Labor Law 2 A2010 - 69 -
ART. 242. Rights of legitimate labor organizations. - A
ART. 234. Requirements of registration. - Any applicant labor
organization, association or group of unions or workers shall acquire legal
personality and shall be entitled to the rights and privileges granted by law
to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements.
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the list
of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent
(20%) of all the employees in the bargaining unit where it seeks to
operate; (As amended by Executive Order No. 111, December 24, 1986).
(d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it. (As amended by Batas Pambansa Bilang 130, August
21, 1981).
RA 9481 Secs 1 and 2
Section 1. Article 234 of Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines, is hereby
further amended to read as follows:
“ART. 234. Requirements of Registration. - A federation, national union or
industry or trade union center or an independent union shall acquire legal
personality and shall be entitled to the rights and privileges granted by law
to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the list
of the workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its
members comprising at least twenty percent (20%) of all the employees in
the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it.”
Sec. 2. A new provision is hereby inserted into the Labor Code as
Article 234-A to read as follows:
“ART. 234-A. Chartering and Creation of a Local Chapter. - A duly
registered federation or national union may directly create a local chapter
by issuing a charter certificate indicating the establishment of the local
chapter. The chapter shall acquire legal personality only for purposes of
filing a petition for certification election from the date it was issued a
charter certificate.
The chapter shall be entitled to all other rights and privileges of a
legitimate labor organization only upon the submission of the following
documents in addition to its charter certificate:
(a) The names of the chapter’s officers, their addresses, and the principal
office of the chapter; and
(b) The chapter’s constitution and by-laws: Provided, That where the
chapter’s constitution and by-laws are the same as that of the federation
or the national union, this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by
the secretary or treasurer of the chapter and attested by its president.”
Disini
legitimate labor organization shall have the right:
(a) To act as the representative of its members for the
purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the
employees in an appropriate bargaining unit for purposes of
collective bargaining;
(c) To be furnished by the employer, upon written request,
with its annual audited financial statements, including the
balance sheet and the profit and loss statement, within thirty
(30) calendar days from the date of receipt of the request,
after the union has been duly recognized by the employer or
certified as the sole and exclusive bargaining representative
of the employees in the bargaining unit, or within sixty (60)
calendar days before the expiration of the existing collective
bargaining agreement, or during the collective bargaining
negotiation;
(d) To own property, real or personal, for the use and benefit
of the labor organization and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the
organization and its members, including cooperative,
housing, welfare and other projects not contrary to law.
Notwithstanding any provision of a general or special law to
the contrary, the income and the properties of legitimate labor
organizations, including grants, endowments, gifts, donations
and contributions they may receive from fraternal and similar
organizations, local or foreign, which are actually, directly and
exclusively used for their lawful purposes, shall be free from
taxes, duties and other assessments. The exemptions
provided herein may be withdrawn only by a special law
expressly repealing this provision.
RA 9481 Sec. 7
Sec. 7. A new provision, Article 242-A is hereby inserted
into the Labor Code to read as follows:
“ART. 242-A. Reportorial Requirements. - The following
are documents required to be submitted to the Bureau
by the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto,
the minutes of ratification, and the list of members who
took part in the ratification of the constitution and by-
laws within thirty (30) days from adoption or ratification
of the constitution and by-lam or amendments thereto;
(b) Its list of officers, minutes of the election of officers,
and list of voters within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after
the close of every fiscal year; and
(d) Its list of members at least once a year or whenever
required by the Bureau.
Failure to comply with the above requirements shall not
be a ground for cancellation of union registration but
shall subject the erring officers or members to
suspension, expulsion from membership, or any
appropriate penalty.”
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3.7 UNION AFFILIATION LOCAL AND
PARENT UNION RELATIONS—ILO
Convention No. 87, Art. 5

Article 5

Workers' and employers' organizations shall have

the right to establish and join federations and
confederations and any such organization, federation or
confederation shall have the right to affiliate with
international organizations of workers and employers.

Rule-Affiliation
1. Affiliation: Purpose of Nature of ADAMSON & ADAMSON V CIR (ADAMSON &
Relations ADAMSON SUPERVISORY UNION)
Art. 211. Declaration of Policy.
See page 66

It is the policy of the State:

c. To foster the free and voluntary organization of a ATLAS LITHOGRAPHIC SERVICES, INC. V
strong and united labor movement; LAGUESMA
See page 67
Purpose COLLEGE OF MEDICINE V LAGUESMA
PHIL SKYLANDERS INC V NLRC (PAFLU)
See page 65 See page 68

Nature Relationship 3. Local Union Disaffiliation

FILIPINO PIPE AND FOUNDRY CORP V NLRC, NLU-TUCP, LERUM
See page 65
Nature Right Disaffiliation

