NATIONAL ASSOCIATION OF TRADE UNIONS (NATU) – REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER, PETITIONER, VS. HON. RUBEN D. TORRES, SECRETARY OF LABOR AND EMPLOYMENT AND REPUBLIC PL…

NATIONAL ASSOCIATION OF
TRADE UNIONS (NATU) – REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER seeks
nullification of the decision of public respondent Secretary of Labor dated 23
March 1990, which modified the order of Med-Arbiter Manases T. Cruz dated 17
August 1989 as well as his order dated 20 April 1990 denying reconsideration.

On 17 March 1989, NATU
filed a petition for certification election to determine the exclusive
bargaining representative of respondent Bank’s employees occupying supervisory
positions. On 24 April 1989, the
Bank moved to dismiss the petition on the ground that the supposed supervisory
employees were actually managerial and/or confidential employees thus
ineligible to join, assist or form a union, and that the petition lacked the
20% signatory requirement under the Labor Code.

On 17 August 1989, Med-Arbiter Manases T. Cruz granted the
petition thus –

WHEREFORE x x x x let a certification election be ordered conducted
among all the regular employees of the Republic Planters Bank occupying
supervisory positions or the equivalent within 20 days from receipt of a copy
of this Order. The choice shall
be: (1) National Association of Trade
Unions (NATU) – Republic Planters Bank Supervisors Chapter; and (2) No Union.

The payroll three months prior to the filing of this petition shall
be utilized in determining the list of eligible voters x x x x^[1]

Respondent Bank appealed the order to the Secretary of Labor on
the main ground that several of the employees sought to be included in the
certification election, particularly the Department Managers, Branch
Managers/OICs, Cashiers and Controllers were managerial and/or confidential
employees and thus ineligible to join, assist or form a union. It presented annexes detailing the job
description and duties of the positions in question and affidavits of certain
employees. It also invoked provisions of the General Banking Act and the
Central Bank Act to show the duties and responsibilities of the bank and its
branches.

On 23 March 1990, public respondent issued a decision partially
granting the appeal, which is now being challenged before us –

WHEREFORE x x x the appeal is hereby partially granted. Accordingly, the Order dated 17 August 1989
is modified to the extent that Department Managers, Assistant Managers, Branch
Managers, Cashiers and Controllers are declared managerial employees. Perforce, they cannot join the union of
supervisors such as Division Chiefs, Accounts Officers, Staff Assistants and
OIC’s (sic) unless the latter are regular managerial employees x x x x^[2]

NATU filed a motion for reconsideration but the same was denied
on 20 April 1990.^[3]
Hence this recourse assailing public respondent for rendering the decision of
23 March 1990 and the order of 20 April 1990 both with grave abuse of
discretion.

The crucial issue presented for our resolution is whether the
Department Managers, Assistant Managers, Branch Managers/OICs, Cashiers and
Controllers of respondent Bank are managerial and/or confidential employees
hence ineligible to join or assist the union of petitioner.

NATU submits that an analysis of the decision of public
respondent readily yields certain flaws that result in erroneous
conclusions. Firstly, a branch does not
enjoy relative autonomy precisely because it is treated as one unit with the
head office and has to comply with uniform policies and guidelines set by the
bank itself. It would be absurd if each
branch of a particular bank would be adopting and implementing different
policies covering multifarious banking transactions. Moreover, respondent Bank’s own evidence clearly shows that
policies and guidelines covering the various branches are set by the head
office. Secondly, there is absolutely
no evidence showing that bank policies are laid down through the collective
action of the Branch Manager, the Cashier and the Controller. Thirdly, the organizational setup where the
Branch Manager exercises control over branch operations, the Controller
controls the Accounting Division, and the Cashier controls the Cash Division,
is nothing but a proper delineation of duties and responsibilities. This delineation is a Central Bank
prescribed internal control measure intended to objectively establish
responsibilities among the officers to easily pinpoint culpability in case of
error. The “dual control” and
“joint custody” aspects mentioned in the decision of public
respondent are likewise internal control measures prescribed by the Central
Bank.

