ALHAMBRA CIGAR & CIGARETTE MANUFACTURING COMPANY AND KAPISANAN NG MANGGAGAWA SA ALHAMBRA (FOITAF), PETITIONERS, VS. ALHAMBRA EMPLOYEES’ ASSOCIATION (PAFLU), RESPONDENT.

This is a petition to review on certiorari the order of the Court of
Industrial Relations (in Case No. 392-MC) dated December 12, 1956, and
its resolution en banc of December 27, 1957.

Respondent Alhambra Employees’ Association (PAFLU) filed with the
above-mentioned court a petition, which was later amended, praying that
it be certified as the sole and exclusive bargaining agent for all the
employees, 82 in number, in the administrative, sales, engineering, and
dispensary departments of petitioner Alhambra Cigar & Cigarette
Manufacturing Company. Petitioner company, later joined by the
co-petitioner Kapisanan Ng Manggagawa sa Alhambra (FOITAF), as
Intervenor, opposed the petition, on the ground that there was in force
an existing collective bargaining agreement covering ail the workers of
the company, signed by the latter and Intervenor union.

The case was referred to Hearing Examiner Antonio P. Amistad who,
on November 19, 1956, submitted his report to the court, which reads as
follows:

REPORT

“This concerns an amended petition filed by the
Alhambra Employees’ Association (PAFLU), a legitimate labor
organization, in which it is prayed that said union be certified as the
sole and exclusive bargaining agent for all the employees paid either
on the monthly, daily or commission basis in the administrative, sales,
engineering and dispensary departments of the Alhambra Cigar and
Cigarette Manufacturing Company, a business concern existing under and
by virtue of the laws of the Philippines, engaged in the manufacture of
cigars and cigarettes, with postal address at 31 Tayuman Street, Tondo,
Manila.

“The petition is opposed by the Company and another
legitimate labor organization, the Federacion Obrera de la Industria
Tabaquera de Filipinas (FOITAF). The opposition is based principally on
two grounds, namely, that the appropriate collective bargaining unit is
the employer unit not the smaller unit sought by petitioner and that
there is an existing collective bargaining agreement between the
company and the FOITAF which constitutes a bar to the instant
certification proceeding.

“The first issue to be resolved by
the Court concerns the composition of the appropriate unit. The
petitioner contends that all the employees paid on the monthly, daily
or commission basis in the administrative, sales, engineering, and
dispensary departments constitute an appropriate unit, while both the
company and the FOITAF maintain that the appropriate unit is the
employer unit. While the two contending unions as well as the company
were agreed that confidential employees should be excluded, they could
not agree on the exclusion or inclusion of the technical employees. The
FOITAF’S stand is that technical employees should also be excluded,
while the petitioner favors their inclusion. The company on the other
hand, manifested that it did not care whether the technical employees
are included or not in the bargaining unit.

“The evidence
shows that there are eight departments existing in the company, namely,
the administrative department, manlalasi or raw leaf department, cigar
department, cigarette department, engineering department and garage,
precinteria department, dispensary, and sales department.

“In
the manlalasi or raw leaf department, the work consists mainly of
classifying the tobacco leaves removing the middle ribs from them. The
cigar and cigarette departments are engaged in producing cigars and
cigarettes while the packing of the finished products is done in the
precinteria department. The work in the engineering department and
garage is devoted to operation of the machines and the maintenance of
the machineries, buildings, garage as well as all the vehicles used by
the company. The employees in the sales department are engaged in
selling the products of the company and they perform their duties
outside the factory premises. The dispensary department consists of one
doctor and two nurses. In the administrative department are found the
office personnel, watchmen, porters and cleaners.

“Judging
from the nature of the work performed in the different departments’,
the workers in the manlalasi, cigar, cigarette, precinteria and
engineering, departments may be considered as production and
maintenance employees because they are engaged directly in producing
the manufactured products of the company and in operating and
maintaining its machines, buildings and vehicles.

“On
the other hand the employees in the administrative, sales and
dispensary departments are engaged in an entirely different kind of
work which does not involve production and maintenance and the places
where they work are separate from those of the workers in the other
departments. It can be said therefore that they have a community of
interest among themselves which is entirely separate and distinct from
the production and maintenance employees. That paramount consideration
has led the undersigned to conclude that all the employees in the
administrative, sales and dispensary departments constitute an
appropriate collective bargaining unit subject to the exclusions
which are discussed hereinbelow. However, petitioner’s contention that
the employees in the engineering department and garage should also be
included in said unit is without merit. As pointed out earlier, the
workers in said department are maintenance employees and for purposes
of collective bargaining it is the better policy to group together
production and maintenance employees.

