A.

) RIGHTS AND CONDITIONS OF MEMBERSHIP

Article 241. Rights and conditions of membership in a labor organization. The following are the
rights and conditions of membership in a labor organization:

(a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate
labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;

(b) The members shall be entitled to full and detailed reports from their officers and
representatives of all financial transactions as provided for in the constitution and by-laws of the
organization;

(c) The members shall directly elect their officers, including those of the national union or
federation to which they or their union is affiliated, by secret ballot at intervals of five (5) years.
No qualification requirements for candidacy to any position shall be imposed other than
membership in good standing in subject labor organization. The secretary or any other responsible
union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected
officers, together with the appointive officers or agents who are entrusted with the handling of
funds, within thirty (30) calendar days after the election of officers or from the occurrence of any
change in the list of officers of the labor organization; (As amended by Section 16, Republic Act
No. 6715, March 21, 1989).

(d) The members shall determine by secret ballot, after due deliberation, any question of major
policy affecting the entire membership of the organization, unless the nature of the organization
or force majeure renders such secret ballot impractical, in which case, the board of directors of the
organization may make the decision in behalf of the general membership;

(e) No labor organization shall knowingly admit as members or continue in membership any
individual who belongs to a subversive organization or who is engaged directly or indirectly in
any subversive activity;

(f) No person who has been convicted of a crime involving moral turpitude shall be eligible for
election as a union officer or for appointment to any position in the union;
 (g) No officer, agent or member of a labor organization shall collect any fees, dues, or other
contributions in its behalf or make any disbursement of its money or funds unless he is duly
authorized pursuant to its constitution and by-laws;

(h) Every payment of fees, dues or other contributions by a member shall be evidenced by a
receipt signed by the officer or agent making the collection and entered into the record of the
organization to be kept and maintained for the purpose;

(i) The funds of the organization shall not be applied for any purpose or object other than those
expressly provided by its constitution and by-laws or those expressly authorized by written
resolution adopted by the majority of the members at a general meeting duly called for the purpose;

(j) Every income or revenue of the organization shall be evidenced by a record showing its
source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom
the payment is made, which shall state the date, place and purpose of such payment. Such record
or receipt shall form part of the financial records of the organization.

Any action involving the funds of the organization shall prescribe after three (3) years from the
date of submission of the annual financial report to the Department of Labor and Employment or
from the date the same should have been submitted as required by law, whichever comes earlier:
Provided, That this provision shall apply only to a legitimate labor organization which has
submitted the financial report requirements under this Code: Provided, further, that failure of any
labor organization to comply with the periodic financial reports required by law and such rules and
regulations promulgated thereunder six (6) months after the effectivity of this Act shall
automatically result in the cancellation of union registration of such labor organization; (As
amended by Section 16, Republic Act No. 6715, March 21, 1989).

(k) The officers of any labor organization shall not be paid any compensation other than the
salaries and expenses due to their positions as specifically provided for in its constitution and by-
laws, or in a written resolution duly authorized by a majority of all the members at a general
membership meeting duly called for the purpose. The minutes of the meeting and the list of
participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly
authorized representatives. Any irregularities in the approval of the resolutions shall be a ground
for impeachment or expulsion from the organization;

(l) The treasurer of any labor organization and every officer thereof who is responsible for the
account of such organization or for the collection, management, disbursement, custody or control
of the funds, moneys and other properties of the organization, shall render to the organization and
to its members a true and correct account of all moneys received and paid by him since he assumed
office or since the last day on which he rendered such account, and of all bonds, securities and
other properties of the organization entrusted to his custody or under his control. The rendering of
such account shall be made:

(1) At least once a year within thirty (30) days after the close of its fiscal year;

(2) At such other times as may be required by a resolution of the majority of the members of
the organization; and

(3) Upon vacating his office.

The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished
the Secretary of Labor.

(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; and

(p) It shall be the duty of any labor organization and its officers to inform its members on the
provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor
relations system and all their rights and obligations under existing labor laws.

For this purpose, registered labor organizations may assess reasonable dues to finance labor
relations seminars and other labor education activities.

Any violation of the above rights and conditions of membership shall be a ground for cancellation
of union registration or expulsion of officers from office, whichever is appropriate. At least thirty
percent (30%) of the members of a union or any member or members specially concerned may
report such violation to the Bureau. The Bureau shall have the power to hear and decide any
reported violation to mete the appropriate penalty.

Criminal and civil liabilities arising from violations of above rights and conditions of membership
shall continue to be under the jurisdiction of ordinary courts.

B.) What is the nature and purpose of check off?

Check-offs in truth impose as extra burden on the employer in the form of additional administrative
and bookkeeping costs. It is a burden assumed by management at the instance of the union and for
its benefit, in order to facilitate the collection of dues necessary for the latter’s life and sustenance.
But the obligation to pay union dues and agency fees obviously devolves not upon the employer,
but the individual employee. It is a personal obligation not demandable from the employer upon
default or refusal of the employer to consent to a check-off. The only obligation of the employer
under a check-off is to effect the deductions and remit the collections to the union. The principle
of unjust enrichment necessarily precludes recovery of union dues -- or agency fees -- from the
employer, these being, to repeat, obligations pertaining to the individual worker in favor of the
bargaining union. Where the employer fails or refuses to implement a check-off agreement, logic
and prudence dictate that the union itself undertake the collection of union dues and assessments
from its members (and agency fees from non-union employees); this, of course, without prejudice
to suing the employer for unfair labor practice.

B.1) [G.R. No. 110007. October 18, 1996]

HOLY CROSS OF DAVAO COLLEGE, INC., petitioner, vs. HON. JEROME JOAQUIN,
in his capacity as Voluntary Arbitrator, and HOLY CROSS OF DAVAO COLLEGE
UNION KALIPUNAN NG MANGGAGAWANG PILIPINO (KAMAPI), respondents.

DECISION

NARVASA, C.J.:

A collective bargaining agreement, effective from June 1, 1986 to May 31, 1989 was entered into
between petitioner Holy Cross of Davao College, Inc. (hereafter Holy Cross), an educational
institution, and the affiliate labor organization representing its employees, respondent Holy Cross
of Davao College Union-KAMAPI (hereafter KAMAPI). Shortly before the expiration of the
agreement, KAMAPI President Jose Lagahit, wrote Holy Cross under date of April 12, 1989
expressing his unions desire to renew the agreement, withal seeking its extension for two months,
or until July 31, 1989, on the ground that the teachers were still on summer vacation and union
activities necessary or incident to the negotiation of a new agreement could not yet be
conducted.i[1] Holy Cross President Emilio P. Palma-Gil replied that he had no objection to the
extension sought, it being allowable under the collective bargaining agreement.ii[2]

On July 24, 1989, Jose Lagahit convoked a meeting of the KAMAPI membership for the purpose
of electing a new set of union officers, at which Rodolfo Gallera won election as president. To the
surprise of many, and with resultant dissension among the membership, Galera forthwith initiated
discussions for the unions disaffiliation from the KAMAPI Federation.

Galleras group subsequently formed a separate organization known as the Holy Cross of Davao
College Teachers Union, and elected its own officers. For its part, the existing union, KAMAPI,
sent to the School its proposals for a new collective bargaining contract; this it did on July 31,
1989, the expiry date of the two-month extension it had sought.iii[3]

Holy Cross thereafter stopped deducting from the salaries and wages of its teachers and employees
the corresponding union dues and special assessment (payable by union members), and agency
fees (payable by non-members), in accordance with the check-off clause of the CBA,iv[4]
prompting KAMAPI, on September 1, 1989, to demand an explanation.

In the meantime, there ensued between the two unions a full-blown action on the basic issue of
representation, which was to last for some two years. It began with the filing by the new union
(headed by Gallera) of a petition for certification election in the Office of the Med-Arbiter.v[5]
KAMAPI responded by filing a motion asking the Med-Arbiter to dismiss the petition. On August
31, 1989, KAMAPI also advised Holy Cross of the election of a new set of officers who would
also comprise its negotiating panel.vi[6]

The Med-Arbiter denied KAMAPIs motion to dismiss, and ordered the holding of a certification
election. On appeal, however, the Secretary of Labor reversed the Med-Arbiters ruling and ordered
the dismissal of the petition for certification election, which action was eventually sustained by
this Court in appropriate proceedings.

After its success in the certification election case KAMAPI presented, on April 11, 1991, revised
bargaining proposals to Holy Cross;vii[7] and on July 11, 1991, it sent a letter to the School asking
for its counter-proposals. The School replied, that it did not know if the Supreme Court had in fact
affirmed the Labor Secretarys decision in favor of KAMAPI as the exclusive bargaining
representative of the School employees, whereupon KAMAPIs counsel furnished it with a copy of
the Courts resolution to that effect; and on September 7, 1991, KAMAPI again wrote to Holy
Cross asking for its counter-proposals as regards the terms of a new CBA.

In response, Holy Cross declared that it would take no action towards a new CBA without a
definitive ruling on the proper interpretation of Article I of the old CBA which should have expired
on May 31, 1989 (but, as above stated, had been extended for two months at the KAMAPIs
request). Said Article provides inter alia for the automatic extension of the CBA for another period
of three (3) years counted from its expiration, if the parties fail to agree on a renewal, modification
or amendment thereof. It appears, in fact, that the opinion of the DOLE Regional Director on the
meaning and import of said article I had earlier been sought by the College president, Emilio Palma
Gil.viii[8]

KAMAPI then sent another letter to Holy Cross, this time accusing it of unfair labor practice for
refusing to bargain despite the formers repeated demands; and on the following day, it filed a
notice of strike with the National Mediation and Conciliation Board..ix[9]

KAMAPI and Holy Cross were ordered to appear before Conciliator-Mediator Agapito J. Adipen
on October 2, 1991. Several conciliation meetings were thereafter held between them, and when
these failed to bring about any amicable settlement, the parties agreed to submit the case to
voluntary arbitration.x[10] Both parties being of the view that the dispute did indeed revolve
around the interpretation of 1 and 2 of Article I of the CBA, they submitted position papers
explicitly dealing with the following issues presented by them for resolution to the voluntary
arbitrator:

a. Whether or not the CBA which expired on May 31, 1989 was automatically renewed and
did not serve merely as a holdover CBA; and

b. Whether or not there was refusal to negotiate on the part of the Holy Cross of Davao
College.

On both issues, Voluntary Arbitrator Jerome C. Joaquin found in favor of KAMAPI.

Respecting the matter of the automatic renewal of the bargaining agreement, the Voluntary
Arbitrator ruled that the request for extension filed by KAMAPI constituted seasonable notice of
its intention to renew, modify or amend the agreement, which it could not however pursue because
of the absence of the teachers who were then on summer vacation.xi[11] He rejected the contention
of Holy Cross that KAMAPI had unreasonably delayed (until July 31, 1989) the submission of
bargaining proposals, opining that the delay was partly attributable to the Schools prolonged
inaction on KAMAPIs request for extension of the CBA. He also ruled that Holy Cross was
estopped from claiming automatic renewal of the CBA because it ceased to implement the check-
off provision embodied in the CBA, declaring said Schools argument -- that a "definitive ruling"
by the DOLE on the correct interpretation of the automatic-extension clause of the old CBA was
a condition precedent to negotiation for a new CBA -- to be a mere afterthought set up to justify
its refusal to bargain with KAMAPI after the latter had proven that it was the legally-empowered
bargaining agent of the school employees. In the dispositive portion of his award, the Voluntary
Arbitrator ordered Holy Cross to:

1. sit down, negotiate and conclude (an agreement) with the Holy Cross of Davao College Faculty
Union-KAMAPI, which, by Resolution of the Supreme Court, remains the collective
bargaining agent of the permanent and regular teachers of said educational institution; (and)

2. pay to the Union the amount equivalent to the uncollected union dues from August 1989 up to
the time respondent shall have concluded a new CBA with the Union, it appearing that
respondent stopped complying with the CBAs check-off provisions as of said date.xii[12]

The Voluntary Arbitrator also requested the Fiscal Examiner of the NLRC, region XI, Davao City,
to make the proper computation of the union dues to be paid by management to the complainant
union.

Dissatisfied, Holy Cross filed the petition at bar, challenging the Voluntary Arbitrators decision
on the following grounds, viz.:xiii[13]

1. That the voluntary arbitrator erred and acted in grave abuse of discretion amounting to lack or
excess of jurisdiction in ordering petitioner to pay the union the uncollected union dues to
private respondent which was not even an issue submitted for voluntary arbitration, resulting
in serious violation of due process.

2. That the voluntary arbitrator erred in considering that petitioner refused to negotiate with (the)
Union, contrary to the records and evidence presented in the case.

The Voluntary Arbitrators conclusion -- that petitioner Holy Cross had, in light of the evidence on
record, failed to negotiate with KAMAPI, adjudged as the collective bargaining agent of the
schools permanent and regular teachers -- is a conclusion of fact that the Court will not review, the
inquiry at bar being limited to the issue of whether or not said Voluntary Arbitrator had acted
without or in excess of his jurisdiction, or with grave abuse of discretion; nor does the Court see
its way clear, after analyzing the record, to pronouncing that reasoned conclusion to have been
made so whimsically, capriciously, oppressively, or unjustifiably -- in other words, attended by
grave abuse of discretion amounting to lack or excess of jurisdiction -- as to call for extension of
the Courts correcting hand through the extraordinary writ of certiorari. Said finding should
therefore be, and is hereby, sustained.

Now, concerning its alleged failure to observe the check-off provisions of the collective bargaining
agreement, Holy Cross contends that this was not one of the issues raised in the arbitration
proceedings; that said issue was therefore extraneous and improper; and that even assuming the
contrary, it (Holy Cross) had not in truth violated the CBA.

Holy Cross asserts that it could not comply with the check-off provisions because contrary to
established practice prior to August, 1989, KAMAPI failed to submit to the college comptroller
every 8th day of the month, a list of employees from whom union dues and the corresponding
agency fees were to be deducted; further, that there was an uncertainty as to the recognized
bargaining agent with whom it would deal -- a matter settled only upon its receipt of a copy of this
Courts Resolution on July 18, 1991 -- and in any case, the Voluntary Arbitrators order for it to pay
to the union the uncollected employees' dues or agency fees -- would amount to the unions unjust
enrichment.xiv[14]

KAMAPI maintains, on the other hand, that the check-off issue was raised in the position paper it
submitted in the voluntary arbitration proceedings; and that in any case, the issue was intimately
connected with those submitted for resolution and necessary for complete adjudication of the rights
and obligations of the parties;xv[15] and that said position paper had alleged the manifest bad faith
of management in not providing information as to who were regular employees, thereby precluding
determination of teachers eligible for union membership.

