TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION vs.

TOYOTA MOTOR PHILIPPINES CORPORATION EMPLOYEES AND WORKERS UNION, TOYOTA MOTOR PHILIPPINES CORPORATION, and THE SECRETARY OF LABOR AND EMPLOYMENT Facts: On 24 April 1997 respondent TMPCEWU filed a Petition for Certification Election before the Med-Arbitration Unit of the DOLE-NCR seeking to represent the rank-and-file employees of the manufacturing division from Levels 1 to 4 of Toyota Motor Philippines Corp. (TMPC). On 13 May 1997, pending hearing, petitioner TMPCLU claiming to be the legitimate labor organization, filed a Motion to Intervene with Opposition to the Certification Election. It claimed that: o the petition was premature due to an earlier resolution by the Secretary of Labor ordering the conduct of a certification election among the rank-andfile employees of TMPC represented by petitioner which was the subject of certiorari proceedings before the Supreme Court and still awaiting final resolution at the time o the collective bargaining unit which respondent TMPCEWU sought to represent violated the "single or employer" unit policy since it excluded the rank-and-file employees in the other divisions and departments in respondent TMPC. Petitioner TMPCLU outlined the antecedent events prior to the TMPCEWU's filing of its Petition for Certification Election (see previous case). At the time respondent TMPCEWU filed its Petition for Certification Election on 24 April 1997 the decision of the Supreme Court had not ripened into a final and executory judgment. Thus petitioner invoked that the "pending proceeding before the Supreme Court may be said to be a pre-judicial question which should be resolved first before the instant petition can prosper. On 2 July 1997, the Med-Arbiter ordered the provisional dismissal of TMPCEWU's Petition for Certification Election pending a final ruling by the Supreme Court on the Petition for Certification Election. On 3 June 1997 the decision of the SC dated 19 February 1997 became final and executory. In view of respondent TMPCEWU's revival of its Petition for Certification Election, petitioner filed on 30 October 1997 its Petition-in-Intervention4 alleging that: o it was representing only the rank-and-file employees; o it enjoys the support of the regular rank-and-file workers at large in TMPC and not only among the manufacturing division thereof; o TMPCEWU had a pending petition for the cancellation of its certification of registration on the ground of fraud; o TMPCEWU's representation of the rank-and-file employees, Levels 1 to 4, within the manufacturing division only violated the "single or employer" unit policy; and o the establishment of the proposed bargaining unit would induce the proliferation of unions in a single employer. On 24 February 1998 the Med-Arbiter rendered a decision: o dismissing for lack of merit TMPCEWU's Petition for Certification Election, since it failed to include all rank-and-file employees from Levels 1 to 4 in

Issue:

other departments of TMPC in violation of the "one-union in one-company" policy o dismissing TMPCLU's Petition-in-Intervention for lack of legal personality o TMPCLU has NO legal personality to file thePetition-in-Intervention: At the time intervenor TMPCLU filed its application for registration and subsequently thereafter was issued a certificate of registration on November 24, 1992, its union membership is composed of supervisory and rank-and-file employees. The registration certificate issued by the DOLE is void ab initio because at the time of the issuance the constitution of intervenor union TMPCLU is a mixture of supervisory and rankand-file employees. Petitioner appealed to the Secretary of Labor who justified his affirmance of the Med-Arbiter's decision: o It is true that the employer is a mere by-stander during the conduct of a certification election. Prior to the election, however, the employer is not precluded from ascertaining the legitimacy of the union. There is therefore no error in allowing the employer to question the status of appellant. o It had earlier been finally ruled by the Supreme Court (see previous case) that since the bargaining unit of the rank-in-file which TMPCLU is seeking to represent is a mixture of supervisory employees which is prohibited under Article 245 of the Labor Code, as amended, the union prior to purging itself of supervisory employees-members, had not attained the status of a legitimate labor organization. Appellant has not however shown that it registered anew because. The need to register anew is necessary and the purging by itself of its officers who are holding supervisory position is imperative. One of the requirements for registration is the submission of the list of officers. Appellant has not as yet attained the status of a legitimate labor organization. It has therefore no legal authority to oppose the instant petition. Secretary denied petitioner's motion for reconsideration. WON petitioner had legal personality on when it filed its Petition-in-Intervention. Should petitioner register anew despite its alleged purging of the supervisory employee-members and the issuance in its favor of a certificate of registration after it was found to have violated Art. 245 of the Labor Code? Petitioner could not have been issued its Certificate of Registration on November 24, 1992 when it applied for registration only on November 23, 1992 as shown by the official receipt of payment of filing fee. It is unlikely that an application for registration is approved on the date that it is filed or the day thereafter as the processing course had to pass through routing, screening, and assignment, evaluation, review and initialing, and approval/disapproval procedure, among others, that a 30-day period is

