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GR No. and Date: GR No. 77951, Sep 26, 1988

Topics: Worker/Member of Cooperative

Facts: Petitioner Cooperative Rural Bank of Davao City, Inc. is a cooperative banking corporation
operating in Davao City. It is owned in part by the Government and its employees are members and co-
owners of the same. The petitioner has around 16 rank-and-file employees. As of August, 1986, there
was no existing collective bargaining agreement between the said employees and the establishment. On
the other hand, the herein private respondent Federation of Free Workers is a labor organization
registered with the Department of Labor and Employment. It is interested in representing the said
employees for purposes of collective bargaining.

Private respondent filed with the Ministry of Labor and Employment a verified Petition for certification
election among the rank-and-file employees of the petitioner. Herein public respondent issued an Order
granting the Petition for certification election. Petitioner filed an Appeal Memorandum and sought a
reversal of the Order of the Med-Arbiter. The petitioner argued therein that, among others, a cooperative
is not covered by the Rules governing certification elections inasmuch as it is not an institution operating
for profit. The petitioner also adds that two of the alleged rank-and-file employees seeking the
certification election are managerial employees disqualified from joining concerted labor activities. In
sum, the petitioner insists that its employees are disqualified from forming labor organizations for
purposes of collective bargaining.

Private respondent filed a "Motion to Dismiss the Appeal." Public respondent Bureau of Labor Relations
Director Pura Ferrer-Calleja issued a Resolution affirming the Order of the Med-Arbiter and dismissing
the Appeal. Finding the action taken by the Bureau unsatisfactory, the petitioner brought the case
directly to this Court on April 9, 1987 by way of the instant Petition for certiorari.

Issue: Whether or not the employees of a cooperative can organize themselves for purposes of collective

Held: 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. 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. However, in so far as it involves cooperatives with
employees who are not members or co-owners thereof, certainly such employees are entitled to exercise
the rights of all workers to organization, collective bargaining, negotiations and others as are enshrined
in the Constitution and existing laws of the country.

WHEREFORE, the herein petition is hereby GRANTED and the resolution of public respondent Pura
Ferrer-Calleja, Director, Bureau of Labor Relations of February 11, 1987 is hereby MODIFIED to the
effect that only the rank and file employees of petitioner who are not its members or co-owners are
entitled to self-organization, collective bargaining, and negotiations, while the other employees who are
members or co-owners thereof cannot enjoy such right.
GR No. and Date: GR No. 83190, Aug 04, 1992

Topics: DOLE Registration as Basis

Facts: This petition seeks the reversal of the resolution of the Bureau of Labor Relations which affirmed
the decision of the Med-Arbiter holding that the set of officers of Seamen's Association of the
Philippines headed by Dominica C. Nacua, as president, was the lawful set of officers entitled to the
release and custody of the union dues as well as agency fees of said association.

A group of deck officers and marine engineers organized themselves into an association and registered
the same as a non-stock corporation known as Cebu Seaman's Association, Inc. (CSAI) with the
Securities and Exchange Commission (SEC). The same group subsequently registered its association
with the Bureau of Labor Relations as a labor union known as the Seamen's Association of the
Philippines, Incorporated (SAPI). SAPI has an existing collective bargaining agreement (CBA) with
Aboitiz Shipping Corporation which remitted checked-off dues to SAPI. Later on, a group of union
members headed by Manuel Gabayoyo claimed that they are entitled to the custody of the union dues
because they were elected as the new set of officers under the supervision of SEC. Another group
headed by Dominica Nacua, claiming that they were the duly elected set of officers of the union and
therefore entitled to the union dues, filed a complaint to restrain the group of Gabayoyo from
representing the union. CSAI represented by the Gabayoyo group.



