CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSOCIATION, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS, CALTEX (PHILIPPINES) INC., W. E. MENEFEE AND B. F. EDWARDS, RESPONDENTS.

Caltex Filipino Managers and Supervisors Association versus Court of Industrial Relations

The Case

This is a labor case between the Caltex Filipino Managers and Supervisors Association, a duly registered union of managerial and supervisory employees, and Caltex (Philippines) Inc., together with two of its officers, W. E. Menefee and B. F. Edwards. The union charged the company with unfair labor practice for refusing to recognize and bargain with it on the ground that its members were managerial personnel. The case matters because it settles a question of first impression in Philippine labor law: whether managerial employees may organize, and whether an unfair labor practice may be committed against them. The Court answers both in the affirmative, anchoring the right of managers to organize not merely in statute but in the Constitution itself.

Procedural History

The unfair labor practice case was filed with the Court of Industrial Relations, which found the company guilty and ordered it to bargain collectively with the union. The company appealed to the Supreme Court, which rendered its decision on April 11, 1972, affirming the ruling below. The company then filed a motion for reconsideration on April 25, 1972, raising as its principal ground that managerial personnel could neither claim nor be the object of an unfair labor practice. This resolution disposes of that motion.

Facts

The Caltex Filipino Managers and Supervisors Association organized and registered itself as a labor union composed of managerial and supervisory employees of Caltex (Philippines) Inc., a firm that is alien-owned or controlled. The union sought recognition from the company as the bargaining representative of its members.

The company refused. It relied on an earlier order of the Court of Industrial Relations in a certification election case in its Cebu District, dated September 9, 1964, which had declared certain positions managerial and excluded them from the bargaining unit of supervisors. The company insisted that its refusal was made in good faith, in the honest belief that managers, being part of management, should not be included in a union of supervisors.

The Court of Industrial Relations found the company guilty of unfair labor practice, and the Supreme Court affirmed on April 11, 1972. The company moved for reconsideration, arguing that no unfair labor practice could be committed against managerial personnel because of the alleged identity of interest between the managerial staff and the employing firm. The Court denied the motion, and this resolution explains why.

Issues

• Whether or not an unfair labor practice may be committed against managerial personnel who are members of a registered labor union.
• Whether or not managerial personnel may organize into a labor union and acquire the rights granted by Republic Act Number 875.
• Whether or not the company's reliance on the earlier Cebu certification order furnished a valid legal basis for refusing recognition, such that it could not be guilty of unfair labor practice.

Applicable Provisions

The Constitution, Article Three, Section One, paragraph six, provides:

The right to form associations or societies for purposes not contrary to law shall not be abridged.

This is the constitutional foundation of the Court's holding that the right to self-organization is not a mere statutory creation and extends even to managerial employees.

Section 4 of Republic Act Number 875, insofar as an employer is concerned, provides:

To interfere with, restrain or coerce employees in the exercise of their rights guaranteed in section three; To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; To initiate, dominate, assist in or interfere with the formation or administration of any labor organization or to contribute financial or other support to it; To discriminate in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, That nothing in this Act or in any other Act or statute of the Republic of the Philippines shall preclude an employer from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in Section twelve, but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization; To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having filed charges or for having given or being about to give testimony under this Act; To refuse to bargain collectively with the representatives of his employees subject to the provisions of sections thirteen and fourteen.

This defines the acts constituting unfair labor practice by an employer, including the refusal to bargain collectively, which the company committed against the union.

Ruling

On the first issue, the Court held that an unfair labor practice may indeed be committed against managerial personnel. The objection was framed as though the only question were whether unfair labor practice could be committed against managers, but the Court saw that this missed what is truly of legal relevance. The basic question is whether managerial personnel can organize. The Court declared that the right to self-organization is not merely a statutory creation; it is fortified by the Constitution. All are free to exercise the right unless their purpose is contrary to law. Having organized and having been duly registered, as happened here, the union is entitled to all the rights under Republic Act Number 875. Given the acts denominated unfair labor practice under Section 4 of that Act and the facts established, the answer to the objection is in the negative: the company could be, and was, guilty.

On the second issue, the Court rejected the argument of identity of interest between the managerial staff and the employing firm. While such identity ordinarily exists where the dispute is between management and the rank and file, it does not follow that what binds the managerial staff to the corporation forecloses the possibility of conflict between them. There could be a real difference between what the welfare of the managerial group requires and the concessions the firm is willing to grant, and their needs might go unattended in the absence of an organization of their own. The Court noted that the record, including the very case cited by the company, proved an uneasy and troubled relationship, and that the impression was difficult to erase that an alien firm failed to manifest sympathy for the claims of its Filipino executives.

On the third issue, the Court found the company's reliance on the earlier Cebu order misplaced as a matter of law. The company claimed that its position had been upheld by the Supreme Court in a prior case, but the Court clarified that its resolution of March 23, 1965, merely dismissed the company's petition for lack of merit. Such a curt resolution meant no more than that the company was unable to present a sufficiently meritorious petition, and it could not have the effect of res judicata. The Court also observed that the party that could have raised the question, the supervisors and foremen's union, did not bother to do so. The company's good faith belief, therefore, did not insulate it from liability.

Doctrine

Managerial employees may organize into a labor union. The right to self-organization is not merely a statutory creation; it is fortified by the Constitution, which provides that the right to form associations or societies for purposes not contrary to law shall not be abridged. Once managerial personnel have organized and their union has been duly registered, the union is entitled to all the rights under Republic Act Number 875, and an unfair labor practice may be committed against its members. The alleged identity of interest between managerial staff and the employing firm does not foreclose the possibility of conflict between them, and it is no answer to a charge of unfair labor practice. Finally, a curt resolution of the Supreme Court dismissing a petition for lack of merit is not an adjudication on the merits and cannot serve as res judicata.

Disposition

The motion for reconsideration was denied, and the decision of April 11, 1972, finding the company guilty of unfair labor practice, was affirmed in all respects.

Remember This

Memorize this line: the right to self-organization is not merely a statutory creation; it is fortified by the Constitution, and managers as such are not precluded from organizing. Examiners use this case to test whether managerial employees may form a union and whether unfair labor practice may be committed against them, and to test the rule that a minute resolution dismissing a petition for lack of merit is not res judicata.