G.R. No.

74425 October 7, 1986

BULLETIN PUBLISHING CORPORATION, petitioner, vs.

HON. AUGUSTO S. SANCHEZ, CRESENCIANO B. TRAJANO, et al, respondents.

I. Labor Relation dispute:

 Art. 259, Labor Code. Unfair Labor Practice of Employers.

The dispute in the present case is (1) whether or not supervisors in petitioner

company may, for purposes of collective bargaining, form a union separate and distinct

from the existing union organized by the rank-and-file employees of the same company;

and (2) the validity of a threatened strike by members of such union.

II. Parties involved

Petitioner and respondents:

The petitioner in this case is BULLETIN PUBLISHING CORPORATION, while the

respondent in this case is HON. AUGUSTO S. SANCHEZ, CRESENCIANO B. TRAJANO,

PRIMITIVA C. BATERBONIA, and others.

Petitioner corporation has been engaged in the business of newspaper and magazine. The

total number of the personnel complement of the said firm, constituting the rank-and-file regular

members, is said to be over three hundred persons. The supervisory employees are about forty-

eight. About 300 employees belonging to the rank-and-file had previously formed the Bulletin

Employees Union. This labor organization (BEU) presently administers their current Collective

Bargaining Agreement which began on July 15, 1984 and remain effective up to July 15, 1987.

Ever since, there has been only one bargaining unit in the petitioner company and this is the BEU
(the union of the rank-and-file employees). Supervisory employees were never included in said

bargaining unit nor had they ever sought inclusion in the said BEU labor union, much less

registered any protest or challenged to their non-inclusion.

III. Cause of dispute:

The purpose of Petitioner is to prevent the private respondents, members of the Bulletin

Publishing Corporation Supervisors Union (BSU), from staging a strike against the said publishing

company.

5 out of 48 supervisors in the Bulletin Publishing Corporation formed a labor union and

adopted a charter calling themselves members of the “Bulletin Publishing Corporation Supervisors

Union” or BSU. A petition for registration of BSU was filed with the Ministry of Labor and

Employment. Registration Certificate No. 10547-LC was issued. A letter was sent to the

management of petitioner corporation by BSU giving notice of the registration of the BSU and

demanding its recognition as the sole bargaining agent of all the supervisors in the company.

Contention of the petitioner:

Claims that a strike by the BSU is a bogus union and whose registration and

operation is against public policy and legal prohibitions. It would cause untold harm on

herein petitioner which is engaged in publishing daily periodicals. Understandably, the

purpose behind the formation of the Union would be to gain leverage to pressure

Management to desist from the contemplated measures.

 Contention of the respondent:

Citing Adamson and Adamson versus CIR, L-35120, where honorable court held:

“supervisory employees of an employer cannot join any labor organization of employees

under their supervision but may validly form a separate organization of their own.” And

that they do not actually perform duties which are managerial.

In addition, private respondents declare that the primary reasons which prompted

their filing of a notice of strike are the arbitrary and discriminatory retirement of four (4)

members of the supervisor’s union, namely: Jose Bernal, Ramiro Nebres, Alcantara de la

Paz and Luis Garcia; as well as the immediate promotion of some members of the union

to executive positions in order to remove the said persons promoted from the coverage of,

or membership from the supervisory union. Private respondents charge that these acts are

tantamount to union busting tactics and constitute unfair labor practices that warrant a

strike.

Private respondents claim that petitioner does not have any definite policy

governing the retirement of supervisory employees as distinguished from rank-and-file

employees.

IV. Type of dispute:

The type of labor relations dispute in this case involves a complaint for unfair labor

practices of employer under Art. 259 of the Labor Code, specifically the act of restraint or coerce

employee in the exercise of their right to self-organization. The respondents (BSU or Bulletin

Publishing Corporation Supervisors Union) in this case filed a notice of strike with the Ministry

of Labor due to certain acts allegedly performed by petitioner which BSU claims to be union
busting and unfair labor practices. Refusing to recognize the BSU, the Bulletin Publishing

Corporation filed a petition seeking cancellation of the registration of the BSU on the ground that

Article 246 of the Labor Code and Section 11 of Rule II, Book V of the Implementing Rules which

prohibit supervisors from forming labor organizations

Also, this involves a representation disputes wherein there has be uncertainty as to which

is the appropriate collective bargaining unit.

