FIRSTDIVISION

[G.R.No.108855.February28,1996]

METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES

ROLDANCONFESOR, in her capacity as Secretary of the Department of
Labor and Employment and METRO DRUG CORPORATION EMPLOYEES
ASSOCIATIONFEDERATIONOFFREEWORKERS,respondents.
SYLLABUS
1.REMEDIALLAWEVIDENCEFINDINGSOFFACTOFADMINISTRATIVEAGENCIESRULE
CASE AT BAR. We reaffirm the doctrine that considering their expertise in their respective
fields, factual findings of administrative agencies supported by substantial evidence are
accordedgreatrespectandbindsthisCourt.TheSecretaryofLaborruled,thus:xxxAnyact
committedduringthependencyofthedisputethattendstogiverisetofurthercontentiousissues
orincreasethetensionsbetweenthepartiesshouldbeconsideredanactofexacerbation.One
mustlookattheactitself,notonspeculativereactions.Amisplacedrecourseisnotneededto
provethatadisputehasbeenexacerbated.Forinstance,theUnioncouldnotbeexpectedtofile
another notice of strike. For this would depart from its theory of the case that the layoff is
subsumedundertheinstantdispute,forwhichanoticeofstrikehadalreadybeenfiled.Onthe
otherhand,toexpectviolentreactions,unrulybehavior,andanyotherchaoticordrasticaction
fromtheUnionistoexpectittocommitactsdisruptiveofpublicorderoractsthatmaybeillegal.
Underaregimeoflaws,legalremediestaketheplaceofviolentones.xxxProtestagainstthe
subject layoffs need not be in the form of violent action or any other drastic measure. In the
instant case the Union registered their dissent by swiftly filing a motion for a cease and desist
order. Contrary to petitioners allegations, the Union strongly condemned the layoffs and
threatenedmassactioniftheSecretaryofLaborfailstotimelyintervene:xxx3.Thisunilateral
actionofmanagementisablatantviolationoftheinjunctionofthisOfficeagainstcommittingacts
whichwouldexacerbatethedispute.UnlesssuchactisenjoinedtheUnionwillbecompelledto
resort to its legal right to mass actions and concerted activities to protest and stop the said
managementaction.Thismasslayoffisclearlyonewhichwouldresultinaveryseriousdispute
unless this Office swiftly intervenes. x x x Metrolab and the Union were still in the process of
resolving their CBA deadlock when petitioner implemented the subject layoffs. As a result,
motions and oppositions were filed diverting the parties attention, delaying resolution of the
bargaining deadlock and postponing the signing of their new CBA, thereby aggravating the
wholeconflict.
2. LABOR AND SOCIAL LEGISLATION TERMINATION OF EMPLOYMENT EXERCISE OF
MANAGEMENTPREROGATIVESNOTABSOLUTESUBJECTTOEXCEPTIONSIMPOSED
BYLAW.ThisCourtrecognizestheexerciseofmanagementprerogativesandoftendeclines
tointerferewiththelegitimatebusinessdecisionsoftheemployer.However,thisprivilegeisnot
absolutebutsubjecttolimitationsimposedbylaw.InPALvs.NLRC,(225SCRA301[1993]),we
issued this reminder: ... the exercise of management prerogatives was never considered
boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that managements
prerogatives must be without abuse of discretion ...All this points to the conclusion that the
exercise of managerial prerogatives is not unlimited.It is circumscribed by limi(ations found in
law, a collective bargaining agreement, or the general principles of fair play and justice
(UniversityofSto.Tomasv.NLRC,190SCRA758[1990]).
3.ID.ID.ID.ID.ID.CASEATBARANEXCEPTION.Thecaseatbenchconstitutesoneofthe
exceptions. The Secretary of Labor is expressly given the power under the Labor Code to
assume jurisdiction and resolve labor disputes involving industries indispensable to national
interest.Thedisputedinjunctionissubsumedunderthisspecialgrantofauthority.Art.263(g)of
the Labor Code specifically provides that: x x x (g) When, in his opinion, there exists a labor

disputecausingorlikelytocauseastrikeorlockoutinanindustryindispensabletothenational
interest,theSecretaryofLaborandEmploymentmayassumejurisdictionoverthedisputeand
decideitorcertifythesametotheCommissionforcompulsoryarbitration.Suchassumptionor
certification shall have the effect of automatically enjoining the intended or impending strike or
lockoutasspecifiedintheassumptionorcertificationorder.Ifonehasalreadytakenplaceatthe
timeofassumptionorcertification,allstrikingorlockedoutemployeesshallimmediatelyreturn
to work and the employer shall immediately resume operations and readmit all workers under
the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor
and Employment or the Commission may seek the assistance of law enforcement agencies to
ensurecompliancewiththisprovisionaswellaswithsuchordersashemayissuetoenforcethe
same....ThatMetrolabsbusinessisofnationalinterestisnotdisputed.Metrolabisoneofthe
leading manufacturers and suppliers of medical and pharmaceutical products to the country.
Metrolabs management prerogatives, therefore, are not being unjustly curtailed but duly
balanced with and tempered by the limitations set by law, taking into account its special
characterandtheparticularcircumstancesinthecaseatbench.
4. ID. LABOR RELATIONS INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM
ANDASSISTANYLABORORGANIZATIONPROHIBITIONEXTENDEDTOCONFIDENTIAL
EMPLOYEES.AlthoughArticle 245 of the Labor Code limits the ineligibility to join, form and
assist any labor organization to managerial employees, jurisprudence has extended this
prohibitiontoconfidentialemployeesorthosewhobyreasonoftheirpositionsornatureofwork
are required to assist or act in a fiduciary manner to managerial employees and hence, are
likewiseprivytosensitiveandhighlyconfidentialrecords.
5. ID. ID. EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE
BARGAINING UNIT NOT TANTAMOUNT TO DISCRIMINATION. Confidential employees
cannot be classified as rank and file. As previously discussed, the nature of employment of
confidential employees is quite distinct from the rank and file, thus, warranting a separate
category.Excluding confidential employees from the rank and file bargaining unit, therefore, is
nottantamounttodiscrimination.
APPEARANCESOFCOUNSEL
BautistaPicazoBuycoTan&Fiderforpetitioner.
TheSolicitorGeneralforpublicrespondent.
PerfectoV.Fernandez,JoseP.Fernandez&CristobalP.FernandezforMetroDrugCorporation.

