93. Golden Farms vs.

Secretary of Labor Held:

Facts: Yes. The monthly paid office and technical rank-and-file
employees of petitioner Golden Farms enjoy the constitutional right
Petitioner Golden Farms, Inc., is a corporation engaged in to self-organization and collective bargaining. A “bargaining unit”
the production and marketing of bananas for export. On February 27, has been defined as a group of employees of a given employer,
1992, private respondent Progressive Federation of Labor (PFL) filed comprised of all or less than all of the entire body of employees,
a petition before the Med-Arbiter praying for the holding of a which the collective interest of all the employees, consistent with
certification election among the monthly paid office and technical equity to the employer, indicate to be the best suited to serve the
rank-and-file employees of petitioner Golden Farms. reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.
Petitioner moved to dismiss the petition on three (3)
grounds. First, respondent PFL failed to show that it was organized In the case at bench, the evidence established that the
as a chapter within petitioner’s establishment. Second, there was monthly paid rank-and-file employees of petitioner primarily
already an existing collective bargaining agreement between the perform administrative or clerical work. In contradistinction, the
rank-and- file employees represented by the National Federation of petitioner’s daily paid rank-and-file employees mainly work in the
Labor (NFL) and petitioner. And third, the employees represented by cultivation of bananas in the fields. It is crystal clear the monthly
PFL had allegedly been disqualified by this Court from bargaining paid rank-and-file employees of petitioner have very little in
with management in Golden Farms, Inc. vs. Honorable Director common with its daily paid rank-and-file employees in terms of
Pura Ferrer-Calleja. duties and obligations, working conditions, salary rates, and skills.
To be sure, the said monthly paid rank-and-file employees have even
Respondent PFL opposed petitioner’s Motion to Dismiss. It been excluded from the bargaining unit of the daily paid rank-and-
countered that the monthly paid office and technical employees file employees. This dissimilarity of interests warrants the formation
should be allowed to form a separate bargaining unit because they of a separate and distinct bargaining unit for the monthly paid rank-
were expressly excluded from coverage in the Collective Bargaining and-file employees of the petitioner. To rule otherwise would deny
Agreement (CBA) between petitioner and NFL. It also contended this distinct class of employees the right to self-organization for
that the case invoked by petitioner was inapplicable to the present purposes of collective bargaining. Without the shield of an
case. organization, it will also expose them to the exploitations of
management.
Med-Arbiter: granted the petition and ordered that a certification
election be conducted. The Court’s decision in Golden Farms, Inc. vs. Honorable
Pura Ferrer-Calleja, op. cit., does not pose any obstacle in holding a
Secretary of labor: denied appeal. Motion for reconsideration denied
certification election among petitioner’s monthly paid rank-and-file
employees. The issue brought to fore in that case was totally
Issue: Whether or not the private respondent is allowed to form a different, i.e., whether or not petitioner’s confidential employees,
separate bargaining unit considering the nature of their work, should be included in the
bargaining unit of the daily paid rank-and-file employees. In the case
at bench, the monthly paid rank-and-file employees of petitioner are
being separated as a bargaining unit from its daily paid rank-and-file Held:
employees, on the ground that they have different interest to protect.
The principle of res judicata is, therefore, inapplicable. No. The Labor Code recognizes two (2) principal groups of
employees, namely, the managerial and the rank and file groups.