VOLKSCHEL LABOR UNION V BUREAU OF LABOR

Effect-Legal Personality RELATIONS (ALUMETAL)
ADAMSON & ADAMSON V CIR (ADAMSON & ADAMSON
SUPERVISORY UNION) 137 SCRA 42
See page 66 CUEVAS; June 19, 1985
NATURE
2. Supervisor—Rank and File Union Petition for certiorari to review the resolutions of the Bureau of Labor
Relations.
Affiliation
FACTS
Art. 245. Ineligibility of managerial employees - Petitioner Volkschel Labor Union (Volkschel) was once affiliated
to join any labor organization; right of with the Associated Labor Union for Metal Workers (ALUMETAL).
supervisory employees. (as amended by RA 9481 Both unions, using the name Volkschel-ALUMETAL, jointly entered
2007) Managerial employees are not eligible to join, into a collective bargaining agreement with respondent companies.
assist or form any labor organization. Supervisory - One of the subjects dealt with is the payment of union dues which is
employees shall not be eligible for membership in a provided for in Section 3, Art. 1, of the CBA, which says that “the
COMPANY agrees to make payroll deductions not oftener than twice
labor organization of the rank-and-file employees but
a month of UNION membership dues and such special assessments
may join, assist or form separate labor organizations of
fees or fines as may be duly authorized by the UNION, provided that
their own. The rank and file union and the supervisors’ the same is covered by the individual check-off authorization of the
union operating within the same establishment may UNION members.”
join the same federation or national union. - March 10, 1976: a majority of petitioner’s members decided to
Art. 245-A.Effect of Inclusion as Members of disaffiliate from respondent federation in order to operate on its own
Employees Outside the Bargaining Unit.- The as an independent labor group pursuant to Art. 241 of the Labor
inclusion as union members of employees outside the Code:
bargaining unit shall not be a ground for the “Incumbent affiliates of existing federations or national unions
cancellation of the registration of the union. Said may disaffiliate only for the purpose of joining a federation or
employees
ART. are automatically
243. Coverage deemedright
and employees’ remove from the
to self- national union in the industry or region in which it properly
list of membership
organization. of saidemployed
- All persons union. in commercial, belongs or for the purpose of operating as an independent
industrial and agricultural enterprises and in labor group.”
- A resolution was adopted and signed by petitioner’s members
religious, charitable, medical, or educational
revoking their check-off authorization in favor of ALUMETAL and
institutions, whether operating for profit or not, shall
notices thereof were served on ALUMETAL and respondent
have the right to self-organization and to form, join,
companies.
or assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed
people, rural workers and those without any definite
employers may form labor organizations for their
mutual aid and protection. (As amended by Batas
Pambansa Bilang 70, May 1, 1980).
 Labor Law 2 A2010
- Med-Arbiter George Eduvalla rendered a Resolution which found the
disaffiliation legal but at the same time gave the opinion that members
should continue paying their dues to ALUMETAL. Director Francisco
Estrella reversed the Med-Arbiter’s decision and declared that the Bureau
recognized the continued affiliation of Volkschel with ALUMETAL.
ISSUES
1. WON Volkschel Labor Union’s disaffiliation from ALUMETAL is valid.
2. WON respondent companies have the right to effect union dues
collections despite revocation by the employees.
HELD
1. YES
Ratio A local union, being a separate and voluntary association, is free to
serve the interest of all its members including the freedom to disaffiliate
when circumstances warrant.
Reasoning This right is consistent with the Constitutional guarantee of
freedom of association (Art. III, Sec. 8, 1987 Constitution).
- The disaffiliation was prompted by the federation’s deliberate and
habitual dereliction of duties as mother federation towards petitioner
union.
- It would go against the spirit of the labor law to restrict petitioner’s right
to self-organization due to the existence of the CBA. A disaffiliation does
not disturb the enforceability and administration of a collective agreement;
it does not occasion a change of administrators of the contract nor even
an amendment of the provisions thereof.
2. NO
Ratio The obligation of respondent companies is conditioned on the
individual check-off authorization of petitioner’s members. The employees’
check-off authorization, even if declared irrevocable, is good only as long
as they remain members of the union concerned.
Reasoning ALUMETAL is entitled to receive the dues from respondent
companies as long as petitioner union is affiliated with it and respondent
companies are authorized by their employees (members of petitioner
union) to deduct union dues.
- Without said affiliation, the employer has no link to the mother union.
DISPOSITION
Resolutions of Bureau of Labor Relations are reversed and set aside.
ALUMETAL is ordered to return to petitioner all the union dues.
PHIL. LABOR ALLIANCE COUNCIL v BLR
75 SCRA 162
FERNANDO, J.; January 31, 1977
NATURE
certiorari and prohibition proceeding to indict an order for a certification
election by respondent Bureau of Labor Relations as tainted by a
jurisdictional infirmity in view of what is contended to be an existing duly
certified collective bargaining contract
FACTS
- there was a renewal of the collective bargaining agreement with a union
shop clause on March 9,1974 between petitioner union and respondent
company to last for another period of 3 years. The claim was that at that
time it was the only bargaining agent of the respondent company
unchallenged by any labor organization. Then came the assertion that on
May 27, 1974, with due notice to all the members of the petitioner union,
and with more than 1,500 of them present, such collective bargaining
agreement was ratified by a unanimous vote. It was then so certified by
the former NLRC on June 4, 1974. It was further alleged that at the time
of such certification, there was no pending request for union recognition
by any other labor organization with management.
- on June 20, 1974, respondent Federation of Free Workers, setting forth
that its members represent more than 60% out of 1,500, more or less,
rank-and-file employees of respondent company, sought a certification
election. Petitioner union opposed such a move on the grounds that the
collective bargaining agreement entered into with the respondent
company had been certified. The NLRC affirmed the dismissal of the
petition for certification, and the Secretary of Labor affirmed.
- respondent Federation filed a complaint with the respondent Bureau of
Labor Relations, the present Labor Code having become effective,
- 71 - Disini
alleging that some 848 employees, in a resolution attached to the
complaint disaffiliated from petitioner union and affiliated with it,
characterizing the certified agreement as having been entered into
allegedly to thwart such disaffiliation and seeking a declaration of the
nullity thereof. Respondent Bureau issued an order setting aside the
certification of the collective bargaining agreement and ordering a
certification election.
ISSUE
WON the existing CBA is a bar to a certification election
HELD
NO
Ratio
Once the fact of disaffiliation has been demonstrated beyond doubt,
as in this case, a certification election is the most expeditious way of
determining which labor organization is to be the exclusive
bargaining representative.
Reasoning
The collective bargaining agreement entered into by petitioner with
management was decertified in the challenged order, in which it was
specifically pointed out; "it is not disputed that the CBA certified by
the NLRC was not ratified by the majority of the employees within the
bargaining unit. This is blatant non-observance of the basic
requirement necessary to certification. With respect to the complaint
of the confirmation of disaffiliation of the members of PLAC the same
should be resolved in the most expedient and simple method of
determining the exclusive bargaining representative through the
holding of a certification election."
On the Nature of the Right of Disaffiliation:
Mass disaffiliation is nothing new in the Philippine labor movement.
Nor is it open to any legal objection. It is implicit in the freedom of
association explicitly ordained by the Constitution. There is then the
incontrovertible right of any individual to join an organization of his
choice. That option belongs to him. A workingman is not to be denied
that liberty. He may be, as a matter of fact, more in need of it if the
institution of collective bargaining as an aspect of industrial
democracy is to succeed.
Disposition
Petition is DISMISSED
MALAYANG SAMAHAN NG MGA MANGGAGAWA
SA M. GREENFIELD V RAMOS
326 SCRA 428
PURISIMA; February 28, 2000
NATURE
Petition for certiorari
FACTS
-Petitioner MALAYANG SAMAHAN NG MGA MANGGAGAWA SA
M. GREENFIELD (MSMG) had a union security clause provision on
their CBA with respondent M. Greenfield Inc.
-MSMG was an affiliate of respondent United Lumber and General
Workers of the Philippines (ULGWP).
-MSMG held a general membership meeting. Many did not attend.
As such they were fined with P50 by the union. MSMG wrote to
respondent company saying that they deduct the P50 from the
employees’ salaries. ULGWP opposed and wrote to respondent
company. The company did not deduct.
-The imposition of P50.00 fine became the subject of bitter
disagreement between the Federation and the local union
culminating in the latter's declaration of general autonomy
-The officials of ULGWP called a Special National Executive Board
Meeting where a Resolution was passed placing the MSMG under
trusteeship and appointing respondent Cesar Clarete as
administrator.
-The said administrator wrote the respondent company
informing the latter of its designation of a certain Alfredo
Kalingking as local union president and "disauthorizing" the
 Labor Law 2 A2010
incumbent union officers from representing the employees. This
action by the national federation was protested by the petitioners
- The petitioner union officers received identical letters from the
administrator requiring them to explain within 72 hours why they
should not be removed from their office and expelled from union
membership.
-ULGWP advised respondent company of the expulsion of the 30
union officers and demanded their separation from employment
pursuant to the Union Security Clause. The company at first
refused but later, when the ULGWP declared a strike against them,
they subsequently agreed.
ISSUE/S
1. WON MSMG’s disaffiliation was an act of disloyalty to ULGWP
HELD
1. NO
Ratio A local union has the right to disaffiliate from its mother union or
declare its autonomy. A local union, being a separate and voluntary
association, is free to serve the interests of all its members including the
freedom to disaffiliate or declare its autonomy from the federation to which
it belongs when circumstances warrant, in accordance with the
constitutional guarantee of freedom of association.
Reasoning
-The purpose of affiliation by a local union with a mother union or a
federation is to increase by collective action the bargaining power in
respect of the terms and conditions of labor. Yet the locals remained the
basic units of association, free to serve their own and the common
interest of all, subject to the restraints imposed by the Constitution and
By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought
it into existence.
-Thus, a local union which has affiliated itself with a federation is free to
sever such affiliation anytime and such disaffiliation cannot be considered
disloyalty. In the absence of specific provisions in the federation's
constitution prohibiting disaffiliation or the declaration of autonomy of a
local union, a local may dissociate with its parent union.
-The evidence on hand does not show that there is such a provision in
ULGWP's constitution. Respondents' reliance upon Article V, Section 6, of
the federation's constitution is not right because said section, in fact,
bolsters the petitioner union's claim of its right to declare autonomy:
Sec. 6. The autonomy of a local union affiliated with ULGWP shall be
respected insofar as it pertains to its internal affairs, except as provided
elsewhere in this Constitution.
-There is no disloyalty to speak of, neither is there any violation of the
federation's constitution because there is nothing in the said constitution
which specifically prohibits disaffiliation or declaration of autonomy.
Hence, there cannot be any valid dismissal because Article II, Section 4 of
the union security clause in the CBA limits the dismissal to only three (3)
grounds, to wit: failure to maintain membership in the union (1) for non-
payment of union dues, (2) for resignation; and (3) for violation of the
union's Constitution and By-Laws
Rule-Legality Act-Disaffiliation
VILLAR V INCIONG
121 SCRA 44
GUERRERO; April 20, 1983
NATURE
Petition for review by certiorari
FACTS
- Petitioners were members of the Amigo Employees Union-PAFLU, a
duly registered labor organization which was the existing bargaining agent
of the employees in private respondent Amigo Manufacturing, Inc. They
then signed a joint resolution which stated that they were disaffiliating
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themselves as members of the PAFLU, and were not further
authorizing PAFLU to represent them in any CBA.
- During a special meeting of the Union, a Resolution was approved
which
called for the investigation of all the petitioners for "continuously
maligning, libelling and slandering not only the incumbent officers but
even the union itself and the federation" and for causing
divisiveness.
- The union security clause was reincorporated in the new CBA:
“any members who shall resign, be expelled, or shall in any
manner cease to be a member of the UNION, shall be dismissed
from his employment upon written request of the UNION to the
Company.”
- Petitioners contend that their acts do not constitute disloyalty as
these are in the exercise of their constitutional right to self-
organization.
- The PAFLU President then rendered a decision finding them guilty
of the charges and expelling them from the Union and as a
consequence the Management of the employer is hereby requested
to terminate them from their employment in conformity with the
security clause.
ISSUE/S
1. WON PAFLU had the authority to investigate the petitioners and,
thereafter, expel them from the roll of membership of the Amigo
Employees Union-PAFLU
2. WON the petitioners were entitled to disaffiliate from the Union
HELD
1.YES
Ratio That PAFLU had the authority to investigate petitioners on the
charges filed by their co-employees in the local union and after
finding them guilty as charged, to expel them from the roll of
membership of the Amigo Employees Union-PAFLU is clear under
the constitution of the PAFLU to which the local union was affiliated.
And pursuant to the security clause of the new CBA, reiterating the
same clause in the old CBA, PAFLU was justified in applying said
security clause.
UNION-MEMBER RELATIONS: Discipline Issues
Inherent in every labor union, or any organization for that matter, is
the right of self-preservation. When members of a labor union,
therefore, sow the seeds of dissension and strife within the union;
when they seek the disintegration and destruction of the very union
to which they belong, they thereby forfeit their rights to remain as
members of the union which they seek to destroy. Prudence and
equity, as well as the dictates of law and justice, therefore,
compelling mandate the adoption by the labor union of such
corrective and remedial measures in keeping with its laws and
regulations, for its preservation and continued existence; lest by its
folly and inaction, the labor union crumble and fall.
2. YES
Ratio Although they are entitled to disaffiliate from their union and
form a new organization of their own, they must, however, suffer the
consequences of their separation from the union under the security
clause of the CBA.
Reasoning Disaffiliation from a labor union is not open to legal
objection. It is implicit in the freedom of association ordained by the
Constitution. But this Court has laid down the ruling that a closed
shop is a valid form of union security, and such provision in a
collective bargaining agreement is not a restriction of the right of
freedom of association guaranteed by the Constitution.
Local Union Disaffiliation: Rule - Legality act - Disaffiliation
There are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU, and only 96 signed the "Sama-Samang
Kapasiyahan." They constituted a small minority for which reason
they could not have successfully disaffiliated the local union from
PAFLU. It can be inferred that the majority wanted the union to
remain an affiliate of PAFLU. The action of the majority must,
therefore, prevail over that of the minority members.
Disposition The Order appealed from affirming the joint decision of
the OIC granting clearance to terminate petitioners as well as
dismissing their complaint with application for preliminary injunction,
 Labor Law 2 A2010
is hereby AFFIRMED.
TROPICAL HUT EMPLOYEES’ UNION V. TROPICAL
HUT FOOD MARKET INC.
181 SCRA 173
MEDIALDEA; Jan 20, 1990
NATURE
Petition for certiorari.
FACTS
- Rank and file workers of Tropical Hut organized a Union (THEU) and
sought affiliation with NATU. Registration certificate was issued by Dept
of Labor. But NATU itself was not registered as a federation.
- CBA was concluded bet the 2 parties.
- Dilag, President of Union, was appointed Manager. He resigned as
President of THEU-NATU. VP Encinas assumed presidency.
- THEU wrote NATU saying they want to disaffiliate from the federation.
THEU affiliated with CGW.
- THEU-CGW conducted elections and Encinas won. NATU requested
Tropical Hut to dismiss Encinas because of his “violations”.
- Tropical Hut suspended Encinas pending application for clearance with
Dept of Labor to dismiss him. THEU-CGW members protested.
- Upon request of NATU, Tropical Hut also suspended and applied for
clearance to dismiss members and officers of THEU-CGW.
- A petition was made to cancel the word NATU after the word THEU in
the registration.
- NLRC directed certification election between THEU-NATU and THEU-
CGW. Reinstatement of complainants were also ordered.
ISSUE/S
1. WON petitioners failed to exhaust administrative remedies when they
immediately elevated the case to this Court without an appeal having
been made to the Office of the President
2. WON disaffiliation of local union from the national federation was valid
3. WON dismissal of petitioner employees resulting from their unions
disaffiliation for the mother federation was illegal and constituted unfair
labor practice
HELD
1. NO
Remedy of appeal from the Secretary of Labor to the Office of the
President is not a mandatory requirement before resort to courts can be
had, but an optional relief provided by law to parties seeking expeditious
disposition of their labor disputes.
2. YES
- The right of a local union to disaffiliate from its mother federation is well-
settled. A local union, being a separate and voluntary association, is free
to serve the interest of all its members including the freedom to disaffiliate
when circumstances warrant. This right is consistent with the
constitutional guarantee of freedom of association.
- The inclusion of the word NATU after the name of the local union THEU
in the registration with the Department of Labor is merely to stress that the
THEU is NATU's affiliate at the time of the registration. It does not mean
that the said local union cannot stand on its own.
- In the absence of enforceable provisions in the federation's constitution
preventing disaffiliation of a local union a local may sever its relationship
with its parent. There is nothing in the constitution of the NATU or in the
constitution of the THEU-NATU that the THEU was expressly forbidden to
disaffiliate from the federation. Firstly, NATU was not even a legitimate
labor organization, it appearing that it was not registered. Secondly, the
act of non-compliance with the procedure on withdrawal is premised on
purely technical grounds which cannot rise above the fundamental right of
self-organization.
- There is no merit in the contention of the respondents that the act of
disaffiliation violated the union security clause of the CBA and that their
dismissal as a consequence thereof is valid. A perusal of the collective
bargaining agreements shows that the THEU-NATU, and not the NATU
federation, was recognized as the sole and exclusive collective bargaining
agent. Although NATU was designated as the sole bargaining agent in
the check-off authorization form attached to the CBA, this simply means it
- 73 - Disini
was acting only for and in behalf of its affiliate. NATU possessed the
status of an agent while the local union remained the basic principal
union.
3. YES
- The union security clause embodied in the agreements cannot be
used to justify the dismissals. CBA imposes dismissal only in case
an employee is expelled from the union for joining another federation
or for forming another union or who fails or refuses to maintain
membership therein. The case at bar does not involve the
withdrawal of merely some employees from the union but of the
whole THEU itself from its federation.
- With regard to the process by which the workers were suspended
or dismissed, this Court finds that it was hastily and summarily done
without the necessary due process.
ALEX FERRER et al v. NLRC[HUI KAM CHANG et al]
224 SCRA 410
MELO; July 5, 1993
- Petitioners were regular and permanent employees of the
Occidental Foundry Corporation (OFC) in Malanday, Valenzuela,
Metro Manila which was under the management of Hui Kam Chang.
As piece workers, petitioners' earnings ranged from P110 to P140 a
day. They had been in the employ of OFC for about 10 yrs at the
time of their dismissal in 1989.
- the Samahang Manggagawa ng Occidental Foundry Corporation-
FFW (SAMAHAN) and the OFC entered into a CBA which would be
effective for the 3-year period between October 1, 1988 and
September 30, 1991
- Art II thereof provides for a union security clause thus:
Sec. 1 : The company agrees that all permanent and
regular factory workers in the company who are members
in good standing of the union or who thereafter may
become members, shall as a condition of continued
employment, maintain their membership in the union in
good standing for the duration of the agreement.
---xxx xxx xxx---
Sec. 3 : The parties agree that failure to retain membership
in good standing with the UNION shall be ground for the
operation of paragraph 1 hereof and the dismissal by the
company of the aforesaid employee upon written request
by the union. The aforesaid request shall be accompanied
by a verified carbon original of the Board of (sic)
Resolution by the UNION signed by at least a majority of
its officers/directors.
- Ferrer and the SAMAHAN, filed in the DOLE, a complaint for the
expulsion from SAMAHAN of the following officers: Genaro Capitle
