[G.R. No. 88957 June 25, 1992]PHILIPS INDUSTRIAL DEVELOPMENT, INC. vs.NATIONAL LABOR RELATIONS COMMISSION

FACTS: PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products Since 1971, it had a total of six (6) collective bargaining agreements (CBAs) with private respondent Philips Employees Organization-FFW (PEO-FFW), a registered labor union and the certified bargaining agent of all the rank and file employees of PIDI. In the first CBA (1971-1974), the supervisors referred to in R.A. No. 875, confidential employees, security guards, temporary employees and sales representatives were excluded from the bargaining unit. In the second to the fifth CBAs (1975-1977; 1978-1980; 1981-1983; and 1984-1986), the sales force, confidential employees and heads of small units, together with the managerial employees, temporary employees and security personnel, were specifically excluded from the bargaining unit.  The confidential employees are the division secretaries of light/telecom/data and consumer electronics, marketing managers, secretaries of the corporate planning and business manager, fiscal and financial system manager and audit and EDP manager, and the staff of both the General Management and the Personnel Department.

In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among others, that the subject of inclusion or exclusion of service engineers, sales personnel and confidential employees in the coverage of the bargaining unit would be submitted for arbitration.

The Labor Arbiter rendered a decision ordering the respondent to conduct a referendum to determine the will of the service engineers, sales representatives as to their inclusion or exclusion in the bargaining unit. It declared however that Division Secretaries and all Staff of general management, personnel and industrial relations department, secretaries of audit, EDP, financial system are confidential employees and as such are deemed excluded in the bargaining unit.

The NLRC reversed decision and ordered inclusion of all the employees concerned.

ISSUE: W/N security personnel are disqualified from joining labor unions. W/N confidential employees may join union for rank and file employees

HELD:  1. A palpable error was committed by the NLRC in ruling that under the law, all workers, except managerial employees and security personnel, are qualified to join a union, or form part of a bargaining unit. At the time Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security personnel were no longer disqualified from joining or forming a union.

Section 6 of E.O. No. 111 repealed the original provisions of Article 245 of the Labor Code disqualifying security personnel. By virtue of such repeal and substitution, security guards became eligible for membership in any labor organization.

1. All the subject employees, with the exception of the service engineers and the sales force personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.

RATIONALE OF PROHIBITION

In Bulletin Publishing Co., Inc. vs. Hon Augusto Sanchez, this Court elaborated on this rationale, thus:

. . . The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty, to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership.

In Golden Farms, Inc. vs. Ferrer-Calleja, ¹⁴ this Court explicitly made this rationale applicable to confidential employees:

This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators, who having access to confidential information, may become the source of undue advantage. Said employee(s) may act as a spy or, spies of either party to a collective bargaining agreement. This is specially true in the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/ positions are expressly excluded.