Case Summary (G.R. No. 197089)
Key Dates and Procedural Posture
AFA organized in October 2004 and received a Certificate of Registration on December 20, 2004. AFA filed a petition for certification election (May 16, 2007); AIM filed a petition to cancel AFA’s registration (July 11, 2007). Mediator-Arbiter denied AFA’s certification petition (Aug. 30, 2007); the Secretary of Labor reversed and ordered the election (Feb. 20, 2009). Bureau of Labor Relations ordered AFA retained in the roster of legitimate labor organizations (Dec. 29, 2009). The Court of Appeals issued conflicting determinations in the two consolidated matters; the Supreme Court granted AFA’s petition for review (G.R. No. 197089) and denied AIM’s petition for review (G.R. No. 207971).
Applicable Law and Constitutional Framework
The Supreme Court applied the 1987 Constitution: Article II, Section 18 (State policy to protect labor) and Article XIII, Section 3 (rights of workers to self-organization and collective bargaining). Relevant provisions of the Labor Code and implementing rules considered include the definitions and prohibitions concerning managerial and supervisory employees (Art. 212/219(m) as amended by RA 6715), the rules for certification elections in unorganized establishments (Art. 269/257; Omnibus Rules Book V, Rule VIII), and the exclusive statutory grounds for cancellation of a labor organization’s certificate of registration (Art. 247/239 and Art. 245/238).
Material Facts
AIM had been an unorganized establishment since 1968. AIM’s faculty organized AFA and secured registration. AIM contended tenure-track faculty determine faculty standards and have operational control, claiming they are managerial employees. AFA conceded that some faculty held administrative posts but maintained that the faculty’s policymaking is recommendatory, and that the faculty’s primary duties are academic (teaching, research, mentoring) subject to Board/President/Dean review. AIM sought both to prevent certification election and to cancel AFA’s registration on the ground that its members were managerial employees and thus ineligible.
Procedural History Summarized
- Mediator-Arbiter denied AFA’s petition on managerial-employee grounds.
- Secretary of Labor reversed, finding the faculty were not managerial employees and ordering a certification election.
- AIM filed certiorari in the Court of Appeals; CA reversed the Secretary on managerial-status analysis and reinstated the Mediator-Arbiter’s order denying the petition.
- Separately, DOLE regional director initially granted AIM’s petition to delist AFA, but the Bureau of Labor Relations reversed and ordered AFA retained in the roster. CA later affirmed the Bureau in the cancellation case. The Supreme Court consolidated the two petitions and reviewed both issues.
Issue 1 — Whether AIM Faculty Are Managerial Employees
The Court applied statutory and precedential tests for managerial status: a managerial employee is one vested with powers to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees; supervisory employees effectively recommend such managerial actions if independent judgment is required. The Supreme Court examined AIM’s policy manuals and actual duties. It found the faculty’s policymaking authority was predominantly recommendatory and subject to evaluation, review, and final approval by AIM’s Board of Trustees, President or Dean. The faculty’s primary duties—teaching, research, mentorship, and academic-administrative tasks when duly appointed—are academic in nature and not proprietary or managerial. The manuals required specific teaching loads and time allocations (e.g., 70% time to AIM, specified number of teaching sessions), undermining a finding that faculty were not subject to regular hours or were free from standardized outputs. The Court relied on prior decisions (e.g., University of the Philippines v. Ferrer-Calleja, Engineering Equipment, Cathay Pacific Steel) to emphasize that recommendatory powers subject to higher review do not make employees managerial for labor-relations purposes. The presence of some faculty who hold administrative positions does not automatically render the entire bargaining unit managerial; the proper remedy is inclusion-exclusion proceedings to remove any disqualified individuals. Conclusion: most AIM faculty are not managerial employees; the Mediator-Arbiter’s denial was reversed.
Issue 2 — Whether the Legitimacy of a Labor Organization May Be Collaterally Attacked in Certification-Election Proceedings
The Court reaffirmed the “bystander rule” and the policy that certification-election proceedings in unorganized establishments are non-adversarial and investigative; the employer is generally a bystander and lacks legal personality to oppose or dismiss a petition on the ground of membership eligibility. Registration vests a labor organization with legal personality; that status may be assailed only through an independent petition for cancellation under the rules expressly provided, not by collateral attack in a certification-election proceeding. The implementing rules expressly state that the legal personality of a registered union can be questioned only by an independent petition for cancellation; issues on eligibility or mixture in union membership are to be resolved in inclusion-exclusion proceedings. Consequently, AIM’s attempt to defeat the certification petition by attacking AFA’s legitimacy in the certification process violated statutory scheme and entrenched policy to protect workers’ choice.