(PRES), Jesus Tumagan (VP), Godofredo Pacheco (auditor), and
Marcelino Pacheco (board member).
-The complaint was founded on said officers' alleged inattentiveness
to the economic demands of the workers. However, Diaz and Alex
Ferrer withdrew the petition
- Petitioners conducted a special election of officers of the
SAMAHAN which was, however, later questioned by the FFW. -
Nonetheless, the elected set of officers tried to dissuade the OFC
from remitting union dues to the officers led by Capitle who were
allied with the Federation of Free Workers (FFW).
- Later, however, Romulo Erlano, one of the officers elected at the
special election, manifested to the DOLE that he was no longer
objecting to the remittance of union dues to the officers led by
Capitle. Petitioners' move to stage a strike based on economic
demands was also later disowned by members of the SAMAHAN.
- The intraunion squabble came to a head when a resolution
expelling petitioners from the SAMAHAN was issued by the aforesaid
union officials headed by Capitle, together with board members
George Ignas, Pio Domingo, and Jaime Baynado
- Capitle sent OFC a letter asking Hui Kam Chang to dismiss Ferrer
et al pursuant to the CBA (failing to retain good standing in union
membership).
- Petitioners had learned about their dismissal from employment as
shown by the letter which they sent the Federation of Democratic
Labor Unions (FEDLU). They volunteered therein to be admitted as
 Labor Law 2 A2010
members of the FEDLU and requested that they be represented by said
federation before the DOLE in the complaint which they intended to file
against the union (SAMAHAN), the FFW and the company for illegal
dismissal, reinstatement, and other benefits in accordance with law.
- Petitioners wrote to Hui Kam Chang professing innocence of the
charges levelled against them by the SAMAHAN and the FFW and
pleading that they be reinstated. No response came from Hui Kam Chang.
- Thus, contending that their dismissal was without cause and in utter
disregard of their right to due process of law, petitioners, through the
FEDLU, filed a complaint for illegal dismissal and unfair labor practice
before the NLRC against Hui Kam Chang, OFC, Macedonio S. Velasco
(as representative of the FFW) the FFW, and the SAMAHAN officers
headed by Capitle.
- LA: Dismissed complaint; said that “in dismissing petitioners, OFC was
"merely complying with the mandatory provisions of the CBA - the law
between it and the union." The dismissal of petitioners was an exercise of
legitimate management prerogative which cannot be considered as an
unfair labor practice.
- NLRC: affirmed in toto the decision of the LA; denied MR of petitioners.
Hence, this instant petition for certiorari
ISSUE:
WON petitioners violated their CBA (meaning, they were fired pursuant to
the CBA provision mentioned above TF no illegal dismissal)
HELD: NO.
REASONING:
- A CBA is the law between the company and the union and compliance
therewith is mandated by the express policy to give protection to labor.
Said policy should be given paramount consideration unless otherwise
provided for by law (Meycauayan College vs. Drilon, 185 SCRA 50 [1990].
- A CBA provision for a closed shop is a valid form of union security and it
is not a restriction on the right or freedom of association guaranteed by
the Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 SCRA 87 [1981].
However, in the implementation of the provisions of the CBA, both parties
thereto should see to it that no right is violated or impaired.
- In the case at bar, while it is true that the CBA between OFC and the
SAMAHAN provided for the dismissal of employees who have not
maintained their membership in the union, the manner in which the
dismissal was enforced left much to be desired in terms of respect for the
right of petitioners to procedural due process. (No hearing was conducted
which should’ve been done pursuant to the SAMAHAN”S own constitution
and by-laws to petitioners an opportunity to air their side and explain their
moves.)
- While the law recognizes the right of an employer to dismiss employees
in warranted cases, it frowns upon arbitrariness as when employees are
not accorded due process (Tan, Jr. vs. NLRC, 183 SCRA 651 [1990]).
Thus, the prerogatives of the OFC to dismiss petitioners should not have
been whimsically done for it unduly exposed itself to a charge of unfair
labor practice for dismissing petitioners in line with the closed shop
provision of the CBA, without a proper hearing (Tropical Hut Employees'
Union-CGW vs. Tropical Hut Food Market, Inc). Neither can the manner
of dismissal be considered within the ambit of managerial prerogatives,
for while termination of employment is traditionally considered a
management prerogative, it is not an absolute prerogative subject as it is
to limitations founded in law, the CBA, or general principles of fair play
and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
- Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas
Pambansa Blg. 130, the OFC and the SAMAHAN should solidarity
indemnify petitioners for the violation of their right to procedural due
process (Wenphil vs. NLRC, 170 SCRA 69,1989). However, such penalty
may be imposed only where the termination of employment is justified and
not when the dismissal is illegal as in this case where the damages are in
the form of back wages.
- As earlier discussed, petitioners' alleged act of sowing disunity among
the members of the SAMAHAN could have been ventilated and threshed
out through a grievance procedure within the union itself. But resort to
such procedure was not pursued. What actually happened in this case
was that some members, including petitioners, tried to unseat the
SAMAHAN leadership headed by Capitle due to the latter's alleged
inattention to petitioners' demands for the implementation of the P25-
wage increase which took effect on July 1, 1989. The intraunion
- 74 - Disini
controversy was such that petitioners even requested the FFW to
intervene to facilitate the enforcement of the said wage increase
- Petitioners sought the help of the FEDLU only after they had
learned of the termination of their employment upon the
recommendation of Capitle. Their alleged application with federations
other than the FFW can hardly be considered as disloyalty to the
SAMAHAN, nor may the filing of such applications denote that
petitioners failed to maintain in good standing their membership in
the SAMAHAN. The SAMAHAN is a different entity from FFW, the
federation to which it belonged. Neither may it, be inferred that
petitioners sought disaffiliation from the FFW for petitioners had not
formed a union distinct from that of the SAMAHAN.
- Parenthetically, the right of a local union to disaffiliate from a
federation in the absence of any provision in the federation's
constitution preventing disaffiliation of a local union is legal
(People's Industrial and Commercial Employees and Worker's Org.
(FFW) vs. People's Industrial and Commercial Corp., 112 SCRA 440
(1982]). Such right is consistent with the constitutional
guarantee of freedom of association (Tropical Hut Employees
Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173
[1990]).
- Hence, while petitioners' act of holding a special election to oust
Capitle, et al. may be considered as an act of sowing disunity among
the SAMAHAN members, and, perhaps, disloyalty to the union
officials, which could have been dealt with by the union as a
disciplinary matter, it certainly cannot be considered as constituting
disloyalty to the union. Faced with a SAMAHAN leadership which
they had tried to remove as officials, it was but a natural act of
self-preservation that petitioners fled to the arms of the FEDLU
after the union and the OFC had tried to terminate their
employment. Petitioners should not be made accountable for
such an act.
Disposition: WHEREFORE, the decision appealed from is hereby
SET ASIDE and private respondents are hereby ordered to reinstate
petitioners to their former or equivalent positions without loss of
seniority rights and with full back wages, inclusive of allowances and
other benefits or their monetary equivalent, pursuant to Article 279 of
the Labor Code, as amended by Republic Act No. 6715.
PHIL SKYLANDERS INC V NLRC (PAFLU)
375 SCRA 369
BELLOSILLO; Jan 31, 2002
NATURE
Petition for certiorari
FACTS
Nov 1993, the Philippine Skylanders Employees Association (PSEA),
a local labor union affiliated with the Philippine Association of Free
Labor Unions (PAFLU) September (PAFLU), won in the certification
election conducted among the rank and file employees of Philippine
Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested
the result of the election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA
sent PAFLU a notice of disaffiliation citing as reason PAFLU's
supposed deliberate and habitual dereliction of duty toward its
members.
PSEA subsequently affiliated itself with the National Congress of
Workers (NCW), changed its name to Philippine Skylanders
Employees Association - National Congress of Workers (PSEA-
NCW), and allowed the former officers of PSEA-PAFLU to continue
occupying their positions as elected officers PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining
agreement with PSI which was immediately registered with DOLE.
PAFLU Secretary General Serafin Ayroso wrote Mariles C. Romulo
requesting a copy of PSI's audited financial statement. Ayroso
explained that with the dismissal of PSEA-WATU's election protest
the time was ripe for the parties to enter into a collective bargaining
agreement. PSI through its personnel manager Francisco Dakila
 Labor Law 2 A2010
denied the request citing as reason PSEA's disaffiliation from PAFLU and
its subsequent affiliation with NCW.
PAFLU through Serafin Ayroso filed a complaint for unfair labor practice
against PSI, its president Mariles Romulo and personnel manager
Francisco Dakila. PAFLU amended its complaint by including the elected
officers of PSEA-PAFLU as additional party respondents.
Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held
PSI, PSEA-PAFLU and their respective officers guilty of unfair labor
practice.
NLRC upheld the Decision of the Labor Arbiter and conjectured that since
an election protest questioning PSEA-PAFLU's certification as the sole
and exclusive bargaining agent was pending resolution before the
Secretary of Labor, PSEA could not validly separate from PAFLU, join
another national federation and subsequently enter into a collective
bargaining agreement with its employer-company
ISSUE/S
WON PSEA, which is an independent and separate local union, may
validly disaffiliate from PAFLU pending the settlement of an election
protest questioning its status as the sole and exclusive bargaining agent
of PSI's rank and file employees
HELD
YES. The pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid
disaffiliation.
Reasoning In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills,
Inc. the SC upheld the right of local unions to separate from their mother
federation on
the ground that RATIONALE CLOSED SHOP: The requirement for employees or workers to become members of a union as a condition for
as separate
employment redounds to the benefit and advantage of said employees because by holding out to loyal members a
and voluntary
promise of employment in the closed-shop the union wields group solidarity. In fact it is said that the closedshop
associations,
local unions do contract is the most prized achievement of unionism.
not owe their
creation and existence to the national federation to which they are
affiliated but, instead, to the will of their members. The sole essence of
affiliation is to increase, by collective action, the common bargaining
power of local unions for the effective enhancement and protection of their
interests.
Yet the local unions remain the basic units of association, free to serve
their own interests subject to the restraints imposed by the constitution
and by-laws of the national federation, and free also to renounce the
affiliation upon the terms laid down in the agreement which brought such
affiliation into existence.
Policy considerations dictate that in weighing the claims of a local union
as against those of a national federation, those of the former must be
preferred. Parenthetically though, the desires of the mother federation to
protect its locals are not altogether to be shunned. It will however be to err FACTS
greatly against the Constitution if the desires of the federation would be
favored over those of its members. If it were otherwise, instead of
protection, there would be disregard and neglect of the lowly workingmen.
Disposition Petition is granted.
PART FOUR –
UNION SECURITY
4.01 STATUTORY BASIS—
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ART. 248. Unfair labor practices of employers. - It
shall be unlawful for an employer to commit any of the
following unfair labor practice:
(e) To discriminate in regard to wages, hours of
work and other terms and conditions of employment
in order to encourage or discourage membership in
any labor organization. Nothing in this Code or in
any other law shall stop the parties from requiring
membership in a recognized collective bargaining
agent as a condition for employment, except those
employees who are already members of another
union at the time of the signing of the collective
bargaining agreement. Employees of an appropriate
bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues
and other fees paid by members of the recognized
collective bargaining agent, if such non-union
members accept the benefits under the collective
bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph
(o) of this Code shall not apply to the non-members
of the recognized collective bargaining agent;
4.02 RATIONALE
DEL MONTE PHILIPPINES, INC. v. SALDIVAR
504 SCRA 192
TINGA; OCT 11, 2006
The Associated Labor Union (ALU) is the exclusive bargaining agent
of plantation workers of petitioner Del Monte Philippines, Inc. (Del
Monte) in Bukidnon. Respondent Nena Timbal (Timbal), as a rank-
and-file employee of Del Monte plantation in Bukidnon, is also a
member of ALU. Del Monte and ALU entered into a Collective
Bargaining Agreement (CBA) with an effective term of five (5) years
from 1 September 1988 to 31 August 1993.
Timbal, along with four other employees (collectively, co-employees),
were charged by ALU for disloyalty to the union, particularly for
encouraging defections to a rival union, the National Federation of
Labor (NFL). The matter was referred to a body within the ALU
organization, ominously named "Disloyalty Board. The charge
against Timbal was supported by an affidavit Artajo, also an
employee of Del Monte. Artajo alleged that she was personally
informed by Timbal on 13 July 1991 that a seminar was to be
conducted by the NFL on the following day. When Artajo demurred
from attending, Timbal assured her that she would be given
honorarium in the amount of P500.00 if she were to attend the NFL
meeting and bring new recruits. Artajo admitted having attended the
NFL meeting together with her own recruits, including Paz Piquero
(Piquero). Artajo stated that after the meeting she was given
P500.00 by Timbal.
 Labor Law 2 A2010
Timbal filed an Answer before the Disloyalty Board, denying the
allegations in the complaint and the averments in Artajo's Affidavit.
Nevertheless, the ALU Disloyalty Board concluded that Timbal was guilty
of acts or conduct inimical to the interests of ALU, through a Resolution. It
found that the acts imputed to Timbal were partisan activities, prohibited
since the "freedom period" had not yet commenced as of that time. Thus,
the Disloyalty Board recommended the expulsion of Timbal from
membership in ALU, and likewise her dismissal from Del Monte in
accordance with the Union Security Clause in the existing CBA between
ALU and Del Monte. The Disloyalty Board also reached the same
conclusions as to the co-employees, expressed in separate resolutions
also recommending their expulsion from ALU.
The Regional Vice President of ALU adopted the recommendations of the
Disloyalty Board and expelled Timbal and her co-employees from ALU.
The ALU National President affirmed the expulsion. Subsequently, Del
Monte terminated Timbal and her co-employees effective 19 June 1993,
noting that the termination was "upon demand of [ALU] pursuant to
Sections 4 and 5 of Article III of the current Collective Bargaining
Agreement."
Timbal and her co-employees filed separate complaints against Del
Monte and/or its Personnel Manager Warfredo C. Balandra and ALU with
the Regional Arbitration Branch (RAB) of the National Labor Relations
Commission (NLRC) for illegal dismissal, unfair labor practice and
damages. The complaints were consolidated and heard before Labor
Arbiter Pedilla. The Labor Arbiter affirmed that all five were illegally
dismissed and ordered Del Monte to reinstate complainants, including
Timbal, to their former positions and to pay their full backwages and other
allowances, though the other claims and charges were dismissed for want
of basis.
Only Del Monte interposed an appeal with the NLRC. The NLRC reversed
the Labor Arbiter and ruled that all the complainants were validly
dismissed. On review, the Court of Appeals ruled that only Timbal was
illegally dismissed. At the same time, the appellate court found that Del
Monte had failed to observe procedural due process in dismissing the co-
employees, and thus ordered the company to pay P30,000.00 to each of
the co-employees as penalties. The co-employees sought to file a Petition
for Review with this Court assailing the ruling of the Court of Appeals
affirming their dismissal, but the petition was denied because it was not
timely filed.
On the other hand, Del Monte, through the instant petition, assails the
Court of Appeals decision insofar as it ruled that Timbal was illegally
dismissed. Del Monte argues that the decision of the Labor Arbiter, which
awarded Timbal full backwages and other allowances, was inconsistent
with jurisprudence which held that an employer who acted in good faith in
dismissing employees on the basis of a closed-shop provision is not liable
to pay full backwages.
ISSUE
WON there was sufficient cause for the dismissal of a rank-and-file
employee effectuated through the enforcement of a closed-shop provision
in the Collective Bargaining Agreement (CBA) between the employer and
the union.
HELD
NO. It bears elaboration that Timbal's dismissal is not predicated on any
of the just or authorized causes for dismissal under Book Six, Title I of the
Labor Code, but on the union security clause in the CBA between Del
Monte and ALU. Stipulations in the CBA authorizing the dismissal of
employees are of equal import as the statutory provisions on dismissal
under the Labor Code, since "[a] CBA is the law between the company
and the union and compliance therewith is mandated by the express
policy to give protection to labor." The CBA, which covers all regular
hourly paid employees at the pineapple plantation in Bukidnon, stipulates
that all present and subsequent employees shall be required to become a
member of ALU as a condition of continued employment.
The CBA adopts a closed-shop policy which mandates, as a condition of
employment, membership in the exclusive bargaining agent. A "closed-
shop" may be defined as an enterprise in which, by agreement between
the employer and his employees or their representatives, no person may
- 76 - Disini
be employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of a union entirely comprised of
or of which the employees in interest are a part. A CBA provision for
a closed-shop is a valid form of union security and it is not a
restriction on the right or freedom of association guaranteed by the
Constitution.
Timbal's expulsion from ALU was premised on the ground of
disloyalty to the union, which under Section 4(3), Article II of the
CBA, also stands as a ground for her dismissal from Del Monte.
Indeed, Section 5, Article II of the CBA enjoins Del Monte to dismiss
from employment those employees expelled from ALU for disloyalty,
albeit with the qualification "in accordance with law."
Article 279 of the Labor Code ordains that "in cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by [Title I, Book
Six of the Labor Code]." Admittedly, the enforcement of a closed-
shop or union security provision in the CBA as a ground for
termination finds no extension within any of the provisions under Title
I, Book Six of the Labor Code. Yet jurisprudence has consistently
recognized, thus: "It is State policy to promote unionism to enable
workers to negotiate with management on an even playing field and
with more persuasiveness than if they were to individually and
separately bargain with the employer. For this reason, the law has
allowed stipulations for 'union shop' and 'closed shop' as means of
encouraging workers to join and support the union of their choice in
the protection of their rights and interests vis-a-vis the employer."
It might be suggested that since Timbal was expelled from ALU on
the ground of disloyalty, Del Monte had no choice but to implement
the CBA provisions and cause her dismissal. Similarly, it might be
posited that any tribunal reviewing such dismissal is precluded from
looking beyond the provisions of the CBA in ascertaining whether
such dismissal was valid. Yet deciding the problem from such a
closed perspective would virtually guarantee unmitigated discretion
on the part of the union in terminating the employment status of an
individual employee. What the Constitution does recognize is that all
workers, whether union members or not, are "entitled to security of
tenure." The guarantee of security of tenure itself is implemented
through legislation, which lays down the proper standards in
determining whether such right was violated.
Agabon v. NLRC did qualify that constitutional due process or
security of tenure did not shield from dismissal an employee found
guilty of a just cause for termination even if the employer failed to
render the statutory notice and hearing requirement. At the same
time, it should be understood that in the matter of determining
whether cause exists for termination, whether under Book Six, Title I
of the Labor Code or under a valid CBA, substantive due process
must be observed as a means of ensuring that security of tenure is
not infringed.
The immutable truth under our constitutional and labor laws is that no
employee can be dismissed without cause. Agabon may have
tempered the procedural due process requirements if just cause for
dismissal existed, but in no way did it eliminate the existence of a
legally prescribed cause as a requisite for any dismissal. The fact
that a CBA may provide for additional grounds for dismissal other
than those established under the Labor Code does not detract from
the necessity to duly establish the existence of such grounds before
the dismissal may be validated. And even if the employer or, in this
case, the collective bargaining agent, is satisfied that cause has
been established to warrant the dismissal, such satisfaction will be of
no consequence if, upon legal challenge, they are unable to
establish before the NLRC or the courts the presence of such
causes.
In the matter at bar, the Labor Arbiter, the proximate trier of facts,
and the Court of Appeals both duly appreciated that the testimony of
