Joseph |1

Legend/note: [ ] – texts enclosed in bracket are provided by me for better understanding and notes.
The winner of the case is indicated by a star () above parties’ name.
Dialog boxes are used to indicate the contention of the party where it points at.


Filoil Refinery corporation –vs– Filoil Supervisory & Confidential Employees Assoc & Court of Industrial Relations
46 SCRA 512 [1972] (J. Teehankee)
Facts: *Law in effect: (RA 875) Industrial peace act (PD442 or the labor code took effect 1974)
Filoil Supervisory & Confidential Employees Assoc (FSCA) – legitimate labor association
[Petitioner] [filed petition for certification as sole and exclusive collective bargaining agent
of all of the supervisory and confidential employees]
Motion to dismiss; supervisors are not employees, since they
are part of management, they do not have the right to
bargain collectively. To allow them to bargain collectively
would be tantamount to management bargaining with itself.
 The then Court of Industrial Relations (CIA) and NLRB (National labor relations board) ruled in
favor of FSCA.

Issue: Whether or not (WON) supervisors form part of the management and are not considered as
employees entitled to bargain collectively.
Held: Supervisor has a dual status as a representative of the management and as an employee.

“Section 3 of the Industrial Peace Act explicitly provides that ‘employees’ – and this includes
supervisors – ‘shall have the right to self-organization, and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining and other mutual aid
or protection’ and that ‘individuals employed as supervisors x x x may form separate
organizations of their own’. Indeed, it is well settled that ‘in relation to his employer’, a foreman
or supervisor ‘is an employee within the meaning of the Act’ x x x For this reason, supervisors
are entitled to engage in union activitites and any discrimination against them by reason thereof
constitutes an unfair labor practice.”

“Supervisors and confidential employees, even though they may exercise the prerogatives of
management as regards the rank and file employees are indeed employees in relation to their
employer, the company which is owned by the stockholders and bondholders (capital) and should
therefore by entitled under the law to bargain collectively with the top management with respect
to their terms and conditions of employment”.


National Sugar Refineries Corporation (NASU-REFCO) –vs– NLRC and NBSR Supervisory Union (PACIWU) TUCP.
220 SCRA 452 [1993] (J. Regalado)
Facts: *Members of the union are supervisory employees.
1988 - NASU-REFCO implemented a Job Evaluation (JE) program to adjust their wages & benefits.
Prior to this, the members of PACIWU used to be paid OT, rest and holiday pay.
1990 – PACIWU filed a complaint w/ the exec. Labor arbiter for non-payment of overtime, rest
day, and holiday pay (allegedly amounting to diminution of benefits – violation of art100)

NLRC and Labor Arbiter ruled in favour of the union.

Issue: WON supervisory employees (as defined in Art 212(m)) should be considered as officers or
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members of the managerial staff under Art.82 (under conditions of employment), and hence are
not entitled to overtime, rest day and holiday pay.
Held: NOT entitled to OT, rest day, and holiday pay.
[The NLRC in its ruling adopted the definition in Art 212 (m):]

Art 212. (m) “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. 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 off the above definitions are considered rank-
and-file employees for the purposes of this Book.”

“The distinction made by NLRC on the basis of WON the union members are managerial employees,
to determine the latter’s entitlement to the questioned benefits, is misplaced and inappropriate. x x
x Hence, to distinguish them from a managerial employee, as defined either under Articles 82 or
212(m) of the labor code, is puerile and inefficacious. The controversy actually involved here seeks a
determination of whether or not these supervisory employees ought to be considered as offiers or
members of the managerial staff.”

[The SC, in sustaining the contention of the petitioner, mentioned it in the case]
“x x x the definition of managerial and supervisory employees under Article 212(m) should be made
to apply only to the provisions on Labor Relations, while the right of the said employees to the
questioned benefits should be considered in the light of the meaning of a managerial employee and
of the officers or members of the managerial staff, as contemplated under Article 82 of the code and
Section 2, Rule I, Book III of the implementing rules. In other words, for purposes of forming and
joining unions, certification elections, collective bargaining, and so forth, the union members are
supervisory employees. In terms of working conditions and rest periods and entitlement to the
questioned benefits, they are not entitled thereto.”

[The SC looked at the defined duties and functions defined by the JE program, and
compared it to the existing law/implementing rules]

The members of the respondent union discharge duties and responsibilities which ineluctably
qualify them as officers or members of the managerial staff (as defined in the Rules to implement
the labor code (Book III, Rule I, Sec 2). They should be considered as officers or members of the
managerial staff and are, therefore, exempt from the coverage of Article 82, which provides:

Art 82. Coverage. – “The provisions of this title shall apply to employees in all establishments
and undertakings whether for profit or not, but not to government employees, managerial
employees, field personnel, x x x
As used herein, ‘managerial employees’ refer to those whose primary duty consists
of the management of the establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members to the managerial staff”.