V. Remedies in labor dispute

The dispute in this case has been dealt with through arbitration. As the supervisors

threatened to strike on May 12, 1986, petitioner was prompted to file a petition with the Ministry

of Labor (also known as the DOLE), urging therein that said office assume jurisdiction in the

matter of the impending strike. When the Minister of Labor failed to exercise his jurisdiction or

act on the matter, petitioner then felt that the remedy it seeks should be sought from this

Court(Supreme court) because, further resort to the Ministry of Labor may be construed as a

recognition by petitioner of the supervisors union (BSU) which would be inconsistent with

petitioner's challenge to the assertion of BSU to exist as a legitimate labor union.

Petitioner invokes the equity jurisdiction of this Court, claiming that a strike by the BSU

which it considers a bogus union and whose registration and operation is challenged as against

public policy and legal prohibitions, will cause untold harm on herein petitioner which is engaged

in publishing daily periodicals.

VI. Resolution or judgement

The Court is not persuaded by private respondents' submissions. Members of the Bulletin

Supervisory Union, wholly composed of supervisors employed by petitioner corporation, are not

QUALIFIED to organize a Labor Union of their own.

The supervisory employees of petitioner firm may not form a supervisor’s union, separate

and distinct from the existing bargaining unit (BEU), composed of the rank-and-file employees of

the Bulletin Publishing Corporation. It is evident that most of the private respondents are

considered managerial employees. Also it is distinctly stated in Section 11, Rule I, of the Omnibus

Rules Implementing the Labor Code, that supervisory unions are presently no longer recognized

nor allowed to exist and operate as such.

Article 246 of the Labor Code explicitly excludes managerial employees from the right of

self-organization, the right to form, join and assist labor organizations. The nature of their duties

gives rise to the conclusion that most of the herein private respondents are performing managerial

functions. Their responsibilities inherently require the exercise’ of discretion and independent

judgment as supervisors. They possess the power and authority to lay down or exercise

management policies. Managerial employees are those vested with powers or prerogatives to lay

down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,

assign or discipline employees, or to effectively recommend such managerial actions.

Petitioner has satisfactorily shown that it has been management policy to likewise apply

the provisions of the Collective Bargaining Agreement (CBA) between petitioner and the rank-

and-file union (BEU), also to supervisors. Under the CBA, the retirement of an employee may be

done upon initiative and option of the management. And where there are cases of voluntary

retirement, the same is effective only upon the approval of management. There should be no unfair
labor practice committed by management if the retirement of private respondents were made in

accord with the agreed option.

The promotion of employees to managerial or executive positions rests upon the discretion

of management. Managerial positions are offices which can only be held by persons who have the

trust of the corporation and its officers. It is the prerogative of management to promote any

individual working within the company to a higher position. It should not be inhibited or prevented

from doing so.

The court finds nothing improper in the promotions made by the petitioner company. These

were only implementation of petitioner's well-considered policy on retirement and promotions

intended to improve the morale of lower and middle management ranks by promoting those

specially deserving before they are eventually retired. This then would allow subsequent

promotions of their replacements from lower ranks. Similarly, the management does not commit

unfair labor practice if it exercises the option given to it in the CBA to retire an employee who

either rendered 25 years of service or reached the age of 60.

VII. Personal comment in the case at bar.

I agree with the Supreme Court’s decision in the case herein. The nature of their duties

gives rise to the conclusion that most of the herein private respondents are performing managerial

functions. Their responsibilities require the exercise of discretion and independent judgment as

supervisors. The purpose for the prohibition of supervisors to form their union is because if these

managerial employees would belong to or be affiliated with a Union, they might not be assured of

their loyalty to the Union in view of evident conflict of interests. No one may serve two masters
at the same time. The Union can also become company-dominated with the presence of managerial

employees in Union membership.