Artajo against Timbal could not be given credence, especially in
proving Timbal's disloyalty to ALU. This is due to the prior animosity
between the two engendered by the pending civil complaint filed by
Timbal's husband against Artajo. Considering that the civil complaint
was filed just six days prior to the execution of Artajo's affidavit
against Timbal, it would be plainly injudicious to presume that Artajo
possessed an unbiased state of mind as she executed that affidavit.
 Labor Law 2 A2010
Such circumstance was considered by the Labor Arbiter, and especially
the Court of Appeals, as they rendered a favorable ruling to Timbal. The
NLRC may have decided against Artajo, but in doing so, it failed to
provide any basis as to why Artajo's testimony should be believed, instead
of disbelieved. No credible disputation was offered by the NLRC to the
claim that Artajo was biased against Timbal; hence, we should adjudge
the findings of the Labor Arbiter and the Court of Appeals as more cogent
on that point.
Dispositive Petition DENIED
GUIJARNO V CIR
52 SCRA 307
FERNANDO; August 27, 1973
NATURE
Special civil action of certiorari
FACTS
- Three unfair labor practice cases for unlawful dismissal allegedly based
on legitimate union activity were filed against respondent Central Santos
Lopez Co., Inc. and respondent United Sugar Workers Union-ILO
- The respondent company, in its answer, alleged that the only reason for
the dismissal of the complainants herein is because their said dismissal
was asked by the USWU-ILO of which union respondent company has a
valid and existing collective bargaining contract with a closed-shop
provision to the effect that those laborers who are no longer members of
good standing in the union may be dismissed by the respondent company
if their dismissal is sought by the union; that respondent company has
never committed acts of unfair labor practice against its employees or
workers much less against the complainants herein but that it has a
solemn obligation to comply with the terms and conditions of the contract.
- Petitioners were employed by the company long before the collective
bargaining contract.
RATIO:
GENERALLY: a state may NOT compel ordinary voluntary associations to
admit thereto any given individual, because membership therein may be
accorded or withheld as a matter of privilege.
EXCEPTION: The rule is qualified in respect of labor unions holding a
monopoly in the supply of labor, either in a given locality, or as regards a
particular employer with which it has a closed shop agreement.
Consequently, it is well settled that such unions are NOT entitled to
arbitrarily excluded qualified applicants for membership, and a closed
shop provision would not justify the employer in discharging, or a union in
insisting upon the discharge of, an employee whom he union thus refuses
to admit to membership, without any reasonable ground thereof.
- To further increase the effectiveness of labor organizations, a closed-
shop has been allowed.
4.03 VALIDITY AGREEMENT AND EFFECT
ON FREEDOM OF CHOICE
TANDUAY DISTILLERY LABOR UNION V. NLRC
149 SCRA 470
GUTIERREZ, JR.; April 30, 1987
NATURE
-Consolidated petitions for certiorari
FACTS
-Private respondents were all employees of Tanduay Distillery, Inc., (TDI)
and members of the Tanduay Distillery Labor Union (TDLU), a duly
organized and registered labor organization and the exclusive bargaining
agent of the rank and file employees of the petitioner company.
-a Collective Bargaining Agreement (CBA), was executed between TDI
and TDLU. The CBA was duly ratified by a majority of the workers in TDI
- 77 - Disini
including herein private respondents, and a copy was filed with the
Ministry of Labor and Employment (MOLE) on October 29, 1980 for
certification. The CBA had a term of three (3) years from July 1, 1979
to June 30, 1982. It also contained a union security clause, which
provides:
"All workers who are or may during the effectivity of this
Contract, become members of the Union in accordance with its
Constitution and By-Laws shall as a condition of their
continued employment, maintain membership in good standing
in the Union for the duration of the agreement."
-while the CBA was in effect and within the contract bar period, the
private respondents joined another union, the Kaisahan Ng
Manggagawang Pilipino (KAMPIL) and organized its local chapter in
TDI
ISSUE
1. WON the union security clause constitutes unfair labor practice
nor are they violations of the freedom of association clause of the
Constitution.
HELD
1. NO.
Reasoning Article 249 (e) of the Labor Code as amended
specifically recognizes the closed shop arrangement as a form of
union security. The closed shop, the union shop, the maintenance of
membership shop, the preferential shop, the maintenance of treasury
shop, and check-off provisions are valid forms of union security and
strength. They do not constitute unfair labor practice nor are they
violations of the freedom of association clause of the Constitution.
(See Pascual, Labor Relations Law, 1986 Edition, pp. 221-225 and
cases cited therein.) There is no showing in these petitions of any
arbitrariness or a violation of the safeguards enunciated in the
decisions of this Court interpreting union security arrangements
brought to us for review.
In this light, the petitioner points out that embedded at the very core
and as raison d'etre for the doctrine which enforces the closed-shop,
the union shop, and other forms of union security clauses in the
collective bargaining agreement is the principle of sanctity and
inviolability of contracts guaranteed by the Constitution. Private
respondents cannot, therefore, escape the effects of the security
clause of their own applicable collective bargaining agreement.
Disposition Petition of TDLU GRANTED
4.04 CONTRACT DRAFTING AND
INTERPRETATION OF PROVISIONS –
UNION SECURITY
RIZAL LABOR UNION V. RIZAL CEMENT CO. INC.
G.R. No. L-19779.
BARRERA; July 30, 1966
NATURE
-for the review of the resolution of the Court of Industrial Relations en
banc
FACTS
-Carlos Santos and 14 other employees of the Rizal Cement
Company, while still members of the Binangonan Labor Union, Local,
formed and organized the Rizal Labor Union. The company was
notified thereof. Prior to this date, Carlos Santos and Teofenes
Minguillan, president, and secretary, respectively, of the newly-
organized Rizal Labor Union, received identical letters from the
Binangonan Labor Union, requiring them to explain in 48 hours why
they should not be expelled for disloyalty. Although Santos and
Minguillan requested for the convocation of a general meeting of the
members of the Binangonan Labor Union to explain their side, the 15
organizers of the new union were expelled from their original union.
 Labor Law 2 A2010
On the same day, it demanded the dismissal of the expelled members
from employment, which the company did.
-The dismissed employees went to the Court of Industrial Relations
charging the Company and the Binangonan Labor Union with unfair labor
practices.
ISSUE
2. WON the dismissal of the complaining 15 employees was justified or
not
HELD
2. NO.
Reasoning The provisions of the contract relied by respondents read as
follows:
"The EMPLOYER agrees to have in its employ and to employ only
members in good standing of the UNION, in all its branches units, plants,
quarries, warehouses, docks, etc. The UNION agrees to furnish at all time
the laborers, employees and all technical helps that the EMPLOYER may
require. EMPLOYER, however, reserves its right to accept or reject where
they fail to meet its requirements."
"The EMPLOYER agrees not to have in its employ nor to hire any new
employee or laborer unless he is a member of good standing of the
UNION, and a bonafide holder of a UNION (NWB) card, provided such
new employee or laborer meets the qualifications required by the
EMPLOYER."
-Inasmuch as Article II above quoted does not provide that employees
'must continue to remain members in good standing' of respondent union
'to keep their jobs,' the collective bargaining agreement between them
does not establish a closed shop, except in a very limited sense namely,
that the laborers, employees and workers engaged by the company after
the signing of the agreement, must be members of respondent union. The
agreement does not affect the light of the company to retain those already
working therefor on or before said date, or those hired or employed
subsequently thereto, while they were members of respondent union, but
who, thereafter; resign or are expelled therefrom.
"In order that an employer may be deemed bound, under a collective
bargaining agreement, to dismiss employees for non-union membership,
the stipulation to this effect must be so clear and unequivocal as to leave
no room for doubt thereon. An undertaking of this nature is so harsh that it
must be strictly construed, and doubts must be resolved against the
existence of 'closed shop'. Referring particularly to the above-quoted
Article II, we note that the same establishes the exclusive right of
respondent union to 'supply' laborers, etc., and limits the authority of the
company to 'employ or hire' them. In other words, it requires that the
laborers, employees and workers hired or employed by the company be
members of respondent union at the time of the commencement of the
employer-employee relation. Membership in respondent union is not a
condition for the continuation of said relation or for the retention of a
laborer or employee engaged either before said agreement or while he
was a member of said union.
Disposition Petition GRANTED
MANILA CORDAGE CO. V CIR (MANILA CORDAGE
WORKERS UNION)
78 SCRA 398
FERNANDEZ; August 31, 977
NATURE
Petitions to review the decision and the resolution dated of the Court of
Industrial Relations
FACTS
-In 1957, the Manila Cordage Company and the Manco Labor Union, then
acting as the exclusive bargaining representative of the former's
employees, entered into a collective bargaining agreement which
contained, among others, the following stipulation: Both parties agree
that all employees of the COMPANY who are already members of the
UNION at the time of the signing of this AGREEMENT shall continue
to remain members of the UNION for the duration of this
AGREEMENT.
-The foregoing stipulation was also embodied in the 1959 CBA between
the two
- 78 - Disini
-When the collective bargaining agreements were entered into, the
employees Rabago, Trajano and Nisperos were already members of
Manco Labor Union.
-Shortly after 1959, some employees of Manila Cordage Company
formed the Manila Cordage Workers Union.
-Some employees who were members of the Manco Labor Union
resigned from said union and joined the Manila Cordage Workers
Union.
-At the instance of the Manco Labor Union, the Manila Cordage
Company dismissed those who resigned from the Manco Labor
Union
-Manila Cordage Workers Union caused the filing of a complaint with
the CIR for unfair labor practice against Manila Cordage Company
and the Manco Labor Union
-The Manco Labor Union averred in its answer that the complainants
were dismissed on the basis of an existing collective bargaining
contract between said union and the Manila Cordage Company.
-The Manila Cordage Company alleged: that one of the conditions of
employment provided in said collective bargaining agreement is the
maintenance-of-membership clause requiring all members of the
Manco Labor Union to remain as such members thereof during the
life of the contract; that the Manco Labor Union demanded of the
Manila Cordage Company the dismissal of the individual
complainants from employment for the reason that said complainants
had failed to continue and maintain their membership in the union;
that acting in good faith and in pursuance of its obligations under the
said contract, respondent company had to terminate the employment
of said complainants, otherwise the Manila Cordage Company would
be charged with contractual breach and confronted with the Manco
Labor Union's reprisal.
-Court of Industrial Relations ordered the petitioner, Cordage
Company, and the Manco Labor Union "To reinstate complainants
Silvino Rabago, Natalio Nisperos and Ricardo Trajano to their former
positions
-The motions for reconsideration of the Manila Cordage Company
and the Manco Labor Union were denied, hence this petition
ISSUE
WON under the maintenance-of-membership clause in the CBA,
employees of the company who are already members of the said
union were required to remain as such as a condition for continued
employment in the company
HELD
No.
-It is a fact that the complainants were employees of the Manila
Cordage Company and members of the Manco Labor Union when
the following stipulation was included in the collective bargaining
agreement: Both parties agree that all employees of the COMPANY
who are already members of the UNION at the time of the signing of
this AGREEMENT shall continue to remain members of the UNION
for the duration- of this AGREEMENT"
-The foregoing stipulation, however, does not clearly state that
maintenance of membership in the Manco Labor Union is a condition
of continuous employment in the Manila Labor Cordage Company.
-In consonance with the ruling in Confederated Sons of Labor vs.
Anakan Lumber Co., et al., 107 Phil. 915, in order that the Manila
Cordage Company may be deemed bound to dismiss employees
who do not maintain their membership in the Manco Labor Union,
the stipulation to this effect must be so clear as to leave no
room for doubt thereon
-An undertaking of this nature is so harsh that it must be strictly
construed and doubts must be resolved against the existence of
the right to dismiss.
-Aware of the deficiency of the maintenance- of membership clause,
the petitioner urges that the same should be construed together with
the "Whereas" provision of the contract which reads: WHEREAS, the
parties hereto nave decided to enter into an agreement relating to
the terms and conditions of employment and reference to those
employees to whom the provisions of this AGREEMENT apply.
-To construe the stipulations above-quoted as imposing as a
condition to continued employment in the Manila Cordage Company
the maintenance of membership in the Manco Labor Union is to
 Labor Law 2 A2010
violate the natural and constitutional right of the laborer to organize freely.
Such interpretation would be inconsistent with the constitutional mandate
that the State shall afford protection to labor.
-The respondent Court of Industrial Relations correctly found that the
disputed "maintenance-of-membership" clause in question did not give the
Manila Cordage Company the right to dismiss just because they resigned
as members of the Manco Labor Union.
Disposition
The decision appealed from is hereby affirmed
4.05 COVERAGE- WORKER INCLUSION AND
EXCLUSION
ART. 248. Unfair labor practices of employers. - It
shall be unlawful for an employer to commit any of the
following unfair labor practice:
(e) To discriminate in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in
this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining
agent as a condition for employment, except those employees
who are already members of another union at the time of the
signing of the collective bargaining agreement. Employees of an
appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such
non-union members accept the benefits under the collective
bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this
Code shall not apply to the non- members of the recognized
collective bargaining agent;
(Cases cited in Guijarno)
Confederated Sons of Labor v. Anakan Lumber Co.
Concepcion ; April 29, 1960
Nature
This is an unfair labor practice case instituted at the instance of the
Confederated Sons of Labor against the Anakan Lumber Company and
the United Workers' Union The amended complaint filed with the Court of
Relations charged said respondents with unfair labor practices committed
by Anakan Lumber Company through dominating, assisting and
interferring with the administration of the respondent United Workers'
Union and by contributing financial and other support to it and in
discriminating in regards to hire or tenure of employment for the purpose
of encouraging membership in the respondent United Workers' Union
and/or discouraging membership in the complainant Confederated Sons
of Labor or because of union membership or activity by dismissing and in
fact did dismiss without cause all its workers affiliated with the
complainant union and replaced by new ones. Also the United Workers'
Union in causing the respondent Anakan Company to discriminate against
the workers mentioned in Paragraph IV of the foregoing complaint in
violation of Section 4 (a), subparagraph 4 of the Act by demanding from
the respondent Anakan Lumber Company the dismissal of said workers
from their work therein, or in discriminating against them to whom
membership in the respondent United Workers' Union have been
terminated on grounds other than the usual terms and conditions of
- 79 - Disini
membership made available to other members by expelling them as
members from the said Union in violation of the respondent union's
Constitution and By-laws and who were subsequently dismissed by
the respondent Anakan Lumber Company on demand by the
respondent United Workers' Union, in violation of Section 4(b), sub-
paragraph 2 of Republic Act No. 875.
It appears that respondent union has a membership of more than
1,000 laborers and employees of the company, with whom it entered,
on January 23, 1955, into a contract entitled "Collective Bargaining
and Closed Shop Agreement". Subsequently, 46 employees of the
company and members of respondent union joined petitioner herein,
which is another labor organization. As a consequence, said 46
employees were expelled from respondent union, pursuant to its
constitution and by-laws. Thereafter, respondent union demanded
from the company the dismissal of these 46 employees, upon the
authority of Article II of said "Collective Bargaining and Closed Shop
Agreement", and claiming to act in pursuance of such Article II and in
compliance with the aforementioned agreement, the company
dismissed said 46 employees. Inasmuch as they are members of
petitioner herein, the latter caused this unfair labor practice
proceedings to be instituted.
CIR dismiss the charge of union domination against the company.
Upon the merits of the case presiding judge absolved union while
finding company guilty of unfair labor practices in dismissing 46
employees thereof and ordering said company "to cease and desist
from engaging in unfair labor practice and to reinstate the 46
employees concerned, with back wages from the date of their
separation from its service until reinstated."
MFR reversed. Thus, review for certiorari.
Issue
Whether the company was bound to expel the aforementioned 46
employees under the provisions of said Article II of its collective
bargaining agreement with respondent union
Held
That the UNION shall have the exclusive right, and privilege to
supply the COMPANY with such laborers, employees and workers
as are necessary in the logging, mechanical, sawmill, office,
logponds, motor pools, security guards and all departments in its
many phases of operations, excepting such positions which are
highly technical and confidential in character and/or such positions
which carry the exercise of authority in the interest of the COMPANY
which exercise is not merely clerical or routinary within the
contemplation of the law, and that the COMPANY agrees to employ
or hire in any of its departments only such person or persons who
are members of the UNION.
No. it is erroneous to consider such a closed shop agreement.
Definition of Closed-Shop Agreement: Closed-Shop agreement is an
agreement whereby an employer binds himself to hire only members
of the contracting union who must continue to remain members in
good standing to keep their job. (National Labor Union vs.
Aguinaldo's Echague, Inc., 51 Off. Gaz. No. 6, p. 2899, cited in
Bacolod-Murcia Milling Co., Inc. and Alfredo T. Garcia vs. National
Employees-Workers Security Union, 53 Off. Gaz., 615; Emphasis
ours.)
Rothenberg, in his work on Labor Relations, has the following to say
about "closed shop":
A "closed shop" may be defined as an enterprise in which,
agreement between the employer and his employees or their
representatives, no person may be employed in any or certain
agreed departments of the enterprise unless he or she is, becomes,
and, for duration of the agreement, remains a member in good
standing for a union entirely comprised of or of which the employees
in interest are a part. (Rothenberg on Labor Relations)
Inasmuch as Article II above quoted does not provide that
employees "must continue to remain members in good
standing" of respondent union "to keep their jobs," the
collective bargain-agreement between them does not establish
a 'closed shop," except in a very limited sense, namely, that the
laborers, employees and workers engaged by the company after
the signing of the agreement on January 23, 1955, must be
members of respondent union.
 Labor Law 2 A2010 - 80 - Disini
The agreement does not affect the right of the company to retain those honest belief that it was bound to dismiss them pursuant to said
already working therefor on or before said date, or those hired or agreement.
employed subsequently thereto, while they were members of respondent
union, but who, thereafter, resign or are expelled therefrom. Disposition
In order that an employer may be deemed bound, under a collective Wherefore, the resolution appealed from is hereby affirmed, insofar
bargaining agreement, to dismiss employees for non-union only as the aforementioned 45 laborers and employees are
membership, the stipulation to this effect must be so clear and concerned, and another one shall be entered directing the
unequivocal as to leave no room for doubt thereon. An undertaking reinstatement of said 45 laborers and employees, with costs against
of this nature is so harsh that it must be strictly construed, and the respondents. It is so ordered.
doubts must be resolved against the existence of "closed shop".
Referring particularly to the above-quoted Article II, we note that the same
establishes the exclusive right of respondent union to "supply" laborers FREEMAN SHIRT MANUFACTURING CO., INC V
etc., and limits the authority of the company to "employ or hire" them. In CIR
other words, it requires that the laborers, employees and workers hired or G.R. No. L-16561
employed by the company be members of respondent union at the time of
the commencement of the employer-employee relation. Membership
GUTIERREZ DAVID; January 28, 1961
respondent union is not a condition for the continuation of said
NATURE
relation or for the retention of a laborer or employee engaged either
Petition for certiorari
before said agreement or while he was a member of said union.
Indeed, Article III-A of the agreement provides:
FACTS
That the COMPANY may dismiss or otherwise remove from employments
- Freeman Shirt Employees Labor Union won and was certified as
any employee or laborer for gross inefficiency, misconduct, gross
the sole collective bargaining representative of the employees of the
disrespect to the manager, misbehavior, or culpable negligence in the