DECISION
KAPUNAN,J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the
annulment of the Resolution and Omnibus Resolution of the Secretary of Labor and Employment
dated 14 April 1992 and 25 January 1993, respectively, in OSAJ0449111 (NCMBNCRNS08
5959 1 NCMBNCRNS0967891) on grounds that these were issued with grave abuse of
discretionandinexcessofjurisdiction.
PrivaterespondentMetroDrugCorporationEmployeesAssociationFederationofFreeWorkers
(hereinafter referred to as the Union) is a labor organization representing the rank and file
employeesofpetitionerMetrolabIndustries,Inc.(hereinafterreferredtoasMetrolab/MII)andalsoof
MetroDrug,Inc.
On31December1990,theCollectiveBargainingAgreement(CBA)betweenMetrolabandthe
Unionexpired.ThenegotiationsforanewCBA,however,endedinadeadlock.
Consequently,on23August1991,theUnionfiledanoticeofstrikeagainstMetrolabandMetro
Drug Inc. The parties failed to settle their dispute despite the conciliation efforts of the National
ConciliationandMediationBoard.
To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D.
Torres, issued an assumption order dated 20 September 1991, the dispositive portion of which
reads,thus:

WHEREFORE,PREMISESCONSIDERED,andpursuanttoArticle263(g)oftheLaborCode,asamended,
thisOfficeherebyassumesjurisdictionovertheentirelabordisputeatMetroDrug,Inc.MetroDrug
DistributionDivisionandMetrolabIndustriesInc.
Accordingly,anystrikeorlockoutisherebystrictlyenjoined.TheCompaniesandtheMetroDrugCorp.
EmployeesAssociationFFWarelikewisedirectedtoceaseanddesistfromcommittinganyandallactsthat
mightexacerbatethesituation.
Finally,thepartiesaredirectedtosubmittheirpositionpapersandevidenceontheaforequoteddeadlocked
issuestothisofficewithintwenty(20)daysfromreceipthereof.
SOORDERED.[1](Italicsours.)
On27December1991,thenLaborSecretaryTorresissuedanorderresolvingallthedisputed
itemsintheCBAandorderedthepartiesinvolvedtoexecuteanewCBA.
Thereafter,theUnionfiledamotionforreconsideration.
On 27 January 1992, during the pendency of the abovementioned motion for reconsideration,
Metrolablaidoff94ofitsrankandfileemployees.
Onthesamedate,theUnionfiledamotionforaceaseanddesistordertoenjoinMetrolabfrom
implementingthemasslayoff,allegingthatsuchactviolatedtheprohibitionagainstcommittingacts
thatwouldexacerbatethedisputeasspecificallydirectedintheassumptionorder.[2]
Ontheotherhand,Metrolabcontendedthatthelayoffwastemporaryandintheexerciseofits
managementprerogative.Itmaintainedthatthecompanywouldsufferayearlygrossrevenuelossof
approximately sixtysix (66) million pesos due to the withdrawal of its principals in the Toll and
Contract Manufacturing Department. Metrolab further asserted that with the automation of the
manufacture of its product Eskinol, the number of workers required its production is significantly
reduced.[3]
Thereafter,onvariousdates,Metrolabrecalledsomeofthelaidoffworkersonatemporarybasis
duetoavailabilityofworkintheproductionlines.
On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the
layoff of Metrolabs 94 rank and file workers illegal and ordered their reinstatement with full
backwages.Thedispositiveportionreadsasfollows:
WHEREFORE,theUnionsmotionforreconsiderationisgrantedinpart,andourorderof28December1991
isaffirmedsubjecttothemodificationsinallowancesandinthecloseshopprovision.Thelayoffofthe94
employeesatMIIisherebydeclaredillegalforthefailureofthelattertocomplywithourinjunctionagainst
committinganyactwhichmayexacerbatethedisputeandwiththe30daynoticerequirement.Accordingly,
MIIisherebyorderedtoreinstatethe94employees,exceptthosewhohavealreadybeenrecalled,totheir
formerpositionsorsubstantiallyequivalent,positionswithfullbackwagesfromthedatetheywereillegally
laidoffon27January1992untilactuallyreinstatedwithoutlossofseniorityrightsandotherbenefits.Issues
relativetotheCBAagreeduponbythepartiesandnotembodiedinourearlierorderareherebyordered
adoptedforincorporationintheCBA.Further,thedispositionsanddirectivescontainedinallpreviousorders
andresolutionsrelativetotheinstantdispute,insofarasnotinconsistentherein,arereiterated.Finally,the
partiesareenjoinedtoceaseanddesistfromcommittinganyactwhichmaytendtocircumventthisresolution.
SORESOLVED.[4]
On6March1992,MetrolabfiledaPartialMotionforReconsiderationallegingthatthelayoffdid
notaggravatethedisputesincenountowardincidentoccurredasaresultthereof.It,likewise,fileda
motionforclarificationregardingtheconstitutionofthebargainingunitcoveredbytheCBA.
On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The
execution,however,waswithoutprejudicetotheoutcomeoftheissuesraisedinthereconsideration
andclarificationmotionssubmittedfordecisiontotheSecretaryofLabor.[5]
Pendingtheresolutionoftheaforestatedmotions,on2October1992,Metrolablaidoff73ofits

