Confidential Employees
confidential employees or not.
2. San Miguel Corporation Supervisors and
Exempt Union v. Laguesma G.R. No. 110399
Facts: This is a Petition for Certiorari with prayer for
the issuance of preliminary injunction filed by
petitioner San Miguel Corporation Supervisors and
Exempt Union seeking to reverse and set aside the
Order of public respondent Undersecretary of the
DOLE Bienvenido Laguesma excluding the
employees under supervisory levels 3 and 4 and the so-
called exempt employees from the proposed
bargaining unit and ruled out their participation in the
certification election.
The questioned order declared that Supervisory 3 and
4 and the so-called exempt employees are confidential
employees and therefore they are not allowed to form,
join or assist a labor union for purposes of collective
bargaining.
Consequently, they are not allowed to participate in
the certification election. In the instant case,
petitioners posed the issue of whether or not
supervisory employees 3 and 4 and the exempt
employees fall under the category of "confidential
employees" and if not, do the employees of the three
plants constitute one single bargaining unit.
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. No, the Court ruled that said employees do not
fall within the term "confidential employees" who may
be prohibited from joining a union.
There is no question that the said employees,
supervisors and the exempt employees, are not vested
with the powers and prerogatives to lay down and
execute management policies and/or to hire, transfer,
suspend, layoff, recall, discharge or dismiss
employees. They are, therefore, 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. The only question that need be addressed is
whether these employees are properly classified as
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."
"Access to information which is regarded by the
employer to be confidential from the business
standpoint, such as financial information or technical
trade secrets, will not render an employee a
confidential employee."
Herein listed are the functions of supervisors 3 and
higher:
1. To undertake decisions to discontinue/temporarily
stop shift operations when situations require.
2. To effectively oversee the quality control function
at the processing lines in the storage of chicken and
other products.
3. To administer efficient system of evaluation of
products in the outlets.
4. To be directly responsible for the recall, holding and
rejection of direct manufacturing materials.
5. To recommend and initiate actions in the
maintenance of sanitation and hygiene throughout the
plant.
From the foregoing functions, it can be gleaned that
the confidential information said employees have
access to concern the employer's internal business
operations. As held in Westinghouse Electric
Corporation v. National Labor Relations Board, "an
employee may not be excluded from appropriate
bargaining unit merely because he has access to
confidential information concerning employer's
internal business operations and which is not related to
the field of labor relations."
2. Yes.
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.
It is readily seen that the employees in the instant case
have "community or mutuality of interests," which is
the standard in determining the proper constituency of
a collective bargaining unit. It is undisputed that they
all belong to the Magnolia Poultry Division of San
Miguel Corporation. This means that, although they
belong to three different plants, they perform work of
the same nature, receive the same wages and
compensation, and most importantly, share a common
stake in concerted activities.
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.
3. San Miguel Foods v. San Miguel Corporation
Supervisors and Exempt Union
Facts: Pursuant to the Court's decision in G.R. No.
110399 (case above), the DOLE-NCR conducted pre-
election conferences. However, there was a
discrepancy in the list of eligible voters, i.e., petitioner
submitted a list of 23 employees for the San Fernando
plant and 33 for the Cabuyao plant, while respondent
listed 60 and 82, respectively.
The Med-Arbiter issued an order directing the election
officer to conduct the certification election. On the
date of the election, petitioner filed the Omnibus
Objections and Challenge to Voters, questioning the
eligibility to vote by some of its employees on the
grounds that some employees do not belong to the
bargaining unit which respondent seeks to represent or
that there is no employer-employee relationship with
petitioner.
Specifically, it argued that certain employees should
not be allowed to vote as they are: (1) confidential
employees; (2) employees assigned to the live chicken
operations (as opposed to dressed chicken operations),
which are not covered by the bargaining unit; (3)
employees whose job grade is level 4, but are
performing managerial work and scheduled to be
promoted; (4) employees who belong to the Barrio
Ugong plant; (5) non-SMFI employees; and (6)
employees who are members of other unions.
The Med-Arbiter issued an Order directing respondent
to submit proof showing that the employees in the
submitted list are covered by the original petition for
certification election and belong to the bargaining unit
it seeks to represent and substantitate the allegations in
the Omnibus objections.
In compliance thereto, respondent averred that (1) the
bargaining unit contemplated in the original petition is
the Poultry Division of San Miguel Corporation, now
known as San Miguel Foods, Inc.; (2) it covered the
operations in Calamba, Laguna, Cavite, and Batangas
and its home base is either in Cabuyao, Laguna or San
Fernando, Pampanga; and (3) it submitted individual
and separate declarations of the employees whose
votes were challenged in the election.
Based on the election results, the Med-Arbiter issued
an Order stating that since the “Yes” vote received
97% of the valid votes cast, the respondent is certified
to be the exclusive bargaining agent of the supervisors
and exempt employees of petitioner’s Magnolia
Poultry Products Plants in Cabuyao, San Fernando,
and Otis.
On appeal, the then Acting DOLE USec affirmed the
Order with modification that Matias, Lozano, Delos
Reyes, and Pajaron be excluded rom the bargaining
unit which respondent seeks to represent. She opined
that the challenged voters should be excluded from the
bargaining unit, because Matias and Lozano are
members of Magnolia Poultry Processing Plants
Monthly Employees Union, while Delos Reyes and
Pajaron are employees of San Miguel Corporation,
which is a separate and distinct entity from petitioner.
MR was denied.
Issues: 1. Whether the CA departed from
jurisprudence when it expanded the scope of the
bargaining unit defined by the Court in G.R. No.
110399 - NO
2. Whether the CA departed from jurisprudence
specifically, this Court’s definition of a “confidential
employee” – when it ruled for the inclusion of the
“payroll master” position in the bargaining unit –NO
3. Whether this petition is a “rehash” or a
“resurrection” of the issues raised in G.R. No. 110399
-YES
Held: 1. No. Petitioner's contentions are erroneous. In
G.R. No. 110399, the Court explained that the
employees of San Miguel Corporation Magnolia
Poultry Products Plants of Cabuyao, San Fernando,
and Otis constitute a single bargaining unit, which is
not contrary to the one-company, one-union policy.
