effect to any statute. Obviously, the framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within 5 years and challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, the terms and conditions of employment (economic and non-economic) can not be questioned by the employers or employees during the period of effectivity of the CBA. The CBA is a contract between the parties and the parties must respect the terms and conditions of the agreement. Notably, the framers of the law did not give a fixed term as to the effectivity of the terms and conditions of employment. It can be gleaned from their discussions that it was left to the parties to fix the period. The issue as to the term of the non-representation provisions of the CBA need not belaboured. The parties,

by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does not coincide with the said 5-year term, and said agreement is ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting parties. Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the CBA shall be for 3 years. II. Undeniably, the transformation of the companies was a management prerogative and business judgment which the courts can not look into unless it is contrary to law, public policy or morals. Neither can we impute any bad faith on the part of SMC so as to justify the application of the doctrine of piercing the corporate veil.18 Ever mindful of the employees’ interests, management has assured the concerned employees that they will be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits according to the existing CBAs. They were advised that upon the expiration of the CBAs, new agreements will be negotiated between the management of the new corporations and the bargaining representatives of the employees concerned. Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they can not belong to a single bargaining unit. Moreover, in determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they performed. 22 Considering the spin-offs, the companies would consequently have their respective and distinctive concerns in terms of the nature of work, wages, hours of work and other conditions of employment. Interests of employees in the different companies perforce differ. The nature of their products and scales of business may require different skills which must necessarily be commensurated by different compensation packages. The different companies may have different volumes of work and different working conditions. For such reason, the employees of the different companies see the need to group themselves together and organize themselves into distinctive and different groups. It would then be best to have separate bargaining units for the different companies where the employees can bargain separately according to their needs and according to their own working conditions. WHEREFORE, the petition is DISMISSED for lack of merit. 4. SAN MIGUEL CORPORATION VS. LAGUESMA G.R. NO. 100485, SEPTEMBER 21, 1994

FACTS: On June 4, 1990, the North Luzon Magnolia Sales Labor Union (respondent union for brevity) filed with the Department of Labor a petition for certification election among all the regular sales personnel of Magnolia Dairy Products in the North Luzon Sales Area. Petitioner opposed the petition and questioned the appropriateness of the bargaining unit sought to be represented by respondent union. It claimed that its bargaining history in its sales offices, plants and warehouses is to have aseparate bargaining unit for each sales office. The petition was heard on November 9, 1990. Later, the lawyer of the petitioner withdrew his opposition to a certification election and agreed to consider all the sales offices in northern Luzon as one bargaining unit. At the pre-election conference, the parties agreed inter alia, on the date, time and place of the consent election. Respondent union won the election held on November 24, 1990. In an Order dated December 3, 1990, MediatorArbiter Benalfre J. Galang certified respondent union as the sole and exclusive bargaining agent for all the regular sales personnel in all the sales offices of Magnolia Dairy Products in the North Luzon Sales Area. Petitioner appealed to the Secretary of Labor. In a Resolution dated March 19, 1991, public respondent, by authority of the Secretary of Labor, denied SMC's appeal and affirmed the Order of the Med- Arbiter. Hence this petition for certiorari. ISSUES: (1) whether or not respondent union represents an appropriate bargaining unit, and (2) whether or not petitioner is bound by its lawyer's act of agreeing to consider the sales personnel in the north Luzon sales area as one bargaining unit. HELD: 1. Yes. A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. In the case at bench, respondent union sought to represent the sales personnel in the various Magnolia sales offices in northern Luzon. There is similarity of employment status for only the regular sales personnel in the north Luzon area are covered. They have the same duties and responsibilities and substantially similar

