Title V COVERAGE
Article 243. Coverage and employees’ right to self-organization. – All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980).
________ 1. ORGANIZING IN GENERAL
The rights to organize and to bargain, in a general sense, are given not exclusively to employees. Even workers who are not employees of any particular employer may form their organizations to protect their interests.
Under Art. 243 of this Code, the right to organize refers also to forming, joining or assisting a labor organization. Connected to Art. 246 this right carries with it the right to engage in group action, provided it is peaceful, to support the organization’s objective which is not necessarily bargaining but, simply, to aid and protect its members. But this kind of group action must be differentiated from strike which, because it is work stoppage, must observe certain regulation; otherwise, the strike may be declared illegal and its leaders may be thrown out of their jobs.
1.1 Coverage of the Right to Organize; Exceptions
The right to form, join or assist a labor organization is granted to all kinds of employees of all kinds of employers—public or private, profit or non-profit, commercial or religious. Their usual form of organization is a union and the usual purpose is collective bargaining with their employers.
But the seemingly all-inclusive coverage of “all persons” in Article 243 actually admits exceptions. Under Art. 245, for instance, managerial employees, regardless of the kind of organization where they are employed, may not join, assist or form any labor organization, meaning a labor union.
Accordingly, managerial employees cannot, in the absence of an agreement to the contrary, be allowed to share in the concessions obtained by the labor union through collective negotiation. Otherwise, they would be exposed to the temptation of colluding with the union during the negotiations to the detriment of the employer. However, there is nothing to prevent the employer from granting benefits to managerial employees equal to or higher than those afforded to union members.
Supervisors are allowed to organize, but they cannot for, join or assist a rank-and-file union.
2. RIGHT TO ORGANIZE CANNOT BE BARGAINED AWAY Although we have upheld the validity of the CBA as the law among the parties, its provisions cannot override what is expressly provided by law that only managerial employees are ineligible to join, assist or
form any labor organization. Therefore, regardless of the challenged employees' designations, whether they are employed as Supervisors or in the confidential payrolls, if the nature of their job does not fall under the definition of "managerial" as defined in the Labor Code, they are eligible to be members of the bargaining unit and to vote in the certification election. Their right to self-organization must be upheld in the absence of an express provision of law to the contrary. It cannot be curtailed by a collective bargaining agreement.
3. EMPLOYEES OF NONPROFIT INSTITUTIONS
Under Article 243 of the Labor Code, the rank-and-file employees of non-profit medical institutions are permitted to form, organize or join labor unions of their choice for purposes of collective bargaining. If the union has complied with the requisites provided by law for calling a certification election, it is incumbent upon the DOLE Regional Director to conduct such certification election to ascertain the bargaining representative of the hospital employees.
4. EXCEPTION: EMPLOYEE-MEMBERS OF A COOPERATIVE
A cooperative is by its nature different from an ordinary business concern being run either, by persons, partnerships or corporations. Its owners and/or members are the ones who run and operate the business while the others are its employees. As above stated, irrespective of the name of shares owned by its members they are entitled to cast one vote each in deciding upon the affair of the cooperative. Their share capital earn limited interests. They enjoy special privileges as exemption from income tax and sales taxes, preferential right to supply their products to State agencies and even exemption from minimum wage laws.
An employee of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners.
However, in so far as it involves cooperatives with employees who are not members or co-owners thereof, certainly such employees are entitled to exercise the rights of all workers to organization, collective bargaining, negotiations and others as are enshrined in the Constitution and existing laws of the country.
In another case, the court clarified that it is the fact of ownership of the cooperative, and not involvement in the management thereof, which disqualifies a member from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in the actual management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective bargaining.
But member-employees of a cooperative may withdraw as members of the cooperative in order to join a labor union. Membership in a cooperative is voluntary; inherent in it is the right not to join.
4.1 Exception to Exception: Association, not Union
While the members of a cooperative who are also its employees cannot unionize for bargaining purposes, the law does not prohibit them from forming an association for their mutual aid and protection as employees.
D.O. No. 40-03 allows and defines a “workers’ association” as one which is organized for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining.
5. EXCEPTION: INTERNATIONAL ORGANIZATIONS
A certification election cannot be conducted in an international organization which the Philippine Government has granted immunity from local jurisdiction.
The grant of such immunity is a political question whose resolution by the executive branch of government is conclusive upon the courts (1) “International Organization” and “Specialized Agencies”—The term "international organization" is generally used to describe an organization set up by agreement between two or more states. Under contemporary international law, such organizations are endowed with some degree of international legal personality such that they are capable of exercising specific rights, duties and powers. They are organized mainly as a means for conducting general international business in which the member states have an interest. The United Nations, for instance, is an international organization dedicated to the propagation of world peace. "Specialized agencies" are international organizations having functions in particular fields. The term appears in Articles 57 and 63 of the Charter of the United Nations.
