Labor Relations

Case Digest Compilation

representation of the employees in Patrol Division, Treasury Security
Manila Electric Company vs Secretary of Labor Service Section and rank and file employees in Pay Grades I-VI";
GR No. 91902, May 20, 1991 while FLAMES (First Line Association of Meralco Supervisory
Employees), on the other hand, had limited its representation to
Facts: On November 22, 1988, the Staff and Technical Employees employees belonging to Pay Grades VII-XIV, generally accepted as
Association of MERALCO (STEAM-PCWF), a labor organization of supervisory employees, as follows:
staff and technical employees of MERALCO, filed a petition for
certification election, seeking to represent regular employees of Supervisory Employees with Pay Grades VII to XIV are
MERALCO who are: (1) non-managerial employees with Pay not managerial employees. In fact the petition itself of
Grades VII and above; (2) non-managerial employees in the Patrol petitioner Manila Electric Company on page 9, paragraph
Division, Treasury Security Services Section, Secretaries who are 3 of the petition stated as follows, to wit:
automatically removed from the bargaining unit; and (3) employees
within the rank and file unit who are automatically disqualifies from There was no need for petitioner to prove that
becoming union members of any organization within the same these employees are not rank-and-file. As
bargaining unit. adverted to above, the private respondents
admit that these are not the rank-and-file but the
Allegation of the petition: While there exists a duly-organized supervisory employees, whom they seek to
union for rank and file employees in Pay Grade I-VI, which is the represent. What needs to be established is the
MERALCO Employees and Worker’s Association (MEWA) which rank where supervisory ends and managerial
holds a valid CBA for the rank and file employees, there is no other begins.
labor organization except STEAM-PCWF claiming to represent the
MERALCO employees. and First Line Association of Meralco Supervisory
Employees herein states that Pay Grades VII to XIV are
The petition was premised on the exclusion/disqualification of certain not managerial employees. In fact, although employees
MERALCO employees pursuant to Article 1, Section 2 and 3 of the with Pay Grade XV carry the Rank of Department
existing MEWA CBA. Managers, these employees only enjoys the Rank
Manager but their recommendatory powers are
MERALCO moved for the dismissal of the petition on the grounds subject to evaluation, review and final action by the
that the employees sought to be represented by petitioner are either department heads and other higher executives of the
managerial who are prohibited by law from forming or joining company.
supervisory union, security services personnel who are prohibited
from joining or assisting the rank-and-file union, secretaries who do Based on the foregoing, it is clear that the employees from Pay
not consent to the petitioner’s representation and whom petitioner Grades VII and up have been recognized and accepted as
cannot represent, and rank-and-file employees represented by the supervisory.
certified or duly recognized bargaining representative of the only
rank-and-file bargaining unit in the company. Anent the instant petition therefore, STEAM-PCWF, and FLAMES
would therefore represent supervisory employees only. In this
MERALCO’s Contention: The employees from Pay Grades VII and regard, the authority given by the Secretary of Labor for the
above are classified as managerial employees who, under the law, establishment of two labor organizations for the rank and file
are prohibited from forming, joining or assisting a labor organization will have to be disregarded since We hereby uphold certification
of the rank-and-file. elections only for supervisory employees from Pay Grade VII and up,
with STEAM-PCWF and FLAMES as choices.
As regards those in the Patrol Division and Treasury Security
Service Section, MERALCO maintains that since these employees Issue #2: Whether or not employees from pay grades VII and above
are tasked with providing security to the company, they are not are rank-and-file employees
eligible to join the rank and file bargaining unit, pursuant to Sec. 2(c),
Rule V, Book V of the then Implementing Rules and Regulation of Ruling: No. As to the alleged failure of the Secretary of Labor to
the Labor Code (1988). establish a demarcation line for purposes of segregating the
supervisory from the managerial employees, the required
As regards those rank and file employees enumerated in Sec. 3, Art. parameter is really not necessary since the law itself, Art. 212-m,
I, MERALCO contends that they are already beneficiaries of the (as amended by Sec. 4 of RA 6715) has already laid down the
MEWA-CBA, they may not be treated as a separate and distinct corresponding guidelines:
appropriate bargaining unit. MERALCO raised the same argument
with respect to employees sought to be represented by STEAM- Art. 212. Definitions. . . .
PCWF, claiming that these were already covered by the MEWA-
CBA. (m) "Managerial employee" is one who is vested with powers
or prerogatives to lay down and execute management policies
Med-Arbiter’s Ruling: Having been excluded from the existing and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
Collective Bargaining Agreement for rand and file employees, these discipline employees. Supervisory employees are those who, in the
employees have the right to form a union of their own, except those interest of the employer, effectively recommend such managerial
employees performing managerial functions. actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All
With respect to those employees who has resented their alleged employees not falling within any of the above definitions are
involuntary membership in the existing CBA, the Med-Arbiter stated considered rank-and-file employees for purposes of to Book.
that the holding of a certification election would allow them to fully
translate their sentiment on the matter, and thus directed the holding In his resolution, the Secretary of Labor further elaborated:
of a certification election.
. . . Thus, the determinative factor in classifying an employee as
Secretary of Labor affirmed the assailed order of the Med-Arbiter. managerial, supervisory or rank-and-file is the nature of the work of
the employee concerned.
Issue #1: Whether or not another rank-and-file bargaining unit
should be established independent, distinct and separate from the In National Waterworks and Sewerage Authority vs. National
existing rank-and-file bargaining unit Waterworks and Sewerage Authority Consolidated Unions, the
Supreme Court had the occasion to come out with an enlightening
Ruling: No. In this petition, MERALCO has admitted that the dissertation of the nature of the work of a managerial employees as
employees belonging to Pay Grades VII and up are supervisory. The follows:
records also show that STEAM-PCWF had "renounced its
1
Based on the syllabus of Atty. Maria Christina S. Sagmit
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ampog,Banosan,Esmael,Frias,Mahusay,Malicay,Paclibar,Peῆamante,Picot,Sinsuat,Sosoban,
 Labor Relations
Case Digest Compilation
. . . that the employee's primary duty consists of the management of officials and employees, the control of access to the employer’s
the establishment or of a customarily recognized department or premises, and the maintenance of order in the event of emergencies
subdivision thereof, that he customarily and regularly directs the and untoward incidents.
work of other employees therein, that he has the authority to hire or
discharge other employees or that his suggestions and It is hoped that the corresponding amendatory and/or suppletory
recommendations as to the hiring and discharging and or to the laws be passed by Congress to avoid possible conflict of interest in
advancement and promotion or any other change of status of other security personnel.
employees are given particular weight, that he customarily and
regularly exercises discretionary powers . . .

