Labor Law: Book V; Title V Coverage (Arts. 253-257)

  Book V

Labor Relations

Title V

Coverage

Arts. 253-257

Q: Do employees in non-profit non-governmental institutions have the right to unionize?

Q: What are the legally recognized purposes of self-organization of workers?

Q: How does "managerial employee" under Article 245 differ from "managerial employee" under Article 82?

Q: May confidential employees join a union?

Art. 253. Coverage and employees’ right to self-organization. 

All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

Own Notes

• Covered Employees
• Enterprises
• commercial enterprises
• industrial enterprises
• agricultural enterprises
• Institutions operating for profit or not
• religious institutions
• charitable institutions
• medical institutions
• educational institutions
• Others
• ambulant workers
• intermittent workers
• itinerant workers
• self-employed people
• rural workers
• those without any definite employers

Notes

• This Article mentions two rights:
• the right to self-organize and
• the right to form, join or assist labor organization
• "Organizing" is frequently equated with "unionizing" but the two are not the same. 
• All persons may organize for a lawful purpose, but to say that all persons may form labor unions is not accurate.
• There are many persons whom the law and court decisions do not allow to form or join labor organizations for purposes of collective bargaining.
• Examples:
• managers
• others specifically disqualified by law or court rulings
• Even employees of traditionally nonprofit organizations like religious a charitable, medical, or educational institutions may unionize. 
• This policy is which did significant departure from that of the Industrial Peace Act (1953) not allow employees of non-profit firms to unionize.

Art. 254. Right of employees in the public service. 

Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to form associations for purposes not contrary to law. 

Own Notes

• Government Corporations under the Corporation Code
• right to organize
• right to bargain collectively
• Other Employees in Civil Service
• right to form associations for purposes not contrary to law

Government Employees; "C.N.A."

• Government employees:
• may organize
• may unionize 
• may negotiate collective negotiation agreements (CNA) or memorandum of agreement (MOA) with their employers. 
• Their organizations have to be registered with the Civil Service Commission and the DOLE. 
• The governing law on this and related matters is E.O. No. 180, issued in 1987.
• The Executive Order applies to "government employees," referring to:
• employees of all branches, subdivisions, instrumentalities, and agencies of the Government
• including government-owned or -controlled corporations with original charters from Congress.
• The Executive Order, however, does not apply to:
• members of the Armed Forces
• including police officers
• policemen
• firemen
• jail guards
• Not eligible to join the rank-and-file organization:
• High-level employees doing:
• policy-making
• managerial, or 
• confidential duties
• The right of Government employees to deal and negotiate with their respective employers is not quite as extensive as that of private employees.
• Excluded from negotiation by government employees are the "terms and conditions of employment that are fixed by law." 
• Only those terms and conditions not otherwise fixed by law are negotiable.
• Employees and officers of SSS are not entitled to the signing bonus provided for in  collective negotiation agreement because the process of collective negotiations in the public sector does not encompass terms and conditions of employment requiring the appropriation of public funds. (SSS vs. Commission on Audit, G.R. No. 149240, July 11, 2000) 
• The Court reminds the Social Security Commission that the SSS fund is not their money.
• E.O. No. 180 concedes to government employees, like their counterparts in the private sector, the right to engage in concerted activities, including the right to strike.
• However, the executive order further states that those activities must be exercised in accordance with law, i,e., subject both to:
• Civil Service Law and rules and 
• any legislation that may be enacted by Congress.
• It also states that "the resolution of complaints, grievances, and cases involving government employees" is not ordinarily left to collective bargaining or other related concerted activities, but to "Civil Service Law and labor laws and procedures whenever applicable."
• In case any dispute remains unresolved after exhausting all available remedies under existing laws and procedures, the parties may jointly refer the dispute to the (Public Sector Labor-Management) Council for appropriate action.
• Memorandum Circular No. 6 of the Civil Service Commission, issued on April 21, 1987, enjoins strikes by government officials and employees. (Arizala, September 14, 1990) 
• To sum up, government employees covered by E.O. No. 180 may organize, even unionize, and negotiate employment condition fixed by law but they cannot strike.