employeesongroundsofredundancyduetolackofworkwhichtheUnionagainpromptlyopposed
on5October1992.
On15October1992,LaborSecretaryConfesoragainissuedaceaseanddesistorder.Metrolab
movedforareconsideration.[6]
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution
containingthefollowingorders:
xxxxxxxxx.
1.MIIsmotionforpartialreconsiderationofour14April1992resolutionspecificallythatportionthereof
assailingourrulingthatthelayoffofthe94employeesisillegal,isherebydenied.MIIisherebyorderedtopay
suchemployeestheirfullbackwagescomputedfromthetimeofactuallayofftothetimeofactualrecall
2.Forthepartiestoincorporateintheirrespectivecollectivebargainingagreementstheclarificationsherein
containedand
3.MIIsmotionforreconsiderationwithrespecttotheconsequencesofthesecondwaveoflayoffaffecting73
employees,totheextentofassailingourrulingthatsuchlayofftendedtoexacerbatethedispute,ishereby
denied.Butinasmuchasthelegalityofthelayoffwasnotsubmittedforourresolutionandnoevidencehad
beenadduceduponwhichacategoricalfindingthereoncanbebased,thesameisherebyreferredtotheNLRC
foritsappropriateaction.
Finally,allprohibitoryinjunctionsissuedasaresultofourassumptionofjurisdictionoverthisdisputeare
herebylifted.
SORESOLVED.[7]
Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed
shopprovisionoftheCBA,notfromthebargainingunit.
On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the
presentpetitionforcertiorariwithapplicationforissuanceofaTemporaryRestrainingOrder.
On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor
from enforcing and implementing the assailed Resolution and Omnibus Resolution dated 14 April
1992and25January1993,respectively.
Initspetition,Metrolabassignsthefollowingerrors:
A

THEPUBLICRESPONDENTHON.SECRETARYOFLABORANDEMPLOYMENTCOMMITTED
GRAVEABUSEOFDISCRETIONANDEXCEEDEDHERJURISDICTIONINDECLARINGTHE
TEMPORARYLAYOFFILLEGALANDORDERINGTHEREINSTATEMENTANDPAYMENTOF
BACKWAGESTOTHEAFFECTEDEMPLOYEES.*
B

THEPUBLICRESPONDENTHON.SECRETARYOFLABORANDEMPLOYMENTGRAVELY
ABUSEDHERDISCRETIONININCLUDINGEXECUTIVESECRETARIESASPARTOFTHE
BARGAININGUNITOFRANKANDFILEEMPLOYEES.[8]
Anent the first issue, we are asked to determine whether or not public respondent Labor
Secretarycommittedgraveabuseofdiscretionandexceededherjurisdictionindeclaringthesubject
layoffsinstitutedbyMetrolabillegalongroundsthattheseunilateralactionsaggravatedtheconflict
betweenMetrolabandtheUnionwhowere,then,lockedinastalemateinCBAnegotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties from committing any act
thatmightexacerbatethedisputeisoverlybroad,sweepingandvagueandshouldnotbeusedto
curtailtheemployersrighttomanagehisbusinessandensureitsviability.
WecannotgivecredencetoMetrolabscontention.

ThisCourtrecognizestheexerciseofmanagementprerogativesandoftendeclinestointerfere
with the legitimate business decisions of the employer. However, this privilege is not absolute but
subjecttolimitationsimposedbylaw.[9]
InPALv.NLRC,[10]weissuedthisreminder:
xxxxxxxxx

...theexerciseofmanagementprerogativeswasneverconsideredboundless.Thus,inCruzvs.Medina(177
SCRA565[1989]),itwasheldthatmanagementsprerogativesmustbewithoutabuseofdiscretion....
xxxxxxxxx

Allthispointstotheconclusionthattheexerciseofmanagerialprerogativesisnotunlimited.Itis
circumscribedbylimitationsfoundinlaw,acollectivebargainingagreement,orthegeneralprinciplesoffair
playandjustice(UniversityofSto.Tomasv.NLRC,190SCRA758[1990])....(Italicsours.)
xxxxxxxxx.