(2) Principles Underlying the Grant of International Immunities to
International Organizations—There are basically three propositions
underlying the grant of international immunities to international organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international institutions should have a status which protects them against control or interference by any one government in the performance of functions for the effective discharge of which they are responsible to democratically constituted international bodies in which all the nations concerned are represented; 2) no country should derive any national financial advantage by levying fiscal charges on common international funds; and 3) the international organization should, as a collectivity of States members, be accorded the facilities for the conduct of its official business customarily extended to each other by its individual member States. The theory behind all three propositions is said to be essentially institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but with the elements of functional independence necessary to free international institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their members. The raison d'etre for these immunities is the assurance of unimpeded performance of their functions by the agencies concerned.
(3) Labor’s Basic Rights Remain—The immunity of International Catholic Migration Commission (ICMC) and the International Rice Research Institution (IRRI) from local jurisdiction by no means deprives labor of its basic rights, which are guaranteed by Article II, Section 18, Article III, Section 8, and Article XIII, Section 3, of the 1987 Constitution; and implemented by Articles 243 and 246 of the Labor Code.
(4) Certification Election Barred by Immunity—The immunity granted being "from every form of legal process except in so far as in any particular case they have expressly waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification election cannot be viewed as an independent or isolated process. It could trigger off a series of events in the collective bargaining process together with related incidents and/or concerted activities, which could inevitably involve ICMC in the "legal process," which includes “any penal, civil and administrative proceedings.” The eventuality of Court litigation is neither remote and from which international organizations are precisely shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions of international Organizations. “The immunity covers the organization concerned, its property and its assets...”
5.1 Waiver of Immunity
Waiver of its immunity is discretionary to IRRI. Without such express waiver the NLRC or its labor arbiters have no jurisdiction over IRRI even in cases of alleged illegal dismissal of any of its employees. 5.2 Foreign Workers
Foreigners, whether natural or juridical, as well as foreign corporations are strictly prohibited from engaging directly or indirectly in all forms of trade union activities. However, aliens working in the country with valid work permits may exercise the right to self-organization if they are nationals of a country that grants the same or similar rights to Filipino workers. (Art. 269) 6. EXCEPTION: RELIGIOUS OBJECTORS; IGLESIA NI CRISTO MEMBERS
Under the Industrial Peace Act (1953) which preceded the Labor Code (and even under the present Code) the employer and the union could enter into a “closed shop” agreement which would compel employees to become union workers as a condition of continued employment. But in 1961 R.A. No. 3350 was passed to exempt from such compulsory union membership the followers of any religious sect (such as the Iglesia ni Cristo) whose teachings forbid membership in labor unions. The constitutionality of R.A. No. 3350 was upheld by the Supreme Court in Victoriano v. Elizalde.
It may not be amiss to point out here that the free exercise of religious profession or belief is superior to contract rights. In case of conflict, the latter must, therefore, yield to the former.
6.1 Does the Exemption Still Stand?
6.2 Iglesia Ni Cristo Members May Form and Join Own Union ________
Article 244. Right of employees in the public service. – Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to form associations for purposes not contrary to law. (As amended by Executive Order No. 111, December 24, 1986).
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1. GOVERNMENT EMPLOYEES’ RIGHT TO ORGANIZE; LIMITATIONS
The highest law of the land guarantees to government employees the right to organize and to negotiate, but not the right to strike.
1.1 Limited Purpose
The extent of the government employees' right of self-organization differs significantly from that of employees in the private sector. The latter's right of self-organization, i.e., "to form, join or assist labor organizations for purposes of collective bargaining," admittedly includes the right to deal and negotiate with their respective employers in order to fix the terms and conditions of employment and also, to engage in concerted activities for the attainment of their objectives, such as strikes, picketing, boycotts. But the right of government employees to "form, join or assist employees organizations of their own choosing" under Executive Order No. 180 is not regarded as existing or available for "purposes of collective
bargaining," but simply "for the furtherance and protection of their interests."
In other words, the right of Government employees to deal and negotiate with their respective employers is not quite as extensive as that of private employees. Excluded from negotiation by government employees are the "terms and conditions of employment...that are fixed by law," it being only those terms and conditions not otherwise fixed by law that "may be subject of negotiation between the duly recognized employees' organizations and appropriate government authorities."
Declared to be 'not negotiable' are matters "that require appropriation of funds;" e.g., increase in salary emoluments and other allowances, car plan, special hospitalization, medical and dental services, increase in retirement benefits (Sec. 3, Rule VIII), and those "that involve the exercise of management prerogatives;" e.g., appointment, promotion, assignment/detail, penalties as a result of disciplinary actions, etc. (Sec. 4, Id.) Considered negotiable are such matters as schedule of vacation and other leaves, work assignment of pregnant women; recreational, social, athletic, and cultural activities and facilities, etc. (Sec. 2, Id.).
