Labor Law

San Miguel Corporation Supervisors and Exempt Union v. Laguesma G.R. No. 110399 August 15, 1997 Appropriate Bargaining Unit, Confidential Employees, Mutuality of Interests Doctrine


Petitioner union filed before the DOLE a for Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis.

On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order to conduct a certification election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit.

On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the Med-Arbiter’s error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature.

Public respondent, Undersecretary Laguesma, granted the Appeal. 

Upon petitioner-union’s motion, Undersecretary Laguesma directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants at Cabuyao, San Fernando and Otis.

Respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings, which was granted by the public respondent.

Hence this petition.


  1. Whether or not Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union.
  1. Whether or not the employees of the three plants constitute an appropriate single bargaining unit.



This Court rules that said employees do not fall within the term “confidential employees” who may be prohibited from joining a union.

Confidential employees are those who 

(1)  assist or act in a confidential capacity, (2) formulate, determine, and effectuate management policies in the field of labor relations. 

The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee — that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. 

The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the ”confidential employee rule.” The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests.  

Thus, an employee of a labor union, or of a management association, must have access to confidential labor relations information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining to the companies with which the union deals, or which the association represents, will not cause an employee to be excluded from the bargaining unit representing employees of the union or association.”  “Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information or technical trade secrets, will not render an employee a confidential employee.”


This Court finds the contention of the petitioner meritorious.

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.” 

A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. 

It is readily seen that the employees in the instant case have “community or mutuality of interests,” which is the standard in determining the proper constituency of a collective bargaining unit.  It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed.

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