Neither is there evidence showing that subject employees are vested
with powers or prerogatives to hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees. The bare allegations in the affidavits of respondent Bank’s Executive
Assistant to the President^[4] and
the Senior Manager of the Human Resource Management Department^[5]
that those powers and prerogatives are inherent in subject positions are
self-serving. Their claim cannot be
made to prevail upon the actual duties and responsibilities of subject
employees.

The other evidence of respondent Bank which purports to show that
subject employees exercise managerial functions even belies such claim. Insofar as Department Managers and Assistant
Managers are concerned, there is absolutely no reason mentioned in the decision
why they are managerial employees. Not
even respondent Bank in its appeal questioned the inclusion of Assistant
Managers among the qualified petitioning employees. Public respondent has deviated from the real issue in this case,
which is, the determination of whether subject employees are managerial
employees within the contemplation of the Labor Code, as amended by RA 6715;
instead, he merely concentrated on the nature, conduct and management of banks
conformably with the General Banking Act and the Central Bank Act.

Petitioner concludes that subject employees are not managerial
employees but supervisors. Even
assuming that they are confidential employees, there is no legal prohibition
against confidential employees who are not performing managerial functions to
form and join a union.

On the other hand, respondent Bank maintains that the Department
Managers, Branch Managers, Cashiers and Controllers are inherently possessed of
the powers enumerated in Art. 212, par. (m), of the Labor Code. It relies heavily on the affidavits of its
Executive Assistant to the President and Senior Manager of the Human Resource
Department. The Branch Managers,
Cashiers and Controllers are vested not only with policy-making powers
necessary to run the affairs of the branch, given the independence and relative
autonomy which it enjoys in the pursuit of its goals and objectives, but also
with the concomitant disciplinary authority over the employees.

The Solicitor General argues that NATU loses sight of the fact
that by virtue of the appeal of respondent Bank, the whole case is thrown open
for consideration by public respondent. Even errors not assigned in the appeal, such as the exclusion by the
Med-Arbiter of Assistant Managers from the managerial employees category, is
within his discretion to consider as it is closely related to the errors
properly assigned. The fact that Department Managers are managerial
employees is borne out by the evidence of petitioner itself. Furthermore, while it assails public
respondent’s finding that subject employees are managerial employees,
petitioner never questioned the fact that said officers also occupy
confidential positions and thus remain prohibited from forming or joining
any labor organization.

Respondent Bank has no
legal personality to move for the dismissal of the petition for certification
election on the ground that its supervisory employees are in reality managerial
employees. An employer has no standing
to question the process since this is the sole concern of the workers. The only exception is where the employer
itself has to file the petition pursuant to Art. 258 of the Labor Code because
of a request to bargain collectively.^[6]

Public respondent,
invoking RA 6715 and the inherent functions of Department Managers, Assistant
Managers, Branch Managers, Cashiers and Controllers, held that these officers
properly fall within the definition of managerial employees. The ratiocination in his Decision of 23
March 1990^[7] is that –

Republic Act No. 6715, otherwise known as the Herrera-Veloso Law,
restored the right of supervisors to form their own unions while maintaining
the proscription on the right to self-organization of managerial
employees. Accordingly, the Labor Code,
as amended, distinguishes managerial, supervisory and rank-and-file employees
thus:

Art. 212 (m) – Managerial employee is one who is vested
with powers or prerogatives to lay down and execute management policies and/or
to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees. Supervisory employees
are those who, in the interest of the employer, effectively recommend such
managerial actions, if the exercise of such managerial authority is not
routinary in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered
rank-and-file employees (underscoring supplied).