Disregarding the objection of failure to seasonably set up the check-off question -- the factual
premises thereof not being indisputable, and technical objections of this sort being generally
inconsequential in quasi-judicial proceedings -- the issues here ultimately boil down to whether or
not an employer is liable to pay to the union of its employees, the amounts it failed to deduct from
their salaries -- as union dues (with respect to union members) or agency fees (as regards those not
union members) -- in accordance with the check-off provisions of the collective bargaining
contract (CBA) which it claims to have been automatically extended.

A check-off is a process or device whereby the employer, on agreement with the union recognized
as the proper bargaining representatives, or on prior authorization from its employees, deducts
union dues or agency fees from the latter's wages and remits them directly to the union.xvi[16] Its
desirability to a labor organization is quite evident; by it, it is assured of continuous funding.
Indeed, this Court has acknowledged that the system of check-off is primarily for the benefit of
the union and, only indirectly, of the individual laborers.xvii[17] When stipulated in a collective
bargaining agreement, or authorized in writing by the employees concerned -- the labor Code and
its Implementing Rules recognize it to be the duty of the employer to deduct sums equivalent to
the amount of union dues from the employees' wages for direct remittance to the union, in order
to facilitate the collection of funds vital to the role of the union as representative of employees in
a bargaining unit to the role of the union as representative of employees in a bargaining unit if not,
indeed, to its very existence. And it may be mentioned in this connection that the right to union
dues deducted pursuant to a check of, pertains to the local union which continues to represent the
employees under the terms of a CBA, and not to the parent association from which it has
dissaffiliated.xviii[18]

The legal basis of check-off is thus found in statute or in contract.xix[19] Statutory limitations on
check-offs generally require written authorization from each employee to deduct wages; however,
a resolution approved and adopted by a majority of the union members at a general meeting will
suffice when the right to check-off has been recognized by the employer, including collection of
reasonable assessments in connection with mandatory activities of the union, or other special
assessments and extraordinary fees.xx[20]

Authorization to effect a check-off of union dues is co-terminous with the union affiliation or
membership of employees.xxi[21] On the other hand, the collection of agency fees in an amount
equivalent to union dues and fees, from employees who are not union members, is recognized by
Article 248 (e) of the Labor Code. No requirement of written authorization from the non-union
employee is imposed. The employees acceptance of benefits resulting from a collective bargaining
agreement justifies the deduction of agency fees from his pay and the unions entitlement thereto.
In this aspect, the legal basis of the unions right to agency fees is neither contractual nor statutory,
but quasi-contractual, deriving from the established principle that non-union employees may not
unjustly enrich themselves by benefiting from employment conditions negotiated by the
bargaining union.xxii[22]

No provision of law makes the employer directly liable for the payment to the labor organization
of union dues and assessments that the former fails to deduct from its employees salaries and wages
pursuant to a check-off stipulation. The employers failure to make the requisite deductions may
constitute a violation of a contractual commitment for which it may incur liability for unfair labor
practice.xxiii[23] But it does not by that omission, incur liability to the union for the aggregate of
dues or assessments uncollected from the union members, or agency fees for non-union employees.

Check-offs in truth impose as extra burden on the employer in the form of additional administrative
and bookkeeping costs. It is a burden assumed by management at the instance of the union and for
its benefit, in order to facilitate the collection of dues necessary for the latters life and sustenance.
But the obligation to pay union dues and agency fees obviously devolves not upon the employer,
but the individual employee. It is a personal obligation not demandable from the employer upon
default or refusal of the employer to consent to a check-off. The only obligation of the employer
under a check-off is to effect the deductions and remit the collections to the union. The principle
of unjust enrichment necessarily precludes recovery of union dues -- or agency fees -- from the
employer, these being, to repeat, obligations pertaining to the individual worker in favor of the
bargaining union. Where the employer fails or refuses to implement a check-off agreement, logic
and prudence dictate that the union itself undertake the collection of union dues and assessments
from its members (and agency fees from non-union employees); this, of course, without prejudice
to suing the employer for unfair labor practice.

There was thus no basis for the Voluntary Arbitrator to require Holy Cross to assume liability for
the union dues and assessments, and agency fees that it had failed to deduct from its employees
salaries on the proffered plea that contrary to established practice, KAMAPI had failed to submit
to the college comptroller every 8th day of the month, a list of employees from whose pay union
dues and the corresponding agency fees were to be deducted.
WHEREFORE, the requirement imposed on petitioner Holy Cross by the challenged decision of
the Voluntary Arbitrator, to pay respondent KAMAPI the amount equivalent to the uncollected
union dues and agency fees from August 1989 up to the time a new collective bargaining
agreement is concluded, is NULLIFIED and SET ASIDE; but in all other respects, the decision of
the Voluntary Arbitrator is hereby AFFIRMED.

SO ORDERED.

Davide, Jr., Melo, Francisco, and Panganiban, JJ., concur

C.) What are the requirements before levy and check-off of special assessments are
allowed?

Check off, which is an arrangement by a union with the employer for dues to be deducted
regularly from the members’ salaries wherein the sum collected is remitted to the union by
check

The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o)
of Article 241 apply. Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off"
of a special assessment. Both provisions must be complied with. Under paragraph (n), the
Union must submit to the Company a written resolution of a majority of all the members at a
general membership meeting duly called for the purpose. In addition, the secretary of the
organization must record the minutes of the meeting which, in turn, must include, among
others, the list of all the members present as well as the votes cast.

Paragraph (o) on the other hand requires an individual written authorization duly signed by
every employee in order that a special assessment may be validly checked-off. Even assuming
that the special assessment was validly levied pursuant to paragraph (n), and granting that
individual written authorizations were obtained by the Union, nevertheless there can be no
valid check-off considering that the majority of the union members had already withdrawn
their individual authorizations. A withdrawal of individual authorizations is equivalent to no
authorization at all. Hence, the ruling in Galvadores that "no check-offs from any amounts due
 employees may be effected without an individual written authorization signed by the
employees ... " is applicable.

Article 222 (b) prohibits attorney's fees, negotiations fees and similar charges arising out of
the conclusion of a collective bargaining agreement from being imposed on any individual
union member. The collection of the special assessment partly for the payment for services
rendered by union officers, consultants and others may not be in the category of "attorney's
fees or negotiations fees."

C.1) [G.R. No. 85333] February 26, 1990

CARMELITO L. PALACOL, ET AL., petitioners,

vs.
PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI
SALES FORCE UNION, and COCA-COLA BOTTLERS (PHILIPPINES), INC.,
respondents.

Wellington B. Lachica for petitioners.

Adolpho M. Guerzon for respondent Union.

Can a special assessment be validly deducted by a labor union from the lump-sum pay of its
members, granted under a collective bargaining agreement (CBA), notwithstanding a subsequent
disauthorization of the same by a majority of the union members? This is the main issue for
resolution in the instant petition for certiorari.

On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as
the Union), as the collective bargaining agent of all regular salesmen, regular helpers, and relief
helpers of the Manila Plant and Metro Manila Sales Office of the respondent Coca-Cola Bottlers
(Philippines), Inc. (hereinafter referred to as the Company) concluded a new collective bargaining
agreement with the latter. 1 Among the compensation benefits granted to the employees was a
general salary increase to be given in lump sum including recomputation of actual commissions
earned based on the new rates of increase.
On the same day, the president of the Union submitted to the Company the ratification by the union
members of the new CBA and authorization for the Company to deduct union dues equivalent to
P10.00 every payday or P20.00 every month and, in addition, 10% by way of special assessment,
from the CBA lump-sum pay granted to the union members. The last one among the
aforementioned is the subject of the instant petition.

As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the
special assessment sought to be levied is "to put up a cooperative and credit union; purchase
vehicles and other items needed for the benefit of the officers and the general membership; and for
the payment for services rendered by union officers, consultants and others." 2 There was also an
additional proviso stating that the "matter of allocation ... shall be at the discretion of our incumbent
Union President."

This "Authorization and CBA Ratification" was obtained by the Union through a secret
referendum held in separate local membership meetings on various dates. 3 The total membership
of the Union was about 800. Of this number, 672 members originally authorized the 10% special
assessment, while 173 opposed the same. 4

Subsequently however, one hundred seventy (170) members of the Union submitted documents to
the Company stating that although they have ratified the new CBA, they are withdrawing or
disauthorizing the deduction of any amount from their CBA lump sum. Later, 185 other union
members submitted similar documents expressing the same intent. These members, numbering
355 in all (170 + 185), added to the original oppositors of 173, turned the tide in favor of
disauthorization for the special assessment, with a total of 528 objectors and a remainder of 272
supporters. 5

On account of the above-mentioned disauthorization, the Company, being in a quandary as to

whom to remit the payment of the questioned amount, filed an action for interpleader with the
Bureau of Labor Relations in order to resolve the conflicting claims of the parties concerned.
Petitioners, who are regular rank-and-file employees of the Company and bona fide members of
the Union, filed a motion/complaint for intervention therein in two groups of 161 and 94,
respectively. They claimed to be among those union members who either did not sign any
individual written authorization, or having signed one, subsequently withdrew or retracted their
signatures therefrom.

Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to
Article 222(b) of the Labor Code. Article 222(b) provides as follows:

ART. 222. Appearances and Fees. —

xxx xxx xxx

(b) No attorney's fees, negotiation fees or similar charges of any kind

arising from any collective bargaining negotiations or conclusion of
the collective agreement shall be imposed on any individual member
of the contracting union; Provided, however, that attorney's fees
may be charged against union funds in an amount to be agreed upon
by the parties. Any contract, agreement or arrangement of any sort
to the contrary shall be null and void.

On the other hand, Article 241(o) mandates that:

ART. 241. Rights and conditions of membership in a labor organization. —

xxx xxx xxx

(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;

As authority for their contention, petitioners cited Galvadores v. Trajano, 6 wherein it was ruled
that no check-offs from any amount due employees may be effected without individual written
authorizations duly signed by the employees specifically stating the amount, purpose, and
beneficiary of the deduction.

In its answer, the Union countered that the deductions not only have the popular indorsement and
approval of the general membership, but likewise complied with the legal requirements of Article
241 (n) and (o) of the Labor Code in that the board resolution of the Union imposing the questioned
special assessment had been duly approved in a general membership meeting and that the
collection of a special fund for labor education and research is mandated.

Article 241(n) of the Labor Code states that —

ART. 241. Rights and conditions of membership in a labor organization. —

xxx xxx xxx

(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 at 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 assessments or fees. The record shall
be attested to by the president;

Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988
whereby he directed the Company to remit the amount it had kept in trust directly to the rank-and-
file personnel without delay.

On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed
and set aside by the respondent-Director in a resolution dated August 19, 1988 upholding the claim
of the Union that the special assessment is authorized under Article 241 (n) of the Labor Code,
and that the Union has complied with the requirements therein.

Hence, the instant petition.

Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting
to lack or excess of jurisdiction when she held Article 241 (n) of the Labor Code to be the
applicable provision instead of Article 222(b) in relation to Article 241(o) of the same law.

According to petitioners, a cursory examination and comparison of the two provisions of Article
241 reveals that paragraph (n) cannot prevail over paragraph (o). The reason advanced is that a
special assessment is not a matter of major policy affecting the entire union membership but is one
which concerns the individual rights of union members.

Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph
(o), the Union has nevertheless failed to comply with the procedure to legitimize the questioned
special assessment by: (1) presenting mere minutes of local membership meetings instead of a
written resolution; (2) failing to call a general membership meeting; (3) having the minutes of
three (3) local membership meetings recorded by a union director, and not by the union secretary
as required; (4) failing to have the list of members present included in the minutes of the meetings;
and (5) failing to present a record of the votes cast. 7 Petitioners concluded their argument by citing
Galvadores.

After a careful review of the records of this case, We are convinced that the deduction of the 10%
special assessment by the Union was not made in accordance with the requirements provided by
law.

Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the
instant case. The principle "that employees are protected by law from unwarranted practices that
diminish their compensation without their known edge and consent" 8 is in accord with the
constitutional principle of the State affording full protection to labor. 9

The respondent-Union brushed aside the defects pointed out by petitioners in the manner of
compliance with the legal requirements as "insignificant technicalities." On the contrary, the
failure of the Union to comply strictly with the requirements set out by the law invalidates the
questioned special assessment. Substantial compliance is not enough in view of the fact that the
special assessment will diminish the compensation of the union members. Their express consent
is required, and this consent must be obtained in accordance with the steps outlined by law, which
must be followed to the letter. No shortcuts are allowed.

The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of
Article 241 apply. Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a
special assessment. Both provisions must be complied with. Under paragraph (n), the Union must
submit to the Company a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose. In addition, the secretary of the organization
must record the minutes of the meeting which, in turn, must include, among others, the list of all
the members present as well as the votes cast.

As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of
paragraph (n). It held local membership meetings on separate occasions, on different dates and at
various venues, contrary to the express requirement that there must be a general membership
meeting. The contention of the Union that "the local membership meetings are precisely the very
general meetings required by law" 10 is untenable because the law would not have specified a
general membership meeting had the legislative intent been to allow local meetings in lieu of the
latter.

It submitted only minutes of the local membership meetings when what is required is a written
resolution adopted at the general meeting. Worse still, the minutes of three of those local meetings
held were recorded by a union director and not by the union secretary. The minutes submitted to
the Company contained no list of the members present and no record of the votes cast. Since it is
quite evident that the Union did not comply with the law at every turn, the only conclusion that
may be made therefrom is that there was no valid levy of the special assessment pursuant to
paragraph (n) of Article 241 of the Labor Code.

Paragraph (o) on the other hand requires an individual written authorization duly signed by every
employee in order that a special assessment may be validly checked-off. Even assuming that the
special assessment was validly levied pursuant to paragraph (n), and granting that individual
written authorizations were obtained by the Union, nevertheless there can be no valid check-off
considering that the majority of the union members had already withdrawn their individual
authorizations. A withdrawal of individual authorizations is equivalent to no authorization at all.
Hence, the ruling in Galvadores that "no check-offs from any amounts due employees may be
effected without an individual written authorization signed by the employees ... " is applicable.

The Union points out, however, that said disauthorizations are not valid for being collective in
form, as they are "mere bunches of randomly procured signatures, under loose sheets of paper."
11 The contention deserves no merit for the simple reason that the documents containing the
disauthorizations have the signatures of the union members. The Court finds these retractions to
be valid. There is nothing in the law which requires that the disauthorization must be in individual
form.

Moreover, it is well-settled that "all doubts in the implementation and interpretation of the
provisions of the Labor Code ... shall be resolved in favor of labor."12 And as previously stated,
labor in this case refers to the union members, as employees of the Company. Their mere desire to
establish a separate bargaining unit, albeit unproven, cannot be construed against them in relation
to the legality of the questioned special assessment. On the contrary, the same may even be taken
to reflect their dissatisfaction with their bargaining representative, the respondent-Union, as shown
by the circumstances of the instant petition, and with good reason.

