GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), PETITIONER VS. GOVERNMENT SERVICE INSURANCE SYSTEM SUPERVISOR’S UNION (GSISSU), GOVERNMENT SERVICE INSURANCE SYSTEM EMPLOYEES ASSOCIA…

Government Service Insurance System versus Government Service Insurance System Supervisor's Union

The Case

This is a consolidated set of petitions for review by certiorari brought by the Government Service Insurance System against its own supervisors' union and against the Court of Industrial Relations. The dispute began when the industrial court certified the supervisors' union as the sole and exclusive bargaining representative of employees in the higher pay classes of the System, and the System resisted that certification at every turn. The case matters because it settles, for the first time in this jurisdiction, that a union of supervisors may lawfully bargain collectively with the employer, and because it shows how the industrial court's orders remain executory pending appeal.

Procedural History

The Court of Industrial Relations, in a case for direct certification, issued an order dated August 4, 1967, certifying the Government Service Insurance System Supervisor's Union as the sole and exclusive bargaining representative of all employees holding positions from pay classes 7 to 13. The industrial court, sitting en banc, affirmed that order in a resolution dated October 16, 1967. When the System issued reassignment orders affecting those same supervisors, the union sought an injunction, and the industrial court issued an order dated February 24, 1968, directing the parties to observe the status quo. The System's motion for reconsideration was denied, and it came to the Supreme Court by petition for review by certiorari. Later, when the union charged the System with refusing to bargain and with unfair labor practices, the industrial court issued an order dated June 4, 1969, annulling a September 1968 agreement, ordering the System to bargain in good faith, and finding it guilty of discrimination amounting to unfair labor practice. The System's motion for reconsideration was denied, and it again came to the Supreme Court by certiorari. Finally, when the Government Corporate Counsel issued a memorandum circular terminating the union membership of lawyers in the legal department, the union asked the industrial court to restrain its enforcement, and the industrial court, in an order dated July 17, 1970, held the circular in abeyance pending resolution of the main appeal. The System's motion for reconsideration was denied, and it brought a third petition for certiorari. The Supreme Court consolidated the three petitions and resolved them together.

Facts

The Government Service Insurance System Supervisor's Union had, since 1961, been one of the bargaining representatives of the System's employees. In 1966 it filed a petition for direct certification, asking to be certified as the sole and exclusive bargaining representative of all employees holding positions from pay classes 7 to 13 of the salary and position pay plan. The employees' association intervened, but only on the question of which of those employees were rank and file rather than supervisors. After almost a year of hearings, the industrial court found that the personnel in pay classes 7 to 13 performed supervisory functions, that they had always been treated as a single bargaining unit, and that they constituted an appropriate unit separate and distinct from the rank and file. It certified the union accordingly on August 4, 1967.

While that certification was on review, the System's General Manager issued two office orders in February 1968 partially implementing a plan to reassign supervisors in pay classes 7 to 13. The union demanded consultation and was refused. It went to the industrial court for an injunction, warning that the reshuffle would deplete its membership and render the certification moot. The industrial court ordered the parties to maintain the status quo until the question of jurisdiction was resolved.

The System then refused to bargain. The union filed a petition charging eleven counts of unfair labor practice, and the industrial court found that the System had conditioned the payment of salary differentials to union members on their agreement to suspend bargaining demands, while paying non-members without condition. It annulled that agreement, ordered the System to bargain in good faith subject to the outcome of the main appeal, and found the System guilty of discrimination amounting to unfair labor practice. Separately, a memorandum circular of the Government Corporate Counsel sought to terminate the union membership of lawyers in the legal department, and the industrial court held its enforcement in abeyance pending the main appeal.

Issues

• Whether or not the Court of Industrial Relations had jurisdiction to certify the supervisors' union as the sole and exclusive bargaining representative, and whether or not a union of supervisors may bargain collectively with the employer under Republic Act Number 875.
• Whether or not the Court of Industrial Relations had jurisdiction to issue the status quo order restraining the reassignment of supervisory personnel pending resolution of the certification case.
• Whether or not the September 1968 agreement between the System and the union is null and void, and whether or not the industrial court gravely abused its discretion in ordering the System to bargain in good faith and in finding it guilty of unfair labor practice.
• Whether or not the industrial court gravely abused its discretion in holding in abeyance the enforcement of the memorandum circular of the Government Corporate Counsel.

Applicable Provisions

Section 3 of Republic Act Number 875, the Industrial Peace Act, provides:

Employees 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 through representatives of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. Individuals employed as supervisors shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own.

This provision is the foundation of the Court's holding, because it recognizes the supervisors' right to form their own organization and, by fair implication, the right to bargain collectively.

Section 4, paragraph (a), subparagraph 4 of Republic Act Number 875, as applied by the industrial court, defines discrimination as an unfair labor practice, and it is the provision under which the System was found guilty.

Section 10 of Republic Act Number 875 provides that the orders and resolutions of the Court of Industrial Relations are executory pending appeal, and it is the basis for requiring the System to bargain even while the certification was on review.

Ruling

On the first issue, the Court held that the industrial court had jurisdiction and that the supervisors' union may bargain collectively. The argument that Republic Act Number 875 grants supervisors the right to organize but not the right to bargain is, in the Court's words, weak and entirely devoid of merit. By fair implication, the authority to form a separate union carries with it the right to bargain with the employer, for to rule otherwise would defeat the very purpose of the law. The Court also rejected the theory that supervisors are management and that management cannot bargain with itself, observing that those who perform acts of management are still entitled to bargain for their own welfare.

On the second issue, the Court held that the status quo order was a mere incident of the certification case over which the industrial court already had jurisdiction, and that the System, having submitted to that jurisdiction, could not now question it. The order was intended to prevent the certification from becoming moot and academic, and it was interlocutory and not appealable.

On the third issue, the Court upheld the annulment of the September 1968 agreement. The condition suspending bargaining was imposed only on union members as a requisite for receiving salary differentials, while non-members received theirs without condition. This was discriminatory, and the consent of the union was obtained through imposition or threat, so there was no true agreement. The order to bargain in good faith was not an abuse of discretion, because no injunction had been issued and the industrial court's orders are executory pending appeal.

On the fourth issue, the Court sustained the industrial court's order holding the memorandum circular in abeyance pending resolution of the main appeal.

Doctrine

A union of supervisors may bargain collectively with the employer. The right to form a separate organization under Section 3 of Republic Act Number 875 carries with it, by fair implication, the right to bargain collectively, for otherwise the grant of the right to organize would be rendered meaningless. Supervisors who perform acts of management are still entitled to bargain collectively, because the employer is an artificial being while the employees, including supervisors, are natural persons struggling for their welfare. An agreement whose consent is obtained through imposition or threat, and which imposes on union members a condition not imposed on non-members, is null and void. The orders of the Court of Industrial Relations are executory pending appeal.

Disposition

The Supreme Court dismissed the petitions and affirmed the orders of the Court of Industrial Relations in all three cases, with costs against the Government Service Insurance System.

Remember This

The one line to memorize: the right of supervisors to form a separate union carries with it, by fair implication, the right to bargain collectively. Examiners use this case to test the supervisors' right to collective bargaining under Republic Act Number 875 and the rule that industrial court orders are executory pending appeal.