An appropriate bargaining unit is 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.
In National Association of Free Trade Unions v.
Mainit Lumber Development Company Workers
Union — United Lumber and General Workers of the
Phils., the Court explained that while the existence of
a 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 interest. 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.
Thus, applying the ruling to the present case, the Court
affirms the finding of the CA that there should be only
one bargaining unit for the employees in Cabuyao, San
Fernando, and Otis of Magnolia Poultry Products
Plant involved in "dressed" chicken processing and
Magnolia Poultry Farms engaged in "live" chicken
operations. Certain factors, such as specific line of
work, working conditions, location of work, mode of
compensation, and other relevant conditions do not
affect or impede their commonality of interest.
Although they seem separate and distinct from each
other, the specific tasks of each division are actually
interrelated and there exists mutuality of interests
which warrants the formation of a single bargaining
unit.
2. No. A confidential employee is one entrusted with
confidence on delicate, or with the custody, handling
or care and protection of the employer's property. 28
Confidential employees, such as accounting
personnel, should be excluded from the bargaining
unit, as their access to confidential information may
become the source of undue advantage. However, such
fact does not apply to the position of Payroll Master
and the whole gamut of employees who, as perceived
by petitioner, has access to salary and compensation
data. The CA correctly held that the position of Payroll
Master does not involve dealing with confidential
labor relations information in the course of the
performance of his functions. Since the nature of his
work does not pertain to company rules and
regulations and confidential labor relations, it follows
that he cannot be excluded from the subject bargaining
unit.
Corollarily, although Article 245 of the Labor Code
limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence
has extended this prohibition to confidential
employees or those who by reason of their positions or
nature of work are required to assist or act in a
fiduciary manner to managerial employees and, hence,
are likewise privy to sensitive and highly confidential
records. Confidential employees are thus excluded
from the rank-and-file bargaining unit. The rationale
for their separate category and disqualification to join
any labor organization is similar to the inhibition for
managerial employees, because if allowed to be
affiliated with a union, the latter might not be assured
of their loyalty in view of evident conflict of interests
and the union can also become company-denominated
with the presence of managerial employees in the
union membership. Having access to confidential
information, confidential employees may also become
the source of undue advantage. Said employees may
act as a spy or spies of either party to a collective
bargaining agreement.
3. The proceedings for certification election are quasi-
judicial in nature and, therefore, decisions rendered in
such proceedings can attain finality. Applying the
doctrine of res judicata, the issue in the present case
pertaining to the coverage of the employees who
would constitute the bargaining unit is now a foregone
conclusion.
4. Standard Chartered Bank Employees Union v.
Standard Chartered Bank
Facts: Petitioner and the Standard Chartered Bank
(Bank) began negotiating for a new Collective
Bargaining Agreement (CBA) in May 2000 as their
1998-2000 CBA already expired. Due to a deadlock in
the negotiations, petitioner filed a Notice of Strike
prompting the Secretary of Labor and Employment to
assume jurisdiction over the labor dispute.
SOLE Patricia Sto. Tomas issued and Order directing
the parties to execute their CBA effective 01 April
2001 until 30 March 2003 incorporating therein the
foregoing dispositions and the agreements they
reached in the course of negotiations and conciliation.
All other submitted issues that were not passed upon
are dismissed. The charge of unfair labor practice for
bargaining in bad faith and the claim for damages
relating thereto are hereby dismissed for lack of merit.
Finally, the charge of unfair labor practice for gross
violation of the economic provisions of the CBA is
hereby dismissed for want of jurisdiction.
Both parties filed a MR. Petitioner filed a petcert with
the CA. The CA dismissed their petition and affirmed
the SOLE’s Orders.
Issues: Whether the Bank's Chief Cashiers and
Assistant Cashiers, personnel of the Telex Department
and HR staff are confidential employees, such that
they should be excluded.
Note: The resolution of this case has been overtaken
by the execution of the parties' 2003-2005 CBA.
While this would render the case moot and
academic, nevertheless, the likelihood that the same
issues will come up in the parties' future CBA
negotiations is not far-fetched, thus compelling its
resolution. Courts will decide a question otherwise
moot if it is capable of repetition yet evading review.
Held: No (for failure to substantiate its claim). The
disqualification of managerial and confidential
employees from joining a bargaining unit for rank and
file employees is already well-entrenched in
jurisprudence. While Article 245 of the Labor
Code limits the ineligibility to join, form and assist any
labor organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason of their
positions or nature of work are required to assist or act
in a fiduciary manner to managerial employees and
hence, are likewise privy to sensitive and highly
confidential records.
As regards the qualification of bank cashiers as
confidential employees, National Association of
Trade Unions (NATU) — Republic Planters Bank
Supervisors Chapter v. Torres declared that they are
confidential employees having control, custody and/or
access to confidential matters, e.g., the branch's cash
position, statements of financial condition, vault
combination, cash codes for telegraphic transfers,
demand drafts and other negotiable instruments,
pursuant to Sec. 1166.4 of the Central Bank Manual
regarding joint custody, and therefore, disqualified
from joining or assisting a union; or joining, assisting
or forming any other labor organization.
Golden Farms, Inc. v. Ferrer-Calleja meanwhile
stated that "confidential employees such as accounting
personnel, radio and telegraph operators who,
having access to confidential information, may
become the source of undue advantage. Said
employee(s) may act as spy or spies of either party to
a collective bargaining agreement".
Finally, in Philips Industrial Development, Inc. v.
National Labor Relations Commission, the Court
designated personnel staff, in which human resources
staff may be qualified, as confidential employees
because by the very nature of their functions, they
assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise
managerial functions in the field of labor relations.