The Med-Arbiter correctly ruled in his Order that:

The mandate of the majority rank and file have (sic) to be respected considering
they are the ones directly affected and the realities of the high standards of survival
nowadays. To ignore the mandate of the rank and file would enure to destabilizing
industrial peace and harmony within the rank and file and the employer's fold,
which we cannot countenance.

Moreover, it will be recalled that precisely union dues are collected from the union
members to be spent for the purposes alluded to by respondent. There is no reason
shown that the regular union dues being now implemented is not sufficient for the
alleged expenses. Furthermore, the rank and file have spoken in withdrawing their
consent to the special assessment, believing that their regular union dues are
 adequate for the purposes stated by the respondent. Thus, the rank and file having
spoken and, as we have earlier mentioned, their sentiments should be respected.

Of the stated purposes of the special assessment, as embodied in the board resolution of the Union,
only the collection of a special fund for labor and education research is mandated, as correctly
pointed out by the Union. The two other purposes, namely, the purchase of vehicles and other
items for the benefit of the union officers and the general membership, and the payment of services
rendered by union officers, consultants and others, should be supported by the regular union dues,
there being no showing that the latter are not sufficient to cover the same.

The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of
the Labor Code. The contention is impressed with merit. Article 222 (b) prohibits attorney's fees,
negotiations fees and similar charges arising out of the conclusion of a collective bargaining
agreement from being imposed on any individual union member. The collection of the special
assessment partly for the payment for services rendered by union officers, consultants and others
may not be in the category of "attorney's fees or negotiations fees." But there is no question that it
is an exaction which falls within the category of a "similar charge," and, therefore, within the
coverage of the prohibition in the aforementioned article. There is an additional proviso giving the
Union President unlimited discretion to allocate the proceeds of the special assessment. Such a
proviso may open the door to abuse by the officers of the Union considering that the total amount
of the special assessment is quite considerable — P1,027,694.33 collected from those union
members who originally authorized the deduction, and P1,267,863.39 from those who did not
authorize the same, or subsequently retracted their authorizations. 13 The former amount had
already been remitted to the Union, while the latter is being held in trust by the Company.

The Court, therefore, stakes down the questioned special assessment for being a violation of
Article 241, paragraphs (n) and (o), and Article 222 (b) of the Labor Code.

WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau
of Labor Relations dated August 19, 1988 is hereby REVERSED and SET ASIDE, while the order
of the Med-Arbiter dated February 17, 1988 is reinstated, and the respondent Coca-Cola Bottlers
(Philippines), Inc. is hereby ordered to immediately remit the amount of P1,267,863.39 to the
respective union members from whom the said amount was withheld. No pronouncement as to
costs. This decision is immediately executory.

SO ORDERED.

Narvasa, Griño-Aquino and Medialdea, JJ., concur.

Cruz, J., took no part.

D.) What are the rights of legitimate What are the rights of legitimate labor organization
under Article 251 (242)

Rights of legitimate labor organizations. – A 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. (As amended by Section 17, Republic Act No. 6715, March 21,
1989).
 E.) Discuss Art. 252 (242-A) of the labor code.

Article 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. (As inserted by Section 7, Republic Act No. 9481 which
lapsed into law on May 25, 2007 and became effective on June 14, 2007).

F.) Discuss Art. 253 (243) of the labor code.

Article 243. Coverage and employees right to self-organization. All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical, or
educational institutions, whether operating for profit or not, shall have the right to self-organization
and to form, join, 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).

G.) What is a union security clause?

“Union security" is a generic term, which is applied to and comprehends "closed shop," union
shop," "maintenance of membership," or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment.

A union security clause is a provision in a collective bargaining agreement which requires

bargaining unit employees to establish and maintain union membership (which is ultimately
restricted to the payment of dues and initiation fees) as a condition of employment. This is a
mandatory subject of bargaining (also see “union shop”).
 H.) Define (1) closed-shop agreement; (2) union-shop agreement; and (3) maintenance-
of-membership clause.

There is union shop when all new regular employees are required to join the union within a certain period
as a condition for their continued employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued employment until they are
promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed shop, on
the other hand, may be defined as an enterprise in which, by 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 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.[15]

1. A closed shop agreement is a type of collective agreement that requires non-union

workers to join the union.

A shop in which persons are required to join a particular union as a precondition to

employment and to remain union members for the duration of their employment.

The federal National Labor Relations Act (NLRA) (29 U.S.C.A. §§ 151 et seq.) protects the
rights of workers to organize and bargain collectively and prohibits management from engaging
in UNFAIR LABOR PRACTICES that would interfere with these rights. Popularly known as the
Wagner Act, the NLRA was signed into law by President FRANKLIN D. ROOSEVELT on July 5,
1935.

Among the workers' rights legalized by the NLRA was the right to enter into a "closed shop"
agreement. It differs from a union shop, in which all workers, once employed, must become
union members within a specified period as a condition of their continued employment. Closed
shop agreements ensured that only union members who were bound by internal union rules,
including those enforcing worker solidarity during strikes, were hired.

2. A union shop is a place of employment that requires that an employee join a union, usually
30 to 60 days after being hired. If you cease to be a member of the union, the company is
required to fire you. Many states, either by legislation or by court decision, have banned
the closed shop. Opponents of the closed shop argue that forcing unwilling workers to pay
union dues is an infringement of their rights; that union membership is sometimes closed
to certain workers or the initiation fee so high as to be an effective bar to membership; and
that employers are deprived of the privilege of hiring competent workers or firing
incompetent ones.

3. Maintenance of Membership is a union security system under which an employee binds

himself to remain a member for the duration of the union contract once s/he joins the
union, or if already a member. S/he may resign during the escape period. But s/he does
not do so membership has to be maintained until the duration of the contract.
H.1) [G.R. No. L-27079] August 31, 1977

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

MANILA CORDAGE COMPANY, petitioner,

vs.

THE COURT OF INDUSTRIAL RELATIONS AND MANILA CORDAGE WORKERS

UNION, respondents.

G.R. No. L-27080 August 31, 1977

MANCO LABOR UNION (NLU), petitioner,

vs.

MANILA CORDAGE WORKERS UNION and THE COURT OF INDUSTRIAL

RELATIONS, respondents.

G.R. No. L-27080 August 31, 1977

MANCI LABOR UNION (NLU), petitioner,

vs.

MANILA CORDAGE WORKERS UNION and THE COURT OF INDUSTRIAL

RELATIONS, respondents.

Sycip, Salazar, Luna & Associates for petitioner Manila Cordage Company.

Eulogio R. Lerum for petitioner Manco Labor Union (NLU)

B. C. Pineda & Associates for private respondent.

FERNANDEZ, J.:
 These are petitions to review the decision dated May 4, 1966 1 and the resolution dated October
19, 1966 2 of the respondent Court of Industrial Relations (CIR) in Case No. 2728-ULP entitled
"Manila Cordage Workers Union, complainant, vs. Manila Cordage Company and Manco Labor
Union, respondents."

The dispositive part of the decision reads:

FOREGOING PREMISES CONSIDERED, this Court finds substantial evidence to sustain the
charge of unfair labor practice against respondent Manila Cordage Company in violation of
Section 4(a), paragraphs 1, 2 and 4 of the Industrial Peace Act, and against respondent Manco
Labor Union in violation of Section 4(b), paragraphs 1 and 2 of the same Act and, therefore, orders
both respondents their officials or agents:

1. To cease and desist from restraining and coersing complainants in the exercise of their rights
guaranteed by Section 3 of Republic Act No. 875;

2. To cease and desist from further committing the unfair labor practice complained of; and 3. To
reinstate complainants Silvino Rabago, Natalio Nisperos and Ricardo Trajano to their former
positions and with all the rights and privileges formerly appertaining thereto and to pay jointly and
salary their back wages from the time of their respective dismissal on January 27, 1961, February
3, 1961, and May 2, 1961 up to the date of their actual re-instatements, minus their earnings
elsewhere, if any.

To facilitate the payment of back wages due the complainants, the Chief of the Examining
Division of this Court and/or his duly authorized assistant is hereby directed to examine the
payrolls, daily time records and other pertinent documents relative to complainants services with
respondent company and to submit the corresponding report and computation for further
disposition.

SO ORDERED.

Manila, Philippines, May 4, 1966.

AMANDO C. BUGAYONG Associate Judge 3

The resolution dated October 19, 1966 denied the two (2) separate motions filed by Manila
Cordage Company and Manco Labor Union for the reconsideration of the decision dated May
4,1966.

On February 1, 1967 the petitioner Manco Labor Union filed the following Motion in G.R. No.
L-27080 (Manco Labor Union [NLU] vs. Manila Cordage Workers Union, et al.):

MOTION TO CONSOLIDATE THIS CASE WITH G.R. NO. L-27079 AND TO ADOPT THE
PETITION THEREIN AS THE PETITION IN THIS CASE
Comes now the petitioner Manco Labor Union NLU by the undersigned attorney, and to this
Honorable Court, respectfully states:

That in Case No. 2728-ULP of the Court of Industrial Relations. entitled "Manila Cordage
Company and Manco Labor Union NLU respondents", said Court rendered its Decision and
Resolution on May 4, 1966 and October 19, 1966, respectively, against the respondents;

That the Manila Cordage Company had appealed said Decision and Resolution in Case No.
2728-ULP before this Honorable Court by certiorari and in the resolution of this Court dated
January 23, 1967, in G.R. No. L-27079 (Manila Cordage Company vs. The Court of Industrial
Relations, et al.), the same was given due course by this Court.

That since the issues to be brought by the herein petitioner in this case are similar to the issues
raised in the petition for certiorari in G.R. No. L-27079, in order to avoid a multiplicity of cases,
it is desirable that the present case be consolidated with the said case;

That in order to avoid repetitions and a voluminous record, herein petitioner is adopting the
petition for review filed in G.R. No. L- Z7079 as its own in the present case, and by reference, is
made a part hereof;

That this motion is timely because copy of the resolution of the Court of Industrial Relations in
this case was received on January 6, 1967, notice of appeal and a petition for extension for 15 days
was filed with this Court on January 16, 1967, which was granted, and today is the last day for the
filing of our petition for review in this case.

WHEREFORE, it is respectfully prayed of this Honorable Court:

1. That the present case be consolidated with G.R. No. L- 27079, entitled "Manila Cordage
Company vs. The Court of Industrial Relations and Manila Cordage Workers Union;

2. That herein petitioner be allowed to adopt the petition for review in G.R. No. L-27079 as its
own, and by reference made a part hereof;

3. That upon notice in accordance with the Rules of this Court, herein petitioner will deposit the
amount of P80.40 in payment of costs.

4. That in case this motion will be denied, that herein petitioner be given five (15) days from
notice to file its own petition for review. Manila, January 31, 1967.

EULOGIO R. LERUM

Attorney for Petitioner

Manco Labor Union (NLU)

3199 Magsaysay Blvd., Manila

 The Court issued on February 15, 1967 the following resolution:

Considering the motion of attorney for petitioner in L-27080 (Manco Labor Union [NLU] vs.
Manila Cordage Workers Union, et al.) praying (a) that this case be consolidated with L-27079
(Manila cordage Company vs. The Court of Industrial Relations, et al. (b) that petitioner be allowed
to adopt the petition for review in aforesaid case L-27079 as its own, and by reference made a part
thereof; (c) that upon notice in accordance with the Rules of Court, petitioner will deposit the
amount of P80.40 for costs; and (d) in case the motion is denied, petitioner be given five days from
notice to file its own petition for review THE COURT RESOLVED to grant the first three prayers
of the motion, provided that docket and other fees are paid.

Very truly yours,

BIENVENIDO EJERCITO

Clerk of Court

On October 24, 1967 the petitioner Manco Labor Union submitted the following motion:

MOTION TO ADOPT THE BRIEF OF

PETITIONER MANILA CORDAGE CO.

Comes now the petitioner Manco Labor Union NLU by the undersigned attorney, and to this
Honorable Court, respectfully moves that in view of the fact that said Union could not afford the
printing of its brief due to poor finances, that it be allowed to adopt as its own, the brief of the
Manila Cordage Co.

That in addition to the arguments contained in said brief, this petitioner would like to emphasize
the following:

1. That complainants in the Court below, namely, Silvino Rabago, Natalio Nisperos and Ricardo
Trajano, by resigning from the Manco Labor Union NLU violated the provision of the collective
bargaining agreement then in force, which reads as follows: IV MAINTENANCE OF
MEMBERSHIP

'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' (Exhibits '5-B' and '6- B' Company)

Having violated said agreement, these complainants are liable to dismissal in the same manner as
strikers who violate a no strike clause in a contract could be dismissed although said contract is
silent regarding the penalty for breach thereof.

Hence, the Manco Labor Union NLU should not be the one penalized for its effort to secure
compliance with the terms of its central with petitioning company,
 2. That said agreement could not be susceptible of any other interpretation except that violation
thereof would result in dismissal because as found out by the Court below, the said provision was
explained to the members before and after the same was signed.

3. Petitioner Manco Labor Union (NLU) could not be held guilty of discriminating against
Rabago, Nisperos and Trajano because of heir union activities, The record shows that besides these
three, Vicente Untalan Ruperto Balsams and 40 others resigned. In the case of Untalan and
Balsamo after the Manila Cordage Co. had dismissed them on request of the petitioning Union,
this Union was also the one who asked for their reinstatement when they withdrew their resignation
from the union, In the case of the other 40 members who resigned (Exhs. 'A', A-l to 'A-49') when
they withdrew their resignations, the Manco Labor Union did not do anything to them, although it
had full knowledge that they have joined the rival union.

WHEREFORE, considering that Silvino Rabago, Natalio Nisperos and Ricardo Traiano had
violated the Collective Bargaining Agreement whereas the action of the petitioner was one in good
faith in what it believes to be its right under said contract, we respectfully pray of this Honorable
Court that the decision appealed from be set aside and case No. 2728-ULP of the Court of Industrial
Relations be ordered dismissed.

Manila, October 24, 1967.

EULOGIO R. LERUM

Attorney for the Petitioner

3199 Magsaysay Blvd., Manila

The petitioner, Manila Cordage Company, is a corporation duly organized and existing under
the laws of the Philippines.

The petitioner, Manco Labor Union, is a legitimate labor organization.

The respondent, Manila Cordage Workers Union, is also a legitimate labor organization. Said
respondent union is composed of employees of the petitioner company.