It is also noteworthy that the New Labor Code recognizes two principal groups of

employees, namely, managerial and the rank-and- file group. Art. 212 (k) provides:

“Managerial employee' is one who is vested with powers or prerogatives to lay down and

execute management policies and/or to hire, transfer, suspend, lay-off, recall,, discharge, assign or

discipline employees, or to effectively recommend such managerial actions. All employees not

falling within this definition are considered rank and file employees for purposes of this Book.”
 G.R. No. 124224, March 17, 2000

NEW PACIFIC TIMBER & SUPPLY COMPANY, CO., INC., petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION, MUSIB M. BUAT, LEON G.

GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT

and 350 OTHERS, respondents.

I. Labor Relation dispute:

 Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement.

A complaint for unfair labor practice (ULP) against the petitioner on the ground of

refusal to bargain collectively.

II. Parties involved

The primary parties in this case are:

1. The employer or New Pacific Timber & Supply Co., Inc. (petitioner in this case).

2. Employees, which are named as respondents herein

3. The union, which is the National Federation of Labor (NFL)

As to the secondary parties to this case, we have Executive Labor Arbiter Hakim S.

Abdulwahid and Labor Arbiter Reynaldo S. Villena, who has given orders or resolution in relation

to the respective issues raised herein.

The National Federation of Labor (NFL) was certified as the sole and exclusive bargaining

representative of all the regular rank-and-file employees of New Pacific Timber & Supply Co.,

Inc. (petitioner). NFL started to negotiate for better terms and conditions of employment for the
employees. However, the same was allegedly resisted by petitioner Company, so NFL was

prompted to file a complaint for unfair labor practice (ULP) against the latter on the ground of

refusal to bargain collectively.

III. Cause of dispute:

NFL started to negotiate for better terms and conditions of employment for the employees.

However, the same was allegedly resisted by petitioner Company, so NFL was prompted to file a

complaint for unfair labor practice (ULP) against the latter on the ground of refusal to bargain

collectively.

The Executive Labor Arbiter (that time) Hakim S. Abdulwahid issued an order declaring:

(a) petitioner Company guilty of ULP; and

(b) the CBA proposals submitted by the NFL as the CBA between the regular rank-

and-file employees in the bargaining unit and petitioner Company.

 APPEAL (NLRC):

Petitioner Company appealed the above order to the NLRC. The NLRC dismissed the

appeal for lack of merit. A motion for reconsideration was likewise denied in a Resolution.

Unsatisfied, petitioner Company filed a petition for certiorari (meaning: asking the

Supreme Court to review the decision of a lower court) with this Court. But the Court dismissed

said petition in a Resolution.

The records of the case were remanded to the ‘arbitration branch of origin’ of the execution

of Labor Arbiter Abdulwahid's Order granting monetary benefits consisting of wage increases,

housing allowances, bonuses, etc. to the regular rank-and-file employees. Petitioner Company
complied; and the corresponding quitclaims were executed. The case was considered closed

following NFL's manifestation that it will no longer appeal.

 APPEAL (by Petition for Relief to NLRC)

Later, a "Petition for Relief" was filed in behalf of 186 of the private respondents. They

claimed that they were wrongfully excluded from enjoying the benefits under the CBA since the

agreement with NFL and petitioner Company limited the CBA's implementation to only the 142

rank-and-file employees enumerated. They claimed that NFL's misrepresentations had precluded

them from appealing their exclusion.

 Contention of the Petitioner:

Petitioners argues that the private respondents are not entitled to the benefits under the

CBA because employees hired after the term of a CBA are not parties to the agreement, and

therefore, may not claim benefits thereunder, even if they subsequently become members of the

bargaining unit.

