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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]

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EN BANC

G.R. No. 122226 March 25, 1998

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

Separate Opinions

VITUG, J., separate concurring and dissenting;

The pivotal issues raised in the case at bar, aptly stated by the Office of the Solicitor General, are:

(1) Whether or not public respondent, Undersecretary of the Department of Labor and Employment ("DOLE") Bienvenido E. Laguesma, gravely abused his discretion in categorizing the members of petitioner union to be managerial employees and thus ineligible to form or join labor organizations; and

(2) Whether or not the provision of Article 245 of the Labor Code, disqualifying managerial employees from joining, assisting or forming any labor organization, violates Section 8, Article III, of the 1987 Constitution, which expresses that "(t)he right of the people, including those employed in public and private sectors to form unions, associations or societies for purposes not contrary to law shall not be abridged."

The case originated from a petition for direct certification or certification election among route managers/supervisory employees of Pepsi-Cola Products Phils., Inc. ("Pepsi"), filed by the United Pepsi-Cola Supervisory Union ("Union"), claiming to be a legitimate labor organization duly registered with the Department of Labor and Employment under Registration Certificate No. NCR-UR-3-1421-95. Pepsi opposed the petition on the thesis that the case was no more than a mere duplication of a previous petition for direct certification1 filed by the same route managers through the Pepsi-Cola Employees Association (PCEA-Supervisory) which petition had already been denied by Undersecretary Laguesma. The holding reiterated a prior decision in Workers Alliance Trade Unions ("WATU") vs. Pepsi-Cola Products Phils., Inc.,2 that route managers were managerial employees.

In its decision, dated 05 May 1995, Med-Arbiter Brigida C. Fadrigon dismissed for lack of merit the petition of the Union, stating that the issue on the proper classification and status of route managers had already been ruled with finality in the previous decisions, aforementioned, rendered by DOLE.

The union appealed the decision. In his resolution of 31 August 1995, Undersecretary Laguesma dismissed the appeal, saying that there was no compelling reason to abandon the ruling in the two old cases theretofore decided by DOLE. In his order of 22 September 1995, Undersecretary Laguesma denied the Union's motion for reconsideration.

The Union went to this Court, via a petition for certiorari, assailing the cancellation of its certificate of registration. The Court, after considering the petition and the comments thereon filed by both public and private respondents, as well as the consolidated reply of petitioner, dismissed the case in its resolution of 08 July 1996 on the premise that no grave abuse of discretion had been committed by public respondent.

Undaunted, the Union moved, with leave, for the reconsideration of the dismissal of its petition by the Court En Banc. In its resolution of 16 June 1997, the case was referred to the Court En Banc en consulta with the movant's invocation of unconstitutionality of Article 245 of the Labor Code vis-a-vis Section 8, Article III, of the 1987 Constitution.

There is merit, in my view, in petitioner's motion for reconsideration but not on constitutional grounds.

There are, in the hierarchy of management, those who fall below the level of key officers of an enterprise whose terms and conditions of employment can well be, indeed are not infrequently, provided for in collective bargaining agreements. To this group belong the supervisory employees. The "managerial employees," upon the other hand, and relating the matter particularly to the Labor Code, are those "vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees" as distinguished from the supervisory employees whose duties in these areas are so designed as to verily be implementary to the policies or rules and regulations already outstanding and priorly taken up and passed upon by management. The managerial level is the source, as well as prescribes the compliance, of broad mandates which, in the field of labor relations, are to be carried out through the next rank of employees charged with actually seeing to the specific personnel action required. In fine, the real authority, such as in hiring or firing of employees, comes from management and exercised by means of instructions, given in general terms, by the "managerial employees;" the supervisory employees, although ostensibly holding that power, in truth, however, only act in obedience to the directives handed down to them. The latter unit, unlike the former, cannot be considered the alter ego of the owner of enterprise.

The duties and responsibilities of the members of petitioner union, shown by their "job description" below —

PCPPI RM's JOB DESCRIPTION
A. GENERAL/OVERALL OBJECTIVE OF THIS POSITION
To contribute to the growth and profitability of PCPPI via well-selected, trained and motivated Route Sales Team who sell, collect and merchandise, following the Pepsi Way, and consistent with Company policies and procedures as well as the corporate vision of Customer Satisfaction.
B. SPECIFIC JOB DESCRIPTION:
KEY RESULT AREAS	STANDARD OR PERFORMANCE
SALES VOLUME DISTRIBUTION ACCOUNTS RECEIVABLE MANAGEMENT ASSET MANAGEMENT TRADE DEVELOPMENT EXPENSE MANAGEMENT ROUTE MANAGEMENT CUSTOMER SATISFACTION HUMAN RESOURCE MANAGEMENT ADMINISTRATIVE MANAGEMENT	*100% Vs. NRC Target _____% NTG * Product Availability 70% Pepsi 80% Seven-Up 40% Mirinda 65% Mt. Dew 5% Out of Stock 65% Current (Incl. Legal & Col.) 80:20 Cash to Credit Ratio DSO — assigned Std. to Division by the District 30 cases for ice-coolers 80 cases for electric coolers BLOWAGA on Division Vehicles 60 cases on Rolling/Permanent Kiosks 100% Buying Customers Based on master list that bought once 5 months payback on concessions 4 CED's/Rte. a). 5% Absentism rate Excl. VL b). 280 cases/route/day c). 15% cost-to-sales ratio 3 Days on RR/Wk — Days on BC-SC- Financial & Co. Assets — Days on TD 75% Load Factor 18 Productive Calls Customer Complaint attended to within the next working day 5% Absentism Excl. VL (approved) 3 Documented RR/ Week using SLM's Training Log — Complete, timely and accurate reports.ℒαwρhi৷

