Labor 2-3
Labor 2-3
Labor 2-3
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the On November 11, 2003, respondent BPI presented its evidence ex parte.26 It offered as
November 16, 2007 Decision3and the September 19 2008 Resolution4 of the Court of Appeals evidence the testimony of its Account Consultant, Lilie Coria Ultu (Ultu), who testified on the
(CA) in CA-G.R. SP No. 91217. veracity of the Promissory Note with Chattel Mortgage, the Deed of Assignment, the demand
letter dated October 16, 1998, and the Statement of Account27 of petitioner-spouses.28
Factual Antecedents
For their part, petitioner-spouses offered as evidence the Alarm Sheet issued by the Philippine
On June 13, 1995, petitioner-spouses Manolito and Lourdes de Leon executed a Promissory National Police on December 3, 1997, the Sinumpaang Salaysay executed by Reynaldo Llanos
Note5 binding themselves to pay Nissan Gallery Ortigas the amount of ₱458,784.00 in 36 (Llanos), the Subpoena for Llanos, the letter of Citytrust dated July 30, 1996, the letters of
monthly installments of ₱12,744.00, with a late payment charge of five percent (5%) per respondent BPI dated January 6, 1998 and June 25, 1998, and the testimonies of Ultu and
month.6 To secure the obligation under the Promissory Note, petitioner-spouses constituted petitioner Manolito.29
a Chattel Mortgage7 over a 1995 Nissan Sentra 1300 4-Door LEC with Motor No. GA-13-
549457B and Serial No. BBAB-13B69336.8 Ruling of the Metropolitan Trial Court
On the same day, Nissan Gallery Ortigas, with notice to petitioner-spouses, executed a Deed On November 17, 2004, the MeTC rendered a Decision30 in favor of respondent BPI and
of Assignment9 of its rights and interests under the Promissory Note with Chattel Mortgage declared petitioner-spouses liable to pay their remaining obligation for failure to notify
in favor of Citytrust Banking Corporation (Citytrust).10 Citytrust or respondent BPI of the alleged theft of the mortgaged vehicle and to submit proof
thereof.31 The MeTC considered the testimony of petitioner Manolito dubious and self-
On October 4, 1996, Citytrust was merged with and absorbed by respondent Bank of the serving.32 Pertinent portions of the Decision read:
Philippine Islands (BPI).11
[Petitioner Manolito] declared on the witness stand that he sent to [Citytrust], through "fax,"
Petitioner-spouses, however, failed to pay their monthly amortizations from August 10, 1997 the papers necessary to formalize his report on the loss of [the] subject motor vehicle, which
to June 10, 1998.12Thus, respondent BPI, thru counsel, sent them a demand letter13 dated included the Alarm Sheet (Exhibit "1") and the Sinumpaang Salaysay of one Reynaldo Llanos
October 16, 1998. y Largo (TSN dated August 3, 2004, pp. 17-19).
On November 19, 1998, respondent BPI filed before the Metropolitan Trial Court (MeTC) of However, [his claim that] such documents were indeed received by [Citytrust] only remains
Manila a Complaint14 for Replevin and Damages, docketed as Civil Case No. 161617 and self-serving and gratuitous. No facsimile report has been presented that such documents
were indeed transmitted to Citytrust. No formal letter was made to formalize the report on WHEREFORE, premised from the above considerations and findings, the decision appealed
the loss. For an individual such as [petitioner Manolito], who rather appeared sharp and from is hereby reversed and set aside.
intelligent enough to know better, an apparent laxity has been displayed on his part. Heedless
The Complaint and the counterclaim are hereby DISMISSED for lack of merit.
of the consequences, [petitioner Manolito] simply satisfied himself with making a telephone
call, if indeed one was made, to [a rank and file employee] of Citytrust or [respondent BPI] x SO ORDERED.39
x x and did not exercise x x x due diligence to verify any feedback or action on the part of the
banking institution. Ruling of the Court of Appeals
Worse, [petitioners] x x x failed to prove that they indeed submitted proof of the loss or theft Aggrieved, respondent BPI elevated the case to the CA via a Petition for Review under Rule
of the motor vehicle. [Petitioner-spouses] merely [presented] an Alarm Sheet and the 42 of the Rules of Court.
Sinumpaang Salaysay of one Reynaldo Llanos y Largo. But a formal police report on the matter On November 16, 2007, the CA reversed and set aside the RTC Order and reinstated the MeTC
is evidently missing. It behooved [petitioner-spouses] to establish the alleged theft of the Decision, thus:
motor vehicle by submitting a police action on the matter, but this, they did not do.
WHEREFORE, the instant petition for review is GRANTED. The Order issued by the Regional
Haplessly, therefore, the required notice and proof of such loss have not been satisfied.33 Trial Court of Manila (Branch 34), dated July 18, 2005, in Civil Case No. 05-111630, is
Thus, the MeTC disposed of the case in this wise: REVERSED and SET ASIDE and the Decision of the Metropolitan Trial Court of Manila (Branch
6) is REINSTATED. No pronouncement as to costs.
WHEREFORE, judgment is hereby rendered in favor of [respondent BPI] and against
[petitioner-spouses] Lourdes E. De Leon and Jose Manolito De Leon, as follows: SO ORDERED.40
(i) Ordering [petitioner-spouses] to jointly and severally pay the sum of ₱130,018.08 plus 5% Petitioner-spouses moved for reconsideration, which the CA partly granted in its September
interest per month as late payment charges from date of default on August 10, 1997, until 19, 2008 Resolution,41the dispositive portion of which reads:
fully paid; WHEREFORE, the foregoing premises considered, our decision of 16 November 2007 is
(ii) Ordering [petitioner-spouses] to jointly and severally pay attorney’s fees fixed in the deemed amended only to the extent herein discussed and the dispositive portion of said
reasonable sum of ₱10,000.00; and decision should now read as follows:
(iii) Ordering [petitioner-spouses] to jointly and severally pay the costs of suit. "WHEREFORE, the instant petition for review is GRANTED. The Order issued by the Regional
Trial Court of Manila (Branch 34), dated July 18, 2005, in Civil Case No. 05-111630, is
SO ORDERED.34 REVERSED and SET ASIDE and the Decision of the Metropolitan Trial Court of Manila (Branch
6) is REINSTATED with the [lone] modification that the therein ordered payment of 5% interest
Ruling of the Regional Trial Court (RTC)
per month as late payment charges, is reduced to 1% interest per month from date of default
On appeal,35 the RTC, Branch 34, reversed the MeTC Decision. Unlike the MeTC, the RTC gave on August 10, 1997 until fully paid.
credence to the testimony of petitioner Manolito that he informed Citytrust of the theft of
No pronouncement as to costs."
the mortgaged vehicle by sending through fax all the necessary documents.36 According to
the RTC, since there was sufficient notice of the theft, respondent BPI should have collected IT IS SO ORDERED.42
the proceeds of the insurance policy and applied the same to the remaining obligation of
petitioner-spouses.37 The fallo of the RTC Order38 dated July 18, 2005 reads: Issue
Based on the foregoing, the mortgagor must notify and submit proof of loss to the
mortgagee.1âwphi1 Otherwise, the mortgagee would not be able to claim the proceeds of
the insurance and apply the same to the remaining obligation.
This brings us to the question of whether petitioner-spouses sent notice and proof of loss to
Citytrust or respondent BPI.
Testimonial evidence must also be credible, reasonable, and in accord with human
experience.
Testimonial evidence, to be believed, must come not only from the mouth of a credible
witness, but must also "be credible, reasonable, and in accord with human experience."59 A
credible witness must, therefore, be able to narrate a convincing and logical story.
In this case, petitioner Manolito's testimony that he sent notice and proof of loss of the
mortgaged vehicle to Citytrust through fax lacks credibility especially since he failed to present
the facsimile report evidencing the transmittal.60 His failure to keep the facsimile report or to
ask for a written acknowledgement from Citytrust of its receipt of the transmittal gives us
reason to doubt the truthfulness of his testimony. His testimony on the alleged theft is
likewise suspect. To begin with, no police report was presented.61 Also, the insurance policy
was renewed even after the mortgaged vehicle was allegedly stolen.62 And despite repeated
demands from respondent BPI, petitioner-spouses made no effort to communicate with the
bank in order to clarify the matter. The absence of any overt act on the part of petitioner-
spouses to protect their interest from the time the mortgaged vehicle was stolen up to the
time they received the summons defies reason and logic. Their inaction is obviously contrary
to human experience. In addition, we cannot help but notice that although the mortgaged
vehicle was stolen in November 1997, petitioner-spouses defaulted on their monthly
amortizations as early as August 10, 1997. All these taken together cast doubt on the truth
and credibility of his testimony.
Thus, we are in full accord with the findings of the MeTC and the CA that petitioner Manolito's
testimony lacks credence as it is dubious and self-serving.63 Failing to prove their defense,
petitioner-spouses are liable to pay their remaining obligation.
WHEREFORE the Petition is hereby DENIED. The assailed November 16, 2007 Decision and the
September 19, 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 91217 are hereby
AFFIRMED.
SECOND DIVISION NACHURA, J.:
CLIENTLOGIC PHILPPINES, INC. (now known as SITEL), G.R. No. 186070 This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
JOSEPH VELASQUEZ, IRENE ROA, and RODNEY SPIRES, September 1, 2008 Decision[1] and the January 7, 2009 Resolution[2] of the Court of Appeals
(CA), affirming with modification the November 29, 2007 resolution[3] of the National Labor
Petitioners,
Present: Relations Commission (NLRC), which held that respondent Benedict Castro was not illegally
dismissed. The CA, however, awarded respondents money claims, viz.:
CARPIO, J.,
WHEREFORE, premises considered, the instant Petition is PARTLY GRANTED. The Resolutions
Chairperson, dated 29 November 2007 and 23 January 2008 of the National Labor Relations Commission
- versus - (Third Division) in NLRC CN. RAB-CAR-02-0091-07 LAC NO. 08-002207-
NACHURA,
07 are AFFIRMED with MODIFICATION in that the monetary awards of Executive Labor
PERALTA, Arbiter Vito C. Bose in his Decision dated 29 June 2007, as computed in Annex A
ABAD, and thereof, ONLY for holiday premiums of Php 16,913.35; service incentive leave pay
Php8,456.65; overtime pay of Php 578,753.10; and rest day pay of Php 26,384.80 which
MENDOZA, JJ. (petitioners) shall jointly and solidarily pay to petitioner, are hereby REINSTATED. No
pronouncement as to costs.
BENEDICT CASTRO,
Promulgated:
Respondent. SO ORDERED.[4]
x------------------------------------------------------------------------------------x
The facts:
Respondent was employed by petitioner ClientLogic Philippines, Inc. (now known and shall
hereafter be referred to as SITEL) on February 14, 2005 as a call center agent for its Bell South
DECISION Account. After six (6) months, he was promoted to the Mentor position, and thereafter to the
Coach position. A Coach is a team supervisor who is in charge of dealing with customer
complaints which cannot be resolved by call center agents. In June 2006, he was transferred
to the Dot Green Account.
In their position paper,[6] petitioners averred that respondent was dismissed on account of
valid and justifiable causes. He committed serious misconduct which breached the trust and
confidence reposed in him by the company. He was duly furnished the twin notices required
During respondents stint at the Dot Green Account, respondent noticed that some of the call
by the Labor Code. Further, he is not entitled to overtime pay, rest day pay, night shift
center agents under him would often make excuses to leave their work stations. Their most
differential, holiday pay, and service incentive leave pay because he was a supervisor, hence,
common excuse was that they would visit the companys medical clinic. To verify that they
a member of the managerial staff.
were not using the clinic as an alibi to cut their work hours, respondent sent an e-mail to the
clinics personnel requesting for the details of the agents alleged medical consultation. His
request was denied on the ground that medical records of employees are highly confidential
In a decision dated June 29, 2007,[7] the LA ruled in favor of respondent by declaring him
and can only be disclosed in cases involving health issues, and not to be used to build any
illegally dismissed and ordering petitioners to pay his full backwages and, in lieu of
disciplinary case against them.
reinstatement, his separation pay. The LA further awarded respondents money claims upon
finding that he was not occupying a managerial position. The decretal portion of the decision
reads:
On October 11, 2006, respondent received a notice requiring him to explain why he should
not be penalized for: (1) violating Green Dot Companys Policy and Procedure for Direct
Deposit Bank Info Request when he accessed a customers online account and then gave the
WHEREFORE, all premises duly considered, the (petitioners) are hereby found guilty of
latters routing and reference numbers for direct deposit; and (2) gravely abusing his discretion
illegally dismissing (respondent). As such, (petitioners) shall be jointly and solidarily liable to
when he requested for the medical records of his team members. Respondent did not deny
pay (respondent) his full backwages from the date of his dismissal to the finality of this
the infractions imputed against him. He, however, justified his actuations by explaining that
decision, computed as of today at One Hundred Thirty Eight Thousand Seven Hundred Fifty
the customer begged him to access the account because she did not have a computer or an
Nine Pesos and 80/100 (P138,759.80) plus, Seven Hundred Sixty Three Thousand Two
internet access and that he merely requested for a patient tracker, not medical records.
Hundred Forty Eight Pesos and 67/100 (P763,248.67) representing his separation pay at one
month pay for every year of service, holiday pay and service incentive leave pay for the three
years prior to the filing of this case, overtime pay for six (6) hours daily, rest day and ten
In November 2006, a poster showing SITELs organizational chart was posted on the companys
percent (10%) as attorneys fees.
bulletin board, but respondents name and picture were conspicuously missing, and the name
and photo of another employee appeared in the position which respondent was supposedly
occupying.
All other claims are hereby dismissed for lack of evidence.
On January 22, 2007, SITEL posted a notice of vacancy for respondents position, and on
The computation of the foregoing monetary claims is hereto attached and made an integral
February 12, 2007, he received a Notice of Termination. These events prompted him to file a
part hereof as Annex A.
complaint for illegal dismissal; non-payment of overtime pay, rest day pay, holiday pay,
service incentive leave pay; full backwages; damages; and attorneys fees before the Labor
Arbiter (LA) against herein petitioners SITEL and its officers, Joseph Velasquez (Velasquez),
Irene Roa (Roa), and Rodney Spires (Spires).[5] SO ORDERED.[8]
evidence otherwise adequately passed upon by the labor tribunals especially when affirmed
by the appellate court.[14]
Aggrieved, petitioners appealed to the NLRC, which, in its November 29, 2007
resolution,[9] reversed and set aside the decision of the LA by dismissing the complaint for lack
of merit on the ground that respondents employment was terminated for a just cause. The
Petitioners claim exception to the foregoing rule and assert that the factual findings of the LA
NLRC failed to discuss the money claims.
and the NLRC were conflicting. This is not correct. The labor tribunals decisions were at odds
only with respect to the issue of illegal dismissal. Anent the money claims issue, it cannot be
said that their rulings were contradictory because the NLRC, disappointingly, did not make
On September 1, 2008, the CA affirmed the NLRCs finding that there was no illegal dismissal.
any finding thereon and it erroneously construed that the resolution of the money claims was
Anent the money claims, however, the CA concurred with the LAs ruling.[10]
intertwined with the determination of the legality of respondents dismissal. Nonetheless, the
CA has already rectified such lapse when it made a definitive review of the LAs factual findings
on respondents money claims. Agreeing with the LA, the CA held:
Petitioners and respondent respectively moved for partial reconsideration, but their motions
were denied in the CA Resolution dated January 7, 2009.[11] From the said denial, only
petitioners sought recourse with this Court through the petition at bar. Respondents failure
Article 82 of the Labor Code states that the provisions of the Labor Code on working
to partially appeal the CAs Decision finding him not illegally dismissed has now rendered the
conditions and rest periods shall not apply to managerial employees. Generally, managerial
same final and executory; hence, the instant petition shall traverse only the issue on money
employees are not entitled to overtime pay for services rendered in excess of eight hours a
claims.
day.
Petitioners argue in the main[12] that, as a team supervisor, respondent was a member of the
Article 212 (m) of the Labor Code defines a managerial employee as one who is vested with
managerial staff; hence, he is not entitled to overtime pay, rest day pay, holiday pay, and
powers or prerogatives to lay down and execute management policies and/or to hire,
service incentive leave pay.
transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively
recommend such managerial actions.
(Respondents) duties do not fall under any of the categories enumerated above. His work is
Employees are considered occupying managerial positions if they meet all of the following
not directly related to management policies. Even the circumstances shown by the instant
conditions, namely:
case reveal that (respondent) does not regularly exercise discretion and independent
judgment. (Petitioners) submitted a list of the responsibilities of HR Manager/Supervisor and
Division Manager/Department Manager/Supervisors but these do not pertain to
1) Their primary duty consists of management of the establishment in which they are (respondent) who does not have any of the said positions. He was just a team Supervisor and
employed or of a department or subdivision thereof; not (an) HR or Department Supervisor.[15]
2) They customarily and regularly direct the work of two or more employees therein;
We find no reversible error in the above ruling. The test of supervisory or managerial status
3) They have the authority to hire or fire other employees of lower rank; or their suggestions depends on whether a person possesses authority to act in the interest of his employer and
and recommendations as to the hiring and firing and as to the promotion or any other change whether such authority is not merely routinary or clerical in nature, but requires the use of
of status of other employees are given particular weight. independent judgment.[16] The position held by respondent and its concomitant duties failed
to hurdle this test.
They are considered as officers or members of a managerial staff if they perform the following
duties and responsibilities: As a coach or team supervisor, respondents main duty was to deal with customer complaints
which could not be handled or solved by call center agents. If the members of his team could
not meet the needs of a customer, they passed the customers call to respondent.
