Bacolod-Murcia Milling v. National Employee-Workers Security Union
REITERATIONFacts
The Antecedents: Petitioners Bacolod-Murcia Milling Co., Inc. (Company) and its employees, primarily affiliated with the Allied Workers Association of the Philippines (Allied Workers Association), had a collective bargaining and closed shop agreement since 1947, renewed periodically. In July or August 1953, a group of laborers, mostly members of the Allied Workers Association, organized the National Employees-Workers' Security Union (NEWSUN), which was registered on January 23, 1954. On December 24, 1953, NEWSUN presented labor demands to the Company. The Company, citing its existing agreement with the Allied Workers Association, declined these demands. Subsequently, on February 5, 1954, the Allied Workers Association requested the Company to dismiss some of its members who had been expelled from the association, in accordance with the closed shop agreement. The Company complied, giving notice and severance pay. These dismissed members then filed charges of unfair labor practice against the Company. Procedural History: The Court of Industrial Relations (CIR) held that the collective bargaining and closed shop agreement between the Company and the Allied Workers Association was null and void and found the Company guilty of unfair labor practice. The CIR ordered the Company to cease and desist from such practice and to reinstate the dismissed laborers with back pay. The Petition: The Company and its manager, Alfredo T. Garcia, filed a petition for review of the CIR's decision.
Issue(s)
Whether the closed shop agreement entered into between the Company and the Allied Workers Association is null and void. Whether the Company can be held guilty of unfair labor practice for dismissing employees in line with the closed shop agreement.
Ruling
The Supreme Court reversed the decision of the Court of Industrial Relations. The closed shop agreement was declared valid, and the Company was absolved of the charge of unfair labor practice.
Ratio Decidendi
On the validity of the closed shop agreement: The Court found that the CIR erred in declaring the closed shop agreement null and void. The agreement was entered into under subsection (a) of Section 12 of Republic Act No. 875, which allows a labor organization designated by the majority of employees to act as their exclusive representative for collective bargaining. The Allied Workers Association represented a majority of the Company's employees, and its collective bargaining agreement with the Company, including the closed shop provision, was renewed in 1953. The formation of NEWSUN in July/August 1953 and its registration in January 1954 occurred after the renewal of the agreement on December 19, 1953. The Court clarified that the methods for entering into collective bargaining agreements under Section 12 of Republic Act No. 875 include designation by majority vote (subsection a), certification election (subsections b and c), and employer petition for election under specific conditions (subsection d). The method used by the Company and the Allied Workers Association fell under subsection (a), which does not require court intervention if a majority of employees designate a representative. The Court also noted that the Allied Workers Association was a legitimate labor organization duly registered under Commonwealth Act No. 213. On the charge of unfair labor practice: The Court disagreed with the CIR's finding that the closed shop agreement's stipulations contravened the law on unfair labor practices. The Court pointed to Section 4(a)(4) of Republic Act No. 875, which expressly permits an employer to make an agreement with a labor organization requiring membership therein as a condition of employment, provided the organization is the exclusive representative of the employees. The Court cited its previous ruling in National Labor Union vs. Aguinaldo's Exhague, Inc., which affirmed the validity of closed shop agreements as approved by Congress. Therefore, dismissing employees who ceased to be members of the contracting union, in accordance with a valid closed shop agreement, did not constitute unfair labor practice.
Main Doctrine
A closed shop agreement, recognized and expressly permitted by Republic Act No. 875, is valid and does not constitute unfair labor practice, provided the labor organization is the exclusive representative of the employees.