Case Summary (G.R. No. 122226)
Parties
Petitioner: United Pepsi-Cola Supervisory Union (UPSU) Respondents: Hon. Bienvenido E. Laguesma (DOLE) and Pepsi-Cola Products Philippines, Inc.
Key Dates
• March 20, 1995 – UPSU files petition for certification election.
• August 31, 1995 and September 22, 1995 – DOLE orders denying certification.
• May 5, 1995 – Med-arbiter dismisses petition for lack of new grounds.
• July 8, 1996 – Supreme Court Third Division dismisses petition for certiorari.
• June 16, 1997 – Case referred en banc.
• March 25, 1998 – En banc decision promulgated.
Applicable Law
1987 Constitution, Art. III, Sec. 8 (right to self-organization subject to law) Labor Code, Art. 212(m) (definitions of managerial, supervisory, and rank-and-file employees) Labor Code, Art. 245 (managerial employees ineligible to join labor organizations), as amended by R.A. 6715 (1989)
Issues
- Are Pepsi route managers “managerial employees” under Art. 212(m)?
- Does Art. 245, prohibiting managerial employees from unionizing, violate Art. III, Sec. 8 of the 1987 Constitution?
Factual Background
Route managers supervise sales routes, direct route sales teams, achieve sales and distribution targets, handle receivables, implement promotions, and train personnel. UPSU sought certification to represent them but was rebuffed by DOLE’s finding—based on job descriptions and prior cases—that their duties exceed mere supervision and amount to management prerogatives.
Classification of Managerial Employees
Art. 212(m) distinguishes:
- Managerial employees: vested with authority to establish and execute policy, and to hire, transfer, suspend, lay off, recall, discharge, assign or discipline staff.
- Supervisory employees: recommend managerial actions requiring independent judgment but do not themselves set policy.
- Rank-and-file: perform tasks without managerial or supervisory authority.
Prior Administrative Determinations and Res Judicata
In WATU v. PCPPI (1991) and a 1992 DOLE ruling, route managers were deemed managerial employees. The Court held that quasi-judicial administrative decisions on certification become final and are binding under res judicata, absent lack of substantial evidence.
Substantial Evidence on Route Managers’ Roles
The Court reviewed a detailed “Route Manager Position Description” pamphlet, showing that route managers:
- Set and achieve sales and distribution objectives, develop new accounts, control promotions and pricing.
- Administer route logistics, receivables, and adherence to policies.
- Train, evaluate, discipline, and motivate route sales teams.
These functions go beyond routine supervision, involving independent judgment and policy implementation.
Constitutionality of Article 245
Art. 245 bars managerial employees from union membership while permitting separate unions for supervisors. Examining the 1987 Constitutional Commission’s deliberations, the Court found that the intent to restore organizational rights applied only to government employees, supervisory staff, and security guards previously covered by pre-Labor Code statutes—not to all “managerial employees.” Denying managerial staff the right to unionize has a rational basis in preserving loyalty and avoiding conflicts of interest, and is consistent with the Constitution’s caveat that organizational rights may be regulated by law.
Final Ruling of the Court
The en banc Court held that:
- Pepsi route managers qualify as managerial employees under Art. 212(m).
- Art. 245’s prohibition on their union membership does not violate Art. III, Sec. 8 of the 1987 Constitution.
Accordingly, the petition for certification
Case Syllabus (G.R. No. 122226)
Facts of the Case
- On March 20, 1995, the United Pepsi-Cola Supervisory Union (UPSU) filed with the Department of Labor and Employment (DOLE) a petition for certification election on behalf of Pepsi-Cola route managers.
- The DOLE Med-Arbiter denied the petition on the ground that route managers are managerial employees ineligible to join unions under Art. 245 of the Labor Code.
- On appeal, the Secretary of Labor and Employment reaffirmed the denial in orders dated August 31 and September 22, 1995.
- UPSU filed a certiorari petition in the Supreme Court, challenging the DOLE orders and the constitutionality of Art. 245 vis-à-vis Sec. 8, Art. III of the 1987 Constitution.
Procedural History
- DOLE Med-Arbiter: petition dismissed for lack of merit.
- Secretary of Labor: appeal dismissed, orders of August 31 and September 22, 1995.
- NLRC Third Division: petition for certiorari dismissed on July 6, 1996 (no grave abuse of discretion).
- Supreme Court En Banc: case referred back for resolution of classification and constitutional issues.
Issues Presented
- Are Pepsi-Cola route managers “managerial employees” or “supervisory employees” under Art. 212(m) of the Labor Code?
- Does Art. 245 of the Labor Code, barring managerial employees from union membership, violate Sec. 8, Art. III of the Constitution?
Definitions Under the Labor Code (Art. 212)
- Managerial employees: vested with power 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 managerial actions in the employer’s interest, using independent judgment; cannot both supervise rank-and-file and join their union.
- Rank-and-file employees: those not falling within the first two definitions.
Organizational Hierarchy
- Top management: sets overall policies; e.g., CEO, president.
- Middle management: implements policies, balances