Thus, Art. 212 (k) of the Code provides: xxx xxx xxx “k)
94. Philtranco Services Enterprises vs. BLR ‘Managerial employee’ is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to
Facts: hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions. All
Petitioner Philtranco Service Enterprises, Inc. is a land employees not falling within this definition are considered rank and
transportation company engaged in the business of carrying file employees for purposes of this Book.” In implementation of the
passengers and freight. The company employees included field aforequoted provision of the law, Section 11 of Rule II, Book V of
workers consisting of drivers, conductors, coach drivers, coach the Omnibus Rules implementing the Labor Code did away with
stewards and mechanics and office employees like clerks, cashiers, existing supervisors’ unions “classifying the members either as
programmers, telephone operators, etc. managerial or rank and file employees depending on the work they
perform. If they discharge managerial functions, supervisors are
On February 15, 1988, the Kapisanan ng mga Kawani, prohibited from forming or joining any labor organization. If they do
Assistant, Manggagawa at Konpidensyal sa Philtranco (KASAMA not perform managerial work, they may join the rank and file union
KO), a registered labor organization filed a petition for certification and if none exists, they may form one such rank and file
election with the Department of Labor and Employment. organization. This rule was emphasized in the case of Bulletin
Publishing Corp. v. Sanchez
On February 24, 1988, the National Mines and Allied
Workers Union (NAMAWU-MIF) filed a motion for intervention It, therefore, follows that the members of the KASAMA KO
alleging that it is the bargaining agent of the workers at Philtranco who are professional, technical, administrative and confidential
and as such it has a substantial interest in the outcome of the petition. personnel of PHILTRANCO performing managerial functions are
not qualified to join, much less form a union. This rationalizes the
Arbiter Paterno Adap: petition is dismissed. Individual members exclusion of managers and confidential employees exercising
of the herein petitioner eligible to join a labor organization, if any, managerial functions from the ambit of the collective bargaining
are hereby directed to be included/incorporated in the existing unit. As correctly observed by Med-Arbiter Adap: “x x x managerial
bargaining unit. and confidential employees were expressly excluded within the
operational ambit of the bargaining unit for the simple reason that
Bureau of Labor relations: reversed under the law, managers are disqualified to be members of a labor
organization. On the other hand, confidential workers were not
Issue: Whether or not the private respondents may form a separate included because either they were performing managerial functions
union and/or their duties and responsibilities were considered or may be
categorized as part and parcel of management as the primary reason confidential employees vis-a-vis the field workers or drivers,
for their exclusion in the bargaining unit. The other categorized conductors and mechanics of the petitioner. Against this contention,
employees were likewise not included because parties have agreed the Court finds that the “substantial differences” in the terms and
on the fact that the aforementioned group of workers are not conditions of employment between the private respondent’s
qualified to join a labor organization at the time the agreement was members and the rest of the company’s rank and file employees are
executed and that they were classified as outside the parameter of the more imagined than real. The Court agrees with the petitioner that
bargaining unit.” the differences alleged are not substantial or significant enough to
merit the formation of another union, x x x There may be differences
The Court is constrained to disallow the formation of another as to the nature of their individual assignments but the distinctions
union. There is no dispute that there exists a labor union in the are not enough to warrant the formation of separate unions. The
company, herein intervenor, the NAMAWU-MIF which is the private respondent has not even shown that a separate bargaining
collective bargaining agent of the rank and file employees in unit would be beneficial to the employees concerned. Office
PHILTRANCO. x x x The Court sees no need for the formation of employees also belong to the rank and file. There is an existing
another union in PHILTRANCO. The qualified members of the employer wide unit in the company represented by NAMAWU-MIF.
KASAMA KO may join the NAMAWU-MIF if they want to be And as earlier stated, the fact that NAMAWU-MIF moved to
union members, and to be consistent with the one union, one- intervene in the petition for certification election filed by KASAMA
company policy of the Department of Labor and Employment, and KO negates the allegation that “substantial differences” exist
the laws it enforces. As held in the case of General Rubber and between the employees concerned. The Court finds a commonality
Footwear Corp. v. Bureau of Labor Relations(155 SCRA 283 of interest among them. There are no compelling reasons for the
[1987]): “x x x It has been the policy of the Bureau to encourage the formation of another union.
formation of an employer unit ‘unless circumstances otherwise
require.’ The proliferation of unions in an employer unit is 95. SMC Supervisors vs. Laguesma
discouraged as a matter of policy unless there are compelling reasons
which would deny a certain class of employees the right to self- Facts:
organization for purposes of collective bargaining. This case does
not fall squarely within the exception.” (Emphasis supplied). There On October 5, 1990, petitioner union filed before the
are no compelling reasons in this case such as a denial to the Department of Labor and Employment (DOLE) a Petition for Direct
KASAMA KO group of the right to join the certified bargaining unit Certification or Certification Election among the supervisors and
or substantial distinctions warranting the recognition of a separate exempt employees of the SMC Magnolia Poultry Products Plants of
group of rank and file workers. Precisely, NAMAWU-MIF Cabuyao, San Fernando and Otis.
intervened to make it clear it has no objections to qualified rank and
file workers joining its union. On December 19, 1990, Med-Arbiter Danilo L. Reynante
issued an Order ordering the conduct of certification election among
The respondents state that this case is an exception to the the supervisors and exempt employees of the SMC Magnolia Poultry
general rule considering that substantial differences exist between Products Plants of Cabuyao, San Fernando and Otis as one
the office employees or professional, technical, administrative and bargaining unit.
