BENGUET ELECTRIC COOPERATIVE, INC., petitioner, vs. HON.

PURA FERRER-
CALLEJA, Director of the Bureau of Labor Relations, and BENECO EMPLOYEES LABOR
UNION, respondents.

Facts:
Beneco Worker's Labor Union-Association of Democratic Labor Organizations (BWLU-
ADLO) filed a petition for direct certification as the sole and exclusive bargaining representative
of all the rank and file employees of Benguet Electric Cooperative, Inc. (BENECO) alleging that
BENECO has in its employ 214 rank and file employees; that 198 or 92.5% of these employees
have supported the filing of the petition; that no certification election has been conducted for the
last 12 months; that there is no existing collective bargaining representative of the rank and file
employees sought to represented by BWLU- ADLO; and, that there is no collective bargaining
agreement in the cooperative. An opposition to the petition was filed by the Beneco Employees
Labor Union (BELU) contending that it was certified as the sole and exclusive bargaining
representative of the subject workers pursuant to an order issued by the med-arbiter; that pending
resolution by the NLRC are two cases it filed against BENECO involving bargaining deadlock
and unfair labor practice; and, that the pendency of these cases bars any representation question.
BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit
electric cooperative engaged in providing electric services to its members and patron-consumers;
and, that the employees sought to be represented by BWLU-ADLO are not eligible to form, join
or assist labor organizations of their own choosing because they are members and joint owners of
the cooperative. The med-arbiter issued an order giving due course to the petition for
certification election. However, the med-arbiter limited the election among the rank and file
employees of BENECO who are non-members thereof and without any involvement in the actual
ownership of the cooperative. The med-arbiter found that there are 37 employees who are not
members and without any involvement in the actual ownership of the cooperative. BELU and
BENECO appealed but the same was dismissed for lack of merit. So BENECO filed with the SC
a petition for certiorari which the SC dismissed for lack of merit in a minute resolution dated
April 1986. The ordered certification election was held in October 1986. Prior to the conduct
thereof BENECO's counsel verbally manifested that "the cooperative is protesting that
employees who are members-consumers are being allowed to vote when they are not eligible to
be members of any labor union for purposes of collective bargaining; much less, to vote in this
certification election." BENECO submitted a certification showing that only 4 employees are not
members of BENECO and insisted that only these employees are eligible to vote in the
certification election. Canvass of the votes showed that BELU garnered 49 of the 83 "valid"
votes cast. Thereafter BENECO formalized its verbal manifestation by filing a Protest. The med-
arbiter dismissed the protest. BLR director Calleja affirmed the med-arbiter's order and certified
BELU as the sole and exclusive bargaining agent of all the rank and file employees of BENECO.

Issue:
W/N employees of a cooperative are qualified to form or join a labor organization for
purposes of collective bargaining.

NO

Ratio:
Under Article 256 LC, to have a valid certification election, "at least a majority of all
eligible voters in the unit must have cast their votes. The labor union receiving the majority of
the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit."
BENECO asserts that the certification election held was null and void since members-employees
who are not eligible to form and join a labor union for purposes of collective bargaining were
allowed to vote therein. The issue has already been resolved and clarified in the case of
Cooperative Rural Bank of Davao City, Inc. vs. Ferrer Calleja, et al. and reiterated in the cases of
Batangas-Electric Cooperative Labor Union v. Young, et al. and San Jose City Electric Service
Cooperative, Inc. v. Ministry of Labor and Employment, et al. wherein the Court had stated that
the right to collective bargaining is not available to an employee of a cooperative who at the
same time is a member and co-owner thereof. With respect, however, to employees who are
neither members nor co- owners of the cooperative they are entitled to exercise the rights to self-
organization, collective bargaining and negotiation as mandated by the Constitution and
applicable statutes.
Calleja argues that to deny the members of petitioner cooperative the right to form, assist or join
a labor union of their own choice for purposes of collective bargaining would amount to a patent
violation of their right to self-organization.
The above contention is untenable. Contrary to respondents' claim, the fact that the members-
employees of BENECO do not participate in the actual management of the cooperative does not
make them eligible to form, assist or join a labor organization for the purpose of collective
bargaining with petitioner. The Court's ruling in the Davao City case that members of
cooperative cannot join a labor union for purposes of collective bargaining was based on the fact
that as members of the cooperative they are co-owners thereof. As such, they cannot invoke the
right to collective bargaining for "certainly an owner cannot bargain with himself or his co-
owners." It is the fact of ownership of the cooperative, and not involvement in the management
thereof, which disqualifies a member from joining any labor organization within the cooperative.
Thus, irrespective of the degree of their participation in the actual management of the cooperative, all
members thereof cannot form, assist or join a labor organization for the purpose
of collective bargaining.
Respondent union further claims that if nominal ownership in a cooperative is "enough to take
away the constitutional protections afforded to labor, then there would be no hindrance for
employers to grant, on a scheme of generous profit sharing, stock bonuses to their employees and
thereafter claim that since their employees are stockholders, albeit in a minimal and involuntary
manner, they are now also co-owners and thus disqualified to form unions."
The above contention is based on the erroneous presumption that membership in a cooperative is
the same as ownership of stocks in ordinary corporations. While cooperatives may exercise some
of the rights and privileges given to ordinary corporations provided under existing laws, such
cooperatives enjoy other privileges not granted to the latter. Similarly, members of cooperatives
have rights and obligations different from those of stockholders of ordinary corporations. It was
precisely because of the special nature of cooperatives, that the Court held in the Davao City
case that members-employees thereof cannot form or join a labor union for purposes of
collective bargaining.