Government Corporations Registered with SEC

• For employees or government corporations incorporated under the Corporation Code and registered with the Securities and Exchange Commission, the governing labor relations law is the Labor Code, not E.O. No. 180.
• Examples:
• Land Bank of the Philippines (LBP)
• Government Service Insurance System (GSIS)
• Social Security System (SSS)
• Development Bank of the Philippines (DBP)
• Philippine Health Insurance Corporation (PhilHealth)

Art. 255. 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. 

Own Notes

• Managerial Employees
• not eligible to join, assist or form any labor organization
• Supervisory Employees
• not eligible for membership in a labor organization of the rank-and-file employees
• may join, assist or form separate labor organizations of their own

Art. 256. Effect of Inclusion as Members of Employees Outside the Bargaining Unit.

The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union.

Own Notes

• Effect of Inclusion of Employees Outside Bargaining Unit
• not a ground for the cancellation of the registration of the union
• employees are automatically deemed removed from the list of membership

Supervisors and Managers

• "Managerial employee" and "supervisor" are differentiated in Article 219(m).
• “Managerial employee” is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. 
• decision-maker
• 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.
• recommender
• The power to decide and do managerial acts is separated from the power to recommend those managerial acts, such as laying down policy, hiring or dismissing employees, and so on. 
• Supervisor — power only to recommend
• Managerial employee — power to decide and do those acts
• They pertain to either policy decisions or people (personnel) decisions.
• The powers of the position, not the title, make the position-holder a manager or a supervisor.
• But to make one a supervisor, the power to recommend must not be merely routinary or clerical in nature; it should require the use of independent judgment. 
• In other words, the recommendation is:
1. discretionary or judgmental (not clerical)
2. independent (not a dictation of someone else), 
3. effective (given particular weight in making the management decision) 
• If these qualities are lacking or, worse, if the power to recommend is absent, then the person is not really a supervisor but a rank-and-file employee and therefore may join rank-and-file organization.
• Similarly, a so-called manager, regardless of impressive title, is not really a manager in the eyes of the law, if he does not possess managerial powers to make policy decisions or people decisions (to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees). 
• If he can only recommend the exercise of any of these powers, he a supervisor, hence, may join, assist or form a supervisors organization. 
• Worse, if he cannot even recommend those acts, the way a supervisor does, then he is not even a supervisor but a rank-and-file employee, regardless of position title, perquisites, or seniority. Therefore, he belongs or should belong to a rank-and-file organization.
• In the determination of whether certain employees are managerial employees, the court accords due respect [to] and therefore sustains the findings of fact made by quasi-judicial agencies which are supported by substantial evidence, considering their expertise in their respective fields. (Asian Institute of Management, January 23, 2017, citing earlier decisions)
• The prohibition of unionization of managerial employees does not violate the Philippine Constitution. (United Pepsi-Cola, March 25, 1998)

Segregation

• Article 255 allows supervisory employees to form, join, or assist separate labor organizations of their own, but they are not eligible for membership in labor organization of the rank-and-file employees.
• Before R.A. No. 9481 took effect on June 14, 2007, it was ruled that a supervisors' union could not affiliate with the same federation as that of the rank-and-file union. (Atlas Lithographic, January 6, 1992) 
• It was further ruled that a union whose membership included supervisors and rank-and-file employees was not and could not become a legitimate labor organization. It could not petition for a certification election. It could not ask to be recognized as the bargaining representative of employees, and it could not strike. (Toyota Motor, February 19, 1997)
• The above rulings in Atlas Lithographic and Toyota are no longer true because of the last sentence of Article 255 and amendatory Article 256, both added by R.A. No. 9481.

