PEPSI-COLA PRODUCTS, PHILIPPINES, vs. HONORABLE SECRETARY to join a rank-and-file union.

The prohibition extends to a

OF LABOR, supervisors’ local union applying for membership in a national
FACTS: The Pepsi-Cola Employees Organization-UOEF (Union) filed a federation the members of which include local unions of rank and
petition for certification election with the Med-Arbiter seeking to be file employees. The intent of the law is clear especially where, as in
the exclusive bargaining agent of supervisors of Pepsi-Cola this case at bar, the supervisors will be co-mingling with those
Philippines, Inc. (PEPSI). employees whom they directly supervise in their own bargaining
unit.
The Med-Arbiter granted the Petition, with the explicit statement
that it was an affiliate of Union de Obreros Estivadores de Filipinas As regards the issue of whether or not confidential employees can
(federation) together with two (2) rank and file unions. Pepsi-Cola join the labor union of the rank and file, what was held in the case
Labor Unity (PCLU) and Pepsi-Cola Employees Union of the of National Association of Trade Unions (NATU) — . . A confidential
Philippines (PEUP). employee is one entrusted with confidence on delicate matters, or
with the custody, handling, or care and protection of the employer’s
PEPSI filed with the Bureau of Labor Relations a petition to Set Aside, property. While Art. 245 of the Labor Code singles out managerial
Cancel and/or Revoke Charter Affiliation of the Union, entitled employee as ineligible to join, assist or form any labor organization,
PCPPI v. PCEU-UOEF on the grounds that (a) the members of the under the doctrine of necessary implication, confidential employees
Union were managers and (b) a supervisors’ union can not affiliate are similarly disqualified.
with a federation whose members include the rank and file union of
the same company.

ISSUE: Whether or not a supervisors’ union can affiliate with the

same Federation of which two rank and file unions are likewise
members, without violating Article 245 of the Labor Code (PD 442),
as amended? W/N confidential employees may join rank and file
employees union.

HELD: In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA

121 [1992], as members it was ratiocinated:

xxx xxx xx

The prohibition against a supervisors’ union joining a local union of

rank and file is replete with jurisprudence. The Court emphasizes
that the limitation is not confined to a case of supervisors’ wanting
COCA-COLA BOTTLERS PHILIPPINES, INC (CCBPI). v. ILOCOS Confidential employees are defined as those who (1) assist or act in a
PROFESSIONAL AND TECHNICAL EMPLOYEES UNION (IPTEU) confidential capacity, in regard (2) to persons who formulate, determine,
and effectuate management policies in the field of labor relations.
September 9, 2015 | Peralta, J. | Confidential employees