1.2 No Signing Bonus
Employees and officers of SSS are not entitled to the signing bonus provided for in the collective negotiation agreement because the process of collective negotiations in the public sector does not encompass terms and conditions of employment requiring the appropriation of public funds. The Court reminds the Social Security Commission officials that the SSS fund is not their money
1.3 Excepted Employees
Excepted from the application of Executive Order 180, however, are “members of the Armed Forces of the Philippines, including police officers, policemen, firemen, and jail guards” (Sec. 4). For reasons of security and safety, they are not allowed to unionize.
A “high level employee” is one “whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature. A managerial function refers to the exercise of powers such as: (1) to effectively recommend such managerial actions; (2) to formulate or execute management policies and decisions; or (3) to hire, transfer, lay-off, recall, dismiss, assign or discipline employees.
1.3a Professors as rank-and-file employees
Professors at the University of the Philippines who are not exercising managerial or highly confidential functions are rank-and-file employees and may unionize separately from the non-academic personnel.
In short, the professors, associate professors and assistant professors of the University of the Philippines are rank-and-file employees. The full professors, associate professors, assistant professors, instructors and the research, extension and professional staff may, if so minded, organize themselves into a separate collective bargaining unit.
1.4 Right to Strike
EO No. 180 also concedes to government employees, like their counterparts in the private sector, the right to engage in concerted activities, including the right to strike, the executive order is quick to add that those activities must be
exercised in accordance with law, i.e. are subject both to "Civil Service Law and rules" and "any legislation that may be enacted by Congress," that "the resolution of complaints, grievances and cases involving government employees" is not ordinarily left to collective bargaining or other related concerted activities, but to "Civil Service Law and labor laws and procedures whenever applicable;" and that in case "any dispute remains unresolved after exhausting all available remedies under existing laws and procedures, the parties may jointly refer the dispute to the (Public Sector Labor-Management) Council for appropriate action." What is more, the Rules and Regulations implementing Executive Order No. 180 explicitly provide that since the "terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and government-owned and controlled corporations with original charters are governed by law, the employees therein shall not strike for the purpose of securing changes thereof. 2. REGISTRATION
Sec. 7. Government employees' organizations shall register with the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of the Department which shall process the same in accordance with the provisions of the Labor Code of the Philippines, as amended. Applications may also be filed with the Regional Offices of the Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within three (3) days from receipt thereof.
Sec. 8. Upon approval of the application, a registration certificate be issued to the organization recognizing it as a legitimate employees' organization with the right to represent its members and undertake activities to further and defend its interest. The corresponding certificates of registration shall be jointly approved by the Chairman of the Civil Service Commission and Secretary of Labor and Employment. (E.O. No. 180)
3. CERTIFICATION ELECTION IN GOVERNMENT CORPORATION
A certification election to choose the union that will represent the employees may be conducted by the Bureau of Labor Relations in a government corporation, whether governed by the Labor Code or the Civil Service rules.
3.1 Election of Officers in Government Unions
It is quite clear from this provision that BLR has the original and exclusive jurisdiction on all inter-union and intra-union conflicts. An intra-union conflict would refer to a conflict within or inside a labor union, and an inter-union controversy or dispute, one occurring or carried on between or among unions. The subject of the case at bar, which is the election of the officers and members of the board of KMKK-MWSS, is, clearly, an intra-union conflict, being within or inside a labor union. It is well within the powers of the BLR to act upon.
4. WHEN PSLMC MAY RULE ON LEGALITY OF DISMISSAL The Public Sector Labor-Management Council, created by Executive Order No. 180 (June 1, 1987) has jurisdiction to hear charges of unfair labor practice filed by government employees against their employer, e.g., the Pamantasan ng Lungsod ng Maynila. In deciding the ULP charge the PSLMC may also rule on the complainants’ dismissal if the two issues—ULP and dismissal—are unavoidably interlinked.
5. UNION-BUSTING IN A GOVERNMENT AGENCY, U.L.P. 5.1 Even Temporary Employees May Organize
Even temporary employees enjoy the basic right to form organization or association for purposes not contrary to law.
Under Art. 277(c) of the Labor Code, “any employee, whether employed for a definite period of not, shall beginning on his first day of service, be considered an employee for purposes of membership in any labor union.”
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Article 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 the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank-and-file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (As amended by Section 18, Republic Act No. 6715, March 21, 1989 and Section 8, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).
________ 1. CATEGORIES OF EMPLOYEES
RA 6715 which took effect on March 21, 1989 (15 days after its publication in the "Philippines Daily Inquirer") provides that although "supervisory employees shall not be eligible for membership in a labor organization of the rank and file employees," they may, however, "join, assist or form separate labor organization of their own."
2. INELIGIBILITY OF MANAGERS 2.1 Types of Managerial Employees
The term "manager" generally refers to "anyone who is responsible for subordinates and other organizational resources." As a class, managers constitute three levels of a pyramid, namely, top management, middle management, and first-line management which is also called supervisor. Below this third level are the operatives or operating employees who, we may add, are also called rank-and-file.