1) The primary duty consists of the performance of work directly related to management of
policies of their employer;
This job description does not indicate that respondent can exercise the powers and
prerogatives equivalent to managerial actions which require the customary use of
2) Customarily and regularly exercise discretion and independent judgment; independent judgment. There is no showing that he was actually conferred or was actually
exercising the following duties attributable to a member of the managerial staff, viz.:
3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of management of the establishment in which he is employed or subdivision thereof; 1) The primary duty consists of the performance of work directly related to management of
or (ii) execute under general supervision work along specialized or technical lines requiring policies of their employer;
2) Customarily and regularly exercise discretion and independent judgment; e. Advise HR Manager on the state of discipline in their respective departments; problems, if
any, and recommend solution(s) and corrective action(s).
3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of management of the establishment in which he is employed or subdivision thereof;
As correctly observed by the CA and the LA, these duties clearly pertained to Division
or (ii) execute under general supervision work along specialized or technical lines requiring
Managers/Department Managers/ Supervisors, which respondent was not, as he was merely
special training, experience, or knowledge; or (iii) execute, under general supervision, special
a team supervisor. Petitioners themselves described respondent as the superior of a call
assignment and tasks; and
center agent; he heads and guides a specific number of agents, who form a team.[18]
4) Who do not devote more than 20 percent of their hours worked in a workweek to activities
From the foregoing, respondent is thus entitled to his claims for
which are not directly and closely related to the performance of the work described in
holiday pay, service incentive leave pay, overtime pay and rest day pay,
paragraphs (1), (2), and (3) above.[17]
pursuant to Book Three of the Labor Code, specifically Article 82,[19] in relation to Articles
According to petitioners, respondent also performed the following duties, as shown in the 87,[20] 93,[21] and 95[22] thereof.
companys Statement of Policy on Discipline:
WHEREFORE, premises considered, the Petition is hereby DENIED. The September 1, 2008
a. Know and understand in full the Policy on Discipline including their underlying reasons. Decision and the January 7, 2009 Resolution of the Court of Appeals are AFFIRMED.
c. Ensure that the said Policy on Discipline is communicated to and understood by all
employees.
UNIVERSITY OF THE PHILIPPINES, petitioner, Director Calleja ruled on the matter on August 7, 1990. 7 She declared that "the appropriate
vs. organizational unit . . should embrace all the regular rank-and-file employees, teaching and
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of non-teaching, of the University of the Philippines, including all its branches" and that there
Labor and Employment, and THE ALL U.P. WORKERS' UNION, represented by its President, was no sufficient evidence "to justify the grouping of the non-academic or administrative
Rosario del Rosario, respondent. personnel into an organization unit apart and distinct from that of the academic or teaching
personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer unit consisting of rank-and-
NARVASA, C.J.: file employees, unless circumstances otherwise require.
In this special civil action of certiorari the University of the Philippines seeks the nullification and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2,
of the Order dated October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor Resolution of Public Sector Labor Management Council dated May 14, 1989, viz.:
Relations holding that "professors, associate professors and assistant professors (of the
University of the Philippines) are . . rank-and-file employees . . ;" consequently, they should, xxx xxx xxx
together with the so-called non-academic, non-teaching, and all other employees of the
For purposes of registration, an appropriate organizational unit may refer to:
University, be represented by only one labor organization. 1 The University is joined in this
undertaking by the Solicitor General who "has taken a position not contrary to that of xxx xxx xxx
petitioner and, in fact, has manifested . . that he is not opposing the petition . . ." 2
d. State universities or colleges, government-owned or controlled corporations with original
The case 3 was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 charters.
by a registered labor union, the "Organization of Non-Academic Personnel of UP"
She went on to say that the general intent of EO 180 was "not to fragmentize the employer
(ONAPUP). 4 Claiming to have a membership of 3,236 members — comprising more than 33%
unit, as "can be gleaned from the definition of the term "accredited employees' organization,"
of the 9,617 persons constituting the non-academic personnel of UP-Diliman, Los Baños,
which refers to:
Manila, and Visayas, it sought the holding of a certification election among all said non-
academic employees of the University of the Philippines. At a conference thereafter held on . . a registered organization of the rank-and-file employees as defined in these rules
March 22, 1990 in the Bureau, the University stated that it had no objection to the election. recognized to negotiate for the employees in an organizational unit headed by an officer with
sufficient authority to bind the agency, such as . . . . . . state colleges and universities.
On April 18, 1990, another registered labor union, the "All UP Workers' Union," 5 filed a
comment, as intervenor in the certification election proceeding. Alleging that its membership The Director thus commanded that a certification election be "conducted among rank-and-
covers both academic and non-academic personnel, and that it aims to unite all UP rank-and- file employees, teaching and non-teaching" in all four autonomous campuses of the UP, and
file employees in one union, it declared its assent to the holding of the election provided the that management appear and bring copies of the corresponding payrolls for January, June,
appropriate organizational unit was first clearly defined. It observed in this connection that and July, 1990 at the "usual pre-election conference . . ."
the Research, Extension and Professional Staff (REPS), who are academic non-teaching
personnel, should not be deemed part of the organizational unit. At the pre-election conference held on March 22, 1990 at the Labor Organizational Division
of the DOLE, 8 the University sought further clarification of the coverage of the term, "rank-
and-file" personnel, asserting that not every employee could properly be embraced within Implementing Guidelines of Executive Order No. 180, defining "high level employee" as
both teaching and non-teaching categories since there are those whose positions are in truth follows:
managerial and policy-determining, and hence, excluded by law.
1. High Level Employee — is one whose functions are normally considered policy determining,
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking managerial or one whose duties are highly confidential in nature. A managerial function refers
the exclusion from the organizational unit of those employees holding supervisory positions to the exercise of powers such as:
among non-academic personnel, and those in teaching staff with the rank of Assistant
1. To effectively recommend such managerial actions;
Professor or higher, submitting the following as grounds therefor:
2. To formulate or execute management policies and decisions; or
1) Certain "high-level employees" with policy-making, managerial, or confidential functions,
are ineligible to join rank-and-file employee organizations under Section 3, EO 180: 3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees.
Sec. 3. High-level employees whose functions are normally considered as policy-making or The Director adjudged that said teachers are rank-and-file employees "qualified to join unions
managerial or whose duties are of a highly confidential nature shall not be eligible to join the and vote in certification elections." According to her —
organization of rank-and file government employees;
A careful perusal of the University Code . . shows that the policy-making powers of the Council
2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank- are limited to academic matters, namely, prescribing courses of study and rules of discipline,
and file: just as there are those occupying managerial positions within the non-teaching fixing student admission and graduation requirements, recommending to the Board of
roster, there is also a dichotomy between various levels of the teaching or academic staff; Regents the conferment of degrees, and disciplinary power over students. The policy-
determining functions contemplated in the definition of a high-level employee pertain to
3) Among the non-teaching employees composed of Administrative Staff and Research
managerial, executive, or organization policies, such as hiring, firing, and disciplining of
personnel, only those holding positions below Grade 18 should be regarded as rank-and-file,
employees, salaries, teaching/working hours, other monetary and non-monetary benefits,
considering that those holding higher grade positions, like Chiefs of Sections, perform
and other terms and conditions of employment. They are the usual issues in collective
supervisory functions including that of effectively recommending termination of
bargaining negotiations so that whoever wields these powers would be placed in a situation
appointments or initiating appointments and promotions; and
of conflicting interests if he were allowed to join the union of rank-and-file employees.
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those
The University seasonably moved for reconsideration, seeking to make the following points,
holding appointments at the instructor level may be so considered, because those holding
to wit:
appointments from Assistant Professor to Associate Professor to full Professor take part, as
members of the University Council, a policy-making body, in the initiation of policies and rules 1) UP professors do "wield the most potent managerial powers: the power to rule on tenure,
with respect to faculty tenure and promotion. 9 on the creation of new programs and new jobs, and conversely, the abolition of old programs
and the attendant re-assignment of employees.
The ONAPUP quite categorically made of record its position; that it was not opposing the
University's proferred classification of rank-and file employees. On the other hand, the "All 2) To say that the Council is "limited to (acting on) academic matters" is error, since academic
UP Workers' Union" opposed the University's view, in a Position Paper presented by it under decisions "are the most important decisions made in a University . . (being, as it were) the
date of October 18, 1990. heart, the core of the University as a workplace.
Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the 3) Considering that the law regards as a "high level" employee, one who performs either
"sole issue" of "whether or not professors, associate professors and assistant professors are policy-determining, managerial, or confidential functions, the Director erred in applying only
included in the definition of high-level employee(s)" in light of Rule I, Section (1) of the the "managerial functions" test, ignoring the "policy-determining functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an Personnel actions affecting the faculty and other academic personnel should, however, "be
administrative officer of the College of Law is a high level employee, while a full Professor considered under uniform guidelines and consistent with the Resolution of the Board (of
who has published several treatises and who has distinguished himself in argument before Regents) adopted during its 789th Meeting (11-26-69) creating the University Academic
the Supreme Court is a mere rank-and-file employee. A dormitory manager is classified as a Personnel Board." 16 Thus, the Departmental Academic Personnel Committee is given the
high level employee, while a full Professor or Political Science with a Ph. D. and several function of "assist(ing) in the review of the recommendations initiated by the Department
Honorary doctorates is classified as rank-and-file." 10 Chairman with regard to recruitment, selection, performance evaluation, tenure and staff
development, in accordance with the general guidelines formulated by the University
The motion for reconsideration was denied by Director Calleja, by Order dated November 20,
Academic Personnel Board and the implementing details laid down by the College Academic
1990.
Personnel Committee;" 17 while the College Academic Personnel Committee is entrusted with
The University would now have this Court declare void the Director's Order of October 30, the following functions: 18
1990 as well as that of November 20, 1990. 11 A temporary restraining order was issued by
1. Assist the Dean in setting up the details for the implementation of policies, rules, standards
the Court, by Resolution dated December 5, 1990 conformably to the University's application
or general guidelines as formulated by the University Academic Personnel Board;
therefor.
2. Review the recommendation submitted by the DAPCs with regard to recruitment, selection,
Two issues arise from these undisputed facts. One is whether or not professors, associate
performance evaluation, tenure, staff development, and promotion of the faculty and other
professors and assistant professors are "high-level employees" "whose functions are normally
academic personnel of the College;
considered policy determining, managerial or . . highly confidential in nature." The other is
whether or not, they, and other employees performing academic functions, 12 should 3. Establish departmental priorities in the allocation of available funds for promotion;
comprise a collective bargaining unit distinct and different from that consisting of the non-
4. Act on cases of disagreement between the Chairman and the members of the DAPC
academic employees of the University, 13 considering the dichotomy of interests, conditions
particularly on personnel matters covered by this Order;
and rules existing between them.
5. Act on complaints and/or protests against personnel actions made by the Department
As regards the first issue, the Court is satisfied that it has been correctly resolved by the
Chairman and/or the DAPC.
respondent Director of Bureau Relations. In light of Executive Order No. 180 and its
implementing rules, as well as the University's charter and relevant regulations, the The University Academic Personnel Board, on the other hand, performs the following
professors, associate professors and assistant professors (hereafter simply referred to as functions: 19
professors) cannot be considered as exercising such managerial or highly confidential
functions as would justify their being categorized as "high-level employees" of the institution. 1. Assist the Chancellor in the review of the recommendations of the CAPC'S.
The Academic Personnel Committees, through which the professors supposedly exercise 2. Act on cases of disagreement between the Dean and the CAPC.
managerial functions, were constituted "in order to foster greater involvement of the faculty 3. Formulate policies, rules, and standards with respect to the selection, compensation, and
and other academic personnel in appointments, promotions, and other personnel matters promotion of members of the academic staff.
that directly affect them." 14 Academic Personnel Committees at the departmental and
college levels were organized "consistent with, and demonstrative of the very idea of 4. Assist the Chancellor in the review of recommendations on academic promotions and on
consulting the faculty and other academic personnel on matters directly affecting them" and other matters affecting faculty status and welfare.
to allow "flexibility in the determination of guidelines peculiar to a particular department or From the foregoing, it is evident that it is the University Academic Personnel Committee,
college." 15 composed of deans, the assistant for academic affairs and the chief of personnel, which
formulates the policies, rules and standards respecting selection, compensation and
promotion of members of the academic staff. The departmental and college academic personnel committees is that not all professors are members thereof. Membership and the
personnel committees' functions are purely recommendatory in nature, subject to review and number of members in the committees are provided as follows: 25
evaluation by the University Academic Personnel Board. In Franklin Baker Company of the
Sec. 2. Membership in Committees. — Membership in committees may be made either
Philippines vs. Trajano, 20 this Court reiterated the principle laid down in National
through appointment, election, or by some other means as may be determined by the faculty
Merchandising Corp. vs. Court of Industrial Relations, 21 that the power to recommend, in
and other academic personnel of a particular department or college.
order to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical Sec. 3. Number of Members. — In addition to the Chairman, in the case of a department, and
nature but should require the use of independent judgment." Where such recommendatory the Dean in the case of a college, there shall be such number of members representing the
powers, as in the case at bar, are subject to evaluation, review and final action by the faculty and academic personnel as will afford a fairly representative, deliberative and
department heads and other higher executives of the company, the same, although present, manageable group that can handle evaluation of personnel actions.
are not effective and not an exercise of independent judgment as required by law.
Neither can membership in the University Council elevate the professors to the status of high-
Significantly, the personnel actions that may be recommended by the departmental and level employees. Section 6 (f) and 9 of the UP Charter respectively provide: 26
college academic personnel committees must conform with the general guidelines drawn up
by the university personnel academic committee. This being the case, the members of the Sec. 6. The Board of Regents shall have the following powers and duties . . . ;
departmental and college academic personnel committees are not unlike the chiefs of xxx xxx xxx
divisions and sections of the National Waterworks and Sewerage Authority whom this Court
considered as rank-and-file employees in National Waterworks & Sewerage Authority vs. (f) To approve the courses of study and rules of discipline drawn up by the University Council
NWSA Consolidated Unions, 22because "given ready policies to execute and standard practices as hereinafter provided; . . .
to observe for their execution, . . . they have little freedom of action, as their main function is Sec. 9. There shall be a University Council consisting of the President of the University and of
merely to carry out the company's orders, plans and policies." all instructors in the university holding the rank of professor, associate professor, or assistant
The power or prerogative pertaining to a high-level employee "to effectively recommend such professor. The Council shall have the power to prescribe the courses of study and rules of
managerial actions, to formulate or execute management policies or decisions and/or to hire, discipline, subject to the approval of the Board of Regents. It shall fix the requirements for
transfer, suspend, lay-off, recall, dismiss, assign or discipline employees" 23 is exercised to a admission to any college of the university, as well as for graduation and the receiving of a
certain degree by the university academic personnel board/committees and ultimately by the degree. The Council alone shall have the power to recommend students or others to be
Board of Regents in accordance with Section 6 of the University recipients of degrees. Through its president or committees, it shall have disciplinary power
Charter, 24 thus: over the students within the limits prescribed by the rules of discipline approved by the Board
of Regents. The powers and duties of the President of the University, in addition to those
(e) To appoint, on the recommendation of the President of the University, professors, specifically provided in this Act shall be those usually pertaining to the office of president of
instructors, lecturers and other employees of the University; to fix their compensation, hours a university.
of service, and such other duties and conditions as it may deem proper; to grant them in its
discretion leave of absence under such regulations as it may promulgate, any other provision It is readily apparent that the policy-determining functions of the University Council are
of law to the contrary notwithstanding, and to remove them for cause after investigation and subject to review, evaluation and final approval by the Board of Regents. The Council's power
hearing shall have been had. of discipline is likewise circumscribed by the limits imposed by the Board of Regents. What
has been said about the recommendatory powers of the departmental and college academic
Another factor that militates against petitioner's espousal of managerial employment status personnel committees applies with equal force to the alleged policy-determining functions of
for all its professors through membership in the departmental and college academic the University Council.
Even assuming arguendo that UP professors discharge policy-determining functions through Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the
the University Council, still such exercise would not qualify them as high-level employees Labor Code with minor changes, no guidelines were included in said Code for determination
within the context of E.O. 180. As correctly observed by private respondent, "Executive Order of an appropriate bargaining unit in a given case. 30 Thus, apart from the single descriptive
No. 180 is a law concerning public sector unionism. It must therefore be construed within that word "appropriate," no specific guide for determining the proper collective bargaining unit
context. Within that context, the University of the Philippines represents the government as can be found in the statutes.
an employer. 'Policy-determining' refers to policy-determination in university mattes that
Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section
affect those same matters that may be the subject of negotiation between public sector
9, is that "(t)he appropriate organizational unit shall be the employer unit consisting of rank-
management and labor. The reason why 'policy-determining' has been laid down as a test in
and-file employees, unless circumstances otherwise require." Case law fortunately furnishes
segregating rank-and-file from management is to ensure that those who lay down policies in
some guidelines.
areas that are still negotiable in public sector collective bargaining do not themselves become
part of those employees who seek to change these policies for their collective welfare." 27 When first confronted with the task of determining the proper collective bargaining unit in a
particular controversy, the Court had perforce to rely on American jurisprudence.
The policy-determining functions of the University Council refer to academic matters, i.e.
In Democratic Labor Association vs. Cebu Stevedoring Company, Inc., decided on February 28,
those governing the relationship between the University and its students, and not the
1958, 31 the Court observed that "the issue of how to determine the proper collective
University as an employer and the professors as employees. It is thus evident that no conflict
bargaining unit and what unit would be appropriate to be the collective bargaining
of interest results in the professors being members of the University Council and being
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound
classified as rank-and-file employees.
. . (to which resort may be had) considering that our present Magna Carta has been patterned
Be that as it may, does it follow, as public respondent would propose, that all rank-and-file after the American law on the subject." Said the Court:
employees of the university are to be organized into a single collective bargaining unit?
