Law and Definition of Appropriate Bargaining Unit When negotiations for a new CBA were held on June 1995,
or a new CBA were held on June 1995, petitioner ISAE, a
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner,
vs.
HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and
Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting
Secretary of Labor and Employment; DR. BRIAN MACCAULEY in his capacity as
the Superintendent of International School-Manila; and INTERNATIONAL
SCHOOL, INC., respondents.
G.R. No. 128845.
June 1, 2000
Ponente: KAPUNAN, J. :
FACTS
Private respondent International School, Inc. (School), pursuant to PD 732, is a
domestic educational institution established primarily for dependents of foreign
diplomatic personnel and other temporary residents. The decree authorizes the
School to employ its own teaching and management personnel selected by it
either locally or abroad, from Philippine or other nationalities, such personnel
being exempt from otherwise applicable laws and regulations attending their
employment, except laws that have been or will be enacted for the protection of
employees. School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires.
The School grants foreign-hires certain benefits not accorded local-hires. Foreign-
hires are also paid a salary rate 25% more than local-hires. These benefits were
given by the school due to the following reasons: (a) the "dislocation factor" and
(b) limited tenure
legitimate labor union and the collective bargaining representative of all faculty
members of the School, contested the difference in salary rates between foreign
and local-hires. This issue, as well as the question of whether foreign-hires should
be included in the appropriate bargaining unit, eventually caused a deadlock
between the parties.
ISAE filed a notice of strike. Due to the failure to reach a compromise in the
National Conciliation and Mediation Board (NCMB), the matter reached the DOLE
which favored the School. Hence this petition
ISSUE/s of the CASE
1. W/N the foreign-hires do not belong to the same bargaining unit as the local-
hires NO
ACTION OF THE COURT
NCMB: no compromise was reached
DOLE : ordered to uphold the practice of respondent School
SC: granted petition of the union in terms of the salaries
COURT RATIONALE ON THE ABOVE CASE
The foreign-hires do not belong to the same bargaining unit as the local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, consistent with equity to the
employer indicate to be the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law."[29]
The factors in determining the appropriate collective bargaining unit are (1) the
will of the employees (Globe Doctrine); (2) affinity and unity of the employees'
interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status.The
basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights.
It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also shows that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires enjoy security of
tenure. Although foreign-hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their
status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.
SUPREME COURT RULING
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED
IN PART. The Orders of the Secretary of Labor and Employment dated June 10,
1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they
uphold the practice of respondent School of according foreign-hires higher
salaries than local-hires.
SO ORDERED.
STA. LUCIA EAST COMMERCIAL CORPORATION vs. HON. SECRETARY OF LABOR
AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORPORATION
WORKERS ASSOCIATION (CLUP LOCAL CHAPTER)
G.R. No. 162355 August 14, 2009
CARPIO, J
Facts:
On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition
for certification election among the regular rank-and-file employees of Sta. Lucia
East Commercial Corporation (THE CORPORATION)and its Affiliates. The affiliate
companies included in the petition were SLE Commercial, SLE Department Store,
SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and
Essentials. On August 2001, Med-Arbiter Bactin ordered the dismissal of the
petition due to inappropriateness of the bargaining unit. Later CLUP in its local
chapter under THECORPORATION reorganized itself and re-registered as CLUP-Sta.
