Labor II

Mactan Workers Union v. Aboitiz (1972)

Fernando
Under what topic: Right to Self-Organization Party Protected
Plaintiff-Appellees: Mactan Workers Union and Tomas Ferrer, as President thereof
Defendant-Appellees: Ramon Aboitiz, President, Cebu Shipyard * Engineering Works, Inc.;
Eddie Lim, as Treasurer; Jesus Diago, Superintendent of the Aforesaid Corporation; Wilfredo
Viray, as Resident Manager of the Shipyard & Engineering Works, Inc.; and the Cebu Shipyard
& Engineering Works, Inc.
Intervenor-Appellant: Associated Labor Union
Synopsis:
There were 2 rival labor organizations in the company, ALU and MWU. ALU was able to get the
majority vote needed in order to become the exclusive bargaining representative of the
workers in that capacity, it entered into a CBA with the company. One of the benefits granted
by the CBA was a profit-sharing bonus. The company was to give the bonus to ALU and in turn
ALU was to distribute it to all workers. Members of MWU ended up not getting their share of
the bonus as they refused to go to the office of ALU. ALU returned the unclaimed portion to the
company and advised the company not to give it to MWU except when there is a court order
to do so. The company instead deposited the money with the Labor Administrator. Thus, MWU
filed a case with the City Court of Lapulapu to recover the bonus. The City Court decided in
favor of MWU, as did the CFI of Cebu on appeal. ALU then filed an appeal with the SC, as
intervenor-appelant.
The SC affirmed the decisions of the lower courts. It said that there was nothing to impugn, as
all the lower courts did was to enforce the provisions of the CBA, which constituted the law
between the workers and the company. MWU members were just as entitled to the profitsharing bonus as the other employees were.
Doctrine:
The terms and conditions of a collective bargaining contract constitute the law between the
parties. Those who are entitled to its benefits can invoke its provisions. The benefits of a
collective bargaining agreement extend to the laborers and employees in the collective

Facts:
The Antecedents

thus, ALU was the labor union that

entered into the CBA with the
company.

There were 2 rival labor unions in Cebu Shipyard One of the benefits secured in the CBA was a
and Engineering Works, Inc (Company):
profit-sharing scheme (found in Article XIII)
Associated Labor Union (ALU) and Mactan
which made workers entitled to 10% of the
Workers Union (MWU).
net profits or net income1 derived from the
ALU was able to get the majority vote
1 Less income tax and the bonus given annually
needed in order to become the exclusive
bargaining representative of the workers to the General Manager, the Superintendent,

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direct operations of the shipyard and ship
in Lapu-Lapu City, to be given in two
installments March and June with each
workers entitlement in proportion to his/her
salary or wages.
This bonus was to be paid by the
Company to ALU.
o ALU then had the duty to
distribute the bonus to the
workers, and to furnish and
deliver to the company the
corresponding receipts duly signed
by the recipient-employees.
If any employee does not want to accept
the profit-sharing bonus, it was the duty
of ALU to return the money to the
company, within 60 days from the time
that the company delivered the money.
In accordance with Article XIII of the CBA, the
company delivered the profit-sharing bonus to
ALU for distribution.
All workers got their share, with the
exception of those (72) affiliated
with MWU.
o The members of MWU did not like
to go the office of ALU to collect
their shares.

MWU, on behalf of its members, filed an action

to recover the profit-sharing bonus (P4,035.82)
with the City Court of Lapulapu.
The City Court decided in favor of the
plaintiff-union. The plaintiffs were able to
secure a similar judgment with the CFI of Cebu,
on appeal.
Thus, this appeal, intersposed by ALU.
Issue/s - Holding:
(1) Are the members of MWU entitled to the
profit-sharing bonus granted by the CBA? (YES.)
(*) Did the complaint lack a cause of action?
(NO. There was a right violated on the part of
the members of the MWU and this called for
redress)
(*) Did the City Court of Lapulapu have
jurisdiction over the subject matter? (YES.
According to the Judiciary Act, City Courts have
jurisdiction over all civil actions not exclusively
cognizable by the CFI where the value of the
subject-matter or amount of demand does not
exceed P10,000. In the case at bar, the profitsharing bonus being demanded by MWU on
behalf of its members totals P4,035.82. It is only
in cases where unfair labor practice may be
discerned in the enforcement of a CBA when the
matter becomes solely cognizable by the CFI.
This is not the case in the present action.)

Thus, 60 days from its receipt of the profitsharing bonus, ALU returned the unclaimed
portion to the company.
ALU also advised the company NOT
to deliver the amount to the
members of MWU unless ordered
by the Court otherwise, ALU will
(*) Did MWU have standing to file a suit on
take such step to protect the interest behalf of its members? (YES. Note that the SC
of its members.
indirectly dismissed this contention as a halfo Due to the warning, the company, hearted attempt on the part of ALU. The
instead of distributing the money ponencia said that [t]here was an element of
to the members of MWU, deposited surprise, considering that such a contention
the same with the Labor
came from a labor organization, which under
Administrator.
normal condition should be the last to lay itself
The Case
and the members of the Board of Directors, as
well as the Corporate Secretary.

open to a charge that it is not averse to

denigrating the effectiveness of labor unions.)
Ratio:
(1) Members of MWU are as much entitled to the
benefits granted by the CBA as are the

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members of ALU, the exclusive bargaining
representative of the collective bargaining unit.
Workers entitlement under the CBA
The terms and conditions of a CBA constitute
the law between the parties the rights therein
granted are judicially enforceable in the event of
non-compliance.

[I]t is not to be forgotten that

what is entitled to constitutional
protection is labor, or more
specifically the working men and
women, not labor organizations.
Labor organizations are
merely the instrumentalities
though which workers
welfare may be promoted
and fostered.
The utmost care should be
taken then, lest in displaying
an unyielding, intransigent
attitude on behalf of their
members, injustice be
committed against opposing
labor organizations.

The CBA is entered into by exclusive bargaining

representative elected by a majority of the
employees comprising the collective bargaining
unit.
"[T]he right to be the exclusive
representative of all the employees in an
appropriate collective bargaining unit is
vested in the labor union 'designated or
selected' for such purpose 'by the
As applied to the case
majority of the employees' in the unit
concerned." (United Restauror's
ALU had no business disregarding the
Employees and Labor Union vs. Torres)
rights of the members of MWU, as regards
their share in the profit-sharing bonus.
At the same time, it is a well-settled doctrine
As the exclusive representative
that the benefits of a CBA extend to all
organization, they represented all
laborers and employees in the collective
employees in entering into the CBA with
bargaining unit including those who do
the company.
NOT belong to the chosen bargaining
The benefits secured by the CBA apply to
organization.
all those in the bargaining unit including
An opposing view would constitute
members of MWU.
discrimination, on which the law frowns.
A collective bargaining scheme is meant Thus, there is nothing to impugn the decisions
to allow labor to secure better terms and of the lower court.
employment conditions, and even higher
The lower courts had the covenants
rates of pay to exclude non-members
contained in the CBA carried out and
of the exclusive representative
respected.
organization would frustrate this
o They restricted themselves to
objective.
compelling the parties to abide by
o The labor union that gets the
what had been agreed upon.
majority vote as the exclusive
bargaining representative does
Dispositive:
NOT act for its members alone. It
represents ALL the employees in
WHEREFORE, the decision of the lower court of
such a bargaining unit.
February 22, 1968 is affirmed. Costs against
Any effort on its part to Associated Labor Union.
disregard the rights of
non-members will NOT be Digesters notes:
indulged.