Freeman Shirt Manufacturing Co., Inc. Thereafter, the company and
office, commission of any crime or misdemeanor while in the course of his
the winning union entered into a CBA respecting terms and
employment or work or office, only upon report of the same in writing duly
conditions of employment. Included in the agreement is a provision
signed by the supervisor or company official directly responsible over
on union security which states that:
such employee or laborer to the Manager of the COMPANY which report
“Membership in the UNION shall be a condition to continued
shall contain in concise form the facts and circumstances upon which
employment in the COMPANY. Employees who are not members of
such removal or dismissal is based, furnishing therewith in the form of
the UNION on the effectivity of this Agreement and who fails to
notice the President of the UNION within 3 days before such dismissal or
become a member of the UNION within 30 days after such date of
removal is effected, the latter upon receipt thereof shall give his consent
effectivity, shall be dismissed by the COMPANY from employment
or dissent thereto in writing, which in case of dissent shall be considered a
upon notice of that fact by the UNION to the COMPANY; any person
formal request for reconsideration of the cause of each individual case or
hired by the COMPANY during the term of this Agreement who fails
removal or dismissal by the COMPANY.
to become a member of the UNION within 30 days after becoming a
If the parties to the agreement intended to establish a "closed shop", in
regular employee shall likewise be dismissed upon notice of that fact
the strict sense of the phrase, they would have inserted in said Article III-
by the UNION to the COMPANY. Any employee who, during the term
a, among the grounds for dismissal by the company therein specified the
of this Agreement, resigns from the UNION or is expelled therefrom
discontinuance of membership in respondent union. Their failure to make
in accordance with the Constitution and By-Laws of the UNION shall
such insertion strongly indicates that said discontinuance of membership
likewise be dismissed by the COMPANY upon notice of that fact by
was not understood to be a ground for dismissal.
the UNION to the COMPANY. “
Further confirmation of this view is the fact that on August 24, 1955, or
- The CBA was duly publicized among the employees of the
after the dismissal of all of the employees above mentioned--except one
company. Before the expiration of the 30 day-period within which all
who was dismissed on August 30, 1955.
employees were required to join the union under pain of separation
Article II of the agreement was amended to read as follows:
from employment. 10 employees refused to join the union, so they
That the UNION shall have the exclusive right and privilege to supply the
were dismissed by the company upon demand by the union. The
COMPANY with such skilled and/or unskilled laborers, employees and
filed suit for ULP against the company and Freeman Shirt Employees
workers as are necessary in the logging, mechanical, sawmill, office, log
Labor Union, it being charged that the company dominated the union
ponds, motor pool, security guards and all departments in its many
and that said company violated sec. 4 (a) of Republic Act No. 875 for
phases of operation whether on an apprenticeship or temporary status,
having dismissed the ten laborers.
excepting such positions which are highly technical and confidential in
- CIR[a] absolved the company of the charges of unfair labor practice
character and/or such positions which carry the exercise of authority in
and ordered the dismissal of the complaint; [b] holding that the
the interest of the COMPANY which exercise is not merely clerical or
closed-shop agreement authorized in sec. 4, subsec.(a) (4) of RA.
routinary within the contemplation of the law, and that the COMPANY
875 is applicable only to new employees to be hired or to non-union
agrees to comply or hire in any of its department only such person or
members, and not to those already in the company's service, it
persons who are members of the union and to retain in its employ only
ordered the reinstatement of the dismissed employees. MFR denied,
such employees or laborers who remain members of good standing of the
hence, this action
Union; subject to the following limitations or conditions, to wit:
1. An apprentice shall, after serving 78 working days, be automatically
ISSUE
classified as temporary employee or laborer. 2. A temporary employee
WON CIR committed error in ordering the reinstatement of the
becomes automatically permanent and regular after working 152 working
dismissed employees
days.
The addition, to the last part of the original Article II, of the clause "and to
HELD
retain in its employ only such employees or laborers who remain
NO.
members of good standing of the union," indicates that the company
Ratio A closed-shop agreement has been considered as one form of
was not prohibited prior thereto from retaining in its employ such
union security whereby only union members can be hired and
laborers as do not remain members of good standing of respondent
workers must remain union members in good standing as a condition
union.
to continued employment. Such agreement sanctioned under
In short, the dismissal of 45 out of the 46 laborers in question, prior
to said amendment of Article II, was illegal, and, hence, said 45
laborers should be reinstated. Considering, however, that the
agreement was entitled "Closed Shop" and that there is no local
decision squarely in point, the Court is inclined to give the company
the benefit of doubt as regards its claim that it acted under the
 Labor Law 2 A2010
1
Industrial Peace Act, sec. 4, subsec. a(4) , apply to persons to be hired or
to employees who are not yet members of any labor organization.
Reasoning The closed shop agreement applies only to persons to be
hired or to employees who are not yet members of any labor organization.
It is inapplicable to those already in the service who are members of
another union. To hold otherwise, i.e., that the employees in a company
who are members of a minority union may be compelled to disaffiliate
from their union and join the majority or contracting union, would render
nugatory the right of all employees to self-organization and to form, join or
assist labor organizations of their own choosing, a right guaranteed by the
Industrial Peace Act and by the Constitution. Since a closed-shop clause
in a collective bargaining agreement is inapplicable to employees who
were already in the company's service at the time of its execution, the
dismissal of the employees herein concerned is unjustified. The dismissal
here was made pursuant to a closed-shop agreement – which is
unauthorized by law. Hence, the order for the reinstatement was proper.
Disposition.Petition DISMISSED.
KAPISANAN NG MGA MANGGAGAWA NG ALAK V
HAMILTON DISTILLERY COMPANY
G.R. No. L-18112
CONCEPCION; October 30, 1962
NATURE
Appeal by certiorari from a decision of the Court of Industrial Relations
FACTS
- On September 24, 1957, two labor unions, composed of employees and
laborers of the Company, were registered with the Department of Labor,
namely, petitioner Kapisanan ng mga Mangagawa ng Alak (NAFLU), and
respondent Hamilton Workers' Union (Workers' Union). Thereupon, the
latter and the Company entered into a collective bargaining agreement,
incorporated into a private instrument purporting to have been executed
on September 24, 1957. Moreover, the Company issued a notice bearing
the same date, addressed to all of its employees, giving non-members of
the Workers' Union 30 days within which to join the same, or else, be
dismissed.
- Upon learning that the NAFLU was being organized, Co Bon Beng
(superintendent of Company) sent for Francisco Dumlao, and inquired
whether it was true that he had organized said labor union and was its
president. Upon receipt of an affirmative answer, Co Bon Beng urged
Dumlao to dissolve the NAFLU, for otherwise he would be dismissed.
When Dumlao answered that he could not follow this advice, Co Bon
Beng bade him to look for another job.
- On September 24, 1957, Co Bon Beng refused to admit him to work,
upon the ground that he was unwilling to dissolve the NAFLU.
Subsequently, some members thereof resigned therefrom and joined the
Workers' Union, because otherwise they would be dismissed by the
Company. Beginning from September 30, 1957, those who remained
affiliated to the NAFLU were allowed to work only 2 days a week and on
October 28, 1957 some members of the NAFLU, who did not join the
Workers' Union, were dismissed by the Company.
- The dismissed employees reported the matter to the Court of Industrial
Relations, with which a formal complaint for unfair labor practice was filed
against the Company, its aforementioned superintendent and manager,
and the Workers' Union. In their answer to this complaint, respondents
denied the charge and invoked a "closed shop" clause in the collective
bargaining agreement between the Company and the Workers' Union.
- On October 11, 1957, the NAFLU filed with the Court of Industrial
Relations a petition for certification. On November 25, 1957, the NAFLU
filed, in the unfair labor practice proceedings, an urgent petition for an
1 responsibility of individually signing up new laborers."
To discriminate in regard to hire or tenure of employment or
any term or condition of employment to encourage or
discourage membership in any labor organization: Provided, That
nothing in this Act or in any other Act or statute of the Republic
of the Philippines shall preclude an employer from making an
agreement with a labor organization to require as a condition of
employment membership therein, if such labor organization is
the representative of the employees as provided in section
twelve;"
- 81 - Disini
injunctive relief, praying, among other things, that the effectivity of
the collective bargaining agreement between the Company and the
Workers' Union be suspended and that the Company be ordered to
reinstate the dismissed employees or laborers with backpay. This
petition was denied. Thereafter, said Court rendered a decision
dismissing the unfair labor practice case. A reconsideration of such
decision having been denied by the Court sitting en banc, the case is
now before us on appeal by certiorari taken by the NAFLU.
ISSUE
(1) WON the collective bargaining agreement between the Company
and the Workers' Union had been made fraudulently; and
(2) WON the dismissal of members of the NAFLU who had failed and
refused to join the Workers' Union constitutes an unfair labor
practice.
HELD
1. YES
- One cannot minimize the importance of the fact that, although the
Workers' Union was registered on September 24, 1957, its collective
bargaining agreement with the Company and the notice issued by
the Company — giving its employees who were not members of the
Workers' Union 30 days to join the same, or else be dismissed —
bear the same date. Likewise, note-worthy is the circumstance that,
aside from being a Chinese, Valentin Kaw, the president of the
Workers' Union was the timekeeper of the Company, who as such,
had supervisory authority over its employees and laborers, and
could, therefore, exercise substantial pressure upon them to induce,
if not compel, them to join the Workers' Union, and that the treasurer
thereof was his brother Benito Kaw, another Chinese. Considering
further that said agreement was contained in a private document,
and that the NAFLU was, also, registered as a duly organized labor
union, on the date aforementioned, we find it difficult to avoid the
feeling that the Workers' Union was, if not company dominated, at
least organized under the patronage of the Company, and that the
same was in such a hurry to bargain with the Workers' Union, in
order to beat the NAFLU and prevent it from taking appropriate
action prior thereto, that the agreement was made in a Private
instrument, thus suggesting that it must have been made late at
night. Otherwise the agreement could have been executed before a
notary public for the corresponding acknowledgment.
- Indeed, the record shows that, despite several defections from the
NAFLU, prior to the expiration of the period given by the Company to
non-members of the Workers' Union, the Company had to dismiss 52
members of the NAFLU, apart from its president, for failure to join the
Workers' Union within said period. Considering that the Company
had altogether around 100 employees only, it is clear that a petition
for certification election, if filed by the NAFLU prior to the execution
of the collective bargaining agreement between the Workers' Union
and the company, would have, in all probability, barred effectively
said agreement.
2. YES
- The provisions of the CBA do not legalize the dismissal of members
of the NAFLU. The lower court held otherwise, relying upon the
"closed shop" clause of said agreement reading:
"That the COMPANY shall establish the policy of 'Union Shop'
effective October 24, 1957. All workers shall by that date become
members of the UNION, except those monthly salaries employees,
and other supervisor-employees (technical men) listed by the
Management. The COMPANY shall be free to hire new laborers with
out giving consideration to their membership or non-membership to
the Union. However, all laborers hired must join the UNION within
sixty (60) days of employment, or face discharge, except, those
selected by the Management above. The UNION assumes
- In this connection, it is well settled in this jurisdiction that, in the
absence of a manifest intent to the contrary, "closed shop" provisions
in a collective bargaining agreement apply only to persons to be
hired or to employees who are not yet members of any labor
organization and that said provisions of the agreement are not
applicable to those already in the service at the time of its execution.
- The language of the above quoted "closed shop" clause is not such
as to bar necessarily the limitation of its application to new
 Labor Law 2 A2010
employees or laborers, or at least, to those who were not as yet affiliated
to any labor organization. The first sentence of said clause may be
construed to refer to laborers or employees admitted after September 24,
but before October 24, 1957. At any rate, if the Company and the
Workers' Union intended, by said clause, to authorize the dismissal of
persons already in the service of said Company on or before September
24, 1957, but belonging to another labor organization, and who failed to
quit from the latter and join the Workers' Union on or before October 24,
1957, then such stipulation would be null and void.
Disposition decision appealed from is reversed
SALUNGA v. CIR
(pending)
ELEGANCE INC V CIR (FLORENTINO et al)
G.R. No. L-24096
MAKALINTAL; April 20, 1971
FACTS:
-In a certification case filed by the said Association, the Elegance
Employees and Workers Union, was certified by the Court of Industrial
Relations as the exclusive bargaining representative of the employees of
petitioner. In their CBA with the company it was agreed that “SEC. 3. —
THE COMPANY agrees to a UNIONSHOP; All present employees and
workers in the bargaining unit who are not now members of the Union,
must become members within thirty (30) days after the signing of this
agreement as a condition of continued employment, with the exception of
supervisors”
-after the 30 day deadline, the Union asked for the dismissal of
employees who failed to join the Union. After having a meeting with the
union, the employees were dismissed.
-dismissed employees filed a complaint with the CIR. The CIR held that
the Company committed unfair labor practices and ordered reinstatement
and backwages.
ISSUE:
WON the CIR erred in its decision.
HELD: NO
-the separation of said employees were effected only by a note posted on
the company billboard. There was no opportunity for the employees to be
heard before their termination.
-second, it was shown in the evidence that said employees did send a
letter of application to the Union before the deadline passes. The letter
however was not received on time as it was sent by registered mail.
-given that the employees did comply with said requirement, and the
manner by which thy were dismissed was unjust, the Company should not
have dismissed employees.
*-FURTHER the Court mentioned that the employees were already
employees even before the UNIONSHOP agreement. The statement in
the agreement to the effect that existing employees who are members of
different unions should join the certified UNION “ran counter to the spirit of
the Industrial Peace Act which recognizes the right of the employees to
self-organization and to form, join or assist labor organizations of their
own choosing. And as a matter of fact the doubt was resolved in the case
of Freeman Shirt Manufacturing Co., Inc., et al. vs. CIR, et al., where this
Court, construing a clause similar to the one involved in the case at bar,
said:
The closed-shop agreement authorized under Sec. 4 sub-sec. a(4) of the
Industrial Peace Act abovequoted should, however, apply only to persons
to be hired or to employees who are not yet members of any labor
organization. It is inapplicable to those already in the service who are
members of another union. To hold otherwise, i.e., that the employees in
a company who are members of a minority union may be compelled to
disaffiliate from their union and join the majority or contracting union,
would render nugatory the right of all employees to self-organization and
to form, join or assist labor organizations of their own choosing, a right
guaranteed by the Industrial Peace Act (Sec. 3, Republic Act No. 875) as
well as by the Constitution (Art. III, see. 1 [6]).”
- 82 - Disini
FINDLAY MILLAR TIMBER COMPANY V
PHILIPPINE LAND-AIR-SEA LABOR UNION
6 SCRA 227
BAUTISTA ANGELO; September 29, 1962
FACTS
- Two cases for unfair labor practice were filed before the Court of
Industrial Relations by some employees and laborers of Findlay
Millar Timber Company which were affiliated with the Philippine
Land-Air-Sea Labor Union, referred to herein as PLASLU, for short,
against said company and some of its principal officials. One was
filed on August 15, 1955, docketed as Case No. 41-ULP-Cebu,
relating to the alleged dismissal of 60 employees as a result of some
discriminatory acts, and another was filed on June 28, 1956,
docketed as Case 6-ULP-MIN, covering alleged dismissal of 29
employees named in the complaint. The theory of both complaint is
that the company and its co-respondent officials, individually or
collectively, interfered with, restrained, or coerced the PLASLU's
affiliates or members who complained in the exercise of their right to
self-organization by inquiring into their union affiliation and activities,
convincing them to withdraw from their union or join another as a
condition for continued employment with the company, by
threatening them with dismissal if they did not resign from their
union, by discriminating against them through the application of the
rotation system, and reducing them to part-time work as compared to
those who resigned their union affiliation and joined another who
were continued on full-time basis.
- The company and its co-respondents denied the commission of
unfair labor practices. They reasoned out that they entered into a
closed-shop agreement with Western Lanao Labor Union (WELLU).
- Both cases were dismissed by TC saying that closed shop
agreement applied to both present and future employees.
- Respondent court (CIR) reversed ordering reinstatement and
backwages.
ISSUE/S
1. WON closed shop agreement applies to both present and future
employees.
HELD
1. NO.
Ratio The closed-shop agreement authorized under sec. 4, subsec.
a (4) of the Industrial Peace Act above quoted should however, apply
only to persons to be hired or to employees who are not yet
members of any labor organization. It is inapplicable to those already
in the service who are members of another union. To hold otherwise,
i.e., that the employees in a company who are members of a minority
union may be compelled to disaffiliate from their union and join the
majority or contracting union, would render nugatory the right of all
employees to self organization and to form, join or assist labor
organization of their own choosing a right guaranteed by the
Industrial Peace Act (sec. 3, Rep. Act No. 875) as well as by the
Constitution (Art. III, sec. 1 [6]) [Freeman Shirt Mfg v CIR]
Reasoning It should, however, be observed that the employer,
petitioner herein, cannot be blamed if in its interpretation of in the
closed shop provision was led to apply its effects not only to future
employees but also to those who were already in the service
considering not only the ambiguous terms into which the same is
couched but also the meaning of a closed shop as understood in
American jurisdiction, and therefore, it is fair to presume that before
the promulgation of our decision in the Freeman case the employer
acted having in mind the closed shop as construed in the United
States after whose statutes our Republic Act No. 875 was patterned,
for authorities abound insinuating that in the application of law of
American origin the rulings of the Supreme Court of the United
States construing similar provisions are considered of persuasive
effect and may be followed as authority.So, it is fair to presume, we
repeat, that when petitioner separated the complainants because of
their refusal to disaffiliate themselves from the PLASLU and join the
 Labor Law 2 A2010 - 83 - Disini
WELLU which has collective bargaining agreement with the employer,
merely acted in pursuance of the terms of the closed shop clause in the
light of American jurisprudence thereby justifying its claim that it has acted 4.06 IMPLEMENTATION – OBLIGATIONS
on the matter not without justification. It is, therefore, fair to conclude that
the employer had acted in good faith. In reaching this view, this Court
AND LIABILITIES
holds the opinion that while complainants are entitled to reinstatement or
the theory that the separation was based upon a mistaken interpretation CARINO v. NLRC (Harrison Industrial Corp)
of the closed shop provision, they are not however entitled back wages 185 SCRA 177
because their separation was effected in faith.
Disposition WHEREFORE, the decision of respondent court which is in
FELICIANO; May 8, 1990
the form of a resolution issued on January 6, 1961 is modified in the
NATURE
sense that those who were dismissed improperly as aforesaid should be
Petition to declare null and void NLRC decision
reinstated but without back wages. No pronouncement as to costs.
FACTS
- Petitioner CARINO was the former President of Harrison Industrial
UNITED STATES LINES CO., ET AL. V ASSOCIATED Workers' Union ("Union"). He was widely believed to have grossly
WATCHMEN AND SECURITY UNION, ET AL. mismanaged Union affairs; charges include unilaterally increasing
G.R. No. L-15508 union dues and payment of atty’s fees out of union funds without
MAKALINTAL; June 29, 1963 receipts.
- At a general membership meeting, the Union decided to expel him
and to recommend his termination from employment. They
NATURE
accordingly informed the company of the expulsion and demanded
Petition for review by certiorari
application of the Union Security Clause of the then existing