 On January 18, 1991, respondent San Miguel Corporation 2) If they are not confidential employees, do the employees
filed a Notice of Appeal with Memorandum on Appeal, pointing out, of the three plants constitute an appropriate single bargaining unit.
among others, the Med-Arbiter’s error in grouping together all three
(3) separate plants, Otis, Cabuyao and San Fernando, into one Held:
bargaining unit, and in including supervisory levels 3 and above 1) On the first issue, this Court rules that said employees do
whose positions are confidential in nature. not fall within the term “confidential employees” who may be
prohibited from joining a union.
On July 23, 1991, the public respondent, Undersecretary
Laguesma, granted respondent company’s Appeal and ordered the Confidential employees are those who (1) assist or act in a
remand of the case to the Med-Arbiter of origin for determination of confidential capacity, (2) to persons who formulate, determine, and
the true classification of each of the employees sought to be included effectuate management policies in the field of labor relations. The
in the appropriate bargaining unit. two criteria are cumulative, and both must be met if an employee is
to be considered a confidential employee—that is, the confidential
Upon petitioner-union’s motion dated August 7, 1991, relationship must exist between the employee and his supervisor, and
Undersecretary Laguesma granted the reconsideration prayed for on the supervisor must handle the prescribed responsibilities relating to
September 3, 1991 and directed the conduct of separate certification labor relations.
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 The exclusion from bargaining units of employees who, in
Cabuyao, San Fernando and Otis. the normal course of their duties, become aware of management
policies relating to labor relations is a principal objective sought to
On September 21, 1991, respondent company, San Miguel be accomplished by the “confidential employee rule.” The broad
Corporation filed a Motion for Reconsideration with Motion to rationale behind this rule is that employees should not be placed in a
suspend proceedings. On March 11, 1993, an Order was issued by position involving a potential conflict of interests. “Management
the public respondent granting the Motion. Said Order reads in part: should not be required to handle labor relations matters through
“x x x Confidential employees, like managerial employees, are not employees who are represented by the union with which the
allowed to form, join or assist a labor union for purposes of collective company is required to deal and who in the normal performance of
bargaining.
their duties may obtain advance information of the company’s
In this case, S3 and S4 Supervisors and the so-called exempt position with regard to contract negotiations, the disposition of
employees are admittedly confidential employees and therefore, they are grievances, or other labor relations matters.”
not allowed to form, join or assist a labor union for purposes of collective
bargaining following the above court’s ruling. Consequently, they are not
allowed to participate in the certification election.
An important element of the “confidential employee rule” is
the employee’s need to use labor relations information. Thus, in
Issues: determining the confidentiality of certain employees, a key question
1) Whether Supervisory employees 3 and 4 and the exempt frequently considered is the employee’s necessary access to
employees of the company are considered confidential employees, confidential labor relations information.
hence ineligible from joining a union.
 It is evident that whatever confidential data the questioned that there is no legal prohibition against confidential employees who
employees may handle will have to relate to their functions. From are not performing managerial functions to form and join a union.
the foregoing functions, it can be gleaned that the confidential
information said employees have access to concern the employer’s 2) It is readily seen that the employees in the instant case
internal business operations. As held in Westinghouse Electric have “community or mutuality of interests,” which is the standard in
Corporation v. National Labor Relations Board, “an employee may determining the proper constituency of a collective bargaining unit.
not be excluded from appropriate bargaining unit merely because he It is undisputed that they all belong to the Magnolia Poultry Division
has access to confidential information concerning employer’s of San Miguel Corporation.
internal business operations and which is not related to the field of
labor relations.” This means that, although they belong to three different
plants, they perform work of the same nature, receive the same
It must be borne in mind that Section 3 of Article XIII of the wages and compensation, and most importantly, share a common
1987 Constitution mandates the State to guarantee to “all” workers stake in concerted activities. In light of these considerations, the
the right to self-organization. Hence, confidential employees who Solicitor General has opined that separate bargaining units in the
may be excluded from bargaining unit must be strictly defined so as three different plants of the division will fragmentize the employees
not to needlessly deprive many employees of their right to bargain of the said division, thus greatly diminishing their bargaining
collectively through representatives of their choosing. An leverage. Any concerted activity held against the private respondent
appropriate bargaining unit may be defined as “a group of employees for a labor grievance in one bargaining unit will, in all probability,
of a given employer, comprised of all or less than all of the entire not create much impact on the operations of the private respondent.
body of employees, which the collective interest of all the The two other plants still in operation can well step up their
employees, consistent with equity to the employer, indicate to be production and make up for the slack caused by the bargaining unit
best suited to serve the reciprocal rights and duties of the parties engaged in the concerted activity. This situation will clearly frustrate
under the collective bargaining provisions of the law.” the provisions of the Labor Code and the mandate of the
Constitution.