PCPPI RM's BASIC DAILY ACTIVITIES

A. AT THE SALES OFFICE 1. PRACTICES BLOWAGA ON SERVICE VEHICLE (AT HOME) 2. REPORTS FOR WORK ON OR BEFORE 6:15 A.M. 3. REPORTS IN CLEAN AND NEAT UNIFORM (GOOD GROOMING) 4. DAILY BRIEFING WITH THE DM 5. CONDUCTS SKILLS ENHANCEMENT OR HUDDLES WITH RST's a). ATTENDANCE/GROOMING b). OPERATIONAL DIRECTIONS & PRIORITIES c). ANNOUNCEMENT 6. RM's PRESENCE DURING CHECK-OUT a). SLM PRACTICES BLOWAGA ON ROUTE TRUCK b). PRIVATE COUNSELING WITH RST (AM & PM IF NECESSARY) c). PROPER HANDLING OF SELLING/MDSG. MATERIALS d). YESTERDAY's FINAL SETTLEMENT REVIEW 7. UPDATE REPORTS, MONITORS, DOCUMENTS & TELEPHONE CONMATION 8. ATTENDS TO PRODUCT COMPLAINTS (GFM) 9. CONDUCTS ADMINISTRATIVE INVESTIGATION OR ATTENDS DM's MEETING (on Saturdays) B. FIELD WORK ROUTE RIDE 1. CHECKS SLMS. TRAINING LOG (PROGRESS & DEV'T.) 2. SALESMAN's CPC 3. ROUTE COVERAGE EVALUATION 4. LOAD FACTOR 5. SALESMAN's ROUTING SYSTEM EVALUATION BC/SC 1. FINANCIAL & ASSET VERIFICATION, CONFIRMATION & AUDIT 2. BACKCHECKS FIRST 5 CUSTOMERS SERVED FOR THE DAY a). MERCHANDISING b). SERVICING c). RM's TERRITORY FAMILIARITY d). KEY ACCOUNTS GOODWILL TRADE DEVELOPMENT 1. PREPARATION PRIOR TO CALL 2. ACTUAL CALL 3. POST CALL ANALYSIS (HOW DID I FARE? WHY? WHAT ACTIONS TO TAKE) 4. FOLLOW-UP ACTION C. AT CLOSE OF DAY 1. MAINTAINS & UPDATES CORRECT & ACCURATE RECORDS & REPORTS 2. RM-SLM DEBRIEFING 3. SLR DISCUSSION (BASED ON A.M. SLR) 4. COORDINATES WITH DM ON PLANS & PROGRAMS 5. PREPARATIONS FOR NEXT DAY's ACTIVITIES3

— convey no more than those that are aptly consigned to the "supervisory" group by the relatively small unit of "managerial" employees. Certain portions of a pamphlet, the so-called "Route Manager Position Description" referred to by Mr. Justice Vicente Mendoza, in his ponencia, hereunder reproduced for easy reference, thus —

A. BASIC PURPOSE

A Manager achieves objectives through others.7!ᕼdMᗄ7

As a Route Manager, your purpose is to meet the sales plan; and you achieve this objective through the skillful management of your job and the management of your people.

These then are your functions as Pepsi-Cola Route Manager. Within these functions — managing your job and managing your people — you are accountable to your District Manager for the execution and completion of various tasks and activities which will make it possible for you to achieve your sales objectives.

B. PRINCIPAL ACCOUNTABILITIES

1.0 MANAGING YOUR JOB

The Route Manager is accountable for the following:

1.1 SALES DEVELOPMENT

1.1.1 Achieve the sales plan.

1.1.2 Achieve all distribution and new account objectives.

1.1.3 Develop new business opportunities thru personal contacts with dealers.

1.1.4 Inspect and ensure that all merchandising objectives are achieved in all outlets.

1.1.5 Maintain and improve productivity of all cooling equipment and kiosks.

1.1.6 Execute and control all authorized promotions.

1.1.7 Develop and maintain dealer goodwill.

1.1.8 Ensure all accounts comply with company suggested retail pricing.

1.1.9 Study from time to time individual route coverage and productivity for possible adjustments to maximize utilization of resources.

1.2 Administration

1.2.1 Ensure the proper loading of route trucks before check-out and the proper sorting of bottles before check-in.ℒαwρhi৷

1.2.2 Ensure the upkeep of all route sales reports and all other related reports and forms required on an accurate and timely basis.