compensation and working conditions. Petitioner cannot insist that each of the sales office of Magnolia should constitute only one bargaining unit. What greatly militates against this position is the meager number of sales personnel in each of the Magnolia sales office in northern Luzon. Even the bargaining unit sought to be represented by respondent union in the entire north Luzon sales area consists only of approximately fifty-five (55) employees. Surely, it would not be for the best interest of these employees if they would further be fractionalized. The adage "there is strength in number" is the very rationale underlying the formation of a labor union. 2. Yes. the collective bargaining history of a company is not decisive of what should comprise the collective bargaining unit. Insofar as the alleged "mistake" of the substitute lawyer is concerned, we find that this mistake was the direct result of the negligence of petitioner's lawyers. It will be noted that Atty. Ona was under the supervision of two (2) other lawyers, Attys. Jacinto de la Rosa, Jr. and George C. Nograles. There is nothing in the records to show that these two (2) counsels were likewise unavailable at that time. Instead of deferring the hearing, petitioner's counsels chose to proceed therewith. Indeed, prudence dictates that, in such case, the lawyers allegedly actively involved in SMC's labor case should have adequately and sufficiently briefed the substitute lawyer with respect to the matters involved in the case and the specific limits of his authority. Unfortunately, this was not done in this case. The negligence of its lawyers binds petitioner. As held by this Court in the case of Villa Rhecar Bus v. De la Cruz: . . . As a general rule, a client is bound by the mistakes of his counsel. Only when the application of the general rule would result in serious injustice should an exception thereto be called for. In the case at bench, petitioner insists that each of the sales offices in northern Luzon should be considered as a separate bargaining unit for negotiations would be more expeditious. Petitioner obviously chooses to follow the path of least resistance. It is not, however, the convenience of the employer that constitutes the determinative factor in forming an appropriate bargaining unit. Equally, if not more important, is the interest of the employees. In choosing and crafting an appropriate bargaining unit, extreme care should be taken to prevent an employer from having any undue advantage over the employees' bargaining representative. Our workers are weak enough and it is not our social policy to further debilitate their bargaining representative. Hence, the SC considered the challenged Resolution and Order of public respondent are hereby AFFIRMED in toto, there being no showing of grave abuse of discretion or lack of jurisdiction

5. SAN MIGUEL CORPORATION SUP. UNION VS. LAGUESMA G.R. NO. 110399, AUGUST 15, 1997 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-Arbiter’s 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 company’s 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-union’s 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. ISSUES: 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. HELD: (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 company’s 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 employee’s need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key question frequently considered is the employee’s 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.

6.UNIVERSITY OF THE PHILIPPINES VS. FERRERCALLEJA, 211 SCRA 451 FACTS: The case was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a registered labor union, the "Organization of Non-Academic Personnel of UP" (ONAPUP). Claiming to have a membership of 3,236 members — comprising more than 33% of the 9,617

persons constituting the non-academic personnel of UPDiliman, Los Baños, Manila, and Visayas, it sought the holding of a certification election among all said nonacademic employees of the University of the Philippines. On April 18, 1990, another registered labor union, the "All UP Workers' Union," filed a comment, as intervenor in the certification election proceeding. For its part, the University, through its General Counsel, made of record its view that there should be two (2) unions: one for academic, the other for non-academic or administrative, personnel considering the dichotomy of interests, conditions and rules governing these employee groups. Director Calleja ruled on the matter on August 7, 1990 and declared that "the appropriate organizational unit . . should embrace all the regular rank-and-file employees, teaching and non-teaching, of the University of the Philippines, including all its branches" and that there was no sufficient evidence "to justify the grouping of the nonacademic or administrative personnel into an organization unit apart and distinct from that of the academic or teaching personnel." The Director thus commanded that a certification election be in all four autonomous campuses of the UP, and that management appear and bring copies of the corresponding payrolls for January, June, and July, 1990 at the "usual pre-election conference . . ." At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the DOLE, the University sought further clarification of the coverage of the term, "rank-and-file" personnel, asserting that not every employee could properly be embraced within both teaching and non-teaching categories since there are those whose positions are in truth managerial and policydetermining, and hence, excluded by law. At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the exclusion from the organizational unit of those employees holding supervisory positions among non-academic personnel, and those in teaching staff with the rank of Assistant Professor or higher. Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving that said teachers are rankand-file employees "qualified to join unions and vote in certification elections." The University seasonably moved for reconsideration but such motion was denied by Director Calleja, by Order dated November 20, 1990. The University would now have theCourt for this special civil action of certiorari to declare void the Director's Order of October 30, 1990 as well as that of November 20, 1990. A temporary restraining order was issued by the Court, by Resolution dated December 5, 1990 conformably to the University's application therefor. ISSUES:

1. whether or not professors, associate professors and assistant professors are "high-level employees" "whose functions are normally considered policy determining, managerial or . . highly confidential in nature." 2. whether or not, they, and other employees performing academic functions, should comprise a collective bargaining unit distinct and different from that consisting of the non-academic employees of the University, considering the dichotomy of interests, conditions and rules existing between them HELD: 1. No. The professors, associate professors and assistant professors (hereafter simply referred to as professors) cannot be considered as exercising such managerial or highly confidential functions as would justify their being categorized as "high-level employees" of the institution. It is evident that it is the University Academic Personnel Committee, composed of deans, the assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards respecting selection, compensation and promotion of members of the academic staff. The departmental and college academic personnel committees' functions are purely recommendatory in nature, subject to review and evaluation by the University Academic Personnel Board The power or prerogative pertaining to a high-level employee "to effectively recommend such managerial actions, to formulate or execute management policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" is exercised to a certain degree by the university academic personnel board/committees and ultimately by the Board of Regents in accordance with Section 6 of the University. 2. Yes.A "bargaining unit" has been 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 the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act. The test of the grouping is community or mutuality of interests which is 'the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights' (Rothenberg on Labor Relations, 490)." Since then, the "community or mutuality of interests" test has provided the standard in determining the proper constituency of a collective bargaining unit. In the case at bar, the University employees may, as already suggested, quite easily be categorized into two general classes: one, the group

composed of employees whose functions are nonacademic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers; and two, the group made up of those performing academic functions, i.e., full professors, associate professors, assistant professors, instructors — who may be judges or government executives — and research, extension and professorial staff. Not much reflection is needed to perceive that the community or mutuality of interests which justifies the formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the university. It would seem obvious that teachers would find very little in common with the University clerks and other non-academic employees as regards responsibilities and functions, working conditions, compensation rates, social life and interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in the compensation and working conditions of the academic and non-academic personnel dictate the separation of these two categories of employees for purposes of collective bargaining. The formation of two separate bargaining units, the first consisting of the rank-and-file non-academic personnel, and the second, of the rank-and-file academic employees, is the set-up that will best assure to all the employees the exercise of their collective bargaining rights. These special circumstances, i.e., the dichotomy of interests and concerns as well as the dissimilarity in the nature and conditions of work, wages and compensation between the academic and non-academic personnel, bring the case at bar within the exception contemplated in Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to have ruled otherwise, ignoring plain and patent realities. Therefore, the SCAFFIRMED the decision of Director Calleja in resolving that said teachers are rankand-file employees "qualified to join unions and vote in certification elections in so far as it declares the professors, associate professors and assistant professors of the University of the Philippines as rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the sense that the non-academic rank-and-file employees of the University of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution.

7.MECHANICAL DEPARTMENT LABOR UNION CIR G.R. NO. L-28223, AUGUST 30, 1968

VS.

FACTS: The respondent herein, "Samahan ng mga Manggagawa, etc.", filed a petition on 13 February 1965 before the Court of Industrial Relations calling attention to the fact that there were three unions in the Caloocan shops of the Philippine National Railways: the "Samahan", the "Kapisanan ng Manggagawa sa Manila Railroad Company", and the Mechanical Department Labor Union; that no certification election had been held in the last 12 months in the Caloocan shops; that both the "Samahan" and the Mechanical Department Labor Union had submitted different labor demands upon the management for which reason a certification election was needed to determine the proper collective bargaining agency for the Caloocan shop workers. The petition was opposed by the management as well as by the Mechanical Department Labor Union, the latter averring that it had been previously certified in two cases as sole and exclusive bargaining agent of the employees and laborers of the PNR'S mechanical department, and had negotiated two bargaining agreements with management in 1961 and 1963; that before the expiration of the latter, a renewal thereof had been negotiated and the contract remained to be signed; that the "Samahan" had been organized only in 21 January 1965; that the Caloocan shops unit was not established nor separated from the Mechanical Department unit; that the "Samahan" is composed mainly of supervisors who had filed a pending case to be declared non-supervisors; and that the purpose of the petition was to disturb the present smooth working labor management relations. Judge Martinez held that the employees in the Caloocan Shops should be given a chance to vote on whether their group should be separated from that represented by the Mechanical Department Labor Union, and ordered a plebiscite held for the purpose. The ruling was sustained by the Court en banc; wherefore, the Mechanical Department Labor Union appealed to this Court questioning the applicability under the circumstances of the "Globe doctrine" of considering the will of the employees in determining what union should represent them. ISSUE: Whether or not a new unit should be established, the Caloocan shops, separate and distinct from the rest of the workers under the Mechanical Department now represented by the Mechanical Department Labor Union. HELD: No. The appeal is premature, since the result of the ordered plebiscite among the workers of the Caloocan shops may be adverse to the formation of a separate unit, in which event, as stated in the appealed order, all questions raised in this case would be rendered moot and academic. The Industrial Court has found that there is a basic difference, in that those in the Caloocan shops not

only have a community of interest and working conditions but perform major repairs of railway rolling stock, using heavy equipment and machineries found in said shops, while the others only perform minor repairs. It is easy to understand, therefore, that the workers in the Caloocan shops require special skill in the use of heavy equipment and machinery sufficient to set them apart from the rest of the workers. In addition, the record shows that the collective bargaining agreements negotiated by the appellant union have been in existence for more than two (2) years; hence, such agreements can not constitute a bar to the determination, by proper elections, of a new bargaining representative (PLDT Employees' Union vs. Philippine Long Distance Telephone Co., 51 Off. Gaz., 4519).