At first glance, pursuant to the above-definitions and based on
their job descriptions as guideposts, there would seem to be no difficulty in
distinguishing a managerial employee from that of a supervisor, or from that of
a mere rank-and-file employee. Yet,
this task takes on a different dimension when applied to banks, particularly
the branches thereof. This is so
because unlike ordinary corporations, a bank’s organizational operation is
governed and regulated by the General Banking Act and the Central Bank Act,
both special laws x x x x

As pointed out by the respondent, in the banking industry, a branch
is the microcosm of a banking institution, uniquely autonomous and
self-governing.

This relative autonomy of a branch finds legal basis in Section 27
of the General Banking Act, as amended, thus:

x x x x The bank shall be responsible for all business conducted in
such branches to the same extent and in the same manner as though such business had all been
conducted in the head office.

For the purpose of this
Act, a bank and its branches shall be treated as a unit (underscoring supplied).

Conformably with the above, bank policies are laid down and/or
executed through the collective action of the Branch Manager, Cashier and
Controller at the branch level. The
Branch Manager exercises over-all control and supervision over branch operation
being on the top of the branch’s pyramid structure. However, both the controller and the cashier who are called in
banking parlance as ‘Financial Managers’ due to their fiscal functions are
given such a share and sphere of responsibility in the operations of the
bank. The cashier controls and supervises
the cash division while the controller that of the Accounting Division. Likewise, their assigned task is of great
significance, without which a bank or branch for that matter cannot operate or
function.

Through the collective action of these three branch officers
operational transactions are carried out like: The two (2) -signature requirement of the manager, on one hand, and that
of the controller or cashier on the other hand as required in bank’s issuances
and releases. This is the so-called
‘dual control’ through check-and-balance as prescribed by the Central Bank, per
Section 1166.6, Book I, Manual of Regulations for Banks and Financial
Intermediaries. Another is in the joint
custody of the branch’s cash in vault, accountable forms, collaterals, documents
of title, deposit, ledgers and others, among the branch manager and at least
two (2) officers of the branch as required under Section 1166.6 of the Manual
of Regulations for Banks and Other Financial Intermediaries.

This structural set-up creates a triad of managerial authority
among the branch manager, cashier and controller. Hence, no officer of the bank ‘x x x have (sic) complete
authority and responsibility for handling all phases of any transaction from
beginning to end without some control or balance from some other part of the organization’
(Section 1166.3, Division of Duties and Responsibilities, Ibid). This aspect in the banking system
which calls for the division of duties and responsibilities is a clear
manifestation of managerial power and authority. No operational transaction at branch level is carried out by the
singular act of the Branch Manager but rather through the collective act of the
Branch Manager, Cashier/Controller (underscoring supplied).

Noteworthy is the ‘on call client’ set up in banks. Under this scheme, the branch manager is
tasked with the responsibility of business development and marketing of the
bank’s services which place him on client call. During such usual physical absences from the branch, the cashier
assumes the reins of branch control and administration. On those occasions, the ‘dual control
system’ is clearly manifest in the transactions and operations of the branch
bank as it will then require the necessary joint action of the controller and
the cashier.

The grave abuse of discretion committed by public respondent is
at once apparent. Art. 212, par. (m),
of the Labor Code is explicit. A
managerial employee is (a) one who is vested with powers or prerogatives to lay
down and execute management policies, or to hire, transfer,
suspend, lay off, recall, discharge, assign or discipline employees; or
(b) one who is vested with both powers or prerogatives. A supervisory employee is different from a
managerial employee in the sense that the supervisory employee, in the interest
of the employer, effectively recommends such managerial actions, if the
exercise of such managerial authority is not routinary in nature but requires
the use of independent judgment.

Ranged against these definitions and after a thorough examination
of the evidence submitted by both parties, we arrive at a contrary
conclusion. Branch Managers, Cashiers
and Controllers of respondent Bank are not managerial employees but supervisory
employees. The finding of public
respondent that bank policies are laid down and/or executed through the
collective action of these employees is simply erroneous. His discussion on the division of their
duties and responsibilities does not logically lead to the conclusion that they
are managerial employees, as the term is defined in Art. 212, par. (m).