Sometime 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 stipulations:

WHEREAS, the parties hereto decided to enter into an agreement relating to the terms and
conditions of employment, with reference to those members to whom the provisions of this
agreement applies.

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. 4
 The foregoing stipulations were also embodied in the collective bargaining agreement entered
into between the Manila Cordage Company and the Manco Labor Union in 1959.

When the collective bargaining agreements were entered into, the employees. Silvino Rabago,
Ricardo Trajano and Natalio Nisperos were already members of Manco Labor Union.

Shortly after 1959, some employees of Manila Cordage Company formed the Manila Cordage
Workers Union. The usual campaign for membership of the new union took place. 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, among them, Silvino
Rabago, Vicente Untalan, Ruperto Balsamo, Natalio Nisperos, Ricardo Traiano, Roque Ruby and
Salvador de Leon. It is alleged that the Manco Labor Union held meetings wherein the members
were informed that under the above-quoted stipulations of the collective bargaining agreement,
continued membership in the Manco Labor Union was a condition precedent to employment in the
Manila Cordage Company. As a consequence, some of those who resigned from the Manco Labor
Union withdrew their resignations and were re-employed by the Manila Cordage Company.

At the behest of the Manila Cordage Workers Union, an acting prosecutor of the Court of
Industrial Relations filed a complaint dated March 28, 1961 for unfair labor practice against Manila
Cordage Company and the Manco Labor Union in behalf of the Manila Cordage Workers Union
and its members namely, Silvino Rabago, Vicente Untalan Ruperto Balsams rid Natalio Nisperos
The complaint was docketed as Case No. Z728-ULP of the Court of Industrial Relations. 5

The acting prosecutor of the Court of Industrial Relations filed an amended complaint in Case
No. 2728-ULP dated July 14, 1961 adding as complainants Ricardo Trajano and Salvador de Leon.

It was alleged in the amended complaint that the Manco Labor Union, through its President, for
no other valid cause except for the resignation of some of its members and the active campaign of
the Manila Cordage Workers Union in recruiting members, knowingly and unlawfully influenced
and connived with officers of the Manila Cordage Company in the dismissal of Silvino Rabago,
Vicente Untalan Ruperto Balsams Natalio Nisperos Ricardo Trajano and Salvador de Leon, who
had resigned from the Manco Labor Union and joined the Manila Cordage Workers 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. 7

The Manila Cordage Company alleged that said company had entered into a valid collective
bargaining contract with the Manco Labor Union, a bona fide legitimate labor organization, then
recognized as the sole and exclusive bargaining agent for all the employees of the respondent
company; 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. 8

After trial the respondent Court of Industrial Relations rendered a decision dated May 4, 1966
ordering the petitioner, Cordage Company, and the Manco Labor Union "To reinstate
complainants Silvino Rabago, Natalio Nisperos and Ricardo Trajano to their former positions and
with all the rights and privileges formerly appertaining thereto and to pay jointly and severally
their back wages from the time of their respective dismissals on January 27, 1961, February 3,
1961, and May 2, 1961 tip to the date of their actual reinstatements, minus their hearings elsewhere,
if any. 9

The motions for reconsideration of the Manila Cordage Company and the Manco Labor Union
were denied by the Court of Industrial Relations in a resolution en banc dated October 19, 1966.
10 However, the Presiding Judge voted for the modification of the decision dated May 4, 1966 by
eliminating therefrom the award of back wages. He concurred in the reinstatement of complainants
Nisperos Trajano and Rabago. 11

The petitioner Manila Cordage Company assigns the following errors:

I. THE LOWER COURT ERRED IN NOT HOLDING THAT, UNDER THE

MAINTENANCE-OF-MEMBERSHIP' CLAUSE IN THE COLLECTIVE BARGAINING
AGREEMENT BETWEEN THE PETITIONER ('COMPANY') AND MANCO LABOR UNION
MANCO EMPLOYEES OF THE COMPANY WHO ARE ALREADY MEMBERS OF MANCO
WHEN SAID AGREEMENT TOOK EFFECT WERE REQUIRED TO REMAIN SUCH
MEMBERS AS A CONDITION OF CONTINUED EMPLOYMENT IN THE COMPANY.

II. THE LOWER COURT ERRED IN NOT HOLDING THAT INDIVIDUALS, WHOSE
EMPLOYMENT HAS CEASED DUE TO ALLEGED UNFAIR LABOR PRACTICES AND
WHO HAVE NOT SOUGHT OTHER SUBSTANTIALLY EQUIVALENT AND REGULAR
EMPLOYMENT, CEASE TO BE 'EMPLOYEES' WITHIN THE MEANING OF SECTION 2 (d)
OF REPUBLIC ACT NO. 875, AS AMENDED, AND HENCE, ARE NOT ENTITLED TO
PROTECTION AND RELIEF UNDER This ACT.

III. THE LOWER COURT ERRED IN NOT HOLDING THAT INDIVIDUALS DISMISSED
PURSUANT TO A UNION SECURITY CLAUSE ARE NOT ENTITLED TO BACK WAGES,
WHEN THEIR EMPLOYER EFFECTED THEIR DISMISSAL IN GOOD FAITH AND IN AN
HONEST BELIEF THAT THE CLAUSE AUTHORIZED SUCH DISMISSAL.

IV. THE LOWER COURT ERRED IN NOT DISMISSING THE COMPLAINT. 12

Anent the first error assigned, the petitioner avers:

 It should be emphasized strongly that this is virtually a case of first impression in this
jurisdiction, We are not aware of any decision of this Tribunal squarely determinative of the
principal issue in this petition. For this reason, it should be appropriate to consider American
jurisprudence which is the source of most of our law on labor relations. (Flores vs. San Pedro, L-
8580, September 30, 1957.)

Decisions of American federal and state courts as well as the comments of recognized American
treatise writers uniformly define a maintenance-of-membership provision as one which requires
all employees who are already members of the union at the time the provision takes effect to remain
such members during the life thereof -is a condition of continued employment. (NLRB vs. Eaton
Mfg. Co. [6th Cir. 1949]175 F2d 292, 16 Lab Cas 75, 761; Markham & Callow vs. International
Woodworkers, 175 P2d 727, 170 or 517 [1943]; Walter vs. State, 38 Sold 609, 34 AlaApp 268
[1949]; Colonial Press vs. Ellis 74 NE2d 1, 321 Mass 495; Rothenberg on Labor Relations, 49-50;
Mathews Labor Relations and the Law 448; Prentice-Hall Labor Course, Par. 12, 204, also at 914;
3 CCH Labor Law Reporter [Labor Relations], Pat. 4520. ) 13

It is not necessary to consider American jurisprudence. The issue of whether or not the so-called
"maintenance-of membership" clause requires all employees who were already members of the
Manco Labor Union at the time the said clause took effect to remain members of the union during
the life of the collection bargaining agreement as a condition of continued employment may be
resolved under the constitution and relevant Philippine jurisprudence.

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:

IV MAINTENANCE OF MEMBERSHIP

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" (Exhibits '5-B' and '6-B' Company ). 14

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.

Apparently 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 7 the provisions of this
AGREEMENT apply." (Exhibits '5-A' and '?-A-Company) 15

Anent this point, the Court of Industrial Relations through 'Judge Amando Bugayong ruled:

But whether read disjunctively or conjunctively, these two provisions would not justify the
interpretation which respondent company would want to attribute to the same. For said whereas'
proviso neither refers to tenure of duration of employment which is tile issue in the case at bar but
only to terms and conditions of employment such as working hours. wages, other benefits and
privileges clearly specified therein. We need not stretch our imagination too far to know the
difference between or duration of employment from terms and conditions of employment. Besides
even on the assumption that 'terms and conditions of employment' covers continuity or period of
employment, the ambiguity of the provision should not adversely affect complainants. Hence, even
with the conjuctive interpretation, these two provisions can not supplant the omission of and said
maintenance of membership clause, let alone cure the act of the same This is especially so if the
rule which states that in case of inconsistency a particular provision like the disputed maintenance
of membership clause prevails over or controls a general provision, such as 'WHEREAS' proviso,
invoked by respondents, is to be applied to the interpretation of this doubtful provision (Rule
130(4), Section 10, New Rules of Court). 16 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 violate the natural and constitutional
right of the laborer to organize freely. 17 Such interpretation would be inconsistent with the
constitutional mandate that the State shall afford protection to labor. 18

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.

There is a showing that the dismissed complainants sought our substantially equivalent and
regular employment. They failed to find any.

The contention n of the petitioners that they acted in good faith in dismissing the complainants
and, therefore, should not be field liable to pay their back wages has no merit. The dismissal of the
complainants by the petitioners was precipitate and done with undue haste. Considering that the
so-called "maintenance to membership' clause did it clearly the petitioners the right to dismiss the
complainants if said complainants did not maintain their membership in the Manco Labor Union,
the petitioners should have raised the issue before the Court of Industrial Relations in a petition
for permission to dismiss the complainants.

However, considering the circumstances and equity of the case, the petitioners should be held
liable to pay the back wages of the complainants for a period of two years only from the date they
were respectively dismissed. 19

The reinstatement order of respondent Court of Industrial Relations of complainants Silvino

Rabago, Natalio Nisperos and Ricardo Trajano to their former positions and with all the rights arid
privileges formerly appertaining thereto is correct (supra, p. 2). Such reinstatement now is of
course subject to said complainants still being within the required physical and age requirements,
but any physical or medical examination to which they may be subjected is to be given them as
old reinstated workers, but not as a precondition to their reinstatement. Our ruling in Davao Free
Workers Front vs. CIR, 60 SCRA 408, 425, is fully applicable mutatis mutandis in the case at bar
as follows: ... The filing and pendency of an unfair labor practice case as in the case at bar
presupposes a continuing employer-employee relationship and when the case is decided in favor
of the workers, this relationship is in law deemed to have continued uninterruptedly
notwithstanding their unlawful dismissal or the lawful strike and stoppage of work, and hence,
seniority and other privileges are preserved in their favor, To require them to undergo a physical
or medical examination ad a precondition of reinstatement or return to work simply because of the
long pendency of their case which is due to no fault of theirs would not only defeat the purpose of
the law and the constitutional and statutory mandates to protect labor but would work to their
unfair prejudice as aggrieved parties and give an undue advantage to employers as the offenders
who have the means and resources to wage attrition and withstand the bane of protracted litigation.

Hence, the aggrieved workers may be subjected to periodic physical or medical examination as
old reinstated workers, but not as a precondition to their reinstatement or return to work with the
important consequence that if they are found to be ill or suffering from some disability, they would
be entitled to all the benefits that the laws and company practices provide by way of compensation,
medical care, disability benefits and gratuities. etc. to employees and workers.

WHEREFORE, the decision appealed from is hereby affirmed with the sole modification that
the backwages which both the petitioners are ordered, jointly and severally, to pay the
complainants Silvino Rabago, Natalio Nisperos and Ricardo Trajano are hereby fixed at the
equivalent of two years pay without deduction or qualification computed on the basis of their
wages at the time of their respective dismissals on January 27, 1961, February 3, 1961 and May 2,
1961. Without pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Muñ;oz-Palma, Martin and Guerrero, JJ., concur.

H.2) [G.R. No. L-20764] November 29, 1965 –

SANTOS JUAT v. COURT OF INDUSTRIAL RELATIONS : NOVEMBER 1965 - PHILIPPINE

SUPREME COURT JURISPRUDENCE

R.E. Diaz

PHILIPPINE SUPREME COURT DECISIONS

EN BANC

SANTOS JUAT, Petitioner, v. COURT OF INDUSTRIAL RELATIONS, BULAKLAK

PUBLICATIONS and JUAN EVANGELISTA, Respondents.
Vicente T. Ocampo for Petitioner.

Mariano B. Tuason for respondent Court of Industrial Relations

Rufo B. Albor for Respondents.

SYLLABUS

1. COLLECTIVE BARGAINING AGREEMENT; CLOSE-SHOP PROVISO; EMPLOYEES

BOUND. — The closed-shop proviso of a collective bargaining agreement entered into between
an employer and a duly authorized labor union is applicable not only to the employees or laborers
that are employed after the collective bargaining agreement had been entered into but also to old
employees who are not members of any labor union at the time the said collective bargaining
agreement was entered into. In other words, if an employee or laborer is already a member of a
labor union different from the contracting labor union, said employee or worker cannot be obliged
to become a member of that union as a condition for his continued employment. Upon the other
hand, if said employee or worker is a non-member of any labor union, he can be compelled to join
the contracting labor union, and his refusal to do so would constitute a justifiable basis for
dismissal.

DECISION

ZALDIVAR, J.:

This is a petition for certiorari to review the decision dated August 15, 1962 and the resolution en
banc dated October 30, 1962, of the Court of Industrial Relations in its Case No. 2889-ULP.

After investigating charges of unfair labor practice filed by petitioner Santos Juat before the Court
of Industrial Relations against respondents Bulaklak Publications and its Executive Officer, Acting
Prosecutor Alberto Cruz of the Court of Industrial Relations filed a complaint, docketed as Case
No. 2889-ULP, charging Bulaklak Publications and/or Juan N. Evangelista of unfair labor practice
within the meaning of Section 4(a) subsections 1, 4 and 5 of Republic Act 875, alleging, among
others, that complainant Santos Juat was an employee of the respondent company since August
1953; that on or about July 15, 1960, and on several occasions thereafter, complainant Santos Juat
was asked by his respondent employer to join the Busocope Labor Union, but he refused to do so;
that respondent employer suspended him without justifiable cause; that two separate cases were
filed by complainant against the respondents — one on March 13, 1961 for unfair labor practice,
and another on March 18, 1961 for payment of wages for overtime work and work on Sundays
and holidays, the filing of which cases had come to the knowledge of the respondents; that on
March 15, 1961, respondent employer dismissed him from the service without justifiable cause
and that from the time of his dismissal up to the filing of the complaint he had not found any
substantial employment for himself.

In their answer, dated August 3, 1961, respondents alleged, among others, that complainant Santos
Juat was suspended for cause; that while Case No. 1462-V was filed with the Court of Industrial
Relations on March 13, 1961, the same came to the knowledge of respondents only when they
received the summons and a copy of the petition on March 24, 1961, and while case No. 2789-
ULP was filed on April 3, 1961, the same became known to respondents long after the employer-
employee relationship between respondent employer and Santos Juat had been terminated, so that
the suspension of the complainant on March 1, 1961 and his subsequent separation from the service
were not acts of reprisal because of the filing of those two cases; that it was complainant Juat who
had caused his separation when he ignored the letter sent to him by Juan N. Evangelista, executive
officer of respondent company, requiring him to report for work; that the principal reason why
complainant refused to work with respondent company was because he was occupied with his
work in the Juat Printing Press Co. of which he was a stockholder and the treasurer. Respondent
company thereby made a counterclaim for damages because of complainant’s having filed an
unwarranted and malicious action against it.