Petitioner insists that the foregoing employees are not
confidential employees; however, it failed to buttress
its claim. Aside from its generalized arguments, and
despite the Secretary's finding that there was no
evidence to support it, petitioner still failed to
substantiate its claim. Petitioner did not even bother to
state the nature of the duties and functions of these
employees, depriving the Court of any basis on which
it may be concluded that they are indeed confidential
employees. As aptly stated by the CA:
While We agree that petitioner's proposed revision is
in accordance with the law, this does not necessarily
mean that the list of exclusions enumerated in the
1998-2000 CBA is contrary to law. As found by public
respondent, petitioner failed to show that the
employees sought to be removed from the list of
exclusions are actually rank and file employees who
are not managerial or confidential in status and
should, accordingly, be included in the appropriate
bargaining unit.
Absent any proof that Chief Cashiers and Assistant
Cashiers, personnel of the Telex department and
one (1) HR Staff have mutuality of interest with the
other rank and file employees, then they are
rightfully excluded from the appropriate
bargaining unit. . . .
Petitioner cannot simply rely on jurisprudence without
explaining how and why it should apply to this case.
Allegations must be supported by evidence. In this
case, there is barely any at all.
There is likewise no reason for the Court to disturb the
conclusion of the Secretary and the CA that the
additional remuneration should be given to employees
placed in an acting capacity for one month. The CA
correctly stated:
Likewise, We uphold the public respondent's Order
that no employee should be temporarily placed in a
position (acting capacity) for more than one month
without the corresponding adjustment in the salary.
Such order of the public respondent is not in violation
of the "equal pay for equal work" principle,
considering that after one (1) month, the employee
performing the job in an acting capacity will be
entitled to salary corresponding to such position.
xxx xxx xxx
In arriving at its Order, the public respondent took all
the relevant evidence into account and weighed both
parties arguments extensively. Thus, public
respondent concluded that a restrictive provision with
respect to employees being placed in an acting
capacity may curtail management's valid exercise of
its prerogative. At the same time, it recognized that
employees should not be made to perform work in an
acting capacity for extended periods of time without
being adequately compensated. . . .
D. Effect of Commingling of Membership (Art. 256)
1. Republic v. Kawashima Textile
Facts: On January 24, 2000, KFWU filed with DOLE
Regional Office a Petition for Certification Election to
be conducted in the bargaining unit composed of 145
rank-and-file employees of respondent. Attached to its
petition are a Certificate of Creation of
Local/Chapter issued on January 19, 2000 by DOLE
Regional Office stating that it submitted to said office
a Charter Certificate issued to it by the national
federation Phil. Transport & General Workers
Organization (PTGWO), and a Report of Creation of
Local/Chapter.
Respondent filed a Motion to Dismiss the petition on
the ground that KFWU did not acquire any legal
personality because its membership of mixed rank-
and-file and supervisory employees violated Article
245 of the Labor Code and its failure to submit its
books of account contravened the ruling of the Court
in Progressive Development Corporation v. Secretary,
Department of Labor and Employment.
In an Order dated May 17, 2000, Med-Arbiter Bactin
found KFWU's legal personality defective and
dismissed its petition for certification election finding
that two members of KFWU namely Hernandez and
Quinto are supervisory employees, having a number of
personnel under them. Being supervisory employees,
they are prohibited under Art. 245 of the LC, as
amended, to join the union of the rank-and-file
employees.
Fernandez and Quinto, Chief Engineers of the
Maintenance and Manufacturing Department,
respectively, act as foremen to the line engineers,
mechanics and other non-skilled workers and
responsible [for] the preparation and organization of
maintenance shop fabrication and schedules, inventory
and control of materials and supplies and tasked to
implement training plans on line engineers and
evaluate the performance of their subordinates. The
above-stated actual functions of Fernandez and Quinto
are clear manifestation that they are supervisory
employees
In Toyota Motor Philippines Corporation v. Toyota
Motor Philippines Corporation Labor Union, since
petitioner's members are mixture of rank and file
and supervisory employees, petitioner union, at this
point [in] time, has not attained the status of a
legitimate labor organization. Petitioner should
first exclude the supervisory employees from it
membership before it can attain the status of a
legitimate labor organization.
Furthermore, in Dunlop Slazenger (Phils.), Inc. vs.
Honorable Secretary of Labor and Employment, et al.,
the commingling of rank and file and supervisory
employees in one (1) bargaining unit cannot be cured
in the exclusion-inclusion proceedings [at] the pre-
election conference.
On the basis of the abovecited cases, the respondent
filed with the DOLE RO a petition for Cancellation of
Charter/Union Registration of KFWU.
KFWU appealed and such appeal was granted setting
aside the decision May 17, 2000 Order of the Med-
Arbiter.
The DOLE held that Med-Arbiter Bactin's reliance on
the decisions of the Court in Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation
Labor Union and Dunlop Slazenger, Inc. v. Secretary
of Labor and Employment was misplaced, for while
Article 245 declares supervisory employees ineligible
for membership in a labor organization for rank-and-
file employees, the provision did not state the effect of
such prohibited membership on the legitimacy of the
labor organization and its right to file for certification
election. Neither was such mixed membership a
ground for cancellation of its registration.
Respondent filed a MR but DOLE denied the same.
However, on appeal, the CA rendered the December
13, 2002 decision reversed and held that since
respondent union clearly consists of both rank and
file and supervisory employees, it cannot qualify as
a legitimate labor organization imbued with the
requisite personality to file a petition for
certification election. This infirmity in union
membership cannot be corrected in the inclusion-
exclusion proceedings during the pre-election
conference.
Issues: 1. Whether a mixed membership of rank-and-
file and supervisory employees in a union is a ground
for the dismissal of a petition for certification election
in view of the amendment brought about by D.O. 9,
series of 1997, which deleted the phraseology in the
old rule that "[t]he appropriate bargaining unit of the
rank-and-file employee shall not include the
supervisory employees and/or security guards;" and
2. Whether the legitimacy of a duly registered
labor organization can be collaterally
attacked in a petition for a certification
election through a motion to dismiss filed by
an employer such as Kawashima Textile
Manufacturing Phils., Inc.
Held: 1. The Court reverses the ruling of the CA and
reinstates that of the DOLE granting the petition for
certification election of KFWU.