[the term, “officers or members to the managerial staff” was elaborated in the Rules to
implement the labor code]

Perforce, they are not entitled to OT, rest day, and holiday pay.
 Joseph |3


Philippine Appliance Corporation, (PHILACOR) –vs– The hon. Bienvenido E. Laguesma, in his capacity as
Undersecretary of Labor & Employment, Genuine Labor Organization Or Workers in Hotel, Restaurant & Allied
Industries (GLOWHRAIN) and DOLE Reginal office, NCR.
226 SCRA 730 [1993] J. Quiason
Facts: The following are the nature of the job of the petitioners:
 In filing/charging of overtime, the petitioners are guided by the Standard Procedure on
Overtime/Charging. They did not participate in its formulation.
 They interview and determine, from a set of applicants recommended by the personnel
dept, who should be hired for a particular job.*
 As to the power to discipline, suspend and discharge employees, they merely enforce the
company rules and regulations against erring employees. It is the corporate legal service
which actually conducts the formal investigation...
 As to the power to assign or transfer employees, the petitioning employees execute the
shifting rotation made by the plant manager.

They had requested for a “certification election” of all supervisory employees of PHILACOR. This
was opposed by the employer on the ground that the petitioners were managers.

Issue: WON the petitioning employees are supervisory employees eligible to form a supervisory union.
Held: YES.

“Under the old Industrial Peace Act (RA.875):

The Labor Code was further amended by RA6715. Sec 4 thereof amended Art 212(m), which now
contains separate definitions for managerial and supervisory employees, to wit:

“Sec 2. (k) ‘Supervisor’ means any person having authority in the interest of an employer, to
hire, transfer, suspend, lay-off, recall, discharge, direct them, and to adjust their grievances,
or effectively to recommend such acts if, in connection with the foregoing, the exercise of
such authority is not of a merely routinary or clerical nature by requires the use of
independent judgment.”

With the enactment of P.D. 442, the term “supervisor” was replaced by the term “managerial
employee”. The labor code was further amended by RA6715, which amended Art 212(m) to read:

Art 212. (m) “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. 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. x x x.”

The test of “supervisory” or “managerial status” depends on whether a person possesses

authority to act in the interest of his employer in the manner specified in Art 212 (m) of the labor
code and Rule 1(o) of Book V 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 before us, are subject to evaluation, review
and final action by the department heads and other higher executives of the company, the same,
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although not present, are not effective and not an exercise of independent judgment as required
by law.”

[The four bulleted facts above were used by the SC as basis to say that the petitioning employees
merely recommend the implementation and management of policies or the discipline or dismissal
of subordinates. As to bullet 2 it was mentioned...]

*The said interview merely involves the accomplishment of an interview rating form x x x The
ultimate power to hire still rests with the Manager of the Personnel Administration.

[OBITER but worth quoting]: The fact that their work descriptions are either managers or
supervisors is of no moment considering that it is the nature of their functions and not the said
nomenclatures of titles of their jobs which determines their statuses.
 Joseph |5


Toyota Motor Philippines Corp. (TMPC)–vs– TMPC labor union (TMPCLU) and the secretary of DOLE
268 SCRA 573 [1997] J. Kapunan
Facts: TMPCLU filed a petition for certification election with DOLE. It is composed of 42 members, with
27 supervisory employees in the supervisory positions.
DOLE ruled in favour of the union. Herein petitioner opposed.

Grounds: 1. Union was in the process of registration and has

no legal personality to file it as it was not a legitimate labor
org. as of the date of filing. [not relevant]
2. The union was composed of both rank-and-file and
supervisory employees in violation of law (Art. 245)

Issue: Should the petition for certification election be granted?

Held: NO.

Article 245 provides:

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 a separate labor organizations of their own.

[rationale for the law]:

1. “In determining the labor organization which represents the interests of the workforce,
those interests must be, as far as reasonably possible, homogeneous, so as to genuinely
reach the concerns of the individual members of a labor organization.”
2. “A bargaining unit is the 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.”
3. “Such [supervisory] 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 fund unity or
mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and
supervisory employees.”

The fundamental test of bargaining units’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.

As respondent’s union’s membership list contains at least 27 supervisory employees, the union
could not, prior to purging itself of supervisory employee members, attain the status of a
legitimate labor organization. Not being one, it cannot possess the prerequisite personality to file
a petition for certification election.