On August 15, 1962, after hearing, Associate Judge Baltazar N. Villanueva of the Court of
Industrial Relations rendered a decision dismissing the complaint but made no pronouncement
regarding respondent’s counterclaim.

Petitioner filed a motion for reconsideration of the decision, and in a resolution dated October 30,
1962, the Court of Industrial Relations en banc denied the motion for reconsideration. Hence, this
petition for certiorari to review said decision and resolution.

The facts of this case may best be gathered from the findings and conclusions of the Court of
Industrial Relations in its decision, as follows:jgc:chanrobles.com.ph

"On December 1, 1959, a collective bargaining agreement was entered into between the Bulaklak
Publications and the BUSOCOPE LABOR UNION, to remain in effect for 3 years, and renewable
for another term of 3 years. Section 4 of said agreement contains a closed shop proviso. On
December 27, 1960, said Section 4 of said agreement was amended to read as follows:chanrob1es
virtual 1aw library

`All employees and/or workers who on January 1, 1960 are members of the Union in good standing
in accordance with its Constitution and By-Laws and all members who become members after that
date shall, as a condition of employment, maintain their membership in the Union for the duration
of this Agreement. All employees and/or workers who on January 1, 1961 are not yet members of
the Union shall, as a condition of maintaining their employment, become members of such union.’

"It is clear that it was by virtue of the above-mentioned closed shop provision of the collective
bargaining agreement between the Busocope Labor Union and the Bulaklak Publications that the
management of the latter required Santos Juat to become a member of the former. In requiring
Santos Juat to become a member of said Union, it was only obeying the law between the parties,
which is their collective bargaining agreement.

"Because of the refusal of Santos Juat to become a member of said Union, Mr. Juan N. Evangelista,
the executive officer of respondent company, suspended him for 15 days. After the expiration of
the suspension of Santos Juat, Mr. Evangelista addressed a letter to the former, ordering him to
report back for duty, and in spite of said letter, Santos Juat did not report for work, consequently,
Santos Juat was dropped from the service of the company. Juat could afford not to report for duty
because he has his own business by the name of JUAT PRINTING PRESS CO., INC. The refusal
of Santos Juat to become a member of the Busocope Labor Union as well as his refusal to report
for work when ordered by his superior officer, shows the lack of respect on the part of Santos Juat
toward his superior officer. With such attitude, the continuation in the service of the company of
Santos Juat is indeed inimical to the interest of his employer.

"The charge of complainant to the effect that on March 13, 1961, he filed a petition with this Court
against respondent company which was docketed as Case No. 1462-V is of no moment, because
according to the decision of the Supreme Court in (109 Phil. 900), Royal Interocean Lines, Et. Al.
v. Hon. Court of Industrial Relations, Et Al., promulgated October 31, 1960, it was held that an
employee’s having filed charges or having given testimony or being about to give testimony has
no relation to union activities. With respect to Case No. 2789-ULP, Mr. Evangelista stated that he
did not know anything about its having been filed in Court."cralaw virtua1aw library

It is now contended by the petitioner before this Court that:chanrob1es virtual 1aw library

1. The Court of Industrial Relations erred, or committed a grave abuse of discretion, when it
applied to the petitioner the collective bargaining agreement with close shop proviso between the
respondent Bulaklak Publications and the Busocope Labor Union, he being an old employee;

2. The Court of Industrial Relations erred or committed a grave abuse of discretion, in holding that
the respondent Bulaklak Publications did not commit unfair labor practice when it dismissed
petitioner for his refusal to join the Busocope Labor Union; and

3. The Court of Industrial Relations committed a grave abuse of discretion when it dismissed the
complaint of petitioner because its allegations are not supported by substantial evidence.

The contentions of the petitioner are without merit. The closed- shop proviso in a collective
bargaining agreement between employer and employee is sanctioned by law. The pertinent
provision of the law, in this connection, says:jgc:chanrobles.com.ph

"Provided, that nothing in this Act or in any 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 said section twelve; . . ." (Section 4, subsection [a] par. 4 of Republic
Act No. 875, known as the Industrial Peace Act).

The validity of a closed-shop agreement has been upheld by this Court. In one particular case this
Court held:jgc:chanrobles.com.ph

"There is no need for us to take sides and give reasons because our Congress, in the exercise of its
policy-making power, has chosen to approve the closed-shop, when it legalized in Sec. 4,
subsection (a) paragraph 4 of Republic Act 875 (Magna Carta of labor) `any agreement of the
employer with a labor organization requiring membership in such organization as a condition of
employment’, provided such labor organization properly represents the employees" (National
Labor Union v. Aguinaldo’s Echague, Et Al., G.R. No. L-7385, May 31, 1955.)
The foregoing pronouncement of this Court had been reiterated in the cases of Tolentino, Et. Al.
v. Angeles, Et Al., 99 Phil. 309; Ang Malayang Manggagawa Ng Ang Tibay Enterprises, Et. Al.
v. Ang Tibay, Et. Al. G. R No. L-8259, Dec. 23, 1957; Confederated Sons of Labor v. Anakan
Lumber Co., Et Al., 107 Phil. 915; Bacolod-Murcia Milling Co., Et. Al. v. National Employees
Workers Security Union, 53 Off. Gaz., 615.

A closed-shop agreement has been considered as one form of union security whereby only union
members can be hired and workers must remain union members as a condition of continued
employment. The requirement for employees or workers to become members of a union as a
condition for employment redound to the benefit and advantage of said employees because by
holding out to loyal members a promise of employment in the closed-shop the union wields group
solidarity. In fact, it is said that "the closed-shop contract is the most prized achievement of
unionism" (National Labor Union v. Aguinaldo-Echague, Inc., Et Al., supra).

Coming now to the closed-shop proviso of the collective bargaining agreement between the
respondent Bulaklak Publications and the Busocope Labor Union, it is clearly provided that "All
employees and/or workers who on January 1, 1961 are not yet members of the Union shall, as
condition of maintaining their employment, become members of such Union." The question now
before Us is whether the above-quoted proviso of the said collective bargaining agreement applies
to the petitioner Santos Juat. The contention of said petitioner is that the said proviso cannot apply,
and should not be applied, to him because he is an old employee of the Bulaklak Publications. It
is not disputed that petitioner had been employed with the Bulaklak Publications since 1953, and
the collective bargaining agreement embodying the closed- shop proviso in question was entered
into only on December 1, 1959 and amended on December 27, 1960. It has been established,
however, that said petitioner was not a member of any labor union when that collective bargaining
agreement was entered into, and in fact he had never been a member of any labor union.

This Court had categorically held in the case of Freeman Shirt Manufacturing Co., Inc. Et. Al. v.
Court of Industrial Relations, Et Al., 110 Phil. 962, that the closed-shop proviso of a collective
bargaining agreement entered into between an employer and a duly authorized labor union is
applicable not only to the employees or laborers that are employed after the collective bargaining
agreement had been entered into but also to old employees who are not members of any labor
union at the time the said collective bargaining agreement was entered into. In other words, if an
employee or laborer is already a member of a labor union different from the union that entered into
the collective bargaining agreement with the employer providing for a closed-shop, said employee
or worker cannot be obliged to become a member of that union which had entered into a collective
bargaining agreement with the employer as a condition for his continued employment. This Court
in that Freeman case made this clear pronouncement:jgc:chanrobles.com.ph

"The closed-shop agreement authorized under Sec. 1 sub-section 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., 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]).

"Section 12 of the Industrial Peace Act, providing that when there is reasonable doubt as to who
the employees have chosen as their representative the Industrial Court can order a certification
election, would also become useless. For once a union has been certified by the court and enters
into a collective bargaining agreement with the employer a closed-shop clause applicable to all
employees be they union or non-union members, the question of majority representation among
the members would be closed forever. Certainly, there can no longer exist any petition for
certification election, since eventually the majority of contracting union will become a perpetual
labor union. This alarming result could not have been the intention of Congress. The Industrial
Peace Act was enacted precisely for the promotion of unionism in this country." (Italics supplied)

The above-quoted ruling was re-affirmed by this Court in its decision in the case of Findlay Miller
Timber Co. v. PLASLU Et. Al., G.R. Nos. L-18217 & L- 18222, Sept. 29, 1962.

It should be declared, therefore, as a settled doctrine, that the closed-shop proviso of a collective
bargaining agreement entered into between an employer and a duly authorized labor union applies,
and should be applied, to old employees or workers who are non-members of any labor union at
the time the collective bargaining agreement was entered into. In other words, the old employees
or workers can be obliged by his employer to join the labor union which had entered into a
collective bargaining agreement that provides for a closed-shop as a condition for his continuance
in his employment, otherwise his refusal to join the contracting labor union would constitute a
justifiable basis for his dismissal.

It being established by the evidence that petitioner Santos Juat, although an old employee of the
respondent Bulaklak Publications, was not a member of any labor union at the time when the
collective bargaining agreement in question was entered into he could be obliged by the respondent
Bulaklak Publications to become a member of the Busocope Labor Union. And because petitioner
Santos Juat refused to join the Busocope Labor Union respondent Bulaklak Publications was
justified in dismissing him from the service on the ground that he had refused to join said union.

We, therefore, hold that the respondent Court of Industrial Relations did not err, nor did it commit
a grave abuse of discretion, when it decided that the respondent Bulaklak Publications did not
commit unfair labor practice when it dismissed petitioner because of his refusal to join the
Busocope labor union. Moreover, as found by the respondent Court of Industrial Relations,
petitioner Santos Juat had furnished another ground for his dismissal — and that was because he
refused to return to work after the end of his suspension even when he was ordered to do so by his
employer, the respondent Bulaklak Publications. The respondent Court of Industrial Relations
further found that the reason why the petitioner did not want to return to work was because he was
already working in his own establishment known as the "Juat Printing Press Co. Inc." of which he
was a stockholder and the treasurer.

Neither did the respondent Court of Industrial Relation commit a grave abuse of discretion when
it dismissed the complaint on the ground that the petitioner had not adduced substantial evidence
to support the allegations in the complaint. We have carefully examined the records, and We
believe that the factual findings of the respondent court should not be disturbed.

IN VIEW OF THE FOREGOING, the decision and resolution appealed from are affirmed, with
costs against the petitioner.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal and
Bengzon, J.P., JJ., concur.

Barrera, J., took no part.

H.3) G.R. NO. L-25246, 12 September 1974.

BENJAMIN VICTORIANO, plaintiff-appellee,

vs.

ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., defendants,
ELIZALDE ROPE WORKERS' UNION, defendant-appellant.

Salonga, Ordonez, Yap, Sicat & Associates for plaintiff-appellee.

Cipriano Cid & Associates for defendant-appellant.

ZALDIVAR, J.:p

Appeal to this Court on purely questions of law from the decision of the Court of First Instance of
Manila in its Civil Case No. 58894.

The undisputed facts that spawned the instant case follow:

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. 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.

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

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. 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).2 Upon the facts agreed upon by the parties during the pre-trial conference, the Court a quo
rendered its decision on August 26, 1965, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, judgment is rendered 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.3

From this decision, the Union appealed directly to this Court on purely questions of law, assigning
the following errors:

I. That the lower court erred when it did not rule that Republic Act No. 3350 is unconstitutional.

II. That the lower court erred when it sentenced appellant herein to pay plaintiff the sum of P500
as attorney's fees and the cost thereof.

In support of the alleged unconstitutionality of Republic Act No. 3350, the Union contented,
firstly, that the Act infringes on the fundamental right to form lawful associations; that "the very
phraseology of said Republic Act 3350, that membership in a labor organization is banned to all
those belonging to such religious sect prohibiting affiliation with any labor organization"4 ,
"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. 6

Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for impairing the
obligation of contracts in that, while the Union is obliged to comply with its collective bargaining
agreement containing a "closed shop provision," the Act relieves the employer from its reciprocal
obligation of cooperating in the maintenance of union membership as a condition of employment;
and that said Act, furthermore, impairs the Union's rights as it deprives the union of dues from
members who, under the Act, are relieved from the obligation to continue as such members.7

Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those religious
sects which ban their members from joining labor unions, in violation of Article Ill, Section 1 (7)
of the 1935 Constitution; and while said Act unduly protects certain religious sects, it leaves no
rights or protection to labor organizations.8

Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional provision that "no
religious test shall be required for the exercise of a civil right," in that the laborer's exercise of his
civil right to join associations for purposes not contrary to law has to be determined under the Act
by his affiliation with a religious sect; that conversely, if a worker has to sever his religious
connection with a sect that prohibits membership in a labor organization in order to be able to join
a labor organization, said Act would violate religious freedom.9

Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection of laws"
clause of the Constitution, it being a discriminately legislation, inasmuch as by exempting from
the operation of closed shop agreement the members of the "Iglesia ni Cristo", it has granted said
members undue advantages over their fellow workers, for while the Act exempts them from union
obligation and liability, it nevertheless entitles them at the same time to the enjoyment of all
concessions, benefits and other emoluments that the union might secure from the employer. 10

Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional provision
regarding the promotion of social justice. 11

Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargaining
agreement cannot be considered violative of religious freedom, as to call for the amendment
introduced by Republic Act No. 3350; 12 and that unless Republic Act No. 3350 is declared
unconstitutional, trade unionism in this country would be wiped out as employers would prefer to
hire or employ members of the Iglesia ni Cristo in order to do away with labor organizations. 13

Appellee, assailing appellant's arguments, contended that Republic Act No. 3350 does not violate
the right to form lawful associations, for the right to join associations includes the right not to join
or to resign from a labor organization, if one's conscience does not allow his membership therein,
and the Act has given substance to such right by prohibiting the compulsion of workers to join
labor organizations; 14 that said Act does not impair the obligation of contracts for said law formed
part of, and was incorporated into, the terms of the closed shop agreement; 15 that the Act does
not violate the establishment of religion clause or separation of Church and State, for Congress, in
enacting said law, merely accommodated the religious needs of those workers whose religion
prohibits its members from joining labor unions, and balanced the collective rights of organized
labor with the constitutional right of an individual to freely exercise his chosen religion; that the
constitutional right to the free exercise of one's religion has primacy and preference over union
security measures which are merely contractual 16 ; that said Act does not violate the constitutional
provision of equal protection, for the classification of workers under the Act depending on their
religious tenets is based on substantial distinction, is germane to the purpose of the law, and applies
to all the members of a given class; 17 that said Act, finally, does not violate the social justice
policy of the Constitution, for said Act was enacted precisely to equalize employment
opportunities for all citizens in the midst of the diversities of their religious beliefs." 18

I. Before We proceed to the discussion of the first assigned error, it is necessary to premise that
there are some thoroughly established principles which must be followed in all cases where
questions of constitutionality as obtains in the instant case are involved. All presumptions are
indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must
prove its invalidity beyond a reasonable doubt, that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will
be upheld, and the challenger must negate all possible bases; that the courts are not concerned with
the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of the
constitution in favor of the constitutionality of legislation should be adopted. 19

1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the members of
such religious sects that forbid affiliation of their members with labor unions from joining labor
unions appears nowhere in the wording of Republic Act No. 3350; neither can the same be deduced
by necessary implication therefrom. It is not surprising, therefore, that appellant, having thus
misread the Act, committed the error of contending that said Act is obnoxious to the constitutional
provision on freedom of association.