The key to the closure that petitioner seeks could have
been Republic Act (R.A.) No. 9481, Section 8 which
provides for the ineligibility of managerial employees
to join any labor organization and the right of
supervisory employees to join, assist or form separate
collective bargaining units and/or legitimate labor
organizations on their own, and Section 9 which
provides that the inclusion as union members of
employees outside the bargaining unit shall not be a
ground for the cancellation of the registration of the
union. Said employees are automatically deemed
removed from the list of membership of said union.
However, R.A. No. 9481 took effect only on June 14,
2007; hence, it applies only to labor representation
cases filed on or after said date. As the petition for
certification election subject matter of the present
petition was filed by KFWU on January 24,
2000, R.A. No. 9481 cannot apply to it. There may
have been curative labor legislations that were given
retrospective effect, but not the aforecited provisions
of R.A. No. 9481, for otherwise, substantive rights and
interests already vested would be impaired in the
process.
Instead, the law and rules in force at the time of the
filing by KFWU of the petition for certification
election on January 24, 2000 are R.A. No. 6715,
amending Book V of Presidential Decree (P.D.) No.
442 (Labor Code), as amended, and the Rules and
Regulations Implementing R.A. No. 6715, as amended
by Department Order No. 9, series of 1997.
If there is one constant precept in our labor laws (cited
above) it is that only a legitimate labor organization
may exercise the right to be certified as the exclusive
representative of all the employees in an appropriate
collective bargaining unit for purposes of collective
bargaining. What has varied over the years has been
the degree of enforcement of this precept, as reflected
in the shifting scope of administrative and judicial
scrutiny of the composition of a labor organization
before it is allowed to exercise the right of
representation.
One area of contention has been the composition of the
membership of a labor organization, specifically
whether there is a mingling of supervisory and rank-
and-file employees and how such questioned mingling
affects its legitimacy.
Effective 1989, R.A. No. 6715 restored the prohibition
against the questioned mingling in one labor
organization, viz:
Sec. 18. Article 245 of the same Code, as amended, is
hereby further amended 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.”
Unfortunately, just like R.A. No. 875, R.A. No. 6715
omitted specifying the exact effect any violation of the
prohibition would bring about on the legitimacy of a
labor organization.
Thus, when the issue of the effect of mingling was
brought to the fore in Toyota, the Court, citing Article
245 of the Labor Code, as amended by R.A. No. 6715,
held:
Clearly, based on this provision, a labor organization
composed of both rank-and-file and supervisory
employees is no labor organization at all. It cannot, for
any guise or purpose, be a legitimate labor
organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a
legitimate labor organization, including the right to file
a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore,
anterior to the granting of an order allowing a
certification election, to inquire into the composition
of any labor organization whenever the status of the
labor organization is challenged on the basis of Article
245 of the Labor Code xxxx
In the case at bar, as respondent union’s membership
list contains the names of at least twenty-seven (27)
supervisory employees in Level Five positions, the
union could not, prior to purging itself of its
supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot
possess the requisite personality to file a petition for
certification election.
But then, on June 21, 1997, the 1989 Amended
Omnibus Rules was further amended by Department
Order No. 9, series of 1997 (1997 Amended Omnibus
Rules). Specifically, the requirement under Sec. 2(c)
of the 1989 Amended Omnibus Rules – that the
petition for certification election indicate that the
bargaining unit of rank-and-file employees has not
been mingled with supervisory employees – was
removed.
Consequently, the Court reverses the ruling of the CA
and reinstates that of the DOLE granting the petition
for certification election of KFWU.
3. Except when it is requested to bargain
collectively, an employer is a mere bystander
to any petition for certification election; such
proceeding is non-adversarial and merely
investigative, for the purpose thereof is to
determine which organization will represent
the employees in their collective bargaining
with the employer. The choice of their
representative is the exclusive concern of the
employees; the employer cannot have any
partisan interest therein; it cannot interfere
with, much less oppose, the process by filing
a motion to dismiss or an appeal from it; not
even a mere allegation that some employees
participating in a petition for certification
election are actually managerial employees
will lend an employer legal personality to
block the certification election. The
employer's only right in the proceeding is to
be notified or informed thereof.
2. Holy Child Catholic School v. Sto. Tomas
Facts: On May 31, 2002, a petition for certification
election was filed by private respondent Pinag-Isang
Tinig at Lakas ng Anakpawis — Holy Child Catholic
School Teachers and Employees Labor Union (HCCS-
TELU-PIGLAS), alleging that:
 PIGLAS is a legitimate labor
organization duly registered with
the Department of Labor and
Employment (DOLE) representing
HCCS-TELU-PIGLAS; HCCS is a
private educational institution duly
registered and operating under
Philippine laws;
 there are approximately one
hundred twenty (120) teachers and
employees comprising the proposed
appropriate bargaining unit; and
 HCCS is unorganized, there is no
collective bargaining agreement or a
duly certified bargaining agent or a
labor organization certified as the
sole and exclusive bargaining agent
of the proposed bargaining unit
within one year prior to the filing of
the petition.
In its Comment and Position Paper, petitioner HCCS
consistently noted that it is a parochial school with a
total of 156 employees as of June 28, 2002, broken
down as follows:
 ninety-eight (98) teaching
personnel
 twenty-five (25) non-teaching
academic employees, and
 thirty-three (33) non-teaching non-
academic workers.
It averred that of the employees who signed to support
the petition, fourteen (14) already resigned and six (6)
signed twice.
Petitioner raised that members of private respondent
do not belong to the same class; it is not only a mixture
of managerial, supervisory, and rank-and-file
employees —
 as three (3) are vice-principals,
 one (1) is a department head/supervisor, and
 eleven (11) are coordinators —
but also a combination of teaching and non-teaching
personnel — as twenty-seven (27) are non-teaching
personnel.
It insisted that, for not being in accord with Article 245
10 of the Labor Code, private respondent is an
illegitimate labor organization lacking in personality
to file a petition for certification election, as held in
Toyota Motor Philippines Corporation v. Toyota
Motor Philippines Corporation Labor Union; and an
inappropriate bargaining unit for want of community
or mutuality of interest, as ruled in Dunlop Slazenger
(Phils.), Inc. v. Secretary of Labor and Employment
and De La Salle University Medical Center and
College of Medicine v. Laguesma.
