NATIONAL UNION OF WORKERS IN HOTELS,

RESTAURANTS AND ALLIED INDUSTRIES-

MANILA PAVILION HOTEL CHAPTER vs. SEC.
OF LABOR
OCTOBER 25, 2012 ~ VBDIAZ

G.R. No. 181531 July 31, 2009

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED

INDUSTRIES- MANILA PAVILION HOTEL CHAPTER vs. SECRETARY OF LABOR AND
EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA PAVILION
HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION

FACTS: A certification election was conducted on June 16, 2006 among the rank-and-file employees of
respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results:

EMPLOYEES IN VOTERS’ LIST = 353

TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22

In view of the significant number of segregated votes, contending unions, petitioner, NUHWHRAIN-
MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case
back to Med-Arbiter to decide which among those votes would be opened and tallied. 11 votes were
initially segregated because they were cast by dismissed employees, albeit the legality of their dismissal
was still pending before the Court of Appeals. Six other votes were segregated because the employees
who cast them were already occupying supervisory positions at the time of the election. Still five other
votes were segregated on the ground that they were cast by probationary employees and, pursuant to the
existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on,
however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted.

Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, specially those cast by
the 11 dismissed employees and those cast by the six supposedly supervisory employees of the Hotel.

Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE),
arguing that the votes of the probationary employees should have been opened considering that
probationary employee Gatbonton’s vote was tallied. And petitioner averred that respondent HIMPHLU,
which garnered 169 votes, should not be immediately certified as the bargaining agent, as the opening of
the 17 segregated ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence,
the 169 votes which HIMPHLU garnered would be one vote short of the majority which would then
become 169.

Secretary affirmed the decision of the med-arbiter. In fine, the SOLE concluded that the certification of
HIMPHLU as the exclusive bargaining agent was proper.

ISSUES: (1) whether employees on probationary status at the time of the certification elections should
be allowed to vote (2) whether HIMPHLU was able to obtain the required majority for it to be certified
as the exclusive bargaining agent.

HELD:

I. On the first issue, the Court rules in the affirmative.

The inclusion of Gatbonton’s vote was proper not because it was not questioned but because
probationary employees have the right to vote in a certification election. The votes of the six other
probationary employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-
Calleja holds:

In a certification election, all rank and file employees in the appropriate bargaining unit, whether
probationary or permanent are entitled to vote. This principle is clearly stated in Art. 255 of the Labor
Code which states that the “labor organization designated or selected by the majority of the employees in
an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for
purposes of collective bargaining.” Collective bargaining covers all aspects of the employment
relation and the resultant CBA negotiated by the certified union binds all employees in
the bargaining unit. Hence, all rank and file employees, probationary or permanent, have
a substantial interest in the selection of the bargaining representative. The Code makes
no distinction as to their employment status as basis for eligibility in supporting the
petition for certification election. The law refers to “all” the employees in the bargaining
unit. All they need to be eligible to support the petition is to belong to the “bargaining
unit.” (Emphasis supplied)

For purposes of this section (Rule II, Sec. 2 of Department Order No. 40-03, series of
2003), any employee, whether employed for a definite period or not, shall beginning on
the first day of his/her service, be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers
and those without any definite employers may form labor organizations for their mutual aid and
protection and other legitimate purposes except collective bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees from voting cannot
override the Constitutionally-protected right of workers to self-organization, as well as
the provisions of the Labor Code and its Implementing Rules on certification elections
and jurisprudence thereon.

A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order or public policy.

II. As to whether HIMPHLU should be certified as the exclusive bargaining agent, the
Court rules in the negative.

It is well-settled that under the so-called “double majority rule,” for there to be a valid
certification election, majority of the bargaining unit must have voted AND the winning
union must have garnered majority of the valid votes cast.

Prescinding from the Court’s ruling that all the probationary employees’ votes should be deemed valid
votes while that of the supervisory employees should be excluded, it follows that the number of valid
votes cast would increase – from 321 to 337. Under Art. 256 of the Labor Code, the union obtaining the
majority of the valid votes cast by the eligible voters shall be certified as the sole and exclusive
bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50% + 1. Hence,
50% of 337 is 168.5 + 1 or at least 170.

HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain
a majority vote. The position of both the SOLE and the appellate court that the opening of the 17
segregated ballots will not materially affect the outcome of the certification election as for, so they
contend, even if such member were all in favor of petitioner, still, HIMPHLU would win, is thus
untenable.

It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to
serve as basis for computing the required majority, and not just to determine which union won the
elections. The opening of the segregated but valid votes has thus become material.

To be sure, the conduct of a certification election has a two-fold objective: to determine the appropriate
bargaining unit and to ascertain the majority representation of the bargaining representative, if the
employees desire to be represented at all by anyone. It is not simply the determination of who between
two or more contending unions won, but whether it effectively ascertains the will of the members of the
bargaining unit as to whether they want to be represented and which union they want to represent them.

Having declared that no choice in the certification election conducted obtained the
required majority, it follows that a run-off election must be held to determine which
between HIMPHLU and petitioner should represent the rank-and-file employees.
PETITION GRANTED.

_____________

NOTES:

A run-off election refers to an election between the labor unions receiving the 2 highest number of votes
in a certification or consent election with 3 or more choices, where such a certified or consent election
results in none of the 3 or more choices receiving the majority of the valid votes cast; provided that the
total number of votes for all contending unions is at least 50% of the number of votes cast.

COCA-COLA BOTTLERS PHILIPPINES, INC (CCBPI). v.

ILOCOS PROFESSIONAL AND TECHNICAL EMPLOYEES
UNION (IPTEU)
September 9, 2015 | Peralta, J. | Confidential employees
Digester: Santos, Ihna
SUMMARY: IPTEU filed a petition for certification of election to
represent a bargaining unit consisting of 22 rank-and-file
professional and technical employees of CCBPI. CCBPI opposes
this, arguing that said employees already belong to a bargaining
unit (IMU) and that the 22 are considered as confidential
employees, hence should be excluded from the bargaining unit. SC
held that said employees are not members of the IMU due to
reclassification of their positions, and it also refrained from
resolving the issue of whether the 22 are confidential employees
or not, as this was a factual issue. SC defers to the findings of fact
of the Mediator-Arbiter, the SOLE, and the CA that the 22 are not
confidential employees.
DOCTRINE: Access to vital labor information is the imperative
consideration in determining whether or not an employee is a
confidential employee. An employee must assist or act in a
confidential capacity and obtain confidential information relating
to labor relations policies. Exposure to internal business
operations of the company is not per se a ground for the exclusion
in the bargaining unit.
[from footnotes]
Confidential employees are defined as those who (1) assist or act
in a confidential capacity, in regard (2) to persons who formulate,
determine, and effectuate management policies in the field of
labor relations.
The exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management
policies relating to labor relations is a principal objective sought to
be accomplished by the “confidential employee rule.”
The rationale for their separate category and disqualification to
join any labor organization is similar to the inhibition for
managerial employees, because if allowed to be affiliated with a
union, the latter might not be assured of their loyalty in view of
evident conflict of interests and the union can also become
company-denominated with the presence of managerial employees
in the union membership. Having access to confidential
information, confidential employees may also become the source of
undue advantage. Said employees may act as a spy or spies of
either party to a collective bargaining agreement.
FACTS:

July 9, 2007 – IPTEU, a registered independent labor
organization, filed a verified petition for certification election
to represent a bargaining unit consisting of approximately 22
rank-and-file professional and technical employees of CCBPI
Ilocos Norte Plant.

CCBPI prayed for the denial and dismissal of the petition,
arguing that the Sales Logistics Coordinator and Maintenance
Foreman are supervisory employees, while the 8 Financial
Analysts, 5 Quality Assurance Specialists, Maintenance
Manager Secretary, Trade Promotions and Merchandising
Assistant, Trade Asset Controller and Maintenance
Coordinator, Sales Information Analyst, Sales Logistics
Assistant, Product Supply Coordinator, Buyer, Inventory
Planner, and Inventory Analyst are confidential employees;
hence, ineligible for inclusion as members of IPTEU. It also
sought to cancel and revoke the registration of IPTEU for
failure to comply with the 20% membership requirement based
on all the supposed employees in the bargaining unit it seeks to
operate.

A preliminary hearing of the petition was held and the
possibility of voluntary recognition or consent election was not
acceded to by CCBPI.