In the case at bar, supervisors 3 and above may not be
considered confidential employees merely because they handle 96. Belyca Corporation vs. Ferrer Calleja
“confidential data” as such must first be strictly classified as
pertaining to labor relations for them to fall under said restrictions. Facts:
The information they handle are properly classifiable as technical
and internal business operations data which, to our mind, has no On June 3, 1986, private respondent Associated Labor Union
relevance to negotiations and settlement of grievances wherein the (ALU)-TUCP, a legitimate labor organization duly registered with
interests of a union and the management are invariably adversarial. the Ministry of Labor and Employment, filed with the Regional
Since the employees are not classifiable under the confidential type, Office No. 10, Ministry of Labor and Employment at Cagayan de
this Court rules that they may appropriately form a bargaining unit Oro City, a petition for direct certification as the sole and exclusive
for purposes of collective bargaining. Furthermore, even assuming bargaining agent of all the rank and file employees/workers of
that they are confidential employees, jurisprudence has established Belyca Corporation (Livestock and Agro-Division), a duly
organized, registered and existing corporation engaged in the Issue: Whether or not the proposed bargaining unit is an appropriate
business of poultry raising, piggery and planting of agricultural crops bargaining unit
such as corn, coffee and various vegetables, employing
approximately 205 rank and file employees/workers, the collective Held:
bargaining unit sought in the petition, or in case of doubt of the
union’s majority representation, for the issuance of an order Yes. The Labor Code does not specifically define what
authorizing the immediate holding of a certification election. constitutes an appropriate collective bargaining unit. Article 256 of
Although the case was scheduled for hearing at least three times, no the Code provides:
amicable settlement was reached by the parties. During the “Art. 256. Exclusive bargaining representative.—The labor organization
scheduled hearing of July 31, 1986 they, however, agreed to submit designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be exclusive representative of the
simultaneously their respective position papers on or before August employees in such unit for the purpose of collective bargaining. However, an
11, 1986. individual employee or group of employees shall have the right at any time to
present grievances to their employer.”
Petitioner ALU-TUCP, private respondent herein, in its
petition and position paper alleged, among others, (1) that there is no According to Rothenberg, a proper bargaining unit maybe
existing collective bargaining agreement between the respondent said to be a group of employees of a given employer, comprised of
employer, petitioner herein, and any other existing legitimate labor all or less than all of the entire body of employees, which the
unions; (2) that there had neither been a certification election collective interests of all the employees, consistent with equity to the
conducted in the proposed bargaining unit within the last twelve (12) employer, indicate to be best suited to serve reciprocal rights and
months prior to the filing of the petition nor a contending union duties of the parties under the collective bargaining provisions of the
requesting for certification as the sole and exclusive bargaining law
representative in the proposed bargaining unit; (3) that more than a
majority of respondent employer’s rank-and-file employees/workers This Court has already taken cognizance of the crucial issue
in the proposed bargaining unit or one hundred thirty-eight (138) as of determining the proper constituency of a collective bargaining
of the date of the filing of the petition, have signed membership with unit. Among the factors considered in Democratic Labor Association
the ALU-TUCP and have expressed their written consent and v. Cebu Stevedoring Co. Inc. are: “(1) will of employees (Glove
authorization to the filing of the petition; and etc. Doctrine); (2) afinity and unity of employee’s interest, such as
substantial similarity of work and duties or similarity of
The Labor Arbiter granted the certification election sought compensation and working conditions; (3) prior collective bargaining
for by petitioner union. history; and (4) employment status, such as temporary, seasonal and
probationary employees”.
Petitioner contends that the bargaining unit must include all
the workers in its integrated business concerns ranging from piggery, Under the circumstance of that case, the Court stressed the
poultry, to supermarts and cinemas so as not to split an otherwise importance of the fourth factor and sustained the trial court’s
single bargaining unit into fragmented bargaining units. 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.

In any event, whether importance is focused on the

employment status or the mutuality of interest of the employees
concerned “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.

Coming back to the case at bar, it is beyond question that the

employees of the livestock and agro division of petitioner
corporation perform work entirely different from those performed by
employees in the supermarts and cinema. 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.