Lucia East Commercial Corporation Workers Association (herein THEUNION),
limiting its membership to the rank-and-file employees of Sta. Lucia East
Commercial Corporation. On the same date, THE UNION filed the instant petition
for certification election. It claimed that no certification election has been held
among them within the last 12months prior to the filing of the petition, and while
there is another union registered covering the same employees, namely
Samahang Manggawa sa SLEC [SMSLEC], it has not been recognized as the
exclusive bargaining agent of [THE CORPORATIONs] employees. On November
2001, THE CORPORATION or THECORPORATION filed a motion to dismiss the
petition. It averred that it has voluntarily recognized SMSLEC as the exclusive
bargaining agent of its regular rank-and-file employees, and that collective
bargaining negotiations already commenced between them. THECORPORATION
argued that the petition should be dismissed for violating the one year and
negotiation bar rules under the Omnibus Rules Implementing the Labor Code.The
CBA between SMSLEC and the corporation was ratified by its rank-and-file
employees and registered with DOLE. In the meantime, on December 2001, the
union filed its Opposition to THE CORPORATIONS Motion to Dismiss questioning
the validity of the voluntary recognition of [SMSLEC] by [THECORPORATION] and
their consequent negotiations and execution of a CBA. According to [THE UNION],
the voluntary recognition of [SMSLEC] by [THE CORPORATION] violated the
requirements for voluntary recognition, i.e., non-existence of another labor
organization in the same bargaining unit. It pointed out that the time of the
voluntary recognition on 20 July2001, appellants registration which covers the
same group of employees covered by Samahang Manggagawa sa Sta. Lucia East
Commercial, was existing and has neither been cancelled or abandoned.
Actions of the Court:
The Med-Arbiters Ruling
Med-Arbiter Bactin dismissed THE UNIONs petition for direct certification on the
ground of contract bar rule. The prior voluntary recognition of SMSLEC and the
CBA between THE CORPORATION and SMSLEC bars the filing of THE UNIONs
petition for direct certification
The Ruling of the Secretary of Labor andEmployment
The Secretary held that the subsequent negotiations and registration of a CBA
executed by THE CORPORATION with SMSLEC could not bar THE UNIONs petition.
THE UNION constituted a registered labor organization atthe time of THE
CORPORATIONs voluntary recognition of SMSLEC.
The appellate court affirmed the ruling of the Secretary.
Issue:
Whether THE CORPORATIONs voluntary recognition of SMSLEC was done while a
legitimate labor organization was in existence in the bargaining unit.
Petition has no merit.
Ratio:
Article 212(g) of the Labor Code defines a labor organization as any union or
association of employees which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers concerning terms and
conditions of employment. Upon compliance with all the documentary
requirements, the Regional Office or Bureau shall issue in favor of the applicant
labor organization a certificate indicating that it is included in the roster of
legitimate labor organizations.[6] Any applicant labor organization shall acquire
legal personality and shall be entitled to the rights and privileges granted by law
to legitimate labor organizations upon issuance of the certificate of registration.
[7]
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from,
but related to, the concept of a bargaining unit. We explained the concept of a
bargaining unit in San Miguel Corporation v. Laguesma,[8]where we stated that:
A bargaining unit is a group of employees of a given employer, comprised of all
or less than all of the entire body of employees, consistent with equity to the
employer, indicated to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law.
The fundamental factors in determining the appropriate collective bargaining unit
are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the
employees interest, such as substantial similarity of work and duties, or similarity
of compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status.
Contrary to petitioners assertion, this Court has categorically ruled that the
existence of a prior collective bargaining history is neither decisive nor conclusive
in the determination of what constitutes an appropriate bargaining unit.
LUP-SLECC and its Affiliates Workers Unions initial problem was that they
constituted a legitimate labor organization representing a non-appropriate
bargaining unit. However, CLUP-SLECC and its Affiliates Workers Union
subsequently re-registered as CLUP-SLECCWA, limiting its members to the rank-
and-file of SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers
Union was a legitimate labor organization at the time of SLECCs voluntary
recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether
CLUP-SLECC and its Affiliates Workers Union represented an appropriate
bargaining unit.
The inclusion in the union of disqualified employees is not among the grounds for
cancellation of registration, unless such inclusion is due to misrepresentation,
false statement or fraud under the circumstances enumerated in Sections (a) to
(c) of Article 239 of the Labor Code.[10] THUS, CLUP-SLECC AND ITS AFFILIATES
WORKERS UNION, HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF
REGISTRATION, SHOULD BE CONSIDERED AS HAVING ACQUIRED JURIDICAL
PERSONALITY WHICH MAY NOT BE ATTACKED COLLATERALLY. THE PROPER
PROCEDURE FOR SLECC IS TO FILE A PETITION FOR CANCELLATION OF
CERTIFICATE OF REGISTRATION[11]OF CLUP-SLECC AND ITS AFFILIATES WORKERS
UNION AND NOT TO IMMEDIATELY COMMENCE VOLUNTARY RECOGNITION
PROCEEDINGS WITH SMSLEC.