. . . Under these precedents, there are various factors which must be satisfied and considered
A "bargaining unit" has been defined as a group of employees of a given employer, comprised in determining the proper constituency of a bargaining unit. No one particular factor is itself
of all or less than all of the entire body of employees, which the collective interest of all the decisive of the determination. The weight accorded to any particular factor varies in
employees, consistent with equity to the employer, indicate to be the best suited to serve the accordance with the particular question or questions that may arise in a given case. What are
reciprocal rights and duties of the parties under the collective bargaining provisions of the these factors? Rothenberg mentions a good number, but the most pertinent to our case are:
law. 28 (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees' interest, such
as substantial similarity of work and duties, or similarity of compensation and working
Our labor laws do not however provide the criteria for determining the proper collective
conditions; (3) prior collective bargaining history; and (4) employment status, such as
bargaining unit. Section 12 of the old law, Republic Act No. 875 otherwise known as the
temporary, seasonal probationary employees. . . .
Industrial Peace Act, simply reads as follows: 29
xxx xxx xxx
Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. — The labor
organization designated or selected for the purpose of collective bargaining by the majority An enlightening appraisal of the problem of defining an appropriate bargaining unit is given
of the employees in an appropriate collective bargaining unit shall be the exclusive in the 10th Annual Report of the National Labor Relations Board wherein it is emphasized that
representative of all the employees in such unit for the purpose of collective bargaining in the factors which said board may consider and weigh in fixing appropriate units are: the
respect to rates of pay, wages, hours of employment, or other conditions of history, extent and type of organization of employees; the history of their collective
employment; Provided, That any individual employee or group of employees shall have the bargaining; the history, extent and type of organization of employees in other plants of the
right at any time to present grievances to their employer. same employer, or other employers in the same industry; the skill, wages, work, and working
conditions of the employees; the desires of the employees; the eligibility of the employees
for membership in the union or unions involved; and the relationship between the unit or of their individual assignments but the distinctions are not enough to warrant the formation
units proposed and the employer's organization, management, and operation. . . . of a separate bargaining unit.
. . In said report, it is likewise emphasized that the basic test in determining the appropriate In the case at bar, the University employees may, as already suggested, quite easily be
bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who categorized into two general classes: one, the group composed of employees whose functions
have substantial, mutual interests in wages, hours, working conditions and other subjects of are non-academic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters,
collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor Laws, 162). . . . electricians, grounds-keepers, chauffeurs, mechanics, plumbers; 32 and two, the group made
up of those performing academic functions, i.e., full professors, associate professors, assistant
The Court further explained that "(t)he test of the grouping is community or mutuality of
professors, instructors — who may be judges or government executives — and research,
interests. And this is so because 'the basic test of an asserted bargaining unit's acceptability
extension and professorial staff. 33 Not much reflection is needed to perceive that the
is whether or not it is fundamentally the combination which will best assure to all employees
community or mutuality of interests which justifies the formation of a single collective
the exercise of their collective bargaining rights' (Rothenberg on Labor Relations, 490)."
bargaining unit is wanting between the academic and non-academic personnel of the
Hence, in that case, the Court upheld the trial court's conclusion that two separate bargaining
university. It would seem obvious that teachers would find very little in common with the
units should be formed, one consisting of regular and permanent employees and another
University clerks and other non-academic employees as regards responsibilities and
consisting of casual laborers or stevedores.
functions, working conditions, compensation rates, social life and interests, skills and
Since then, the "community or mutuality of interests" test has provided the standard in intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the
determining the proper constituency of a collective bargaining unit. In Alhambra Cigar & dissimilarity in the nature of the work and duties as well as in the compensation and working
Cigarette Manufacturing Company, et al. vs. Alhambra Employees' Association (PAFLU), 107 conditions of the academic and non-academic personnel dictate the separation of these two
Phil. 23, the Court, noting that the employees in the administrative, sales and dispensary categories of employees for purposes of collective bargaining. The formation of two separate
departments of a cigar and cigarette manufacturing firm perform work which have nothing bargaining units, the first consisting of the rank-and-file non-academic personnel, and the
to do with production and maintenance, unlike those in the raw lead (malalasi), cigar, second, of the rank-and-file academic employees, is the set-up that will best assure to all the
cigarette, packing (precintera) and engineering and garage departments, authorized the employees the exercise of their collective bargaining rights. These special circumstances, i.e.,
formation of the former set of employees into a separate collective bargaining unit. The ruling the dichotomy of interests and concerns as well as the dissimilarity in the nature and
in the Democratic Labor Association case, supra, was reiterated in Philippine Land-Air-Sea conditions of work, wages and compensation between the academic and non-academic
Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were personnel, bring the case at bar within the exception contemplated in Section 9 of Executive
barred from joining the union of the permanent and regular employees. Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to
have ruled otherwise, ignoring plain and patent realities.
Applying the same "community or mutuality of interests" test, but resulting in the formation
of only one collective bargaining units is the case of National Association of Free Trade Unions WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it
vs. Mainit Lumber Development Company Workers Union-United Lumber and General declares the professors, associate professors and assistant professors of the University of the
Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598. In said case, the Philippines as rank-and-file employees. The Order of August 7, 1990 is MODIFIED in the sense
Court ordered the formation of a single bargaining unit consisting of the Sawmill Division in that the non-academic rank-and-file employees of the University of the Philippines shall
Butuan City and the Logging Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit constitute a bargaining unit to the exclusion of the academic employees of the institution
Lumber Development Company. The Court reasoned: — i.e., full professors, associate professors, assistant professors, instructors, and the
research, extension and professorial staff, who may, if so minded, organize themselves into a
Certainly, there is a mutuality of interest among the employees of the Sawmill Division and separate collective bargaining unit; and that, therefore, only said non-academic rank-and-file
the Logging Division. Their functions mesh with one another. One group needs the other in personnel of the University of the Philippines in Diliman, Manila, Los Baños and the Visayas
the same way that the company needs them both. There may be difference as to the nature are to participate in the certification election.SO ORDERED.
FIRST DIVISION (74) are managerial employees while two (2) others are confidential employees, hence, must
be excluded from the certification election and from the bargaining unit that may result from
G.R. No. 75039 January 28, 1988
such election (Rollo, p. 3).
FRANKLIN BAKER COMPANY OF THE PHILIPPINES, petitioner,
Hearings were held and thereafter, the parties agreed to file their respective memoranda.
vs.
Likewise, petitioner filed a reply to private respondent's Memorandum (Rollo, p. 4).
HONORABLE CRESENCIO B. TRAJANO, DIRECTOR OF BUREAU OF LABOR RELATIONS,
FRANKLIN BAKER BROTHERHOOD ASSOCIATION (TECHNICAL AND OFFICE EMPLOYEES)- Subsequently, on September 17, 1984, Med-Arbiter Conchita J. Martinez issued an order, the
ASSOCIATION OF TRADE UNIONS (ATU), respondents. dispositive part of which reads:
Accordingly, the petition is hereby granted and a certification election among the office and
technical employees of Franklin Baker Company of the Philippines, Davao Plant is ordered
PARAS, J.:
within twenty (20) days from receipt hereof. The choices shall be the following:
This is a petition for certiorari seeking the annulment of. (a) the Order of Mediator-Arbiter
1. Franklin Baker Brotherhood Association-(ATU)
Conchita J. Martinez of the Ministry of Labor and Employment, Davao City, dated September
17, 1984 in LRD Case No. R-22 MED-ROXI-UR-28-84 entitled "In Re: Petition for Certification 2. No Union
Election Among the Office and Technical Employees of Franklin Baker Company of the
The representation officer assigned shall call the parties for a pre-election conference at least
Philippines, Davao Plant at Coronan, Sta. Cruz, Davao del Sur, Franklin Baker Company of the
five (5) days before the date of the election to thresh out the mechanics of the election, the
Philippines, Davao Plant, Employer, Franklin Baker Brotherhood Association (Technical and
finalization of the list of voters, the posting of notices and other relevant matters.
Office Employees)-Association of Trade Unions (ATU)," insofar as it includes the managerial
employees (inspectors, foremen and supervisors) in the certification election; (b) the Order The company's latest payroll shall be the basis for determining the office and technical
of April 7, 1986 of Director Cresencio B. Trajano, also of the MOLE, dismissing the appeal of workers qualified to vote.
aforesaid Order of September 17, 1985 for lack of merit; and (c) the Order of June 6, 1986 of
said Director denying reconsideration of his Order of April 7, 1986 and affirming the same in SO ORDERED. (Rollo, pp. 47-48).
toto (Rollo, p. 90). From the aforequoted order petitioner Company appealed to the Bureau of Labor Relations,
In brief, the undisputed facts of this case are as follows: docketed as BLR Case No. A-22884, praying that the appealed order be set aside and another
be issued declaring the seventy four (74) inspectors, foremen and supervisors as managerial
On April 23, 1984, private respondent Franklin Baker Brotherhood Association-(ATU) filed a employees.
petition for certification election among the office and technical employees of petitioner
company with the Ministry of Labor and Employment, Regional Office No. XI, Davao City, During the pendency of the appeal, sixty one (61) of the employees involved, filed a Motion
docketed as LRD No. R-22, MED-ROXI-UR-2884. Among other things, it alleges that Franklin to Withdraw the petition for certification election praying therein for their exclusion from the
Baker Company of the Phils. Davao Plant, had in its employ approximately ninety (90) regular Bargaining Unit and for a categorical declaration that they are managerial employees, as they
technical and office employees, which group is separate and distinct from the regular rank are performing managerial functions (Rollo, p. 4).
and file employees and is excluded from the coverage of existing Collective Bargaining On April 7, 1986, public respondent Bureau of Labor Relations Cresencio B. Trajano issued a
Agreement. Resolution affirming the order dated September 17, 1984, the dispositive part of which reads:
Petitioner company did not object to the holding of such an election but manifested that out
of the ninety (90) employees sought to be represented by the respondent union, seventy four
WHEREFORE, the appealed Order dated September 17, 1985 is hereby affirmed and the (inspectors, foremen, supervisors and the like) and therefore, may participate in the
appeal dismissed for lack of merit. Let the certification election among the office and technical certification election among the office and technical employees. Such ruling is contrary to
employees of Franklin Baker Company of the Philippines proceed without delay. jurisprudence and to the factual evidence presented by petitioner which was not rebutted by
private respondent union and is therefore patently baseless.
The latest payrolls of the company shall be used as basis of determining the list of eligible
voters. (Rollo, p. 77), From this assigned error two questions are raised by petitioner, namely: (1) whether or not
subject employees are managerial employees under the purview of the Labor Code and its
Petitioner company sought the reconsideration of the aforequoted resolution but its motion
Implementing Rules; and (2) whether the Director of the Bureau of Labor Relations acted with
was denied by Director Cresencio B. Trajano in his order dated June 6, 1986, the dispositive
abuse of discretion in affirming the order of Mediator-Arbiter Conchita J. Martinez.
part of which reads:
There is no question that there are in the DAVAO Plant of petitioner company approximately
WHEREFORE, the appeal of respondent company is, dismissed for lack of merit and the
90 regular technical and office employees which form a unit, separate and distinct from the
Bureau's Resolution dated April 1986 affirmed in toto.
regular rank and file employees and are excluded from the coverage of existing Collective
Let, therefore, the pertinent papers of this case be immediately forwarded to the Office of Bargaining Agreement; that said group of employees organized themselves as Franklin Baker
origin for the conduct of the certification election. (Rollo, p. 90). Brotherhood Association (technical and office employees) and affiliated with the local chapter
of the Association of trade Unions (ATU), a legitimate labor organization with Registration
Hence, this petition. Permit No. 8745 (Fed) LC and with office located at the 3rd Floor of Antwell Bldg., Sta. Ana,
In the resolution of July 30, 1986, the Second Division of this Court without giving due course Davao City; that petitioner company did not object to the holding of such certification, but
to the petition required the respondents to file their comment (Rollo, p. 91). On August 28, only sought the exclusion of inspectors, foremen and supervisors, members of Franklin Baker
1986, public respondent filed its comment (Rollo, pp. 99 to 102). Likewise private respondent Brotherhood Association (technical and office employees) numbering 76 from the
filed its comment on September 5, 1986 (Rollo, pp. 104 to 107). certification election on the ground that they are managerial employees.
In the resolution of September 8, 1986, petitioner was required to file its reply to public A managerial employee is defined as one "who is vested with powers or prerogatives to lay
respondent's comment (Rollo, p. 119) which reply was filed on September 18, 1986 (Rollo, down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
pp. 122-127). discharge, assign or discipline employees, or to effectively recommend such managerial
actions." (Reynolds Phil. Corp. v. Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.
On October 20, 1986, this Court resolved to give due course to the petition and required the
parties to file their respective Memoranda (Rollo, p. 133). In compliance with said resolution, Also pertinent thereto is Section 1 (M) of the Implementing Rules and Regulations, which is
petitioner and private respondent filed their Memoranda on December 8, 1986 and practically a restatement of the above provision of law.
December 29, 1986, respectively (Rollo, pp. 183-187). On the other hand, public respondent To sustain its posture, that the inspectors, foreman and supervisors numbering 76 are
filed with this Court a manifestation (Rollo, p. 153) to the effect that it is adopting as its managerial employees, petitioner painstakingly demonstrates that subject employees indeed
memorandum its comment dated August 18, 1986 (Rollo, p. 99) which manifestation was participate in the formulation and execution of company policies and regulations as to the
noted by this Court in its resolution dated November 26, 1986 conduct of work in the plant, exercised the power to hire, suspend or dismiss subordinate
(Rollo, p. 155). employees and effectively recommend such action, by citing concrete cases, among which
The lone assignment of error raised by petitioner states: are: (1) Mr. Ponciano Viola, a wet process inspector, who while in the performance of his duty,
found Mr. Enrique Asuncion, a trimmer "forging", falsifying and simulating a company time
Public respondent acted with grave abuse of discretion amounting to lack of jurisdiction when card (timesheet) resulting in payroll padding, immediately recommended the dismissal of said
he ruled that the 76 employees subject of this petition are not managerial employees erring employee, resulting in the latter's discharge. (Employer's Memo, Rollo, p.18); (2) Mr.
Manuel Alipio, an opening inspector, recommended for suspension Nut Operator Ephraim that performance of the functions enumerated in the law qualifies an employee as a
Dumayos who was caught in the act of surreptitiously transferring to a co-worker's bin some managerial employee.
whole nuts which act constitutes a violation of company policy; (3) Mr. Sofronio Abangan, a
It is well settled that the findings of fact of the Ministry of Labor and National Labor Relations
line inspector, censured and thereafter recommended the suspension of Mr. Romeo Fullante,
Commission are entitled to great respect, unless the findings of fact and the conclusions made
for being remiss in the proper and accurate counting of nuts; (4) Binleader Dionisio Agtang
therefrom, are not supported by substantial evidence, or when there is grave abuse of
was required to explain his inefficiency of Mr. Saturnino Bangkas, Bin Loading Inspector; (5)
discretion committed by said public official (Kapisanan ng Manggagawa sa Camara Shoes, 2nd
for disobeying the orders of Bin Loading Inspector Mauricio Lumanog's order, Macario Mante,
Heirs of Santos Camara, et al., 111 SCRA 477 [1982]; International hardwood and Veneer Co.
Eduardo Adaptor, Rodolfo Irene and George Rellanos were all recommended for suspension
of the Philippines v. Leonardo, 117 SCRA 967 [1982]; Pan-Phil-Life, Inc. v. NLRC, 114 SCRA 866
which culminated in an investigation conducted by Lumanog's higher bosses (Ibid., p. 20).
[1982]; Pepsi-Cola Labor Union-BF LUTUPAS Local Chapter N-896 v. NLRC, 114 SCRA 930
It has also been shown that subject employees have the power to hire, as evidenced by the [1982]; Egyptair v. NLRC, 148 SCRA 125 [1987]; RJL Martinez Fishing Corp. v. NLRC, G.R. Nos.
hiring of Rolando Asis, Roy Layson, Arcadio Gaudicos and Felix Arciaga, upon the 63550-51, 127 SCRA 455 [1984]; and Reyes v. Phil. Duplicators, G.R. No. 54996, 109 SCRA 489
recommendation of Opening Inspector Serafin Suelo, Processing Inspector Leonardo Velez [1981]).
and Laureano C. Lim, Opening Inspector (Ibid., p. 21).
By "grave abuse of discretion" is meant, such capricious and whimsical exercise of judgment
It will be noted, however, that in the performance of their duties and functions and in the as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the
exercise of their recommendatory powers, subject employees may only recommend, as the power is exercised in an arbitrary or despotic manner by reason of passion or personal
ultimate power to hire, fire or suspend as the case may be, rests upon the plant personnel hostility and must be so patent and gross as to amount to an evasion of positive duty or to a
manager. virtual refusal to perform the duty enjoined by or to act at all in contemplation of law (G.R.
No. 59880, George Arguelles [Hda. Emma Arguelles v. Romeo Yang, etc.], September 11,
The test of "supervisory" or "managerial status" depends on whether a person possesses
1987).
authority to act in the interest of his employer in the matter specified in Article 212 (k) of the
Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not Moreover, this Court has ruled that findings of administrative agencies which have acquired
merely routinary or clerical in nature, but requires the use of independent judgment. Thus, expertise, like the Labor Ministry, are accorded respect and finality (Special Events and Central
where such recommendatory powers as in the case at bar, are subject to evaluation, review Shipping Office Workers Union v. San Miguel Corp., 122 SCRA 557 [1983] and that the remedy
and final action by the department heads and other higher executives of the company, the of certiorari does not lie in the absence of any showing of abuse or misuse of power properly
same, although present, are not effective and not an exercise of independent judgment as vested in the Ministry of Labor and Employment (Buiser v. Leogardo, Jr., 131 SCRA 151
required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963]). [1984]).
Furthermore, in line with the ruling of this Court, subject employees are not managerial After a careful review of the records, no plausible reason could be found to disturb the
employees because as borne by the records, they do not participate in policy making but are findings of fact and the conclusions of law of the Ministry of Labor.
given ready policies to execute and standard practices to observe, thus having little freedom
Even if We regard the employees concerned as "managerial employees," they can still join
of action (National Waterworks and Sewerage Authority v. NWSA Consolidated, L-18938, 11
the union of the rank and file employees. They cannot however form their own exclusive
SCRA 766 [1964]).
union as "managerial employees" (Bulletin Publishing Corporation v. Sanchez, 144 SCRA 628).
