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381 Phil. 414

SECOND DIVISION

[ G.R. No. 116194, February 02, 2000 ]

SUGBUANON RURAL BANK, INC., PETITIONER, VS. HON. UNDERSECRETARY BIENVENIDO E. LAGUESMA, DEPARTMENT OF LABOR AND EMPLOYMENT, MED-ARBITER ACHILLES MANIT, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7, CEBU CITY, AND SUGBUANON RURAL BANK, INC. - ASSOCIATION OF PROFESSIONAL, SUPERVISORY, OFFICE, AND TECHNICAL EMPLOYEES UNION-TRADE UNIONS CONGRESS OF THE PHILIPPINES, RESPONDENTS.

D E C I S I O N

QUISUMBING, J.:

In this special civil action for certiorari and prohibition, petitioner seeks the annulment of the April 27, 1994 Resolution of the Department of Labor and Employment, affirming the order of the Med-Arbiter, dated December 9, 1993, which denied petitioner's motion to dismiss respondent union's petition for certification election.

Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered banking institution with principal office in Cebu City and a branch in Mandaue City. Private respondent SRBI-Association of Professional, Supervisory, Office, and Technical Employees Union (APSOTEU) is a legitimate labor organization affiliated with the Trade Unions Congress of the Philippines (TUCP).

On October 8, 1993, the DOLE Regional Office in Cebu City granted Certificate of Registration No. R0700-9310-UR-0064 to APSOTEU- TUCP, hereafter referred to as the union.

On October 26, 1993, the union filed a petition for certification election of the supervisory employees of SRBI. It alleged, among others, that: (1) APSOTEU-TUCP was a labor organization duly-registered with the Labor Department; (2) SRBI employed 5 or more supervisory employees; (3) a majority of these employees supported the petition; (4) there was no existing collective bargaining agreement (CBA) between any union and SRBI; and (5) no certification election had been held in SRBI during the past 12 months prior to the petition.

On October 28, 1993, the Med-Arbiter gave due course to the petition. The pre-certification election conference between SRBI and APSOTEU- TUCP was set for November 15, 1993.

On November 12, 1993, SRBI filed a motion to dismiss the union's petition. It sought to prevent the holding of a certification election on two grounds: First, that the members of APSOTEU-TUCP were in fact managerial or confidential employees. Thus, following the doctrine in Philips Industrial Development Corporation v. National Labor Relations Commission,[1] they were disqualified from forming, joining, or assisting any labor organization. Petitioner attached the job descriptions of the employees concerned to its motion. Second, the Association of Labor Unions-Trade Unions Congress of the Philippines or ALU-TUCP was representing the union. Since ALU- TUCP also sought to represent the rank-and-file employees of SRBI, there was a violation of the principle of separation of unions enunciated in Atlas Lithographic Services, Inc. v. Laguesma.[2]

The union filed its opposition to the motion to dismiss on December 1, 1993. It argued that its members were not managerial employees but merely supervisory employees. The members attached their affidavits describing the nature of their respective duties. The union pointed out that Article 245 of the Labor Code expressly allowed supervisory employees to form, join, or assist their own unions.

On December 9, 1993, the Med-Arbiter denied petitioner's motion to dismiss. He scheduled the inclusion-exclusion proceedings in preparation for the certification election on December 16, 1993.

SRBI appealed the Med-Arbiter's decision to the Secretary of Labor and Employment. The appeal was denied for lack of merit. The certification election was ordered.

On June 16, 1994, the Med-Arbiter scheduled the holding of the certification election for June 29, 1994. His order identified the following SRBI personnel as the voting supervisory employees in the election: the Cashier of the Main office, the Cashier of the Mandaue Branch, the Accountant of the Mandaue Branch, and the Acting Chief of the Loans Department.