Both the Constitution and Republic Act No. 875 recognize freedom of association. Section 1 (6)
of Article III of the Constitution of 1935, as well as Section 7 of Article 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 Republic Act No. 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. Notwithstanding the different
theories propounded by the different schools of jurisprudence regarding the nature and contents of
a "right", it can be safely said that whatever theory one subscribes to, 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. 20 It is clear, therefore, that the right to join a union includes
the right to abstain from joining any union. 21 Inasmuch as what both the Constitution and the
Industrial Peace Act have recognized, and guaranteed to the employee, is the "right" to join
associations of his choice, it would be absurd to say that the law also imposes, in the same breath,
upon the employee the duty to join associations. 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 member 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. Thus Section 4 (a) (4) of the Industrial Peace Act, before its amendment
by Republic Act No. 3350, provides that although it would be an unfair labor practice for an
employer "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" the employer is,
however, 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". By virtue, therefore, of a closed shop agreement, before the enactment of Republic
Act No. 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, Republic Act 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, 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.

2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of
its contract, specifically, the "union security clause" embodied in its Collective Bargaining
Agreement with the Company, by virtue of which "membership in the union was required as a
condition for employment for all permanent employees workers". This agreement was already in
existence at the time Republic Act No. 3350 was enacted on June 18, 1961, and it cannot, therefore,
be deemed to have been incorporated into the agreement. But by reason of this amendment,
Appellee, as well as others similarly situated, could no longer be dismissed from his job even if he
should cease to be a member, or disaffiliate from the Union, and the Company could continue
employing him notwithstanding his disaffiliation from the Union. The Act, therefore, introduced
a change into the express terms of the union security clause; 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.

According to Black, any statute which introduces a change into the express terms of the contract,
or its legal construction, or its validity, or its discharge, or the remedy for its enforcement, impairs
the contract. The extent of the change is not material. It is not a question of degree or manner or
cause, but of encroaching in any respect on its obligation or dispensing with any part of its force.
There is an impairment of the contract if either party is absolved by law from its performance. 22
Impairment has also been predicated on laws which, without destroying contracts, derogate from
substantial contractual rights. 23

It should not be overlooked, however, that the prohibition to impair the obligation of contracts is
not absolute and unqualified. The prohibition is general, affording a broad outline and requiring
construction to fill in the details. The prohibition is not to be read with literal exactness like a
mathematical formula, for it prohibits unreasonable impairment only. 24 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. 25 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. All contracts made with reference to any
matter that is subject to regulation under the police power must be understood as made in reference
to the possible exercise of that power. 26 Otherwise, important and valuable reforms may be
precluded by the simple device of entering into contracts for the purpose of doing that which
otherwise may be prohibited. The policy of protecting contracts against impairment presupposes
the maintenance of a government by virtue of which contractual relations are worthwhile a
government which retains adequate authority to secure the peace and good order of society. The
contract clause of the Constitution must, therefore, 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. It follows that not all legislations, which have the effect of impairing a
contract, are obnoxious to the constitutional prohibition as to impairment, and a statute passed in
the legitimate exercise of police power, although it incidentally destroys existing contract rights,
must be upheld by the courts. 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. 27

In several occasions this Court declared that the prohibition against impairing the obligations of
contracts has no application to statutes relating to public subjects within the domain of the general
legislative powers of the state involving public welfare. 28 Thus, this Court also held that the Blue
Sunday Law was not an infringement of the obligation of a contract that required the employer to
furnish work on Sundays to his employees, the law having been enacted to secure the well-being
and happiness of the laboring class, and being, furthermore, a legitimate exercise of the police
power. 29

In order to determine whether legislation unconstitutionally impairs contract obligations, no

unchanging yardstick, applicable at all times and under all circumstances, by which the validity of
each statute may be measured or determined, has been fashioned, but every case must be
determined upon its own circumstances. Legislation impairing the obligation of contracts can be
sustained when it is enacted for the promotion of the general good of the people, and when the
means adopted to secure that end are reasonable. Both the end sought and the means adopted must
be legitimate, i.e., within the scope of the reserved power of the state construed in harmony with
the constitutional limitation of that power. 30

What then was the purpose sought to be achieved by Republic Act No. 3350? Its purpose was 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. It cannot be gainsaid that said purpose is legitimate.

The questioned Act also provides protection to members of said religious sects against two
aggregates of group strength from which the individual needs protection. 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. 31

The aforementioned purpose of the amendatory law is clearly seen in the Explanatory Note to
House Bill No. 5859, which later became Republic Act No. 3350, as follows:

It would be unthinkable indeed to refuse employing a person who, on account of his religious
beliefs and convictions, cannot accept membership in a labor organization although he possesses
all the qualifications for the job. This is tantamount to punishing such person for believing in a
doctrine he has a right under the law to believe in. The law would not allow discrimination to
flourish to the detriment of those whose religion discards membership in any labor organization.
Likewise, the law would not commend the deprivation of their right to work and pursue a modest
means of livelihood, without in any manner violating their religious faith and/or belief. 32

It cannot be denied, furthermore, that the means adopted by the Act to achieve that purpose —
exempting the members of said religious sects from coverage of union security agreements — is
reasonable.

It may not be amiss to point out here 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. The
Supreme Court of the United States has also declared on several occasions that the rights in the
First Amendment, which include freedom of religion, enjoy a preferred position in the
constitutional system. 33 Religious freedom, although not unlimited, is a fundamental personal
right and liberty, 34 and has a preferred position in the hierarchy of values. Contractual rights,
therefore, must yield to freedom of religion. It is only where unavoidably necessary to prevent an
immediate and grave danger to the security and welfare of the community that infringement of
religious freedom may be justified, and only to the smallest extent necessary to avoid the danger.
3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant
Union averred that said Act discriminates in favor of members of said religious sects in violation
of Section 1 (7) of Article Ill of the 1935 Constitution, and which is now Section 8 of Article IV
of the 1973 Constitution, which provides:

No law shall be made respecting an establishment of religion, or prohibiting the free exercise
thereof, and the free exercise and enjoyment of religious profession and worship, without
discrimination and preference, shall forever be allowed. No religious test shall be required for the
exercise of civil or political rights.

The constitutional provision into only prohibits legislation for the support of any religious tenets
or the modes of worship of any sect, thus forestalling compulsion by law of the acceptance of any
creed or the practice of any form of worship, 35 but also assures the free exercise of one's chosen
form of religion within limits of utmost amplitude. It has been said that the religion clauses of the
Constitution are all designed to protect the broadest possible liberty of conscience, to allow each
man to believe as his conscience directs, to profess his beliefs, and to live as he believes he ought
to live, consistent with the liberty of others and with the common good. 36 Any legislation whose
effect or purpose is to impede the observance of one or all religions, or to discriminate invidiously
between the religions, is invalid, even though the burden may be characterized as being only
indirect. 37 But if the stage regulates conduct by enacting, within its power, a general law which
has for its purpose and effect to advance the state's secular goals, the statute is valid despite its
indirect burden on religious observance, unless the state can accomplish its purpose without
imposing such burden. 38

In Aglipay v. Ruiz 39 , this Court had occasion to state that the government should not be precluded
from pursuing valid objectives secular in character even if the incidental result would be favorable
to a religion or sect. It has likewise been held that the statute, in order to withstand the strictures
of constitutional prohibition, must have a secular legislative purpose and a primary effect that
neither advances nor inhibits religion. 40 Assessed by these criteria, Republic Act No. 3350 cannot
be said to violate the constitutional inhibition of the "no-establishment" (of religion) clause of the
Constitution.

The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual or religious
or holy and eternal. It was intended 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. In fact, the state is enjoined, in the 1935 Constitution, to afford
protection to labor, and regulate the relations between labor and capital and industry. 41 More so
now in the 1973 Constitution where it is 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. 42

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 "establishment clause" (of religion)
does not ban regulation on conduct whose reason or effect merely happens to coincide or
harmonize with the tenets of some or all religions. 43 The free exercise clause of the Constitution
has been interpreted to require that religious exercise be preferentially aided. 44

We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of
the constitutional provision. It acted merely to relieve the exercise of religion, by certain persons,
of a burden that is imposed by union security agreements. It was Congress itself that imposed that
burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it
so deems advisable, could take away the same burden. It is certain that not every conscience can
be accommodated by all the laws of the land; but when general laws conflict with scrupples of
conscience, exemptions ought to be granted unless some "compelling state interest" intervenes. 45
In the instant case, We see no such compelling state interest to withhold exemption.

Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects,
it leaves no right to, and is silent as to the protection of, labor organizations. The purpose of
Republic Act No. 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. As to the lamented silence of the
Act regarding the rights and protection of labor unions, suffice it to say, first, that the validity of a
statute is determined by its provisions, not by its silence 46 ; and, second, the fact that the law may
work hardship does not render it unconstitutional. 47

It would not be amiss to state, regarding this matter, that to compel persons to join and remain
members of a union to keep their jobs in violation of their religious scrupples, would hurt, rather
than help, labor unions, Congress has seen it fit to exempt religious objectors lest their resistance
spread to other workers, for religious objections have contagious potentialities more than political
and philosophic objections.
Furthermore, let it be noted that coerced unity and loyalty even to the country, and a fortiori to a
labor — union assuming that such unity and loyalty can be attained through coercion — is not a
goal that is constitutionally obtainable at the expense of religious liberty. 48 A desirable end cannot
be promoted by prohibited means.

4. Appellants' fourth contention, that Republic Act No. 3350 violates the constitutional prohibition
against requiring a religious test for the exercise of a civil right or a political right, is not well
taken. 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. A conscientious religious objector
need not perform a positive act or exercise the right of resigning from the labor union — he is
exempted from the coverage of any closed shop agreement that a labor union may have entered
into. How then can there be a religious test required for the exercise of a right when no right need
be exercised?

We have said that it was within the police power of the State to enact Republic Act No. 3350, and
that its purpose was legal and in consonance with the Constitution. It is never an illegal evasion of
a constitutional provision or prohibition to accomplish a desired result, which is lawful in itself,
by discovering or following a legal way to do it. 49

5. Appellant avers as its fifth ground that Republic Act No. 3350 is a discriminatory legislation,
inasmuch as it grants to the members of certain religious sects undue advantages over other
workers, thus violating Section 1 of Article III of the 1935 Constitution which forbids the denial
to any person of the equal protection of the laws. 50

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the
laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man, woman and child should be affected
alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not require that things which are
different in fact be treated in law as though they were the same. The equal protection clause does
not forbid discrimination as to things that are different. 51 It does not prohibit legislation which is
limited either in the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification in
law, as in the other departments of knowledge or practice, is the grouping of things in speculation
or practice because they agree with one another in certain particulars. A law is not invalid because
of simple inequality. 52 The very idea of classification is that of inequality, so that it goes without
saying that the mere fact of inequality in no manner determines the matter of constitutionality. 53
All that is required of a valid classification is that it be reasonable, which means that the
classification should be based on substantial distinctions which make for real differences; that it
must be germane to the purpose of the law; that it must not be limited to existing conditions only;
and that it must apply equally to each member of the class. 54 This Court has held that the standard
is satisfied if the classification or distinction is based on a reasonable foundation or rational basis
and is not palpably arbitrary. 55

In the exercise of its power to make classifications for the purpose of enacting laws over matters
within its jurisdiction, the state is recognized as enjoying a wide range of discretion. 56 It is not
necessary that the classification be based on scientific or marked differences of things or in their
relation. 57 Neither is it necessary that the classification be made with mathematical nicety. 58
Hence legislative classification may in many cases properly rest on narrow distinctions, 59 for the
equal protection guaranty does not preclude the legislature from recognizing degrees of evil or
harm, and legislation is addressed to evils as they may appear.

We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act
classifies employees and workers, as to the effect and coverage of union shop security agreements,
into those who by reason of their religious beliefs and convictions cannot sign up with a labor
union, and those whose religion does not prohibit membership in labor unions. Tile classification
rests on real or substantial, not merely imaginary or whimsical, distinctions. There is such real
distinction in the beliefs, feelings and sentiments of employees. Employees do not believe in the
same religious faith and different religions differ in their dogmas and cannons. Religious beliefs,
manifestations and practices, though they are found in all places, and in all times, take so many
varied forms as to be almost beyond imagination. There are many views that comprise the broad
spectrum of religious beliefs among the people. There are diverse manners in which beliefs,
equally paramount in the lives of their possessors, may be articulated. Today the country is far
more heterogenous in religion than before, differences in religion do exist, and these differences
are important and should not be ignored.

Even from the phychological point of view, the classification is based on real and important
differences. Religious beliefs are not mere beliefs, mere ideas existing only in the mind, for they
carry with them practical consequences and are the motives of certain rules. of human conduct and
the justification of certain acts. 60 Religious sentiment makes a man view things and events in
their relation to his God. It gives to human life its distinctive character, its tone, its happiness or
unhappiness its enjoyment or irksomeness. Usually, a strong and passionate desire is involved in
a religious belief. To certain persons, no single factor of their experience is more important to them
than their religion, or their not having any religion. Because of differences in religious belief and
sentiments, a very poor person may consider himself better than the rich, and the man who even
lacks the necessities of life may be more cheerful than the one who has all possible luxuries. Due
to their religious beliefs people, like the martyrs, became resigned to the inevitable and accepted
cheerfully even the most painful and excruciating pains. Because of differences in religious beliefs,
the world has witnessed turmoil, civil strife, persecution, hatred, bloodshed and war, generated to
a large extent by members of sects who were intolerant of other religious beliefs. The
classification, introduced by Republic Act No. 3350, therefore, rests on substantial distinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law is
precisely to avoid those who cannot, because of their religious belief, join labor unions, from being
deprived of their right to work and from being dismissed from their work because of union shop
security agreements.

Republic Act No. 3350, furthermore, is not limited in its application to conditions existing at the
time of its enactment. The law does not provide that it is to be effective for a certain period of time
only. It is intended to apply for all times as long as the conditions to which the law is applicable
exist. As long as there are closed shop agreements between an employer and a labor union, and
there are employees who are prohibited by their religion from affiliating with labor unions, their
exemption from the coverage of said agreements continues.

