G.R. No.

75039 January 28, 1988

FRANKLIN BAKER COMPANY OF THE PHILIPPINES, petitioner,

vs.
HONORABLE CRESENCIO B. TRAJANO, DIRECTOR OF BUREAU OF LABOR
RELATIONS, FRANKLIN BAKER BROTHERHOOD ASSOCIATION (TECHNICAL
AND OFFICE EMPLOYEES)-ASSOCIATION OF TRADE UNIONS (ATU),
respondents.

PARAS, J.:

This is a petition for certiorari seeking the annulment of. (a) the Order of Mediator-
Arbiter 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 Election Among the Office and Technical Employees of Franklin
Baker Company of the Philippines, Davao Plant at Coronan, Sta. Cruz, Davao del Sur,
Franklin Baker Company of the Philippines, Davao Plant, Employer, Franklin Baker
Brotherhood Association (Technical and 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 of April 7, 1986 of Director
Cresencio B. Trajano, also of the MOLE, dismissing the appeal of 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 toto
(Rollo, p. 90).

In brief, the undisputed facts of this case are as follows:

On April 23, 1984, private respondent Franklin Baker Brotherhood Association-(ATU)

filed a 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, docketed as LRD No. R-22, MED-ROXI-UR-2884. Among other things, it
alleges that Franklin Baker Company of the Phils. Davao Plant, had in its employ
approximately ninety (90) regular technical and office employees, which group is
separate and distinct from the regular rank and file employees and is excluded from the
coverage of existing Collective Bargaining Agreement.

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 (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 such election (Rollo, p. 3).
Hearings were held and thereafter, the parties agreed to file their respective
memoranda. Likewise, petitioner filed a reply to private respondent's Memorandum
(Rollo, p. 4).

Subsequently, on September 17, 1984, Med-Arbiter Conchita J. Martinez issued an

order, the 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 within twenty (20) days from
receipt hereof. The choices shall be the following:

1. Franklin Baker Brotherhood Association-(ATU)

2. No Union

The representation officer assigned shall call the parties for a pre-election
conference at least five (5) days before the date of the election to thresh
out the mechanics of the election, the finalization of the list of voters, the
posting of notices and other relevant matters.

The company's latest payroll shall be the basis for determining the office
and technical workers qualified to vote.

SO ORDERED. (Rollo, pp. 47-48).

From the aforequoted order petitioner Company appealed to the Bureau of Labor
Relations, 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 employees.

During the pendency of the appeal, sixty one (61) of the employees involved, filed a
Motion to Withdraw the petition for certification election praying therein for their
exclusion from the Bargaining Unit and for a categorical declaration that they are
managerial employees, as they are performing managerial functions (Rollo, p. 4).

On April 7, 1986, public respondent Bureau of Labor Relations Cresencio B. Trajano

issued a Resolution affirming the order dated September 17, 1984, the dispositive part
of which reads:

WHEREFORE, the appealed Order dated September 17, 1985 is hereby

affirmed and the appeal dismissed for lack of merit. Let the certification
election among the office and technical employees of Franklin Baker
Company of the Philippines proceed without delay.
 The latest payrolls of the company shall be used as basis of determining
the list of eligible voters. (Rollo, p. 77),

Petitioner company sought the reconsideration of the aforequoted resolution but its
motion was denied by Director Cresencio B. Trajano in his order dated June 6, 1986,
the dispositive part of which reads:

WHEREFORE, the appeal of respondent company is, dismissed for lack

of merit and the Bureau's Resolution dated April 1986 affirmed in toto.

Let, therefore, the pertinent papers of this case be immediately forwarded

to the Office of origin for the conduct of the certification election. (Rollo, p.
90).

Hence, this petition.

In the resolution of July 30, 1986, the Second Division of this Court without giving due
course to the petition required the respondents to file their comment (Rollo, p. 91). On
August 28, 1986, public respondent filed its comment (Rollo, pp. 99 to 102). Likewise
private respondent filed its comment on September 5, 1986 (Rollo, pp. 104 to 107).

In the resolution of September 8, 1986, petitioner was required to file its reply to public
respondent's comment (Rollo, p. 119) which reply was filed on September 18, 1986
(Rollo, pp. 122-127).

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, petitioner and private respondent filed their Memoranda on December 8,
1986 and December 29, 1986, respectively (Rollo, pp. 183-187). On the other hand,
public respondent filed with this Court a manifestation (Rollo, p. 153) to the effect that it
is adopting as its memorandum its comment dated August 18, 1986 (Rollo, p. 99) which
manifestation was noted by this Court in its resolution dated November 26, 1986
(Rollo, p. 155).