Thecaseatbenchconstitutesoneoftheexceptions.TheSecretaryofLaborisexpresslygiven
the power under the Labor Code to assume jurisdiction and resolve labor disputes involving
industriesindispensabletonationalinterest.Thedisputedinjunctionissubsumedunderthisspecial
grantofauthority.Art.263(g)oftheLaborCodespecificallyprovidesthat:
xxxxxxxxx
(g)When,inhisopinion,thereexistsalabordisputecausingorlikelytocauseastrikeorlockoutinan
industryindispensabletothenationalinterest,theSecretaryofLaborandEmploymentmayassume
jurisdictionoverthedisputeanddecideitorcertifythesametotheCommissionforcompulsoryarbitration.
Suchassumptionorcertificationshallhavetheeffectofautomaticallyenjoiningtheintendedorimpending
strikeorlockoutasspecifiedintheassumptionorcertificationorder.Ifonehasalreadytakenplaceatthetime
ofassumptionorcertification,allstrikingorlockedoutemployeesshallimmediatelyreturntoworkandthe
employershallimmediatelyresumeoperationsandreadmitallworkersunderthesametermsandconditions
prevailingbeforethestrikeorlockout.TheSecretaryofLaborandEmploymentortheCommissionmayseek
theassistanceoflawenforcementagenciestoensurecompliancewiththisprovisionaswellaswithsuch
ordersashemayissuetoenforcethesame...(Italicsours.)
xxxxxxxxx.
That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading
manufacturersandsuppliersofmedicalandpharmaceuticalproductstothecountry.
Metro labs management prerogatives, therefore, are not being unjustly curtailed but duly
balanced with and tempered by the limitations set by law, taking into account its special character
andtheparticularcircumstancesinthecaseatbench.
AsaptlydeclaredbypublicrespondentSecretaryofLaborinitsassailedresolution:
xxxxxxxxx.
MIIisrighttotheextentthatasarule,wemaynotinterferewiththelegitimateexerciseofmanagement
prerogativessuchaslayoffs.Butitmayneverthelessbeappropriatetomentionherethatoneofthesubstantive
evilswhichArticle263(g)oftheLaborCodeseekstocurbistheexacerbationofalabordisputetothefurther
detrimentofthenationalinterest.Whenalabordisputehasinfactoccurredandageneralinjunctionhasbeen
issuedrestrainingthecommissionofdisruptiveacts,managementprerogativesmustalwaysbeexercised
consistentlywiththestatutoryobjective.[11]
xxxxxxxxx.
MetrolabinsiststhatthesubjectlayoffsdidnotexacerbatetheirdisputewiththeUnionsinceno
untoward incident occurred after the layoffs were implemented.There were no work disruptions or
stoppages and no mass actions were threatened or undertaken. Instead, petitioner asserts, the
affectedemployeescalmlyacceptedtheirfateasthiswasamatterwhichtheyhadbeenpreviously

advisedwouldbeinevitable.[12]
Afterajudiciousreviewoftherecord,wefindnocompellingreasontooverturnthefindingsof
theSecretaryofLabor.
Wereaffirmthedoctrinethatconsideringtheirexpertiseintheirrespectivefields,factualfindings
ofadministrativeagenciessupportedbysubstantialevidenceareaccordedgreatrespectandbinds
thisCourt.[13]
TheSecretaryofLaborruled,thus:
xxxxxxxxx.
Anyactcommittedduringthependencyofthedisputethattendstogiverisetofurthercontentiousissuesor
increasethetensionsbetweenthepartiesshouldbeconsideredanactofexacerbation.Onemustlookattheact
itself,notonspeculativereactions.Amisplacedrecourseisnotneededtoprovethatadisputehasbeen
exacerbated.Forinstance,theUnioncouldnotbeexpectedtofileanothernoticeofstrike.Forthiswould
departfromitstheoryofthecasethatthelayoffissubsumedundertheinstantdispute,forwhichanoticeof
strikehadalreadybeenfiled.Ontheotherhand,toexpectviolentreactions,unrulybehavior,andanyother
chaoticordrasticactionfromtheUnionistoexpectittocommitactsdisruptiveofpublicorderoractsthat
maybeillegal.Underaregimeoflaws,legalremediestaketheplaceofviolentones.[14]
xxxxxxxxx.
Protestagainstthesubjectlayoffsneednotbeintheformofviolentactionoranyotherdrasticmeasure.Inthe
instantcasetheUnionregisteredtheirdissentbyswiftlyfilingamotionforaceaseanddesistorder.Contrary
topetitionersallegations,theUnionstronglycondemnedthelayoffsandthreatenedmassactioniftheSecretary
ofLaborfailstotimelyintervene:
xxxxxxxxx.
3.ThisunilateralactionofmanagementisablatantviolationoftheinjunctionofthisOfficeagainst
committingactswhichwouldexacerbatethedispute.UnlesssuchactisenjoinedtheUnionwillbecompelled
toresorttoitslegalrighttomassactionsandconcertedactivitiestoprotestandstopthesaidmanagement
action.ThismasslayoffisclearlyonewhichwouldresultinaveryseriouslabordisputeunlessthisOffice
swiftlyintervenes.[15]
xxxxxxxxx.
MetrolabandtheUnionwerestillintheprocessofresolvingtheirCBAdeadlockwhenpetitioner
implementedthesubjectlayoffs.Asaresult,motionsandoppositionswerefileddivertingtheparties
attention, delaying resolution of the bargaining deadlock and postponing the signing of their new
CBA,therebyaggravatingthewholeconflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94 rankandfile
employeeswastemporary,despitetherecallofsomeofthelaidoffworkers.
IfMetrolabintendedthelayoffofthe94workerstobetemporary,itshouldhaveplainlystatedso
in the notices it sent to the affected employees and the Department of Labor and Employment.
Considerthetenorofthepertinentportionsofthelayoffnoticetotheaffectedemployees:
xxxxxxxxx.
Dahilsamgabagaynaito,napilitanangatingkumpanyanamagsagawanglayoffngmgaempleyadosaRank
&Filedahilnabawasanangtrabahoatpuwestoparasakanila.Maramisaatinangkasamasalayoffdahil
walanangtrabahoparasakanila.Mahiraptanggapinangmgabagaynaitosubalitkailangannatinggawin
dahilhindikayangkumpanyaangmagbayadngsuweldokungangempleyadoaywalangtrabaho.Kungtayo
aypatuloynamagbabayadngsuweldo,mashihinaangatingkumpanyaatmasmaramiangmaaring
maapektuhan.
SapagpapatupadnglayoffsusundinnatinangLASTINFIRSTOUTpolicy.Angmgaempleyadongmay
pinakamaiklingserbisyosakumpanyaangunangmaaapektuhan.ItoaybataynarinsanakasaadsaatingCBA
naangmgahulingpumasoksakumpanyaangunangmasasamasalayoffkapagnagkaroonngganitongmga