Issue #3: Whether or not security personnel are prohibited from

membership in a labor organization of the rank and file

Ruling: NO. With regards to the rights of the security guards to self-
organize, MERALCO has questioned the legality of allowing them to
join either the rank and file or the supervisory union, claiming that
this is a violation of par. 2, Sec. 1, Rule II, Book V of the
Implementing Rules of RA 6715, which states as follows:

Sec 1. Who may join unions. . . .

Supervisory employees and security guards shall not be

eligible for membership in a labor organization of the rank-
and-file employees but may join, assist or form separate
labor organizations of their own; . . .

On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No.

111 which eliminated the above-cited provision on the
disqualification of security guards. What was retained was the
disqualification of managerial employees, renumbered as Art. 245
(previously Art. 246), as follows:

Art. 245. Ineligibility of managerial employees to joint any

labor organization.—Managerial employees are not
eligible to join, assist or form any labor organization.

With the elimination, security personnel were thus free to join a rank
and file organization.

On March 2, 1989, the present Congress passed RA 6715. Section

18 thereof amended Art. 245, to read as follows:

Art. 245. Ineligibility of managerial employees to join any

labor organization; right of supervisory employees.—
Managerial employees are not eligible to join, assist or
form any labor organization. Supervisory employees shall
not be eligible for membership in a labor organization of
the rank-and-file employees but may join, assist, or form
separate labor organizations of their own. (emphasis ours)

As will be noted, the second sentence of Art. 245 embodies an

amendment disqualifying supervisory employees from membership
in a labor organization of the rank-and-file employees. It does not
include security guards in the disqualification.

While therefore under the old rules, security guards were barred
from joining a labor organization of the rank and file, under RA
6715, they may now freely join a labor organization of the rank
and file or that of the supervisory union, depending on their
rank. By accommodating supervisory employees, the Secretary of
Labor must likewise apply the provisions of RA 6715 to security
guards by favorably allowing them free access to a labor
organization, whether rank and file or supervisory, in recognition of
their constitutional right to self-organization.

The Court is aware however of possible consequences in the

implementation of the law in allowing security personnel to join labor
unions within the company they serve. The law is apt to produce
divided loyalties in the faithful performance of their duties. Economic
reasons would present the employees concerned with the temptation
to subordinate their duties to the allegiance they owe the union of
which they are members, aware as they are that it is usually union
action that obtains for them increased pecuniary benefits.

Thus, in the event of a strike declared by their union, security

personnel may neglect or outrightly abandon their duties, such as
protection of property of their employer and the persons of its
2
Based on the syllabus of Atty. Maria Christina S. Sagmit
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ampog,Banosan,Esmael,Frias,Mahusay,Malicay,Paclibar,Peῆamante,Picot,Sinsuat,Sosoban,