The lone assignment of error raised by petitioner states:

Public respondent acted with grave abuse of discretion amounting to lack

of jurisdiction when he ruled that the 76 employees subject of this petition
are not managerial employees (inspectors, foremen, supervisors and the
like) and therefore, may participate in the certification election among the
office and technical employees. Such ruling is contrary to jurisprudence
and to the factual evidence presented by petitioner which was not rebutted
by private respondent union and is therefore patently baseless.

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 Implementing Rules; and (2) whether the Director of the Bureau of Labor
Relations acted with abuse of discretion in affirming the order of Mediator-Arbiter
Conchita J. Martinez.

There is no question that there are in the DAVAO Plant of petitioner company
approximately 90 regular technical and office employees which form a unit, separate
and distinct from the regular rank and file employees and are excluded from the
coverage of existing Collective Bargaining Agreement; that said group of employees
organized themselves as Franklin Baker 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 Permit No. 8745 (Fed) LC and
with office located at the 3rd Floor of Antwell Bldg., Sta. Ana, Davao City; that petitioner
company did not object to the holding of such certification, but only sought the exclusion
of inspectors, foremen and supervisors, members of Franklin Baker Brotherhood
Association (technical and office employees) numbering 76 from the certification
election on the ground that they are managerial employees.

A managerial employee is defined as 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, or to effectively recommend such
managerial actions." (Reynolds Phil. Corp. v. Eslava, 137 SCRA [1985], citing Section
212 (K), Labor Code.

Also pertinent thereto is Section 1 (M) of the Implementing Rules and Regulations,
which is practically a restatement of the above provision of law.

To sustain its posture, that the inspectors, foreman and supervisors numbering 76 are
managerial employees, petitioner painstakingly demonstrates that subject employees
indeed participate in the formulation and execution of company policies and regulations
as to the conduct of work in the plant, exercised the power to hire, suspend or dismiss
subordinate employees and effectively recommend such action, by citing concrete
cases, among which 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 card (timesheet) resulting in payroll padding,
immediately recommended the dismissal of said 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 Dumayos who was caught in the
act of surreptitiously transferring to a co-worker's bin some whole nuts which act
constitutes a violation of company policy; (3) Mr. Sofronio Abangan, a line inspector,
censured and thereafter recommended the suspension of Mr. Romeo Fullante, for being
remiss in the proper and accurate counting of nuts; (4) Binleader Dionisio Agtang was
required to explain his inefficiency of Mr. Saturnino Bangkas, Bin Loading Inspector; (5)
for disobeying the orders of Bin Loading Inspector Mauricio Lumanog's order, Macario
Mante, Eduardo Adaptor, Rodolfo Irene and George Rellanos were all recommended
for suspension which culminated in an investigation conducted by Lumanog's higher
bosses (Ibid., p. 20).
It has also been shown that subject employees have the power to hire, as evidenced by
the hiring of Rolando Asis, Roy Layson, Arcadio Gaudicos and Felix Arciaga, upon the
recommendation of Opening Inspector Serafin Suelo, Processing Inspector Leonardo
Velez and Laureano C. Lim, Opening Inspector (Ibid., p. 21).

It will be noted, however, that in the performance of their duties and functions and in the
exercise of their recommendatory powers, subject employees may only recommend, as
the ultimate power to hire, fire or suspend as the case may be, rests upon the plant
personnel manager.

The test of "supervisory" or "managerial status" depends on whether a person

possesses 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 merely routinary or clerical in nature, but requires the use
of independent judgment. Thus, where such recommendatory powers as in the case at
bar, are subject to evaluation, review and final action by the department heads and
other higher executives of the company, the same, although present, are not effective
and not an exercise of independent judgment as required by law (National Warehousing
Corp. v. CIR, 7 SCRA 602-603 [1963]).

Furthermore, in line with the ruling of this Court, subject employees are not managerial
employees because as borne by the records, they do not participate in policy making
but are given ready policies to execute and standard practices to observe, thus having
little freedom of action (National Waterworks and Sewerage Authority v. NWSA
Consolidated, L-18938, 11 SCRA 766 [1964]).

Petitioner's contention that the Director of the Bureau of Labor Relations acted with
abuse of discretion amounting to lack of jurisdiction in holding that the 76 employees
are not 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 that performance of the functions enumerated in the law qualifies
an employee as a managerial employee.