CBA. Cariño received a letter of termination, effective the next day.
FACTS
- Carino then filed a complaint for illegal dismissal with the Labor
- a strke was held by respondent Associated Watchmen, of which other
Arbiter. LA held that there was no just cause for the dismissal. The
individual respondents were members
manner of petitioner's dismissal had been in disregard of the
- Maligaya Ship Watchmen Agency was registered in the DOLE as a
requirements of notice and hearing laid down in the Labor Code.
Union, known as “The Maligaya Ship Watchmen a Union” . A closed-shop
- The Company and the Union appealed before NLRC. NLRC held
agreement was signed between the agency and the union. The contract
Cariño's silence as "tantamount to [an] admission of guilt" and
provided that Maligaya Ship Watchmen Agency “shall hire no other
as constituting the ultimate cause for his dismissal.
watchmen but members of the maligaya Ship Watchmen Union during the
entire duration of the agreement.”
ISSUE/S
- At the time the contract was entered into, the watchmen’s strike against
1. WON there had been just cause for his dismissal
the United State Lines had been certified to the CIR and was pending to
2. WON his right to procedural due process was violated
determine who should be the proper bargaining representative of the
employees. So the 11 watchmen respondents reported to the head
HELD
watchmen of the USL for assignment, but the company refused to take
1. YES
them back unless they first joined the Maligaya Ship Watchmen Union.
Reasoning The Collective Bargaining Agreement between the
- A complaint for unfair labor practice was filed with respondent court
Company and the Union provided that any union member may be
suspended and/or expelled by the Union for “Participation in an
ISSUES
unfair labor practice or any derogatory act against the UNION or any
1. Is it unfair labor practice for an employer to refuse to reinstate
of its officers or members; and Involvement in any violation of this
employees who went on strke unless they first become members of the
Agreement or the UNION's Constitution and By-Laws.”
union which has a collective bargaining agreement with the employer
2. YES
containing a closed shop provision?
Reasoning The right of an employee to be informed of the charges
against him and to reasonable opportunity to present his side in a
HELD
controversy with either the Company or his own Union, is not wiped
1. YES
away by a Union Security Clause or a Union Shop Clause in a CBA.
Reasoning it has been held in a number of cases that the closed-shop
An employee is entitled to be protected not only from a company
provision of such an agreement, assuming it to be valid, cannot operate
which disregards his rights but also from his own Union, the
retroactively so as to compel those already employed to join the union
leadership of which could yield to the temptation of swift and arbitrary
favored by the closed-shop provision (Local 7, Press & Printing Free
expulsion from membership and hence dismissal from his job.
Workers, et al. v. Tabigne, L-16093, November 29, 1960; Freeman shirt
Manufacturing Co. v. CIR, L-16561, January 28, 1961; Findlay Millar
Union Security: IMPLEMENTATION – Obligations and Liabilities
Company, L-18217 &L-18222, September 29, 1962; Kapisanan Ng Mga
- For the company to inquire into the lawfulness of the acts of the
Manggagawa ng Alak [NAFLU]v. Hamilton Distillery Company, et al., L-
Union in this regard (expulsion of its members) does NOT constitute
18112, October 30, 1962). The fact that the watchmen who are
interference in the administration of Union affairs.
respondents here went on strike before the agreement was entered into
- Employer is bound to exercise caution in terminating the services of
did not deprive them to their status as employees.
his employee especially so when it is made upon the request of a
Disposition There being no reason to say that the foregoing findings are
labor union pursuant to the CBA. Dismissals must not be arbitrary
not supported by substantial evidence so as to justify their reversal, the
and capricious.
decision appealed from is affirmed.
- Due process must be observed because it affects not only his
position but also his means of livelihood. Employers should therefore
respect and protect the rights of their employees, which include the
National Brewery & Allied Industries Labor Union of the Phil. right to labor.
v. San Miguel Brewery, Inc.,
L-18170, August 31, 1963, Disposition The Court DISMISSED the Petition for certiorari for lack
8 SCRA 805 of merit but MODIFIED the Decision of the NLRC dated 26 May 1989
by eliminating the grant of separation pay and in lieu thereof
imposing a penalty of P5,000.00 payable to the petitioner to be
borne solidarily by the Company and the Union.
 Labor Law 2 A2010
SANYO PHILIPPINES WORKERS UNION-PSSLU V
HON. CAÑIZARES
211 SCRA 361
MEDIALDEA, July 8,1992
NATURE
PETITION to review the orders of the National Labor Relations
Commission.
FACTS
-Union had an existing CBA with Sanyo Philippines, Inc. (SANYO) which
provided a union security clause. The said clause gave the Union the right
to demand from the company the dismissal of members of the union by
reason of their voluntary resignation from membership or willful refusal to
pay the Union Dues or by reasons of their having formed, organized,
joined, affiliated, supported and/or aided directly or indirectly another labor
organization
-Through the union security clause, PSSLU informed SANYO
management of the cancellation of membership of the respondents from
the Union. These workers were apparently not members of the Union but
of another union, KAMAO. Some of the members of KAMAO executed a
pledge of cooperation with PSSLU, nevertheless, the Union sent another
letter to Sanyo management recommending the dismissal of the non-
Union workers and former Union members. Sanyo management sent a
memorandum to the said workers, informing them that they were put
under preventive suspension, and if they failed to appeal the decision of
the union for dismissal, then they would be considered dismissed from the
company. No reply from the said workers so company considered them
dismissed.
-dismissed employees filed complaint with NLRC for illegal dismissal
against the Union and Sanyo
-Union filed motion to dismiss: LA had no jurisdiction over cases arising
from the interpretation or implementation of the collective bargaining
agreements
-dismissed complainants opposed motion to dismiss
LA: Resolution of case suspended until presentation of position papers
and supporting documents – Union filed another motion to solve motion to
dismiss complaint with a prayer that the Labor Arbiter resolve the issue of
jurisdiction
LA: assumed jurisdiction over case
Union’s contention: under Article 217(c) of the Labor Code, in relation to
Article 261 thereof, as well as Policy Instruction No. 6 of the Secretary of
Labor, respondent Arbiter has no jurisdiction and authority to take
cognizance of the complaint brought by private respondents which
involves the implementation of the union security clause of the CBA. The
function of the Labor Arbiter under the same law and rule is to refer this
case to the grievance machinery and voluntary arbitration.
Respondent dismissed workers’ contention: (1) Labor Arbiters have
jurisdiction over the case, being a termination dispute; (2) Some of the
respondents were not covered by the provisions of the CBA, joining
KAMAO during the freedom period.
Respondent Labor Arbiter’s Contention: a distinction should be made
between a case involving "interpretation or implementation of collective
bargaining agreement or "interpretation" or "enforcement" of company
personnel policies, on the one hand and a case involving termination, on
the other hand. The case at bar does not involve an "interpretation or
implementation" of a collective bargaining agreement or "interpretation or
enforcement" of company policies but involves a "termination." Where the
dispute is just in the interpretation, implementation or enforcement stage,
it may be referred to the grievance machinery set up in the CBA or by
voluntary arbitration. Where there was already actual termination, i.e.,
violation of rights, it is already cognizable by the Labor Arbiter.
ISSUE
WON the Labor Arbiter had jurisdiction over the case
HELD
YES. Only disputes involving the union and the company shall be referred
to the grievance machinery or voluntary arbitrators.
- 84 - Disini
Ratio. both the union and the company are united or have come to
an agreement regarding the dismissal of private respondents. No
grievance between them exists which could be brought to a
grievance machinery. The problem or dispute in the present case is
between the union and the company on the one hand and some
union and non-union members who were dismissed, on the other
hand. The dispute has to be settled before an impartial body. The
grievance machinery with members designated by the union and the
company cannot be expected to be impartial against the dismissed
employees. Due process demands that the dismissed workers
grievances be ventilated before an impartial body. Since there has
already been an actual termination, the matter falls within the
jurisdiction of the Labor Arbiter.
Reasoning. A217 interpretation: Termination cases fall under the
jurisdiction of the Labor Arbiter. Expressly excepted from his
jurisdiction are cases arising from the interpretation or
implementation of collective bargaining agreements and those
arising from the interpretation and enforcement of company
personnel policies.
- The procedure introduced in RA 6715 of referring certain
grievances originally and exclusively to the grievance machinery and
when not settled at this level, to a panel of voluntary arbitrators
outlined in CBA's does not only include grievances arising from the
interpretation or implementation of the CBA but applies as well to
those arising from the implementation of company personnel
policies. No other body shall take cognizance of these cases.
- While it appears that the dismissal of the private respondents was
made upon the recommendation of PSSLU pursuant to the union
security clause provided in the CBA, We are of the opinion that these
facts do not come within the phrase "grievances arising from the
interpretation or implementation of (their) Collective Bargaining
Agreement and those arising from the interpretation or enforcement
of company personnel policies," the jurisdiction of which pertains to
the Grievance Machinery or thereafter, to a voluntary arbitrator or
panel of voluntary arbitrators.
Disposition. ACCORDINGLY, the petition is DISMISSED. Public
respondent Labor Arbiter is directed to resolve the complaints of
private respondents immediately. SO ORDERED.
MALAYANG SAMAHAN NG MGA MANGGAGAWA
SA M. GREENFIELD (MSMG-UWP) v RAMOS
326 SCRA 428
PURISIMA; February 28, 2000
FACTS
- MSMG is an affiliate of the United Lumber and General Workers of
the Phils. (ULGWP).
- The collective bargaining agreement between MSMG and M.
Greenfield, Inc. provides that any employee who fails to maintain his
membership in the union for non-payment of UNION dues, for
resignation and for violation of union’s Constitution and By-Laws
shall be dismissed from the employment by the company; and that
the UNION shall hold the company free and blameless from any and
all liabilities that may arise should the dismissed employee question
his dismissal.
- MSMG officers were expelled by the federation for allegedly
commiting acts of disloyalty and/or inimical to the interest of ULGWP
and in violation of its Constitution and By-laws. Upon demand of the
federation, the company terminated the petitioners without
conducting a separate and independent investigation. Respondent
company did not inquire into the cause of the expulsion and whether
or not the federation had sufficient grounds to effect the same.
Relying merely upon the federation’s allegations, respondent
company terminated petitioners from employment when a separate
inquiry could have revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers.
ISSUE
WON the dismissal of the union officers is valid
HELD
NO
Although this Court has ruled that union security clauses embodied
in the collective bargaining agreement may be validly enforced and
 Labor Law 2 A2010
that dismissals pursuant thereto may likewise be valid, this does not
erode the fundamental requirement of due process. The reason behind
the enforcement of union security clauses which is the sanctity and
inviolability of contracts cannot override one’s right to due process.
The power to dismiss is a normal prerogative of the employer. However,
this is not without limitation. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is made
upon the request of a labor union pursuant to the Collective Bargaining
Agreement, xxx. Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee because it affects
not only his position but also his means of livelihood. Employers should
respect and protect the rights of their employees, which include the right
to labor.
As held in the case of Cariño v NLRC, "the right of an employee to be
informed of the charges against him and to reasonable opportunity to
present his side in a controversy with either the company or his own union
is not wiped away by a union security clause or a union shop clause in a
collective bargaining agreement. An employee is entitled to be protected
not only from a company which disregards his rights but also from his own
union the leadership of which could yield to the temptation of swift and
arbitrary expulsion from membership and mere dismissal from his job."
While respondent company may validly dismiss the employees expelled
by the union for disloyalty under the union security clause of the collective
bargaining agreement upon the recommendation by the union, this
dismissal should not be done hastily and summarily thereby eroding the
employees’ right to due process, self-organization and security of tenure.
The enforcement of union security clauses is authorized by law provided
such enforcement is not characterized by arbitrariness, and always with
due process. Even on the assumption that the federation had valid
grounds to expel the union officers, due process requires that these union
officers be accorded a
4.07 FINANCIAL SECURITY-
AGENCY SHOP
ART. 248. Unfair labor practices of employers. - It
shall be unlawful for an employer to commit any of the
following unfair labor practice:
(e) To discriminate in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in
this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining
agent as a condition for employment, except those employees
who are already members of another union at the time of the
signing of the collective bargaining agreement. Employees of an
appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such
non-union members accept the benefits under the collective
bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this
Code shall not apply to the non- members of the recognized
collective bargaining agent;
CHECK- OFF
ART. 113. Wage deduction. - No employer, in his own behalf
or in behalf of any person, shall make any deduction from the
wages of his employees, except:
-xxx-
(b) For union dues, in cases where the right of the worker or his
union to check-off has been recognized by the employer or
authorized in writing by the individual worker concerned;
- 85 - Disini
ART. 241. Rights and conditions of membership in a labor
organization. - The following are the rights and conditions of
membership in a labor organization:
(m) The books of accounts and other records of the financial
activities of any labor organization shall be open to inspection
by any officer or member thereof during office hours;
(n) No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless
authorized by a written resolution of a majority of all the
members in a general membership meeting duly called for the
purpose. The secretary of the organization shall record the
minutes of the meeting including the list of all members
present, the votes cast, the purpose of the special assessment
or fees and the recipient of such assessment or fees. The
record shall be attested to by the president.
(o) Other than for mandatory activities under the Code, no
special assessments, attorney’s fees, negotiation fees or any
other extraordinary fees may be checked off from any amount
due to an employee without an individual written authorization
duly signed by the employee. The authorization should
specifically state the amount, purpose and beneficiary of the
deduction;
NATIONAL BREWERY V SAN MIGUEL BREWERY
8 SCRA 805
REGALA; August 31, 1963
NATURE
Appeal directly from the CFI of Manila dismissing the complaint upon
the petition of the defendant San Miguel Brewery Workers'
Association
FACTS
- National Brewery & Allied Industries Labor Union of the Philippines
is the bargaining representative of all regular workers paid on the
daily basis and of route helpers of San Miguel Brewery, Inc. It signed
a CBA with the company, which provided among other things, that:
"The COMPANY will deduct the UNION agency fee from the wages
of workers who are not members of the UNION, provided the
aforesaid workers authorize the Company to make such deductions
in writing or if no such authorization is given, if a competent court
direct the COMPANY to make such deduction."
- Alleging that it had obtained benefits for all workers in the company
and that "defendant Independent SMB Workers' Association refuses
to pay UNION AGENCY FEE to the plaintiff UNION and defendant
COMPANY also refuses to deduct the UNION AGENCY FEE from
the wages of workers who are not members of the plaintiff UNION,"
the union brought suit in the CFI of Manila for the collection of union
agency fees under the CBA. The lower court dismissed the
complaint.
ISSUE
1. WON a union agency fee as a form of union security is valid.
HELD
1. NO.
Ratio Where the parties are not free to require of employees
membership in a union as a condition of employment, neither can
they require a lesser form of union security. For one cannot waive a
right he does not have.
Reasoning The right of employees "to self-organization and to form,
join or assist labor organization of their own choosing" (Sec. 3, RA
875 or the Industrial Peace Act) is a fundamental right that yields
only to the proviso that nothing in this Act or statute of the Republic
 Labor Law 2 A2010 - 86 - Disini
of the Philippines shall preclude an employer from making an agreement
with a labor organization to require as a condition of employment
ART. 255. Exclusive bargaining representation and
membership therein, if such Labor organization is the representative of
workers’ participation in policy and decision-making. -
the employees…
The labor organization designated or selected by the majority
- Although a closed-shop agreement may validly be entered into under the
of the employees in an appropriate collective bargaining unit
Industrial Peace Act, the same cannot be made to apply to employees
shall be the exclusive representative of the employees in
who, like the employees in this case, are already in the service and are
such unit for the purpose of collective bargaining. However,
members of another union (Freeman Shirt Mfg. Co. vs. CIR). Hence, if a
an individual employee or group of employees shall have the
closed shop agreement cannot be applied to these employees, neither
right at any time to present grievances to their employer.
may an agency fee, as a lesser form of union security, be imposed upon
them.
Any provision of law to the contrary notwithstanding, workers
- The union claims, that whatever benefits the majority union obtains from
shall have the right, subject to such rules and regulations as
the employer accrue to its members as well as to non-members. But this
the Secretary of Labor and Employment may promulgate, to
alone does not justify the collection of agency fee from nonmembers. The
participate in policy and decision-making processes of the
benefits of a CBA are extended to all employees regardless of their
establishment where they are employed insofar as said
membership in the union because to withhold the same from the non-
processes will directly affect their rights, benefits and welfare.
members would be to discriminate against them (International Oil Factory
For this purpose, workers and employers may form labor-
Workers Union (FFW) vs. Martinez). Moreover, when a union bids to be
management councils: Provided, That the representatives of
the bargaining agent, it voluntarily assumes the responsibility of
the workers in such labor-management councils shall be
representing all the employees in the appropriate bargaining unit.
elected by at least the majority of all employees in said
- The union further contends that non-members should be made to pay on
establishment. (As amended by Section 22, Republic Act No.
the principle of quasi contract. But the benefits that accrue to non-
6715, March 21, 1989).
members can hardly be termed "unjust enrichment" because the same
are extended to them precisely to avoid discrimination among employees.
Besides, there is no allegation that the amount of P4 represents the RA 9481, SEC 9- Anew provision, Art 245-A is inserted
expense incurred by the union in representing each employee. For the into the Labor Code to read as follows:
benefits extended to non-members are merely incidental.
- Lastly, it is contended that the collection of agency fee may be justified
on the principle of agency. In answer to this point, when a union acts as Art. 245-A.Effect of Inclusion as Members of Employees
the bargaining agent, it assumes the responsibility imposed upon it by law Outside the Bargaining Unit.- The inclusion as union
to represent not only its members but all employees in the appropriate members of employees outside the bargaining unit shall not
bargaining unit of which it is the agent. The Civil Code states that agency be a ground for the cancellation of the registration of the
is presumed to be for compensation unless there is proof to the contrary. union. Said employees are automatically deemed remove
(Art. 1875). There can be no better proof that the agency created by law from the list of membership of said union.
between the bargaining representative and the employees in the unit is
without compensation than the fact that these employees in the minority
voted against the appellant union. BELYCA CORPORATION vs. FERRER-CALLEJA
Disposition Orders of the CFI of Manila are AFFIRMED.
168 SCRA 184
PARAS; November 29, 1988
PART FIVE –
NATURE
THE APPROPRIATE Petition for certiorari and prohibition with preliminary injunction.
BARGAINING UNIT
FACTS
- In the instant case, respondent ALU seeks direct certification as
5.01 DEFINITION AND ROLE IN LAW— the sole and exclusive bargaining agent of all the rank-and-file
workers of the livestock and agro division of petitioner BELYCA
Corporation engaged in piggery, poultry raising and the planting of
agricultural crops such as corn, coffee and various vegetables. But
petitioner contends that the bargaining unit must include all the
workers in its integrated business concerns ranging from piggery,
poultry, to supermarts and cinemas so as not to split an otherwise
single bargaining unit into fragmented bargaining units.

