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SUGBUANON RURAL BANK v. UNDERSECRETARY BIENVENIDO E. LAGUESMA

FACTS:

The petitioner, Sugbuanon Rural Bank, Inc. (SRBI), is a banking institution with its principal office in Cebu City and a branch in Mandaue City. The private respondent, SRBI-Association of Professional, Supervisory, Office, and Technical Employees Union (APSOTEU), is a labor organization affiliated with the Trade Unions Congress of the Philippines (TUCP). APSOTEU filed a petition for certification election of the supervisory employees of SRBI, asserting that it met the necessary requirements for certification election. SRBI filed a motion to dismiss, arguing that the members of APSOTEU were actually managerial employees or confidential employees and that there was a violation of the principle of separation of unions since ALU-TUCP also sought to represent rank-and-file employees of SRBI. The union opposed the motion to dismiss, stating that its members were supervisory employees, not managerial employees, and that they had the right to form, join, or assist their own union. The Med-Arbiter denied SRBI's motion to dismiss and ordered the inclusion-exclusion proceedings in preparation for the certification election. SRBI appealed the decision, but the appeal was denied. SRBI also filed a petition seeking the cancellation of APSOTEU's registration. The Undersecretary of DOLE denied SRBI's appeal and held that APSOTEU was a legitimate labor organization with the right to file a petition for certification election. SRBI filed a motion for reconsideration, which was denied. The Med-Arbiter scheduled the certification election, but SRBI filed an urgent motion to suspend the proceedings, which was denied. SRBI then filed an appeal to the DOLE Secretary.

ISSUES:

  1. Whether or not the members of the respondent union are managerial employees and/or highly-placed confidential employees, hence prohibited by law from joining labor organizations and engaging in union activities?

  2. Whether or not the Med-Arbiter may validly order the holding of a certification election upon the filing of a petition for certification election by a registered union, despite the petitioner's appeal pending before the DOLE Secretary against the issuance of the union's registration?

  3. Whether or not the employees in question have access to confidential information specifically relating to the company's labor relations policies.

  4. Whether or not a certification election should be conducted by the Med-Arbiter despite the management's appeal on the validity of the union's registration.

  5. Whether or not the respondent union is an alter ego of ALU, a legitimate labor organization.

  6. Whether or not the membership of the respondent union, composed of both supervisors and rank-and-file employees, violates the law.

RULING:

  1. The Cashiers, Accountants, and Acting Chiefs of the Loans Department of the petitioner are not considered managerial employees as they do not possess managerial powers and duties. Therefore, they are not prohibited from joining labor organizations and engaging in union activities.

  2. Confidential employees are not explicitly prohibited from engaging in union activities under Article 245 of the Labor Code. However, the disqualification of managerial employees also applies to confidential employees under the doctrine of necessary implication. Confidential employees are excluded from union activities because their job responsibilities involve becoming aware of management policies relating to labor relations. If a confidential employee does not have access to confidential labor relations information, there is no legal prohibition against them forming, assisting, or joining a union.

  3. The employees in question do not have access to confidential information specifically relating to the company's labor relations policies.

  4. A certification election should be conducted by the Med-Arbiter despite the management's appeal on the validity of the union's registration.

  5. The respondent union is not an alter ego of ALU.

  6. The membership of the respondent union, composed of both supervisors and rank-and-file employees, does not violate the law.

PRINCIPLES:

  • The definition of managerial employees under Article 212(m) of the Labor Code includes those who have the power to lay down and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees. Supervisory employees are those who effectively recommend managerial actions that require the use of independent judgment.

  • Confidential employees are those who assist or act in a confidential capacity in regard to persons who formulate, determine, and effectuate management policies specifically in the field of labor relations.

  • The confidential-employee rule justifies exclusion of confidential employees from engaging in union activities because they become aware of management policies relating to labor relations in the normal course of their duties. However, if a confidential employee does not have access to confidential labor relations information, there is no legal prohibition against them joining a union.

  • The board of directors is responsible for corporate policies, the exercise of corporate powers, and the general management of the business and affairs of the corporation.

  • A legitimate labor organization has the right to be certified as the exclusive representative of all employees in an appropriate bargaining unit for purposes of collective bargaining.

  • A local union maintains its separate personality despite affiliation with a larger national federation.

  • The law frowns on a union where the membership is composed of both supervisors and rank-and-file employees, for fear that conflicts of interest may arise in the areas of discipline, collective bargaining, and strikes.