The Court held that:

A cooperative is by its nature different from an ordinary business concern being run either by
persons, partnerships, or corporations. Its owners and/or members are the ones who run and
operate the business while the others are its employees. As above stated, irrespective of the
number of shares owned by each member they are entitled to cast one vote each in deciding upon
the affairs of the cooperative. An employee therefore of such a cooperative who is a member and
co-owner thereof cannot invoke the right to collective bargaining for certainly an owner cannot
bargain with himself or his co-owners.
Article 256 of the Labor Code provides, among others, that: To have a valid, election, at least a
majority of all eligible voters in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers
in the unit.
In this case it cannot be determined whether or not respondent union was duly elected by the
eligible voters of the bargaining unit since even employees who are ineligible to join a labor
union within the cooperative because of their membership therein were allowed to vote in the
certification election. Considering the foregoing, the Court finds that respondent director
committed grave abuse of discretion in certifying respondent union as the sole and exclusive
bargaining representative of the rank and file employees of petitioner cooperative.

VICTORIANO VS ELIZALDE ROPE WORKERS' UNION

Topic: Right to self organization
Extent and Scope of Right

FACTS:
1. Benjamin Victoriano (hereinafter referred to as Appellee), a member of the religious sect known as the
"Iglesia ni Cristo", had been in the employ of the Elizalde Rope Factory, Inc. (hereinafter referred to as
Company) since 1958.

2. As such employee, he was a member of the Elizalde Rope Workers' Union (hereinafter referred to as
Union) which had with the Company a collective bargaining agreement containing a closed shop
provision which reads as follows:
Membership in the Union shall be required as a condition of employment for all permanent employees
workers covered by this Agreement.

3. The collective bargaining agreement expired on March 3, 1964 but was renewed the following day,
March 4, 1964.

4. Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to its amendment by Republic Act No.
3350, the employer was not precluded "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." On June 18, 1961, however, Republic Act No. 3350 was enacted, introducing an amendment
to — paragraph (4) subsection (a) of section 4 of Republic Act No. 875, as follows: ... "but such
agreement shall not cover members of any religious sects which prohibit affiliation of their members in
any such labor organization".

5. Being a member of a religious sect that prohibits the affiliation of its members with any labor
organization, Appellee presented his resignation to appellant Union in 1962, and when no action was
taken thereon, he reiterated his resignation on September 3, 1974. Thereupon, the Union wrote a formal
letter to the Company asking the latter to separate Appellee from the service in view of the fact that he
was resigning from the Union as a member.