On September 3, 1986, private respondent filed its position paper and On September 24, 1986, the MedArbiter dismissed the election protest. On October 10, 1986, petitioner NAFTU appealed the order of the Med-Arbiter to the Bureau of Labor Relations in Manila which denied the appeal and the two motions for reconsideration. Hence, this petition certiorari .

CA affirmed the decision of the CIR, with costs against appellant Mechanical Department Labor Union of the Philippine National Railways.

HELD: Yes. Significantly, out of two hundred and one (201) employees of MALDECO, one hundred seventy five (175) consented and supported the petition for certification election, thereby confirming their desire for one bargaining representative (Rollo, p. 104). Moreover, while the existence of bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. This is so because "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights." (Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al., 103 Phil. 1103 [1958]. Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in the same way that the company needs them both. There may be difference as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of a separate bargaining unit.

8. NAT. ASSOC. OF FREE TRADE UNIONS VS. MAINIT LUMBER DEV. CO. UNION G.R. NO. 79526, DECEMBER 21, 1990 FACTS: On January 28, 1985, private respondent Mainit Lumber Development Company Workers Union-United Lumber and General Workers of the Philippines, MALDECOWUULGWP (ULGWP, for short), a legitimate labor organization duly registered with the Ministry of Labor and Employment under Registry No. 2944-IP, filed with Regional Office No. 10, Ministry of Labor and Employment at Cagayan de Oro City, a petition for certification election to determine the sole and exclusive collective bargaining representative among the rank and file workers/employees of Mainit Lumber Development Company Inc. (MALDECO), a duly organized, registered and existing corporation engaged in the business of logging and saw-mill operations employing approximately 136 rank and file employees/workers .On April 11, 1985, the Med-Arbiter granted the petition for certification election. On April 26, 1985, NAFTU appealed the decision of the Med-Arbiter on the ground that MALDECO was composed of two (2) bargaining units, the Sawmill Division and the Logging Division, but both the petition and decision treated these separate and distinct units only as one. On April 28, 1986, the Bureau of Labor Relations affirmed the decision. Thus, a certification election was held on separate dates at the employer's sawmill division and logging area respectively. In said election MALDECOWU-ULGWP garnered a total vote of 146 while NAFTU garnered a total of 2 votes.

ISSUE: Whether or not it was right for the med-arbiter to change the employer from two separate bargaining units to only one.

Therefore, the SC affirmed the decision of the BLR.

9. PHIL LAND-AIR-SEA LABOR UNION VS. CIR G.R. NO. LI14656, NOV. 29, 1960 FACTS: The Industrial Court of Cebu on May 25, 1956 ordered the holding of a certification election to determine which of the two contending labor unions therein, herein petitioner Philippine Land-Air-Sea Labor Union (PLASLU) or respondent Allied Workers' Association of the

Philippines (AWA), shall be the sole collective bargaining agent of the employees of the San Carlos Milling Co. Prior to the holding of the election, respondent AWA filed an urgent motion to exclude 144 employees from participating in the election. The motion, however, was denied. On September 21, 1956, the certification election was held in the premises of the San Carlos Milling Co., PLASLU receiving 88 votes while AWA garnered 149, with 390 ballets recorded as challenged, 242 of them by the petitioner PLASLU and ,148 by the respondent awa. Within 72 hours after the closing of the election, as required by the Rules for Certification Election, awa filed with the Industrial Court a petition contesting the election on the ground of the ineligibility of the voters. PLASLU, on the other hand, in an urgent motion questioned the validity of the 242 ballots cast by the stevedores and piece workers. The Industrial Court, however ordered that all the 390 challenged ballots be opened and canvassed and the corresponding votes added to those already credited to the contending labor unions. PLASLU moved for reconsideration of the order but the motion was denied and pursuant to said order the challenged ballots were opened. After the canvass, 148 votes challenged by awa were counted in favor of PLASLU. Of the 242 votes challenged by PLASLU, 3 were counted in its favor, 228 credited in favor of awa, and 11 declared either for no union or spoiled ballots. Adding the votes to the results of the certification election, the final count showed that respondent AWA garnered a total of 377 votes as against 239 for PLASLU. Accordingly, said respondent was certified by the Industrial Court in its order dated March 12, 1958 as the sole collective bargaining agent of the employees of the San Carlos Milling Co. As its motion for reconsideration of the order was denied by the court en banc .The petitioner PLASLU filed the present petition for review, contending that the Industrial Court erred in not excluding the 242 votes challenged by it from the total number of votes credited to respondent AWA. ISSUE: Whether or not the challenged votes of the pieceworkers and stevedores are valid? HELD: No. In the case of Democratic Labor Union vs. Cebu Stevedoring Co., Inc., et al. (G.R. No. L-10321, February 28, 1958) this Court had occasion to rule that in the determination of the proper constituency of a collective bargaining unit, certain factors must be considered, among them, the employment status of the employees to be affected, that is to say, the positions and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties. The most efficacious bargaining unit is one which is comprised of constituents enjoying a community or mutuality of interest. And this is so because the basic test

