G.R. No.

131248 December 11, 1998

DUNLOP SLAZENGER (PHILS.), INC., petitioner,

In this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner seeks the annulment of
the Resolution and Order, dated July 19, 1997 and October 16, 1997,   of the public respondent Secretary of Labor
1

and Employment calling for a certification election in its company.

It appears that on September 15, 1995, the respondent union filed a Petition for Certification Election among the
supervisory, office and technical employees of the petitioner company before the Department of Labor and
Employment, Regional Office No. III, San Fernando, Pampanga. It alleged that it is a legitimate labor organization, a
duly chartered local of the Associated Professional, Supervisory, Office & Technical Employees Union (APSOTEU);
that petitioner is a domestic corporation engaged in the manufacture of tennis balls and other allied products; that
petitioner is an unorganized establishment and there is no certified bargaining agreement that will bar the filing of its
petition for certification election; and that no certification election has been conducted within one (1) year prior to the
filing certification election.

On October 9, 1995, the petitioner company filed its Answer with Motion to Dismiss based on three (3) grounds,
namely: (1) that the respondent union is comprised of supervisory and rank-and-file employees and cannot act as
bargaining agent for the proposed unit; (2) that a single certification election cannot be conducted jointly among
supervisory and rank-and-file employees; and (3) that the respondent union lacks legal standing since it failed to
submit its books of accounts. 2

In its Reply filed on December 5, 1995, the respondent union alleged that its members are supervisors and not rank-
and-file employees. It averred that all its members are paid monthly by the petitioner company. It alleged that the
bargaining unit it seeks to represent is made up of the monthly paid supervisory employees and other personnel
who cannot be classified as belonging to the rank-and-file. It further contended that it has no obligation to attach its
books of accounts since it is a legitimate labor organization. It urged that the certification election proceeding cannot
be used to question the legal personality of a labor organization.   On March 4, 1996, however, respondent union
3

submitted its new books of accounts consisting of the Cash Receipts Journal, Cash Disbursements Journal and two
(2) ledgers. 
4

On July 15, 1996, Mediator Arbiter Ma. Carmen A. Espinosa granted the petition for certification election.
Respondent Secretary of Labor and Employment affirmed the Arbiter's decision ruling as follows:

x x x           x x x          x x x

The order of the Med-Arbiter directing the conduct of a certification elections is well and proper.

A perusal of the records shows that the bargaining unit that the petitioner seeks to represent has
been properly defined and this is composed of all the supervisory employees of the respondent
company. We wish to emphasize that the right of supervisory employees to form their own labor
organization separate from that of the rank-and-file union has been recognized by law. This is quite
clear from the provisions of Article 245 of the Labor Code, as amended, which states:

ART. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees-managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership
in a labor organization of the rank and file employees but may join, assist or form
separate labor organizations of their own.

As to the contention of the respondent that the petitioning union is composed of both supervisory
and rank and file employees, suffice it to stress that the same is not a sufficient reason that would
warrant the dismissal of the present petition. The same can be taken care (sic) of during the pre-
election conference thru the exclusion-inclusion proceedings wherein those employees who are
occupying rank and file positions will be excluded from the list of eligible voters.

Anent the issue on the legitimacy of the petitioner, we agree with the findings of the Med-Arbiter that
the petitioner has acquired the requisite legal personality to file the present petition for certification
elections. This is shown by the fact that the petitioner has sufficiently complied with the mandatory
reportorial requirements provided for under Section 3, Rule II, Book V of the Rules and Regulations
Implementing the Labor Code, as amended and as enunciated by the Supreme Court in the cases
of Progressive Development Corporation vs. Secretary of labor, et al., 205 SCRA 802 and Protection
Technology Inc. vs. Secretary of Labor, G.R. 11711, March 1, 1995.  5

Respondent Secretary of Labor denied petitioner's motion for reconsideration; hence, this petition.
It is petitioner's submission that:

Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or
excess of jurisdiction in holding that the respondent union is composed of all the supervisory
employees of the [petitioner] company.

II

Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or
excess of jurisdiction in finding that even if the respondent union is composed of both supervisory
and rank-and-file employees such can be taken cared of during the pre-election conference thru the
exclusion-inclusion proceedings.