FIRST-LINE MANAGERS — The lowest level in an organization at which individuals are responsible for the work of others is called line or first-level management. First-line managers direct operating employees only; they do not supervise other managers. Examples of first-line managers are the "foreman" or production supervisor in a manufacturing plant, the technical supervisor in a research department, and the clerical supervisor in a large office. First-level managers are often called supervisors.
MIDDLE MANAGERS — The term middle management can refer to more than one level in an organization. Middle managers direct the activities of other managers and sometimes also those of operating employees. Middle managers' principal responsibilities are to direct the activities that implement their organizations' policies and to balance the demands of their superiors with the capacities of their subordinates. A plant manager in an electronics firm is an example of a middle manager.
TOP MANAGERS — Composed of a comparatively small group of executives, top management is responsible for the overall management of the organization. It establishes operating policies and guides the organization's interactions with its environment. Typical titles of top managers are "chief executive officer," "president," and "senior vice-president." Actual titles vary from one organization to another and are not always a reliable guide to membership in the highest management classification.
As can be seen from this description, a distinction exists between those who have the authority to devise, implement and control strategic and operational policies (top and middle managers) and those whose task is simply to ensure that such policies are carried out by the rank-and-file employees of an organization (first-level managers/supervisors). What distinguishes them from the rank-and-file employees is that they act in the interest of the employer in supervising such rank-and-file employees.
"Managerial employees" may therefore be said to fall into two distinct categories: the "managers" per se, who compose the former group described above, and the "supervisors" who form the latter group. Whether they belong to the first or the second category, managers, vis-a-vis employers, are, likewise, employees.
2.2 Constitutionality of the Prohibition
The question is whether the first sentence of Art. 245 of the Labor Code, prohibiting managerial employees from forming, assisting or joining any labor organization, is constitutional in light of Art. III, Sec. 8 of the Constitution which provides:
The right of the people, including those employed in the public and private sectors, to form unions, association, or societies for purposes not contrary to law shall not be abridged.
The present Article 245 is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions of the Labor Code which it superseded, R.A. No. 6715 provides separate definitions of the terms "managerial" and "supervisory employees" (See Art. 212[m]).
Although the definition of "supervisory employees" seems to have been unduly restricted to the last phrase of the definition in the Industrial Peace Act, the legal significance given to the phrase "effectively recommends" remains the same. In fact, the distinction between top and middle managers, who set management policy, and front-line supervisors, who are merely responsible for ensuring that such policies are carried out by the rank and file, is articulated in the present definition.
The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership.
2.2a Other Opinions
Justice Puno further airs a warning: “To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing industrial life and will open the floodgates to unionization at all levels of the industrial hierarchy. Such a ruling will wreak havoc on the existing set-up between management and labor. If all managerial employees will be allowed to unionize, then all who are in the payroll of the company, starting from the president, vice-president, general managers and everyone, with the exception of the directors, may go on strike or picket the employer. Company officers will join forces with the supervisors and rank-and-file.”
3. EVOLUTION OF SUPERVISORS’ RIGHT TO ORGANIZE Unlike managers, supervisors can unionize.
The problem was that although the Industrial Peace Act defined a “supervisor,” it failed to define a “manager” or “managerial employee.” So the question arose: Did the word “supervisor” include “manager”? Could managers also unionize? In a case involving Caltex managers, the Court answered affirmatively.
3.2 Second Period: Under the Labor Code Before Amendment by R.A. No. 6715
This time the question was: Did ‘managerial employee” include “supervisor”? Were supervisors also banned from unionizing? Yes. The prohibition was applied to supervisors in the case of Bulletin Publishing Corp. V. Sanchez, 144 SCRA 428, decided on October 7, 1986.
3.3 Third Period: Under the Labor Code as Amended by RA 6715 R.A. No. 6715 presents a compromise formula: retain the ineligibility of managerial employees but revive the right of supervisory employees to unionize.
4. DEFINITION OF MANAGER AND SUPERVISOR
Unlike in the Industrial Peace Act and the Labor Code before such amendment, the power to decide on managerial acts is now separated from the power to recommend those managerial acts, such as laying down policy, hiring or dismissing employees, etc. A supervisor has the power only to recommend while a managerial employee has the power to decide and do those acts.
But to make one a supervisor, the power to recommend must not be merely routinary or clerical in nature but requires the use of independent judgment. In other words, the recommendation is (1) discretionary or judgmental (not clerical), (2) independent (not a dictation of someone else), and (3) effective (given particular weight in making the management decision). If these qualities are lacking or, worse, if the power to recommend is absent, then the person is not really a supervisor but a rank-and-file employee and therefore belongs or should belong to a rank-and-file organization.
Similarly, a so-called manager, no matter how his position is titled, is not really a manager in the eyes of the law if he does not possess managerial powers (to lay down and execute management policies and/ or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees). If he can only recommend the exercise of any of these powers, he is only a supervisor, hence, may join, assist or form a supervisors’ organization.
5. TEST OF SUPERVISORY STATUS
The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the interest of his employer in the matter specified in Article 212 (k) of the Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Thus, where such recommendatory powers as in the case at bar, are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law.