Private respondent, however, countered that assuming
it to be true, it argued that D.O. No. 9, Series of 1997,
provided for specific instances in which a petition filed
by a legitimate organization shall be dismissed by the
Med-Arbiter and that "mixture of employees" is not
one of those enumerated. Private respondent pointed
out that questions pertaining to qualifications of
employees may be threshed out in the inclusion-
exclusion proceedings prior to the conduct of the
certification election, pursuant to Section 2, Rule XII
of D.O. No. 9. Lastly, similar to the ruling in In Re:
Globe Machine and Stamping Company, it contended
that the will of petitioner's employees should be
respected as they had manifested their desire to be
represented by only one bargaining unit.
The Med-Arbiter denied the petition for certification
election on the ground that the unit which private
respondent sought to represent is inappropriate – “In
the case at bar, the employees of [petitioner], may,
as already suggested, quite easily be categorized
into (2) general classes: one, the teaching staff; and
two, the non-teaching-staff. Not much reflection is
needed to perceive that the community or
mutuality of interest is wanting between the
teaching and the non-teaching staff”
Private respondent appealed before the SOLE who
ruled against the dismissal of the petition and directed
the conduct of two separate certification election for
the teaching and the non-teaching personnel. – “We
agree with the Med-Arbiter that there are
differences in the nature of work, hours and
conditions of work and salary determination
between the teaching and non-teaching personnel
of [petitioner]. These differences were pointed out
by [petitioner] in its position paper. We do not,
however, agree with the Med-Arbiter that these
differences are substantial enough to warrant the
dismissal of the petition. Corollary, [private
respondent] can continue to exist as a legitimate
labor organization with the combined teaching and
non-teaching personnel in its membership and
representing both classes of employees in separate
bargaining negotiations and agreements.
The CA eventually dismissed the petition. As to
purported commingling of managerial, supervisory,
and rank-and-file employees in private respondent’s
membership, it held that the Toyota ruling is
inapplicable because the vice-principals, department
head, and coordinators are neither supervisory nor
managerial employees. Anent the alleged mixture of
teaching and non teaching personnel, the CA agreed
with petitioner that the nature of the former’s work
does not coincide with that of the latter. Nevertheless,
it ruled that the SOLE did not commit grave abuse of
discretion in not dismissing the petition for
certification election, since it directed the conduct of
two separate certification elections based on the
Court’s ruling in UP v. Ferrer-Calleja.
Issue: 1. Whether or not the CA erred in holding that
the ruling in Toyota does not apply in the case at bar
despite the commingling of both supervisory or
managerial and rank-and-file employees in the
respondent union
2. Whether or not the CA erred in its conflicting ruling
allowing the conduct of certification election by
upholding that the respondent union represented a
bargaining unit despite its own findings that there is no
mutuality of interest between members of respondent
union
Held: No to both.
1. When the issue of the effect of mingling was
brought to the fore in Toyota, the Court, citing Article
245 of the Labor Code, as amended by R.A. No. 6715,
held:
Clearly, based on this provision, a labor organization
composed of both rank-and-file and supervisory
employees is no labor organization at all. It cannot, for
any guise or purpose, be a legitimate labor
organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a
legitimate labor organization, including the right to file
a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore,
anterior to the granting of an order allowing a
certification election, to inquire into the composition
of any labor organization whenever the status of the
labor organization is challenged on the basis of Article
245 of the Labor Code.
xxx xxx xxx
In the case at bar, as respondent union's membership
list contains the names of at least twenty-seven (27)
supervisory employees in Level Five positions, the
union could not, prior to purging itself of its
supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot
possess the requisite personality to file a petition for
certification election. (Emphasis supplied)
In Dunlop, in which the labor organization that filed a
petition for certification election was one for
supervisory employees, but in which the membership
included rank-and-file employees, the Court reiterated
that such labor organization had no legal right to file a
certification election to represent a bargaining unit
composed of supervisors for as long as it counted rank-
and-file employees among its members.
It should be emphasized that the petitions for
certification election involved in Toyota and Dunlop
were filed on November 26, 1992 and September 15,
1995, respectively; hence, the 1989 Rules was applied
in both cases.
But then, on June 21, 1997, the 1989 Amended
Omnibus Rules was further amended by Department
Order No. 9, series of 1997. Specifically, the
requirement under Sec. 2(c) of the 1989 Amended
Omnibus Rules — that the petition for certification
election indicate that the bargaining unit of rank-and-
file employees has not been mingled with supervisory
employees — was removed.
Then came Tagaytay Highlands Int'l. Golf Club, Inc.
v. Tagaytay Highlands Employees Union-PTGWO in
which the core issue was whether mingling affects the
legitimacy of a labor organization and its right to file
a petition for certification election. This time, given
the altered legal milieu, the Court abandoned the view
in Toyota and Dunlop and reverted to its
pronouncement in Lopez that while there is a
prohibition against the mingling of supervisory and
rank-and-file employees in one labor organization, the
Labor Code does not provide for the effects thereof.
Thus, the Court held that after a labor organization has
been registered, it may exercise all the rights and
privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file
employees in its membership cannot affect its
legitimacy for that is not among the grounds for
cancellation of its registration, unless such mingling
was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor
Code.
In San Miguel Corp. (Mandaue Packaging Products
Plants) v. Mandaue Packing Products Plants-San
Miguel Packaging Products-San Miguel Corp.
Monthlies Rank-and-File Union-FFW, the Court
explained that since the 1997 Amended Omnibus
Rules does not require a local or chapter to provide a
list of its members, it would be improper for the DOLE
to deny recognition to said local or chapter on account
of any question pertaining to its individual members.
More to the point is Air Philippines Corporation v.