Ruling:

provided for under the Labor Code for this purpose, let alone opposition thereto by interested parties which must be also given due course. Another evidence which petitioner presented is the "Union Registration 1992 Logbook of IRD" and the entry date 25 November 1992 as allegedly the date of the release of its registration certificate. On the other hand, respondent company presented a certified true copy of an entry on page 265 of the Union Registration Logbook showing the pertinent facts about petitioner but which did not show that petitioner's registration was issued on or before 26 November 1992. The Med-Arbiter also found that TMPCLU had not acquired legal personality for the reason that its composition, being a mixture of supervisory and rank-and-file employees, was in direct violation of Art. 245 of the Labor Code. The union's composition being in violation of the Labor Code's prohibition of unions composed of supervisory and rank-and-file employees, it could not possess the requisite personality to file for recognition as a legitimate labor organization. In any case, the factual issue, albeit ignored by the public respondents assailed Resolution, was adequately threshed out in the Med-Arbiters September 28, 1994 Order. Petitioner had no valid certificate of registration and therefore no legal personality to file the Petition for Certification Election and in the absence of any attempt on its part to rectify the legal infirmity, likewise the disputed Petition-in-Intervention. If a labor organizations application for registration is vitiated by falsification and serious irregularities, a labor organization should be denied recognition as a legitimate labor organization. And if a certificate of registration has been issued, the propriety of its registration could be assailed directly through cancellation of registration proceedings in accordance with Arts. 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance of an order for certification election.

SMC filed a Motion for Reconsideration with Motion to suspend proceedings. The public respondent granted the Motion, citing the doctrine in Philips Industrial Development, Inc. v. NLRC: o Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining. o In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election. WON Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit. On the first issue, this Court rules that said employees do not fall within the term "confidential employees" who may be prohibited from joining a union. 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. 5 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. An important element of the "confidential employee rule" is the employee's need to use labor relations information. Thus, a key question frequently considered is the employee's necessary access to confidential labor relations information. 13 It is the contention of respondent corporation that Supervisor employees 3 and 4 and the exempt employees come within the meaning of the term "confidential employees" primarily because they answered in the affirmative when asked "Do you handle confidential data or documents?" in the Position Questionnaires. However, it was also stated that the confidential information handled by questioned employees by no means relate to "labor relations." Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee. 16 "If access to confidential labor relations information is to be a factor in the determination of an employee's confidential status, such information must relate to the employer's labor relations policies.

Issues: Ruling:

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President vs. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION Facts: On October 5, 1990, petitioner union filed before the DOLE a Petition for Direct Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis. On December 19, 1990, Med-Arbiter ordered the conduct of certification election. On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing the Med-Arbiter's error in grouping together all three (3) separate plants into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. On July 23, 1991, Undersecretary Laguesma, granted respondent company's Appeal. Upon petitioner-union's motion dated August 7, 1991, Undersecretary Laguesma granted the reconsideration prayed for on September 3, 1991 and directed the conduct of separate certification elections.

Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit representing employees of the union or association." 17 "Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information 18 or technical trade secrets, will not render an employee a confidential employee." In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. It is the contention of the petitioner union that the creation of three (3) separate bargaining units is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests. This Court finds the contention of the petitioner meritorious. 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. 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 Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the mandate of the Constitution. 27

The fact that the three plants are located in three different places is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed. The distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative.

SANTOS JUAT v. COURT OF INDUSTRIAL RELATIONS, BULAKLAK PUBLICATIONS and JUAN EVANGELISTA Facts: On December 1, 1959, a CBA was entered into between the Bulaklak Publications and the BUSOCOPE LABOR UNION, to remain in effect for 3 years, and renewable for another term of 3 years. Section 4 of said agreement contains a closed shop proviso, amended to read as follows: o All employees and/or workers who on January 1, 1960 are members of the Union in good standing in accordance with its Constitution and By-Laws and all members who become members after that date shall, as a condition of employment, maintain their membership in the Union for the duration of this Agreement. o All employees and/or workers who on January 1, 1961 are not yet members of the Union shall, as a condition of maintaining their employment, become members of such union. It is clear that the management of the latter required Santos Juat to become a member of the former. It was only obeying the CBA. Because of the refusal of Santos Juat to become a member of said Union, Mr. Juan N. Evangelists, the executive officer of respondent company, suspended him for 15 days. After the expiration of the suspension, Mr. Evangelista addressed a letter to the former, ordering him to report back for duty, and in spite of said letter, Santos Juat did not report for work, consequently, Santos Juat was dropped from the service of the company. Juat could afford not to report for duty because he has his own business by the name of JUAT PRINTING PRESS CO., INC. The refusal of Santos Juat to become a member of the Busocope Labor Union as well as his refusal to report for work when ordered by his superior officer, shows the lack of respect on the part of Santos Juat toward his superior officer. With such attitude, the continuation in the service of the company of Santos Juat is indeed inimical to the interest of his employer. The charge of complainant to the effect that on March 13, 1961, he filed a petition with this Court against respondent company is of no moment, because according to the Supreme Court in Royal Interocean Lines, et al. vs. Hon. CIR, et al., Promulgated October 31, 1960, it was held that an employee's having filed charges or having given testimony or being about to give testimony has no relation to union activities. WON the above-quoted proviso of the said CBA applies to the petitioner Santos Juat.