Confidential Employees

• Confidential employees do not constitute a distinct category for purposes of organizational right.
• Confidentiality may attach to a managerial or nonmanagerial position, hence, by itself is not enough basis of exclusion from union coverage. 
• However, in Philips Industrial Development vs. NLRC, G.R. No. 88957, June 25, 1992 the court sustained the exclusion of confidential rank-and-file employees from the rank-and-file union. 
• The court applied the "doctrine of necessary implication" which essentially means that what is implied in a statute is as much a part thereof as that which is expressed. Hence, the court extended to confidential employees the prohibition against managers' membership in unions. 
• Confidential and managerial employees are, as it were, birds of the same feather, Said the Court:
• By the nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them.
• The ineligibility of confidential employees, enunciated in Philips, is entrenched in the 1995 case of Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores Union, G.R. No. 119854, February 13, 1995, where the Court observed that legal secretaries, though neither managers nor supervisors, are confidential employees. 
• "Thus, to them applies our holding in the case of Philips Industrial Dev, Inc. vs. NLRC (210 SCRA 339 [1992])." 
• In Metrolab Industries vs. Roldan-Confesor; et al., G.R. No. 108855, February 28, 1996, the Court excluded the confidential employees not only from union membership but from the rank-and-file bargaining unit itself. 
• Hence, the union security clause in the CBA requiring payment of agency fee or compulsory union membership does not apply to the confidential staff.
• Not every position that the management labels as "confidential" automatically becomes disqualified from union membership. The legal definition must be applied; otherwise, the employer can easily decimate or reduce the union membership. 
• In unionization context, confidential employees are limited to those who:
1. assist or act in a confidential capacity
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 relations. (San Miguel Corp. Supervisors and Exempt Union, et al. vs. Hon. Laguesma et al., G.R. No. 110399, August 15, 1997)
• When the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees from forming, assisting or joining a union. (Sugbuanon Rural Bank, February 2, 2000) 
• The definition of "confidential employee" intends to exclude from the bargaining unit those employees who, in the normal course of their duties become aware of management policies relating to labor relations. (Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery, August 3, 2010)
• Applying this definition, a payroll master and the employees who have access to salary and compensation data are not considered confidential employees in relation to unionization. (San Miguel Foods, August 2011)
• Quoting from a textbook, the court points out that confidentiality of position is "not a matter of official rank; it is a matter of job content and authority." When the registrar, guidance counsellor, etc. of a school refused to resign from the union, despite the decision of a panel of arbitrators, the school dismissed them, insisting that they were confidential employees that should not be union members. The court found their dismissal justified. (University of the Immaculate Concepcion, September 14, 2015)

Security Guards

• Security guards used to be barred from joining a labor organization of the rank-and-file. 
• The disqualification has been removed. They may join a labor organization of the rank-and-file or that of the supervisory union, depending on their rank. (Manila Electric, May 20, 1991)

Coop Members

• An employee of a cooperative who is also a member and co-owner cannot invoke the right to collective bargaining, for certainly an owner cannot bargain with himself or his co-owners. 
• In cooperatives, however, with employees who are not members or co-owners thereof, such employees are entitled to exercise the rights of workers to self-organization, collective bargaining, and other rights enshrined in the Constitution and existing laws. (San Jose Electric, May 31, 1989)
• But even as regards the employees who are members of the cooperative, their incapacity to to bargain bargain does not stop them from forming their organization which is not union. Its purpose is not to collectively bargain with the cooperative but to extend aid and protection to its members. 
• The capacity of such an association to sue the cooperative which forcibly required members to sign applications for retirement, resignation or separation was upheld in Nueva Ecija Electric, January 24, 2000.