of a bargaining unit's acceptability is whether it will best assure to all employees the exercise of their collective bargaining rights. It appearing that the 242 stevedores and piece workers, whose votes have been challenged, were employed on a casual or day to day basis and have no reasonable basis for continued or renewed employment for any appreciable substantial time—not to mention the nature of work they perform—they cannot be considered to have such mutuality of interest as to justify their inclusion in a bargaining unit composed of permanent or regular employees. There is nothing to the contention that the order complained of is merely complementary to the order of the Industrial Court dated September 4, 1957, which has become final and executory the same not having been appealed. It will be observed that the said order of September 4, 1957 merely ordered the opening and canvassing of the challenged ballots. Any appeal taken from said order would therefore have been premature. Hence, the order complained of is reversed and the petitioner PLASLU is hereby certified as the collective bargaining agent of the employees of the San Carlos Milling Company. Without costs. 10. DIATAGON LABOR FEDERATION VS. OPLE 101

SCRA 534 FACTS: Lianga Bay Logging Co., Inc. is a domestic corporation engaged in logging and manufacturing plywood. The Diatagon Labor Federation Local 110 of ULGWP (United Lumber and General Workers of the Philippines) had a collective bargaining agreement with the Lianga Bay logging Co., Inc. which was due to expire on March 31, 1975. On February 3, 1975, or before the expiration of that CBA, a rival union, the Mindanao Association of Trade Unions, filed with the Bureau of Labor Relations a petition for the holding of a certification election at Lianga Bay Logging Co., Inc., BLR Case No. 0399. Before that petition could be acted upon, the Diatagon Labor Federation was able to negotiate on March 17, 1975 with Georgia Pacific International Corporation a CBA for a term of three years expiring on March 31, 1978 whose CBA was certified by the Bureau of Labor Relations on July 10, 1975.The said CBA included 236 employees working at the veneer plant and electrical department of Georgia Pacific International Corporation in Lianga. Those 236 employees were formerly employees of Lianga Bay Logging Co., Inc. After July, 1974, they were transferred to Georgia Pacific International Corporation and became employees of the latter In spite of the transfer, the 236 employees continued to use in 1975 the pay envelopes and Identification cards of their former employer, Lianga Bay Logging Co., Inc. That confusing circumstance spawned the controversy in this case because the Mindanao Association of Trade

Unions and the Director of Labor Relations used that circumstance to support their conclusion that the 236 employees should still be regarded as employees of Lianga Bay Logging Co., Inc. and not of Georgia Pacific International Corporation or that the two companies should be regarded as only one bargaining unit. ISSUE: Whether two companies should be regarded as a single collective bargaining unit? HELD: No. The two companies are indubitably distinct entities with separate juridical personalities. The fact that their businesses are related and that the 236 employees of Georgia Pacific International Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a justification for disregarding their separate personalities. Hence, the 236 employees, who are now attached to Georgia Pacific International Corporation, should not be allowed to vote in the certification election at the Lianga Bay Logging Co., Inc. They should vote at a separate certification election to determine the collective bargaining representative of the employees of Georgia Pacific International Corporation. However, at this late hour, or after the lapse of more than five years, the result of the 1975 certification election should not be implemented. A new certification election should be held at Lianga Bay Logging Co., Inc. but the 236 employees should not be allowed to vote in that election. With respect to the refusal of the Secretary of Labor (now Minister of Labor and Employment) to entertain appeals from the orders of the Director of Labor Relations, that norm of conduct is based on the rule laid down by the Secretary himself in Rule V (Certification Cases and IntraUnion Conflicts of Book Five [Labor Relations]) of the Rules and Regulations Implementing the Labor Code dated February 16, 1976, which Rule V provides: SECTION 10. Decision of the Bureau is final and inappealable. — The Bureau shall have twenty (20) working days from receipt of the records of the case within which to decide the appeal (from the Med-Arbiter). The decision of the Bureau in all cases shall be final and inappealable. (sic) WHEREFORE, the orders of the Director of Labor Relations holding that the employees of Lianga Bay Logging Co., Inc. and Georgia Pacific International Corporation should be treated as one bargaining unit are reversed and set aside. A new certification election should be held at Lianga Bay Logging Co., Inc. The 236 employees of Georgia Pacific International Corporation should not be allowed to vote in that election.