Mediator-Arbiter Florence Marie Gacad-Ulep, convinced that
the union members are rank-and-file employees and not
occupying positions that are supervisory and confidential in
nature, granted IPTEU’s petition to exclude said employees
from the existing bargaining units of CCBPI.

CCBPI filed an appeal before the SOLE. The Mediator-Arbiter
acknowledged having received the Memorandum of Appeal but
informed that, pursuant to the IRR of the Labor Code: “the
order granting the conduct of a certification election in an
unorganized establishment shall not be subject to appeal. Any
issue arising therefrom may be raised by means of protest on
the conduct and results of the certification election.”

CCBPI then filed an Urgent Motion to Suspend Proceedings,
alleging that the notice issued by the Assistant Regional
Director for the conduct of pre-election conference is premature since the
decision of the Mediator-Arbiter is not yet
final and executory and that the Mediator-Arbiter already lost
jurisdiction over the case with the filing of an appeal. Two days
after, CCBPI filed a Manifestation, stating that its participation
in the pre-election conference, certification election, and other
proceedings is not a waiver, withdrawal or abandonment of the
pending appeal and motion to suspend proceedings.

In the Pre-election Conference CCBPI and IPTEU mutually
agreed to conduct the certification election. On election day,
only 16 of the 22 employees in the IPTEU list voted. However,
no votes were canvassed. CCBPI filed and registered a Protest
questioning the conduct and mechanics of the election and a
Challenge to Votes on the ground that the voters are
supervisory and confidential employees.

The parties met for the opening and counting of the challenged
votes. CCBPI filed a motion for inhibition, which the Mediator
Arbiter verbally denied on the grounds that it was not verified
and would cause undue delay in the proceedings as there no
other Mediators-Arbiters in the Region. The parties were
informed that their agreement to have the ballots opened could
not bind the Mediator- Arbiter. Instead, they were directed to
submit additional evidence that would aid in the resolution of
the challenged votes.

The Mediator-Arbiter denied CCBPI’s challenge to the 16
votes. She found that the voters are rank-and-file employees
holding positions that are not confidential in nature, and who
are not, or used to be, members of Ilocos Monthlies Union
(IMU) due to the reclassification of their positions by CCBPI
and have been excluded from the CBA entered into by IMU and
CCBPI from 1997 to 2005. Consequently, the challenged votes
were opened and canvassed. After garnering 14 out of the 16
votes cast, IPTEU was proclaimed as the sole and exclusive
bargaining agent of the rank-and-file exempt workers in CCBPI
Ilocos Norte Plant.

CCBPI elevated the case to the SOLE. However, said appeal
was denied. The SOLE held that, as shown by the certification
of the IMU President and the CBAs forged between CCBPI and
IMU from 1997 to 2007, the 22 employees sought to be
represented by IPTEU are not part of IMU and are excluded
from its CBA coverage; that even if the 16 challenged voters
may have access to information which are confidential from the
business standpoint, the exercise of their right to self
organization could not be defeated because their common
functions do not show that there exist a confidential
relationship within the realm of labor relations; and that the
order granting the certification election and sustaining its
validity despite the pendency of appeal and motion to suspend
is proper in view of Section 17, Rule VIII of Department Order
No. 40, Series of 2003, which states that the order granting the
conduct of a certification election in an unorganized
establishment is not subject to appeal and that any issue
arising therefrom may be raised by means of protest on the
conduct and results of the certification election.

CCBPI filed before the CA a petition for certiorari with prayer
for temporary restraining order and writ of preliminary
injunction. CA denied said petition, as well the MR filed by
CCBPI; hence, this petition.
RULING: Petition denied. CA resolution which affirmed the
resolution of the SOLE, dismissing petitioner’s appeal that the
assailed decision on challenged voters and proclamation of the
winner of the Mediator-Arbiter affirmed.
Whether the 22 employees are confidential employees and
should be excluded from the bargaining unit – NO