On June 17, 1994, SRBI filed with the Med-Arbiter an urgent motion to suspend proceedings The Med-Arbiter denied the same on June 21, 1994. SRBI then filed a motion for reconsideration. Two days later, the Med- Arbiter cancelled the certification election scheduled for June 29, 1994 in order to address the motion for reconsideration.

The Med-Arbiter later denied petitioner's motion for reconsideration. SRBI appealed the order of denial to the DOLE Secretary on December 16, 1993.

On December 22, 1993, petitioner proceeded to file a petition with the DOLE Regional Office seeking the cancellation of the respondent union's registration. It averred that the APSOTEU-TUCP members were actually managerial employees who were prohibited by law from joining or organizing unions.

On April 22, 1994, respondent DOLE Undersecretary denied SRBI's appeal for lack of merit. He ruled that APSOTEU- TUCP was a legitimate labor organization. As such, it was fully entitled to all the rights and privileges granted by law to a legitimate labor organization, including the right to file a petition for certification election. He also held that until and unless a final order is issued canceling APSOTEU- TUCP's registration certificate, it had the legal right to represent its members for collective bargaining purposes. Furthermore, the question of whether the APSOTEU- TUCP members should be considered as managerial or confidential employees should not be addressed in the proceedings involving a petition for certification election but best threshed out in other appropriate proceedings.

On May 25, 1994, SRBI moved for reconsideration of the Undersecretary's decision which was denied on July 7, 1994. The Med- Arbiter scheduled the holding of certification elections on August 12, 1994.

Hence the instant petition grounded on the following assignments of error:

I
RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED:
  1. IN HOLDING THAT ART. 257 OF THE LABOR CODE REQUIRES THE MED-ARBITER TO CONDUCT A CERTIFICATION ELECTION IN ANY UNORGANIZED ESTABLISHMENT EVEN WHEN THE PETITIONING UNION DOES NOT POSSESS THE QUALIFICATION FOR AN APPROPRIATE BARGAINING AGENT; AND

  2. IN REFUSING TO ASSUME JURISDICTION OVER THE PETITIONER'S APPEAL AND TO DISMISS THE RESPONDENT UNION'S PETITION FOR CERTIFICATION ELECTION.

II
RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED IN DENYING THE PETITIONER'S APPEAL DESPITE THE FACT THAT:

  1. THE ALLEGED MEMBERS OF RESPONDENT UNION ARE MANAGERIAL EMPLOYEES WHO ARE LEGALLY DISQUALIFIED FROM JOINING ANY LABOR ORGANIZATION.

  2. AT THE VERY LEAST, THE ALLEGED MEMBERS OF RESPONDENT UNION ARE OCCUPYING HIGHLY CONFIDENTIAL POSITIONS IN PETITIONER AND, THUS, THE LEGAL DISQUALIFICATION OF MANAGERIAL EMPLOYEES EQUALLY APPLY TO THEM.

III
IN ANY EVENT, THE CONCLUSIONS REACHED IN THE SUBJECT RESOLUTIONS ARE CONTRARY TO LAW AND ARE DIAMETRICALLY OPPOSED TO RESPONDENT UNION'S RECORDED ADMISSIONS AND REPRESENTATIONS.
Considering petitioner's assigned errors, we find two core issues for immediate resolution:
(1)
Whether or not the members of the respondent union are managerial employees and/or highly-placed confidential employees, hence prohibited by law from joining labor organizations and engaging in union activities?

(2)
Whether or not the Med-Arbiter may validly order the holding of a certification election upon the filing of a petition for certification election by a registered union, despite the petitioner’s appeal pending before the DOLE Secretary against the issuance of the union’s registration?
The other issues based on the assigned errors could be resolved easily after the core issues are settled.

