G.R. No.

108855 February 28, 1996

TOPIC:

This Court recognizes the exercise of management prerogatives and often declines to interfere with the
legitimate business decisions of the employer. However, this privilege is not absolute but subject to
limitations imposed by law. The case at bench constitutes one of the exceptions.

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.

If confidential employees could unionize in order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the interest of the employers. Moreover,
unionization of confidential employees for the purpose of collective bargaining would mean the
extension of the law to persons or individuals who are supposed to act "in the interest of the employers.
It is not farfetched that in the course of collective bargaining, they might jeopardize that interest which
they are duty-bound to protect.

Closed-Shop Agreement: It is an agreement whereby an employer binds himself to hire only members of
the contracting union, who must continue to remain members in good standing to keep their jobs.

Exceptions:

a. Members of minority unions;

FACTS:

Herein petitioner Metrolab Industries represented by the private respondent MetroDrug Corp. a labor
organization representing the petitioners’ employees. After the CBA between the parties expired,
negotiations for new CBA ended into deadlock. Both parties failed to settle their dispute hence the order
issued by the Secretary of Labor and Employment that any strike or acts that might exacerbate the
situation is ceased and ordered the parties to execute a new CBA. Later, the petitioner moved two lay-off
acts to its rank and file employees and was opposed by the union. Petitioner assailed that the move was
temporary and exercise of its management prerogative. Herein public respondent declared that the
Petitioner’s act illegal and issued two resolution of cease and desist stating that the move exacerbate and
caused conflict to the case at bar. Included on the last resolution issued by the public respondent which
states that executive secretaries are excluded from the closed-shop provision of the CBA, not from the
bargaining unit. A petition for certiorari seeking the annulment of the Resolution and Omnibus
Resolution of Roldan-Confesor on grounds that they were issued with grave abuse of discretion and
excess of jurisdiction.

Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner
implemented the subject layoffs. As a result, motions and oppositions were filed diverting the parties',
attention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA,
thereby aggravating the whole conflict.

ISSUE:

1. Whether or not public respondent Labor Secretary committed grave abuse of discretion and
exceeded her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal on
grounds that these unilateral actions aggravated the conflict between Metrolab and the Union
who were, then, locked in a stalemate in CBA negotiations.
2. Whether or not the Public Respondent Secretary of DOLE gravely abused her discretion in
including executive secretaries as part of the bargaining unit of the rank and file employees

RULING:

1. NO. The Secretary of Labor is expressly given the power under the Labor Code to assume
jurisdiction and resolve labor disputes involving industries indispensable to national interest.
MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of
management prerogatives such as layoffs. But it may nevertheless be appropriate to mention
here that one of the substantive evils which Article 278 (g) of the Labor Code seeks to curb is the
exacerbation of a labor dispute to the further detriment of the national interest. When a labor
dispute has in fact occurred and a general injunction has been issued restraining the commission
of disruptive acts, management prerogatives must always be exercise consistently with the
statutory objective. The case at bench constitutes one of the exceptions. The Secretary of Labor is
expressly given the power under the Labor Code to assume jurisdiction and resolve labor
disputes involving industries indispensable to national interest.

Art. 278 (g) (263) of the Labor Code specifically provides that:

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in
an industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the assumption or certification
order. If one has already taken place at the time of assumption or certification, all striking or locked
out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the
strike or lockout. The Secretary of Labor and Employment or the Commission may seek the
assistance of law enforcement agencies to ensure compliance with this provision as well as with
such orders as he may issue to enforce the same

2. NO. In the case at bench, the Union does not disagree with petitioner that the executive
secretaries are confidential employees. By recognizing the expanded scope of the right to self-
organization, the intent of the court was to delimit the types of employees excluded from the
close shop provisions, not from the bargaining unit. The executive secretaries of General
Manager and the Management Committees should not only be exempted from the closed-shop
provision but should not be permitted to joinin the bargaining unit of the rank and file employees
as well as on the grounds that the executive secretaries are confidential employees, having access
to “vital labor information”. As stated in several cases, confidential employees are prohibited and
disqualified to join any bargaining unit since the very nature of the functions are to assist and act
in a confidential capacity, or to have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. Finally, confidential employees cannot be
classified as rank and file from the very nature of their work. Excluding confidential employees
from the rank and file of bargaining unit, therefore, is not tantamount to discrimination.
Therefore, executive secretaries of petitioners’ General Manager and its Management Committee
are permanently excluded from the bargaining unit of petitioner’s rank and file employees.