As proven by the certification of the IMU President as well as
the CBAs executed between IMU and CCBPI, the 22
employees sought to be represented by IPTEU are not
IMU members and are not included in the CBAs due to
reclassification of their positions. If these documents were
false, the IMU should have manifested its vigorous opposition.
o
The existing unions at CCBPI, especially the IMU of which
most of the IPTEU members were once part (until they
were considered outside the ambit of its existing
bargaining unit) never once opposed the Petition and the
Certification election, whether verbally or in written
Opposition.
o
Between Management and IMU, it is the latter which has
more to lose, as the creation of a separate bargaining unit
would reduce the scope of IMU’s bargaining unit. Yet
through all these proceedings, the Court took notice of the
substantial moral support that has been extended to the
Petitioner by the other Unions of CCBPI, so much so that,
until objected to by Management, they were even willing
to be present during the Certification Election

As to whether the 16 voters sought to be excluded from
the appropriate bargaining unit are confidential
employees, such query is a question of fact, which is not a proper issue in a petition for review
under Rule 45 of
the Rules. This holds more true in the present case in
view of the consistent findings of the Mediator-Arbiter,
the SOLE, and the CA.
o The factual findings by quasi-judicial agencies, such as the
DOLE, when supported by substantial evidence, are
entitled to great respect in view of their expertise in their
respective fields. Judicial review of labor cases does not
go so far as to evaluate the sufficiency of evidence on
which the labor official's findings rest. It is not the SC’s
function to assess and evaluate all over again the
evidence, testimonial and documentary, adduced by the
parties to an appeal, particularly where the findings of
both the trial court (here, the DOLE Secretary) and the
appellate court on the matter coincide, as in this case at
bar.
o
Absent any showing of whimsical or capricious exercise of
judgment, and unless lack of any basis for the conclusions
made by the appellate court be amply demonstrated, SC
may not disturb such factual findings.
o
The determination of factual issues is vested in the
Mediator-Arbiter and the Department of Labor and
Employment. Pursuant to the doctrine of primary
jurisdiction, the Court should refrain from resolving such
controversies unless the case falls under recognized and
well-established exceptions. The doctrine of primary
jurisdiction does not warrant a court to arrogate unto
itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an
administrative body of special competence.

In this case, organizational charts, detailed job descriptions,
and training programs were presented by CCBPI before the
Mediator-Arbiter, the SOLE, and the CA. Despite these, the
Mediator-Arbiter ruled that employees who encounter or
handle trade secrets and financial information are not
automatically classified as confidential employees. It was
admitted that the subject employees encounter and handle
financial as well as physical production data and other
information which are considered vital and important from the
business operations’ standpoint. Nevertheless, it was opined
that such information is not the kind of information that is
relevant to collective bargaining negotiations and settlement of
grievances as would classify them as confidential employees.
The SOLE, which the CA affirmed, likewise held that the
questioned voters do not have access to confidential labor
relations information.
o The Court defers to the findings of fact of the Mediator
Arbiter, the SOLE, and the CA. Certainly, access to vital
labor information is the imperative consideration.
An employee must assist or act in a confidential
capacity and obtain confidential information relating
to labor relations policies. Exposure to internal
business operations of the company is not per se a
ground for the exclusion in the bargaining unit.
NOTES: (footnotes)

San Miguel Foods, Inc. v. San Miguel Corp. Supervisors and
Exempt Union:
o Confidential employees are defined as those who (1)
assist or act in a confidential capacity, in regard (2)
to persons who formulate, determine, and effectuate
management policies in the field of labor relations.
The two criteria are cumulative, and both must be met if
an employee is to be considered a confidential employee –
that is, the confidential relationship must exist between
the employee and his supervisor, and the supervisor must
handle the prescribed responsibilities relating to labor
relations. The exclusion from bargaining units of
employees who, in the normal course of their duties,
become aware of management policies relating to
labor relations is a principal objective sought to be
accomplished by the “confidential employee rule.”
o Although Article 245 of the Labor Code limits the
ineligibility to join, form and assist any labor organization
to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by
reason of their positions or nature of work are required to
assist or act in a fiduciary manner to managerial
employees and, hence, are likewise privy to sensitive and
highly confidential records. Confidential employees are
thus excluded from the rank-and-file bargaining unit. The
rationale for their separate category and
disqualification to join any labor organization is
similar to the inhibition for managerial employees,
because if allowed to be affiliated with a union, the
latter might not be assured of their loyalty in view of
evident conflict of interests and the union can also
become company-denominated with the presence of managerial employees in the union
membership.
Having access to confidential information,
confidential employees may also become the source
of undue advantage. Said employees may act as a spy
or spies of either party to a collective bargaining
agreement.