Petitioner's contention that the Director of the Bureau of Labor Relations acted with abuse of
PREMISES CONSIDERED, the petition is DISMISSED, and the assailed resolution and orders are
discretion amounting to lack of jurisdiction in holding that the 76 employees are not
AFFIRMED.
managerial employees and must be included in the certification election has no basis in fact
and in law. Neither is its contention that the use of the word's "and/or" categorically shows SO ORDERED.
THIRD DIVISION WHEREFORE, premises considered, the decision appealed from is modified by reducing the
award for demurrage to P44,000.00 and deleting the award for attorneys fees and expenses
[G.R. No. 112287. December 12, 1997]
of litigation. Except as thus modified, the decision is AFFIRMED. There is no pronouncement
NATIONAL STEEL CORPORATION, petitioner, vs. COURT OF APPEALS AND VLASONS as to costs.
SHIPPING, INC., respondents.
SO ORDERED. [3]
[G.R. No. 112350. December 12, 1997]
The Facts
VLASONS SHIPPING, INC., petitioner, vs. COURT OF APPEALS AND NATIONAL STEEL
The MV Vlasons I is a vessel which renders tramping service and, as such, does not transport
CORPORATION, respondents.
cargo or shipment for the general public. Its services are available only to specific persons
DECISION who enter into a special contract of charter party with its owner. It is undisputed that the ship
is a private carrier. And it is in this capacity that its owner, Vlasons Shipping, Inc., entered into
PANGANIBAN, J.: a contract of affreightment or contract of voyage charter hire with National Steel Corporation.
The Court finds occasion to apply the rules on the seaworthiness of a private carrier, its The facts as found by Respondent Court of Appeals are as follows:
owners responsibility for damage to the cargo and its liability for demurrage and attorneys
fees. The Court also reiterates the well-known rule that findings of facts of trial courts, when (1) On July 17, 1974, plaintiff National Steel Corporation (NSC) as Charterer and defendant
affirmed by the Court of Appeals, are binding on this Court. Vlasons Shipping, Inc. (VSI) as Owner, entered into a Contract of Voyage Charter Hire (Exhibit
B; also Exhibit 1) whereby NSC hired VSIs vessel, the MV VLASONS I to make one (1) voyage
The Case to load steel products at Iligan City and discharge them at North Harbor, Manila, under the
Before us are two separate petitions for review filed by National Steel Corporation (NSC) and following terms and conditions, viz:
Vlasons Shipping, Inc. (VSI), both of which assail the August 12, 1993 Decision of the Court of 1. x x x x x x.
Appeals. [1] The Court of Appeals modified the decision of the Regional Trial Court of Pasig,
Metro Manila, Branch 163 in Civil Case No. 23317. The RTC disposed as follows: 2. Cargo: Full cargo of steel products of not less than 2,500 MT, 10% more or less at Masters
option.
WHEREFORE, judgment is hereby rendered in favor of defendant and against the plaintiff
dismissing the complaint with cost against plaintiff, and ordering plaintiff to pay the 3. x x x x x x
defendant on the counterclaim as follows:
4. Freight/Payment: P30.00 /metric ton, FIOST basis. Payment upon presentation of Bill of
1. The sum of P75,000.00 as unpaid freight and P88,000.00 as demurrage with interest at the Lading within fifteen (15) days.
legal rate on both amounts from April 7, 1976 until the same shall have been fully paid;
5. Laydays/Cancelling: July 26, 1974/Aug. 5, 1974.
2. Attorneys fees and expenses of litigation in the sum of P100,000.00; and
6. Loading/Discharging Rate: 750 tons per WWDSHINC. (Weather Working Day of 24
3. Cost of suit. consecutive hours, Sundays and Holidays Included).
(g) It was also established that the vessel encountered rough seas and bad weather while en The trial court erred in exempting VSI from liability on the ground of force majeure.
route from Iligan City to Manila causing sea water to splash on the ships deck on account of
V
which the master of the vessel (Mr. Antonio C. Dumlao) filed a Marine Protest on August 13,
1974 (Exh. 15) which can be invoked by defendant as a force majeure that would exempt the The trial court erred in finding that NSC violated the contract of voyage charter hire.
defendant from liability.
VI
(h) Plaintiff did not comply with the requirement prescribed in paragraph 9 of the Voyage
The trial court erred in ordering NSC to pay freight, demurrage and attorneys fees, to VSI.[4]
Charter Hire contract that it was to insure the cargo because it did not. Had plaintiff complied
with the requirement, then it could have recovered its loss or damage from the As earlier stated, the Court of Appeals modified the decision of the trial court by reducing the
insurer. Plaintiff also violated the charter party contract when it loaded not only steel demurrage from P88,000.00 to P44,000.00 and deleting the award of attorneys fees and
products, i.e. steel bars, angular bars and the like but also tinplates and hot rolled sheets expenses of litigation. NSC and VSI filed separate motions for reconsideration. In a
which are high grade cargo commanding a higher freight. Thus plaintiff was able to ship high Resolution[5] dated October 20, 1993, the appellate court denied both motions. Undaunted,
grade cargo at a lower freight rate. NSC and VSI filed their respective petitions for review before this Court. On motion of VSI, the
Court ordered on February 14, 1994 the consolidation of these petitions.[6]
(I) As regards defendants counterclaim, the contract of voyage charter hire under paragraph
4 thereof, fixed the freight at P30.00 per metric ton payable to defendant carrier upon The Issues
presentation of the bill of lading within fifteen (15) days. Plaintiff has not paid the total freight
due of P75,000.00 despite demands. The evidence also showed that the plaintiff was required In its petition[7] and memorandum,[8] NSC raises the following questions of law and fact:
and bound under paragraph 7 of the same Voyage Charter Hire contract to pay demurrage
Questions of Law 1. Questions of Fact
1. Whether or not a charterer of a vessel is liable for demurrage due to cargo unloading delays 2. Effect of NSCs Failure to Insure the Cargo
caused by weather interruption;
3. Admissibility of Certificates Proving Seaworthiness
2. Whether or not the alleged seaworthiness certificates (Exhibits 3, 4, 5, 6, 7, 8, 9, 11 and 12)
4. Demurrage and Attorneys Fees.
were admissible in evidence and constituted evidence of the vessels seaworthiness at the
beginning of the voyages; and The Courts Ruling
3. Whether or not a charterers failure to insure its cargo exempts the shipowner from liability The Court affirms the assailed Decision of the Court of Appeals, except in respect of the
for cargo damage. demurrage.
Questions of Fact Preliminary Matter: Common Carrier or Private Carrier?
1. Whether or not the vessel was seaworthy and cargo-worthy; At the outset, it is essential to establish whether VSI contracted with NSC as a common carrier
or as a private carrier. The resolution of this preliminary question determines the law,
2. Whether or not vessels officers and crew were negligent in handling and caring for NSCs
standard of diligence and burden of proof applicable to the present case.
cargo;
Article 1732 of the Civil Code defines a common carrier as persons, corporations, firms or
3. Whether or not NSCs cargo of tinplates did sweat during the voyage and, hence, rusted on
associations engaged in the business of carrying or transporting passengers or goods or both,
their own; and
by land, water, or air, for compensation, offering their services to the public. It has been held
(4) Whether or not NSCs stevedores were negligent and caused the wetting[/]rusting of NSCs that the true test of a common carrier is the carriage of passengers or goods, provided it has
tinplates. space, for all who opt to avail themselves of its transportation service for a fee. [11] A carrier
which does not qualify under the above test is deemed a private carrier. Generally, private
In its separate petition, [9] VSI submits for the consideration of this Court the following alleged
carriage is undertaken by special agreement and the carrier does not hold himself out to carry
errors of the CA:
goods for the general public. The most typical, although not the only form of private carriage,
A. The respondent Court of Appeals committed an error of law in reducing the award of is the charter party, a maritime contract by which the charterer, a party other than the
demurrage from P88,000.00 to P44,000.00. shipowner, obtains the use and service of all or some part of a ship for a period of time or a
voyage or voyages. [12]
B. The respondent Court of Appeals committed an error of law in deleting the award
of P100,000 for attorneys fees and expenses of litigation. In the instant case, it is undisputed that VSI did not offer its services to the general public. As
found by the Regional Trial Court, it carried passengers or goods only for those it chose under
Amplifying the foregoing, VSI raises the following issues in its memorandum: [10] a special contract of charter party. [13] As correctly concluded by the Court of Appeals, the MV
I. Whether or not the provisions of the Civil Code of the Philippines on common carriers Vlasons I was not a common but a private carrier. [14] Consequently, the rights and obligations
pursuant to which there exist[s] a presumption of negligence against the common carrier in of VSI and NSC, including their respective liability for damage to the cargo, are determined
case of loss or damage to the cargo are applicable to a private carrier. primarily by stipulations in their contract of private carriage or charter party. [15] Recently, in
Valenzuela Hardwood and Industrial Supply, Inc., vs. Court of Appeals and Seven Brothers
II. Whether or not the terms and conditions of the Contract of Voyage Charter Hire, including Shipping Corporation, [16] the Court ruled:
the Nanyozai Charter, are valid and binding on both contracting parties.
The foregoing issues raised by the parties will be discussed under the following headings:
x x x in a contract of private carriage, the parties may freely stipulate their duties and Art. 362. The carrier, however, shall be liable for damages arising from the cause mentioned
obligations which perforce would be binding on them. Unlike in a contract involving a in the preceding article if proofs against him show that they occurred on account of his
common carrier, private carriage does not involve the general public.Hence, the stringent negligence or his omission to take the precautions usually adopted by careful persons, unless
provisions of the Civil Code on common carriers protecting the general public cannot the shipper committed fraud in the bill of lading, making him to believe that the goods were
justifiably be applied to a ship transporting commercial goods as a private of a class or quality different from what they really were.
carrier. Consequently, the public policy embodied therein is not contravened by stipulations
Because the MV Vlasons I was a private carrier, the shipowners obligations are governed by
in a charter party that lessen or remove the protection given by law in contracts involving
the foregoing provisions of the Code of Commerce and not by the Civil Code which, as a
common carriers.[17]
general rule, places the prima faciepresumption of negligence on a common carrier. It is a
Extent of VSIs Responsibility and Liability Over NSCs Cargo hornbook doctrine that:
It is clear from the parties Contract of Voyage Charter Hire, dated July 17, 1974, that VSI shall In an action against a private carrier for loss of, or injury to, cargo, the burden is on the plaintiff
not be responsible for losses except on proven willful negligence of the officers of the to prove that the carrier was negligent or unseaworthy, and the fact that the goods were lost
vessel. The NANYOZAI Charter Party, which was incorporated in the parties contract of or damaged while in the carriers custody does not put the burden of proof on the carrier.
transportation, further provided that the shipowner shall not be liable for loss of or damage
Since x x x a private carrier is not an insurer but undertakes only to exercise due care in the
to the cargo arising or resulting from unseaworthiness, unless the same was caused by its lack
protection of the goods committed to its care, the burden of proving negligence or a breach
of due diligence to make the vessel seaworthy or to ensure that the same was properly
of that duty rests on plaintiff and proof of loss of, or damage to, cargo while in the carriers
manned, equipped and supplied, and to make the holds and all other parts of the vessel in
possession does not cast on it the burden of proving proper care and diligence on its part or
which cargo [was] carried, fit and safe for its reception, carriage and preservation. [18] The
that the loss occurred from an excepted cause in the contract or bill of lading. However, in
NANYOZAI Charter Party also provided that [o]wners shall not be responsible for split, chafing
discharging the burden of proof, plaintiff is entitled to the benefit of the presumptions and
and/or any damage unless caused by the negligence or default of the master or crew.[19]
inferences by which the law aids the bailor in an action against a bailee, and since the carrier
Burden of Proof is in a better position to know the cause of the loss and that it was not one involving its
liability, the law requires that it come forward with the information available to it, and its
In view of the aforementioned contractual stipulations, NSC must prove that the damage to
failure to do so warrants an inference or presumption of its liability. However, such inferences
its shipment was caused by VSIs willful negligence or failure to exercise due diligence in
and presumptions, while they may affect the burden of coming forward with evidence, do not
making MV Vlasons I seaworthy and fit for holding, carrying and safekeeping the
alter the burden of proof which remains on plaintiff, and, where the carrier comes forward
cargo. Ineluctably, the burden of proof was placed on NSC by the parties agreement.
with evidence explaining the loss or damage, the burden of going forward with the evidence
This view finds further support in the Code of Commerce which pertinently provides: is again on plaintiff.
Art. 361. Merchandise shall be transported at the risk and venture of the shipper, if the Where the action is based on the shipowners warranty of seaworthiness, the burden of
contrary has not been expressly stipulated. proving a breach thereof and that such breach was the proximate cause of the damage rests
on plaintiff, and proof that the goods were lost or damaged while in the carriers possession
Therefore, the damage and impairment suffered by the goods during the transportation, due does not cast on it the burden of proving seaworthiness. x x x Where the contract of carriage
to fortuitous event, force majeure, or the nature and inherent defect of the things, shall be exempts the carrier from liability for unseaworthiness not discoverable by due diligence, the
for the account and risk of the shipper. carrier has the preliminary burden of proving the exercise of due diligence to make the vessel
The burden of proof of these accidents is on the carrier. seaworthy. [20]
In the instant case, the Court of Appeals correctly found that NSC has not taken the correct As noted earlier, the NSC had the burden of proving that the damage to the cargo was caused
position in relation to the question of who has the burden of proof. Thus, in its brief (pp. 10- by the negligence of the officers and the crew of MV Vlasons I in making their vessel
11), after citing Clause 10 and Clause 12 of the NANYOZAI Charter Party (incidentally plaintiff- seaworthy and fit for the carriage of tinplates. NSC failed to discharge this burden.
appellants [NSCs] interpretation of Clause 12 is not even correct), it argues that a careful
Before us, NSC relies heavily on its claim that MV Vlasons I had used an old and torn tarpaulin
examination of the evidence will show that VSI miserably failed to comply with any of these
or canvas to cover the hatches through which the cargo was loaded into the cargo hold of the
obligations as if defendant-appellee [VSI] had the burden of proof.[21]
ship. It faults the Court of Appeals for failing to consider such claim as an uncontroverted
First Issue: Questions of Fact fact [26] and denies that MV Vlasons I was equipped with new canvas covers in tandem with
the old ones as indicated in the Marine Protest xxx. [27] We disagree.
Based on the foregoing, the determination of the following factual questions is manifestly
relevant: (1) whether VSI exercised due diligence in making MV Vlasons I seaworthy for the The records sufficiently support VSIs contention that the ship used the old tarpaulin, only in
intended purpose under the charter party; (2) whether the damage to the cargo should be addition to the new one used primarily to make the ships hatches watertight. The foregoing
attributed to the willful negligence of the officers and crew of the vessel or of the stevedores are clear from the marine protest of the master of the MV Vlasons I, Antonio C. Dumlao, and
hired by NSC; and (3) whether the rusting of the tinplates was caused by its own sweat or by the deposition of the ships boatswain, Jose Pascua. The salient portions of said marine protest
contact with seawater. read:
These questions of fact were threshed out and decided by the trial court, which had the x x x That the M/V VLASONS I departed Iligan City or or about 0730 hours of August 8, 1974,
firsthand opportunity to hear the parties conflicting claims and to carefully weigh their loaded with approximately 2,487.9 tons of steel plates and tin plates consigned to National
respective evidence. The findings of the trial court were subsequently affirmed by the Court Steel Corporation; that before departure, the vessel was rigged, fully equipped and cleared
of Appeals. Where the factual findings of both the trial court and the Court of Appeals by the authorities; that on or about August 9, 1974, while in the vicinity of the western part
coincide, the same are binding on this Court. [22] We stress that, subject to some exceptional of Negros and Panay, we encountered very rough seas and strong winds and Manila office
instances, [23] only questions of law -- not questions of fact -- may be raised before this Court was advised by telegram of the adverse weather conditions encountered; that in the morning
in a petition for review under Rule 45 of the Rules of Court. After a thorough review of the of August 10, 1974, the weather condition changed to worse and strong winds and big waves
case at bar, we find no reason to disturb the lower courts factual findings, as indeed NSC has continued pounding the vessel at her port side causing sea water to overflow on deck
not successfully proven the application of any of the aforecited exceptions. andhatch (sic) covers and which caused the first layer of the canvass covering to give way
while the new canvass covering still holding on;
Was MV Vlasons I Seaworthy?
That the weather condition improved when we reached Dumali Point protected by Mindoro;
In any event, the records reveal that VSI exercised due diligence to make the ship seaworthy
that we re-secured the canvass covering back to position; that in the afternoon of August 10,
and fit for the carriage of NSCs cargo of steel and tinplates. This is shown by the fact that it
1974, while entering Maricaban Passage, we were again exposed to moderate seas and heavy
was drydocked and inspected by the Philippine Coast Guard before it proceeded to Iligan City
rains; that while approaching Fortune Island, we encountered again rough seas, strong winds
for its voyage to Manila under the contract of voyage charter hire. [24] The vessels voyage from
and big waves which caused the same canvass to give way and leaving the new canvass
Iligan to Manila was the vessels first voyage after drydocking.The Philippine Coast Guard
holding on;
Station in Cebu cleared it as seaworthy, fitted and equipped; it met all requirements for
trading as cargo vessel. [25] The Court of Appeals itself sustained the conclusion of the trial xxx xxx xxx [28]
court that MV Vlasons I was seaworthy. We find no reason to modify or reverse this finding
And the relevant portions of Jose Pascuas deposition are as follows:
of both the trial and the appellate courts.
Q: What is the purpose of the canvas cover?
