SEMIRARA COAL CORPORATION, PETITIONER, VS. HON. SECRETARY OF LABOR, SEMIRARA COAL CORPORATION SUPERVISORY UNION (SECCSUN) AND SEMIRARA COAL CORPORATION UNION OF NON-MANAGERIAL E…

Semirara Coal Corporation versus Secretary of Labor

The Case

This is a petition for certiorari brought by Semirara Coal Corporation against the Secretary of Labor, the Semirara Coal Corporation Supervisory Union, and the Semirara Coal Corporation Union of Non-Managerial Employees. The company asks the Supreme Court to annul the rulings of the Secretary of Labor that set aside a Med-Arbiter's order and directed a certification election among the company's supervisory employees, with the supervisory union included as one of the choices. The case matters because it draws the dividing line between managerial and supervisory employees under the Labor Code as amended by Republic Act 6715, and because it confirms that supervisory employees may form their own labor organization and take part in a certification election.

Procedural History

The case began with a petition for certification election filed by the Semirara Coal Corporation Union of Non-Managerial Employees. The Med-Arbiter granted the petition and ordered a certification election among the non-managerial employees, with the non-managerial union and "No Union" as the choices. The company appealed to the Secretary of Labor, who dismissed the appeal and directed that the election proceed. The supervisory union, which had meanwhile obtained its certificate of registration, moved to intervene. The Med-Arbiter later issued an order declaring the so-called supervisory employees to be managerial employees and therefore ineligible to participate in the election. On appeal by the supervisory union, the Secretary of Labor set that order aside, declared the employees truly supervisory, and ordered their union included as a choice in the certification election. The company's motion for reconsideration was denied, and its later manifestation and motion were likewise denied. The company then came to the Supreme Court by petition for certiorari, and the Court issued a temporary restraining order enjoining the election.

Facts

On January 13, 1989, the non-managerial union filed a petition for certification election covering a bargaining unit of supervisors and junior staff, more or less one hundred forty employees. On March 21, 1989, Republic Act 6715 took effect, amending the Labor Code and creating a new group of employees, the supervisory employees, separate and distinct from managerial employees. The Med-Arbiter granted the petition and set the election. The company appealed, arguing that the petitioning union lacked legal personality to seek certification as the exclusive bargaining agent of the supervisory employees, but the Secretary of Labor dismissed the appeal.

The supervisory union, registered on September 11, 1989, moved to intervene. At a hearing, the parties voluntarily agreed to hold a consent election. But instead of submitting the required list of eligible voters, the company sent a telegram to the Med-Arbiter saying it could not submit a list of non-managerial supervisors because all its supervisors were performing managerial functions. It then filed a manifestation and motion claiming that its supervisors were managerial employees, relying on a company memorandum dated August 29, 1988 and samples of its standard disciplinary forms. The Med-Arbiter ruled that the supervisory employees were managerial and ineligible to participate in the election.

On appeal, the Secretary of Labor set aside that order, declared the employees truly supervisory, and ordered the supervisory union included as a choice in the certification election. After the denial of its motion for reconsideration, the company issued a new memorandum dated August 30, 1990, entitled "Policy Empowering All the Junior Staffs/Supervisors In The Company To Discipline The Erring Employees Under Them," and used it to seek reversal of the Secretary's ruling. The Secretary denied the motion, and the company elevated the matter to the Supreme Court.

Issues

• Whether or not the supervisory employees of Semirara Coal Corporation are truly supervisory employees, and not managerial employees, under Article 212 (m) of the Labor Code as amended by Republic Act 6715.
• Whether or not the supervisory employees may participate in the certification election and form their own labor organization under Article 245 of the Labor Code as amended.

Applicable Provisions

Article 212 (m) of the Labor Code, as amended by Republic Act 6715, provides:

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 authority is not merely routinary or clerical 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 for purposes of this Book.

This is the test the Court applied to determine whether the company's supervisors were managerial or supervisory.

Article 245 of the Labor Code, as amended by Republic Act 6715, provides:

Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

This provision secures the right of supervisory employees to organize separately, which the Court held must not be defeated.

Ruling

On the first issue, the Court held that the company's supervisors are truly supervisory employees. Their disciplinary actions are recommendatory in nature, because their findings and decisions remain subject to the approval of the Personnel Manager and the Resident Manager. The August 29, 1988 memorandum did not alter this; it merely reiterated the duty to conduct a preliminary investigation, and it was silent on who ultimately determines the guilt of the erring employee. The standard disciplinary form signed by an immediate supervisor did not show that the supervisor alone decided the fate of erring employees. As for the August 30, 1990 memorandum, the Court agreed with the Solicitor General that if the 1984 memorandum had already been repealed by the 1988 memorandum, there would have been no need for its express repeal by another memorandum, and that the very title of the latest memorandum was a tacit admission that the supervisors were not previously vested with the power to discipline.

On the second issue, the Court held that the members of the supervisory union should be declared as they are so referred, supervisory employees, and that this finding accords with the intention of the lawmakers in enacting Republic Act 6715, which revived the nomenclature of supervisory employees and their right to unionize among themselves. The Court stressed that any doubt must be resolved in favor of the exercise of labor rights, and that to declare the members managerial amid the doubtful reasoning of the company would deprive them of their constitutional right to self-organization.

Doctrine

A managerial employee is one 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. A supervisory employee is one who, in the interest of the employer, effectively recommends such managerial actions, where the exercise of that authority is not merely routinary or clerical but requires the use of independent judgment. Where the disciplinary action of an immediate superior is merely recommendatory and subject to the approval of higher officers, the superior is supervisory, not managerial. Supervisory employees may not join the labor organization of rank-and-file employees, but they may join, assist or form separate labor organizations of their own. In interpreting the Constitution and labor laws, the Court adopts the liberal approach that favors the exercise of labor rights, and doubts are resolved in favor of the worker.

Disposition

The petition was dismissed for lack of merit, the temporary restraining order was lifted, and the decision of the Secretary of Labor and its affirmatory orders were affirmed in full.

Remember This

Memorize the line that a supervisor who merely recommends discipline, subject to the approval of higher officers, remains a supervisory employee entitled to form a separate labor organization. Examiners use this case to test the managerial versus supervisory distinction under Article 212 (m) and the separate right to organize under Article 245.