kalagayan.
Angmgaempleyadonakasamasalayoffaynakalistasasulatnaito.AngumpisanglayoffaysaLunes,
Enero27.Hindinamunasilapapasoksakumpanya.MakukuhanilaangsuweldonilasaEnero30,1992.
Hindiponatinmatitiyakkunggaanokatagalanglayoffngunitangamingtinginaymatatagalanbago
magkaroonngdagdagnatrabaho.Dahildito,sinimulannanaminangisangRedundancyProgramsamga
supervisors.Nabawasanangmgapuwestoparasakanila,kayasilaaymawawalanngtrabahoatbibigyanna
ngredundancypay.[16](Italicsours.)
xxxxxxxxx.
WeagreewiththerulingoftheSecretaryofLabor,thus:
xxxxxxxxx.
...MIIinsiststhatthelayoffinquestionistemporarynotpermanent.ItthencitesInternationalHardware,Inc.
vs.NLRC,176SCRA256,inwhichtheSupremeCourtheldthatthe30daynoticerequiredunderArticle283
oftheLaborCodeneednotbecompliedwithiftheemployerhasnointentiontopermanentlysevere(sic)the
employmentrelationship.
Wearenotconvincedbythisargument.InternationalHardwareinvolvesacasewheretherehadbeena
reductionofworkload.Preciselytoavoidlayingofftheemployees,theemployerthereinoptedtogivethem
workonarotatingbasis.Thoughonalimitedscale,workwasavailable.ThiswastheSupremeCourtsbasis
forholdingthattherewasnointentiontopermanentlysevere(sic)theemploymentrelationship.
Here,thereisnocircumstanceatallfromwhichwecaninferanintentionfromMIInottoseverthe
employmentrelationshippermanently.Iftherewassuchanintention,MIIcouldhavemadeitveryclearinthe
noticesoflayoff.Butasitwere,thenoticesarecouchedinalanguagesouncertainthattheonlyconclusion
possibleisthepermanenttermination,notthecontinuation,oftheemploymentrelationship.
MIIalsoseekstoexcuseitselffromcompliancewiththe30daynoticewithatautology.Whileinsistingthat
thereisreallynobesttimetoannounceabadnews,(sic)italsoclaimsthatitbrokethebadnewsonlyon27
January1992becausehaditcompliedwiththe30daynotice,itcouldhavebrokenthebadnewson02January
1992,thefirstworkingdayoftheyear.Ifthereisreallynobesttimetoannounceabadnews(sic),itwouldnt
havematteredifthesamewasannouncedatthefirstworkingdayoftheyear.Thatway,MIIcouldhaveatleast
compliedwiththerequirementofthelaw.[17]
Thesecondissueraisedbypetitionermeritsourconsideration.
IntheassailedOmnibusResolution,LaborSecretaryConfesorclarifiedtheCBAprovisionson
closedshopandthescopeofthebargainingunitinthiswise:
xxxxxxxxx.
Appropriatenessofthebargainingunit.
xxxxxxxxx.
Exclusions.Inour14April1992resolution,weruledontheissueofexclusionasfollows:
Theseaside,wereconsiderourdenialofthemodificationswhichtheUnionproposestointroduceontheclose
shopprovision.Whilewenotethattheprovisionaspresentlywordedhasservedtherelationshipoftheparties
wellunderpreviousCBAs,theshiftinconstitutionalpolicytowardexpandingtherightofallworkerstoself
organizationshouldnowbeformallyrecognizedbytheparties,subjecttothefollowingexclusionsonly:
1.Managerialemployeesand
2.TheexecutivesecretariesofthePresident,ExecutiveVicePresident,VicePresident,VicePresidentfor
Sales,PersonnelManager,andDirectorforCorporatePlanningwhomayhaveaccesstovitallaborrelations
informationorwhomayotherwiseactinaconfidentialcapacitytopersonswhodetermineorformulate
managementpolicies.