“The second issue which
was raised in this case is whether or not the collective bargaining
agreement entered into between the company and the FOITAF constitutes a
bar to the instant proceeding. Said agreement, marked as Exh.
‘3-Alhambra’, Exh. (S-Petitioner’, and Exh. ‘1-Intervenor’, was entered
into on Aug. 18, 1954 and it was stipulated that the agreement would be
effective until June 30, 1955. The effectivity was extended to June 30,
1957, pursuant to a subssequent agreement entered into on Feb. 24,
1955. (Exh. ‘3-A Alhambra, Exh. (‘T-Petitioner’, and Exh.
‘2-Intervenor’)

“After a close examination of the agreement in question, the undersigned notes that in
so far as the fixing of the terms and conditions of employment is
concerned it did not expressly cover the employees in the
administrative, dispensary and sales departments. As a matter of
fact, the recognition clause states that the FOITAF was acting in
representation of all the laborers of the ”ALHAMBRA’ and certainly it
can not be said that all the employees in the administrative,
dispensary and sales departments are laborers’. Furthermore, almost all
the persons referred to with definite particularity in paragraph 6 of
the agreement (Exh. ‘3-Alhambra’.) are those working in the production
and maintenance departments. The same observation applies to the two
subsequent agreements marked as Exh. ‘3-A Alhambra’ and Exh. ‘3-R
Alhambra’. It was only in the agreement entered into on June 25, 1956
(Exh. ‘3-C Alhambra’, Exh. ‘V-Petitioner’, and Exh. ‘4-Intervenor’)
that employees in the administrative department were specifically
covered. The coverage, however, was extended only to the security
guards. Under the premises, the undersigned is of the opinion that the
interests of the employees in the administrative, dispensary, and sales
departments with the exception of the security guards are not
adequately protected in the collective bargaining agreement between the
company and the FOITAF and said agreement therefore could not be validly invoked as a bar to the instant proceeding.

“The
evidence also shows that there are 45 employees in the administrative
department, 3 in the dispensary, and 19 in the sales department so that
all in all there are 67 employees in said departments. The evidence for
the company shows that the watchmen and porters in the administrative
department numbering 16 in all are security guards. (See Exh. ‘3-C
Alhambra’). Following established recedents of this Court, these
security guards should be excluded from the bargaining unit sought to
be represented by the petitioner. In the sales department there are 2
sales supervisors, who should also be excluded pursuant to a specific
provision of Rep. Act No. 875. Although it was agreed upon by all the
parties that confidential employees should also be excluded, the
evidence does not indicate the particular employees whose positions are
confidential. Excluding the 16 security guards and 2 sales supervisors,
there are 49 employees who are eligible for inclusion in the
appropriate unit in this case.

“The evidence also
conclusively shows that 23 employees in the administrative department,
2 in the dispensary, and 16 in the sales department or a total of 41
are members of the petitioning union. There is no question therefore
that said union has been duly selected or designated as the exclusive
representative for collective bargaining purposes by the majority of
the employees in an appropriate unit.

“In view of all
the foregoing, it is respectfully recommended that the Alhambra
Employees Association (PAFLU) be certified as the exclusive bargaining
representative of all the employees in the administrative, dispensary
and sales departments of the” Alhambra Cigar and Cigarette
Manufacturing Company with the exception of supervisors, security
guards and confidential employees.” (Italics supplied.)

On December 12, 1958, the court, by a vote of three to one, with one abstention, adopted the above-quoted report in toto, in its order which, in part, states:

“The foregoing report has been, found to be completely in accordance
with the evidence and the entire record of the case, and the
conclusions therein contained are hereby adopted in toto.

“Wherefore, and as recommended by the Hearing
Examiner, the Alhambra Employees’ Association (PAFLU) is hereby
certified as the exclusive collective bargaining representative of all
the employees in the administrative, dispensary, and sales departments
of the Alhambra Cigar and Cigarette Manufacturing Company with the
exception of supervisors, security guards and confidential employees.
So ordered.”

Their motions for reconsideration of the foregoing order having been
denied, the Company and FOITAF filed the present petition for review.