Digester: Santos, Ihna

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
SUMMARY: IPTEU filed a petition for certification of election to represent
“confidential employee rule.”
a bargaining unit consisting of 22 rank-and-file professional and technical
employees of CCBPI. CCBPI opposes this, arguing that said employees
already belong to a bargaining unit (IMU) and that the 22 are considered as
confidential employees, hence should be excluded from the bargaining The rationale for their separate category and disqualification to join any
unit. SC held that said employees are not members of the IMU due to labor organization is similar to the inhibition for managerial employees,
reclassification of their positions, and it also refrained from resolving the because if allowed to be affiliated with a union, the latter might not be
issue of whether the 22 are confidential employees or not, as this was a assured of their loyalty in view of evident conflict of interests and the
factual issue. SC defers to the findings of fact of the Mediator-Arbiter, the union can also become company-denominated with the presence of
SOLE, and the CA that the 22 are not confidential employees. managerial employees in the union membership. Having access to
confidential information, confidential employees may also become the
source of undue advantage. Said employees may act as a spy or spies of
either party to a collective bargaining agreement.
DOCTRINE: Access to vital labor information is the imperative
consideration in determining whether or not an employee is a confidential
employee. An employee must assist or act in a confidential capacity and
obtain confidential information relating to labor relations policies. FACTS:
Exposure to internal business operations of the company is not per se a
ground for the exclusion in the bargaining unit.  July 9, 2007 – IPTEU, a registered independent labor organization, filed
a verified petition for certification election to represent a bargaining
unit consisting of approximately 22 rank-and-file professional and
technical employees of CCBPI Ilocos Norte Plant.
[from footnotes]  CCBPI prayed for the denial and dismissal of the petition, arguing that
the Sales Logistics Coordinator and Maintenance Foreman are
supervisory employees, while the 8 Financial Analysts, 5 Quality
Assurance Specialists, Maintenance Manager Secretary, Trade
Promotions and Merchandising Assistant, Trade Asset Controller and
 Maintenance Coordinator, Sales Information Analyst, Sales Logistics  The parties met for the opening and counting of the challenged votes.
Assistant, Product Supply Coordinator, Buyer, Inventory Planner, and CCBPI filed a motion for inhibition, which the Mediator-Arbiter
Inventory Analyst are confidential employees; hence, ineligible for verbally denied on the grounds that it was not verified and would
inclusion as members of IPTEU. It also sought to cancel and revoke the cause undue delay in the proceedings as there no other Mediators-
registration of IPTEU for failure to comply with the 20% membership Arbiters in the Region. The parties were informed that their
requirement based on all the supposed employees in the bargaining agreement to have the ballots opened could not bind the Mediator-
unit it seeks to operate. Arbiter. Instead, they were directed to submit additional evidence that
 A preliminary hearing of the petition was held and the possibility of would aid in the resolution of the challenged votes.
voluntary recognition or consent election was not acceded to by  The Mediator-Arbiter denied CCBPI’s challenge to the 16 votes. She
CCBPI. found that the voters are rank-and-file employees holding positions
 Mediator-Arbiter Florence Marie Gacad-Ulep, convinced that the that are not confidential in nature, and who are not, or used to be,
union members are rank-and-file employees and not occupying members of Ilocos Monthlies Union (IMU) due to the reclassification
positions that are supervisory and confidential in nature, granted of their positions by CCBPI and have been excluded from the CBA
IPTEU’s petition to exclude said employees from the existing entered into by IMU and CCBPI from 1997 to 2005. Consequently, the
bargaining units of CCBPI. challenged votes were opened and canvassed. After garnering 14 out
 CCBPI filed an appeal before the SOLE. The Mediator-Arbiter of the 16 votes cast, IPTEU was proclaimed as the sole and exclusive
acknowledged having received the Memorandum of Appeal but bargaining agent of the rank-and-file exempt workers in CCBPI Ilocos
informed that, pursuant to the IRR of the Labor Code: “the order Norte Plant.
granting the conduct of a certification election in an unorganized  CCBPI elevated the case to the SOLE. However, said appeal was
establishment shall not be subject to appeal. Any issue arising denied. The SOLE held that, as shown by the certification of the IMU
therefrom may be raised by means of protest on the conduct and President and the CBAs forged between CCBPI and IMU from 1997 to
results of the certification election.” 2007, the 22 employees sought to be represented by IPTEU are not
 CCBPI then filed an Urgent Motion to Suspend Proceedings, alleging part of IMU and are excluded from its CBA coverage; that even if the
that the notice issued by the Assistant Regional Director for the 16 challenged voters may have access to information which are
conduct of pre-election conference is premature since the decision of confidential from the business standpoint, the exercise of their right to
the Mediator-Arbiter is not yet final and executory and that the self-organization could not be defeated because their common
Mediator-Arbiter already lost jurisdiction over the case with the filing functions do not show that there exist a confidential relationship
of an appeal. Two days after, CCBPI filed a Manifestation, stating that within the realm of labor relations; and that the order granting the
its participation in the pre-election conference, certification election, certification election and sustaining its validity despite the pendency
and other proceedings is not a waiver, withdrawal or abandonment of of appeal and motion to suspend is proper in view of Section 17, Rule
the pending appeal and motion to suspend proceedings. VIII of Department Order No. 40, Series of 2003, which states that the
 In the Pre-election Conference CCBPI and IPTEU mutually agreed to order granting the conduct of a certification election in an
conduct the certification election. On election day, only 16 of the 22 unorganized establishment is not subject to appeal and that any issue
employees in the IPTEU list voted. However, no votes were canvassed. arising therefrom may be raised by means of protest on the conduct