TheprovisionsofArticleI(b)andAttachmentIofthe19881990CBAshallthusbemodifiedconsistently
withtheforegoing.
ArticleI(b)ofthe19881990CBAprovides:
b)CloseShop.AllQualifiedEmployeesmustjointheAssociationimmediatelyuponregularizationasa
conditionforcontinuedemployment.Thisprovisionshallnotapplyto:(i)managerialemployeeswhoare
excludedfromthescopeofthebargainingunit(ii)theauditorsandexecutivesecretariesofseniorexecutive
officers,suchas,thePresident,ExecutiveVicePresident,VicePresidentforFinance,HeadofLegal,Vice
PresidentforSales,whoareexcludedfrommembershipintheAssociationand(iii)thoseemployeeswhoare
referredtoinAttachmentIhereof,subject,however,totheapplicationoftheprovisionofArticleII,par.(b)
hereof.Consequently,theabovespecifiedemployeesarenotrequiredtojointheAssociationasaconditionfor
theircontinuedemployment.
Ontheotherhand,AttachmentIprovides:
ExclusionfromtheScopeoftheCloseShopProvision
ThefollowingpositionsintheBargainingUnitarenotcoveredbytheCloseShopprovisionofthe
CBA(ArticleI,par.b):
1.ExecutiveSecretariesofVicePresidents,orequivalentpositions.
2.ExecutiveSecretaryofthePersonnelManager,orequivalentpositions.
3.ExecutiveSecretaryoftheDirectorforCorporatePlanning,orequivalentpositions.
4.SomepersonnelinthePersonnelDepartment,EDPStaffatHeadOffice,PayrollStaffatHeadOffice,
AccountingDepartmentatHeadOffice,andBudgetStaff,whobecauseofthenatureoftheirdutiesand
responsibilitiesneednotjointheAssociationasaconditionfortheiremployment.
5.NewlyhiredsecretariesofBranchManagersandRegionalManagers.
BothMDDandMIIreadtheexclusionofmanagerialemployeesandexecutivesecretariesinour
14 April 1992 resolution as exclusion from the bargaining unit. They point out that managerial
employeesarelumpedunderoneclassificationwithexecutivesecretaries,sothatsincetheformer
areexcludedfromthebargainingunit,somustthelatterbelikewiseexcluded.
Thisreadingisobviouslycontrarytotheintentofour14April1992resolution.Byrecognizingthe
expanded scope of the right to selforganization, our intent was to delimit the types of employees
excludedfromthecloseshopprovision,notfromthebargainingunit,toexecutivesecretariesonly.
Otherwise,theconversionoftheexclusionaryprovisiontoonethatreferstothebargainingunitfrom
onethatmerelyreferstothecloseshopprovisionwouldeffectivelycurtailalltheorganizationalrights
ofexecutivesecretaries.
The exclusion of managerial employees, in accordance with law, must therefore still carry the
qualifying phrase from the bargaining unit in Article I (b)(i) of the 19881990 CBA. In the same
manner, the exclusion of executive secretaries should be read together with the qualifying phrase
are excluded from membership in the Association of the same Article and with the heading of
AttachmentI.ThelatterreferstoExclusionsfromScopeofCloseShopProvisionandprovidesthat
[t]hefollowingpositionsinBargainingUnitarenotcoveredbythecloseshopprovisionoftheCBA.
The issue of exclusion has different dimension in the case of MII. In an earlier motion for
clarification,MIIpointsoutthatithasdoneawaywiththepositionsofExecutiveVicePresident,Vice
PresidentforSales,andDirectorforCorporatePlanning.Thus,theforegoinggroupofexclusionsis
no longer appropriate in its present organizational structure. Nevertheless, there remain MII officer
positions for which there may be executive secretaries. These include the General Manager and
members of the Management Committee, specifically i) the Quality Assurance Manager ii) the
Product Development Manager iii) the Finance Director iv) the Management System Manager v)
the Human Resources Manager vi) the Marketing Director vii) the Engineering Manager viii) the
MaterialsManagerandix)theProductionManager.