Among the general duties
and responsibilities of a Branch Manager is “[t]o discharge his duties and
authority with a high sense of responsibility and integrity and shall at all
times be guided by prudence like a good father of the family, and sound judgment
in accordance with and within the limitations of the policy/policies
promulgated by the Board of Directors and implemented by the Management
until suspended, superseded, revoked or modified” (par. 5, underscoring
supplied).^[8] Similarly, the job summary of a Controller
states: “Supervises the Accounting
Unit of the branch; sees to the compliance by the Branch with established
procedures, policies, rules and regulations of the Bank and external
supervising authorities; sees to the strict implementation of control
procedures (underscoring supplied).”^[9] The job description of a Cashier does not
mention any authority on his part to lay down policies, either.^[10] On the basis of the foregoing evidence, it
is clear that subject employees do not participate in policy-making but are
given approved and established policies to execute and standard practices to
observe,^[11] leaving little or no discretion at all
whether to implement said policies or not.^[12] It is the nature of the employee’s functions,
and not the nomenclature or title given to his job, which determines whether he
has rank-and-file, supervisory or managerial status.^[13]

Moreover, the bare
statement in the affidavit of the Executive Assistant to the President of
respondent Bank that the Branch Managers, Cashiers and Controllers
“formulate and implement the plans, policies and marketing strategies of
the branch towards the successful accomplishment of its profit targets and
objectives,”^[14] is contradicted by the following evidence
submitted by respondent Bank itself:

(a)  
Memorandum issued by respondent Bank’s Assistant Vice
President to all Regional Managers and Branch Managers giving them temporary
discretionary authority to grant additional interest over the prescribed board
rates for both short-term and long-term CTDs subject, however, to specific
limitations and guidelines set forth in the same memorandum;^[15]

(b)  
Memorandum issued by respondent Bank’s Executive Vice
President to all Regional Managers and Branch Officers regarding the policy and
guidelines on drawing against uncollected deposits (DAUD);^[16]

(c)   Memorandum
issued by respondent Bank’s President to all Field Offices regarding the
guidelines on domestic bills purchased (DBP);^[17] and

(d)   Memorandum issued by the same officer to all
Branch Managers regarding lending authority at the branch level and the terms
and conditions thereof.^[18]

As
a consequence, the affidavit of the Executive Assistant cannot be given any
weight at all.

Neither do the Branch
Managers, Cashiers and Controllers have the power to hire, transfer, suspend,
lay off, recall, discharge, assign or discipline employees. The Senior Manager of the Human Resource
Management Department of respondent Bank, in her affidavit, stated that
“the power to hire, fire, suspend, transfer, assign or otherwise impose
discipline among subordinates within their respective jurisdictions is lodged
with the heads of the various departments, the branch managers and officers-in-­charge,
the branch cashiers and the branch controllers. Inherent as it is in the aforementioned positions, the authority
to hire, fire, suspend, transfer, assign or otherwise discipline employees
within their respective domains was deemed unnecessary to be incorporated in
their individual job descriptions; By way of illustration, on August 24, 1989,
Mr. Renato A. Tuates, the Officer-in Charge/Branch Cashier of the Bank’s
Dumaguete Branch, placed under preventive suspension and thereafter terminated
the teller of the same branch x x x x Likewise, on February 22, 1989, Mr.
Francis D. Robite, Sr., the Officer-in Charge of International Department,
assigned the cable assistant of the International Department as the concurrent
FCDU Accountable Forms Custodian.”^[19]

However, a close scrutiny of the memorandum of Mr. Tuates reveals
that he does not have said managerial power because as plainly stated therein,
it was issued “upon instruction from Head Office.”^[20]
With regard to the memorandum of Mr. Robite, Sr., it appears that the power he
exercised was merely in an isolated instance, taking into account the other
evidence submitted by respondent Bank itself showing lack of said power by
other Branch Managers/OICs:

(a)  Memorandum from the Branch Manager for the AVP
– Manpower Management Department expressing the opinion that a certain
employee, due to habitual absenteeism and tardiness, must be penalized in
accordance with respondent Bank’s Code of Discipline; and

(b)  Memorandum from a Branch OIC for the Assistant
Vice President recommending a certain employee’s promotional adjustment to the
present position he occupies.