Issue:

Ruling:

The closed-shop proviso in a CBA between employer and employee is sanctioned by law: o Provided, that nothing in this Act or in any Act or statute of the Republic of the Philippines shall preclude an employer 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 as provided in said section twelve; ... ." (Section 4, subsection [a] par. 4 of Republic Act No. 875, known as the Industrial Peace Act). The validity of a closed-shop agreement has been upheld by this Court: o Congress, in the exercise of its policy-making power, has chosen to approve the closed-shop, when it legalized in Sec. 4, sub-section (a) paragraph 4 of Republic Act 875 (Magna Charta of Labor) "any agreement of the employer with a labor organization requiring membership in such organization as condition of employment," provided such labor organization properly represents the employees. o A closed-shop agreement has been considered as one form of union security whereby only union members can be hired and workers must remain union members as a condition of continued employment. The requirement for employees or workers to become members of a union as a condition for employment redounds to the benefit and advantage of said employees because by holding out to loyal members a promise of employment in the closed-shop the union wields group solidarity. In fact, it is said that "the closed-shop contract is the most prized achievement of unionism" (National Labor Union vs. Aguinaldo's Echague, et al., G.R. No. L-7358, May 31, 1955.) Contention of said petitioner is that the said proviso cannot apply, and should not be applied to him because he is an old employee of the Bulaklak Publications. o Petitioner had been employed with the Bulaklak Publications since 1953, and the CBA embodying the closed-shop proviso in question was entered into only on December 1, 1959 and amended on December 27, 1960. o However, said petitioner was not a member of any labor union when that CBA was entered into, and in fact had never been a member of any labor union. This Court had held in the case of Freeman Shirt Manufacturing that the closed-shop proviso of a CBA entered into between an employer and a duly authorized labor union is applicable not only to the employees or laborers that are employed after the CBA had been entered into but also to old employees who are not members of any labor union at the time the said CBA was entered into. In other words, if an employee or laborer is already a member of a labor union different from the union that entered into a CBA with the employer providing for a closed-shop, said employee or worker cannot be obliged to become a member of that union which had entered into a CBA with the employer as a condition for his continued employment. This Court in that Freeman case made this clear pronouncement: The closed-shop agreement authorized under Sec. 4 sub-sec. a (4) of the Industrial Peace Act above-quoted should, however, apply only to persons to be hired or to employees who are not yet members of any labor organization. It is inapplicable to those already in the service who are members of another union. To hold otherwise,

i.e., that the employees in a company who are members of a minority union may be compelled to disaffiliate from their union and join the majority or contracting union, would render nugatory the right of all employees to self-organization and to form, joint or assist labor organizations of their own choosing. Section 12 of the Industrial Peace Act, providing that when there is reasonable doubt as to who the employees have chosen as their representative the Industrial Court can order a certification election, would also become useless. For once a union has been certified by the court and enters into a CBA with the employer a closed-shop clause applicable to all employees be they union or non-union members, the question of majority representation among the members would be closed forever. Certainly, there can no longer exist any petition for certification election, since eventually the majority or contracting union will become a perpetual labor union. This alarming result could not have been the intention of Congress. The Industrial Peace Act was enacted precisely for the promotion of unionism in this country. (Emphasis supplied) The closed-shop proviso of a CBA entered into between an employer and a duly authorized labor union applies, and should be applied, to old employees or workers who are non-members of any labor union at the time the CBA was entered into. In other words, the old employees or workers can be obliged by his employer to join the labor union which had entered into a CBA that provides for a closed-shop as a condition for his continuance in his employment, otherwise his refusal to join the contracting labor union would constitute a justifiable basis for his dismissal. Petitioner Santos Juat, although an old employee of the respondent Bulaklak Publications, was not a member of any labor union at the time when the CBA in question was entered into, he could be obliged by the respondent Bulaklak Publications to become a member of the Busocope Labor Union. And because petitioner refused to join the Busocope Labor Union respondent Bulaklak Publications was justified in dismissing him from the service on the ground that he had refused to join said union.