xxxxxxxxx
Thebasisforthequestionedexclusions,itshouldbenoted,isnootherthanthepreviousCBA
betweenMIIandtheUnion.IfMIIhadundergoneanorganizationalrestructuringsincethen,thisisa
facttowhichwehaveneverbeenmadeprivy.Inanyevent,hadthisbeenotherwisetheresultwould
havebeenthesame.Torepeat,welimitedtheexclusionstorecognizetheexpandedscopeofthe
righttoselforganizationasembodiedintheConstitution.[18]
Metrolab, however, maintains that executive secretaries of the General Manager and the
executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance
Director, Management System Manager, Human Resources Manager, Marketing Director,
Engineering Manager, Materials Manager and Production Manager, who are all members of the
companysManagementCommitteeshouldnotonlybeexemptedfromtheclosedshopprovisionbut
shouldbeexcludedfrommembershipinthebargainingunitoftherankandfileemployeesaswellon
grounds that their executive secretaries are confidential employees, having access to vital labor
information.[19]
WeconcurwithMetrolab.
AlthoughArticle245oftheLaborCode[20]limitstheineligibilitytojoin,formandassistanylabor
organization to managerial employees, jurisprudence has extended this prohibition to confidential
employeesorthosewhobyreasonoftheirpositionsornatureofworkarerequiredtoassistoractin
a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly
confidentialrecords.
Therationalebehindtheexclusionofconfidentialemployeesfromthebargainingunitoftherank
andfileemployeesandtheirdisqualificationtojoinanylabororganizationwassuccinctlydiscussed
inPhilipsIndustrialDevelopmentv.NLRC:[21]
xxxxxxxxx.
OnthemainissueraisedbeforeUs,itisquiteobviousthatrespondentNLRCcommittedgraveabuseof
discretioninreversingthedecisionoftheExecutiveLaborArbiterandindecreeingthatPIDIsService
Engineers,SalesForce,divisionsecretaries,allStaffofGeneralManagement,PersonnelandIndustrial
RelationsDepartment,SecretariesofAudit,EDPandFinancialSystemsareincludedwithintherankandfile
bargainingunit.
Inthefirstplace,alltheseemployees,withtheexceptionoftheserviceengineersandthesalesforcepersonnel,
areconfidentialemployees.TheirclassificationassuchisnotseriouslydisputedbyPEOFFWthefive(5)
previousCBAsbetweenPIDIandPEOFFWexplicitlyconsideredthemasconfidentialemployees.Bythe
verynatureoftheirfunctions,theyassistandactinaconfidentialcapacityto,orhaveaccesstoconfidential
mattersof,personswhoexercisemanagerialfunctionsinthefieldoflaborrelations.Assuch,therationale
behindtheineligibilityofmanagerialemployeestoform,assistorjoinalaborunionequallyappliestothem.
InBulletinPublishingCo.,Inc.vs.Hon.AugustoSanchez,thisCourtelaboratedonthisrationale,
thus:
xxxTherationaleforthisinhibitionhasbeenstatedtobe,becauseifthesemanagerialemployeeswould
belongtoorbeaffiliatedwithaUnion,thelattermightnotbeassuredoftheirloyaltytotheUnioninviewof
evidentconflictofinterests.TheUnioncanalsobecomecompanydominatedwiththepresenceofmanagerial
employeesinUnionmembership.
In Golden Farms, Inc. vs. FerrerCalleja, this Court explicitly made this rationale applicable to
confidentialemployees:
Thisrationaleholdstruealsoforconfidentialemployeessuchasaccountingpersonnel,radioandtelegraph
operators,whohavingaccesstoconfidentialinformation,maybecomethesourceofundueadvantage.Said
employee(s)mayactasaspyorspiesofeitherpartytoacollectivebargainingagreement.Thisisspeciallytrue
inthepresentcasewherethepetitioningUnionisalreadythebargainingagentoftherankandfileemployees
intheestablishment.ToallowtheconfidentialemployeestojointheexistingUnionoftherankandfilewould
beinviolationofthetermsoftheCollectiveBargainingAgreementwhereinthiskindofemployeesbythe

natureoftheirfunctions/positionsareexpresslyexcluded.
xxxxxxxxx.
Similarly,inNationalAssociationofTradeUnionRepublicPlantersBankSupervisorsChapter
v.Torres[22]wedeclared:
xxxxxxxxx.
...AsregardstheotherclaimofrespondentBankthatBranchManagers/OICs,CashiersandControllersare
confidentialemployees,havingcontrol,custodyand/oraccesstoconfidentialmatters,e.g.,thebranchscash
position,statementsoffinancialcondition,vaultcombination,cashcodesfortelegraphictransfers,demand
draftsandothernegotiableinstruments,pursuanttoSec.1166.4oftheCentralBankManualregardingjoint
custody,thisclaimisnotevendisputedbypetitioner.Aconfidentialemployeeisoneentrustedwithconfidence
ondelicatematters,orwiththecustody,handling,orcareandprotectionoftheemployersproperty.WhileArt.
245oftheLaborCodesinglesoutmanagerialemployeesasineligibletojoin,assistorformanylabor
organization,underthedoctrineofnecessary,implication,confidentialemployeesaresimilarlydisqualified...
.
xxxxxxxxx.
...(I)nthecollectivebargainingprocess,managerialemployeesaresupposedtobeonthesideoftheemployer,
toactasitsrepresentatives,andtoseetoitthatitsinterestarewellprotected.Theemployerisnotassuredof
suchprotectioniftheseemployeesthemselvesareunionmembers.Collectivebargaininginsuchasituation
canbecomeonesided.ItisthesamereasonthatimpelledthisCourttoconsiderthepositionofconfidential
employeesasincludedinthedisqualificationfoundinArt.245asifthedisqualificationofconfidential
employeeswerewrittenintheprovision.Ifconfidentialemployeescouldunionizeinordertobargainfor
advantagesforthemselves,thentheycouldbegovernedbytheirownmotivesratherthantheinterestofthe
employers.Moreover,unionizationofconfidentialemployeesforthepurposeofcollectivebargainingwould
meantheextensionofthelawtopersonsorindividualswhoaresupposedtoactintheinterestofthe
employers.Itisnotfarfetchedthatinthecourseofcollectivebargaining,theymightjeopardizethatinterest
whichtheyaredutyboundtoprotect....
xxxxxxxxx.
AndinthelatestcaseofPier8Arrastre&StevedoringServices,Inc.vs.RoldanConfesor,[23]we
ruledthat:
xxxxxxxxx.
Upontheotherhand,legalsecretariesareneithermanagersnorsupervisors.Theirworkisbasicallyroutinary
andclerical.However,theyshouldbedifferentiatedfromrankandfileemployeesbecausetheyaretasked
with,amongothers,thetypingoflegaldocuments,memorandaandcorrespondence,thekeepingofrecordsand
files,thegivingofandreceivingnotices,andsuchotherdutiesasrequiredbythelegalpersonnelofthe
corporation.Legalsecretariesthereforefallunderthecategoryofconfidentialemployees....
xxxxxxxxx.
Wethusholdthatpublicrespondentactedwithgraveabuseofdiscretioninnotexcludingthefourforemenand
legalsecretaryfromthebargainingunitcomposedofrankandfileemployees.
xxxxxxxxx.
Inthecaseatbench,theUniondoesnotdisagreewithpetitionerthattheexecutivesecretariesareconfidential
employees.Ithowever,makesthefollowingcontentions:
xxxxxxxxx.
TherewouldbenodangerofcompanydominationoftheUnionsincetheconfidentialemployeeswouldnotbe
membersofandwouldnotparticipateinthedecisionmakingprocessesoftheUnion.