Clearly, those officials or employees
possess only recommendatory powers subject to evaluation, review and final action by higher officials. Therefore, the foregoing affidavit cannot
bolster the stand of respondent Bank.

The positions of Department
Managers and Assistant Managers were also declared by public respondent as
managerial, without providing any basis therefor. Petitioner asserts that the position of Assistant Manager was not
even included in the appeal filed by respondent Bank. While we agree with the Office of the Solicitor General that it
is within the discretion of public respondent to consider an unassigned issue
that is closely related to an issue properly assigned, still, public
respondent’s error lies in the fact that his finding has no leg to stand
on. Anyway, inasmuch as the entire
records are before us, now is the opportunity to discuss this issue.

We analyzed the evidence
submitted by respondent Bank in support of its claim that Department Managers
are managerial employees^[21] and concluded that they are not. Like Branch Managers, Cashiers and
Controllers, Department Managers do not possess the power to lay down policies
nor to hire, transfer, suspend, lay off, recall, discharge, assign or
discipline employees. They occupy
supervisory positions, charged with the duty
among others to “recommend proposals to improve and streamline
operations.”^[22] With respect to Assistant Managers, there is
absolutely no evidence submitted to substantiate public respondent’s finding
that they are managerial employees; understandably so, because this position is
not included in the appeal of respondent Bank.

As regards the other
claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers
are confidential employees, having control, custody and/or access to
confidential matters, e.g., the branch’s cash position, statements of financial
condition, vault combination, cash codes for telegraphic transfers, demand
drafts and other negotiable instruments,^[23] pursuant to Sec. 1166.4 of the Central Bank
Manual regarding joint custody,^[24] this claim is not even disputed by
petitioner. A confidential employee is
one entrusted with confidence on delicate matters, or with the custody,
handling, or care and protection of the employer’s property.^[25] While Art. 245 of the Labor Code singles out
managerial employees as ineligible to join, assist or form any labor
organization, under the doctrine
of necessary implication, confidential employees are similarly
disqualified. This doctrine states that
what is implied in a statute is as much a part thereof as that which is
expressed, as elucidated in several cases^[26] the latest of which is Chua v.
Civil Service Commission^[27] where we said:

No statute can be
enacted that can provide all the details involved in its application. There is always an omission that may not
meet a particular situation. What is
thought, at the time of enactment, to be an all-embracing legislation may be
inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law
is enforced. One of the rules of
statutory construction used to fill in the gap is the doctrine of necessary
implication x x x x Every statute is understood, by implication, to contain all
such provisions as may be necessary to effectuate its object and purpose, or to
make effective rights, powers, privileges or jurisdiction which it grants,
including all such collateral and subsidiary consequences as may be fairly and
logically inferred from its terms. Ex necessitate legis x x x x

In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of
managerial employees expressed in Bulletin Publishing Corporation v.
Sanchez,^[28]
thus: “x x x 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.” Stated differently, in the
collective bargaining process, managerial employees are supposed to be on the
side of the employer, to act as its representatives, and to see to it that its
interests are well protected. The employer
is not assured of such protection if these employees themselves are union
members. Collective bargaining in such
a situation can become one-sided.^[29] It
is the same reason that impelled this Court to consider the position of
confidential employees as included in the disqualification found in Art. 245 as
if the disqualification of confidential employees were written in the
provision. If confidential employees
could unionize in order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the interest of the
employers. Moreover, unionization of
confidential employees for the purpose of collective bargaining would mean the
extension of the law to persons or individuals who are supposed to act “in
the interest of” the employers.^[30] It
is not farfetched that in the course of collective bargaining, they might
jeopardize that interest which they are duty-bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. v. Ferrer­-Calleja^[31] reiterated in Philips Industrial Development, Inc. v. NLRC,^[32] that
“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 spy or spies of either party to a collective bargaining
agreement.”