Held: Yes, Seamen's Association of the Philippines was registered as a Labor Federation with the
Bureau of Labor Relations. CSAI is not a legitimate labor organization because it is only registered with
SEC. It is the registration of the organization with the Bureau of Labor Relations and not with the SEC
which made it a legitimate labor organization with rights and privileges granted under the Labor Code.
On the basis of the evidence presented by the parties, SAPI, the legitimate labor union, registered with
its office, is not the same association as CSAI, the corporation, insofar as their rights under the Labor
Code are concerned. Hence, SAPI and not the CSAI is entitled to the release and custody of union fees
with Aboitiz Shipping and other shipping companies with whom it had an existing CBA. The election of
the so-called set of officers headed by Manuel Gabayoyo was conducted under the supervision of the
SEC. That being the case, the aforementioned set of officers is of the CSAI and not of SAP I. It follows,
then, that any proceedings and actions taken by said set of officers cannot, in any manner, affect the
union and its members. Public respondent Bureau of Labor Relations correctly ruled on the basis of the
evidence presented by the parties that SAPI, the legitimate labor union, registered with its office, is not
the same association as CSAI, the corporation, insofar as their rights under the Labor Code are
concerned. Hence, the former and not the latter association is entitled to the release and custody of union
fees with Aboitiz Shipping and other shipping companies with whom it had an existing CBA. As
correctly held by public respondent, the petition is DISMISSED. The questioned resolution of the
Bureau of Labor Relations is AFFIRMED.
Title of the Case: VALENTIN GUIJARNO, et.al, petitioners vs. COURT OF INDUSTRIAL
UNlON-lLO, respondents.
GR No. and Date: G.R. Nos. L-28791-93, August 27, 1973

Topics: 1) Union Rationale and 2) Worker Inclusion and Exclusion (from Part 8 of Syllabus)

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, with eight of the present petitioners as complainants in the first, six of them in the
second, and five, in the third. There was a consolidated hearing and a consolidated decision not only for
convenience, but also due to there being hardly any difference as to the nature of the alleged grievance
and the defense of management. There was no question about the expulsion from respondent labor union
of the former. In view of a closed-shop provision in the then existing collective bargaining contract,
respondent Central Santos Lopez Co., Inc. assumed it had to dismiss them.

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; and that a closed-shop agreement is sanctioned under this jurisdiction for such kind of
agreement is expressly allowed under the provisions of Republic Act 875 known as the Industrial Peace
Act and the dismissal of complainants is merely an exercise of a right allowed by said law.

There was no question, however, as to petitioners having been employed by such respondent Company
long before the collective bargaining contract.

Issue: Whether the dismissal was justifiable under the closed-shop provision of the collective bargaining

Held: No. The authoritative doctrine that a closed-shop provision in a collective bargaining agreement is
not to be given a retroactive effect so as to preclude its being applied to employees already in the
service. As held in Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations, the closed-
shop agreement authorized under sec. 4, subsec. A (4) of the Industrial Peace Act above quoted should
however, apply 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, Rep. Act No. 875) as well as
by the Constitution (Art. III, sec. 1[6]).
The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure,
and just and humane conditions of work. Correctly understood, it is nothing but the means of assuring
that such fundamental objectives would be achieved. It is the instrumentality through which an
individual laborer who is helpless as against a powerful employer may, through concerted effort and
activity, achieve the goal of economic wellbeing. That is the philosophy underlying the Industrial Peace
Act. For, rightly has it been said that workers unorganized are weak; workers organized are strong.
Necessarily then, they join labor unions. To further increase the effectiveness of such organizations, a
closed-shop has been allowed. It could happen, though, that such a stipulation which assures further
weight to a labor union at the bargaining table could be utilized against minority groups or individual
members thereof. There are indications that such a deplorable situation did so manifest itself here.

Clearly, the petitioners should be reinstated with back pay.

Union Security – Rationale

Closed-shop agreement explained. — A stipulation in a collective bargaining agreement whereby the

employer agreed "not to have in its employ or to hire any new employee or laborer unless he is a
member of good standing of the union" establishes a "closed shop" in a very limited sense, namely, that
laborers, employees, and workers engaged by the company after the signing of the agreement must be
members of the union. A closed-shop agreement is a form of union security whereby only union
members as a condition for employment redounds to the benefit and advantage of the said employees
because by holding out to loyal members a promise of employment in the closed-shop, the union wields
group solidarity. In fact, the closed-shop contract is the most prized achievement of unionism

Worker Inclusion and Exclusion (from Part 8 of Syllabus)

Consequently, it is well settled that such unions are not entitled to arbitrarily exclude 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 the union thus refuses to admit to
membership, without any reasonable ground therefore.

Needless to say, if said unions may be compelled to admit new members, who have the requisite
qualifications, with more reason may the law and the courts exercise the coercive power when the
employee involved is a long standing union member, who, owing to provocations of union officers, was
impelled to tender his resignation, which he forthwith withdrew or revoked.