G.R. No. 78755 July 19, 1989
Golden Farms, Inc., petitioner, vs. The Honorable Director Pura Ferrer-Calleja, Bureau of Labor Relations and National Federation of Labor, respondents.

FACTS

Petitioner Golden Farms, Inc. is a corporation engaged in banana production. Private respondent National Federation of Labor (NFL) is the exclusive bargaining agent for the company’s rank-and-file employees under an existing Collective Bargaining Agreement (CBA). NFL subsequently filed a Petition for Direct Certification Election or Recognition on behalf of a separate group of monthly-paid employees, including cashiers, purchasers, personnel officers, foremen, and confidential employees like accounting personnel. Golden Farms opposed this petition, arguing these employees, by the nature of their jobs, performed managerial or confidential functions and were thus excluded from the rank-and-file bargaining unit and the existing CBA.
The Med-Arbiter dismissed the petition for certification election. However, in the dismissal order, the Med-Arbiter directed Golden Farms and NFL to negotiate a supplementary CBA or to include these disputed employees in the existing CBA. This directive was affirmed by the Director of the Bureau of Labor Relations. Golden Farms filed this petition, challenging the Med-Arbiter’s authority to issue such a directive and asserting the disputed employees are legally disqualified from joining the rank-and-file bargaining unit.

ISSUE

1. Whether a Med-Arbiter has the authority to compel management to enter into a supplemental collective bargaining agreement.
2. Whether employees performing managerial or confidential functions can compel management to enter into a collective bargaining agreement with them as part of the rank-and-file unit.

RULING

The Supreme Court ruled in favor of Golden Farms and nullified the directive. On the first issue, the Court held that a Med-Arbiter, in a certification election proceeding, lacks the authority to order parties to negotiate or execute a CBA. The Med-Arbiter’s jurisdiction is limited to determining the proper bargaining unit and administering the election process. Compelling negotiation or altering the terms of an existing CBA exceeds this limited jurisdiction and infringes on the parties’ freedom to bargain collectively.
On the second issue, the Court held that the disputed employees are not eligible to join the rank-and-file bargaining unit. Citing Article 212(k) of the Labor Code and jurisprudence (Bulletin Publishing Co., Inc. vs. Sanchez), the Court classified the cashiers, purchasers, personnel officers, and foremen as managerial employees, vested with powers to execute management policies or effectively recommend managerial actions. Their inclusion in the union would create a conflict of interest and risk company domination of the union. Confidential employees, such as accounting personnel and radio operators, were also excluded. Having access to confidential information, their membership could make them sources of undue advantage or espionage for either party during CBA negotiations, especially since NFL already represents the rank-and-file. The existing CBA itself expressly excluded such employees. Therefore, they cannot be compelled to be included in the bargaining unit or its agreement.