It is the nature of an employee's functions and not the nomenclature or title given to his job which determines whether he has rank-and-file or managerial status. Among the characteristics of managerial rank are: (1) He is not subject to the rigid observance of regular office hours; (2) His work requires the
consistent exercise of discretion and judgment in its performance; (3) the output produced or the result accomplished cannot be standardized in relation to a given period of time; (4) He manages a customarily recognized department or subdivision of the establishment, customarily and regularly directing the work of other employees therein; (5) He either has the authority to hire or discharge other employees or his suggestions and recommendations as to hiring and discharging, advancement and promotion or other change of status of other employees are given particular weight; and (6) As a rule, he is not paid hourly wages nor subjected to maximum hours of work.
5.1 The Power to Recommend
The power to recommend, in order to qualify an employee as a supervisor, must not only be effective but should require the use of independent judgment. It should not be merely of a routinary or clerical nature.
5.2 Examples of Ineffective or Clerical Recommendation
6. SEGREGATION OF RANK-AND-FILE AND SUPERVISORS Article 245 allows supervisory employees to form, join, or assist separate labor organizations of their own, but they are not eligible for membership in a labor organization of the rank-and-file employees. Neither may a rank-and-file join a union of supervisors.
This policy of segregating the supervisors’ union from that of the rank-and-file is founded on fairness to the employees themselves. It will be doubly detrimental to the employer if the supervisors and the rank-and-file, as members of only one union, could take a common stand against the employer.
6.1 Effects of Having Mixed Membership
A union whose membership is a mixture of supervisors and rank-and-file is not and cannot become a legitimate labor organization. It cannot petition for a certification election, much less ask to be recognized as the bargaining representative of employees.
The Labor Code has made it a clear statutory policy to prevent supervisory employees from joining labor organizations consisting of rank-and-file employees as the concerns which involve members of either group are normally disparate and contradictory.
Clearly, based on Article 245, 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.
The rationale behind the Code's exclusion of supervisors from unions of rank-and-file employees is that such employees, while in the performance of supervisory functions, become the alter ego of management in the making and the implementing of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory employees. And this is so because the fundamental test of a bargaining unit's acceptability is whether or not such a unit will best advance to all employees within the unit the proper exercise of their collective bargaining rights. The Code itself has recognized this, in preventing supervisory employees from joining unions of rank-and-file employees.
6.2 How Many? How Few?
6.3 Illegal Mixed Membership Must Be Raised and Proved
6.4 Cancellation of Union Registration on Ground of Inclusion of Disqualified Positions: What needs to be Proved
What is essential is the nature of the employee’s function and not the nomenclature or title given to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee.
The implementing Rules state that the legal personality of the petitioner union cannot be subject to collateral attack “but may be questioned only in an independent petition for cancellation.”
To summarize, the petition for certification election is not the proper forum to raise the issue of legal personality of the union. Also, a petition to cancel union registration cannot be heard or decided by the Med-Arbiter but either the DOLE Regional Director for enterprise-level or the BLR Director for national unions.
6.5 Affiliation of Supervisors and Rank-and-File Unions
Even in affiliating with a federation, the unions of the supervisors and of the ran-and-file should be segregated.
The peculiar role of supervisors is such that while they are not managers, when they recommend action implementing management policy or ask for the discipline or dismissal of subordinates, they identify with the interests of the employer and may act contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective bargaining and strikes. Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-file employees. In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the other. Moreover, in the event of a strike, the national federation might influence the supervisors' union to conduct a sympathy strike on the sole basis of affiliation.
Thus, if the intent of the law is to avoid a situation where supervisors would merge with the rank and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union activity in the company.
6.6 Restriction in Affiliation Clarified in De La Salle
First, the rank-and-file employees are directly under the authority of the supervisory employees. Second, the national federation is actively involved in union activities in the company. If these two conditions are absent, the rule prohibiting supervisors from affiliating with the mother union of the rank-and-file union does not apply.
The affiliation of two local unions in a company with the same national federation is not by itself a negate-on of their independence since in relation to the employer, the local unions are considered as the principals, while the federation is deemed to be merely their agent.
7. CONFIDENTIAL EMPLOYEES
7.1 First Swing: Inclusion Among Rank-and-File
7.2 Second Swing: Exclusion from Rank-and-File 7.3 Third Swing: Inclusion Among Supervisors
7.4 Fourth Swing: Inclusion Among Monthly Paid Rank-and-File 7.4a Limited Exclusion; Doctrine of Necessary Implication
A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer's property. While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified.
The doctrine of necessary implication means that what is implied in a statute is as much a part thereof as that which is expressed.
7.4b The Metrolab and Meralco Summations: Exclusion from Bargaining unit and Closed-shop Clause
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.
7.4c Who Are Confidential Employees?
Confidential employees 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. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.
Confidential employees are 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.
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.
7.4d The Labor Nexus
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."
Art. 245 of the Labor Code 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. 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. 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.