Respecting the first issue, Article 212 (m) of the Labor Code defines the terms "managerial employee" and "supervisory employees" as follows:
"Art. 212. Definitions-
x x x

(m) 'Managerial employee’ is one who is 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. 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. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book (Italic supplied)."
Petitioner submitted detailed job descriptions to support its contention that the union members are managerial employees and/or confidential employees proscribed from engaging in labor activities.[3] Petitioner vehemently argues that the functions and responsibilities of the employees involved constitute the "very core of the bank's business, lending of money to clients and borrowers, evaluating their capacity to pay, approving the loan and its amount, scheduling the terms of repayment, and endorsing delinquent accounts to counsel for collection."[4] Hence, they must be deemed managerial employees. Petitioner cites Tabacalera Insurance Co. v. National Labor Relations Commission,[5] and Panday v. National Labor Relations Commission,[6] to sustain its submission. In Tabacalera, we sustained the classification of a credit and collection supervisor by management as a managerial/supervisory personnel. But in that case, the credit and collection supervisor "had the power to recommend the hiring and appointment of his subordinates, as well as the power to recommend any promotion and/or increase."[7] For this reason he was deemed to be a managerial employee. In the present case, however, petitioner failed to show that the employees in question were vested with similar powers. At best they only had recommendatory powers subject to evaluation, review, and final decision by the bank's management. The job description forms submitted by petitioner clearly show that the union members in question may not transfer, suspend, lay-off, recall, discharge, assign, or discipline employees. Moreover, the forms also do not show that the Cashiers, Accountants, and Acting Chiefs of the loans Department formulate and execute management policies which are normally expected of management officers.

Petitioner's reliance on Panday is equally misplaced. There, we held that a branch accountant is a managerial employee because the said employee had managerial powers, similar to the supervisor in Tabacalera. Their powers included recommending the hiring and appointment of his subordinates, as the power to recommend any promotion and/or increase.[8]

Here, we find that that the Cashiers, Accountant, and Acting Chief of the Loans Department of the petitioner did not possess managerial powers and duties. We are, therefore, constrained to conclude that they are not managerial employees.

Now may the said bank personnel be deemed confidential employees? Confidential employees are those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies [specifically in the field of labor relations].[9] 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 superior officer; and that officer must handle the prescribed responsibilities relating to labor relations.[10]

Article 245 of the Labor Code[11] does not directly, prohibit confidential employees from engaging in union activities. However, under the doctrine of necessary implication, the disqualification of managerial employees equally applies to confidential employees.[12] The confidential-employee rule justifies exclusion of confidential employees because in the normal course of their duties they become aware of management policies relating to labor relations.[13] It must be stressed, however, that when the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees from forming, assisting, or joining a union.[14]

Petitioner contends that it has only 5 officers running its day-to-day affairs. They assist in confidential capacities and have complete access to the bank's confidential data. They form the core of the bank's management team. Petitioner explains that:
"...Specifically: (1) the Head or the Loans Department initially approves the loan applications before they are passed on to the Board for confirmation. As such, no loan application is even considered by the Board and approved by petitioner without his stamp of approval based upon his interview of the applicant and determination of his (applicant's) credit standing and financial capacity. The same holds true with respect to renewals or restructuring of loan accounts. He himself determines what account should be collected, whether extrajudicially or judicially, and settles the problem or complaints of borrowers regarding their accounts;

"(2) the Cashier is one of the approving officers and authorized signatories of petitioner. He approves the opening of accounts, withdrawals and encashment, and acceptance of check deposits, He deals with other banks and, in the absence of the regular Manager, manages the entire office or branch and approves disbursements of funds for expenses; and

"(3) the Accountant, who heads the Accounting Department, is also one of the authorized signatories of petitioner and, in the absence of the Manager or Cashier, acts as substitute approving officer and assumes the management of the entire office. She handles the financial reports and reviews the debit/credit tickets submitted by the other departments."[15]
Petitioner's explanation, however, does not state who among the employees has access to information specifically relating to its labor relations policies. Even Cashier Patricia Maluya, who serves as the secretary of the bank's Board of Directors may not be so classified. True, the board of directors is responsible for corporate policies, the exercise of corporate powers, and the general management of the business and affairs of the corporation. As secretary of the bank's governing body, Patricia Maluya serves the bank's management, but could not be deemed to have access to confidential information specifically relating to SRBI's labor relations policies, absent a clear showing on this matter. Thus, while petitioner's explanation confirms the regular duties of the concerned employees, it shows nothing about any duties specifically connected to labor relations.