Bureau of Labor Relations, the Court therein reiterated
its ruling in Tagaytay Highlands that the inclusion in a
union of disqualified employees is not among the
grounds for cancellation, unless such inclusion is due
to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of
Article 239 of the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the
1997 Amended Omnibus Rules, as interpreted by the
Court in Tagaytay Highlands, San Miguel and Air
Philippines, had already set the tone for it. Toyota and
Dunlop no longer hold sway in the present altered state
of the law and the rules.
When a similar issue confronted this Court close to
three years later, the above ruling was substantially
quoted in Samahang Manggagawa sa Charter
Chemical Solidarity of Unions in the Philippines for
Empowerment and Reforms (SMCC-Super) v. Charter
Chemical and Coating Corporation. In unequivocal
terms, We reiterated that the alleged inclusion of
supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-
and-file employees does not divest it of its status as
a legitimate labor organization.
Following the doctrine laid down in Kawashima and
SMCC-Super, it must be stressed that petitioner
cannot collaterally attack the legitimacy of private
respondent by praying for the dismissal of the
petition for certification election.
2. The concepts of a union and of a legitimate labor
organization are different from, but related to, the
concept of a bargaining unit:
Article 212(g) of the Labor Code defines a labor
organization as "any union or association of
employees which exists in whole or in part for the
purpose of collective bargaining or of dealing with
employers concerning terms and conditions of
employment." Upon compliance with all the
documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor
organization a certificate indicating that it is included
in the roster of legitimate labor organizations. Any
applicant labor organization shall acquire legal
personality and shall be entitled to the rights and
privileges granted by law to legitimate labor
organizations upon issuance of the certificate of
registration.
In case of alleged inclusion of disqualified employees
in a union, the proper procedure for an employer like
petitioner is to directly file a petition for cancellation
of the union's certificate of registration due to
misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor
Code, as amended. To reiterate, private respondent,
having been validly issued a certificate of registration,
should be considered as having acquired juridical
personality which may not be attacked collaterally.
On the other hand, 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 interests of all the
employees, consistent with equity to the employer,
indicated to be best suited to serve reciprocal rights
and duties of the parties under the collective
bargaining provisions of the law." In determining the
proper collective bargaining unit and what unit would
be appropriate to be the collective bargaining agency,
the Court, in the seminal case of Democratic Labor
Association v. Cebu Stevedoring Company, Inc.,
mentioned several factors that should be considered, to
wit:
(1) will of employees (Globe Doctrine);
(2) affinity and unity of employees' 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.
We stressed, however, that the test of the grouping is
community or mutuality of interest, 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."
Indeed, the purpose of a certification election is
precisely to ascertain the majority of the employees'
choice of an appropriate bargaining unit — to be or not
to be represented by a labor organization and, if in the
affirmative case, by which one.
E. Rights and Conditions of Membership
1. Union Members (Art. 250, 292 (c))
1. Victoriano v. Elizalde Roper Workers’ Union
Facts: Benjamin Victoriano (Appellee), a member of
the religious sect known as the "Iglesia ni Cristo", had
been in the employ of the Elizalde Rope Factory, Inc.
(Company) since 1958. As such employee, he was a
member of the Elizalde Rope Workers' Union (Union)
which had with the Company a collective bargaining
agreement containing a closed shop provision.
The CBA expired on March 3, 1964 but was renewed
the following day.
Under Section 4(a), paragraph 4, of RA No. 875, prior
to its amendment by RA No. 3350, the employer was
not precluded "from making an agreement with a labor
organization to require as a condition of employment
membership therein, if such labor organization is the
representative of the employees."
On June 18, 1961, however, RA No. 3350 was
enacted, introducing an amendment to paragraph
(4) subsection (a) of section 4 of RA No. 875, as
follows: . . . "but such agreement shall not cover
members of any religious sects which prohibit
affiliation of their members in any such labor
organization.”
Being a member of a religious sect that prohibits the
affiliation of its members with any labor organization,
Appellee presented his resignation to appellant Union
in 1962, and when no action was taken thereon, he
reiterated his resignation on September 3, 1974.
Thereupon, the Union wrote a formal letter to the
Company asking the latter to separate Appellee from
the service in view of the fact that he was resigning
from the Union as a member. The management of the
Company in turn notified Appellee and his counsel
that unless the Appellee could achieve a satisfactory
arrangement with the Union, the Company would be
constrained to dismiss him from the service. This
prompted Appellee to file an action for injunction, in
the CFI of Manila to enjoin the Company and the
Union from dismissing Appellee.
In its answer, the Union invoked the "union security
clause" of the collective bargaining agreement;
assailed the constitutionality of RA No. 3350; and
contended that the Court had no jurisdiction over the
case, pursuant to RA No. 875, Sections 24 and 9 (d)
and (e).
The CFI rendered judgment in favor of the Appellee.
The Union appealed directly to the SC on purely
questions of law.
Issues: Whether or not RA No. 3350 is
unconstitutional
1. that the Act infringes on the fundamental
right to form lawful associations; that "the
very phraseology of said RA 3350, that
membership in a labor organization is banned
to all those belonging to such religious sect
prohibiting affiliation with any labor
organization"; "prohibits all the members of
a given religious sect from joining any labor
union if such sect prohibits affiliations of
their members thereto"; and, consequently,
deprives said members of their constitutional
right to form or join lawful associations or
organizations guaranteed by the Bill of
Rights
2. that RA 3350 is unconstitutional for
impairing the obligation of contracts in that,
while the Union is obliged to comply with its
collective bargaining agreement containing a
"closed shop provision," the Act relieves the
employer from its reciprocal obligation of
cooperating in the maintenance of union
membership as a condition of employment;
and that said Act
3. that RA 3350 discriminatorily favors those
religious sects which ban their members from
joining labor unions, in violation of Article
III, Section 1 (7) of the 1935 Constitution
4. that RA 3350 violates the constitutional
provision that "no religious test shall be
required for the exercise of a civil right," in
that the laborer's exercise of his civil right to
join associations for purposes not contrary to
law has to be determined under the Act by his
affiliation with a religious sect
5. that Republic Act No. 3350, violates the
"equal protection of laws" clause of the
Constitution|||
6. that Republic Act No. 3350 violates the
constitutional provision regarding the
promotion of social justice.