Finally, the Act applies equally to all members of said religious sects; this is evident from its
provision. The fact that the law grants a privilege to members of said religious sects cannot by
itself render the Act unconstitutional, for as We have adverted to, the Act only restores to them
their freedom of association which closed shop agreements have taken away, and puts them in the
same plane as the other workers who are not prohibited by their religion from joining labor unions.
The circumstance, that the other employees, because they are differently situated, are not granted
the same privilege, does not render the law unconstitutional, for every classification allowed by
the Constitution by its nature involves inequality.

The mere fact that the legislative classification may result in actual inequality is not violative of
the right to equal protection, for every classification of persons or things for regulation by law
produces inequality in some degree, but the law is not thereby rendered invalid. A classification
otherwise reasonable does not offend the constitution simply because in practice it results in some
inequality. 61 Anent this matter, it has been said that whenever it is apparent from the scope of the
law that its object is for the benefit of the public and the means by which the benefit is to be
obtained are of public character, the law will be upheld even though incidental advantage may
occur to individuals beyond those enjoyed by the general public. 62

6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision
on social justice is also baseless. Social justice is intended to promote the welfare of all the people.
63 Republic Act No. 3350 promotes that welfare insofar as it looks after the welfare of those who,
because of their religious belief, cannot join labor unions; the Act prevents their being deprived of
work and of the means of livelihood. In determining whether any particular measure is for public
advantage, it is not necessary that the entire state be directly benefited — it is sufficient that a
portion of the state be benefited thereby.

Social justice also means the adoption by the Government of measures calculated to insure
economic stability of all component elements of society, through the maintenance of a proper
economic and social equilibrium in the inter-relations of the members of the community. 64
Republic Act No. 3350 insures economic stability to the members of a religious sect, like the
Iglesia ni Cristo, who are also component elements of society, for it insures security in their
employment, notwithstanding their failure to join a labor union having a closed shop agreement
with the employer. The Act also advances the proper economic and social equilibrium between
labor unions and employees who cannot join labor unions, for it exempts the latter from the
compelling necessity of joining labor unions that have closed shop agreements and equalizes, in
so far as opportunity to work is concerned, those whose religion prohibits membership in labor
unions with those whose religion does not prohibit said membership. Social justice does not imply
social equality, because social inequality will always exist as long as social relations depend on
personal or subjective proclivities. Social justice does not require legal equality because legal
equality, being a relative term, is necessarily premised on differentiations based on personal or
natural conditions. 65 Social justice guarantees equality of opportunity 66 , and this is precisely
what Republic Act No. 3350 proposes to accomplish — it gives laborers, irrespective of their
religious scrupples, equal opportunity for work.

7. As its last ground, appellant contends that the amendment introduced by Republic Act No. 3350
is not called for — in other words, the Act is not proper, necessary or desirable. Anent this matter,
it has been held that a statute which is not necessary is not, for that reason, unconstitutional; that
in determining the constitutional validity of legislation, the courts are unconcerned with issues as
to the necessity for the enactment of the legislation in question. 67 Courts do inquire into the
wisdom of laws. 68 Moreover, legislatures, being chosen by the people, are presumed to
understand and correctly appreciate the needs of the people, and it may change the laws
accordingly. 69 The fear is entertained by appellant that unless the Act is declared unconstitutional,
employers will prefer employing members of religious sects that prohibit their members from
joining labor unions, and thus be a fatal blow to unionism. We do not agree. The threat to unionism
will depend on the number of employees who are members of the religious sects that control the
demands of the labor market. But there is really no occasion now to go further and anticipate
problems We cannot judge with the material now before Us. At any rate, the validity of a statute
is to be determined from its general purpose and its efficacy to accomplish the end desired, not
from its effects on a particular case. 70 The essential basis for the exercise of power, and not a
mere incidental result arising from its exertion, is the criterion by which the validity of a statute is
to be measured. 71
II. We now pass on the second assignment of error, in support of which the Union argued that the
decision of the trial court ordering the Union to pay P500 for attorney's fees directly contravenes
Section 24 of Republic Act No. 875, for the instant action involves an industrial dispute wherein
the Union was a party, and said Union merely acted in the exercise of its rights under the union
shop provision of its existing collective bargaining contract with the Company; that said order also
contravenes Article 2208 of the Civil Code; that, furthermore, Appellee was never actually
dismissed by the defendant Company and did not therefore suffer any damage at all . 72

In refuting appellant Union's arguments, Appellee claimed that in the instant case there was really
no industrial dispute involved in the attempt to compel Appellee to maintain its membership in the
union under pain of dismissal, and that the Union, by its act, inflicted intentional harm on Appellee;
that since Appellee was compelled to institute an action to protect his right to work, appellant could
legally be ordered to pay attorney's fees under Articles 1704 and 2208 of the Civil Code. 73

The second paragraph of Section 24 of Republic Act No. 875 which is relied upon by appellant
provides that:

No suit, action or other proceedings shall be maintainable in any court against a labor organization
or any officer or member thereof for any act done by or on behalf of such organization in
furtherance of an industrial dispute to which it is a party, on the ground only that such act induces
some other person to break a contract of employment or that it is in restraint of trade or interferes
with the trade, business or employment of some other person or with the right of some other person
to dispose of his capital or labor. (Emphasis supplied)

That there was a labor dispute in the instant case cannot be disputed for appellant sought the
discharge of respondent by virtue of the closed shop agreement and under Section 2 (j) of Republic
Act No. 875 a question involving tenure of employment is included in the term "labor dispute". 74
The discharge or the act of seeking it is the labor dispute itself. It being the labor dispute itself,
that very same act of the Union in asking the employer to dismiss Appellee cannot be "an act done
... in furtherance of an industrial dispute". The mere fact that appellant is a labor union does not
necessarily mean that all its acts are in furtherance of an industrial dispute. 75 Appellant Union,
therefore, cannot invoke in its favor Section 24 of Republic Act No. 875. This case is not
intertwined with any unfair labor practice case existing at the time when Appellee filed his
complaint before the lower court.

Neither does Article 2208 of the Civil Code, invoked by the Union, serve as its shield. The article
provides that attorney's fees and expenses of litigation may be awarded "when the defendant's act
or omission has compelled the plaintiff ... to incur expenses to protect his interest"; and "in any
other case where the court deems it just and equitable that attorney's fees and expenses of litigation
should be recovered". In the instant case, it cannot be gainsaid that appellant Union's act in
demanding Appellee's dismissal caused Appellee to incur expenses to prevent his being dismissed
from his job. Costs according to Section 1, Rule 142, of the Rules of Court, shall be allowed as a
matter of course to the prevailing party.

WHEREFORE, the instant appeal is dismissed, and the decision, dated August 26, 1965, of the
Court of First Instance of Manila, in its Civil Case No. 58894, appealed from is affirmed, with
costs against appellant Union. It is so ordered.

Makalintal, C.J, Castro, Teehankee, Barredo, Makasiar, Antonio, Esguerra, Muñoz Palma and
Aquino, JJ., concur.

Separate Opinions

FERNANDO, J, concurring:

The decision arrived at unanimously by this Court that Republic Act No. 3350 is free from the
constitutional infirmities imputed to it was demonstrated in a manner wellnigh conclusive in the
learned, scholarly, and comprehensive opinion so typical of the efforts of the ponente, Justice
Zaldivar. Like the rest of my brethren, I concur fully. Considering moreover, the detailed attention
paid to each and every objection raised as to its validity and the clarity and persuasiveness with
which it was shown to be devoid of support in authoritative doctrines, it would appear that the last
word has been written on this particular subject. Nonetheless, I deem it proper to submit this brief
expression of my views on the transcendent character of religious freedom1 and its primacy even
as against the claims of protection to labor,2 also one of the fundamental principles of the
Constitution.

1. Religious freedom is identified with the liberty every individual possesses to worship or not a
Supreme Being, and if a devotee of any sect, to act in accordance with its creed. Thus is
constitutionally safeguarded, according to Justice Laurel, that "profession of faith to an active
power that binds and elevates man to his Creator ...."3 The choice of what a man wishes to believe
in is his and his alone. That is a domain left untouched, where intrusion is not allowed, a citadel to
which the law is denied entry, whatever be his thoughts or hopes. In that sphere, what he wills
reigns supreme. The doctrine to which he pays fealty may for some be unsupported by evidence,
devoid of rational foundation. No matter. There is no requirement as to its conformity to what has
found acceptance. It suffices that for him such a concept holds undisputed sway. That is a
recognition of man's freedom. That for him is one of the ways of self- realization. It would be to
disregard the dignity that attaches to every human being to deprive him of such an attribute. The
"fixed star on our constitutional constellation," to borrow the felicitous phrase of Justice Jackson,
is that no official, not excluding the highest, has it in his power to prescribe what shall be orthodox
in matters of conscience — or to mundane affairs, for that matter.
Gerona v. Secretary of Education 4 speaks similarly. In the language of its ponente, Justice
Montemayor: "The realm of belief and creed is infinite and limitless bounded only by one's
imagination and thought. So is the freedom of belief, including religious belief, limitless and
without bounds. One may believe in most anything, however strange, bizarre and unreasonable the
same may appear to others, even heretical when weighed in the scales of orthodoxy or doctrinal
standards."5 There was this qualification though: "But between the freedom of belief and the
exercise of said belief, there is quite a stretch of road to travel. If the exercise of said religious
belief clashes with the established institutions of society and with the law, then the former must
yield and give way to the latter. The Government steps in and either restrains said exercise or even
prosecutes the one exercising it."6 It was on that basis that the daily compulsory flag ceremony in
accordance with a statute7 was found free from the constitutional objection on the part of a
religious sect, the Jehovah's Witnesses, whose members alleged that their participation would be
offensive to their religious beliefs. In a case not dissimilar, West Virginia State Board of Education
v. Barnette,8 the American Supreme Court reached a contrary conclusion. Justice Jackson's
eloquent opinion is, for this writer, highly persuasive. Thus: "The case is made difficult not because
the principles of its decision are obscure but because the flag involved is our own. Nevertheless,
we apply the limitations of the Constitution with no fear that freedom to be intellectually and
spiritually diverse or even contrary will disintegrate the social organization. To believe that
patriotism will not flourish if patriotic ceremonies are voluntary and spontaneous instead of a
compulsory routine is to make an unflattering estimate of the appeal of our institutions to free
minds. We can have intellectual individualism and the rich cultural diversities that we owe to
exceptional minds only at the price of occasional eccentricity and abnormal attitudes. When they
are so harmless to others or to the State as those we deal with here, the price is not too great. But
freedom to differ is not limited to things that do not matter much. That would be a mere shadow
of freedom. The test of its substance is the right to differ as to things that touch the heart of the
existing order."9

There is moreover this ringing affirmation by Chief Justice Hughes of the primacy of religious
freedom in the forum of conscience even as against the command of the State itself: "Much has
been said of the paramount duty to the state, a duty to be recognized, it is urged, even though it
conflicts with convictions of duty to God. Undoubtedly that duty to the state exists within the
domain of power, for government may enforce obedience to laws regardless of scruples. When
one's belief collides with the power of the state, the latter is supreme within its sphere and
submission or punishment follows. But, in the forum of conscience, duty to a moral power higher
than the state has always been maintained. The reservation of that supreme obligation, as a matter
of principle, would unquestionably be made by many of our conscientious and law-abiding
citizens. The essence of religion is belief in a relation to God involving duties superior to those
arising from any human relation." 10 The American Chief Justice spoke in dissent, it is true, but
with him in agreement were three of the foremost jurists who ever sat in that Tribunal, Justices
Holmes, Brandeis, and Stone.
2. As I view Justice Zaldivar's opinion in that light, my concurrence, as set forth earlier, is
wholehearted and entire. With such a cardinal postulate as the basis of our polity, it has a message
that cannot be misread. Thus is intoned with a reverberating clang, to paraphrase Cardozo, a
fundamental principle that drowns all weaker sounds. The labored effort to cast doubt on the
validity of the statutory provision in question is far from persuasive. It is attended by futility. It is
not for this Court, as I conceive of the judicial function, to restrict the scope of a preferred freedom.

3. There is, however, the question of whether such an exception possesses an implication that
lessens the effectiveness of state efforts to protect labor, likewise, as noted, constitutionally
ordained. Such a view, on the surface, may not be lacking in plausibility, but upon closer analysis,
it cannot stand scrutiny. Thought must be given to the freedom of association, likewise an aspect
of intellectual liberty. For the late Professor Howe a constitutionalist and in his lifetime the
biographer of the great Holmes, it even partakes of the political theory of pluralistic sovereignty.
So great is the respect for the autonomy accorded voluntary societies. 11 Such a right implies at
the very least that one can determine for himself whether or not he should join or refrain from
joining a labor organization, an institutional device for promoting the welfare of the working man.
A closed shop, on the other hand, is inherently coercive. That is why, as is unmistakably reflected
in our decisions, the latest of which is Guijarno v. Court of Industrial Relations, 12 it is far from
being a favorite of the law. For a statutory provision then to further curtail its operation, is precisely
to follow the dictates of sound public policy.

The exhaustive and well-researched opinion of Justice Zaldivar thus is in the mainstream of
constitutional tradition. That, for me, is the channel to follow.

Separate Opinions

FERNANDO, J, concurring:

The decision arrived at unanimously by this Court that Republic Act No. 3350 is free from the
constitutional infirmities imputed to it was demonstrated in a manner wellnigh conclusive in the
learned, scholarly, and comprehensive opinion so typical of the efforts of the ponente, Justice
Zaldivar. Like the rest of my brethren, I concur fully. Considering moreover, the detailed attention
paid to each and every objection raised as to its validity and the clarity and persuasiveness with
which it was shown to be devoid of support in authoritative doctrines, it would appear that the last
word has been written on this particular subject. Nonetheless, I deem it proper to submit this brief
expression of my views on the transcendent character of religious freedom1 and its primacy even
as against the claims of protection to labor,2 also one of the fundamental principles of the
Constitution.

1. Religious freedom is identified with the liberty every individual possesses to worship or not a
Supreme Being, and if a devotee of any sect, to act in accordance with its creed. Thus is
constitutionally safeguarded, according to Justice Laurel, that "profession of faith to an active
power that binds and elevates man to his Creator ...."3 The choice of what a man wishes to believe
in is his and his alone. That is a domain left untouched, where intrusion is not allowed, a citadel to
which the law is denied entry, whatever be his thoughts or hopes. In that sphere, what he wills
reigns supreme. The doctrine to which he pays fealty may for some be unsupported by evidence,
devoid of rational foundation. No matter. There is no requirement as to its conformity to what has
found acceptance. It suffices that for him such a concept holds undisputed sway. That is a
recognition of man's freedom. That for him is one of the ways of self- realization. It would be to
disregard the dignity that attaches to every human being to deprive him of such an attribute. The
"fixed star on our constitutional constellation," to borrow the felicitous phrase of Justice Jackson,
is that no official, not excluding the highest, has it in his power to prescribe what shall be orthodox
in matters of conscience — or to mundane affairs, for that matter.