CCBPI filed and registered a Protest questioning the conduct and and results of the certification election.
mechanics of the election and a Challenge to Votes on the ground that  CCBPI filed before the CA a petition for certiorari with prayer for
the voters are supervisory and confidential employees. temporary restraining order and writ of preliminary injunction. CA
 denied said petition, as well the MR filed by CCBPI; hence, this present case in view of the consistent findings of the Mediator-
petition. Arbiter, the SOLE, and the CA.
o The factual findings by quasi-judicial agencies, such as the DOLE,
when supported by substantial evidence, are entitled to great
RULING: Petition denied. CA resolution which affirmed the resolution of respect in view of their expertise in their respective fields.
the SOLE, dismissing petitioner’s appeal that the assailed decision on Judicial review of labor cases does not go so far as to evaluate
challenged voters and proclamation of the winner of the Mediator-Arbiter the sufficiency of evidence on which the labor official's findings
rest. It is not the SC’s function to assess and evaluate all over
affirmed.
again the evidence, testimonial and documentary, adduced by
the parties to an appeal, particularly where the findings of both
the trial court (here, the DOLE Secretary) and the appellate
Whether the 22 employees are confidential employees and should be court on the matter coincide, as in this case at bar.
o Absent any showing of whimsical or capricious exercise of
excluded from the bargaining unit – NO
judgment, and unless lack of any basis for the conclusions made
by the appellate court be amply demonstrated, SC may not
 As proven by the certification of the IMU President as well as the CBAs
disturb such factual findings.
executed between IMU and CCBPI, the 22 employees sought to be
o The determination of factual issues is vested in the Mediator-
represented by IPTEU are not IMU members and are not included in
Arbiter and the Department of Labor and Employment. Pursuant
the CBAs due to reclassification of their positions. If these documents
to the doctrine of primary jurisdiction, the Court should refrain
were false, the IMU should have manifested its vigorous opposition.
from resolving such controversies unless the case falls under
o The existing unions at CCBPI, especially the IMU of which most
recognized and well-established exceptions. The doctrine of
of the IPTEU members were once part (until they were
primary jurisdiction does not warrant a court to arrogate unto
considered outside the ambit of its existing bargaining unit)
itself the authority to resolve a controversy the jurisdiction over
never once opposed the Petition and the Certification election,
which is initially lodged with an administrative body of special
whether verbally or in written Opposition.
competence.
o Between Management and IMU, it is the latter which has more
 In this case, organizational charts, detailed job descriptions, and
to lose, as the creation of a separate bargaining unit would
training programs were presented by CCBPI before the Mediator-
reduce the scope of IMU’s bargaining unit. Yet through all these
Arbiter, the SOLE, and the CA. Despite these, the Mediator-Arbiter
proceedings, the Court took notice of the substantial moral
ruled that employees who encounter or handle trade secrets and
support that has been extended to the Petitioner by the other
financial information are not automatically classified as confidential
Unions of CCBPI, so much so that, until objected to by
employees. It was admitted that the subject employees encounter and
Management, they were even willing to be present during the
handle financial as well as physical production data and other
Certification Election
information which are considered vital and important from the
 As to whether the 16 voters sought to be excluded from the
business operations’ standpoint. Nevertheless, it was opined that such
appropriate bargaining unit are confidential employees, such query
information is not the kind of information that is relevant to collective
is a question of fact, which is not a proper issue in a petition for
bargaining negotiations and settlement of grievances as would classify
review under Rule 45 of the Rules. This holds more true in the
them as confidential employees. The SOLE, which the CA affirmed,
 likewise held that the questioned voters do not have access to inhibition for managerial employees, because if allowed to be
confidential labor relations information. affiliated with a union, the latter might not be assured of their
o The Court defers to the findings of fact of the Mediator-Arbiter, loyalty in view of evident conflict of interests and the union
the SOLE, and the CA. Certainly, access to vital labor can also become company-denominated with the presence of
information is the imperative consideration. An employee managerial employees in the union membership. Having access
must assist or act in a confidential capacity and obtain to confidential information, confidential employees may also
confidential information relating to labor relations policies. become the source of undue advantage. Said employees may
Exposure to internal business operations of the company is not act as a spy or spies of either party to a collective bargaining
per se a ground for the exclusion in the bargaining unit. agreement.

NOTES: (footnotes)

 San Miguel Foods, Inc. v. San Miguel Corp. Supervisors and Exempt
Union:
o Confidential employees are defined as those who (1) assist or
act in a confidential capacity, in regard (2) to persons who
formulate, determine, and effectuate management policies in
the field of labor relations. The two criteria are cumulative, and
both must be met if an employee is to be considered a
confidential employee – that is, the confidential relationship
must exist between the employee and his supervisor, and the
supervisor must handle the prescribed responsibilities relating
to labor relations. The exclusion from bargaining units of
employees who, in the normal course of their duties, become
aware of management policies relating to labor relations is a
principal objective sought to be accomplished by the
“confidential employee rule.”
o Although Article 245 of the Labor Code limits the ineligibility to
join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to
confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and, hence, are
likewise privy to sensitive and highly confidential records.
Confidential employees are thus excluded from the rank-and-file
bargaining unit. The rationale for their separate category and
disqualification to join any labor organization is similar to the