As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers

to the continuation in full force and effect of the previous CBA's terms and conditions. By

necessity, it could not possibly refers to terms and conditions which, as expressly stipulated, ceased

to have force and effect.

According to petitioner, the provision on wage increase in the 1981 to 1984 CBA between

petitioner Company and NFL provided for yearly wage increases. Logically, these provisions

ended in the years 1984 — the last year that the economic provisions of the CBA were, to contract

and law, effective. Petitioner claims that there is no contractual basis for the grant of CBA benefits

such as wage increases in 1985 and subsequent years, since the CBA stipulated only the increases

for the years 1981 to 1984.

IV. Type of dispute:

The type of labor relations dispute in this case involves a bargaining disputes. Under the

Labor Code, specifically Art. 259 (g) states that it shall be unlawful for an employer to violate the

duty to bargain collectively. Since basically it is a worker’s constitutional right to bargain

collectively (Art 13, Sec 3. 1987 Constitution).

V. Remedies in labor dispute

As result of the failure to renegotiate the making of a new collective bargaining agreement,

they first called upon relief with a Labor Arbiter. NFL was prompted to file a complaint for unfair

labor practice (ULP) against the New Pacific Timber & Supply Co., Inc. on the ground of refusal

to bargain collectively.

On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order

declaring (a) herein petitioner Company guilty of ULP; and (b) the CBA proposals submitted by

the NFL as the CBA between the regular rank-and-file employees in the bargaining unit and

petitioner Company.

Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the

NLRC rendered a decision dismissing the appeal for lack of merit. A motion for reconsideration

thereof was, likewise, denied in a Resolution, dated November 12, 1990.

Unsatisfied, petitioner Company filed a petition for voluntary arbitration. But the Court

dismissed said petition in a Resolution, dated January 21, 1991.

VI. Resolution or judgement

Petitioner's contentions as untenable.

 Article 253 of the Labor Code explains that until a new Collective Bargaining Agreement

has been executed between the parties, they are duty-bound to keep the status quo (present

situation) and to continue in full force and effect the terms and conditions of the existing

agreement. The law does not provide for any exception nor qualification as to which of the

economic provisions of the existing agreement are to retain force and effect, therefore, it must be

understood as encompassing all the terms and conditions in the said agreement.

In this case, no new agreement was entered into by and between petitioner company and

NFL while pending appeal of the decision in NLRC; nor were any of the economic provisions

and/or terms and conditions pertaining to monetary benefits in the existing agreement modified or

altered. Therefore, the existing CBA in its entirety, continues to have legal effect.

As to the 2nd issue: In a long line of cases, it has been held that when a collective bargaining

contract is entered into by the union representing the employees and the employer, even the non-

member employees are entitled to the benefits of the contract. To accord its benefits only to

members of the union without any valid reason would constitute undue discrimination against non-

members.

A laborer can claim benefits from the CBA entered into between the company and the

union of which he is a member at the time of the conclusion of the agreement, after he has resigned

from the said union.

The benefits under the CBA in the instant case should be extended to those employees who

only became such after the year 1984. To exclude them would constitute undue discrimination and

deprive them of monetary benefits they would otherwise be entitled to under a new collective

bargaining contract to which they would have been parties. The purpose of this rule is to avoid or
prevent the situation where no collective bargaining agreement at all would govern between the

employer company and its employees.

Dispositive portion: The instant petition for certiorari was DISMISSED for lack of merit.

VII. Personal comment in the case at bar.

I agree with the Supreme Court’s decision in the case herein. If the law goes otherwise,

making economic provisions of an existing CBA ceased to have effect, it would create a gap and

leaving all the workers zero from their benefits during which no agreement would govern until

new agreement shall have been entered into. It would leave workers with no agreement as to wage

increases and other monetary benefits resulting to deprivation of monetary benefits which they

could have enjoyed. It sounds contrary to the purpose of Article 253 and 253-A of the Labor Code

which is to promote industrial peace. I believe that the sole intent of our laws concerning labor is

to develop responsible and fair labor movement in both the workers and employers.