5. SAN MIGUEL FOODS INC. vs. SAN MIGUEL CORP. SUPERVISORS AND EXEMPT b.

b. who assist or act in a confidential capacity. These criteria must both be met for an
UNION, G.R. No. 146206, August 1, 2011 employee to be considered a confidential employee. A confidential relationship must
exist between the employee and his supervisor, and that the supervisor must handle the
FACTS: In San Miguel Corporation Supervisors and Exempt Union v. Laguesma, the Supreme prescribed responsibilities relating to labor relations.
Court ruled that supervisory employees 3 and 4 and exempt employees of San Miguel Foods, Inc. The Court held that "if these managerial employees would belong to or be affiliated with a Union,
(SMFI) were not considered "confidential employees" because their roles, despite handling internal the latter might not be assured of their loyalty to the Union in view of evident conflict of interest.
company data, did not pertain to labor relations tasks like negotiation or grievance settlement.. As The Union can also become company-dominated with the presence of managerial employees in
such, they were allowed to form a bargaining unit for collective bargaining. The Court also Union membership." An important element of the "confidential employee rule" is the employee's
affirmed that employees from San Miguel’s three plants—Cabuyao, San Fernando, and Otis— need to use labor relations information. Thus, in determining the confidentiality of certain
constituted a single bargaining unit due to their shared work nature, compensation, and common employees, a key question frequently considered is the employee's necessary access to confidential
interests, despite being in different locations. They could form a single bargaining unit despite labor relations information.
being in different locations, as they share a "community or mutuality of interests." This decision
allowed these employees to form a bargaining unit for collective bargaining purposes. The petitioner argued that the position of Payroll Master should be classified as a confidential
employee and thus excluded from the bargaining unit due to access to salary and compensation
Following this decision, a certification election was held on September 30, 1998, with data. However, the Court rejected this argument, explaining that to be considered a confidential
discrepancies in the list of eligible voters between the petitioner and the respondent. Petitioner employee, two criteria must be met: (1) the employee must assist in a confidential capacity, and (2)
submitted a list of 23 employees for the San Fernando plant and 33 for the Cabuyao plant, while the employee must work with management policies related to labor relations. Since the Payroll
respondents listed 60 and 82, respectively. On election day, the petitioner filed objections, Master’s duties do not involve handling confidential labor relations information, they were
challenging the eligibility of certain employees on various grounds, including their alleged correctly included in the bargaining unit. Confidential employees do not apply to the position of
confidential status, managerial roles, assignment outside the bargaining unit, or membership in Payroll Master and the whole gamut of employees who, as perceived by petitioner, have access to
other unions. The Med-Arbiter ordered both parties to submit proof regarding the eligibility of the salary and compensation data. CA correctly held that the position of Payroll Master does not
contested employees. After addressing objections from the petitioner regarding the eligibility of involve dealing with confidential labor relations information in the course of the performance of
certain employees to vote, the election results showed 118 "Yes" votes and 3 "No" votes, leading his functions. Since the nature of his work does not pertain to company rules and regulations and
to the certification of the respondent as the exclusive bargaining agent. confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.
Following the election, where a majority voted "Yes," the Med-Arbiter certified the union as the While Article 245 of the Labor Code excludes managerial employees from labor organizations,
exclusive bargaining representative for supervisors and exempt employees in the three plants. this prohibition also extends to confidential employees who assist managerial staff and handle
However, petitioners continued to challenge the eligibility of some employees and questioned sensitive company information. These employees can pose a conflict of interest if allowed in a
whether the plants could collectively form a single bargaining unit. Petitioner appealed, and the bargaining unit, as their access to confidential data could give them an unfair advantage.
Department of Labor and Employment (DOLE) affirmed the results but excluded certain
individuals from the bargaining unit based on union membership and company affiliation. The The Court upheld the exclusion of Human Resource Assistants and Personnel Assistants from the
Court of Appeals later modified the DOLE’s decision, excluding employees holding positions like bargaining unit. These positions involve direct handling of labor relations matters, such as
Human Resource Assistant and Personnel Assistant from the bargaining unit. recruitment, employee records, and participation in grievance meetings or collective bargaining
negotiations, thus qualifying them as confidential employees who should be excluded from union
ISSUES: membership.
1. WON the inclusion of the employees in supervisor levels 3 and 4 and the exempt
employees in the proposed bargaining unit were proper, thereby allowing their 2. YES. The Supreme Court affirmed the decision that employees of San Miguel Corporation's
participation in the certification election; (YES) Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis should form a single
2. WON the employees of the three plants constitute an appropriate single bargaining unit if bargaining unit, rejecting the petitioner's argument. The Court explained that the one-company,
the Supervisory employees levels 3 and 4 were not confidential employees. one-union policy was not violated because the employees, despite working in different locations
and roles (dressed chicken processing vs. live chicken operations), share a "community or
HELD: mutuality of interests." This includes common needs, interrelated tasks, and shared working
1. YES. The Court held that the said supervisory employees levels 3 and 4 are not considered as conditions. The Court cited the *National Association of Free Trade Unions v. Mainit Lumber
"confidential employees" who were prohibited from joining a union. Said employees are not Development Company* case, which emphasized that the essential test for determining an
qualified to be considered as managerial employees who, under Article 245 of the Labor Code, are appropriate bargaining unit is whether it ensures the best exercise of collective bargaining rights
not eligible to join, assist, or form any labor organization. Confidential employees are those who: for all employees, regardless of minor distinctions in work. Therefore, despite the different
functions at each plant, the employees’ mutual interests justified their inclusion in a single
a. formulate, determine, and effectuate management policies in the field of labor relations, bargaining unit.
and
There shall only be one bargaining unit in the three plants. Certain factors, such as specific line of
work, working conditions, location of work, mode of compensation, and other relevant conditions
do not affect or impede their commonality of interest. Although they seem separate and distinct
from each other, the specific tasks of each division are actually interrelated and there exists
mutuality of interests which warrants the formation of a single bargaining unit.

The fact that the three plants were situated in three different places, specifically in Cabuyao, Otis,
and San Fernando is immaterial. Geographical location can be totally set aside and disregarded if
the communal or mutual interests of the employees are not sacrificed. An appropriate bargaining
unit may be defined as "a group of employees of a given employer, comprised of all or less than all
of the entire body of employees, which the collective interest of all the employees, consistent with
equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law." To be considered as appropriately
combined, a unit must comprise a group of employees who have substantial, mutual interests when
it comes to wages, hours, working conditions and other subjects tackled in a collective bargaining.