6. The management of the Company in turn notified Appellee and his counsel that unless the Appellee
could achieve a satisfactory arrangement with the Union, the Company would be constrained to dismiss
him from the service. This prompted Appellee to file an action for injunction, docketed as Civil Case No.
58894 in the Court of First Instance of Manila to enjoin the Company and the Union from dismissing
Appellee. 1 In its answer, the Union invoked the "union security clause" of the collective bargaining
agreement; assailed the constitutionality of Republic Act No. 3350; and contended that the Court had no
jurisdiction over the case, pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e).
CFI - Manila: enjoining the defendant Elizalde Rope Factory, Inc. from dismissing the plaintiff from his
present employment and sentencing the defendant Elizalde Rope Workers' Union to pay the plaintiff P500
for attorney's fees and the costs of this action

Appeal to this Court on purely questions of law.

ISSUE/S:
WON RA 3350 introducing an amendment to paragraph (4) subsection (a) of section 4 of Republic Act
No. 875, as follows: ... "but such agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization" is unconstitutional

WON RA 3350 infringes on the fundamental right to form lawful associations when it "prohibits all the
members of a given religious sect from joining any labor union if such sect prohibits affiliations of their
members thereto" 5 ; and, consequently, deprives said members of their constitutional right to form or
join lawful associations or organizations guaranteed by the Bill of Rights, and thus becomes obnoxious to
Article III, Section 1 (6) of the 1935 Constitution

RULING:

1. NO. R.A. No. 3350 is constitutional on all counts. It must be pointed out that the free exercise of
religious profession or belief is superior to contract rights. In case of conflict, the latter must, therefore,
yield to the former.

2. No. What the exception provides, therefore, is that members of said religious sects cannot be compelled
or coerced to join labor unions even when said unions have closed shop agreements with the employers;
that in spite of any closed shop agreement, members of said religious sects cannot be refused employment
or dismissed from their jobs on the sole ground that they are not members of the collective bargaining
union.

If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up with the
labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign up, they
can do so; the law does not coerce them to join; neither does the law prohibit them from joining; and
neither may the employer or labor union compel them to join. Republic Act No. 3350, therefore, does not
violate the constitutional provision on freedom of association.

DISPOSITIVE: Benjamin Victoriano Won (Plaintiff)

Appeal is dismissed.

DOCTRINE: The free exercise of religious profession or belief is superior to contract rights. In case of
conflict, the latter must yield to the former.
If in deference and fealty to their religious faith, they refuse to sign up, they can do so; the law does not
coerce them to join; neither does the law prohibit them from joining, and neither may the employer or
labor union compel them to join.

VICTORIANO VS. ELIZALDE UNION

NOVEMBER 17, 2013 ~ VBDIAZ
BENJAMIN VICTORIANO, plaintiff-appellee, vs. ELIZALDE ROPE WORKERS’ UNION and
ELIZALDE ROPE FACTORY, INC., defendants, ELIZALDE ROPE WORKERS’ UNION,
defendant-appellant.
GRN L-25246 September 12, 1974