The employer may voluntarily recognize the representation status of a union in
unorganized establishments.[12] SLECC WAS NOT AN UNORGANIZED
ESTABLISHMENT WHEN IT VOLUNTARILY RECOGNIZED SMSLEC AS ITS EXCLUSIVE
BARGAINING REPRESENTATIVE ON 20 JULY 2001. CLUP-SLECC AND ITS AFFILIATES
WORKERS UNION FILED A PETITION FOR CERTIFICATION ELECTION ON 27
FEBRUARY 2001 AND THIS PETITION REMAINED PENDING AS OF 20 JULY 2001.
THUS, SLECCS VOLUNTARY RECOGNITION OF SMSLEC ON 20 JULY 2001, THE
SUBSEQUENT NEGOTIATIONS AND RESULTING REGISTRATION OF A CBA EXECUTED
BY SLECC AND SMSLEC ARE VOID AND CANNOT BAR CLUP-SLECCWAS PRESENT
PETITION FOR CERTIFICATION ELECTION.
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14
August 2003 as well as the Resolution promulgated on 24 February 2004 of the
Court of Appeals in CA-G.R. SP No. 77015.
SO ORDERED.
University of the Philippines v. Ferrer-Calleja (1992)
Narvasa, C.J.
Facts:
The Organization of Non-Academic Working Personnel of UP (ONAPUP) filed a
petition for certification election with the BLR. It claimed to have a membership of
3,236 membersmore than 33% of the 9,617 persons constituting the non-
academic personnel of four UP campuses (Diliman, Manila, Los Baos, and
Visayas).
Another labor union, the All UP Workers Union (All UP) filed a motion for
intervention. 1. It alleged that its membership covers both academic and non-
academic personnel, and that it aims to unite all rank-and-file employees in one
union. 2. It assented to the holding of the certification election provided
the appropriate organizational unit was first clearly defined. 3. It observed in
this connection that the Research, Extension and Professorial Staff (REPS), who
are academic non-teaching personnel, should not be deemed part of the
organizational unit.
UPs General Counsel was of the stand that there should be two unionsone for
the non-academic/administrative, and one for the academic personnel.
BLR Director Calleja held that the appropriate organizational unit should embrace
all the regular rank-and-file employees. No evidence to justify the grouping of
non-academic personnel separate from academic personnel. The Director quoted
the pertinent provisions of EO 180 and its IRRs:
Section 9. The appropriate organizational unit shall be the employer unit
consisting of rank-and-file employees, unless circumstances otherwise require.
Sec. 1, Rule IV. For purposes of registration, an appropriate organizational unit
may refer to:
xxx
d. State universities or colleges, government-owned or controlled corporations
with original charters.
General intent of the EO is not to fragmentize the employer unit, as can be
gleaned from the definition of the term accredited employees organization,
which refers to:
x x x a registered organization of the rank-and-file employees as defined in these
rules recognized to negotiate for the employees in an organizational unit headed
by an officer with sufficient authority to bind the agency, such as x x x state
colleges and universities.
She thus ordered the holding of a certification among all rank-and-file employees,
teaching and non-teaching.
At the pre-election conference, UP sought clarification of the term rank-and-file.
It claimed that there were some teaching and non-teaching employees whose
functions were in fact managerial and policy-determining. It sought the exclusion
of high-level employees, pursuant to Sec. 3 of EO 180:
SEC. 3. High-level employees whose functions are normally considered as policy-
making or managerial or whose duties are of a highly confidential nature shall not
be eligible to join the organization of rank-and file government employees;
It claims that the following should not be considered rank-and-file:
1. Those with the rank of Assistant Professor or higher;
2. Those administrative employees holding positions Grade 18 or higher.
The University claims that these employees perform supervisory functions and are
vested with effective recommendatory powers. As to the professors, UP notes
that these academic staff are members of the University Council, a policy-making
body. ONAPUP did not oppose UPs classification. All UP remained firm in its
stance to unite all the rank-and-file employees under a single organizational unit.