Issue 3 — Whether AFA Is a Legitimate Labor Organization and Whether Its Registration Should Be Cancelled
The Court reviewed the exclusive statutory grounds for cancellation of a labor organization’s registration: misrepresentation, false statement or fraud in adoption/ratification of constitution/by-laws/minutes/membership lists; misrepresentation or fraud in election of officers or list of voters; or voluntary dissolution. Cancellation may occur only upon proof of those narrow grounds. AIM’s accusation that AFA misrepresented its membership by including managerial employees amounts to a challenge that must be proven as misrepresentation or fraud; mere inclusion of some administrative or managerial posts does not ipso facto establish fraud. The Bureau of Labor Relations had reinstated AFA in the roster and the CA had affirmed that decision in the cancellation case; the Supreme Court found no sufficient evidence of the exclusive statutory grounds to cancel AFA’s registration. Therefore AFA remains a legitimate labor organization and its registration stands.
Legal Reasoning and Key Doctrinal Points
- Managerial status rests on the effective exercise of powers over management policy or personnel actions; recommendatory or academic policy roles subject to higher review do not qualify.
- Observance
Case Syllabus (G.R. No. 197089)
Court and Date
- Second Division of the Supreme Court of the Philippines.
- G.R. Nos. 197089 & 207971 consolidated; Decision promulgated August 31, 2022.
- Opinion authored by Associate Justice Leonen, with Lazaro-Javier, M. Lopez, J. Lopez and Kho, Jr., JJ., concurring.
Parties and Captioned Matters
- Asian Institute of Management Faculty Association (AFA) — petitioner in G.R. No. 197089; respondent in G.R. No. 207971.
- Asian Institute of Management (AIM) — respondent in G.R. No. 197089; petitioner in G.R. No. 207971.
- Two consolidated matters:
- G.R. No. 197089 — Petition for Review on Certiorari by AFA challenging Court of Appeals Decision and Resolution in CA-G.R. SP No. 109487 (denial of Petition for Certification Election).
- G.R. No. 207971 — Petition for Review on Certiorari by AIM challenging Court of Appeals Decision and Resolution in CA-G.R. SP No. 114112 (affirmance of Bureau of Labor Relations denial of AIM’s Petition to Cancel AFA’s Certificate of Registration).
Core Questions Presented
- Whether AIM’s faculty members are managerial employees disqualified from forming or joining a labor organization.
- Whether the legitimacy (legal personality/registration) of a labor organization may be collaterally attacked in proceedings over a petition for certification election.
- Whether AFA is a legitimate labor organization whose registration must be sustained.
Relevant Chronology and Factual Background
- AIM has been an unorganized establishment since 1968.
- October 14, 2004: AIM faculty formed and formally organized the Asian Institute of Management Faculty Association (AFA).
- December 20, 2004: Department of Labor and Employment (DOLE) issued a Certificate of Registration recognizing AFA as a legitimate labor organization (Certificate No. NCR-UR-12-4075*-2004 referenced).
- May 16, 2007: AFA filed a Petition for Certification Election with DOLE-NCR to determine the exclusive bargaining agent of AIM faculty.
- July 11, 2007: AIM filed a Petition for Cancellation of AFA’s Certificate of Registration, asserting faculty were managerial employees.
- August 30, 2007: Mediator-Arbiter Michael T. Parado denied AFA’s Petition for Certification Election, finding all AFA members managerial employees.
- July 11, 2007–Feb 16, 2009: Administrative steps including an order by DOLE-NCR (Feb 16, 2009) granting AIM’s Petition for Cancellation and directing AFA’s delisting; AFA appealed to Bureau of Labor Relations (BLR).
- December 29, 2009: Bureau of Labor Relations Decision ordered AFA remain in the roster of legitimate labor organizations (BLR set aside the DOLE-NCR delisting).
- February 20, 2009: Secretary of Labor and Employment reversed the Mediator-Arbiter and granted the conduct of the certification election, finding AFA members were not managerial employees.
- May 4, 2009: Secretary denied AIM’s Motion for Reconsideration.
- AFA proceeded to a pre-certification conference; certification election commenced October 16, 2009.
- October 22, 2010: Court of Appeals Decision granted AIM’s Petition for Certiorari and reinstated Mediator-Arbiter’s order denying the certification election.
- AFA filed Petition for Review on Certiorari to the Supreme Court (G.R. No. 197089).
- AIM elevated the cancellation case to the Court of Appeals; January 8, 2013 Court of Appeals Decision affirmed BLR’s ruling sustaining AFA’s registration (CA denied AIM’s cancellation petition); AIM filed Petition for Review on Certiorari to the Supreme Court (G.R. No. 207971).
