ATLAS LITHOGRAPHIC SERVICES, INC., PETITIONER, VS. UNDERSECRETARY BIENVENIDO E. LAGUESMA (DEPARTMENT OF LABOR AND EMPLOYMENT) AND ATLAS LITHOGRAPHIC SERVICES, INC. SUPERVISORY, …

This is a petition for certiorari under Rule 65 of the Rules of
Court seeking the modification of the Order dated 14 December 1990 and
the Resolution dated 21 November 1990 issued by the public respondents.

The antecedent facts of the case as gathered from the records are as follows:

On July 16, 1990, the supervisory, administrative personnel, production,
accounting and confidential employees of the petitioner Atlas
Lithographic Services, Inc. (ALSI) affiliated with private respondent
Kaisahan ng Manggagawang Pilipino, a national labor organization. The
local union adopted the name Atlas Lithographic Services, Inc.
Supervisory, Administrative, Personnel, Production, Accounting and
Confidential Employees Association or ALSI-SAPPACEA-KAMPIL in short and
which we shall hereafter refer to as the ‘supervisors’ union.

Shortly thereafter, private respondent Kampil-­Katipunan filed on behalf
of the ‘supervisors’ union a petition for certification election so
that it could be the sole and exclusive bargaining agent of the
supervisory employees.

The petitioners opposed the private respondent’s petition claiming that
under Article 245 of the Labor Code the private respondent cannot
represent the supervisory employees for collective bargaining purposes
because the private respondent also represents the rank-and-file
employees’ union.

On September 18, 1990, the Med-Arbiter issued an order in favor of the
private respondent, the dispositive portion of which provides:

“WHEREFORE, premises considered, a certification election among
the supervisory employees belonging to the Administrative, Personnel,
Production, Accounting Departments as well as confidential employees
performing supervisory functions of Atlas Lithographic Services,
Incorporated is hereby ordered conducted within 20 days from receipt
hereof, subject to usual pre-election conference, with the following
choices:

“1. KAMPIL (KATIPUNAN);

“2. No union.

“SO ORDERED.” (Rollo, pp. 39-40)

The petitioners, as expected, appealed for the reversal of the above
order. The public respondent, however, issued a resolution affirming the
Med-Arbiter’s order.

The petitioners, in turn, filed a motion for reconsideration but the same was denied. Hence, this petition for certiorari.

The sole issue to be resolved in this case is whether or not, under
Article 245 of the Labor Code, a local union of supervisory employees
may be allowed to affiliate with a national federation of labor
organizations of rank-and-file employees and which national federation
actively represents its affiliates in collective bargaining negotiations
with the same employer of the supervisors and in the implementation of
resulting collective bargaining agreements.

The petitioner argues that KAMPIL-KATIPUNAN already represents its
rank-and-file employees and, therefore, to allow the supervisors of
those employees to affiliate with the private respondent is tantamount
to allowing the circumvention of the principle of the separation of
unions under Article 245 of the Labor Code.

It further argues that the intent of the law is to prevent a single
labor organization from representing different classes of employees with
conflicting interests.

The public respondent, on the other hand, contends that despite
affiliation with a national federation, the local union does not lose
its personality which is separate, and distinct from the national
federation. It cites as its legal basis the case of Adamson &
Adamson, Inc. v. CIR, (127 SCRA 268 [1984]).

It maintains that Rep. Act No. 6715 contemplates the principle laid down
by this Court in the Adamson case interpreting Section 3 of Rep. Act
No. 875 (the Industrial Peace Act) on the right of a supervisor’s union
to affiliate. The private respondent asserts that the legislature must
have noted the Adamson ruling then prevailing when it conceived the
reinstatement in the present Labor Code of a similar provision on the
right of supervisors to organize.

Under the Industrial Peace Act of 1953, employees were classified into
three groups, namely: (1) managerial employees; (2) supervisors; and (3)
rank-and­-file employees. Supervisors, who were considered employees in
relation to their employer could join a union but not a union of
rank-and-file employees.