BLR Director Calleja (Second Order): Declared that the professors are rank-and-file
employees.
A careful perusal of the University Code shows that the policy- making powers of
the Council are limited to academic matters, namely, prescribing courses of study
and rules of discipline, fixing student admission and graduation requirements,
recommending to the Board of Regents the conferment of degrees, and
disciplinary power over students. On the other hand, the policies referred to in
the definition of high level employees refers to labor-related policies like hiring,
firing, discipline, labor standards and benefits, and terms and conditions of
employment.
Issues:
1. Are the professors, associate professors and assistant professors high-
level employees? NO.
2. Should the academic employees comprise a bargaining unit separate and
distinct from that of the non-academic employees of UP? YES.
Ratio:
1. In light of Executive Order No. 180 and its implementing rules, as well as
the University's charter and relevant regulations, the professors, associate
professors and assistant professors (hereafter simply referred to as
professors) cannot be considered as exercising such managerial or highly
confidential functions as would justify their being categorized as "high-
level employees" of the institution.
The Academic Personnel Committees, through which the professors
supposedly exercise managerial functions, were constituted "in order to
foster greater involvement of the faculty and other academic personnel in
appointments, promotions, and other personnel matters that directly
affect them." 14 Academic Personnel Committees at the departmental
and college levels were organized "consistent with, and demonstrative of
the very idea of consulting the faculty and other academic personnel on
matters directly affecting them" and to allow "flexibility in the
determination of guidelines peculiar to a particular department or
college." 15
he departmental and college academic personnel committees' functions are
purely recommendatory in nature, subject to review and evaluation by the
University Academic Personnel Board. In Franklin Baker Company of the
Philippines vs. Trajano, 20 this Court reiterated the principle laid down in National
Merchandising Corp. vs. Court of Industrial Relations, 21 that the power to
recommend, in order to qualify an employee as a supervisor or managerial
employee "must not only be effective but the exercise of such authority should
not be merely of a routinary or clerical nature but should require the use of
independent judgment." Where such recommendatory powers, as in the case at
bar, are subject to evaluation, review and final action by the department heads
and other higher executives of the company, the same, although present, are not
effective and not an exercise of independent judgment as required by law.
Significantly, the personnel actions that may be recommended by the
departmental and college academic personnel committees must conform with the
general guidelines drawn up by the university personnel academic committee.
This being the case, the members of the departmental and college academic
personnel committees are not unlike the chiefs of divisions and sections of the
National Waterworks and Sewerage Authority whom this Court considered as
rank-and-file employees in National Waterworks & Sewerage Authority vs. NWSA
Consolidated Unions, 22 because "given ready policies to execute and standard
practices to observe for their execution, . . . they have little freedom of action, as
their main function is merely to carry out the company's orders, plans and
policies."
The power or prerogative pertaining to a high-level employee "to effectively
recommend such managerial actions, to formulate or execute management
policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss,
assign or discipline employees" 23 is exercised to a certain degree by the
university academic personnel board/committees and ultimately by the Board of
Regents in accordance with Section 6 of the University
Charter, 24 thus:
(e) To appoint, on the recommendation of the President of the University,
professors, instructors, lecturers and other employees of the University; to fix
their compensation, hours of service, and such other duties and conditions as it
may deem proper; to grant them in its discretion leave of absence under such
regulations as it may promulgate, any other provision of law to the contrary
notwithstanding, and to remove them for cause after investigation and hearing
shall have been had.
2. A "bargaining unit" has been defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which
the collective interest of all the employees, consistent with equity to the
employer, indicate to be the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law. 28
Our labor laws do not however provide the criteria for determining the proper
collective bargaining unit. Section 12 of the old law, Republic Act No. 875
otherwise known as the Industrial Peace Act, simply reads as follows: 29
Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations.