Who Were Negligent: Seamen or Stevedores?
A: So that the cargo would not be soaked with water. Q: And on top of the beams you said there is a hatch board. How many pieces of wood are
put on top?
A: And will you describe how the canvas cover was secured on the hatch opening?
A: Plenty, sir, because there are several pieces on top of the hatch beam.
WITNESS
Q: And is there a space between the hatch boards?
A: It was placed flat on top of the hatch cover, with a little canvas flowing over the sides and
we place[d] a flat bar over the canvas on the side of the hatches and then we place[d] a A: There is none, sir.
stopper so that the canvas could not be removed.
Q: They are tight together?
ATTY DEL ROSARIO
A: Yes, sir.
Q: And will you tell us the size of the hatch opening? The length and the width of the hatch
Q: How tight?
opening.
A: Very tight, sir.
A: Forty-five feet by thirty-five feet, sir.
Q: Now, on top of the hatch boards, according to you, is the canvas cover. How many canvas
xxxxxxxxx
covers?
Q: How was the canvas supported in the middle of the hatch opening?
A: Two, sir. [29]
A: There is a hatch board.
That due diligence was exercised by the officers and the crew of the MV Vlasons I was further
ATTY DEL ROSARIO demonstrated by the fact that, despite encountering rough weather twice, the new tarpaulin
did not give way and the ships hatches and cargo holds remained waterproof. As aptly stated
Q: What is the hatch board made of?
by the Court of Appeals, xxx we find no reason not to sustain the conclusion of the lower court
A: It is made of wood, with a handle. based on overwhelming evidence, that the MV VLASONS I was seaworthy when it undertook
the voyage on August 8, 1974 carrying on board thereof plaintiff-appellants shipment of 1,677
Q: And aside from the hatch board, is there any other material there to cover the hatch? skids of tinplates and 92 packages of hot rolled sheets or a total of 1,769 packages from NSCs
A: There is a beam supporting the hatch board. pier in Iligan City arriving safely at North Harbor, Port Area, Manila, on August 12,
1974; xxx. [30]
Q: What is this beam made of?
Indeed, NSC failed to discharge its burden to show negligence on the part of the officers and
A: It is made of steel, sir. the crew of MV Vlasons I. On the contrary, the records reveal that it was the stevedores of
Q: Is the beam that was placed in the hatch opening covering the whole hatch opening? NSC who were negligent in unloading the cargo from the ship.
A: No, sir. The stevedores employed only a tent-like material to cover the hatches when strong rains
occasioned by a passing typhoon disrupted the unloading of the cargo. This tent-like covering,
Q: How many hatch beams were there placed across the opening? however, was clearly inadequate for keeping rain and seawater away from the hatches of the
ship. Vicente Angliongto, an officer of VSI, testified thus:
A: There are five beams in one hatch opening.
ATTY ZAMORA:
ATTY DEL ROSARIO
Q: Now, during your testimony on November 5, 1979, you stated on August 14 you went on Q: Now, is this procedure adopted by the stevedores of covering tents proper?
board the vessel upon notice from the National Steel Corporation in order to conduct the
A: No, sir, at the time they were discharging the cargo, there was a typhoon passing by and
inspection of the cargo. During the course of the investigation, did you chance to see the
the hatch tent was not good enough to hold all of it to prevent the water soaking through the
discharging operation?
canvas and enter the cargo.
WITNESS:
Q: In the course of your inspection, Mr. Anglingto [sic], did you see in fact the water enter and
A: Yes, sir, upon my arrival at the vessel, I saw some of the tinplates already discharged on soak into the canvas and tinplates.
the pier but majority of the tinplates were inside the hall, all the hatches were opened.
A: Yes, sir, the second time I went there, I saw it.
Q: In connection with these cargoes which were unloaded, where is the place.
Q: As owner of the vessel, did you not advise the National Steel Corporation [of] the
A: At the Pier. procedure adopted by its stevedores in discharging the cargo particularly in this tent covering
of the hatches?
Q: What was used to protect the same from weather?
A: Yes, sir, I did the first time I saw it, I called the attention of the stevedores but the
ATTY LOPEZ:
stevedores did not mind at all, so, I called the attention of the representative of the National
We object, your Honor, this question was already asked. This particular matter . . . the Steel but nothing was done, just the same. Finally, I wrote a letter to them. [31]
transcript of stenographic notes shows the same was covered in the direct examination.
NSC attempts to discredit the testimony of Angliongto by questioning his failure to complain
ATTY ZAMORA: immediately about the stevedores negligence on the first day of unloading, pointing out that
he wrote his letter to petitioner only seven days later. [32] The Court is not
Precisely, your Honor, we would like to go on detail, this is the serious part of the testimony. persuaded. Angliongtos candid answer in his aforequoted testimony satisfactorily explained
COURT: the delay. Seven days lapsed because he first called the attention of the stevedores, then the
NSCs representative, about the negligent and defective procedure adopted in unloading the
All right, witness may answer. cargo. This series of actions constitutes a reasonable response in accord with common sense
ATTY LOPEZ: and ordinary human experience. Vicente Angliongto could not be blamed for calling the
stevedores attention first and then the NSCs representative on location before formally
Q: What was used in order to protect the cargo from the weather? informing NSC of the negligence he had observed, because he was not responsible for the
stevedores or the unloading operations. In fact, he was merely expressing concern for NSC
A: A base of canvas was used as cover on top of the tin plates, and tents were built at the
which was ultimately responsible for the stevedores it had hired and the performance of their
opening of the hatches.
task to unload the cargo.
Q: You also stated that the hatches were already opened and that there were tents
We see no reason to reverse the trial and the appellate courts findings and conclusions on
constructed at the opening of the hatches to protect the cargo from the rain. Now, will you
this point, viz:
describe [to] the Court the tents constructed.
In the THIRD assigned error, [NSC] claims that the trial court erred in finding that the
A: The tents are just a base of canvas which look like a tent of an Indian camp raise[d] high at
stevedores hired by NSC were negligent in the unloading of NSCs shipment. We do not think
the middle with the whole side separated down to the hatch, the size of the hatch and it is
so. Such negligence according to the trial court is evident in the stevedores hired by [NSC],
soaks [sic] at the middle because of those weather and this can be used only to temporarily
not closing the hatch of MV VLASONS I when rains occurred during the discharging of the
protect the cargo from getting wet by rains.
cargo thus allowing rain water and seawater spray to enter the hatches and to drift to and fall right, as owner and real party in interest, to file an action against VSI for damages caused by
on the cargo. It was proven that the stevedores merely set up temporary tents or canvas to the latters willful negligence. We do not find anything in the charter party that would make
cover the hatch openings when it rained during the unloading operations so that it would be the liability of VSI for damage to the cargo contingent on or affected in any manner by NSCs
easier for them to resume work after the rains stopped by just removing said tents or obtaining an insurance over the cargo.
canvass. It has also been shown that on August 20, 1974, VSI President Vicente Angliongto
Third Issue: Admissibility of Certificates Proving Seaworthiness
wrote [NSC] calling attention to the manner the stevedores hired by [NSC] were discharging
the cargo on rainy days and the improper closing of the hatches which allowed continuous NSCs contention that MV Vlasons I was not seaworthy is anchored on the alleged
heavy rain water to leak through and drip to the tinplates covers and [Vicente Angliongto] inadmissibility of the certificates of seaworthiness offered in evidence by VSI. The said
also suggesting that due to four (4) days continuos rains with strong winds that the hatches certificates include the following:
be totally closed down and covered with canvas and the hatch tents lowered. (Exh 13). This
letter was received by [NSC] on 22 August 1974 while discharging operations were still going 1. Certificate of Inspection of the Philippine Coast Guard at Cebu
on (Exhibit 13-A). [33] 2. Certificate of Inspection from the Philippine Coast Guard
The fact that NSC actually accepted and proceeded to remove the cargo from the ship during 3. International Load Line Certificate from the Philippine Coast Guard
unfavorable weather will not make VSI liable for any damage caused thereby. In passing, it
may be noted that the NSC may seek indemnification, subject to the laws on prescription, 4. Coastwise License from the Board of Transportation
from the stevedoring company at fault in the discharge operations. A stevedore company 5. Certificate of Approval for Conversion issued by the Bureau of Customs. [36]
engaged in discharging cargo xxx has the duty to load the cargo xxx in a prudent manner, and
it is liable for injury to, or loss of, cargo caused by its negligence xxx and where the officers NSC argues that the certificates are hearsay for not having been presented in accordance with
and members and crew of the vessel do nothing and have no responsibility in the discharge the Rules of Court. It points out that Exhibits 3, 4 and 11 allegedly are not written records or
of cargo by stevedores xxx the vessel is not liable for loss of, or damage to, the cargo caused acts of public officers; whileExhibits 5, 6, 7, 8, 9, 11 and 12 are not evidenced by official
by the negligence of the stevedores xxx [34] as in the instant case. publications or certified true copies as required by Sections 25 and 26, Rule 132, of the Rules
of Court. [37]
Do Tinplates Sweat?
After a careful examination of these exhibits, the Court rules that Exhibits 3, 4, 5, 6, 7, 8, 9 and
The trial court relied on the testimony of Vicente Angliongto in finding that xxx tinplates sweat 12 are inadmissible, for they have not been properly offered as evidence. Exhibits 3 and 4 are
by themselves when packed even without being in contact with water from outside especially certificates issued by private parties, but they have not been proven by one who saw the
when the weather is bad or raining xxx. [35] The Court of Appeals affirmed the trial courts writing executed, or by evidence of the genuineness of the handwriting of the maker, or by a
finding. subscribing witness. Exhibits 5, 6, 7, 8, 9, and 12 are photocopies, but their admission under
A discussion of this issue appears inconsequential and unnecessary. As previously discussed, the best evidence rule have not been demonstrated.
the damage to the tinplates was occasioned not by airborne moisture but by contact with rain We find, however, that Exhibit 11 is admissible under a well-settled exception to the hearsay
and seawater which the stevedores negligently allowed to seep in during the unloading. rule per Section 44 of Rule 130 of the Rules of Court, which provides that (e)ntries in official
Second Issue: Effect of NSCs Failure to Insure the Cargo records made in the performance of a duty by a public officer of the Philippines, or by a person
in the performance of a duty specially enjoined by law, are prima facie evidence of the facts
The obligation of NSC to insure the cargo stipulated in the Contract of Voyage Charter Hire is therein stated. [38] Exhibit 11 is an original certificate of the Philippine Coast Guard in Cebu
totally separate and distinct from the contractual or statutory responsibility that may be issued by Lieutenant Junior Grade Noli C. Flores to the effect that the vessel VLASONS I was
incurred by VSI for damage to the cargo caused by the willful negligence of the officers and drydocked x x x and PCG Inspectors were sent on board for inspection x x x. After completion
the crew of MV Vlasons I. Clearly, therefore, NSCs failure to insure the cargo will not affect its
of drydocking and duly inspected by PCG Inspectors, the vessel VLASONS I, a cargo vessel, is allowed it did not lapse, having been tolled by unfavorable weather condition in view of the
in seaworthy condition, meets all requirements, fitted and equipped for trading as a cargo WWDSHINC qualification agreed upon by the parties. Clearly, it was error for the trial court
vessel was cleared by the Philippine Coast Guard and sailed for Cebu Port on July 10, 1974. and the Court of Appeals to have found and affirmed respectively that NSC incurred eleven
(sic) NSCs claim, therefore, is obviously misleading and erroneous. days of delay in unloading the cargo. The trial court arrived at this erroneous finding by
subtracting from the twelve days, specifically August 13, 1974 to August 24, 1974, the only
At any rate, it should be stressed that that NSC has the burden of proving that MV Vlasons
day of unloading unhampered by unfavorable weather or rain which was August 22,
I was not seaworthy. As observed earlier, the vessel was a private carrier and, as such, it did
1974. Based on our previous discussion, such finding is a reversible error. As mentioned, the
not have the obligation of a common carrier to show that it was seaworthy. Indeed, NSC
respondent appellate court also erred in ruling that NSC was liable to VSI for demurrage, even
glaringly failed to discharge its duty of proving the willful negligence of VSI in making the ship
if it reduced the amount by half.
seaworthy resulting in damage to its cargo. Assailing the genuineness of the certificate of
seaworthiness is not sufficient proof that the vessel was not seaworthy. Attorneys Fees
Fourth Issue: Demurrage and Attorneys Fees VSI assigns as error of law the Court of Appeals deletion of the award of attorneys fees. We
disagree. While VSI was compelled to litigate to protect its rights, such fact by itself will not
The contract of voyage charter hire provides inter alia:
justify an award of attorneys fees under Article 2208 of the Civil Code when x x x no sufficient
xxx xxx xxx showing of bad faith would be reflected in a partys persistence in a case other than an
erroneous conviction of the righteousness of his cause x x x. [44] Moreover, attorneys fees may
2. Cargo: Full cargo of steel products of not less than 2,500 MT, 10% more or less at Masters not be awarded to a party for the reason alone that the judgment rendered was favorable to
option. the latter, as this is tantamount to imposing a premium on ones right to litigate or seek judicial
xxx xxx xxx redress of legitimate grievances. [45]
7. Demurrage/Dispatch : P8,000.00/P4,000.00 per day. [39] At bottom, this appeal really hinges on a factual issue: when, how and who caused the
damage to the cargo? Ranged against NSC are two formidable truths. First, both lower courts
The Court defined demurrage in its strict sense as the compensation provided for in the found that such damage was brought about during the unloading process when rain and
contract of affreightment for the detention of the vessel beyond the laytime or that period of seawater seeped through the cargo due to the fault or negligence of the stevedores employed
time agreed on for loading and unloading of cargo. [40] It is given to compensate the shipowner by it. Basic is the rule that factual findings of the trial court, when affirmed by the Court of
for the nonuse of the vessel. On the other hand, the following is well-settled: Appeals, are binding on the Supreme Court. Although there are settled exceptions, NSC has
Laytime runs according to the particular clause of the charter party. x x x If laytime is not satisfactorily shown that this case is one of them. Second, the agreement between the
expressed in running days, this means days when the ship would be run continuously, and parties -- the Contract of Voyage Charter Hire -- placed the burden of proof for such loss or
holidays are not excepted. A qualification of weather permitting excepts only those days damage upon the shipper, not upon the shipowner. Such stipulation, while disadvantageous
when bad weather reasonably prevents the work contemplated. [41] to NSC, is valid because the parties entered into a contract of private charter, not one of
common carriage. Basic too is the doctrine that courts cannot relieve a party from the effects
In this case, the contract of voyage charter hire provided for a four-day laytime; it also of a private contract freely entered into, on the ground that it is allegedly one-sided or unfair
qualified laytime as WWDSHINC or weather working days Sundays and holidays to the plaintiff. The charter party is a normal commercial contract and its stipulations are
included. [42] The running of laytime was thus made subject to the weather, and would cease agreed upon in consideration of many factors, not the least of which is the transport price
to run in the event unfavorable weather interfered with the unloading of which is determined not only by the actual costs but also by the risks and burdens assumed
cargo. [43] Consequently, NSC may not be held liable for demurrage as the four-day laytime by the shipper in regard to possible loss or damage to the cargo. In recognition of such factors,
the parties even stipulated that the shipper should insure the cargo to protect itself from the
risks it undertook under the charter party. That NSC failed or neglected to protect itself with
such insurance should not adversely affect VSI, which had nothing to do with such failure or
neglect.
SO ORDERED.
FIRST DIVISION As culled from the records of the instant case, what really precipitated complainants
preventive suspension culminating to his dismissal is (sic) the incident that took place on
[G.R. No. 121035. April 12, 2000]
December 17, 1993 as gleaned from the exchange of letters/memoranda from both parties.
RUFINO NORBERTO F. SAMSON, petitioner, vs. NATIONAL LABOR RELATIONS
In a letter dated 25 January 1994 (Annex A) addressed to the complainant Mr. Samson signed
COMMISSION, SCHERING-PLOUGH CORPORATION, LEO RICONALLA and JOSE L.
by one J.L. Estingor, the latter called the attention of (sic) the complainants conduct x x x in a
ESTINGOR, respondents.
manner inimical to the interests of SPC and enumerated the following acts committed by the
DECISION complainant; to wit:
Through this petition for certiorari, Rufino Norberto F. Samson ("petitioner") assails the 1. On or about 17 December 1993, during the Sales and Marketing Christmas gathering, you
Decision, dated 17 March 1995, of the National Labor Relations Commission in the made utterances of obscene, insulting, and offensive words, referring to or directed against
consolidated cases of NLRC NCR-00-01-00652-94 and NLRC NCR-00-02-00887-94. Petitioner SPCs Management Committee, in the presence of several co-employees.
likewise assails the Resolution, dated 10 May 1995, of the NLRC denying his motion for
2. On that same occasion, and again in the presence of several co-employees, you uttered
reconsideration.
obscene, insulting and offensive words, and made malicious and lewd gestures, all of which
The assailed decision of the NLRC reversed and set aside the Decision, dated 25 August 1994, referred to or were directed against Mr. Epitacio D. Titong, Jr. President and General Manager
of Labor Arbiter Ricardo C. Nora finding respondent Schering-Plough Corporation of SPC.