It is well settled that the findings of fact of the Ministry of Labor and National Labor
Relations Commission are entitled to great respect, unless the findings of fact and the
conclusions made therefrom, are not supported by substantial evidence, or when there
is grave abuse of discretion committed by said public official (Kapisanan ng
Manggagawa sa Camara Shoes, 2nd Heirs of Santos Camara, et al., 111 SCRA 477
[1982]; International hardwood and Veneer Co. of the Philippines v. Leonardo, 117
SCRA 967 [1982]; Pan-Phil-Life, Inc. v. NLRC, 114 SCRA 866 [1982]; Pepsi-Cola Labor
Union-BF LUTUPAS Local Chapter N-896 v. NLRC, 114 SCRA 930 [1982]; Egyptair v.
NLRC, 148 SCRA 125 [1987]; RJL Martinez Fishing Corp. v. NLRC, G.R. Nos. 63550-
51, 127 SCRA 455 [1984]; and Reyes v. Phil. Duplicators, G.R. No. 54996, 109 SCRA
489 [1981]).
By "grave abuse of discretion" is meant, such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave
as where the power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility and must be so patent and gross as to amount to an
evasion of positive duty or to a 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, 1987).

Moreover, this Court has ruled that findings of administrative agencies which have
acquired expertise, like the Labor Ministry, are accorded respect and finality (Special
Events and Central Shipping Office Workers Union v. San Miguel Corp., 122 SCRA 557
[1983] and that the remedy of certiorari does not lie in the absence of any showing of
abuse or misuse of power properly vested in the Ministry of Labor and Employment
(Buiser v. Leogardo, Jr., 131 SCRA 151 [1984]).

After a careful review of the records, no plausible reason could be found to disturb the
findings of fact and the conclusions of law of the Ministry of Labor.

Even if We regard the employees concerned as "managerial employees," they can still
join the union of the rank and file employees. They cannot however form their own
exclusive union as "managerial employees" (Bulletin Publishing Corporation v.
Sanchez, 144 SCRA 628).

PREMISES CONSIDERED, the petition is DISMISSED, and the assailed resolution and
orders are AFFIRMED.

SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Gancayco, JJ., concur.

Facts: Private respondent Franklin Baker Brotherhood Association-(ATU) filed a petition for
certification election among the office and technical employees of petitioner company with the
Ministry of Labor and Employment. Among other things, it alleges that Franklin Baker Company of
the Phils. Davao Plant, had in its employ approximately ninety (90) regular technical and office
employees, which group is separate and distinct from the regular rank and file employees and is
excluded from the coverage of existing Collective Bargaining Agreement.

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 (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 such election

Med-Arbiter Martinez issued an order granting and a certifying election among the office and
technical employees of Franklin Baker Company of the Philippines.

Petitioner Company appealed to the Bureau of Labor Relations, 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 employees.

ISSUE: whether or not subject employees are managerial employees under the purview of the
Labor Code and its Implementing Rules;

Held:

No. A managerial employee is defined as 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, or to effectively recommend such managerial actions." (Reynolds
Phil. Corp. v. Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.

It has also been shown that subject employees have the power to hire, as evidenced by the hiring of
Rolando Asis, Roy Layson, ArcadioGaudicos and Felix Arciaga, upon the recommendation of Opening
Inspector Serafin Suelo, Processing Inspector Leonardo Velez and Laureano C. Lim, Opening
Inspector (Ibid., p. 21).
It will be noted, however, that in the performance of their duties and functions and in the exercise
of their recommendatory powers, subject employees may only recommend, as the ultimate power to
hire, fire or suspend as the case may be, rests upon the plant personnel manager.

The test of "supervisory" or "managerial status" depends on whether a person possesses 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 merely routinary or
clerical in nature, but requires the use of independent judgment. Thus, where such recommendatory
powers as in the case at bar, are subject to evaluation, review and final action by the department
heads and other higher executives of the company, the same, although present, are not effective
and not an exercise of independent judgment as required by law (National Warehousing Corp. v.
CIR, 7 SCRA 602-603 [1963]).

Furthermore, in line with the ruling of this Court, subject employees are not managerial employees
because as borne by the records, they do not participate in policy making but are given ready
policies to execute and standard practices to observe, thus having little freedom of action (National
Waterworks and Sewerage Authority v. NWSA Consolidated, L-18938, 11 SCRA 766 [1964]).