As to the second issue. One of the rights of a legitimate labor organization under Article 242(b) of the Labor Code is the right to be certified as the exclusive representative of all employees in an appropriate bargaining unit for purposes of collective bargaining. Having complied with the requirements of Art. 234, it is our view that respondent union is a legitimate labor union. Article 257 of the Labor Code mandates that a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization.[16] Nothing is said therein that prohibits such automatic conduct of the certification election if the management appeals on the issue of the validity of the union's registration. On this score, petitioner's appeal was correctly dismissed.

Petitioner argues that giving due course to respondent union's petition for certification election would violate the separation of unions doctrine.[17] Note that the petition was filed by APSOTEU- TUCP, a legitimate labor organization. It was not, filed by ALU. Nor was it filed by TUCP, which is a national labor federation of with which respondent union is affiliated. Petitioner says that respondent union is a mere alter ego of ALU. The records show nothing to this effect. What the records instead reveal is that respondent union was initially assisted by ALU during its preliminary stages of organization. A local union maintains its separate personality despite affiliation with a larger national federation.[18] Petitioner alleges that ALU seeks to represent both respondent union and the rank-and-file union. Again, we find nothing in the records to support this bare assertion.

The law frowns on a union where the membership is composed of both supervisors and rank-and-file employees, for fear that conflicts of interest may arise in the areas of discipline, collective bargaining, and strikes.[19] However, in the present case, none of the members of the respondent union came from the rank-and-file employees of the bank.

Taking into account the circumstances in this case, it is our view that respondent Undersecretary committed no reversible error nor grave abuse of discretion when he found the order of the Med-Arbiter scheduling a certification election in order. The list of employees eligible to vote in said certification election was also found in order, for none was specifically disqualified from membership.

WHEREFORE, the instant petition is hereby DISMISSED. No pronouncement as to costs.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.



[1] 210 SCRA 339 (1992)

[2] 205 SCRA 12 (1992)

[3] Records, pp. 80-82.

[4] Id. at 16.

[5] 152 SCRA 667 (1987)

[6] 209 SCRA 122 (1992)

[7] 152 SCRA 667, 674 (1987)

[8] Supra; 209 SCRA 122, 126 (1992)

[9] San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, 277 SCRA 370, 374 (1997) citing Westinghouse Electric Corp. v. NLRB (CAS) 398 F2d. 689; Ladish Co., 178 NLRB 90 (1969), B.F. Goodrich Co., 115 NLRB 722.

[10] Supra.

[11] 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.

[12] Golden Farms, Inc. v. Ferrer-Calleja, 175 SCRA 471, 477 (1989); Bulletin Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc., 144 SCRA 628, 634 (1986)

[13] San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, supra, 375.

[14] Id. at 376; National Association of Trade Unions-Republic Planters Bank Supervisor Chapter v. Torres, 239 SCRA 546, 560 (1994)

[15] Rollo, pp. 13-14.

[16] Emphasis supplied. Furusawa Rubber Philippines Inc. v. Secretary of Labor and Employment, 282 SCRA 635, 641 (1997); California Manufacturing Corp. v. Laguesma, 209 SCRA 606, 610-611 (1992)

[17] Atlas Lithographic Services, Inc. v. Bienvenido Laguesma, et al, 205 SCRA 12 (1992)

[18] Pambansang Kapatiran Ng Mga Anak Pawis sa Formey Plastic National Workers Brotherhood v. Secretary of Labor, 253 SCRA 96, 103 (1995)

[19] Philippine Phosphate Corporation v. Torres, 231 SCRA 335, 342 (1994)

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