International Organization

• A certification election cannot be conducted in an international organization which the the Philippine Government has granted immunity from local jurisdiction. 
• Examples of such international organizations are the:
• International Rice Research Research Institute (IRRI) 
• International Catholic Migration Commission (ICMC).
• The grant of such immunity is a political question whose resolution the of Executive Branch of Government is conclusive upon the Courts. (International Catholic, 190 SCRA 130 [1990])

Religious Objectors

• Under the Industrial Peace Act — the labor relations law before the passage of the Labor Code — persons whose religion forbade membership in labor unions (e.g., Iglesia ni Cristo), could not be compelled into union membership. 
• This "exemption" was embodied in a law (R.A. No. 3350, enacted on June 18, 1961) whose constitutionality was upheld by the Supreme Court in Victoriano, September 12, 1974.
• In the case Ebralinag, March 1, 1993, the Court, in exempting Jehovah Witnesses from compulsory participation in flag ceremony, supported its decision by citing the religious objectors' exemption from compulsory union membership. 
• Clearly, as late as 1993, the Court acknowledges the existence or justification of the exemption granted by R.A. No. 3350 in 1961.

Art. 257. Non-abridgment of right to self-organization. 

It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization. Such right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for the same purpose for their mutual aid and protection, subject to the provisions of Article 264 of this Code. 

Own Notes

• Unlawful Acts in Exercise of Right to Self-organization
• restrain
• coerce
• discriminate against
• unduly interfere
• Right to Self-organization
• right to form, join, or assist labor organizations for the purpose of collective bargaining
• right to engage in lawful concerted activities

Notes

• The right of self-organization is a pillar of industrial democracy.  So basic and vital is this right that the Constitution and the Code zealously protect its exercise.
• Articles 253 and 257 supplement each other, and the supplementation has expansive significance.
• Article 253 declares that all persons employed in enterprises or institutions have the right to self-organize. 
• And this "right to self organize," according to Article 257, includes at least two components, namely:
• right to form, join, or assist labor organizations
• right to engage in lawful concerted activities
• The two rights as well as their purposes are shielded from abridgement by "any person" 
• whether a private person or a public officer
• whether in a private or public organization, and
• whether in an employment relationship or outside of it
• The two rights, says this Article 257, pertain to "employees and workers, although Article 219(g) defines a labor organization as a union or association of "employees.
• Whether an association or union, independent or affiliated, an organization is needed by workers and employees. It transforms the weakness of the individual into strength of the group. It solidifies. It unites individuals into an entity with a collective voice which employers or the government cannot easily ignore, The law protects a workers' organization because it is a device to check authoritarianism and to diffuse wealth created by combined efforts of hired hands.
• The right to organize carries with it the right to engage in group action.
• But the group action by a non-union cannot be work stoppage only union may resort to work stoppage, subject to legal conditions and requirements.
• These are detailed in Articles 278 through 280. 
• The right to organize, says this Article, should not be abridged or curtailed.  Any act intended to weaken or defeat the right is regarded by law as an offense, which is technically called "unfair labor practice" (ULP). 
• Article 257 captures the essence of unfair labor practice.  The next three Articles elaborate on the concept.

Q: Differentiate Managerial Employees mentioned in Article 255 of the Labor Code on Labor Relations and Managerial Employees in Labor Standards. 

• Managerial Employees in Labor Relations pertains to those with powers and prerogatives to lay down and execute management policies. Unlike the definition in Labor Standards, a managerial employee is distinct from supervisory employees who recommends managerial acts. 
• Managerial Employees in Labor Standards pertains to those with primary duties consisting of management of the establishment, or the department or subdivision of such establishment. Unlike the definition in Labor Relations, managerial employees include all the officers and members of the managerial staff.

Q: Who are excluded from the coverage of the right to self-organization? 

• As a general rule, all persons may exercise their right to self-organization. 
• However, the following are not allowed to form labor organization for collective bargaining purposes: 
1. Managerial Employees 
2. Co-owners of Cooperative 
3. Foreign Workers
4. International Organizations
5. Religious Members
6. Others disqualified by law or court rulings 

Q: What is the effect if managers, supervisor are intermixed as members of a rank and file labor organization? 

• If managers are supervisor are intermixed as members of a rank and file labor organization, it would cause conflict in the existing employment structure. It could potentially destroy the existing structure by crossing the line dividing the management and labor. 
• There could be challenges in representation and management and conflict of interests, specially that managerial employees are the same persons deciding on management policies. Mixing them together in one organization would undermine the effectivity of the collective bargaining agreement.