III

Respondent Secretary acted contrary to law and with grave abuse of discretion amounting to lack or
excess of jurisdiction in upholding the findings of the Med-Arbiter that the respondent union has
complied with all the requirements for it to attain the legal personality to file the petition for
certification election. 
6

The petition is meritorious.

We agree with the public respondent that supervisors can be an appropriate bargaining unit. This is in accord with
our repeated ruling that "[a]n appropriate bargaining unit is a group of employees of a given employer, composed of
all or less than the entire body of employees, which the collective interests of all the employees, consistent with
equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the
collective bargaining provisions of law. Otherwise stated, it is a legal collectivity for collective bargaining purposes
whose members have substantially mutual bargaining interests in terms and conditions of employment as will
assure to all employees their collective bargaining rights. A unit to be appropriate must effect a grouping of
employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of
collective bargaining." 7

The critical issue, however, is whether or not the respondent union can file a petition for certification election to
represent the supervisory employees of the petitioner company. The resolution of this issue depends on whether the
respondent union is composed solely of supervisory employees or of both supervisory and rank-and-file employees.
Article 245 of the Labor Code clearly provides that "supervisory employees shall not be eligible for membership in a
labor organization of the rank-and-file employees . . . ."

To determine who are supervisory and rank-and-file employees reference has to be made to Article 212 (m)
of the Labor Code, as amended, as well as Section 1 (t), Rule I, Book V of the Omnibus Rules Implementing
the Labor Code, as amended, viz:

Managerial employee is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of this Book [these Rules].

Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law. The test of
supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the
interest of his employer, which authority should not be merely routinary or clerical in nature but requires
the use of independent judgment. Corrollarily, what determines the nature of employment is not the
employee's title, but his job description.  8

In the instant case, the list of monthly paid employees submitted by the petitioner company contains the names of
about twenty seven (27) supervisory employees, six (6) managerial employees, one (1) confidential employee and
twenty six (26) office and technical employees holding various positions. The list reveals that the positions occupied
by the twenty six (26) office and technical employees are in fact rank-and-file positions, i.e., A/C mechanic,
draftsmen, storemen, motorpool mechanic, secretaries, accounts clerk, company nurses, industrial mechanic, boiler
men, laboratory technicians, payroll clerk; welder, purchasing clerk, company drivers and electricians. It is fairly
obvious that these positions cannot be considered as supervisory positions for they do not carry the authority to act
in the interest of the employer or to recommend managerial actions. It is not decisive that these employees are
monthly paid employees. Their mode of compensation is usually a matter of convenience and does not
necessarily determine the nature and character of their job.
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the
respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings wherein
those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." Public
respondent gravely misappreciates the basic antipathy between the interest of supervisors and the interest of rank-
and-file employees. Due to the irreconcilability of their interests we held in Toyota Motor Philippines v. Toyota
Motors Philippines Corporation Labor Union   viz:
9

x x x           x x x          x x x

Clearly, based on this provision [Article 245, Labor Code], 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 apetition 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.

Needless to stress, the respondent union has no legal right to file a certification election to represent a
bargaining unit composed of supervisors for so long as it counts rank-and-file employees among its
members.

IN VIEW WHEREOF, the Resolution and Order dated July 19, 1997 and October 16, 1997, in OS-A-10-171-96 of
the public respondent are annulled and set aside. No costs.

SO ORDERED.

Bellosillo, Mendoza and Martinez., JJ., concur.

Footnotes

1 In OS-A-10-171-96 [RO-300-9509-RU-007].

2 Rollo, pp. 27-36.

3 Rollo, pp. 19-20, 38-42.

4 Rollo, pp. 44-45.

5 Resolution, pp. 3-4; Rollo, pp. 20-21.

6 Rollo, pp. 8, 10 and 11.

7 San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, 277 SCRA 370 [1997];
Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union, 268
SCRA 573 [1997]; Belyca Corporation v. Ferrer-Calleja, 168 SCRA 184 [1988].

8 Engineering Equipment, Inc. v. NLRC, 133 SCRA 752 [1984].

9 268 SCRA 573 [1997].