G.R. No. 122226 - Concurring & Dissenting

G.R. No. 122226, March 25, 1998,
♦ Decision, Mendoza, [J]
♦ Concurring & Dissenting Opinion, Davide, [J]
♦ Separate Concurring Opinion, Puno, [J]
♦ Separate Concurring & Dissenting Opinion, Vitug, [J]

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES, INC. respondents.

With due respect, it is my submission that Article 245 of the Labor Code was not repealed by section 8, Article III of the 1987 Constitution for reasons discussed below.1aшphi1

For purposes of applying the law on labor relations, the Labor Code in Article 212 (m) defines three (3) categories of employees. They are managerial, supervisory and rank-and-file, thus:

The test of "managerial" or "supervisory" status depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not routinary or clerical in nature but requires the use of independent judgment.1 The rank-and-file employee performs work that is routinary and clerical in nature. The distinction between these employees is significant because supervisory and rank-and-file employees may form, join or assist labor organizations. Managerial employees cannot.

B. The Exclusion of Managerial Employees: Its Historical Roots in the United States.

The National Labor Relations Act (NLRA), also known as the Wagner Act, enacted by the U.S. Congress in 1935, was the first law that regulated labor relations in the United States and embodied its national labor policy.2 The purpose of the NLRA was to eliminate obstructions to the free flow of commerce through the practice of collective bargaining. The NLRA also sought to protect the workers' full freedoms of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid and protection.3 The NLRA established the right of employees to organize, required employers to bargain with employees collectively through employee-elected representatives, gave employees the right to engage in concerted activities for collective bargaining purposes or other mutual aid or protection, and created the National Labor Relations Board (NLRB) as the regulatory agency in labor-management matters.4

The NLRA was amended in 1947 by the Labor Management Relations Act (LMRA), also known as the Taft-Hartley Act. This Act sought to lessen industrial disputes and placed employers in a more nearly equal position with unions in bargaining and labor relations procedures.5

The NLRA did not make any special provision for "managerial employees."6 The privileges and benefits of the Act were conferred on "employees." Labor organizations thus clamored for the inclusion of supervisory personnel in the coverage of the Act on the ground that supervisors were also employees. Although traditionally, supervisors were regarded as part of management, the NLRB was constrained to recognize supervisors as employees under the coverage of the law. Supervisors were then granted collective bargaining rights.7 Nonetheless, the NLRB refused to consider managers as covered by the law.8

The LMRA took away the collective bargaining rights of supervisors. The sponsors of the amendment feared that their unionization would break down industrial discipline as it would blur the traditional distinction between management and labor. They felt it necessary to deny supervisory personnel the right of collective bargaining to preserve their loyalty to the interests of their employers.9

Several amendments were later made on the NLRA but the exclusion of managers and supervisors from its coverage was preserved. Until now managers and supervisors are excluded from the law.10 Their exclusion hinges on the theory that the employer is entitled to the full loyalty of those whom it chooses for positions of responsibility, entailing action on the employers' behalf. A supervisor's and manager's ability to control the work of others would be compromised by his sharing of employee status with them.11

Labor-management relations in the Philippines were first regulated under the Industrial Peace Act12 which took effect in 1953. Hailed as the Magna Carta of Labor, it was modelled after the NLRA and LMRA of the United States.13 Most of the basic principles of the NLRA have been carried over to the Industrial Peace Act and the Labor Code.14 This is significant because we have ruled that where our labor statutes are based on statutes in foreign jurisdiction, the decisions of the high courts in those jurisdictions construing and interpreting the Act are given persuasive effects in the application of Philippine law.15

The Industrial Peace Act did not carry any provision prohibiting managerial employees from joining labor organizations. Section 3 of said law merely provided:

Significantly, the Industrial Peace Act did not define a manager or managerial employee. It defined a "supervisor" but not a "manager." Thus:

In 1972, we interpreted Section 3 of the Industrial Peace Act to give supervisors the right to join and form labor organizations of their own.16 Soon we grappled with the right of managers to organize. In a case involving Caltex managers, we recognized their right to organize, viz:

The Industrial Peace Act was repealed in 1975 by P.D. 442, the Labor Code of the Philippines. The Labor Code changed existing jurisprudence when it prohibited supervisory and managerial employees from joining labor organizations. Supervisory unions were no longer recognized nor allowed to exist and operate as such.18 We affirmed this statutory change in Bulletin Publishing Corp. v. Sanchez.19 Similarly, Article 246 of the Labor Code expressly prohibited managerial employees from forming, assisting and joining labor organizations, to wit:

In the same Bulletin case, the Court applied Article 246 and held that managerial employees are the very type of employees who, by the nature of their positions and functions, have been decreed disqualified from bargaining with management. This prohibition is based on the rationale that if managerial employees were to belong or be affiliated with a union, the union might not be assured of their loyalty in view of evident conflict of interest or that the union can be company-dominated with the presence of managerial employees in the union membership.20 In the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act as its representative, and to see to it that its interests are well protected. The employer is not assured of such protection if these employees themselves become union members.21

The prohibition on managerial employees to join, assist or form labor organizations was retained in the Labor Code despite substantial amendments made in 1989 by R.A. 6715, the Herrera-Veloso Law. R.A. 6715 was passed after the effectivity of the 1987 Constitution and this law did not abrogate, much less amend the prohibition on managerial employees to join labor organizations. The express prohibition in Article 246 remained. However, as an addendum to this same Article, R.A. 6715 restored to supervisory employees the right to join labor organizations of their own.22 Article 246 now reads:

Article 246 became Article 245 after then Article 244 was repealed by E.O. 111. Article 246 is presently Article 245 of the Labor Code.