("respondent company") guilty of illegal dismissal and ordering it to reinstate petitioner to his
3. Also on that same occasion, you repeated your malicious utterances and threatened to
former position as District Sales Manager and to pay him backwages.
disrupt or otherwise create violence during SPCs forthcoming National Sales Conference, and
As culled from the decisions of the labor arbiter and the NLRC, the facts of the case are as enjoined your co-employees not to prepare for the said conference.
follows:
4. Subsequently, on or about 3 January 1994, you repeated your threats to some co-
This pertains to the case (NCR-00-01-00652-94) filed by the complainant Rufino Norberto F. employees, advising them to watch out for some disruptive actions to happen during the
Samson against the respondents Schering Plough Corp. (SPC for brevity) and Mr. Leo C. National Sales Conference. (Underscoring ours)
Riconalla, National Sales Manager, for money equivalent of rice subsidy for the period April
Complainant was given two (2) days from receipt of the foregoing letter and to explain x x x
1990 to December 1992 and holiday pay, now deemed submitted for resolution based on
why no disciplinary action, including termination, should be taken against the complainant
records available.
and in the meantime was placed on preventive suspension effective immediately, until
On February 1, 1994, said complainant filed another case (NCR-00-02-00887-94) for illegal further notice.
preventive suspension raffled to the Honorable Labor Arbiter Donato G. Quinto, Jr. and
Complainant on the very same date 25 January 1994 and in reply to the above-mentioned
consolidated to the above case number.
letter/memo (Annex B) wrote an explanation stating:
Likewise, on February 4, 1994, complainant filed a Motion to Amend Complaint and averred
xxxxxxxxx
pertinently that x x x complainant was placed under an indefinite preventive suspension on
25 January 1994; and x x x was arbitrarily and summarily terminated from employment on 03 Relative to the said memo I would like to categorically state the following facts:
February 1994 on ground of loss of confidence.
1. That the act(s) alluded in the memo, specifically paragraph[s] 1 and 2, which alleged that I
uttered obscene, insulting and offensive words is not true. If ever I happened to utter such
words it was made in reference to the decision taken by the management committee on the On the basis of the pleadings filed by the parties and evidence on record, the labor arbiter
Cua Lim case and not to any particular or specific person(s) as stated in the memo. rendered his Decision, dated 25 August 1994, declaring the dismissal of petitioner illegal. The
labor arbiter ruled that petitioners conduct is not so serious as to warrant his dismissal
2. I beg to disagree with the statement made in Paragraphs 3 and 4 of the same memo as I
because: 1) the alleged offensive words were uttered during an informal and unofficial get-
deny to have uttered much less threaten to create violence and disrupt the holding of the
together of employees where there was social drinking and petitioner was already tipsy; 2)
National Sales Conference.
the words were uttered to show disapproval over managements decision on the "Cua Lim"
Finally, I am lodging a formal protest for being placed under preventive suspension it being case; 3) the penalty for the offense is only "verbal reminder" under respondent companys
contrary to the memo which gave me two (2) days within which to explain my position before rules and regulations; and 4) petitioner was already admonished during a meeting on 4
any disciplinary action could be initiated. I believe that the pre-empted imposition of the January 1994. Accordingly, respondent company was ordered to reinstate petitioner as
preventive suspension is not only arbitrary but is violative of my constitutional 'right to due District Sales Manager and to pay him backwages.[2]
process'.
Both parties appealed said decision to the NLRC. Petitioner filed a partial appeal of the denial
Submitted for your information.(Underscoring ours) of his claim for holiday pay and the cash equivalent of the rice subsidy. For its part, respondent
company sought the reversal of the decision of the labor arbiter alleging that the latter erred
Again, on January 27, 1994, complainant wrote a letter (Annex 'C') addressed to Mr. J.L. in ruling that petitioners employment was terminated without valid cause and in ordering his
Estingor, HRD Manager, which in part reads: reinstatement.
xxxxxxxxx In reversing the labor arbiters decision, the NLRC found that there was just cause, i.e., gross
Being a staff (DSM) assigned in the field I seldom stay in the office except on extreme necessity misconduct, for petitioners dismissal. The NLRC made the following disquisition, thus:
or when my presence is required. Under such situation my continued employment will not in It is well established in the records that complainant made insulting and obscene utterances
any way poses [sic] serious or imminent threat to the life and property of the company as well directed at the respondent companys management committee in the presence of several
as my co-employees. The preventive suspension meted out against me is not only abusive, employees. Again, he directed his verbal abuse against General Manager and President
arbitrary but indiscriminately applied under the guise of managerial prerogative but violative Epitacio D. Titong, Jr. by uttering "Si EDT, bullshit yan", "sabihin mo kay EDT yan"; and "sabihin
of my right under the law. mo kay EDT, bullshit yan" while gesturing and making the "dirty finger" sign. (page 7, Decision)
I trust that my immediate reinstatement will be acted upon without any further delay. These utterances were made by the complainant in [a] loud manner. (Affidavit of Leo C.
Riconalla, Annex "1", of respondents position paper) He was further accused of threatening
In a letter dated February 3, 1994, respondent SPC thru Mr. J.L. Estingor, wrote a letter (Annex to disrupt respondents national sales conference by telling Ms. Anita Valdezco that the
D) to the complainant Mr. Samson, the dispositive part of which reads as follows: conference will be a "very bloody one." (Respondents position paper)
xxxxxxxxx We consider the foregoing actuations of the complainant as constituting gross misconduct,
In view of the foregoing, notice is hereby given that your employment from Schering Plough sufficient to justify respondents in terminating his services. The actuation of the complainant
Corporation is terminated effective at the close of business hours of 3 February 1994. is destructive of the morals of his co-employees and, therefore, his continuance in the
position of District Sales Manager would be patently inimical to the respondent companys
We reiterate our previous directive for you to turn over the service vehicle, all money, interest.
documents, records and other property in your possession or custody to the National Sales
Manager. Please comply with this directive immediately."[1] Complainant is a managerial employee as he is a District Sales Manager. As such, his position
carries the highest degree of responsibility in improving and upholding the interests of the
employer and in exemplifying the utmost standard of discipline and good conduct among his-
co-employees. (Top Form Mfg. Inc., vs. NLRC, 218 SCRA 313) In terminating the employment Art. 282. Termination by employer. An employer may terminate an employment for any of
of managerial employees, the employer is allowed a wider latitude of discretion than in the the following causes:
case of ordinary rank-and-file employee. (Aurelio vs. NLRC, et al., G.R. 99034, April 12, 1993)[3]
a. Serious misconduct or willful disobedience by the employee of the lawful orders of his
Preliminarily, we find it necessary to resolve the procedural issues raised by respondent employer or representative in connection with his work;
company in its Comment (with Motion for Clarification), dated 6 September 1995.
b. Gross and habitual neglect by the employee of his duties;
Respondent company harped on the fact that the caption of the petition did not include the
docket numbers of the cases before the NLRC in violation of Supreme Court Circular 28-91. c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
We do not find this omission fatal as the pertinent docket numbers had been set out in the authorized representative;
first and second pages of the petition. The same constitutes substantial compliance with the
requirement of the law. d. Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and
Respondent company further opined that the petition should be summarily dismissed as the
decision had become final and executory citing Section 114, Rule VII and Section 2 (b), Rule e. Other causes analogous to the foregoing.
VIII of the Rules of Procedure of the NLRC. This contention is likewise untenable. As an original As borne by the records, petitioners dismissal was brought about by the utterances he made
action for certiorari, the petition was merely required to be filed within a reasonable time during an informal Christmas gathering of respondent companys Sales and Marketing Division
from receipt of a copy of the questioned decision or resolution.[4] Under the rules then in on 17 December 1993. Petitioner was heard to have uttered, "Si EDT (referring to Epitacio D.
effect at the time of the filing of the instant petition, a period of three (3) months was Titong, General Manager and President of respondent company), bullshit yan," "sabihin mo
considered to be "reasonable time".[5] In this case, petitioner received a copy of the assailed kay EDT yan" and "sabihin mo kay EDT, bullshit yan," while making the "dirty finger" gesture.
NLRC decision on 25 April 1995. He filed a motion for reconsideration on 27 April 1995 but it Petitioner likewise told his co-employees that the forthcoming national sales conference of
was denied by the NLRC in its assailed resolution, a copy of which was received by petitioner respondent company would be a "very bloody one."
on 1 July 1995. The instant petition was filed twenty-seven (27) days after said receipt or on
28 July 1995. Clearly, the instant petition was filed well within the reglementary period The NLRC ruled that the foregoing actuation of petitioner constituted gross misconduct
provided by law. warranting his dismissal. Citing jurisprudence, the NLRC held that "in terminating the
employment of managerial employees, the employer is allowed a wider latitude of discretion
Having settled that, we now address the substantive issue involved in this case, i.e., whether than in the case of ordinary rank-and-file."[8]
the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
reversing the decision of the labor arbiter and ruling that petitioner was validly dismissed. We do not agree with the findings of the NLRC.
We rule in favor of petitioner. Misconduct is improper or wrong conduct. It is the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies
The issue of whether petitioner was validly dismissed is a factual one and generally, factual wrongful intent and not mere error in judgment. The misconduct to be serious must be of
findings of the NLRC are accorded respect. In this case, however, there is compelling reason such grave and aggravated character and not merely trivial and unimportant. Such
to deviate from this salutary principle because the findings of facts of the NLRC are in conflict misconduct, however serious, must, nevertheless, be in connection with the employees work
with that of the labor arbiter. Accordingly, this Court must of necessity review the records to to constitute just cause for his separation.[9]
determine which findings should be preferred as more conformable to the evidentiary facts.[6]
In this case, the alleged misconduct of petitioner, when viewed in its context, is not of such
To constitute valid dismissal, two (2) requisites must be met: (1) the dismissal must be for any serious and grave character as to warrant his dismissal. First, petitioner made the alleged
of the causes expressed in Article 282 of the Labor Code; and (2) the employee must be given offensive utterances and obscene gesture during an informal Christmas gathering of
an opportunity to be heard and defend himself.[7] Article 282 of the Labor Code provides:
respondent companys district sales managers and marketing staff. The gathering was just a Filipino utterances and activities." In this case, the records do not show that petitioner made
casual get-together of employees. It is to be expected during this kind of gatherings, where any such false and malicious statements against any of his superiors.
tongues are more often than not loosened by liquor or other alcoholic beverages, that
Third, respondent company itself did not seem to consider the offense of petitioner serious
employees freely express their grievances and gripes against their employers. Employees
and grave enough to warrant an immediate investigation on the matter. It must be recalled
should be allowed wider latitude to freely express their sentiments during these kinds of
that petitioner uttered the alleged offensive language at an informal gathering on 17
occasions which are beyond the disciplinary authority of the employer. Significantly, it does
December 1993. He then allegedly made threatening remarks about the forthcoming sales
not appear in the records that petitioner possessed any ascendancy over the employees who
conference on 3 January 1994. During a meeting on 4 January 1994, Mr. Titong, Jr., the
heard his utterances as to cause demoralization in the ranks.
president and general manager of respondent company and allegedly to whom the offensive
Second, petitioners outburst was in reaction to the decision of the management in the "Cua words were directed, merely admonished petitioner stating that, "when there is a
Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture disagreement, act in a professional and civilized manner." Respondent company allowed
to express his dissatisfaction over said management decision were clearly in bad taste but several weeks to pass before it deemed it necessary to require petitioner to explain why no
these acts were not intended to malign or cast aspersion on the person of respondent disciplinary action should be taken against him for his behavior. This seeming lack of urgency
companys president and general manager. on the part of respondent company in taking any disciplinary action against petitioner negates
its charge that the latters misbehavior constituted serious misconduct.
The instant case should be distinguished from the previous cases where we held that the use
of insulting and offensive language constituted gross misconduct justifying an employees Further, respondent companys rules and regulations[14] provide as follows:
dismissal. In De la Cruz vs. NLRC,[10]the dismissed employee shouted "sayang ang pagka-
NATURE OF THE OFFENSE
professional mo!" and "putang ina mo" at the company physician when the latter refused to
give him a referral slip. In Autobus Workers Union (AWU) vs. NLRC,[11] the dismissed employee 1. xxx
called his supervisor "gago ka" and taunted the latter by saying "bakit anong gusto mo, tang
ina mo." In these cases, the dismissed employees personally subjected their respective 2. Loafing or loitering, engaging in fistcuffs or loudmouthed quarreling or provoking or
superiors to the foregoing verbal abuses. The utter lack of respect for their superiors was engaging others to such behaviour, inflicting bodily harm to another, any violent act or
patent. In contrast, when petitioner was heard to have uttered the alleged offensive words language which affects adversely morals, production or the maintenance of discipline,
against respondent companys president and general manager, the latter was not around. indecent or immoral conduct during working hours; unauthorized participation in activities
during official hours which are outside of regularly assigned duties: malingering; unauthorized
In Asian Design and Manufacturing Corporation vs. Deputy Minister of Labor,[12] the dismissed absence such as undertime; going on sick leave although not actually sick; frequently receiving
employee made false and malicious statements against the foreman (his superior) by telling visitors during official hours for personal matter.
his co-employees: "If you dont give a goat to the foreman you will be terminated. If you want
to remain in this company, you have to give a goat." The dismissed employee therein likewise 3. Willful and intentional refusal without valid reason to accept work or follow specific
posted a notice in the comfort room of the company premises which read: "Notice to all instructions; disrespect; insolence; and like behavior towards a superior authority of a high
Sander - Those who want to remain in this company, you must give anything to your foreman. ranking officer of the company.
Failure to do so will be terminated Alice 80." In Reynolds Philippine Corporation vs. PENALTIES
Eslava,[13] the dismissed employee circulated several letters to the members of the companys
board of directors calling the executive vice-president and general manager a "big fool," "anti- First Offense: Verbal reminder
Filipino" and accusing him of "mismanagement, inefficiency, lack of planning and foresight, Second Offense: Written reprimand
petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to labor, anti-
Third offense: Payroll deduction for time not worked due offenses. Review with Dept. Head Given the environmental circumstances of this case, the acts of petitioner clearly do not
with written follow up. constitute serious misconduct as to justify his dismissal. Neither is his dismissal justified on
ground of loss of confidence. As a ground for dismissal, the term "trust and confidence" is
Fourth Offense: 2nd written reprimand with warning of suspension
restricted to managerial employees.[18] We share the view of the Solicitor General that
Fifth Offense: Suspension and final reprimand with warning of dismissal if reoccurs. petitioner is not a managerial employee. Before one may be properly considered a managerial
employee, all the following conditions must be met:
Sixth Offense: Dismissal
(1) Their primary duty consists of the management of the establishment in which they are
Petitioners conduct on 17 December 1993 may be properly considered as falling under either employed or of a department or sub-division thereof;
paragraph number 2, i.e., use of violent language, or paragraph number 3, i.e., insolence or
disrespect towards a superior authority. Being a first offense, the appropriate penalty (2) They customarily and regularly direct the work of two or more employees therein;
imposable on petitioner is only a "verbal reminder" and not dismissal.
(3) They have the authority to hire or fire other employees of lower rank; or their suggestions
Indeed, the penalty of dismissal is unduly harsh considering that petitioner had been in the and recommendations as to the hiring and firing and as to the promotion or any other change
employ of respondent company for eleven (11) years and it does not appear that he had a of status of other employees are given particular weight.[19]
previous derogatory record. It is settled that notwithstanding the existence of a valid cause
Further, it is the nature of the employees functions, and not the nomenclature or title given
for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be
to his job, which determines whether he has rank-and-file, supervisory or managerial
imposed, as it is too severe a penalty if the latter had been employed for a considerable length
status.[20] Petitioner describes his functions as District Sales Manager as follows:
of time in the service of his employer, and such employment is untainted by any kind of
dishonesty and irregularity.[15] "The office of a District Sales Managers primary responsibility is to achieve or surpass the sales
and profit targets for each territory in the assigned district through: (a) efficient planning; (b)
This concern of the Court for the termination of employment even on the assumption that
management function; and (c) auditing and control. "Management action," on the other
conduct far from exemplary was indulged in was made evident in the case of Almira vs. B.F.
hand, means to direct the activities of the Professional Medical Representatives [by]: (1)
Goodrich Philippines, Inc.,[16] where this Court held:
[making] decisions that are compatible with district, national and corporate objectives; (2)
It would imply at the very least that where a penalty less punitive would suffice, whatever [directing] the activities of representative through - (a) frequent field visits (must spend at
missteps may be committed by labor ought not to be visited with a consequence so severe. It least 80% of working days in a quarter, allocating eight (8) working days per PMR/quarter
is not only because of the laws concern for the workingman. There is, in addition, his family excluding travel time); (b) written communications; (c) sales meetings (3) [training] PMRs in
to consider. Unemployment brings untold hardships and sorrows on those dependent on the medical/product knowledge; (4) [motivating] and [developing] PMRs toward greater
wage-earner. The misery and pain attendant on the loss of jobs then could be avoided if there productivity; (5) [acting] as a channel between field and home office; (6) [maintaining] records
be acceptance of the view that under all circumstances of this case, petitioners should not be as basis for quick analysis of the district performance; (7) [overseeing] special projects
deprived of their means of livelihood. Nor is this to condone what had been done by them. assuring the cost benefit value of such benefit; (8) x x x suggesting to sales management new
For all this while, since private respondent considered them separated from the service, they ideas, methods, devices to increase productivity of sales district or individual properties; and
had not been paid. From the strictly juridical standpoint, it cannot be too strongly stressed, [insuring] safe custody and proper maintenance of all company properties (e.g. company cars,
to follow Davis in his masterly work, Discretionary Justice, that where a decision may be made audio-visuals).[21]
to rest on informed judgment rather than rigid rules, all the equities of the case must be
The above job description does not mention that petitioner possesses the power "to lay down
accorded their due weight.[17]
policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees." Absent this crucial element, petitioner cannot be considered a managerial
employee despite his designation as District Sales Manager.
Granting arguendo that petitioner were to be considered a managerial employee, the ground SO ORDERED.
for "loss of confidence" is still without basis. Loss of trust and confidence to be a valid ground
for an employees dismissal must be clearly established.[22] A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial
grounds and not on the employers arbitrariness, whims, caprices or suspicion, otherwise, the
employee would remain at the mercy of the employer.[23] When petitioner made the offensive
utterances, it can be said that he merely acted "carelessly, thoughtlessly or heedlessly" and
not "intentionally, knowingly, purposely, or without justifiable excuse."
In fine, there being no just cause for petitioners dismissal, the same is consequently unlawful.