ISSUE
WON the proposed bargaining unit by Belyca is an appropriate
bargaining unit.

HELD
No.
- According to Rothenberg, a proper bargaining unit maybe said to
be a group of employees of a given employer, comprised of all or
less than all of the entire body of employees, which the collective
interests of all the employees, consistent with equity to the employer,
indicate to be best suited to serve reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.
- This Court has already taken cognizance of the crucial issue of
determining the proper constituency of a collective bargaining unit.
- Among the factors considered in Democratic Labor Association v.
Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are: "(1) will of
employees (Glove Doctrine); (2) affinity and unity of employee's
interest, such as substantial similarity of work and duties or similarity
 Labor Law 2 A2010
of compensation and working conditions; (3) prior collective bargaining
history; and (4) employment status, such as temporary, seasonal and
probationary employees".
- Under the circumstances of that case, the Court stressed the
importance of the fourth factor and sustained the trial court's conclusion
that two separate bargaining units should be formed in dealing with
respondent company, one consisting of regular and permanent
employees and another consisting of casual laborers or stevedores.
Otherwise stated, temporary employees should be treated separately
from permanent employees. But more importantly, this Court laid down
the test of proper grouping, which is community and mutuality of interest.
Reasoning
It is beyond question that the employees of the livestock and agro division
of petitioner corporation perform work entirely different from those
performed by employees in the supermarts and cinema. Among others,
the noted difference are: their working conditions, hours of work, rates of
pay, including the categories of their positions and employment status. To
lump all the employees of petitioner in its integrated business concerns
cannot result in an efficacious bargaining unit comprised of constituents
enjoying a community or mutuality of interest.
DISPOSITION The petition is DISMISSED for lack of merit.
5.02 DETERMINATION OF APPROPRIATE
BARGAINING UNIT
1. FACTORS –UNIT DETERMINATION
A. In General- Standard Test
UP v FERRER CALLEJA
00 SCRA 00
NARVASA,CJ; July 14, 1992
NATURE
Special civil action of certiorari
FACTS
UP seeks the nullification of the Order of Director Pura Ferrer-Calleja of
the Bureau of Labor Relations holding that "professors, associate
professors and assistant professors are . . rank-and-file employees . . ;"
consequently, they should, together with the so-called non-academic,
non-teaching, and all other employees of the University, be represented
by only one labor organization.
HELD
A bargaining unit is a group of employees, comprised of all or less than
the entire body of the employees, which the collective interest of all the
employees, consistent with equity interest of all the employer, indicate to
be the best suited to serve the reciproocal rights and duties of the parties
under the collective bargaining provisions of the law.
In Democratic Labor Association v Cebu Stevedoring, there are factors
which must be considered in determining the proper unit.
Rothernberg mentions:
1. Will of the employees.
2. Affinity and unity of the employees interest, such as substantial
similarity of works and duties or similarity of compensation and
work conditions,
3. Prior collective bargaining history
4. Employment status
The test of the grouping is community of mutuality of interests because
the basic test of an asserted bargaining unit's acceptability is whether or
not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.
Disposition Wherefore the assailed order is affirmed.
B. History
San Miguel Corp v. Laguesma
236 SCRA 595
(pending)
- 87 - Disini
C. Geography – Location
BENGUET CONSOLIDATED v. BOBOK LUMBER JACK
ASSN
103 Phil. 1150
May 23, 1958
FACTS
Petitioner filed an appeal from the order of CIR holding that it finds
no valid reason to change status of petitioner’s five camps as
separate bargaining units
ISSUE
WON system of having one collective bargaining unit for each camp
should be maintained.
HELD
YES.
- The present system had operated satisfactorily.
- Prime element in determining whether a group of employees
constitute a proper bargaining unit is whether it will, without inequity
to the employer, best serve all the employees in the exercise of their
bargaining rights.
- Separation between camps and the different kinds of work in each
all militate in favor of the present system since the problem and
interest of the worker are peculiar in each camp or department.
D. Size- Composition
PHILIPPINE DIAMOND HOTEL AND RESORT INC
(MANILA DIAMOND HOTEL V MANILA DIAMOND HOTEL
EMPLOYEES UNION
494 SCRA 195
CARPIO MORALES; June 30, 2006
FACTS
-Union filed a petition for certification election to be declared the
exclusive bargaining representative of the Hotel’s employees. This
petition was dismissed by DOLE for lack of legal requirements.
-after a few months, Union sent a letter to Hotel informing it of its
desire to negotiate for a collective bargaining agreement. This was
rejected by the Hotel stating that the Union was not the employee’s
bargaining agent as their petition for certification election was denied.
-Union filed a Notice of Strike with the NCMB alleging the Hotel’
refusal to bargain and for acts of unfair labor practices. NCMB
summoned both parties and held series of dialogues. Union however
suddenly went on strike
-Secretary of DOLE assumed jurisdiction and ordered compulsory
arbitration pursuant to art. 263 (g) of LC. And Union members were
directed to return to work and for Hotel to accept them back. Hotel
refused to accept the employees return. The order was modified (by
a different Secretary) such that reinstatement was to be done only in
the payroll.
-Union filed for certiorari alleging grave abuse of discretion. Case
was referred to the CA. CA affirmed that the “payroll reinstatement”
was not a grave abuse of discretion. On appeal, it modified NLRC
decision ordering reinstatement with back wages of union members.
ISSUE
1) WON the Union can bargain only in behalf of its members and not
for all the employees of the Hotel.
HELD
1) No.
-As provided by art 255 of the LC only the labor organization
designated or selected by the majority of the employees in an
appropriate collective bargaining unit is the exclusive representative
of the employees in such unit for the purpose of collective
bargaining.
 Labor Law 2 A2010
-The Union’s petition for certificate election was denied by the DOLE. The
union thus is admittedly not the exclusive representative of the majority of
the employees of petitioner, hence, it could not demand from petitioner
the right to bargain collectively in their behalf
-Respondent insists, however, that it could validly bargain in behalf of "its
members," relying on Article 242 of the Labor Code.
-the CA ruled that “what [respondent] will be achieving is to divide the
employees, more particularly, the rank-and-file employees of
[petitioner] . . . the other workers who are not members are at a serious
disadvantage, because if the same shall be allowed, employees who are
non-union members will be economically impaired and will not be able to
negotiate their terms and conditions of work, thus defeating the very
essence and reason of collective bargaining, which is an effective
safeguard against the evil schemes of employers in terms and conditions
of work”
- Petitioner’s refusal to bargain then with respondent can not be
considered a ULP to justify the staging of the strike.
E. Corporate Entities
INDOPHIL TEXTILE MILLS WORKERS UNION VS
CALICA (INDOPHIL TEXTILE MILLS, INC)
205 SCRA 697
Padilla, J; January 25, 1991
NATURE
Petition for certiorari
FACTS
- Petitioner is the duly recognized labor union representing the rank and
file in Indophil Textile Mills, Inc. In 1987, Indophil Acrylic Manufacturing
Corporation was formed with Indophil Textile as the major shareholder.
Sometime in July, 1989, the workers of Acrylic unionized and a duly
certified collective bargaining agreement was executed.
- Petitioner claimed that Indophil Textile Mills violated its CBA as
Indophil Acrylic should in fact be considered as a mere extension of
the private respondent and therefore employees of Acrylic should
be represented by petitioner under Section 1(c), Article 1 of the
CBA. To resolve the controversy, both parties agreed to enter into a
submission agreement and appointed Calica as voluntary arbitrator.
- The arbitrator ruled in favor of the private respondent. Hence this
petition to the SC.
ISSUE/S
WON Indophil Acrylic is a separate and distinct entity from respondent
company for purposes of union representation.
HELD
Yes. In the case at bar, petitioner seeks to pierce the veil of corporate
entity of Acrylic, alleging that the creation of the corporation is a devise to
evade the application of the CBA between petitioner Union and private
respondent Company. While we do not discount the possibility of the
similarities of the businesses of private respondent and Acrylic, neither
are we inclined to apply the doctrine invoked by petitioner in granting the
relief sought. The fact that the businesses of private respondent and
Acrylic are related, that some of the employees of the private respondent
are the same persons manning and providing for auxilliary services to the
units of Acrylic, and that the physical plants, offices and facilities are
situated in the same compound, it is our considered opinion that these
facts are not sufficient to justify the piercing of the corporate veil of Acrylic.
- Acrylic not being an extension or expansion of private respondent, the
rank-and-file employees working at Acrylic should not be recognized as
part of, and/or within the scope of the petitioner, as the bargaining
representative of private respondent.
All premises considered, the Court is convinced that the public
respondent Voluntary Arbitrator did not commit grave abuse of discretion
in its interpretation of Section 1(c), Article I of the CBA that the Acrylic is
not an extension or expansion of private respondent.
- 88 - Disini
Disposition Petition is denied.
PHILIPPINE SCOUT VETERANS SECURITY AND
INVESTIGATION AGENCY v. TORRES
G.R. No. 92357
NOCON; July 21, 1993
NATURE
Petition for certiorari with prayer for preliminary injunction
FACTS
- April 6, 1989 > PGA Brotherhood Association - Union of Filipino
Workers (UFW) filed a petition for Direct Certification/Certification
Election among the rank and file employees of Philippine Scout
Veterans Security and Investigation Agency (PSVSIA), GVM Security
and Investigations Agency, Inc. (GVM) and Abaquin Security and
Detective Agency, Inc. (ASDA) collectively referred to by the Union
as the "PGA Security Agency," which is actually the first letters of the
corporate names of the agencies.
- PSVSIA, GVM, ASDA filed a single comment alleging that the three
security agencies have separate and distinct corporate personalities
while PGA Security Agency is not a business or corporate entity and
does not possess any personality
- May 4, 1989 > the security agencies filed a Consolidated Motion to
Dismiss on the grounds that the 721 supporting signatures do not
meet the 20% minimum requirement for certification election as the
number of employees totals 2374 and that there are no implementing
rules yet of R.A. 6715.
- May 8, 1989 > the Union filed an Omnibus Reply to Comment and
Motion to Dismiss alleging that it is clear that it is seeking a
certification election in the three agencies; that the apparent
separate personalities of the three agencies were used merely to
circumvent the prohibition in R.A. 5847, as amended by P.D. 11 and
P.D. 100, that a security agency must not have more than 1,000
guards in its employ; that the three security agencies' administration,
management and operations are so intertwined that they can be
deemed to be a single entity
- May 18, 1989 > the security agencies filed a Rejoinder claiming that
there is no violation of R.A. 5487, as amended by P.D. 11 and P.D.
100 since the three agencies were incorporated long before the
decrees' issuance; that mere duplication of incorporators does not
prove that the three security agencies are actually one single entity
- July 6, 1989 > Med-Arbiter Abdullah issued an Order in favor of the
labor union finding that PSVSIA, GVM and ASDA should be deemed
as a single entity and bargaining unit for the purpose of union
organizing and the holding of a certification election.
- July 21, 1989 > the security agencies appealed the Med-Arbiter's
Order to the Sec of Labor claiming that said Order was issued with
grave abuse of discretion
- December 15, 1989 > Labor Secretary Drilon denied the appeal for
lack of merit while at the same time affirming the Med-Arbiter's Order
and ordered the immediate conduct of a certification election.
- January 5, 1990 > the security agencies filed a MFR arguing that
they were denied their rights to due process
- January 26, 1990 > the succeeding Labor Secretary, Torres,
likewise denied the MFR for lack of merit and reiterated the directive
that a certification election be conducted without further delay.
- March 14, 1990 > instant petition was filed
- Petitioners claim: that there are three (3) corporations in this
petition, each of which has a separate and distinct corporate
personality of its own with separate registrations with the SEC and
different Articles of Incorporation and By-Laws; with separate sets of
corporate officers and directors; and no common business address
except for GVM and ASDA in Sampaloc, Manila.
ISSUE
WON a single petition for certification election or for recognition as
the sole and exclusive bargaining agent can be validly or legally be
filed by a labor union in 3 corporations each of which has a separate
and distinct legal personality instead of filing 3 separate petitions
 Labor Law 2 A2010
HELD
YES
- Indeed, the three agencies in the case at bar failed to rebut the fact that
they are (1) managed through the Utilities Management Corporation with
all of their employees drawing their salaries and wages from said entity;
(2) that the agencies have common and interlocking incorporators and
officers; (3) that the PSVSIA, GVM and ASDA employees have a single
Mutual Benefit System and followed a single system of compulsory
retirement; (4) that the security guards of one agency could easily transfer
from one agency to another and then back again by simply filling-up a
common pro forma slip called "Request for Transfer"; (5) always hold joint
yearly ceremonies such as the "PGA Annual Awards Ceremony"; (6) In
emergencies, all PSVSIA Detachment Commanders were instructed to
get in touch with the officers not only of PSVSIA but also of GVM and
ASDA.
- Accordingly, the veil of corporate fiction of the three agencies should be
lifted for the purpose of allowing the employees of the three agencies to
form a single labor union. As a single bargaining unit, the employees
therein need not file three separate petitions for certification election. All of
these could be covered in a single petition.
Disposition Instant petition for certiorari is hereby DISMISSED for utter
lack of merit.
SAN MIGUEL CORP EMPLOYEES UNION-PTGWO v.
CONFESOR
262 SCRA 81
KAPUNAN; September 19,1996
NATURE
Petition for certiorari assailing order of the Labor Sec.
FACTS
- San Miguel Corp (SMC) formerly had 4 business divisions: beer,
packaging, feeds and livestock, Magnolia and agri-business. The 3rd and
4th divisions were spun-off in Oct. 1991 and became two separate and
distinct corporations: Magnolia Corp and San Miguel Foods Inc (SMFI).
- The original CBA, entered into prior to the spin-off, became effective July
1989 (effective until June 1992). This was renegotiated starting July 1992
- the bargaining unit was the petitioner-union until July 1994
- During the negotiations, the labor union insisted that the bargaining unit
of SMC should still include the employees of Magnolia and SMFI, and that
the renegotiated terms of the CBA be effective only for the remaining
period of the existing CBA (for 2 years). SMC, on the other hand,
contended that the employees who moved to Magnolia and SMFI
automatically ceased to be part of the bargaining unit at the SMC, and
that the CBA should be effective for 3 years in accordance to Art. 253-A of
LC.
- Unable to agree on these issues, a deadlock was declared, and
subsequently the Sec of Labor issued the assailed order directing the
renegotiated terms of the CBA to be effective for the period of 3 years and
that the said CBA should cover only the employees of SMC and not of
Magnolia and SMFI (sided with SMC). Hence, this petition.
ISSUE/S
1. WON the duration of the renegotiated terms of the CBA is to be
effective for 3 years
2. WON the bargaining unit of the SMC includes also the employees of
Magnolia and SMFI
HELD
1. YES
Ratio Art.. 253-A. Terms of a Collective Bargaining Agreement. — Any
Collective Bargaining Agreement that the parties may enter into shall,
insofar as the representation aspect is concerned, be for a term of five (5)
years. xxx All other provisions of the Collective Bargaining Agreement
shall be renegotiated not later than three (3) years after its execution. xxx
Reasoning The “representation aspect” refers to the identity and majority
status of the union that negotiated the CBA as the exclusive bargaining
representative of the appropriate bargaining unit concerned. “All other
provisions” simply refers to the rest of the CBA, economic as well as non-
- 89 - Disini
economic provisions, except representation.
- the law is clear and definite on the duration of the CBA insofar as
the representation aspect is concerned, but is quite ambiguous with
the terms of the other provisions of the CBA. To resolve this, the
court looked into the legislative intent. The framers of the law wanted
to maintain industrial peace and stability by having both management
and labor work harmoniously together without any disturbance.
Thus, no outside union can enter the establishment within 5 years
and challenge the status of the incumbent union as the exclusive
bargaining agent. Likewise, the terms and conditions of employment
(economic and non-economic) can not be questioned by the
employers or employees during the period of effectivity of the CBA.
- In the instant case, it is not difficult to determine the period of
effectivity for the non-representation provisions of the CBA. Taking it
from the history of their CBAs, SMC intended to have the terms of
the CBA effective for 3 years reckoned from the expiration of the old
or previous CBA which was on June 30, 1989
2. NO
Ratio In determining an appropriate bargaining unit, the test of
grouping is mutuality or commonality of interests. The employees
sought to be represented by the collective bargaining agent must
have substantial mutual interests in terms of employment and
working conditions as evinced by the type of work they performed.
Reasoning Considering the spin-offs, the companies would
consequently have their respective and distinctive concerns in terms
of the nature of work, wages, hours of work and other conditions of
employment. Interests of employees in the different companies
perforce differ. SMC is engaged in the business of beer
manufacturing. Magnolia is involved in the manufacturing and
processing of dairy products while SMFI is involved in the production
of feeds and the processing of chicken. The nature of their products
and scales of business may require different skills which must
necessarily be commensurated by different compensation packages.
The different companies may have different volumes of work and
different working conditions. For such reason, the employees of the
different companies see the need to group themselves together and
organize themselves into distinctive and different groups. It would
then be best to have separate bargaining units for the different
companies where the employees can bargain separately according
to their needs and according to their own working conditions.
Disposition Petition is DISMISSED for lack of merit.
COMPLEX ELECTRONICS V NLRC
310 SCRA 403
Kapunan;July 19, 1999
Nature
Petition for appeal on certiorari
Facts
Complex Electronics Corporation (Complex) was engaged in the
manufacture of electronic products as a subcontractor of electronic
products where its customers, who were foreign based companies
with different product lines, gave their job orders, sent their own
materials and consigned their equipment to it. Thus, there was the
AMS Line for the Adaptive Micro System, Inc., the Heril Line for Heril
Co., Ltd., the Lite-On Line for the Lite-On Philippines Electronics Co.,
etc. On March 4, 1992, Complex received a facsimile message from
Lite-On Philippines Electronics Co., requiring it to lower its price by
10%. As their price were no longer competitive with that of mainlang
China.Complex informed its Lite-On personnel that such request of
lowering their selling price by 10% was not feasible as they were
already incurring losses at the present prices of their products and
thus informed the employees that it was left with no alternative but to
close down the operations of the Lite-On Line.
Complex filed a notice of closure of the Lite-On Line with the
Department of Labor and Employment (DOLE) and the retrenchment
of the ninety-seven (97) affected employees.
The Union filed a notice of strike. Two days thereafter the Union
conducted a strike vote which resulted in a "yes" vote. The
machinery, equipment and materials being used for production at
 Labor Law 2 A2010
Complex were pulled-out from the company premises and transferred to
the premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna. The
following day, a total closure of company operation was effected at
Complex.
Issue
WON Ionics is a separate corporate entity, thus Complex is not guilty of
unfair labor practice.
Held
Yes
A “runaway shop” is defined as an industrial plant moved by its owners
from one location to another to escape union labor regulations or state
laws, but the term is also used to describe a plant removed to a new
location in order to discriminate against employees at the old plant
because of their union activities. It is one wherein the employer moves its
business to another location or it temporarily closes its business for anti-
union purposes. A “runaway shop” in this sense, is a relocation motivated
by anti-union animus rather than for business reasons.
Reasoning:
-Ionics was not set up merely for the purpose of transferring the business
of Complex. At the time the labor dispute arose at Complex, Ionics was
already existing as an independent company. As earlier mentioned, it has
been in existence since July 5, 1984. It cannot, therefore, be said that the
temporary closure in Complex and its subsequent transfer of business to
Ionics was for anti-union purposes. The Union failed to show that the
primary reason for the closure of the establishment was due to the union
activities of the employees.
The mere fact that one or more corporations are owned or controlled by
the same or single stockholder is not a sufficient ground for disregarding
separate corporate personalities.
-Ionics may be engaged in the same business as that of Complex, but this
fact alone is not enough reason to pierce the veil of corporate fiction of the
corporation. Well-settled is the rule that a corporation has a personality
separate and distinct from that of its officers and stockholders. This fiction
of corporate entity can only be disregarded in certain cases such as when
it is used to defeat public convenience, justify wrong, protect fraud, or
defend crime. To disregard said separate juridical personality of a
corporation, the wrongdoing must be clearly and convincingly established.
Indophil Textile Mill Workers Union vs. Calica
1.The fact that the businesses of private respondent and Acrylic are
related, that some of the employees of the private respondent are the
same persons manning and providing for auxiliary services to the units of
Acrylic, and that the physical plants, offices and facilities are situated in
the same compound, it is our considered opinion that these facts are not
sufficient to justify the piercing of the corporate veil of Acrylic.
2.Del Rosario vs. National Labor Relations Commission
Substantial identity of the incorporators of two corporations does not
necessarily imply that there was fraud committed to justify piercing the veil
of corporate fiction.
3. Santos vs. National Labor Relations Commission
The basic rule is still that which can be deduced from the Court’s
pronouncement in Sunio vs. National Labor Relations Commission, thus:
Mere ownership by a single stockholder or by another corporation of all or
nearly all of the capital stock of a corporation is not of itself sufficient
ground for disregarding the separate corporate personality.
2. UNIT SEVERANCE AND GLOBE DOCTRINE
INDUSTRIAL /CRAFT UNIONS
KAPISANAN NG MGA MANGGAGAWA SA MANILA
RAILROAD (KAPISANAN) v. YARD CREW UNION
109 Phil 1143
Paredes; Oct 31, 1960
FACTS
-Kapisanan filed with the Court of Industrial Relations (CIR) a petition
praying that it be certified as the exclusive bargaining agent (EBA) in
- 90 - Disini
Manila Railroad Company. During the proceeding, 3 appropriate
bargaining units (ABUs) were determined by CIR; Kapisanan was
eventually certified as the EBA for the remaining-company-personnel
unit.2
-After the decision in favor of Kapisanan became final, the Yard Crew
Union, the Station Employees' Union, and the Railroad Engineering
Department Union, filed their respective petitions, praying that they
be defined as separate bargaining units, and that they be certified in
the units sought to be separated. CIR ordered a plebiscite among the
employees in the 3 proposed groups (i.e. Engineering Department,
Station Employees, and Yard Crew Personnel), “[t]he employee[s] in
the proposed groups… [to] vote, in a secret ballot to be conducted by
[CIR], … whether… they desire to be separated from the unit of the
rest of the employees being represented by the Kapisanan.”
-Kapisanan, being the EBA of the ABU from which the 3 unions is
petitioning for separate ABUs, now contends that the existence of a
collective bargaining agreement between Kapisanan and the
company bars the subject 3 petitions.3
ISSUE
WON CIR’s orders are contrary to law
HELD NO
RATIO
-Because of the modern complexity of the relation between both
employer and union structure, it becomes difficult to determine
from the evidence alone which of the several claimant groups
forms a proper bargaining unit. It becomes necessary to give
consideration to the express will or desire of the employees - a
practice designated as the "Globe doctrine," which sanctions
the holding of a series of elections, not for the purpose of allowing
the group receiving an over all majority of votes to represent all
employees, but for the purpose of permitting the employees in
each of the several categories to select the group which each
chooses as a bargaining unit.
-CIR was simply interested "in the verification of the evidence…
submitted wherein the workers have signed manifestations… of their
desire to be separated from the Kapisanan." CIR has the right of full
investigation in arriving at a correct finding of fact in order to deny or
grant the petitions for certification election. And one way of
determining the desire of the employees is what CIR suggested: a
plebiscite. A plebiscite and not the certification election itself. The
subject orders of CIR do not decide the petitions of the 3 unions.
Mechanical Dep’t Labor Union v CIR
24 SCRA 925
1968
In view of its findings and the history of union representation in the
railway company, indicating that bargaining units had been formed
through separation of new units from existing ones whenever
plebiscites had shown the workers’ desires to have their own
representatives, and relying on the “globe doctrine” the employees in
the Caloocan shop should be given a chance to vote on whether
their group should be separated from that represented by the
mechanical department labor union, and ordered a plebiscite held for
that purpose.
Technically, the appeal was premature since the result of the ordered
plebiscite may be adverse to the creation of a separate bargaining
unit-- however, MDLU seems to have conceded that the results
would favor separation.