1.2.3 Ensure proper implementation of the various company policies and procedures include but not limited to shakedown; route shortage; progressive discipline; sorting; spoilages; credit/collection; accident; attendance.

1.2.4 Ensure collection of receivables and delinquent accounts.

2.0 MANAGING YOUR PEOPLE

The Route Manager is accountable for the following:

2.1 Route Sales Team Development

2.1.1 Conduct route rides to train, evaluate and develop all assigned route salesmen and 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.

2.1.2 Conduct sales meetings and morning huddles. Training should focus on the enhancement of effective sales and merchandising techniques of the salesmen and helpers. Conduct group training at least 1 hour each week on a designated day and of specific topic.

2.2 Code of Conduct

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. —

offer nothing at all that can approximate the authority and functions of those who actually and genuinely hold the reins of management.

I submit, with due respect, that the members of petitioning union, not really being "managerial employees" in the true sense of the term, are not disqualified from forming or joining labor organizations under Article 245 of the Labor Code.

I shall now briefly touch base on the constitutional question raised by the parties on Article 245 of the Labor Code.

The Constitution acknowledges "the right of the people, including those employed in the public and private sectors, to form unions, associations or societies for purposes not contrary to law . . . ."4 Perforce, petitioner claims, that part of Article 245 5 of the Labor Code which states: "Managerial employees are not eligible to join, assist or form any labor organization," being in direct collision with the Constitutional provision, must now be declared abrogated in the law.

Frankly, I do not see such a "direct collision." The Constitution did not obviously grant a limitless right "to form unions, associations or societies" for it has clearly seen it fit to subject its exercise to possible legislative judgment such as may be appropriate or, to put it in the language of the Constitution itself, to "purposes not contrary to law."

Freedom of association, like freedom of expression, truly occupies a choice position in the hierarchy of constitutional values. Even while the Constitution itself recognizes the State's prerogative to qualify this right, heretofore discussed, any limitation, nevertheless, must still be predicated on the existence of a substantive evil sought to be addressed.6 Indeed, in the exercise of police power, the State may, by law, prescribe proscriptions, provided reasonable and legitimate of course, against even the most basic rights of individuals.

The restriction embodied in Article 245 of the Labor Code is not without proper rationale. Concededly, the prohibition to form labor organizations on the part of managerial employees narrows down their freedom of association. The very nature of managerial functions, however, should preclude those who exercise them from taking a position adverse to the interest they are bound to serve and protect. The mere opportunity to undermine that interest can validly be restrained. To say that the right of managerial employees to form a "labor organization" within the context and ambit of the Labor Code should be deemed totally separable from the right to bargain collectively is not justified by related provisions of the Code. For instance —

Art. 212. Definitions.7 — . . .

(g) "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

x x x           x x x          x x x

(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, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinely or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.

Art. 263. . . .

(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent with the national interest, shall continue to be recognized and respected.

The maxim "ut res magis quam pereat" requires not merely that a statute should be given such a consequence as to be deemed whole but that each of its express provisions equally should be given the intended effect.

I find it hard to believe that the fundamental law could have envisioned the use by managerial employees of coercive means against their own employers over matters entrusted by the latter to the former. Whenever trust and confidence is a major aspect of any relationship, a conflict of interest on the part of the person to whom that trust and confidence is reposed must be avoided and when, unfortunately, it does still arise its containment can rightly be decreed.

Article 245 of the Labor Code indeed aligns itself to the Corporation Code, the basic law on by far the most commonly used business vehicle — the corporation — which prescribes the tenure of office, as well as the duties and functions, including terms of employment (governed in most part by the Articles of Incorporation, the By-laws of the Corporation, or resolutions of the Board of Directors), of corporate officers for both the statutory officers, i.e., the president, the treasurer and the corporate secretary, and the non-statutory officers, i.e., those who occupy positions created by the corporate by-laws who are deemed essential for effective management of the enterprise. I cannot imagine these officers as being legally and morally capable of associating themselves into a labor organization and asserting collective bargaining rights against the very entity in whose behalf they act and are supposed to act.

I submit, accordingly, that, firstly, the members of petitioner union or the so-called route managers, being no more than supervisory employees, can lawfully organize themselves into a labor union within the meaning of the Labor Code, and that, secondly, the questioned provision of Article 245 of the Labor Code has not been revoked by the 1987 Constitution.

WHEREFORE, I vote, given all the foregoing, for the reversal of the resolution of 31 August 1995, and the order of 22 September 1995, of public respondent.

Kapunan, Panganiban and Quisumbing, JJ., concur and dissent.

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Footnotes

1 In Re: Petition for Direct Certification and/or Certification Election — Route Managers/Supervisory Employees of the Pepsi-Cola Products Phils., Inc., OS-A-3-71-92; NCR-OD-A-91-10-055.

2 OS-MA-A-10-318-91; ROX Case No. R-1000-9002-Ru-007.

3 Rollo, pp. 68-69.

4 Article III, Section 8, 1987 Constitution provides:

Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

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

6 See People vs. Ferrer, 48 SCRA 382.

7 As amended by Sec. 3, RA 6715.

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