7.4e New CBA may include employees excluded from old CBA; Expired CBA may be Modified, not just Renewed
The employer and the union in an enterprise may negotiate and agree whom to cover in their CBA. And they are free to change their agreement: people excluded before may be included now, or vice versa.
8. SECURITY GUARDS MAY JOIN RANK-AND-FILE OR SUPERVISORS UNION
Under the old rules, security guards were barred from joining a labor organization of the rank-and-file. Under RA 6715, they may now freely join a labor organization of the rank-and-file or that of the supervisory union, depending on their rank.
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Article 245-A. Effect of inclusion as members of employees outside the bargaining unit. - 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. (Introduced as new provision by Section 9, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).
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Article 246. Non-abridgment of right to self-organization. – It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization. Such right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection, subject to the provisions of Article 264 of this Code. (As amended by Batas Pambansa Bilang 70, May 1, 1980).
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1. CONCEPT OF THE RIGHT TO SELF ORGANIZATION This is a key article that offers an inclusionary definition of the right to self-organization (S.O.) by saying not what it is but what it includes. It includes at least two rights: (1) the right to form, join or assist labor organizations, and (2) the right to engage in lawful concerted activities. The “labor organization” may be a union or association of employees, as mentioned in Article 212(g). Its purposes may be collective bargaining (as stated in this Article) or dealing with the employer [as stated in Article 212(g)].
The right to form labor organization is twin to the right to engage in concerted activities.
It is worth noting, finally, that the right to self-organization is granted not only to employees but to “workers,” whether employed or not. In fact, constitutionally speaking, the right to form associations or societies is a right of the “people,” whether workers or not.
No “person”—inside or outside of government, employer or non-employer, unionist or non-unionist—may abridge these rights. If abridged in the workplace, the abridgment is termed ULP (unfair labor practice).
Article 246, is both (in mixed metaphors), the conceptual mother and the formidable fortress of the prohibition expounded in the next three articles.
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UNFAIR LABOR PRACTICES Chapter I
CONCEPT
Article 247. Concept of unfair labor practice and procedure for prosecution thereof. – Unfair labor practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations.
Consequently, unfair labor practices are not only violations of the civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment as herein provided.
Subject to the exercise by the President or by the Secretary of Labor and Employment of the powers vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases involving unfair labor practices, which may include claims for actual, moral, exemplary and other forms of damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor Arbiters. The Labor Arbiters shall give utmost priority to the hearing and resolution of all cases involving unfair labor practices. They shall resolve such cases within thirty (30) calendar days from the time they are submitted for decision.
Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code.
No criminal prosecution under this Title may be instituted without a final judgment finding that an unfair labor practice was committed, having been first obtained in the preceding paragraph. During the pendency of such administrative proceeding, the running of the period of prescription of the criminal offense herein penalized shall be considered interrupted: Provided, however, that the final judgment in the administrative proceedings shall not be binding in the criminal case nor be considered as evidence of guilt but merely as proof of compliance of the requirements therein set forth. (As amended by Batas Pambansa Bilang 70, May 1, 1980 and later further amended by Section 19, Republic Act No. 6715, March 21, 1989).
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1. CONCEPT OF UNFAIR LABOR PRACTICE
As noted at the start of Book V a major aim of labor relations policy is industrial democracy whose realization is most felt in free collective bargaining or negotiation over terms and conditions of employment. But for bargaining negotiation to be true and meaningful, the
employees, first of all, must organize themselves. Because self-organization is a prerequisite—the lifeblood—of industrial democracy, the right to self-organize has been enshrined in the Constitution, and any act intended to weaken or defeat the right is regarded by law as an offense. The offense is technically called “unfair labor practice” (ULP). Literally, it does not mean an unfair practice by labor but a practice unfair to labor, although the offender may either be an employer or a labor organization.
The victim of the offense is not just the workers as a body and the well-meaning employers who value industrial peace, but the State as well. Thus, the attack to this constitutional right is considered a crime which therefore carries both civil and criminal liabilities.
A consideration of the entire law on the matter clearly discloses the intention of the lawmaker to consider acts which are alleged to constitute unfair labor practices as violations of the law or offenses, to be prosecuted in the same manner as a criminal offense. The reason for this provision is that the commission of an unfair labor practice is an offense against a public right or interest and should be prosecuted in the same manner as a public offense. The reason for the distinction between an unfair labor practice case and a mere violation of an employer of its contractual obligation towards an employees is, x x x that unfair labor practice cases involve violations of a public right or policy, to be prosecuted like criminal offenses whereas a breach of an obligation of the employer to his employee is only a contractual breach to be redressed like an ordinary contract or obligation.
1.1 Elements
Commission of unfair labor practice at the enterprise level needs the presence of certain elements: first, there is employer-employee relationship between the offender and the offended; and second, the act done is expressly defined in the Code as an act of unfair labor practice. The first element is required because ULP is negation of, a counteraction to, the right to organize which is available only to employees in relation to their employer. No organizational right can be negated or assailed if employer-employee relationship is absent in the first place.