2
The other 2 ABUs are engine crew unit and train crew unit.
The remaining-personnel unit itself excludes “supervisors,
temporary employees, the members of the Auditing
Department, the members of the security guard and
professional and technical employees.”
3
In other words, Kapisanan is invoking the CONTRACT BAR
RULE in certification elections.
 Labor Law 2 A2010
Plebiscite may be held to determine WON the Employees w/in the dept do
want a separate bargaining agent.
The CIR found basic differences b/w those in the Rolling Stocks (i.e.
Caloocan shops) and those of the others. Those in the Caloocan shops
have a community of interests and working conditions. They also perform
major repairs of railway rolling stock; the other units do
only minor repairs. Also, the workers in Caloocan require special skills in
the operation of heavy equipment, the others do not.
Hence, the GLOBE DOCTRINE properly applies.
Bargaining units had been formed through separation of new units from
existing ones whenever plebiscites had shown the worker’s desire to have
their own representatives.
(from Barops reviewer)
DISINI: A brief explanation of the GLOBE
DOCTRINE
It is best explained in the context of a market place and the demand of
employment on such market place. The GLOBE DOCTRINE usually
applies to employees with rare skills or highly
technical ones.
Example given: Case of Pilots and Stewardess.
If ,originally, pilots and stewardesses belong to ONE bargaining unit (unit
A) for the purpose of collective bargaining, with the use of the GLOBE
DOCTRINE a plebiscite can be held to determine if the pilot employees
would want to form a separate bargaining unit (unit B).
Illustration:
Unit A (original bargaining unit) : 100 Pilots + 200 Stewardesses = 300
employees Unit B (proposed new unit): Pilots = 100 employees.
Those in unit B (100 pilots) will vote in a plebiscite. Their choices will be
(1) To vote for Unit A: this would mean that they do not wish to separate
from the original bargaining unit.
(2) To vote for Unit B: This would mean that they would want to form their
OWN bargaining unit, composed of pilots only.
(3) Neither: They do not want the choices If you have one BIG bargaining
unit, most probably you are grouping together DIFFERENT SKILLED
workers.
Rationale of the Globe Doctrine: highly skilled workers have to separate to
increase their market value.
Under the Globe Doctrine, will of the employees is the determinative
factor.
3. EFFECT PRIOR AGREEMENT
GENERAL RUBBER AND FOOTWEAR CORP. v. BUREAU OF
LABOR RELATIONS NATIONAL ASSOCIATION OF TRADE
UNION OF MONTHLY PAID EMPLOYEES-NATU
GR No. 74262
PARAS; October 29, 1987
NATURE
Petition for review
FACTS
Petitioner is a corporation engaged in the business of manufacturing
rubber sandals and oilier rubber products. In 1985, the Samahang
Manggagawa sa General Rubber Corporation ANGLO was formed by the
daily paid rank and file employees as their union for collective bargaining,
after the expiration on October 15, 1985 of the collective bargaining
agreement previously executed by petitioner with General Rubber
Workers Union (Independent) on October 15, 1982. Be it noted however
that on July 17, 1985, the monthly paid employees of the petitioner-
corporation, after forming their own collective bargaining unit the National
Association of Trade Unions of Monthly Paid Employees-NATU, filed a
petition for direct certification with tile Bureau of Labor Relations which
petition was opposed by herein petitioner. On September 2, 1985, the
Med-Arbiter issued an Order for the holding of a certification election after
finding that a certification election is in order in this case and observing
that it is the fairest remedy to determine whether employees of petitioner
desire to have a union or not. On appeal, the Bureau of Labor Relations
denied both the appeal and motion for reconsideration interposed by
petitioner and affirmed the ruling of the Med-Arbiter. Hence, the present
- 91 - Disini
petition
ISSUE
WON The Bureau of Labor Relations committed grave abuse of
discretion in holding that supervisors, employees perform- ing
managerial, confidential and technical functions and office personnel,
who are negotiated by petitioner to be excluded from the existing
bargaining unit because they are performing vital functions to
management, can form and join a labor organization and be
members of the new bargaining unit.
HELD
It has been the policy of the Bureau to encourage the formation of an
employer unit "unless circumstances otherwise require. The
proliferation of unions in an employer unit is discouraged as a matter
of policy unless there are compelling reasons which would deny a
certain class of employees the right to self-organization for purposes
of collective bargaining, This case does not fall squarely within the
exception. It is undisputed that the monthlies who are rank-and-file
have been historically excluded from the bargaining unit composed
of daily-paid rank-and-filers that is, since 1963 when the existing
rank- and- file union was recognized. In fact, the collective bargaining
agreement (CBA) which expired last 15 October 1985 provides as
follows:
ARTICLE I
SCOPE
Section 1. Appropriate bargaining unit. ? This Agreement covers all
regular employees and workers employed by the company at its
factory in Malabon, Metro Manila. The words "employee," "laborer"
and "workers" when used in this Agreement shall be deemed to refer
to those employees within the bargaining unit. Employees who
occupy managerial, confidential or technical positions, supervisors,
contract employees, monthly-paid employees, security as wen as
office personnel are excluded from the appropriate bargaining unit
(emphasis supplied).
In view of the above, the monthly-paid rank-and-file employees ran
form a union of their own, separate and distinct from the existing
rank-and-file union composed of daily-paid workers. (Rollo, pp. 1920)
Thus, it can be readily seen from the above findings of the Bureau of
labor Relations that the members of private respondent are not
managerial employees as claimed by petitioners but merely
considered as rank-and-file employees who have every right to self-
organization or to be heard through a duly certified collective
bargaining union. The Supervisory power of the members of private
respondent union consists merely in recommending as to what
managerial actions to take in disciplinary cases. These members of
private respondent union do not fit the definition of managerial
employees which We laid down in the case of Bulletin Publishing
Corporation v. Sanchez (144 SCRA 628). These members of private
respondent union are therefore not prohibited from forming their own
collective bargaining unit since it has not been shown by petitioner
that "the responsibilities (of these monthly-paid-employees)
inherently require the exercise of discretion and independent
judgment as supervisors" or that "they possess the power and
authority to lay down or exercise management policies." Similarly, he
held in the same case that "Members of supervisory unions who do
not fall within the definition of managerial employees shall become
eligible to loin or assist the rank-and-file labor organization, and if
none exists, to form or assist in the forming of such rank-and-file
organizations.
Perhaps it is unusual for the petitioner to have to deal with two (2)
collective bargaining unions but there is no one to blame except
 Labor Law 2 A2010
petitioner itself for creating the situation it is in. From the beginning of the
existence in 1963 of a bargaining limit for the employees up to the
present, petitioner had sought to indiscriminately suppress the members
of the private respondent"s right to self-organization provided for by law.
Petitioner, in justification of its action, maintained that the exclusion of the
members of the private respondent from the bargaining union of the rank-
and-file or from forming their own union was agreed upon by petitioner
corporation with the previous bargaining representatives namely: the
General "Rubber Workers Union PTGWO the General Workers Union ?
NAFLU and the General Rubber Workers Union (independent). Such
posture has no leg to stand on. It has not been shown that private
respondent was privy to this agreement. And even if it were so, it can
never bind subsequent federations and unions particularly private
respondent-union because it is a curtailment of the right to self-
organization guaranteed by the labor laws. However, to prevent any
difficulty. and to avoid confusion to all concerned and, more importantly,
to fulfill the policy of the New Labor Code as well as to be consistent with
Our ruling in the Bulletin case, supra, the monthly-paid rank-and-file
employees should be allowed to join the union of the daily-paid-rank-and-
file employees of petitioner so that they can also avail of the CBA benefits
or to form their own rank-and-file union, without prejudice to the
certification election that has been ordered.
HELD Petition dismissed
DLSU v. DLSU EMPLOYEES ASSOCIATION (DLSUEA)
330 SCRA 363
BUENA; April 12, 2000
NATURE
Two petitions for certiorari- the first petition with preliminary injunction
and/or TRO; the second assailing the decision of voluntary arbitrator
Buenaventura Magsalin. These two petitions have been consolidated.
FACTS
- DLSU and DLSU Employees Association-National Federation of
Teachers and Employees Union (DLSUEA-NAFTEU), which is composed
of regular non-academic rank and file employees, (hereinafter referred to
as UNION) entered into a CBA with a life span of 3 years.
- During the freedom period, or 60 days before the expiration of the said
CBA, the Union initiated negotiations with the University for a new CBA
which, however, turned out to be unsuccessful, hence, the Union filed a
Notice of Strike with the National Conciliation and Mediation Board.
- After several conciliation-mediation meetings, 5 out of the 11 issues
raised in the Notice of Strike were resolved by the parties. A partial CBA
was thereafter executed by the parties.
- the parties entered into a Submission Agreement, identifying the
remaining 6 unresolved issues for arbitration, namely: "(1) scope of the
bargaining unit, (2) union security clause, (3) security of tenure, (4) salary
increases for the second and third years of the CBA, (5) indefinite union
leave, reduction of the union president's workload, special leave, and (6)
duration of the agreement."
- The parties appointed Magsalin as voluntary arbitrator. He rendered the
assailed decision. In the said decision, the voluntary arbitrator, on the first
issue ruled that ". . . the Computer Operators assigned at the CSC
[Computer Services Center], just like any other Computer Operators in
other units, should be included as members of the bargaining unit," after
finding that "evidently, the Computer Operators are presently doing
clerical and routinary work and had nothing to do with setting of
management policies for the University. They may have access to vital
information regarding the University's operations but they are not
necessarily confidential." Regarding the discipline officers, the voluntary
arbitrator ". . . believes that this type of employees belongs to the rank-
and-file on the basis of the nature of their job." With respect to the
employees of the College of St. Benilde, the voluntary arbitrator found that
the CSB has a personality separate and distinct from the University and
thus, held ". . . that the employees therein are outside the bargaining unit
of the University's rank-and-file employees."
On the second issue, arbitrator opined that a union shop clause ". . . is
not a restriction on the employee's right to freedom of association but
rather a valid form of union security while the CBA is in force and in
- 92 - Disini
accordance with the Constitutional policy to promote unionism and
collective bargaining and negotiations. The parties therefore should
incorporate such union shop clause in their CBA."
On the third issue the arbitrator upheld the ". . . elementary right
and prerogative of the management of the University to select and/or
choose its employees, a right equally recognized by the Constitution
and the law. The employer, in the exercise of this right, can adopt
valid and equitable grounds as basis for lay-off or separation, like
performance, qualifications, competence, etc. Similarly, the right to
transfer or reassign an employee is an employer's exclusive right
and prerogative."
On the fourth issue the arbitrator opined that the ". . .proposed
budget of the University for SY 1992-93 could not sufficiently cope up
with the demand for increases by the Union... he ruled that the
University can no longer be required to grant a second round of
increase for the school years under consideration and charge the
same to the incremental proceeds."
On the fifth issue the voluntary arbitrator ruled that unionism ". . . is
no valid reason for the reduction of the workload of its President,"
and that there is ". . . no sufficient justification to grant an indefinite
leave." Finding that the Union and the Faculty Association are not
similarly situated, technically and professionally, and that "while
professional growth is highly encouraged on the part of the rank-and-
file employees, this educational advancement would not serve in the
same degree as demanded of the faculty members," the voluntary
arbitrator denied the Union's demand for special leave benefits.
On the last issue the voluntary arbitrator ruled that ". . . when the
parties forged their CBA and signed it, where a provision on duration
was explicitly included, the same became a binding agreement
between them. Notwithstanding the Submission Agreement, thereby
reopening this issue for resolution, this Voluntary Arbitrator is
constrained to respect the original intention of the parties.
- Subsequently, both parties filed their respective motions for
reconsideration which, however, were not entertained by the
voluntary arbitrator
- University filed with this Court, a petition for certiorari with TRO
and/or preliminary injunction assailing the decision of the voluntary
arbitrator
- the Union also filed a petition for certiorari.
- the Solicitor General agreed with the voluntary arbitrator's assailed
decision on all points except that involving the employees of the
College of St. Benilde.
ISSUES
1. WON the computer operators assigned at the University's
Computer Services Center and the University's discipline officers
may be considered as confidential employees and should therefore
be excluded from the bargaining unit which is composed of rank and
file employees of the University.
2. WON the employees of the College of St. Benilde should also be
included in the same bargaining unit.
3. WON a union shop clause should be included in the parties' CBA,
in addition to the existing maintenance of membership clause.
Held:
1. NO.
Ratio The express exclusion of the computer operators and
discipline officers from the bargaining unit of rank-and-file employees
in the 1986 CBA does not bar any re-negotiation for the future
inclusion of the said employees in the bargaining unit. During the
freedom period, the parties may not only renew the existing CBA but
may also propose and discuss modifications or amendments thereto.
With regard to the alleged confidential nature of the said employees'
functions, the said computer operators and discipline officers are not
confidential employees. The service record of a computer operator
reveals that his duties are basically clerical and non-confidential in
nature. As to the discipline officers, we agree with the voluntary
arbitrator that based on the nature of their duties, they are not
confidential employees and should therefore be included in the
bargaining unit of rank-and-file employees.
2. NO.
Ratio The employees of the College of St. Benilde should be
excluded from the bargaining unit of the rank-and-file employees of
 Labor Law 2 A2010
DLSU because the two educational institutions have their own separate
juridical personality and no sufficient evidence was shown to justify the
piercing of the veil of corporate fiction.
3. YES
Ratio The right to refrain from joining labor organizations recognized by
Section 3 of the Industrial Peace Act is limited. The legal protection
granted to such right to refrain from joining is withdrawn by operation of
law, where a labor union and an employer have agreed on a closed shop,
by virtue of which the employer may employ only members of the
collective bargaining union, and the employees must continue to be
members of the union for the duration of the contract in order to keep their
jobs.
Disposition The assailed decision is hereby AFFIRMED with the
modification that the issue on salary increases for the second and third
years of the CBA be REMANDED to the voluntary arbitrator for definite
resolution on the basis of the externally audited financial statements of the
University already submitted by the Union before the voluntary arbitrator
and forming part of the records.
4. CHANGES
San Miguel Corp. v. Mandaue
467 SCRA 107
Tinga ; Aug. 16, 2005
Facts
-CA affirmes DOLE Undersecretary for Labor Relations, Rosalinda
Dimapilis-Baldoz, ordering the immediate conduct of a certification
election among the petitioner’s rank-and-file employees.
- Federation of Free Workers (FFW/ respondent) filed a petition for
certification election with the DOLE Regional Office No. VII. It sought to
be certified and to represent the permanent rank-and-file monthly paid
employees of the petitioner. The following documents were attached to
the petition: (1) a Charter Certificate certifying that respondent as of that
date was duly certified as a local or chapter of FFW; (2) a copy of the
constitution of respondent prepared by its Secretary, Noel T. Bathan and
attested by its President, Wilfred V. Sagun; (3) a list of respondent’s
officers and their respective addresses, again prepared by Bathan and
attested by Sagun; (4) a certification signifying that respondent had just
been organized and no amount had yet been collected from its members,
signed by respondent’s treasurer Chita D. Rodriguez and attested by
Sagun; and (5) a list of all the rank-and-file monthly paid employees of the
Mandaue Packaging Products Plants and Mandaue Glass Plant prepared
by Bathan and attested by Sagun.
-SMC (Petitioner) filed a motion to dismiss the petition for certification
election on the sole ground that herein respondent is not listed or included
in the roster of legitimate labor organizations based on the certification
issued by the Officer-In-Charge, Regional Director of the DOLE Regional
Office No. VII, Atty. Jesus B. Gabor.
-Respondent submitted to the Bureau of Labor Relations the same
documents earlier attached to its petition for certification. The
accompanying letter, signed by respondent’s president Sagun, stated that
such documents were submitted in compliance with the requirements for
the creation of a local/chapter pursuant to the Labor Code and its
Implementing Rules; and it was hoped that the submissions would
facilitate the listing of respondent under the roster of legitimate labor
organizations.The Chief of Labor Relations Division of DOLE Regional
Office No. VII issued a Certificate of Creation of Local/Chapter No. ITD. I-
ARFBT-058/98, certifying that from 30 July 1998, respondent has
acquired legal personality as a labor organization/worker’s association, it
having submitted all the required documents.
Issues
1. WON the inclusion of the two alleged supervisory employees in
appellee union’s membership amounts to fraud, misrepresentation, or
false statement within the meaning of Article 239(a) and (c) of the Labor
Code.
- 93 - Disini
2. WON subsequent developments change the disposition of the
case
Held:
1. No, it does not.
- Under the law, a managerial employee is “one who is vested with
powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, layoff, recall, discharge,
assign or discipline employees.” A supervisory employee is “one
who, in the interest of the employer, effectively recommends
managerial actions if the exercise of such recommendatory authority
is not merely routinary or clerical in nature but requires the use of
independent judgment.’” Finally, “all employees not falling within the
definition of managerial or supervisory employee are considered
rank-and-file employees”. It is also well-settled that the actual
functions of an employee, not merely his job title, are determinative
in classifying such employee as managerial, supervisory or rank and
file. Good faith is presumed in all representations, an essential
element of fraud, false statement and misrepresentation in order
for these to be actionable is intent to mislead by the party
making the representation. In this case, there is no proof to
show that Bathan, or appellee union for that matter, intended to
mislead anyone. If this was appellee union’s intention, it would
have refrained from using a more precise description of the
organization instead of declaring that the organization is
composed of ‘rank and file monthlies’. Hence, the charge of
fraud, false statement or misrepresentation cannot be
sustained.
- Even if they are supervisory employees, no action can be done
that emasculates the right to self-organization and the promotion of
free trade unionism. We take administrative notice of the realities in
union organizing, during which the organizers must take their
chances, oftentimes unaware of the fine distinctions between
managerial, supervisory and rank and file employees. The grounds
for cancellation of union registration are not meant to be applied
automatically, but indeed with utmost discretion. Where a remedy
short of cancellation is available, that remedy should be preferred. In
this case, no party will be prejudiced if Bathan were to be excluded
from membership in the union. The vacancy he will thus create can
then be easily filled up through the succession provision of appellee
union’s constitution and by-laws. What is important is that there is an
unmistakeable intent of the members of appellee union to exercise
their right to organize. We cannot impose rigorous restraints on such
right if we are to give meaning to the protection to labor and social
justice clauses of the Constitution.
2. No, it does not affect the case.
The allegation that the bargaining unit that respondent
sought to represent is no longer the same because of the dynamic
nature of petitioner’s business, a lot of changes having occurred in
the work environment, and that four of respondent’s officers are no
longer connected with petitioner have no effect on the Court’s ruling
that a certification election should be immediately conducted with
respondent as one of the available choices. Petitioner’s bare
manifestations adduce no reason why the certification election
should not be conducted forthwith. If there are matters that have
arisen since the filing of the petition that serve to delay or cancel the
election, these can be threshed out during the pre-election
conferences. Neither is the fact that some of respondent’s officers
have since resigned from petitioner of any moment. The
local/chapter retains a separate legal personality from that of its
officers or members that remains viable notwithstanding any turnover
in its officers or members.
DISPOSITION WHEREFORE, the Petition is DENIED.
5.03 DETERMINING AGENCY
ART. 232. Prohibition on certification election. - The
Bureau shall not entertain any petition for certification
election or any other action which may disturb the
administration of duly registered existing collective
bargaining agreements affecting the parties except under
Articles 253, 253-A and 256 of this Code. (As amended by
Section 15, Republic Act No. 6715, March 21, 1989).
 Labor Law 2 A2010
AGENCY AND FINALITY ORDER
FILOIL REFINERY CORPORATION vs.
FILOIL SUPERVISORY & CONFIDENTIAL EMPLOYEES
ASSOCIATION
46 SCRA 512
TEEHANKEE; Aug 18, 1972
NATURE
Appeal from the orders of the Court of Industrial Relations
FACTS
- Filoil Refinery Corporation executed a collective bargaining agreement
with the Filoil Employees & Workers Association (FEWA), a labor
association composed of the corporation's rank-and-file employees . This
collective bargaining agreement expressly excluded from its coverage
petitioner's supervisory and confidential employees, who in turn organized
their own labor association, respondent herein.
- The Corporation filed a motion to dismiss the petition for certification of
the respondent association as the sole and exclusive collective bargaining
agent of all petitioner’s supervisory and confidential employees working at
its refinery in Rosario, Cavite. Their reason being, since they are part of
the management, they do not have the right to bargain collectively
although they may organize an organization of their own.
Held:
Industrial court enjoys a wide discretion in determining the procedure
necessary to insure the fair and free choice of bargaining representations
by employees, and that its action in deciding upon an appropriate unit for
collective bargaining purpose is discretionary and that its judgment in this
respect is entitled to almost complete finality, unless its action is arbitrary
or capricious and that absent any grave abuse of discretion as to justify
the Court’s intervention.
Action in deciding upon an appropriate unit for collective bargaining
purposes is discretionary. Its judgment is entitled to finality, unless its
action is arbitrary or capricious.
International Labor Organization
- 94 - Disini
Each Member of the International Labour Organisation for which this
Convention is in force undertakes to take all necessary and
appropriate measures to ensure that workers and employers may
exercise freely the right to organise.
C98 Right to Organise and
Collective Bargaining
Convention, 1949
Article 2
1. Workers' and employers' organisations shall enjoy adequate
protection against any acts of interference by each other or each
other's agents or members in their establishment, functioning or
administration.
2. In particular, acts which are designed to promote the
establishment of workers' organisations under the domination of
employers or employers' organisations, or to support workers'
organisations by financial or other means, with the object of placing
such organisations under the control of employers or employers'
organisations, shall be deemed to constitute acts of interference
within the meaning of this Article.
Article 3
Machinery appropriate to national conditions shall be established,
where necessary, for the purpose of ensuring respect for the right to
organise as defined in the preceding Articles.
Article 5
Workers' and employers' organisations shall have the right to
establish and join federations and confederations and any such
organisation, federation or confederation shall have the right to
affiliate with international organisations of workers and employers.
***Note: The ILO C48 in the outline must have been an error
because that convention has absolutely nothing to do with self-
organization as its title is C48 Maintenance of Migrants' Pension
Rights Convention, 1935. Ergo, it’s not included here.

C 87 Freedom of Association and

Protection of the Right to Organise
Convention, 1948
Article 2
Workers and employers, without distinction whatsoever, shall have the
right to establish and, subject only to the rules of the organisation
concerned, to join organisations of their own choosing without previous
authorisation.
Article 3
1. Workers' and employers' organisations shall have the right to draw up
their constitutions and rules, to elect their representatives in full freedom,
to organise their administration and activities and to formulate their
programmes.
2. The public authorities shall refrain from any interference which would
restrict this right or impede the lawful exercise thereof.
Article 7
The acquisition of legal personality by workers' and employers'
organisations, federations and confederations shall not be made subject
to conditions of such a character as to restrict the application of the
provisions of Articles 2, 3 and 4 hereof.
Article 8
1. In exercising the rights provided for in this Convention workers and
employers and their respective organisations, like other persons or
organised collectivities, shall respect the law of the land.
2. The law of the land shall not be such as to impair, nor shall it be so
applied as to impair, the guarantees provided for in this Convention.

Article 11