With the enactment in 1974 of the Labor Code (Pres. Decree No. 442),
employees were classified into managerial and rank-and-file employees.
Neither the category of supervisors nor their right to organize under
the old statute were recognized. So that, in Bulletin Publishing
Corporation v. Sanchez, (144 SCRA 628 [1986]), the Court interpreted the
superseding labor law to have removed from supervisors the right to
unionize among themselves. The Court ruled:

“In the light of the factual background of this case, We are
constrained to hold that the supervisory employees of petitioner firm
may not, under the law, form a supervisors union, separate and distinct
from the existing bargaining unit (BEU), composed of the rank­-and-file
employees of the Bulletin Publishing Corporation. It is evident that
most of the private respondents are considered managerial employees.
Also, it is distinctly stated in Section 11, Rule II, of the Omnibus
Rules Implementing the Labor Code, that supervisory unions are presently
no longer recognized nor allowed to exist and operate as such.” (pp.
633, 634)

In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres.
Decree No. 442, the supervisory unions existing since the effectivity of
the New Code in January 1, 1975 ceased to operate as such and the
members who did not qualify as managerial employees under this
definition in Article 212 (k) therein became eligible to form, to join
or assist a rank-and-file union.

A revision of the Labor Code undertaken by the bicameral Congress
brought about the enactment of Rep. Act No. 6715 in March 1989 in which
employees were reclassified into three groups, namely: (1) the
managerial employees; (2) supervisors, and (3) the rank­-and-file
employees. Under the present law, the category of supervisory employees
is once again recognized. Hence, Art. 212(m) states:

“(m) xxx 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. xxx”

The rationale for the amendment is the government’s recognition of the
right of supervisors to organize with the qualification that they shall
not join or assist in the organization of rank-and-file employees. The
reason behind the Industrial Peace Act provision on the same subject
matter has been adopted in the present statute. The interests of
supervisors on the one hand, and the rank-and-file employees on the
other, are separate and distinct. The functions of supervisors, being
recommendatory in nature are more identified with the interests of the
employer. The performance of those functions may, thus, run counter to
the interests of the rank-and-file.

This intent of the law is made clear in the deliberations of the
legislators on then Senate Bill 530 now enacted as Rep. Act No. 6715.

The definition of managerial employees was limited to those having
authority to hire and fire while those who only recommend effectively
the hiring or firing or transfers of personnel would be considered as
closer to rank-and-file employees. The exclusion, therefore, of middle
level executives from the category of managers brought about a third
classification, the supervisory employees. These supervisory employees
are allowed to form their own union but they are not allowed to join the
rank-and-file union because of conflict of interest (Journal of the
Senate, First Regular Session, 1987-1988, Volume 3, p. 2245).

In terms of classification, however, while they are more closely
identified with the rank-and-file they are still not allowed to join the
union of rank-and-file employees. To quote the Senate Journal:

“In reply to Sen. Guingona’s query whether ‘supervisors’ are
included in the term ‘employee’, Sen. Herrera stated that while they are
considered as rank-and-file employees, they cannot join the union and
they would have to form their own supervisors’ union pursuant to Rep.
Act 875.” (supra, p. 2288).

The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing management policy or
ask for the discipline or dismissal of subordinates, they identify with
the interests of the employer and may act contrary to the interests of
the rank-and-file.

We agree with the petitioners’ contention that a conflict of interest
may arise in the areas of discipline, collective bargaining and strikes.

Members of the supervisory union might refuse to carry out disciplinary
measures against their co-member rank-and-file employees.

In the area of bargaining, their interests cannot be considered
identical. The needs of one are different from those of the other.
Moreover, in the event of a strike, the national federation might
influence the supervisors’ union to conduct a sympathy strike on the
sole basis of affiliation.