- January 23, 2017: Supreme Court consolidated the two cases.
Administrative and Judicial Decisions Reviewed
- DOLE-NCR Mediator-Arbiter Michael T. Parado — August 30, 2007 order denying certification election (found AFA members managerial).
- Secretary of Labor and Employment (via Undersecretary Romeo C. Lagman) — February 20, 2009 Decision reversing Mediator-Arbiter and ordering certification election; May 4, 2009 Resolution denying reconsideration.
- Bureau of Labor Relations — December 29, 2009 Decision keeping AFA in roster of legitimate labor organizations (set aside delisting).
- Court of Appeals (Special Sixteenth Division) — October 22, 2010 Decision reversing Secretary and reinstating Mediator-Arbiter’s order; May 27, 2011 Resolution denying AFA’s reconsideration.
- Court of Appeals (Fourteenth Division) — January 8, 2013 Decision affirming BLR in cancellation case; June 27, 2013 Resolution denying reconsideration.
Statutory and Regulatory Framework Cited
- Constitution:
- Article II, Section 18 — State affirms labor as primary social economic force; protect rights of workers and promote welfare.
- Article XIII, Section 3 — Guarantee of rights of workers to self-organization, collective bargaining, peaceful concerted activities.
- Article III, Section 8 — Right to form unions, associations, or societies.
- Labor Code provisions and numbering as used in the case (recognizing renumbering/amendments noted):
- Article 212(m) / Article 219(m) definitions — “Managerial employee” and “Supervisory employee” definitions referenced.
- Article 245 / Article 255 — Ineligibility of managerial employees to join any labor organization.
- Article 247 / Article 239 — Exclusive grounds for cancellation of union registration (misrepresentation, false statement, fraud; voluntary dissolution).
- Article 269 / Article 257 — Petition for certification election in unorganized establishment: automatic conduct upon filing by any legitimate labor organization.
- Article 272 / Article 259 — Appeal from certification election orders to Secretary.
- Omnibus Rules Implementing the Labor Code, Book V, Rule VIII:
- Rule VIII, Sec. 1 — Who may file a petition for certification election (any legitimate labor organization).
- Rule VIII, Sec. 13 — Order/Decision on petition; required statements in order granting election.
- Rule VIII, Sec. 14 — Grounds for denial/dismissal of petition (includes not listed in Department’s registry).
- Rule VIII, Sec. 15 — Prohibited grounds for denial/suspension; legitimacy of union cannot be collaterally attacked in certification election except narrow exceptions.
- Implementing Rules and Department Orders referenced (e.g., DOLE Department Order No. 40-03 series of 2003) as authority for procedures.
Parties’ Principal Contentions (as presented to the Court)
- AFA (G.R. No. 197089)
- A union’s legitimacy cannot be collaterally attacked in a petition for certification election.
- Employer (AIM) lacks legal personality to have petition dismissed on ground that bargaining unit members are managerial employees; employer is a bystander in certification election proceedings.
- AIM’s faculty members are not managerial employees: faculty policymaking authority under AIM Policy Manual is recommendatory and subject to Board of Trustees’ approval; primary duty is teaching; work hours and deliverables indicate regular, standardizable duties.
- Administrative findings (Secretary, BLR) that faculty are not managerial employees are entitled to respect.
- Even if some faculty occupy managerial posts, remedy is inclusion-exclusion proceedings, not denial of certification election.
- AFA is a legitimate labor organization with valid and subsisting Certificate of Registration; prior delisting was set aside by BLR and Court of Appeals affirmed BLR in cancellation case.
- AIM (G.R. Nos. 197089 & 207971)
- Faculty members are managerial employees because tenure-track faculty determine faculty standards and have historically run AIM operationally; many faculty hold administrative positions.
- AIM alleges that virtually all faculty performed administrative functions and thus are managerial; pre-certification inclusion-exclusion would be futile.
- Board of Trustees only provides guidance; operational control delegated to tenure-track faculty by AIM policy.
- Faculty are not subject to rigid work hours; teaching session counts (130/105) are guidelines and scheduling is largely discretionary; thus, not inconsistent with managerial status.
- In cancellation petition, AIM contends AFA misrepresented its membership as rank-and-file when members were managerial employees (ground for cancellation).
Legal Issues Framed by the Court
- Whether AIM’s faculty members are managerial employees (and thus ineligible to be in the bargaining unit).
- Whether legitimacy of a labor organization may be collaterally attacked during certification election proceedings.
- Whether AFA is a legitimate labor organization whose registration should be sustained.
Court’s Analysis — Managerial Employee Status of AIM Faculty (Holding I)
- Legal standard:
- Managerial employee defined as one “vested with power