The second element is that the act done is prohibited by the Code, specifically in Articles 248 and 261 for an employer and Article 249 for a labor organization. Art. 212(k) emphatically defines “unfair labor practice” as “any unfair labor practice as expressly defined in this Code.” Art. 261 amplifies Art. 248(i) by stating that violation of a CBA is unfair labor practice only if the violation is gross in character. The prohibited acts, it should be stressed, are all related to the worker’s self-organizational right and to the observance of a collective bargaining agreement (CBA). The only possible exception is Art. 248(f) referring to dismissing or prejudicing an employee giving testimony under this Code [regardless of the subject of the testimony].
Because ULP is and has to be related to the right to self-organization and to the observance of the CBA, it follows that not every unfair act is “unfair labor practice.”
ULP, therefore, has a limited, technical meaning because it is a labor relations concept with a statutory definition. It refers only to acts opposed to worker’s right to organize. Without that element, the act, no matter how unfair, is not unfair labor practice as legally defined. Stripped of legalese, unfair labor practice, when committed by the employer, commonly connotes anti-unionism.
1.2 Prejudice to Public Interest not an Element of U.L.P.
A showing of prejudice to public interest is not a requisite for ULP charges to prosper.
2. PROSECUTION OF U.L.P.
Under Art. 247 ULP has civil as well as criminal aspects. The civil aspect may include liability for damages and these may be passed upon by a labor arbiter.
To prosecute ULP as criminal offense is not possible until after finality of judgment in the labor case, finding that the respondent indeed committed unfair labor practice. But such judgment will not serve as evidence of ULP in the criminal case; the criminal charge must be proved independently from the labor case. Moreover, while only substantial evidence is required in labor case in the NLRC, proof beyond reasonable doubt is needed to convict in the criminal case of ULP.
The criminal charge, states Art. 228, falls under the concurrent jurisdiction of the Municipal or Regional Trial Court. The same article defines the penalty of fine and/ or imprisonment.
Under Art. 289, the penalty shall be imposed upon the guilty officers of a corporation, partnership, association or entity. If the ULP is committed by a labor organization the parties liable are those mentioned in Art. 249.
The offense prescribes in one year. (Art. 290) ________ Chapter II
UNFAIR LABOR PRACTICES OF EMPLOYERS
Article 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the following unfair labor practice: (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
(b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall with-draw from one to which he belongs;
(c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of
the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981).
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1. CONDITIONS PRECEDENT TO U.L.P. CHARGE
Before an employee may be considered aggrieved by an alleged unfair labor practice (ULP) by an employer, it must be demonstrated, firstly, that the injured party comes within the definition of “employee” as that term is defined by the Code, and secondly, the act charged as ULP must fall under the prohibition of Art. 248 (acts of the employer) or 249 (acts of the union).
Nonetheless, specific denomination of the act is not necessary to prosecute ULP. In resolving the question of whether or not an employer committed the act charged in the complaint, it is of no consequence, either as a matter of procedure or of substantive law, how the act is denominated—whether as a restraint, interference or coercion, or a discriminatory discharge, or as a refusal to bargain, or even as a combination of any or all of these. For however the employer’s conduct may be characterized, what is important is that it constituted an unfair labor practice.
2. ILO CONVENTION NO. 98 Article 1
1. Workers shall enjoy adequate protection against acts of anti-union discrimination in respect of their employment.
2. Such protection shall apply more particularly in respect of acts calculated
to--(a) make the employment of a worker subject to the condition that he shall not join a union or shall relinquish trade union membership;
(b) cause the dismissal of or otherwise prejudice a worker by reason of union membership or because of participation in union activities outside working hours or, with the consent of the employer, within working hours.
Article 2
1. Workers' and employers' organisations shall enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration.
2. In particular, acts which are designed to promote the establishment of workers' organisations under the domination of employers or employers' organisations, or to support workers' organisations by financial or other means, with the object of placing such organisations under the control of employers or employers' organisations, shall be deemed to constitute acts of interference within the meaning of this Article.
3. NO U.L.P.: ILLUSTRATIVE INSTANCES OF VALID EXERCISE OF MANAGEMENT RIGHTS
The law on “unfair labor practices” is not intended to deprive employers of their fundamental right to prescribe and enforce such rules as they honestly believe to be necessary to the proper, productive and profitable operation of their business. Nor are his rights of selection and discharge of his employees wrested from him by the Act. Rothenberg stresses that an employer, subject to the provisions of his contract with his employees, has the same full measure of control over his business as he had prior to the enactment of the Wagner Act and undiminished by the amended Act. The only condition imposed upon this control is that it must not be exercised so as to effect a violation of the Act and its several prohibitions.
3.1 Personnel Movements
As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other positions when the interests of the company reasonably demand it. Unless there are instances which directly point to interference by the company with the employees' right to self-organization, the transfer of private respondent should be considered as within the bounds allowed by law. Furthermore, although private respondent was transferred to a lower position, his original rank and salary remained undiminished.
