G.R. No. 164561, August 30, 2006
CATHAY PACIFIC STEEL CORPORATION, ET AL., Petitioners, vs. HON. COURT OF APPEALS, CAPASCO UNION OF SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE TAMONDONG III, Respondents.

FACTS

Petitioner Cathay Pacific Steel Corporation (CAPASCO) hired respondent Enrique Tamondong III, who was eventually promoted to Personnel Superintendent. In June 1996, supervisory personnel, including Tamondong, moved to organize a union, the CAPASCO Union of Supervisory Employees (CUSE). Tamondong actively participated and was elected as an officer. CAPASCO sent him a memo on February 3, 1997, directing him to explain and discontinue his union activities, warning that continuance would affect his employment. Tamondong invoked his right to self-organization. Consequently, CAPASCO terminated him on February 6, 1997, citing loss of trust and confidence, alleging his union activities constituted serious disloyalty.
Tamondong filed a complaint for illegal dismissal and unfair labor practice. The Labor Arbiter ruled in his favor, finding illegal dismissal and unfair labor practice, ordering reinstatement with backwages. The NLRC reversed, dismissing the complaints, finding Tamondong was a managerial employee prohibited from joining a union, making his dismissal valid. The Court of Appeals reinstated the Labor Arbiter’s decision, holding that Tamondong was a supervisory, not managerial, employee, thus entitled to self-organization, and his dismissal was illegal.

ISSUE

Whether respondent Enrique Tamondong III was a managerial employee prohibited from joining a labor union, thereby rendering his dismissal based on loss of trust and confidence valid.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that Tamondong was a supervisory, not managerial, employee. The test to determine managerial status hinges on whether the employee’s primary duty consists of the management of the establishment or a department/subdivision, and the consistent exercise of discretion and independent judgment, including the authority to hire, fire, or effectively recommend such actions. The evidence, including Tamondong’s job description, showed his functions were primarily recommendatory and involved implementing company policies under close supervision by higher management. He lacked the independent authority to formulate and execute management policies crucial to managerial rank.
As a supervisory employee, Tamondong possessed the constitutional and statutory right to self-organization under Article 245 of the Labor Code. His active participation in organizing CUSE was a legitimate exercise of this right. Therefore, his dismissal solely for union activity constituted illegal dismissal and an unfair labor practice under Article 248(a) of the Labor Code, as it interfered with his right to organize. Loss of trust and confidence cannot be validly invoked to terminate an employee for exercising a protected right. The Court upheld the award of reinstatement with full backwages and benefits.