Petitioner is thus entitled to reinstatement to his position as District Sales Manager, unless
such position no longer exists, in which case he shall be given a substantially equivalent
position without loss of seniority rights. He is likewise entitled to the payment of his full
backwages.
With respect to petitioners other monetary claims, however, we agree with the findings of
the labor arbiter that he failed to establish his entitlement thereto. We quote with approval
the labor arbiters pertinent findings as follows:
Anent the monetary claims of complainant for payment of the holiday pay and the cash
equivalent of the rice subsidy for the period April 1990 to December 1992 vis-a-vis the
documentary evidence available on records (Annexes "H" and "I") this Office is inclined to
deny said claims for failure of the complainant to substantially and convincingly prove the
same.
When complainant was appointed District Sales Manager effective April 1, 1990, his salary
was increased by PESOS: Two Thousand Five Hundred Only (P2,500.00) (Annex "H") in
accordance with respondents "Salary Administrative Policy".
Again, effective January 1, 1993, complainants salary was increased by PESOS: One Thousand
One Hundred Four, so much so that in the span of two (2) years, complainants salary reached
the amount of Twenty Thousand Five Hundred Thirty Six (P20,536.00) Pesos which lends
credence to the position of the respondent SPC that said claims for holiday pay and rice
subsidy is already integrated in complainants salary.[24]
WHEREFORE, the instant petition is GRANTED. The Decision, dated 17 March 1995, and
Resolution, dated 10 May 1995, of the NLRC in the consolidated cases of NLRC NCR-00-01-
00652-94 and NLRC NCR-00-02-00887-94 are REVERSED and SET ASIDE. The Decision, dated
25 August 1994, of the labor arbiter is REINSTATED.
Two question are presented by the petition: (1) whether the route managers at Pepsi-Cola
Products Philippines, Inc. are managerial employees and (2) whether Art. 245, insofar as it
prohibits managerial employees from forming, joining or assisting labor unions, violates Art.
EN BANC III, 8 of the Constitution.
[G.R. No. 122226. March 25, 1998] In resolving these issues it would be useful to begin by defining who are managerial
employees and considering the types of managerial employees.
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, vs. HON. BIENVENIDO E.
Types of Managerial Employees
LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES, INC. respondents.
DECISION The term manager generally refers to anyone who is responsible for subordinates and other
organization resources.[1] As a class, managers constitute three levels of a pyramid:
MENDOZA, J.:
Top Management
Petitioner is a union of supervisory employees. It appears that on March 20, 1995 the union
filed a petition for certification election on behalf of the route managers at Pepsi-Cola _________________
Products Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal,
Middle Management
by the Secretary of Labor and Employment, on the ground that the route managers are
managerial employees and, therefore, ineligible for union membership under the first _________________
sentence of Art. 245 of the Labor Code, which provides:
First Line
Ineligibility of managerial employees to join any labor organization; right of supervisory
Management
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 (also called Supervisor)
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own. ____________________
Petitioner brought this suit challenging the validity of the order dated August 31, 1995, as ____________________
reiterated in the order dated September 22, 1995, of the Secretary of Labor and Operatives
Employment. Its petition was dismissed by the Third Division for lack of showing that
respondent committed grave abuse of discretion. But petitioner filed a motion for Or Operating Employees
reconsideration, pressing for resolution its contention that the first sentence of Art. 245 of FIRST-LINE MANAGERS The lowest level in an organization at which individuals are
the Labor Code, so far as it declares managerial employees to be ineligible to form, assist or responsible for the work of others is called first-line or first-level management. First-line
join unions, contravenes Art. III 8 of the Constitution which provides: managers direct operating employees only; they do not supervise other managers. Example
The right of the people, including those employed in the public and private sectors, to form of first-line managers are the foreman or production supervisor in a manufacturing plant, the
unions, associations, or societies for the purposes not contrary to law shall not be abridged. technical supervisor in a research department, and the clerical supervisor in a large
office. First-level managers are often called supervisors.
For this reason, the petition was referred to the Court en banc.
MIDDLE MANAGERS The term middle management can refer to more than one level in an
The Issues in this Case
organization. Middle managers direct the activities of other managers and sometimes also
those of operating employees. Middle managers principal responsibilities are to direct the and accounting manager are managerial employees. The rest i.e. quality control manager,
activities that implement their organizations policies and to balance the demands of their yard/transport manager and warehouse operations manager are supervisory employees.
superiors with the capacities of their subordinates. A plant manager in an electronics firm is
To qualify as managerial employee, there must be a clear showing of the exercise of
an example of a middle manager.
managerial attributes under paragraph (m), Article 212 of the Labor Code as
TOP MANAGERS Composed of a comparatively small group of executives, top management is amended. Designations or titles of positions are not controlling. In the instant case, nothing
responsible for the overall management of the organization. It establishes operating policies on record will support the claim that the quality control manager, yard/transport manager
and guides the organizations interactions with its environment. Typical titles of top managers and warehouse operations manager are vested with said attributes. The warehouse
are chief executive officer, president, and senior vice-president. Actual titles vary from one operations manager, for example, merely assists the plant finance manager in planning,
organization to another and are not always a reliable guide to membership in the highest organizing, directing and controlling all activities relative to development and implementation
management classification.[2] of an effective management control information system at the sale offices. The exercise of
authority of the quality control manager, on the other hand, needs the concurrence of the
As can be seen from this description, a distinction exist between those who have the authority
manufacturing manager
to devise, implement and control strategic and operational policies (top and middle
managers) and those whose task is simply to ensure that such polices are carried out by the As to the route managers and accounting manager, we are convinced that they are
rank-and-file employees of an organization (first-level managers/supervisors). What managerial employees. Their job descriptions clearly reveal so.
distinguishes them from the rank-and file employees is that they act in the interest of the
On July 6, 1992, this finding was reiterated in Case No. OS-A-3-71-92, entitled In Re: Petition
employer in supervising such rank-and-file employees.
for Direct Certification and/or Certification Election-Route Managers/Supervisory Employees
Managerial employees may therefore be said to fall into two distinct categories: the of Pepsi-Cola Products Phils. Inc., as follows:
managers per se, who compose the former group described above, and the supervisors who
The issue brought before us is not of first impression. At one time, we had the occasion to
form the latter group. Whether they belong to the first or second category, managers, vis--vis
rule upon the status of route manager in the same company vis a vis the issue as to whether
employers, are, likewise, employees.[3]
or not it is supervisory employee or a managerial employee. In the case of Workers Alliance
The first question is whether route managers are managers are managerial employees or Trade Unions (NATU) vs. Pepsi Cola Products, Phils., Inc. (OS-MA-A-10-318-91), 15 November
supervisors. 1991, we ruled that a route manager is a managerial employee within the context of the
Previous Administrative Determinations of the Question Whether Route Managers are Managerial Employees
definition of the law, and hence, ineligible to join, form or assist a union. We have once more
passed upon the logic of our Decision aforecited in the light of the issues raised in the instant
It appears that this question was the subject of two previous determinations by the Secretary appeal, as well as the available documentary evidence on hand, and have come to the view
of Labor and Employment, in accordance with which this case was decided by the med- that there is no cogent reason to depart from our earlier holding. Route Managers are, by the
arbiter. very nature of their functions and the authority they wield over their subordinates,
managerial employees. The prescription found in Art. 245 of the Labor Code, as amended
In Case No. OS-MA-10318-91, entitled Workerss Alliance Trade Union (WATU) v. Pepsi-Cola therefore, clearly applies to them.[4]4
Products Philippines, Inc., decided on November 13, 1991, the Secretary of Labor found:
Citing our ruling in Nasipit Lumber Co. v. National Labor Relations Commission,[5]5 however,
We examined carefully the pertinent job description of the subject employees and other petitioner argues that these previous administrative determinations do not have the effect
documentary evidence on record vis--vis paragraph (m), Article 212 of the Labor Code, as of res judicata in this case, because "labor relations proceedings" are "non-litigious and
amended, and we find that only those employees occupying the position of route manager summary in nature without regard to legal technicalities."[6] Nasipit Lumber Co. involved a
clearance to dismiss an employee issued by the Department of Labor.The question was
whether in a subsequent proceeding for illegal dismissal, the clearance was res judicata. In employees not falling within any of the above definitions are considered rank-and-file
holding it was not, this Court made it clear that it was referring to labor relations proceedings employees for purposes of this Book.
of a non-adversary character, thus:
At the very least, the principle of finality of administrative determination compels respect for
The requirement of a clearance to terminate employment was a creation of the Department the finding of the Secretary of Labor that route managers are managerial employees as
of labor to carry out the Labor Code provisions on security of tenure and termination of defined by law in the absence of anything to show that such determination is without
employment. The proceeding subsequent to the filing of an application for clearance to substantial evidence to support it. Nonetheless, the Court, concerned that employees who
terminate employment was outlined in Book V, Rule XIV of the Rules and Regulations are otherwise supervisors may wittingly or unwittingly be classified as managerial personnel
Implementing the Labor Code. The fact that said rule allowed a procedure for the approval of and thus denied the right of self- organization, has decided to review the record of this case.
the clearance with or without the opposition of the employee concerned (Secs. 7 & 8), DOLE's Finding that Route Managers are Managerial Employees Supported by Substantial Evidence in the Record
demonstrates the non-litigious and summary nature of the proceeding. The clearance
requirement was therefore necessary only as an expeditious shield against arbitrary dismissal The Court now finds that the job evaluation made by the Secretary of Labor is indeed
without the knowledge and supervision of the Department of Labor. Hence, a duly approved supported by substantial evidence. The nature of the job of route managers is given in a four-
clearance implied that the dismissal was legal or for cause (Sec. 2).[7]v. National Labor page pamphlet, prepared by the company, called "Route Manager Position Description," the
Relations Commission, 177 SCRA 93, 100 (1989).7 pertinent parts of which read:
But the doctrine of res judicata certainly applies to adversary administrative proceedings. As A. BASIC PURPOSE
early as 1956, in Brillantes v. Castro,[8]8 we sustained the dismissal of an action by a trial court
on the basis of a prior administrative determination of the same case by the Wage A Manager achieves objectives through others.
Administration Service, applying the principle of res judicata. Recently, in Abad v. NLRC[9]9 we As a Route Manager, your purpose is to meet the sales plan; and you achieve this objective
applied the related doctrine of stare decisis in holding that the prior determination that through the skillful MANAGEMENT OF YOUR JOB AND THE MANAGEMENT OF YOUR PEOPLE.
certain jobs at the Atlantic Gulf and Pacific Co. were project employments was binding in
another case involving another group of employees of the same company. Indeed, in Nasipit These then are your functions as Pepsi-Cola Route Manager. Within these functions -
Lumber Co., this Court clarified toward the end of its opinion that "the doctrine of res managing your job and managing your people - you are accountable to your District Manager
judicata applies . . . to judicial or quasi judicial proceedings and not to the exercise of for the execution and completion of various tasks and activities which will make it possible
administrative powers."[10]v. National Labor Relations Commission, supra note 7.10 Now for you to achieve your sales objectives.
proceedings for certification election, such as those involved in Case No. OS-M-A-10-318-91 B. PRINCIPAL ACCOUNTABILITIES
and Case No. OS-A-3-71-92, are quasi judicial in nature and, therefore, decisions rendered in
such proceedings can attain finality.[11]v. B.F. Goodrich (Marikina Factory) Confidential and 1.0 MANAGING YOUR JOB
Salaries Employees Union-NATU, 49 SCRA 532 (1973).11
The Route Manager is accountable for the following:
Thus, we have in this case an expert's view that the employees concerned are managerial
1.1 SALES DEVELOPMENT
employees within the purview of Art. 212 which provides:
1.1.1 Achieve the sales plan.
(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, 1.1.2 Achieve all distribution and new account objectives.
assign or discipline employees.Supervisory employees are those who, in the interest of the
1.1.3 Develop new business opportunities thru personal contacts with dealers.
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 1.1.4 Inspect and ensure that all merchandizing [sic] objectives are achieved in all outlets.
1.1.5 maintain and improve productivity of all cooling equipment and kiosks. Earlier in this opinion, reference was made to the distinction between managers per se (top
managers and middle managers) and supervisors (first-line managers). That distinction is
1.1.6 Execute and control all authorized promotions.
evident in the work of the route managers which sets them apart from supervisors in
1.1.7 Develop and maintain dealer goodwill. general. Unlike supervisors who basically merely direct operating employees in line with set
tasks assigned to them, route managers are responsible for the success of the company's main
1.1.8 Ensure all accounts comply with company suggested retail pricing. line of business through management of their respective sales teams. Such management
1.1.9 Study from time to time individual route coverage and productivity for possible necessarily involves the planning, direction, operation and evaluation of their individual
adjustments to maximize utilization of resources. teams and areas whichthe work of supervisors does not entail.
1.2 Administration The route managers cannot thus possibly be classified as mere supervisors because their work
does not only involve, but goes far beyond, the simple direction or supervision of operating
1.2.1 Ensure the proper loading of route trucks before check-out and the proper sorting of employees to accomplish objectives set by those above them. They are not mere
bottles before check-in. functionaries with simple oversight functions but business administrators in their own
1.2.2 Ensure the upkeep of all route sales reports and all other related reports and forms right. An idea of the role of route managers as managers per se can be gotten from a memo
required on an accurate and timely basis. sent by the director of metro sales operations of respondent company to one of the route
managers. It reads:[13]
1.2.3 Ensure proper implementation of the various company policies and procedures incl. but
not limited to shakedown; route shortage; progressive discipline; sorting; spoilages; 03 April 1995
credit/collection; accident; attendance. To : CESAR T. REOLADA
1.2.4 Ensure collection of receivables and delinquent accounts. From : REGGIE M. SANTOS
2.0 MANAGING YOUR PEOPLE Subj : SALARY INCREASE
The Route Manager is accountable for the following: Effective 01 April 1995, your basic monthly salary of P11,710 will be increased
2.1 Route Sales Team Development to P12,881 or an increase of 10%. This represents the added managerial responsibilities you
will assume due to the recent restructuring and streamlining of Metro Sales Operations
2.1.1 Conduct route rides to train, evaluate and develop all assigned route salesmen and brought about by the continuous losses for the last nine (9) months.
helpers at least 3 days a week, to be supported by required route ride documents/reports &
back check/spot check at least 2 days a week to be supported by required documents/reports. Let me remind you that for our operations to be profitable, we have to sustain the intensity
and momentum that your group and yourself have shown last March. You just have to deliver
2.1.2 Conduct sales meetings and morning huddles. Training should focus on the the desired volume targets, better negotiated concessions, rationalized sustaining deals,
enhancement of effective sales and merchandizing [sic] techniques of the salesmen and eliminate or reduced overdues, improved collections, more cash accounts, controlled
helpers. Conduct group training at least 1 hour each week on a designated day and of specific operating expenses, etc. Also, based on the agreed set targets, your monthly performance
topic. will be closely monitored.
2.2 Code of Conduct You have proven in the past that your capable of achieving your targets thru better
planning, managing your group as a fighting team, and thru aggressive selling. I am looking
2.2.1 Maintain the company's reputation through strict adherence to PCPPI's code of conduct
and the universal standards of unquestioned business ethics.[12]12
forward to your success and I expect that you just have to exert your doubly best in turning "performance appraisals") which require a delineation of the functions and responsibilities of
around our operations from a losing to a profitable one! managers by means of ready reference cards as here, have long been recognized in
management as effective tools for keeping businesses competitive.
Happy Selling!!
This brings us to the second question, whether the first sentence of Art. 245 of the Labor
(Sgd.) R.M. SANTOS
Code, prohibiting managerial employees from forming, assisting or joining any labor
The plasticized card given to route managers, quoted in the separate opinion of Justice Vitug, organization, is constitutional in light of Art. III, 8 of the Constitution which provides:
although entitled "RM's Job Description," is only a summary of performance standards. It does
The right of the people, including those employed in the public and private sectors, to form
not show whether route managers are managers per se or supervisors. Obviously, these
unions, associations, or societies for purposes not contrary to law shall not be abridged.
performance standards have to be related to the specific tasks given to route managers in the
four-page "Route Manager Position Description," and, when this is done, the managerial As already stated, whether they belong to the first category (managers per se) or the second
nature of their jobs is fully revealed. Indeed, if any, the card indicates the great latitude and category (supervisors), managers are employees. Nonetheless, in the United States, as Justice
discretion given to route managers - from servicing and enhancing company goodwill to Puno's separate opinion notes, supervisors have no right to form unions. They are excluded
supervising and auditing accounts, from trade (new business) development to the discipline, from the definition of the term "employee" in 2(3) of the Labor-Management Relations Act of
training and monitoring of performance of their respective sales teams, and so forth, - if they 1947.[15]v. Bell Aerospace Co., 416 U.S. 281, n 11, 40 L.Ed.2d 134, 147, n. 11 (1974), thus:
are to fulfill the company's expectations in the "key result areas."
Supervisors are management people. They have distinguished themselves in their work. They
Article 212(m) says that "supervisory employees are those who, in the interest of the have demonstrated their ability to take care of themselves without depending upon the
employer, effectively recommend such managerial actions if the exercise of such authority is pressure of collective action. No one forced them to become supervisors. They abandoned
not merely routinary or clerical in nature but requires the use of independent the "collective security" of the rank and file voluntarily, because they believed the
judgment." Thus, their only power is to recommend. Certainly, the route managers in this opportunities thus opened to them to be more valuable to them than such "security". It
case more than merely recommend effective management action. They perform operational, seems wrong, and it is wrong, to subject people of this kind, who have demonstrated their
human resource, financial and marketing functions for the company, all of which involve the initiative, their ambition and their ability to get ahead, to the leveling processes of seniority,
laying down of operating policies for themselves and their teams. For example, with respect uniformity and standardization that the Supreme Court recognizes as being fundamental
to marketing, route managers, in accordance with B.1.1.1 to B.1.1.9 of the Route Managers principles of unionism. (J.I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 88 L.Ed.