Neitherwouldtherebeadangerofespionagesincetheconfidentialemployeeswouldnothaveanyconflictof
interest,notbeingmembersoftheUnion.Inanycase,thereisalwaysthedangerthatanyemployeewouldleak
managementsecretstotheUnionoutofsympathyforhisfellowrankandfilerevenifhewerenotamemberof
theunionnorthebargainingunit.
Confidentialemployeesarerankandfileemployeesandthey,likealltheotherrankandfileemployees,should
begrantedthebenefitsoftheCollectiveBargainingAgreement.Thereisnovalidbasisfordiscriminating
againstthem.ThemandateoftheConstitutionandtheLaborCode,primarilyofprotectiontoLabor,compels
suchconclusion.[24]
xxxxxxxxx.
The Unions assurances fail to convince. The dangers sought to be prevented, particularly the
threat of conflict of interest and espionage, are not eliminated by nonmembership of Metrolabs
executivesecretariesorconfidentialemployeesintheUnion.Formingpartofthebargainingunit,the
executive secretaries stand to benefit from any agreement executed between the Union and
Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal interests and
their duty as confidential employees to act for and in behalf of Metrolab. They do not have to be
unionmemberstoaffectorinfluenceeitherside.
Finally, confidential employees cannot be classified as rank and file. As previously discussed,
the nature of employment of confidential employees is quite distinct from the rank and file, thus,
warrantingaseparatecategory.Excludingconfidentialemployeesfromtherankandfilebargaining
unit,therefore,isnottantamounttodiscrimination.
WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of
public respondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby
MODIFIEDtotheextentthatexecutivesecretariesofpetitionerMetrolabsGeneralManagerandthe
executive secretaries of the members of its Management Committee are excluded from the
bargainingunitofpetitionersrankandfileemployees.
SOORDERED.
Padilla,Bellosillo,Vitug,andHermosisima,Jr.,JJ.,concur.
[1]Rollo,p.74.
[2]Id.,at202204.
[3]Id.,at89.
[4]
[5]Id.,at303.
[6]Id.,at236241.
[7]Id.,at7071.
* Metrolab submits that the issue in the instant petition for certiorari is limited to the determination of whether or not the

SecretaryofLaborgravelyabusedherdiscretioninrulingthatthelayoffofits94workersexacerbatedtheirlabor
dispute with the Union. Metrolab underscores that the basis for the said layoff has never been placed in issue.
(Rollo,pp.327328.)
Inthesamemanner,MetrolabprefatorilydeclaredthatitdoesnotdisputetheSecretaryofLaborscertificationtotheNLRC
of the legality (or illegality) of the second layoff of Metrolabs 73 rank and file workers on grounds of redundancy
(Rollo,pp.1112).InitsConsolidatedReply,Metrolabstates,thus:
5.0. Moreover, the redundancy program of October 1992 is not an issue in the present petition. The assailed Omnibus
Order,innouncertainterms,orderedthatthismatterbebroughtbeforetheNationalLaborRelationsCommission
(NLRC)foradjudication(PleaseseeAnnexAiofthePetition).Petitionerhereindoesnotquestionthesaidpartof
the Omnibus Resolution in the present petition. The time for the same is not yet ripe, as the NLRC still has to
pass judgment upon the facts surrounding the redundancy program. As of this writing, the said redundancy
program is presently being litigated before the Arbitration Branch of the NLRC in NLRCNCR Case No. 0005
0332593entitledMetroDrugCorporationEmployeesAssociationFFWv.MetrolabIndustries,Inc.,etal.before
LaborArbiterCornelioLinsangan.(Rollo,p.330.)

[8]Id.,at13.
[9]RadioCommunicationsofthePhilippines,Inc.v.NLRC,221SCRA782(1993)Corralv.NLRC,221SCRA693(1993)

Rubberworld(Phils.),Inc.v.NLRC,175SCRA450(1989).
[10]225SCRA301(1993).
[11]Rollo,p.46.
[12]Id.,at335.
[13]Association of Marine Officers & Seamen of Reyes & Lim Co. v. Laguesma, 239 SCRA 460 (1994) Maya Farms

EmployeesOrganizationv.NLRC,239SCRA508(1994)Rabagov.NLRC,200SCRA158(1991)PanPacific
IndustrialSales,Co.,Inc.v.NLRC,194SCRA633(1991).
[14]Rollo,p.57.
[15]Id.,at202204228234UrgentMotiontoResolveUnionsMotiondated27January1992,Folder4,OriginalRecord.
[16]Rollo,p.198.
[17]Id.,at5859.
[18]Rollo,pp.5963.
[19]Id.,at3132.
[20]

Art. 245. Labor Code. 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
employeesshallnotbeeligibleformembershipinalabororganizationoftherankandfileemployeesbutmayjoin,
assistorformseparatelabororganizationsoftheirown.

[21]210SCRA339(1992).
[22]239SCRA546(1994).
[23]241SCRA294(1995).
[24]Rollo,pp.192193.