Indeed, Article 245 of the Labor Code prohibiting managerial employees from joining labor organizations has a social and historical significance in our labor relations law. This significance should be considered in deciphering the intent of the framers of the 1987 Constitution vis-a-vis the said Article.

With due respect, I do not subscribe to the view that section 8, Article III of the Constitution abrogated Article 245 of the Labor Code. A textual analysis of section 8, Article III of the Constitution will not justify this conclusion. With due respect, the resort by Mr. Justice Davide to the deliberations of the Constitutional Commission does not suffice. It is generally recognized that debates and other proceedings in a constitutional convention are of limited value and are an unsafe guide to the intent of the people.23 Judge Cooley has stated that:

It is for this reason that proceedings of constitutional conventions are less conclusive of the proper construction of the instrument than are legislative proceedings of the proper construction of the statute.25 In the statutes, it is the intent of the legislature that is being sought, while in constitutions, it is the intent of the people that is being ascertained through the discussions and deliberations of their representatives.26 The proper interpretation of constitutional provisions depends more on how it was understood by the people adopting it than in the framers' understanding thereof.27

Thus, debates and proceedings of the constitutional convention are never of binding force. They may be valuable but are not necessarily decisive.28 They may shed a useful light upon the purpose sought to be accomplished or upon the meaning attached to the words employed. And the courts are free to avail themselves of any light that may be derived from such sources, but they are not bound to adopt it as the sole ground of their decision.29

Clearly then, a statute cannot be declared void on the sole ground that it is repugnant to a supposed intent or spirit declared in constitutional convention proceedings.

The right of association flows from freedom of expression.30 Like the right of expression, the exercise of the right of association is not absolute. It is subject to certain limitations.

Article 243 of the Labor Code reiterates the right of association of people in the labor sector. Article 243 provides:

Article 243 guarantees the right to self-organization and association to "all persons." This seemingly all-inclusive coverage of "all persons," however, actually admits of exceptions.

Article 24431 of the Labor Code mandates that all employees in the civil service, i.e, those not employed in government corporations established under the Corporation Code, may only form associations but may not collectively bargain on terms and conditions fixed by law. An employee of a cooperative who is a member and co-owner thereof cannot invoke the right of collective bargaining and negotiation vis-a-vis the cooperative.32 An owner cannot bargain with himself or his co-owners.33 Employees in foreign embassies or consulates or in foreign international organizations granted international immunities are also excluded from the right to form labor organizations. 34 International organizations are organized mainly as a means for conducting general international business in which the member-states have an interest and the immunities granted them shield their affairs from political pressure or control by the host country and assure the unimpeded performance of their functions.35

Confidential employees have also been denied the right to form labor-organizations. Confidential employees do not constitute a distinct category for purposes of organizational right. Confidentiality may attach to a managerial or non-managerial position. We have, however, excluded confidential employees from joining labor organizations following the rationale behind the disqualification of managerial employees in Article 245. In the case of National Association of Trade Unions-Republic Planters' Bank Supervisors Chapter v. Torres,36 we held:

It must be noted that Article 245 of the Labor Code deprives managerial employees of their right to join "labor organizations." A labor organization is defined under the Labor Code as:

A labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the employer concerning terms and conditions of employment. To bargain collectively is a right given to a labor organization once it registers itself with the Department of Labor and Employment (DOLE). Dealing with the employer, on the other hand, is a generic description of interaction between employer and employees concerning grievances, wages, work hours and other terms and conditions of employment, even if the employees' group is not registered with the DOLE.38 Any labor organization which may or may not be a union may deal with the employer. This explains why a workers' Organization does not always have to be a labor union and why employer-employee collective interactions are not always collective bargaining.39

In the instant case, it may be argued that managerial employees' labor organization will merely "deal with the employer concerning terms and conditions of employment" especially when top management is composed of aliens, following the circumstances in the Caltex case.

Although the labor organization may exist wholly for the purpose of dealing with the employer concerning terms and conditions of employment, there is no prohibition in the Labor Code for it to become a legitimate labor organization and engage in collective bargaining. Once a labor organization registers with the DOLE and becomes legitimate, it is entitled to the rights accorded under Articles 242 and 263 (b) of the Labor Code. And these include the right to strike and picket.

Notably, however, Article 245 does not absolutely disqualify managerial employees from exercising their right of association.ℒαwρhi৷ What it prohibits is merely the right to join labor organizations. Managerial employees may form associations or organizations so long as they are not labor organizations. The freedom of association guaranteed under the Constitution remains and has not been totally abrogated by Article 245.

To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing industrial life and will open the floodgates to unionization at all levels of the industrial hierarchy. Such a ruling will wreak havoc on the existing set-up between management and labor. If all managerial employees will be allowed to unionize, then all who are in the payroll of the company, starting from the president, vice-president, general managers and everyone, with the exception of the directors, may go on strike or picket the employer.40 Company officers will join forces with the supervisors and rank-and-file. Management and labor will become a solid phalanx with bargaining rights that could be enforced against the owner of the company.41 The basic opposing forces in the industry will not be management and labor but the operating group on the one hand and the stockholder and bondholder group on the other. The industrial problem defined in the Labor Code comes down to a contest over a fair division of the gross receipts of industry between these two groups.42 And this will certainly bring ill-effects on our economy.

The framers of the Constitution could not have intended a major upheaval of our labor and socio-economic systems. Their intent cannot be made to override substantial policy considerations and create absurd or impossible situations.43 A constitution must be viewed as a continuously operative charter of government. It must not be interpreted as demanding the impossible or the impracticable; or as effecting the unreasonable or absurd.44 Courts should always endeavour to give such interpretation that would make the constitutional provision and the statute consistent with reason, justice and the public interest.45