More important, the factual issues in the Adamson case are different
from the present case. First, the rank-and-file employees in the Adamson
case are not directly under the supervisors who comprise the
supervisors’ union. In the case at bar, the rank-and­-file employees are
directly under the supervisors organized by one and the same
federation.

The contemplation of the law in Sec. 3 of the Industrial Peace Act is to
prohibit supervisors from joining a labor organization of employees
under their supervision, Sec. 3 of the Industrial Peace Act provides:

“Sec. 3 – Employees’ Right to Self-Organization. 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 (Underscoring supplied).

This was not the consideration in the Adamson case because as mentioned
earlier, the rank-and-file employees in the Adamson case were not under
the supervision of the supervisors involved.

Meanwhile, Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides:

“Art. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. – Managerial employees
are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own.

The Court construes Article 245 to mean that, as in Section 3 of the
Industrial Peace Act, supervisors shall not be given an occasion to
bargain together with the rank-and-file against the interests of the
employer regarding terms and conditions of work.

Second, the national union in the Adamson case did not actively
represent its local chapters. In the present case, the local union is
actively represented by the national federation. In fact, it was the
national federation, the KAMPIL-KATIPUNAN, which initially filed a
petition for certification in behalf of the respondent union.

Thus, if the intent of the law is to avoid a situation where supervisors
would merge with the rank-­and-file or where the supervisors’ labor
organization would represent conflicting interests, then a local
supervisors’ union should not be allowed to affiliate with the national
federation of union of rank-and-file employees where that federation
actively participates in union activity in the company.

The petitioner further contends that the term labor organization
includes a federation considering that Art. 212 (g) mentions ‘any union
or association of employees.’

The respondent, however, argues that the phrase refers to a local union
only in which case, the prohibition in Art. 245 is inapplicable to the
case at bar.

The prohibition against a supervisors’ union joining a local union of
rank-and-file is replete with jurisprudence. The Court emphasizes that
the limitation is not confined to a case of supervisors wanting to join a
rank-and-file local union. The prohibition extends to a supervisors’
local union applying for membership in a national federation the members
of which include local unions of rank-and-file employees. The intent of
the law is clear especially where, as in the case at bar, the
supervisors will be co-mingling with those employees whom they directly
supervise in their own bargaining unit.

Technicalities should not be allowed to stand in the way of equitably
and completely resolving the rights and obligations of the parties.
(Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What
should be paramount is the intent behind the law, not its literal
construction. Where one interpretation would result in mischievous
consequences while another would bring about equity, justice, and the
promotion of labor peace, there can be no doubt as to what
interpretation shall prevail.

Finally, the respondent contends that the law prohibits the employer
from interfering with the employees’ right to self-organization.

There is no question about this intendment of the law. There is,
however, in the present case, no violation of such a guarantee to the
employee. Supervisors are not prohibited from forming their own union.
What the law prohibits is their membership in a labor organization of
rank-and-file employees (Art. 245, Labor Code) or their joining a
national federation of rank-and-file employees that includes the very
local union which they are not allowed to directly join.

In a motion dated November 15, 1991 it appears that the petitioner has
knuckled under to the respondents’ pressures and agreed to let the
national federation KAMPIL-KATIPUNAN represent its supervisors in
negotiating a collective bargaining agreement. Against the advise of its
own counsel and on the basis of alleged “industrial peace”, the
petitioner expressed a loss of interest in pursuing this action. The
petitioner is, of course, free to grant whatever concessions it wishes
to give to its employees unilaterally or through negotiations but we
cannot allow the resulting validation of an erroneous ruling and policy
of the Department of Labor and Employment (DOLE) to remain on the basis
of the petitioner’s loss of interest. The December 14, 1990 order and
the November 21, 1990 resolution of DOLE are contrary to law and must be
declared as such.

WHEREFORE, the petition is hereby GRANTED. The private
respondent is disqualified from affiliating with a national federation
of labor organizations which includes the petitioner’s rank-and-file
employees.

SO ORDERED.

Feliciano, Bidin, Davide, Jr., and Romero, JJ., concur.