Held: No.
1. To that all embracing coverage of the closed
shop arrangement, Republic Act No. 3350
introduced an exception, when it added to
Section 4 (a) (4) of the Industrial Peace Act
the following proviso: "but such agreement
shall not cover members of any religious
sects which prohibit affiliation of their
members in any such labor organization".
Republic Act No. 3350 merely excludes ipso
jure from the application and coverage of the
closed shop agreement the employees
belonging to any religious sects which
prohibit affiliation of their members with any
labor organization. What the exception
provides, therefore, is that members of said
religious sects cannot be compelled or
coerced to join labor unions even when said
unions have closed shop agreements with the
employers; that in spite of any closed shop
agreement, members of said religious sects
cannot be refused employment or dismissed
from their jobs on the sole ground that they
are not members of the collective bargaining
union. It is clear, therefore, that the
assailed Act, far from infringing the
constitutional provision on freedom of
association, upholds and reinforces it. It
does not prohibit the members of said
religious sects from affiliating with labor
unions. It still leaves to said members the
liberty and the power to affiliate, or not to
affiliate, with labor unions. If,
notwithstanding their religious beliefs, the
members of said religious sects prefer to sign
up with the labor union, they can do so. If in
deference and fealty to their religious faith,
they refuse to sign up, they can do so; the law
does not coerce them to join; neither does the
law prohibit them from joining; and neither
may the employer or labor union compel
them to join. Republic Act No. 3350,
therefore, does not violate the constitutional
provision on freedom of association
2. This agreement was already in existence at
the time Republic Act No. 3350 was enacted
of June 18, 1961, and it cannot, therefore, be
deemed to have been incorporated into the
agreement. But by reason of this amendment,
Appellee, as well as others similarly situated,
could no longer be dismissed from his job
even if he should cease to be a member, or
disaffiliate from the Union, and the Company
could continue employing him
notwithstanding his disaffiliation from the
Union. The Act, therefore, introduced a
change into the express terms of the union
security clause; the Company was partly
 absolved by law from the contractual
obligation it had with the Union of employing
only Union members in permanent positions.
It cannot be denied, therefore, that there was
indeed an impairment of said union security
clause.
The policy of protecting contracts against
impairment presupposes the maintenance of
a government by virtue of which contractual
relations are worthwhile — a government
which retains adequate authority to secure the
peace and good order of society. The contract
clause of the Constitution must, therefore, be
not only in harmony with, but also in
subordination to, in appropriate instances, the
reserved power of the state to safeguard the
vital interests of the people. It follows that not
all legislations, which have the effect of
impairing a contract, are obnoxious to the
constitutional prohibition as to impairment,
and a statute passed in the legitimate exercise
of police power, although it incidentally
destroys existing contract rights, must be
upheld by the courts. This has special
application to contracts regulating relations
between capital and labor which are not
merely contractual, and said labor contracts,
for being impressed with public interest, must
yield to the common good.
3. We believe that in enacting Republic Act No.
3350, Congress acted consistently with the
spirit of the constitutional provision. It acted
merely to relieve the exercise of religion, by
certain persons, of a burden that is imposed
by union security agreements. It was
Congress itself that imposed that burden
when it enacted the Industrial Peace Act
(Republic Act 875), and, certainly, Congress,
if it so deems advisable, could take away the
same burden. It is certain that not every
conscience can be accommodated by all the
laws of the land; but when general laws
conflict with scrupples of conscience,
exemptions ought to be granted unless some
"compelling state interest" intervenes. 45 In
the instant case, We see no such compelling
state interest to withhold exemption.
4. The Act does not require as a qualification, or
condition, for joining any lawful association
membership in any particular religion or in
any religious sect; neither does the Act
require affiliation with a religious sect that
prohibits Its members from joining a labor
union as a condition or qualification for
withdrawing from a labor union. Joining or
withdrawing from a labor union requires a
positive act. Republic Act No. 3350 only
exempts members with such religious
affiliation from the coverage of closed shop
agreements. So, under this Act, a religious
objector is not required to do a positive act —
to exercise the right to join or to resign from
the union. He is exempted ipso jure without
need of any positive act on his part. A
conscientious religious objector need not
perform a positive act or exercise the right of
resigning from the labor union — he is
exempted from the coverage of any closed
shop agreement that a labor union may have
entered into. How then can there be a
religious test required for the exercise of a
right when no right need be exercised?
We have said that it was within the police
power of the State to enact Republic Act No.
3350, and that its purpose was legal and in
consonance with the Constitution. It is never
an illegal evasion of a constitutional
provision or prohibition to accomplish a
desired result, which is lawful in itself, by
discovering or following a legal way to do it.
5. The Act classifies employees and workers, as
to the effect and coverage of union shop
security agreements, into those who by
reason of their religious beliefs and
convictions cannot sign up with a labor
union, and those whose religion does not
prohibit membership in labor unions. The
classification rests on real or substantial, not
merely imaginary or whimsical, distinctions.
There is such real distinction in the beliefs,
feelings and sentiments of employees.
Employees do not believe in the same
religious faith and different religions differ in
their dogmas and canons. Religious beliefs,
manifestations and practices, though they are
found in all places, and in all times, take so
many varied forms as to be almost beyond
imagination. There are many views that
comprise the broad spectrum of religious
beliefs among the people. There are diverse
manners in which beliefs, equally paramount
in the lives of their possessors, may be
articulated. Today the country is far more
heterogenous in religion than before,
differences in religion do exist, and these
differences are important and should not be
ignored. (It is also germane to the purpose of
 the law, not limited to existing conditions
only and applies equally to all members of the
same class)
6. Appellant's further contention that Republic
Act No. 3350 violates the constitutional
provision on social justice is also baseless.
Social justice is intended to promote the
welfare of all the people. 63 Republic Act No.
3350 promotes that welfare insofar as it looks
after the welfare of those who, because of
their religious belief, cannot join labor
unions; the Act prevents their being deprived
of work and of the means of livelihood. In
determining whether any particular measure
is for public advantage, it is not necessary that
the entire state be directly benefited — it is
sufficient that a portion of the state be
benefited thereby.