Job Description, are charged, among other things, with expanding the dealership base of their 762, 64 S. Ct. 576 (1994). It is wrong for the foremen, for it discourages the things in them
respective sales areas, maintaining the goodwill of current dealers, and distributing the that made them foremen in the first place. For the same reason, that it discourages those
company's various promotional items as they see fit. It is difficult to see how supervisors can best qualified to get ahead, it is wrong for industry, and particularly for the future strength
be given such responsibility when this involves not just the routine supervision of operating and productivity of our country.15 In the Philippines, the question whether managerial
employees but the protection and expansion of the company's business vis-a-vis its employees have a right of self-organization has arisen with respect to first-level managers or
competitors. supervisors, as shown by a review of the course of labor legislation in this country.
Right of Self-Organization of Managerial Employees under Pre-Labor Code Laws
While route managers do not appear to have the power to hire and fire people (the evidence
shows that they only "recommended" or "endorsed" the taking of disciplinary action against
Before the promulgation of the Labor Code in 1974, the field of labor relations was governed
certain employees), this is because this is a function of the Human Resources or Personnel
by the Industrial Peace Act (R.A. No. 875).
Department of the company.[14]14 And neither should it be presumed that just because they
are given set benchmarks to observe, they are ipso factosupervisors. Adequate control In accordance with the general definition above, this law defined "supervisor" as follows:
methods (as embodied in such concepts as "Management by Objectives [MBO]" and
SECTION 2. . . . willing to grant. Their needs might not be attended to then in the absence of any organization
of their own. Nor is this to indulge in empty theorizing. The record of respondent Company,
(k) "Supervisor" means any person having authority in the interest of an employer, to hire,
even the very case cited by it, is proof enough of their uneasy and troubled
transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline other
relationship. Certainly the impression is difficult to erase that an alien firm failed to manifest
employees, or responsibly to direct them, and to adjust their grievances, or effectively to
sympathy for the claims of its Filipino executives. To predicate under such circumstances that
recommend such acts, if, in connection with the foregoing, the exercise of such authority is
agreement inevitably marks their relationship, ignoring that discord would not be unusual, is
not of a merely routinary or clerical nature but requires the use of independent
to fly in the face of reality.
judgment.[16]16
. . . The basic question is whether the managerial personnel can organize. What respondent
The right of supervisors to form their own organizations was affirmed:
Company failed to take into account is that the right to self-organization is not merely a
SEC. 3. Employees' Right to Self-Organization. -- Employees shall have the right to self- statutory creation. It is fortified by our Constitution. All are free to exercise such right unless
organization and to form, join or assist labor organizations of their own choosing for the their purpose is contrary to law. Certainly it would be to attach unorthodoxy to, not to say an
purpose of collective bargaining through representatives of their own choosing and to engage emasculation of, the concept of law if managers as such were precluded from
in concerted activities for the purpose of collective bargaining and other mutual aid and organizing. Having done so and having been duly registered, as did occur in this case, their
protection. Individuals employed as supervisors shall not be eligible for membership in a labor union is entitled to all the rights under Republic Act No. 875. Considering what is
organization of employees under their supervision but may form separate organizations of denominated as unfair labor practice under Section 4 of such Act and the facts set forth in our
their own.[17] decision, there can be only one answer to the objection raised that no unfair labor practice
could be committed by respondent Company insofar as managerial personnel is concerned. It
For its part, the Supreme Court upheld in several of its decisions the right of supervisors to is, as is quite obvious, in the negative.[20]20
organize for purposes of labor relations.[18]v. Filoil Supervisory and Confidential Employees
Association, 6 SCRA 522 (1972); Kapisanan ng mga Manggagawa sa Manila Railroad Co. v. CIR, Actually, the case involved front-line managers or supervisors only, as the plantilla of
106 Phil 607 (1959).18 employees, quoted in the main opinion,[21]J.) (emphasis added).21 clearly indicates:
Although it had a definition of the term "supervisor," the Industrial Peace Act did not define CAFIMSA members holding the following Supervisory Payroll Position Title are Recognized by
the term "manager." But, using the commonly-understood concept of "manager," as above the Company
stated, it is apparent that the law used the term "supervisors" to refer to the sub-group of
Payroll Position Title
"managerial employees" known as front-line managers. The other sub-group of "managerial
employees," known as managers per se, was not covered. Assistant to Mgr. - National Acct. Sales
However, in Caltex Filipino Managers and Supervisors Association v. Court of Industrial Jr. Sales Engineer
Relations,[19]J.)19 the right of all managerial employees to self-organization was upheld as a
Retail Development Asst.
general proposition, thus:
Staff Asst. - 0 Marketing
It would be going too far to dismiss summarily the point raised by respondent Company - that
of the alleged identity of interest between the managerial staff and the employing firm. That Sales Supervisor
should ordinarily be the case, especially so where the dispute is between management and
the rank and file. It does not necessarily follow though that what binds the managerial staff Supervisory Assistant
to the corporation forecloses the possibility of conflict between them.There could be a real Jr. Supervisory Assistant
difference between what the welfare of such group requires and the concessions the firm is
Credit Assistant Refinery Shift Supvr. B
Jr. Construction Engineer Finally, also deemed included are all other employees excluded from the rank and file unions
but not classified as managerial or otherwise excludable by law or applicable judicial
St. Sales Supervisor
precedents.
Deport Supervisor A Right of Self-Organization of Managerial Employees under the Labor Code
Terminal Accountant B
Thus, the dictum in the Caltex case which allowed at least for the theoretical unionization of
Merchandiser top and middle managers by assimilating them with the supervisory group under the broad
phrase "managerial personnel," provided the lynchpin for later laws denying the right of self-
Dist. Sales Prom. Supvr. organization not only to top and middle management employees but to front line managers
Instr. - Merchandising or supervisors as well. Following the Caltex case, the Labor Code, promulgated in 1974 under
martial law, dropped the distinction between the first and second sub-groups of managerial
Asst. Dist. Accountant B employees. Instead of treating the terms "supervisor" and "manager" separately, the law
Sr. Opers. Supervisor lumped them together and called them "managerial employees," as follows:
Asst. Bulk Ter. Supt. (k) "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,
Sr. Opers. Supvr. assign or discipline employees, or to effectively recommend such managerial actions. All
employees not falling within this definition are considered rank and file employees for
Credit Supervisor A
purposes of this Book.[22]22
Asst. Stores Supvr. A
The definition shows that it is actually a combination of the commonly understood definitions
Ref. Supervisory Draftsman of both groups of managerial employees, grammatically joined by the phrase "and/or."
Refinery Shift Supvr. B This general definition was perhaps legally necessary at that time for two reasons. First, the
1974 Code denied supervisors their right to self-organize as theretofore guaranteed to them
Asst. Supvr. A - Operations (Refinery)
by the Industrial Peace Act.Second, it stood the dictum in the Caltex case on its head by
prohibiting all types of managers from forming unions. The explicit general prohibition was people WHETHER EMPLOYED BY THE STATE OR PRIVATE ESTABLISHMENTS to form
contained in the then Art. 246 of the Labor Code. associations, unions, or societies for purposes not contrary to law shall not be abridged."[23]23
The practical effect of this synthesis of legal concepts was made apparent in the Omnibus Explaining his proposed amendment, he stated:
Rules Implementing the Labor Code which the Department of Labor promulgated on January
MR. LERUM. Under the 1935 Bill of Rights, the right to form associations is granted to all
19, 1975. Book V, Rule II, 11 of the Rules provided:
persons whether or not they are employed in the government. Under that provision, we allow
Supervisory unions and unions of security guards to cease operation. - All existing supervisory unions in the government, in government-owned and controlled corporations and in other
unions and unions of security guards shall, upon the effectivity of the Code, cease to operate industries in the private sector, such as the Philippine Government Employees' Association,
as such and their registration certificates shall be deemed automatically cancelled. However, unions in the GSIS, the SSS, the DBP and other government-owned and controlled
existing collective agreements with such unions, the life of which extends beyond the date of corporations. Also, we have unions of supervisory employees and of security guards. But what
effectivity of the Code, shall be respected until their expiry date insofar as the economic is tragic about this is that after the 1973 Constitution was approved and in spite of an express
benefits granted therein are concerned. recognition of the right to organize in P.D. No. 442, known as the Labor Code, the right of
government workers, supervisory employees and security guards to form unions was
Members of supervisory unions who do not fall within the definition of managerial employees
abolished.
shall become eligible to join or assist the rank and file labor organization, and if none exists,
to form or assist in the forming of such rank and file organization. The determination of who And we have been fighting against this abolition. In every tripartite conference attended by
are managerial employees and who are not shall be the subject of negotiation between the government, management and workers, we have always been insisting on the return of
representatives of the supervisory union and the employer. If no agreement is reached these rights. However, both the government and employers opposed our proposal, so nothing
between the parties, either or both of them may bring the issue to the nearest Regional Office came out of this until this week when we approved a provision which states:
for determination.
Notwithstanding any provision of this article, the right to self-organization shall not be denied
The Department of Labor continued to use the term "supervisory unions" despite the demise to government employees.
of the legal definition of "supervisor" apparently because these were the unions of front line
We are afraid that without any corresponding provision covering the private sector, the
managers which were then allowed as a result of the statutory grant of the right of self-
security guards, the supervisory employees or majority employees [sic] will still be excluded,
organization under the Industrial Peace Act. Had the Department of Labor seen fit to similarly
and that is the purpose of this amendment.
ban unions of top and middle managers which may have been formed following the dictum
in Caltex, it obviously would have done so. Yet it did not, apparently because no such unions I will be very glad to accept any kind of wording as long as it will amount to absolute
of top and middle managers really then existed. recognition of private sector employees, without exception, to organize.
Real Intent of the 1986 Constitutional Commission
THE PRESIDENT. What does the Committee say?
This was the law as it stood at the time the Constitutional Commission considered the draft FR. BERNAS. Certainly, the sense is very acceptable, but the point raised by Commissioner
of Art. III, 8. Commissioner Lerum sought to amend the draft of what was later to become Art. Rodrigo is well-taken. Perhaps, we can lengthen this a little bit more to read: "The right of the
III, 8 of the present Constitution: people WHETHER UNEMPLOYED OR EMPLOYED BY STATE OR PRIVATE ESTABLISHMENTS."
MR. LERUM. My amendment is on Section 7, page 2, line 19, which is to insert between the I want to avoid also the possibility of having this interpreted as applicable only to the
words "people" and "to" the following: WHETHER EMPLOYED BY THE STATE OR PRIVATE employed.
ESTABLISHMENTS. In other words, the section will now read as follows: "The right of the
MR. DE LOS REYES. Will the proponent accept an amendment to the amendment, Madam of supervisory employees to organize, because he said, "We are afraid that without any
President? corresponding provision covering the private sector, security guards, supervisory employees
or majority [of] employees will still be excluded, and that is the purpose of this
MR. LERUM. Yes, as long as it will carry the idea that the right of the employees in the private
amendment"?[27]
sector is recognized.[24]
It would seem that Commissioner Lerum simply meant to restore the right of supervisory
Lerum thus anchored his proposal on the fact that (1) government employees, supervisory
employees to organize. For even though he spoke of the need to "abolish" Art. 246 of the
employees, and security guards, who had the right to organize under the Industrial Peace
Labor Code which, as already stated, prohibited "managerial employees" in general from
Act, had been denied this right by the Labor Code, and (2) there was a need to reinstate the
forming unions, the fact was that in explaining his proposal, he repeatedly referred to
right of these employees. In consonance with his objective to reinstate the right of
"supervisory employees" whose right under the Industrial Peace Act to organize had been
government, security, and supervisory employees to organize, Lerum then made his proposal:
taken away by Art. 246. It is noteworthy that Commissioner Lerum never referred to the then
MR. LERUM. Mr. Presiding Officer, after a consultation with several Members of this definition of "managerial employees" in Art. 212(m) of the Labor Code which put together,
Commission, my amendment will now read as follows: "The right of the people INCLUDING under the broad phrase "managerial employees," top and middle managers and
THOSE EMPLOYED IN THE PUBLIC AND PRIVATE SECTORS to form associations, unions, or supervisors. Instead, his repeated use of the term "supervisory employees," when such term
societies for purposes not contrary to law shall not be abridged. In proposing that then was no longer in the statute books, suggests a frame of mind that remained grounded
amendment I ask to make of record that I want the following provisions of the Labor Code to in the language of the Industrial Peace Act.
be automatically abolished, which read:
Nor did Lerum ever refer to the dictum in Caltex recognizing the right of all managerial
ART. 245. Security guards and other personnel employed for the protection and security of employees to organize, despite the fact that the Industrial Peace Act did not expressly provide
the person, properties and premises of the employers shall not be eligible for membership in for the right of top and middle managers to organize. If Lerum was aware of the Caltex dictum,
a labor organization. then his insistence on the use of the term "supervisory employees" could only mean that he
was excluding other managerial employees from his proposal. If, on the other hand, he was
ART. 246. Managerial employees are not eligible to join, assist, and form any labor not aware of the Caltex statement sustaining the right to organize to top and middle
organization. managers, then the more should his repeated use of the term "supervisory employees" be
THE PRESIDING OFFICER (Mr. Bengzon). What does the Committee say? taken at face value,as it had been defined in the then Industrial Peace Act.
FR. BERNAS. The Committee accepts. At all events, that the rest of the Commissioners understood his proposal to refer solely to
supervisors and not to other managerial employees is clear from the following account of
THE PRESIDING OFFICER. (Mr. Bengzon) The Committee has accepted the amendment, as Commissioner Joaquin G. Bernas, who writes:
amended.
In presenting the modification on the 1935 and 1973 texts, Commissioner Eulogio R. Lerum
Is there any objection? (Silence) The Chair hears none; the amendment, as amended, is explained that the modification included three categories of workers: (1) government
approved.[25] employees, (2) supervisory employees, and (3) security guards. Lerum made of record the
The question is what Commissioner Lerum meant in seeking to "automatically abolish" the explicit intent to repeal provisions of P.D. 442, the Labor Code. The provisions referred to
then Art. 246 of the Labor Code. Did he simply want "any kind of wording as long as it will were:
amount to absolute recognition of private sector employees, without exception, to ART. 245. Security guards and other personnel employed for the protection and security of
organize"?[26] Or, did he instead intend to have his words taken in the context of the cause the person, properties and premises of the employers shall not be eligible for membership in
which moved him to propose the amendment in the first place, namely, the denial of the right a labor organization.
ART. 246. Managerial employees are not eligible to join, assist, and form any labor judgment. All employees not falling within any of the above definitions are considered rank-
organization.[28]28 and-file employees for purposes of this Book.
Implications of the Lerum Proposal
Although the definition of "supervisory employees" seems to have been unduly restricted to
the last phrase of the definition in the Industrial Peace Act, the legal significance given to the
In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by including labor unions
phrase "effectively recommends" remains the same. In fact, the distinction between top and
in the guarantee of organizational right should be taken in the context of statements that his
middle managers, who set management policy, and front-line supervisors, who are merely
aim was the removal of the statutory ban against security guards and supervisory employees
responsible for ensuring that such policies are carried out by the rank and file, is articulated
joining labor organizations. The approval by the Constitutional Commission of his proposal
in the present definition.[30]30 When read in relation to this definition in Art. 212(m), it will be
can only mean, therefore, that the Commission intended the absolute right to organize of
seen that Art. 245 faithfully carries out the intent of the Constitutional Commission in framing
government workers, supervisory employees, and security guards to be constitutionally
Art. III, 8 of the fundamental law.
guaranteed. By implication, no similar absolute constitutional right to organize for labor
purposes should be deemed to have been granted to top-level and middle managers. As to Nor is the guarantee of organizational right in Art. III, 8 infringed by a ban against managerial
them the right of self-organization may be regulated and even abridged conformably to Art. employees forming a union. The right guaranteed in Art. III, 8 is subject to the condition that
III, 8. its exercise should be for purposes "not contrary to law." In the case of Art. 245, there is a
Constitutionality of Art. 245
rational basis for prohibiting managerial employees from forming or joining labor
organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in
Finally, the question is whether the present ban against managerial employees, as embodied his ponencia in Philips Industrial Development, Inc. v. NLRC:[31]31
in Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This provision reads:
In the first place, all these employees, with the exception of the service engineers and the
ART. 245. Ineligibility of managerial employees to join any labor organization; right of sales force personnel, are confidential employees. Their classification as such is not seriously
supervisory employees. - Managerial employees are not eligible to join, assist or form any disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly
labor organization. Supervisory employees shall not be eligible for membership in a labor considered them as confidential employees. By the very nature of their functions, they assist
organization of the rank-and-file employees but may join, assist or form separate labor and act in a confidential capacity to, or have access to confidential matters of, persons who
organizations of their own.[29]29 exercise managerial functions in the field of labor relations. As such, the rationale behind the
ineligibility of managerial employees to form, assist or joint a labor union equally applies to
This provision is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715, them.
otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions
of the Labor Code which it superseded, R.A. No. 6715 provides separate definitions of the In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this rationale,
terms "managerial" and "supervisory employees," as follows: thus:
ART. 212. Definitions. . . . ". . . The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of
(m) "managerial employee" is one who is vested with powers or prerogatives to lay their loyalty to the Union in view of evident conflict of interests. The Union can also become
down and execute management policies and/or to hire transfer, suspend, lay off, recall, company-dominated with the presence of managerial employees in Union membership."[32]
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 To be sure, the Court in Philips Industrial was dealing with the right of confidential employees
such authority is not merely routinary or clerical in nature but requires the use of independent to organize. But the same reason for denying them the right to organize justifies even more
the ban on managerial employees from forming unions. After all, those who qualify as top or
middle managers are executives who receive from their employers information that not only
is confidential but also is not generally available to the public, or to their competitors, or to
other employees. It is hardly necessary to point out that to say that the first sentence of Art.
245 is unconstitutional would be to contradict the decision in that case.
SO ORDERED