11. DLSU VS. DLSU EMPLOYEES ASSOCIATION G.R. NO. 109002, APRIL 12, 2000

FACTS: On December 1986, De La Salle University and De La Salle University Employees Association entered into a collective bargaining agreement with a life span of 3 years, that is, from December 23, 1986-December 22, 1989. During the freedom period, or 60 days before the expiration of the said collective bargaining agreement, the Union initiated negotiations with the University for a new collective bargaining agreement, which however, turned out to be unsuccessful, hence the Union filed a Notice of Strike with the National Conciliation and Mediation Board, National Capital Region. After several conciliationmediation meetings, 5 out of the 11 issues raised in the Notice of Strike were resolved by the parties. A partial collective bargaining agreement was executed by the parties. On March 18, 1991, the parties entered into a Submission Agreement identifying the 6 unresolved issues. The parties appointed Buenaventura Magsalin as voluntary arbitrator. The Voluntary Arbitrator is constrained to respect the original intention of the parties, the same being not contrary to law, morals or public policy. Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained by the voluntary arbitrator. On March 5, 1993, the University filed with the Second Division of this Court a petition for certiorari with temporary restraining order and/or preliminary injunction assailing the decision of the voluntary arbitrator, as having been rendered “in excess of jurisdiction and/or grave abuse of discretion.” Likewise, the Union also filed a petition for certiorari with the First Division. Upon motion by the Solicitor General, both petitions were consolidated and transferred to the Second Division. The Solicitor General came to the conclusion sufficient evidence to justify the Union’s proposal to consider the University and the CSB as only one entity because the latter is but a mere integral part of the university. Hence, this petition. ISSUE: Whether or not the voluntary arbitrator committed grave abuse of discretion with respect to (1) computer operators assigned at the University’s Computer Services Center and the University’s discipline officers may be considered as confidential employees and should therefore be excluded from the bargaining unit; (2) a union shop clause should be included in the parties’ collective bargaining agreement; (3) the denial of the Union’s proposed method of laying-off employees is proper; (4) the ruling that on the basis of the University’s proposed budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92; (5) the denial of the Union’s proposals on the deloading of the union president is proper; (6) the finding that the mulit-sectoral committee is the legitimate group

which determines the annual salary increases; and (7) the ruling that 70% share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees is proper. HELD: The petitions in the consolidated cases are partially granted. On the first issue, the Court agrees with the Solicitor General that the express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement does not bar any renegotiation for the future inclusion of the said employees in the bargaining unit. On the second issue, the right to join a labor organization should carry with it the corollary right not to join the same. On the third issue, the Supreme Court affirms the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the existing maintenance of membership clause in the collective bargaining agreement. The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is however limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. On the fourth issue, the university can no longer be required to grant a second round of wage increases for the school years 1991-9222 and 199293 and charge the same to the incremental proceeds. The voluntary arbitrator committed grave abuse of discretion amounting to lack of excess of jurisdiction. On the fifth issue, the Supreme Court agrees with the voluntary arbitrator’s rejection of the said demands, there being no justifiable reason for the granting of the same. On the sixth issue, the Court finds that the voluntary arbitrator did not gravely abuse his discretion on the matter. It appears that during the parties’ negotiations for a new collective bargaining agreement, the Union demanded for a 25% and 40% salary increase for the 2nd and 3rd years. Assuming for the sake of argument that the said committee is the group responsible for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the committee’s determination must still be based on duly audited financial statements. On the secventh issue, the Court deems that any determination of this alleged error is unnecessary and irrelevant, in view of the rulings on the fourth and preceding issues and there being no evidence presented before the voluntary arbitrator that the University held incremental tuition fee proceeds from which any wage increase or fringe benefit may be satisfied.