G.R. No. 207971 , January 23, 2017
ASIAN INSTITUTE OF MANAGEMENT, Petitioner, vs. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.

FACTS

The Asian Institute of Management Faculty Association (AFA) filed a petition for certification election to represent a bargaining unit of forty faculty members at the Asian Institute of Management (AIM). AIM opposed the petition, contending that its tenure-track faculty members are managerial employees and are therefore ineligible to form or join a labor union. AIM subsequently filed a petition for the cancellation of AFA’s certificate of registration on the same ground. The Med-Arbiter initially denied the petition for certification election, ruling the faculty were managerial employees. However, the Secretary of Labor reversed this, ordering a certification election. Separately, the Bureau of Labor Relations reversed a Regional Director’s order cancelling AFA’s registration, holding the faculty were not managerial employees.
AIM elevated the certification election order to the Court of Appeals via a Petition for Certiorari. The CA granted AIM’s petition, annulling the DOLE Secretary’s orders. The CA ruled that the DOLE Secretary committed grave abuse of discretion by applying an outdated legal definition of managerial employees. The CA found that AIM’s tenure-track faculty, who participate in formulating and executing academic and administrative policies, hiring, and promotion, fit the current statutory definition of managerial employees under Article 212(m) of the Labor Code. AFA then appealed to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in ruling that AIM’s tenure-track faculty members are managerial employees prohibited from forming a labor union.

RULING

The Supreme Court granted the petition and reversed the Court of Appeals. The Court held that the faculty members are not managerial employees. The legal logic rests on a strict interpretation of Article 212(m) of the Labor Code, which defines a managerial employee as 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. The Court emphasized that the authority must be real and substantial, not merely advisory or subject to evaluation and final approval by a higher authority.
Examining the faculty’s actual functions, the Court found that while they participate in policy-making committees (e.g., for curriculum, faculty hiring, and promotion), their recommendations are not final. All significant actions require review and ultimate approval by the Board of Trustees or the President. Their role is primarily recommendatory in character. They do not possess the independent authority to execute management policies or to hire and discipline employees in their own right. Consequently, they lack the essential powers vested by law to be classified as managerial. They are, therefore, eligible to form a labor organization for purposes of collective bargaining. The Court reinstated the DOLE Secretary’s orders for the conduct of a certification election.