FACTS:
Benjamin Victoriano (Appellee), a member of the religious sect known as the “Iglesia ni Cristo”, had
been in the employ of the Elizalde Rope Factory, Inc. (Company) since 1958. He was a member of the
Elizalde Rope Workers’ Union (Union) which had with the Company a CBA containing a closed shop
provision which reads as follows: “Membership in the Union shall be required as a condition of
employment for all permanent employees workers covered by this Agreement.”
Under Sec 4(a), par 4, of RA 975, prior to its amendment by RA 3350, the employer was not precluded
“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.” On June 18, 1961,
however, RA 3350 was enacted, introducing an amendment to par 4 subsection (a) of sec 4 of RA 875, as
follows: “xxx but such agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization”.
Being a member of a religious sect that prohibits the affiliation of its members with any labor
organization, Appellee presented his resignation to appellant Union. The Union wrote a formal letter to
the Company asking the latter to separate Appellee from the service because he was resigning from the
Union as a member. The Company in turn notified Appellee and his counsel that unless the Appellee
could achieve a satisfactory arrangement with the Union, the Company would be constrained to dismiss
him from the service.
Appellee filed an action for injunction to enjoin the Company and the Union from dismissing Appellee.
The Union invoked the “union security clause” of the CBA and assailed the constitutionality of RA 3350
and contends it discriminatorily favors those religious sects which ban their members from joining labor
unions.
ISSUE:
Whether Appellee has the freedom of choice in joining the union or not.
RULING:
YES. The Constitution and RA 875 recognize freedom of association. Sec 1 (6) of Art III of the
Constitution of 1935, as well as Sec 7 of Art IV of the Constitution of 1973, provide that the right to form
associations or societies for purposes not contrary to law shall not be abridged. Section 3 of RA 875
provides that employees shall have the right to self-organization and to form, join of assist labor
organizations of their own choosing for the purpose of collective bargaining and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or protection. What the
Constitution and the Industrial Peace Act recognize and guarantee is the “right” to form or join
associations. A right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the
absence of legal restraint, whereby an employee may act for himself without being prevented by law; and
second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is,
therefore, the employee who should decide for himself whether he should join or not an association; and
should he choose to join, he himself makes up his mind as to which association he would join; and even
after he has joined, he still retains the liberty and the power to leave and cancel his membership with said
organization at any time. The right to join a union includes the right to abstain from joining any union.
The law does not enjoin an employee to sign up with any association.
The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act
is, however, 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. By virtue
of a closed shop agreement, before the enactment of RA 3350, if any person, regardless of his religious
beliefs, wishes to be employed or to keep his employment he must become a member of the collective
bargaining union. Hence, the right of said employee not to join the labor union is curtailed and
withdrawn.
To that all-embracing coverage of the closed shop arrangement, RA No.3350 introduced an exception,
when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso: “but such agreement
shall not cover members of any religious sects which prohibit affiliation of their members in any such
labor organization”. Republic Act No. 3350 merely excludes ipso jure from the application and coverage
of the closed shop agreement the employees belonging to any religious sects which prohibit affiliation of
their members with any labor organization. What the exception provides is that members of said religious
sects cannot be compelled or coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop agreement, members of said religious
sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not
members of the collective bargaining union. It does not prohibit the members of said religious sects from
affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to
affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of said religious wets
prefer to sign up with the labor union, they can do so. If in deference and fealty to their religious faith,
they refuse to sign up, they can do so; the law does not coerce them to join; neither does the law prohibit
them from joining, and neither may the employer or labor union compel them to join.
The Company was partly absolved by law from the contractual obligation it had with the Union of
employing only Union members in permanent positions. It cannot be denied, therefore, that there was
indeed an impairment of said union security clause.
The prohibition to impair the obligation of contracts is not absolute and unqualified. The prohibition is
general. The prohibition is not to be read with literal exactness, for it prohibits unreasonable impairment
only. In spite of the constitutional prohibition, the State continues to possess authority to safeguard the
vital interests of its people. Legislation appropriate to safeguarding said interests may modify or abrogate
contracts already in effect. For not only are existing laws read into contracts in order to fix the obligations
as between the parties, but the reservation of essential attributes of sovereign power is also read into
contracts as a postulate of the legal order. The contract clause of the Constitution. must be not only in
harmony with, but also in subordination to, in appropriate instances, the reserved power of the state to
safeguard the vital interests of the people. This has special application to contracts regulating relations
between capital and labor which are not merely contractual, and said labor contracts, for being impressed
with public interest, must yield to the common good.
The purpose to be achieved by RA 3350 is to insure freedom of belief and religion, and to promote the
general welfare by preventing discrimination against those members of religious sects which prohibit
their members from joining labor unions, confirming thereby their natural, statutory and constitutional
right to work, the fruits of which work are usually the only means whereby they can maintain their own
life and the life of their dependents.
The individual employee, at various times in his working life, is confronted by two aggregates of power
collective labor, directed by a union, and collective capital, directed by management. The union, an
institution developed to organize labor into a collective force and thus protect the individual employee
from the power of collective capital, is, paradoxically, both the champion of employee rights, and a new
source of their frustration. Moreover, when the Union interacts with management, it produces yet a third
aggregate of group strength from which the individual also needs protection – the collective bargaining
relationship.
The free exercise of religious profession or belief is superior to contract rights. In case of conflict, the
latter must yield to the former.
The purpose of RA 3350 is to serve the secular purpose of advancing the constitutional right to the free
exercise of religion, by averting that certain persons be refused work, or be dismissed from work, or be
dispossessed of their right to work and of being impeded to pursue a modest means of livelihood, by
reason of union security agreements. To help its citizens to find gainful employment whereby they can
make a living to support themselves and their families is a valid objective of the state. The Constitution
even mandated that “the State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relation
between workers and employers.”
The primary effects of the exemption from closed shop agreements in favor of members of religious sects
that prohibit their members from affiliating with a labor organization, is the protection of said employees
against the aggregate force of the collective bargaining agreement, and relieving certain citizens of a
burden on their religious beliefs; and by eliminating to a certain extent economic insecurity due to
unemployment, which is a serious menace to the health, morals, and welfare of the people of the State, the
Act also promotes the well-being of society. It is our view that the exemption from the effects of closed
shop agreement does not directly advance, or diminish, the interests of any particular religion. Although
the exemption may benefit those who are members of religious sects that prohibit their members from
joining labor unions, the benefit upon the religious sects is merely incidental and indirect.
The purpose of RA 3350 was not to grant rights to labor unions. The rights of labor unions are amply
provided for in Republic Act No. 875 and the new Labor Code.
The Act does not require as a qualification, or condition, for joining any lawful association membership in
any particular religion or in any religious sect; neither does the Act require affiliation with a religious sect
that prohibits its members from joining a labor union as a condition or qualification for withdrawing from
a labor union. Joining or withdrawing from a labor union requires a positive act Republic Act No. 3350
only exempts members with such religious affiliation from the coverage of closed shop agreements. So,
under this Act, a religious objector is not required to do a positive act-to exercise the right to join or to
resign from the union. He is exempted ipso jure without need of any positive act on his part.
WHEREFORE, the instant appeal is dismissed.