In fine, only the Branch Managers/OICs, Cashiers and Controllers
of respondent Bank, being confidential employees, are disqualified from joining
or assisting petitioner Union, or joining, assisting or forming any other labor
organization. But this ruling should be
understood to apply only to the present case based on the evidence of the parties, as well as to those similarly
situated. It should not be understood
in any way to apply to banks in general.

WHEREFORE, the petition is partially GRANTED. The decision of public respondent Secretary of Labor dated 23
March 1990 and his order dated 20 April 1990 are MODIFIED, hereby declaring that only the Branch Managers/OICs,
Cashiers and Controllers of respondent Republic Planters Bank are ineligible to
join or assist petitioner National Association of Trade Unions (NATU) –
Republic Planters Bank Supervisors Chapter, or join, assist or form any other
labor organization.

SO ORDERED.

Davide, Jr., Quiason, and Kapunan,
JJ., concur.

Padilla, J., (Chairman), see
concurring and dissenting opinion.

^[1]
Rollo, p. 33.

^[2]
Id., p. 28.

^[3]
Id., pp. 18-19.

^[4]
Id., pp.
103-106.

^[5]
Id., pp.
112-113.

^[6]
Philippine Telegraph and Telephone Corporation v. Laguesma, G.R. No. 101730, 17 June 1993, 223 SCRA 452.

^[7]
Decision of public respondent Secretary of Labor promulgated 23 March 1990,
Annex “B,” Petition; Rollo, pp. 24-26.

^[8]
Records, p. 111.

^[9]
Id., p. 94.

^[10]
Id., pp. 91-92.

^[11]
Franklin Baker Company of the Philippines v. Trajano, G.R. No. 75039, 28 January 1988, 157 SCRA 416.

^[12]
Southern Philippines Federation of Labor (SPFL) v. Calleja, G.R. No.
80882, 24 April 1989, 172 SCRA 676.

^[13]
See Batongbacal v. Associated Bank, G.R. No. 72977, 21 December 1988,
168 SCRA 600.

^[14]
Records, pp. 249-250.

^[15]
Rollo, pp. 201-203.

^[16]
Id., pp. 204-205.

^[17]
Id., pp.
206-207.

^[18]
Id., p. 208.

^[19]
Records, pp. 239-240.

^[20]
Id., pp.
233-238.

^[21]
Records, pp. 112-115.

^[22]
Rollo, p. 170.

^[23]
Records, pp. 120-121.

^[24]
Id., p. 265.

^[25]
See Panday v. NLRC, G.R. No. 67664, 20 May 1992, 209 SCRA 122.

^[26]
In re Dick, 38 Phil 41 [1918]; City of Manila v. Gomez, No.
L-37251, 31 August 1981, 107 SCRA 98; Escribano v. Ovila, No.
L-30375, 12 September 1978, 85 SCRA 245; Go Chico v. Martinez, 45 Phil.
256 [1923]; Gatchalian v. COMELEC, No.
L-32560, 22 October 1970, 35 SCRA 435; People v. Uy Jui Pio, 102 Phil.
679 [1957]; People v. Aquino, 83 Phil. 614 [1949].

^[27]
G.R. No. 88979, 7 February 1992, 206 SCRA 65, and cited cases therein.

^[28]
G.R. No. 74425, 7 October 1986, 144
SCRA 628, 635.

^[29]
Alcantara, Samson S., Philippine Labor
and Social Legislation Annotated, 1991
Ed., p. 455.

^[30]
Pascual, Crisolito, Labor Relations Law, 1986 ed., p. 159.

^[31]
G.R. No. 78755, 19 July 1989, 175 SCRA
471.

^[32]
G.R. No. 88957, 25 June 1992, 210 SCRA
339.

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