It is the company’s prerogative to promote its employees to managerial positions. Managerial positions are offices which can only be held by persons who have the trust of the corporation and its officers. It should not be prevented from doing so. A promotion which is manifestly beneficial to an employee should not give rise to a gratuitous speculation that such a promotion was made simply to deprive the union of the membership of the promoted employee. 3.2 Acceptance of Mass Resignation
Acceptance of a voluntary resignation is not ULP. In a Philippine Airlines case the court said that the pilots’ "protest retirement/resignation" was not a concerted activity which was protected by law. They did not assume the status of strikers. They cannot, therefore, validly claim that the company committed unfair labor practice. When the pilots voluntarily terminated their employment relationship with the company, they cannot claim that they were dismissed.
3.3 Grant of Profit-Sharing Benefits to Non-Union Members
Management has the prerogative to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. Such
management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employers' interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite.
3.4 Forced Vacation Leave
Where the vacation leave without pay, which the employer requires employees to take in view of the economic crisis, is neither malicious, oppressive or vindictive, ULP is not committed.
3.5 Issuance of Rules or Policy
Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed towards that goal. Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.
3.6 Taking Action Against Slowdown
Employees have the right to strike, but they have no right to continue working on their own terms while rejecting the standards desired by their employer. Hence, an employer does not commit an unfair labor practice by discharging employees who engaged in a slowdown, even if their object is a pay increase which is lawful. Moreover, an employer does not violate the act by discharging only some of the employees who participate in the slowdown where he discharges them to serve as an “example” to stop the slowdown and not for discriminatory reasons.
4. DETERMINATION OF VALIDITY
Necessarily, determining the validity of an employer’s act involves an appraisal of his motives.
An employer may treat freely with an employee and is not obliged to support his actions with a reason or purpose. However, where the attendant circumstances, the history of employer's past conduct and like considerations, coupled with an intimate connection between the employer's action and the union affiliations or activities of the particular employee or employees taken as a whole raise a suspicion as to the motivation for the employer's action, the failure of the employer to ascribe a valid reason therefor may justify an inference that his unexplained conduct in respect of the particular employee or employees was inspired by the latter's union membership or activities. While the presence of this mere suspicion neither takes the place of evidence that the employer's conduct was improperly motivated nor dispenses with the requirement of proof of the fact, such suspicion, when coupled with other facts which in themselves, might have been inadequate to support an adverse finding against the employer, may suffice to sustain a finding that the employer's action violated the prohibition of the Act.
5. FIRST U.L.P.: INTERFERENCE (ART. 248[a])
In summarized form, the nine U.L.P. acts of an employer under Art. 248 are: (1) Interference, (2) “yellow dog” condition, (3) contracting out, (4) company unionism, (5) discrimination, (6) discrimination because of testimony, (7) violation of duty to bargaining, (8) paid negotiation, and (9) violation of CBA.
5.1 Interrogation
Persistent interrogation of employees to elicit information as to what had happened at union meetings and the identity of the active union employees was held as violative of organizational rights of employees.
In order that the questioning of an employee concerning his union activities would not be deemed coercive, the employer must communicate to the employee the purpose of the questioning, assure him that no reprisal would take place, and obtain his participation on a voluntary basis. In addition, questioning must also occur in a context free from employer hostility to union organization and must not itself be coercive in nature.
5.2 U.L.P. Even Before Union is Registered
An employer who interfered with the right to self-organization before the union is registered can be held guilty of ULP.
5.3 Prohibiting Organizing Activities
A rule prohibiting solicitation of union membership in company property is unlawful if it applies to non-working time as well as to working time.
Where majority of the employees live on the premises of the employer and cannot be reached by any means or procedures practically available to union organizers, the employer may be required to permit non-employee union organizers to come within its premises, in order to solicit employees.
However, in the absence of showing that the illegal dismissal was dictated by anti-union motives, the same does not constitute an unfair labor practice as would be a valid ground for strike. The remedy is an action for reinstatement with backwages and damages.
We have held that unfair labor practice cases are not, in view of the public interest involved, subject to compromises.
5.4 Violence or Intimidation
An employer unlawfully coerced employees by directing two individuals to his office at gun point on the day of representation election after the individuals had informed the employer that they were on the premises to vote in the election.
5.5 Espionage and Surveillance
One form of “pressure” which some over-eager employers sometimes use is the practice of spying upon employees. This device consists of using one or a small group of employees, or other agents, inspired by profit opportunism, vengeance or come kindred human frailty to use his or their access to employees’ quarters and affairs for the purpose of spying upon fellow employees and reporting back to the employer. It is plainly evident that such conduct on the employer’s part, however subtly it may be accomplished, constitutes interference with the employee’s exercise of their rights. Inasmuch as the “pressure” results more from the employees’ apprehension than from the employer’s purpose in spying and the use of its result, it has been held to be no answer to a charge of unfair labor practice that the fruits of espionage were not used.