Petitioners claim that the lower court erred (1) in holding that all
the employees in the administrative, sales, and dispensary departments
of petitioner company, with the exception of the supervisors, security
guards, and confidential employees therein, constitute an appropriate
separate collective bargaining unit; (2) in holding that the collective
bargaining agreement between petitioner company and petitioner labor
union (FOITAF) did not cover said employees; and (3) in including in
said independent unit the physician and two nurses composing the
dispensary department.

1. In arriving at the conclusion that all the employees in
   the administrative, sales, and dispensary departments of the company,
   with the exception of the supervisor , security guards, and
   confidential employees therein, constitute an appropriate collective
   bargaining unit, the lower court considered the fact that said
   employees are engaged in “an entirely different kind of work” which
   does not involve production and maintenance, and the additional fact
   that the places where they work are separate from those of the workers
   in the other departments of the company.

We find no reason
to disturb said finding of the lower court. There can hardly be any
doubt that, since said employees in the administrative, sales, and
dispensary departments perform work which have nothing to do with
production and maintenance, unlike those in the raw leaf (manlalasi),
cigar, cigarette, packing (precinteria), and engineering and garage
departments whose functions involve production and maintenance, they
have a community of interest which justifies their formation or
existence as a separate appropriate collective bargaining unit. (II
Teller, Labor Disputes and Collective Bargaining, 925-931.)^[1]
The existence of such a unit will, it is believed, insure to said
employees in the three departments the full benefit of their right to
self-organization and collective bargaining and, thereby, effectuate
the policies enunciated in the Industrial Peace Act.^[2]

2. Examination of the collective bargaining agreement entered into between
   the company and FOITAF on August 18, 1954 (Exh. 3-Alhambra) and the
   agreements entered subsequent thereto between the same parties dated
   February 24, 1955 (Exh. 3-A Alhambra) and August 25, 1955 (Exh 3-B
   Alhambra) discloses beyond doubt that they expressly cover only the
   workers in the five departments of the company, namely, the raw leaf
   (manlalasi), cigar, cigarette, packing (precinteria), and engineering
   and garage departments. Exhibits S Alhambra and 3—A Alhambra are
   conspicuous for their repeated use of the term “laborers”. In no single
   instance is the term “employees” mentioned to convey the idea that
   those in the other three departments, namely, the administrative,
   sales, and dispensary departments, are also covered by said agreements.
   Exhibit 3-B “Alhambra consistently uses the term ‘Precinteros”,
   referring to the workers in the packing or precinteria department. It
   is, furthermore, significant to note that the workers who are divided
   into several categories in Exhibit 3-Alhambra, all belong to the
   five-mentioned departments of the company, which again unmistakably
   conveys the impression that said agreement was not intended to cover or
   apply to those workers or employees in the administrative, sales, and
   dispensary departments.

   We agree with the observation
   of the lower court that it is only in Exhibit 3-C Alhambra (executed on
   June 25, 1956) that the employees in the three-mentioned departments
   were expressly covered. Nevertheless, said coverage was limited or
   confined only to the security guards in said departments.

   While it may be true that the benefits granted under said agreements
   were extended to, and enjoyed by, all the workers in all the eight
   departments of the company, the fact remains that those in the
   administrative, sales, and dispensary departments were not expressly
   covered arid, should the company, at any time, decide not to extend to
   them said benefits, they can not legally demand their extension to them
   as they would have nothing to invoke in support of said demand. In
   fine, they have no legal right to said benefits enforceable before the
   courts.

3. Although
   the physician and two nurses in the dispensary department perform
   functions which may properly be designated as technical or
   professional, the lower court, in our opinion, did not err in including
   them in the bargaining unit sought to be represented by respondent
   labor organization, since, as already stated, they are performing
   functions which have nothing to do with production and maintenance and,
   consequently, have a community of interest with the employees in the
   administrative and sales department.

Wherefore, finding no reversible error in the order and resolution of the court a quo appealed from, the same are hereby affirmed in all respects, with costs against the petitioners. So ordered.

Paras, C. J. Bengzon, Montemayor, Bautista Angelo, Labrador, Reyes, J.B.L., Endencia and Gutierrez David, JJ, concur.
Padilla, J., took no part.

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^[1] See also Rothenberg on Labor Relations, 489-490; Democratic Labor Association vs. Cebu Stevedoring Company, et al., G. R. No. L-10321, prom. February 28, 1958.

^[2] Rep. Act No. 875, as amended.