The labor organization designated or selected for the purpose of collective
bargaining by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of all the employees in such
unit for the purpose of collective bargaining in respect to rates of pay, wages,
hours of employment, or other conditions of employment; Provided, That any
individual employee or group of employees shall have the right at any time to
present grievances to their employer.
When first confronted with the task of determining the proper collective
bargaining unit in a particular controversy, the Court had perforce to rely on
American jurisprudence. In Democratic Labor Association vs. Cebu Stevedoring
Company, Inc., decided on February 28, 1958, 31 the Court observed that "the
issue of how to determine the proper collective bargaining unit and what unit
would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the
matter abound . . (to which resort may be had) considering that our present
Magna Carta has been patterned after the American law on the subject." Said the
Court:
. . . Under these precedents, there are various factors which must be satisfied and
considered in determining the proper constituency of a bargaining unit. No one
particular factor is itself decisive of the determination. The weight accorded to
any particular factor varies in accordance with the particular question or
questions that may arise in a given case. What are these factors? Rothenberg
mentions a good number, but the most pertinent to our case are: (1) will of the
employees (Globe Doctrine); (2) affinity and unit of employees' interest, such as
substantial similarity of work and duties, or similarity of compensation and
working conditions; (3) prior collective bargaining history; and (4) employment
status, such as temporary, seasonal probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining
unit is given in the 10th Annual Report of the National Labor Relations Board
wherein it is emphasized that the factors which said board may consider and
weigh in fixing appropriate units are: the history, extent and type of organization
of employees; the history of their collective bargaining; the history, extent and
type of organization of employees in other plants of the same employer, or other
employers in the same industry; the skill, wages, work, and working conditions of
the employees; the desires of the employees; the eligibility of the employees for
membership in the union or unions involved; and the relationship between the
unit or units proposed and the employer's organization, management, and
operation. . . .
. . In said report, it is likewise emphasized that the basic test in determining the
appropriate bargaining unit is that a unit, to be appropriate, must affect a
grouping of employees who have substantial, mutual interests in wages, hours,
working conditions and other subjects of collective bargaining (citing Smith on
Labor Laws, 316-317; Francisco, Labor Laws, 162). . . .
instructors who may be judges or government executives and research,
extension and professorial staff. 33 Not much reflection is needed to perceive that
the community or mutuality of interests which justifies the formation of a single
collective bargaining unit is wanting between the academic and non-academic
personnel of the university. It would seem obvious that teachers would find very
little in common with the University clerks and other non-academic employees as
regards responsibilities and functions, working conditions, compensation rates,
social life and interests, skills and intellectual pursuits, cultural activities, etc. On
the contrary, the dichotomy of interests, the dissimilarity in the nature of the
work and duties as well as in the compensation and working conditions of the
academic and non-academic personnel dictate the separation of these two
categories of employees for purposes of collective bargaining. The formation of
two separate bargaining units, the first consisting of the rank-and-file non-
academic personnel, and the second, of the rank-and-file academic employees, is
the set-up that will best assure to all the employees the exercise of their collective
bargaining rights. These special circumstances, i.e., the dichotomy of interests and
concerns as well as the dissimilarity in the nature and conditions of work, wages
and compensation between the academic and non-academic personnel, bring the
case at bar within the exception contemplated in Section 9 of Executive Order No.
180. It was grave abuse of discretion on the part of the Labor Relations Director to
have ruled otherwise, ignoring plain and patent realities.

The Court further explained that "(t)he test of the grouping is community or
mutuality of interests. And this is so because 'the basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their
collective bargaining rights' (Rothenberg on Labor Relations, 490)." Hence, in that
case, the Court upheld the trial court's conclusion that two separate bargaining
units should be formed, one consisting of regular and permanent employees and
another consisting of casual laborers or stevedores.

n the case at bar, the University employees may, as already suggested, quite easily
be categorized into two general classes: one, the group composed of employees
whose functions are non-academic, i.e., janitors, messengers, typists, clerks,
receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics,
plumbers; 32 and two, the group made up of those performing academic
functions, i.e., full professors, associate professors, assistant professors,