2. Bank of the Philippine Islands v. BPI Employees
Union-Davao Chapter-Federation of Unions in BPI
Unibank
Facts: On March 23, 2000, the Bangko Sentral ng
Pilipinas approved the Articles of Merger executed on
January 20, 2000 by and between BPI, herein
petitioner, and FEBTC. 5 This Article and Plan of
Merger was approved by the Securities and Exchange
Commission on April 7, 2000.
Pursuant to the Article and Plan of Merger, all the
assets and liabilities of FEBTC were transferred to and
absorbed by BPI as the surviving corporation. FEBTC
employees, including those in its different branches
across the country, were hired by petitioner as its own
employees, with their status and tenure recognized and
salaries and benefits maintained.
Respondent BPI Employees Union-Davao Chapter-
Federation of Unions in BPI Unibank (hereinafter the
"Union," for brevity) is the exclusive bargaining agent
of BPI's rank and file employees in Davao City. The
former FEBTC rank-and-file employees in Davao City
did not belong to any labor union at the time of the
merger. Prior to the effectivity of the merger, or on
March 31, 2000, respondent Union invited said
FEBTC employees to a meeting regarding the Union
Shop Clause (Article II, Section 2) of the existing CBA
between petitioner BPI and respondent Union.
Section 2 of the said CBA provides:
Section 2. Union Shop — New employees falling
within the bargaining unit as defined in Article I of this
Agreement, who may hereafter be regularly employed
by the Bank shall, within thirty (30) days after they
become regular employees, join the Union as a
condition of their continued employment. It is
understood that membership in good standing in the
Union is a condition of their continued employment
with the Bank.
After the meeting called by the Union, some of the
former FEBTC employees joined the Union, while
others refused. Later, however, some of those who
initially joined retracted their membership.
Respondent Union then sent notices to the former
FEBTC employees who refused to join, as well as
those who retracted their membership, and called them
to a hearing regarding the matter. When these former
FEBTC employees refused to attend the hearing, the
president of the Union requested BPI to implement the
Union Shop Clause of the CBA and to terminate their
employment pursuant thereto.
The issue was not resolved through the grievance
machinery.
The Voluntary Arbitrator concluded that the former
FEBTC employees could not be compelled to join the
Union, as it was their constitutional right to join or not
to join any organization.
The CA denied petitioner’s MR.
Issue: Whether or not the former FEBTC employees
that were absorbed by petitioner upon the merger
between FEBTC and BPI should be covered by the
Union Shop Clause found in the existing CBA
between petitioner and respondent Union.
Held: No.
Section 2, Article II of the CBA is silent as to how one
becomes a "regular employee" of the BPI for the first
time. There is nothing in the said provision which
requires that a "new" regular employee first undergo a
temporary or probationary status before being deemed
as such under the union shop clause of the CBA.
"Union security" is a generic term which is applied to
and comprehends "closed shop," "union shop,"
"maintenance of membership" or any other form of
agreement which imposes upon employees the
obligation to acquire or retain union membership as a
condition affecting employment. There is union shop
when all new regular employees are required to join
the union within a certain period for their continued
employment. There is maintenance of membership
shop when employees, who are union members as of
the effective date of the agreement, or who thereafter
become members, must maintain union membership
as a condition for continued employment until they are
promoted or transferred out of the bargaining unit or
the agreement is terminated. A closed-shop, on the
other hand, may be defined as an enterprise in which,
by agreement between the employer and his
employees or their representatives, no person may be
employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the
duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which
the employees in interest are a part.
In the case of Liberty Flour Mills Employees v. Liberty
Flour Mills, Inc., we ruled that:
It is the policy of the State to promote unionism to
enable the workers to negotiate with management on
the same level and with more persuasiveness than if
they were to individually and independently bargain
for the improvement of their respective conditions. To
this end, the Constitution guarantees to them the rights
"to self-organization, collective bargaining and
negotiations and peaceful concerted actions including
the right to strike in accordance with law." There is no
question that these purposes could be thwarted if every
worker were to choose to go his own separate way
instead of joining his co-employees in planning
collective action and presenting a united front when
they sit down to bargain with their employers. It is for
this reason that the law has sanctioned stipulations for
the union shop and the closed shop as a means of
encouraging the workers to join and support the labor
union of their own choice as their representative in the
negotiation of their demands and the protection of their
interest vis-à-vis the employer.
excluded from the union shop by express terms of
the agreement.
Indeed, the situation of the former FEBTC employees
in this case clearly does not fall within the first three
exceptions to the application of the Union Shop Clause
discussed earlier. No allegation or evidence of
religious exemption or prior membership in another
union or engagement as a confidential employee was
presented by both parties. The sole category therefore
in which petitioner may prove its claim is the fourth
recognized exception or whether the former FEBTC
employees are excluded by the express terms of the
existing CBA between petitioner and respondent.
To reiterate, petitioner insists that the term "new
employees," as the same is used in the Union Shop
Clause of the CBA at issue, refers only to employees
hired by BPI as non-regular employees who later
qualify for regular employment and become regular
employees, and not those who, as a legal consequence
of a merger, are allegedly automatically deemed
regular employees of BPI. However, the CBA does not
make a distinction as to how a regular employee attains
such a status. Moreover, there is nothing in the
Corporation Law and the merger agreement mandating
the automatic employment as regular employees by
the surviving corporation in the merger.

In other words, the purpose of a union shop or other

union security arrangement is to guarantee the
continued existence of the union through enforced
membership for the benefit of the workers.

All employees in the bargaining unit covered by a

Union Shop Clause in their CBA with management are
subject to its terms. However, under law and
jurisprudence, the following kinds of employees are
exempted from its coverage, namely, employees who
at the time the union shop agreement takes effect are
bona fide members of a religious organization which
prohibits its members from joining labor unions on
religious grounds; employees already in the service
and already members of a union other than the
majority at the time the union shop agreement took
effect; confidential employees who are excluded from
the rank and file bargaining unit; and employees