LABOR II - Supervisory Employees’

CATHAY PACIFIC STEEL CORP v. CA Right to Self Organization

CAPASCO hired Tamondong as Assistant to the Personnel Manager of its Cainta plant and was later
promoted to Personnel/Administrative Officer, and later to that of Personnel Superintendent. The
supervisory personnel of CAPASCO later formed a union known as CUSE. Tamondong joined and was
later elected as an officer. CAPASCO sent a memo to him requiring him to discontinue his activities in
the union. However, Tamondong did not listen and was later terminated. CAPASCO contended that
Tamondong is considered as a managerial employee and being such, he is not eligible to participate in
union activities of CUSE. Thus, Tamondong was validly dismissed because the nature of his position
and functions as Personnel Superintendent prevented him to join a labor union due to conflict of interest.

I: The main issue in this case is WON Tamondong is a managerial employee and therefore not eligible
to participate in union activities.

The SC ruled that he is not a managerial employee. Tamondong was not at liberty to lay down and
execute major business and operational policies for and in behalf of CAPASCO. He does not have the
power to hire, transfer, terminate, or discipline erring employees of the company. Tamondong is a
supervisory employee. Supervisory employees are those who effectively recommend such managerial
actions, if the exercise of such authority is not merely routinary or clerical in nature but requires the use
of independent judgment. Hence, the Labor Code provisions regarding disqualification of a managerial
employee from joining, assisting or forming any labor organization does not apply to Tamondong.
Consequently, based on CAPASCO’s unfair labor practice, Tamondong was illegally dismissed on
account of his union activities.
Facts
1. Cathay Pacific Steel Corporation (CAPASCO), engaged in the business of manufacturing steel
products, hired private respondent Tamondong as Assistant to the Personnel Manager for its Cainta
Plant on 16 February 1990. Thereafter, he was promoted to the position of Personnel/Administrative
Officer, and later to that of Personnel Superintendent.
2. Sometime in June 1996, the supervisory personnel of CAPASCO launched a move to organize a
union among their ranks, later known as private respondent CAPASCO Union Of Supervisory
Employees (CUSE).
3. Tamondong actively involved himself in the formation of the union and was even elected as one of
its officers after its creation.
4. Consequently, CAPASCO sent a memo to Tamondong requiring him to explain and to discontinue
from his union activities, with a warning that a continuance thereof shall adversely affect his
employment in the company.
5. Tamondong ignored said warning and made a reply letter invoking his right as a supervisory
employee to join and organize a labor union.
6. In view of that, on 6 February 1997, CAPASCO sent a memo terminating the employment of
Tamondong on the ground of loss of trust and confidence, citing his union activities as acts
constituting serious disloyalty to the company.
7. Tamondong challenged his dismissal for being illegal and as an act involving unfair labor practice
by filing a Complaint for Illegal Dismissal and Unfair Labor Practice before the NLRC, Regional
Arbitration Branch IV.
8. According to Tamondong, there was no just cause for his dismissal and it was anchored solely on
his involvement and active participation in the organization of the union of supervisory personnel in
CAPASCO. Though Tamondong admitted his active role in the formation of a union composed of

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 supervisory personnel in the company, he claimed that such was not a valid ground to terminate his
employment because it was a legitimate exercise of his constitutionally guaranteed right to self-
organization.
9. CAPASCO contended that by virtue of Tamondong’s position as Personnel Superintendent and the
functions actually performed by him in the company, he was considered as a managerial employee,
thus, under the law he was prohibited from joining a union as well as from being elected as one of
its officers.
10. CAPASCO maintained their argument that the dismissal of Tamondong was perfectly valid based
on loss of trust and confidence because of his active participation in the affairs of the union.
Procedural History
1. LA: Ruled in favor of Tamondong.
a. CAPASCO must cease and desist from further committing acts of unfair labor practice.
b. Reinstate Tamondong to former position without loss of seniority rights and other privileges
and his full backwages inclusive of allowances, and to his other benefits or their monetary
equivalent, computed from the time his compensation was withheld from him up to the time
of his actual reinstatement.
2. NLRC: Modified the ruling by dismissing the complaints for ULP and Illegal dismissal and the award
for damages but ordered the payment of backwages to Tamondong.
3. CA: Ruled in favor of Tamondong.
a. LA Pedro C. Ramos’ Decision was reinstated.
4. SC: Rule 65 Petition.
Points of Contention
CAPASCO contends that the following acts of Tamondong were functions of a managerial employee:
 Issuing memos on company rules and regulations
 Imposing disciplinary sanctions such as warnings and suspensions, and executing the same with
full power and discretion.
 No further approval or review is necessary for Tamondong to execute these functions, and the
notations NOTED BY of the Vice-President of CAPASCO, on the memos are mere notices
 Additionally, Tamondong was not only a managerial employee, but also a confidential employee
having knowledge of confidential information involving company policies on personnel relations.
 Hence, being a managerial employee, he is not eligible to participate in union activities of CUSE.
 Tamondong was validly dismissed because the nature of his position and functions as Personnel
Superintendent prevented him to join a labor union due to conflict of interest.
Issue/s Ruling
1. WON Tamondong is a managerial employee and therefore not eligible to 1. No
participate in union activities.
2. WON Tamondong was illegally dismissed. 2. Yes
Rationale
1. Tamondong is a supervisor because he does not possess the power to hire, transfer,
terminate, or discipline erring employees of the company. Hence, his constitutionally-
guaranteed right to self-organization cannot be curtailed.

Tamondong observed fixed daily working hours from 8:00 am to 12:00 noon and from 1:00
pm to 5:00 pm. In the case of Engineering Equipment, Inc. v. NLRC, this Court held that one of the
essential characteristics of an employee holding a managerial rank is that he is not subjected to the
rigid observance of regular office hours or maximum hours of work.

Moreover, Article 212(m) of the Labor Code, as amended, differentiates supervisory employees
from managerial employees, to wit:
 Supervisory employees are those who, in the interest of the employer, effectively recommend
such managerial actions, if the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment;
 Managerial employees are those who are vested with powers or prerogatives to lay down and
execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or
discipline employees.

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 Tamondong may have possessed enormous powers and was performing important functions that
goes with the position of Personnel Superintendent, nevertheless, there was no clear showing that
he is at liberty, by using his own discretion and disposition, to lay down and execute major business
and operational policies for and in behalf of CAPASCO.

CAPASCO miserably failed to establish that Tamondong was authorized to act in the interest of the
company using his independent judgment.

Tamondong may have been exercising certain important powers, such as control and supervision
over erring rank-and-file employees, however, he does not possess the power to hire, transfer,
terminate, or discipline erring employees of the company.

2. Tamondong is a supervisory employee and not a managerial employee. It is unfair labor

At the most, the record merely showed that Tamondong informed and warned rank-and-file
employees with respect to their violations of CAPASCO’s rules and regulations. Also, the functions
performed by Tamondong such as issuance of warning to employees with irregular attendance and
unauthorized leave of absences and requiring employees to explain regarding charges of
abandonment of work, are normally performed by a mere supervisor, and not by a manager.

Hence, the Labor Code provisions regarding disqualification of a managerial employee from
joining, assisting or forming any labor organization does not apply to Tamondong. Being a
supervisory employee of CAPASCO, he cannot be prohibited from joining or participating in
the union activities of CUSE.

Thus, Tamondong being a supervisory employee and not a managerial employee, it is indeed an
unfair labor practice on the part of CAPASCO to dismiss him on account of his union activities,
thereby curtailing his constitutionally guaranteed right to self-organization.
Disposition
Petition dismissed.

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