WRITTEN BY N.M.P.MAY 5, 2019

DIGEST: VICTORIANO V. ELIZALDE ROPE WORKERS’ UNION
Constitutional Law | Bill of Rights | Right of Association
See full text
Plaintiff-Appellee: Benjamin Victoriano
Defendant-Appellant: Elizalde Rope Workers’ Union
59 SCRA 54
G.R. No. L-25246
September 12, 1974
Ponente: J. Zaldivar

FACTS:
Victoriano was an employee of the Elizalde Rope Factory, Inc. As such employee, he was a member of
the Elizalde Rope Workers’ Union which had a closed shop agreement with the Company that
membership in the Union shall be required as a condition of employment for all its permanent employees.
Prior to its amendment, Section 4(a)(4) of Republic Act No. 875 allows the employer to require as a
condition of employment membership in a labor organization, if such organization is the representative of
the employees. However, the provision was later amended by the enactment of Republic Act No. 3350,
which reads: … “but such agreement shall not cover members of any religious sects which prohibit
affiliation of their members in any such labor organization”.
Being a member of a religious sect that prohibits the affiliation of its members with any labor
organization, Victoriano presented his resignation to the Union. In turn, the Union asked the Company to
dismiss Victoriano from the service in view of the fact that he was resigning from the Union as a
member. This prompted Victoriano to file an action to enjoin the Company and the Union from
dismissing him. The Union assails the constitutionality of RA No. 3350, contending that it infringes on
the fundamental right to form lawful associations guaranteed by the Bill of Rights.
ISSUE:
Whether or not RA No. 3550 is unconstitutional for infringing on the fundamental freedom to form
associations.
RULING:
No. As ruled by the Supreme Court:
“RA No. 3350 merely excludes ipso jure from the application and coverage of the closed shop agreement
the employees belonging to any religious sects which prohibit affiliation of their members with any labor
organization. What the exception provides, therefore, is that members of said religious sects cannot be
compelled or coerced to join labor unions even when said unions have closed shop agreements with the
employers; that in spite of any closed shop agreement, members of said religious sects cannot be refused
employment or dismissed from their jobs on the sole ground that they are not members of the collective
bargaining union. It is clear, therefore, that the assailed Act, far from infringing the constitutional
provision on freedom of association, upholds and reinforces it. It does not prohibit the members of said
religious sects from affiliating with labor unions. It still leaves to said members the liberty and the power
to affiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of
said religious sects prefer to sign up with the labor union, they can do so. If in deference and fealty to
their religious faith, they refuse to sign up, they can do so; the law does not coerce them to join; neither
does the law prohibit them from joining; and neither may the employer or labor union compel them to
join. Republic Act No. 3350, therefore, does not violate the constitutional provision on freedom of
association.”