Gerona v. Secretary of Education 4 speaks similarly. In the language of its ponente, Justice
Montemayor: "The realm of belief and creed is infinite and limitless bounded only by one's
imagination and thought. So is the freedom of belief, including religious belief, limitless and
without bounds. One may believe in most anything, however strange, bizarre and unreasonable the
same may appear to others, even heretical when weighed in the scales of orthodoxy or doctrinal
standards."5 There was this qualification though: "But between the freedom of belief and the
exercise of said belief, there is quite a stretch of road to travel. If the exercise of said religious
belief clashes with the established institutions of society and with the law, then the former must
yield and give way to the latter. The Government steps in and either restrains said exercise or even
prosecutes the one exercising it."6 It was on that basis that the daily compulsory flag ceremony in
accordance with a statute7 was found free from the constitutional objection on the part of a
religious sect, the Jehovah's Witnesses, whose members alleged that their participation would be
offensive to their religious beliefs. In a case not dissimilar, West Virginia State Board of Education
v. Barnette,8 the American Supreme Court reached a contrary conclusion. Justice Jackson's
eloquent opinion is, for this writer, highly persuasive. Thus: "The case is made difficult not because
the principles of its decision are obscure but because the flag involved is our own. Nevertheless,
we apply the limitations of the Constitution with no fear that freedom to be intellectually and
spiritually diverse or even contrary will disintegrate the social organization. To believe that
patriotism will not flourish if patriotic ceremonies are voluntary and spontaneous instead of a
compulsory routine is to make an unflattering estimate of the appeal of our institutions to free
minds. We can have intellectual individualism and the rich cultural diversities that we owe to
exceptional minds only at the price of occasional eccentricity and abnormal attitudes. When they
are so harmless to others or to the State as those we deal with here, the price is not too great. But
freedom to differ is not limited to things that do not matter much. That would be a mere shadow
of freedom. The test of its substance is the right to differ as to things that touch the heart of the
existing order."9
There is moreover this ringing affirmation by Chief Justice Hughes of the primacy of religious
freedom in the forum of conscience even as against the command of the State itself: "Much has
been said of the paramount duty to the state, a duty to be recognized, it is urged, even though it
conflicts with convictions of duty to God. Undoubtedly that duty to the state exists within the
domain of power, for government may enforce obedience to laws regardless of scruples. When
one's belief collides with the power of the state, the latter is supreme within its sphere and
submission or punishment follows. But, in the forum of conscience, duty to a moral power higher
than the state has always been maintained. The reservation of that supreme obligation, as a matter
of principle, would unquestionably be made by many of our conscientious and law-abiding
citizens. The essence of religion is belief in a relation to God involving duties superior to those
arising from any human relation." 10 The American Chief Justice spoke in dissent, it is true, but
with him in agreement were three of the foremost jurists who ever sat in that Tribunal, Justices
Holmes, Brandeis, and Stone.

2. As I view Justice Zaldivar's opinion in that light, my concurrence, as set forth earlier, is
wholehearted and entire. With such a cardinal postulate as the basis of our polity, it has a message
that cannot be misread. Thus is intoned with a reverberating clang, to paraphrase Cardozo, a
fundamental principle that drowns all weaker sounds. The labored effort to cast doubt on the
validity of the statutory provision in question is far from persuasive. It is attended by futility. It is
not for this Court, as I conceive of the judicial function, to restrict the scope of a preferred freedom.

3. There is, however, the question of whether such an exception possesses an implication that
lessens the effectiveness of state efforts to protect labor, likewise, as noted, constitutionally
ordained. Such a view, on the surface, may not be lacking in plausibility, but upon closer analysis,
it cannot stand scrutiny. Thought must be given to the freedom of association, likewise an aspect
of intellectual liberty. For the late Professor Howe a constitutionalist and in his lifetime the
biographer of the great Holmes, it even partakes of the political theory of pluralistic sovereignty.
So great is the respect for the autonomy accorded voluntary societies. 11 Such a right implies at
the very least that one can determine for himself whether or not he should join or refrain from
joining a labor organization, an institutional device for promoting the welfare of the working man.
A closed shop, on the other hand, is inherently coercive. That is why, as is unmistakably reflected
in our decisions, the latest of which is Guijarno v. Court of Industrial Relations, 12 it is far from
being a favorite of the law. For a statutory provision then to further curtail its operation, is precisely
to follow the dictates of sound public policy.

The exhaustive and well-researched opinion of Justice Zaldivar thus is in the mainstream of
constitutional tradition. That, for me, is the channel to follow.

I.) Discuss Article 254 (244) of the Labor Code

 Article 244. Right of employees in the public service. Employees of government corporations
established under the Corporation Code shall have the right to organize and to bargain
collectively with their respective employers. All other employees in the civil service shall have
the right to form associations for purposes not contrary to law. (As amended by Executive
Order No. 111, December 24, 1986).

J.) Discuss Article 255 (245) of the Labor Code

Article 245. Ineligibility of managerial employees to join any labor organization; Right of
Supervisory Employees. - Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in the
collective bargaining unit of the rank-and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor organizations of their own. The rank-and-
file union and the supervisor union operating within the same establishment may join the same
federation or national union. (As amended by Section 18, Republic Act No. 6715, March 21,
1989 and Section 8, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became
effective on June 14, 2007).

K.) What is the effect of inclusion as union members employees outside the bargaining
unit?

On the other hand, contracts of employment are different and have a higher level of regulation
because they are impressed with public interest. Article XIII, Section 3 of the 1987 Constitution
provides full protection to labor: ARTICLE XIII. SOCIAL JUSTICE AND HUMAN RIGHTS . .
. . LABOR Section 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making processes affecting their rights and benefits as
may be provided by law. The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The
State shall regulate the relations between workers and employers, recognizing the right of labor to
its just share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth. Apart from the constitutional guarantee of protection
to labor, Article 1700 of the Civil Code states: ART. 1700. The relations between capital and labor
are not merely contractual. They are so impressed with public interest that labor contracts must
yield to the common good. Therefore, such contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours
of labor and similar subjects. In contracts of employment, the employer and the employee are not
on equal footing. Thus, it is subject to regulatory review by the labor tribunals and courts of law.
The law serves to equalize the unequal. The labor force is a special class that is constitutionally
protected because of the inequality between capital and labor.176 This presupposes that the labor
force is weak. However, the level of protection to labor should vary from case to case; otherwise,
the state might appear to be too paternalistic in affording protection to labor.

L.) Discuss Article 257 (246) in relation to Articles 303 (288) and 304 (289) of the Labor
Code.

Article 246. Non-abridgment of right to self-organization. – It shall be unlawful for any person
to restrain, coerce, discriminate against or unduly interfere with employees and workers in their
exercise of the right to self-organization. Such right shall include the right to form, join, or assist
labor organizations for the purpose of collective bargaining through representatives of their own
choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid
and protection, subject to the provisions of Article 264 of this Code. (As amended by Batas
Pambansa Bilang 70, May 1, 1980).

M.) What is an unfair labor practice?

The Federal Service Labor-Management Relations Statute (the Statute) protects federal
employees’ rights to organize, bargain collectively, and participate in labor organizations of their
choosing – and to refrain from doing so. A ULP is conduct by agencies or unions that violates
rights that the Statute protects or the rules that it establishes.

N.) Is the commission of an unfair labor practice a crime?

O.) Who may be held liable for an unfair labor practice?

An employer may only be held liable for unfair labor practice if it can be shown that his acts affect
in whatever manner the right of his employees to self-organize.

P.) What are the penalties for an unfair labor practice?

Any person who commits any unfair labor practice shall be punishable with imprisonment for a
term which may extend to six months or with fine which may extend to one thousand rupees or
with both.

Q.) When may criminal prosecution for unfair labor practice be instituted?

R.) Discuss the unfair labor practices committed by employers.

R.1) Discuss Carmel Craft Corporation v. NLRC, G.R. Nos. 90634-35, 06 June 1990.
CARMELCRAFT CORPORATION &/OR CARMEN V. YULO, President and General
Manager, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, CARMELCRAFT EMPLOYEES
UNION, PROGRESSIVE FEDERATION OF LABOR, represented by its Local President
GEORGE OBANA, respondents.

Tee, Tomas & Associates for petitioners.

Raul E. Espinosa for private respondents.

CRUZ, J.:

The Court is appalled by the degree of bad faith that has characterized the petitioners' treatment
of their employees. It borders on puredisdain. And on top of this, they now have the temerity to
seek from us a relief to which they are clearly not entitled. The petition must be dismissed.

The record shows that after its registration as a labor union, the Camelcraft Employees Union
sought but did not get recognition from the petitioners. Consequently, it filed a petition for
certification election in June 1987. On July 13, 1987, Camelcraft Corporation, through its
president and general manager, Carmen Yulo, announced in a meeting with the employees that it
would cease operations on August 13, 1987, due to serious financial losses. Operations did cease
as announced. On August 17, 1987, the union filed a complaint with the Department of Labor
against the petitioners for illegal lockout, unfair labor practice and damages, followed the next
day with another complaint for payment of unpaid wages, emergency cost of living allowances,
holiday pay, and other benefits. On November 29, 1988, the Labor Arbiter declared the
shutdown illegal and violative of the employees' right to self-organization. The claim for unpaid
benefits was also granted. 1 After reviewing the decision on appeal, the respondent NLRC
declared:

WHEREFORE, premises considered, the appealed decision is modified. In

addition to the underpayment in their wages, emergency living allowance, 13th
month pay, legal holiday pay and premium pay for holidays for a period of three
years, the respondents are ordered to pay complainants their separation pay
equivalent to one-month pay for every year of service, a fraction of six months or
more shall be considered as one (1) whole year.

The rest of the disposition stand. 2

We do not find that the above decision is tainted with grave abuse of discretion. On the contrary,
it is comformable to the pertinent laws and the facts clearly established at the hearing.

The reason invoked by the petitioner company to justify the cessation of its operations is hardly
credible; in fact, it is preposterous when viewed in the light of the other relevent circumstances.
Its justification is that it sustained losses in the amount of P 1,603.88 as of December 31, 1986 .3
There is no report, however, of its operations during the period after that date, that is, during the
succeeding seven and a half months before it decided to close its business. Significantly, the
company is capitalized at P 3 million .4 Considering such a substantial investment, we hardly
think that a loss of the paltry sum of less than P 2,000.00 could be considered serious enough to
call for the closure of the company.

We agree with the public respondent that the real reason for the decision of the petitioners to
cease operations was the establishment of respondent Carmelcraft Employees Union. It was
apparently unwelcome to the corporation, which would rather shut down than deal with the
union. There is the allegation from the private respondent that the company had suggested that it
might decide not to close the business if the employees were to affiliate with another union
which the management preferred. 5 This allegation has not been satisfactorily disproved. At any
rate, the finding of the NLRC is more believable than the ground invoked by the petitioners.
Notably, this justification was made only eight months after the alleged year-end loss and shortly
after the respondent union filed a petition for certification election.

The act of the petitioners was an unfair labor practice prohibited by Article 248 of the Labor
Code, to wit:

ART. 248. Unfair labor practices of employers.-It shall be unlawful for an

employer to commit any of the following unfair labor practice:

(a) To interfere with, restrain or coerce employees in the exercise of their right to
self-organization;

More importantly, it was a defiance of the constitutional provision guaranteeing to workers the
right to self-organization and to enter into collective bargaining with management through the
labor union of their own choice and confidence. 6

The determination to cease operations is a prerogative of management that is usually not

interfered with by the State as no business can be required to continue operating at a loss simply
to maintain the workers in employment. 7 That would be a taking of property without due
process of law which the employer has a right to resist. But where it is manifest that the closure
is motivated not by a desire to avoid further losses but to discourage the workers from organizing
themselves into a union for more effective negotiations with the management, the State is bound
to intervene.

And, indeed, even without such motivation, the closure cannot be justified because the claimed
losses are obviously not serious. In this situation, the employees are entitled to separation pay at
the rate of one-half month for every year of service under Art. 283 of the Labor Code.

The contention of the petitioners that the employees are estopped from claiming the alleged
unpaid wages and other compensation must also be rejected. This claim is based on the waivers
supposedly made by the complainants on the understanding that "the management will
implement prospectively all benefits under existing labor standard laws." The petitioners argue
that this assurance provided the consideration that made the quitclaims executed by the
employees valid. They add that the waivers were made voluntarily and contend that the contract
should be respected as the law between the parties.

Even if voluntarily executed, agreements are invalid if they are contrary to public policy. This is
elementary. The protection of labor is one of the policies laid down by the Constitution not only
by specific provision but also as part of social justice. The Civil Code itself provides:

ART. 6. Rights may be waived, unless the waiver is contrary to law, public order,
public policy, morals, or good customs, or prejudicial to a third person with a
right recognized by law.

ART. 1306. The contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order, or public policy.

The subordinate position of the individual employee vis-a-vis management renders him
especially vulnerable to its blandishments and importunings, and even intimidations, that may
result in his improvidently if reluctantly signing over benefits to which he is clearly entitled.
Recognizing this danger, we have consistently held that quitclaims of the workers' benefits win
not estop them from asserting them just the same on the ground that public policy prohibits such
waivers.

That the employee has signed a satisfaction receipt does not result in a waiver; the
law does not consider as valid any agreement to receive less compensation than
what a worker is entitled to recover. A deed of release or quitclaim cannot bar an
employee from demanding benefits to which he is legally entitled. 8

Release and quitclaim is inequitable and incongruous to the declared public policy
of the State to afford protection to labor and to assure the rights of workers to
security of tenure. 9

We find also untenable the contention of Carmen Yulo that she is not liable for the acts of the
petitioner company, assuming it had acted illegally, because the Carmelcraft Corporation is a
distinct and separate entity with a legal personality of its own. Yulo claims she is only an agent
of the company carrying out the decisions of its board of directors. We do not agree. Our finding
is that she is in fact and legal effect the corporation, being not only its president and general
manager but also its owner. 10

Moreover, and this is a no less important consideration, she is raising this issue only at this tardy
hour, when she should have invoked this argument earlier, when the case was being heard before
the labor arbiter and later m the NLRC. It is too late now to shunt these responsibilities to the
company after she herself had been found liable.

All told, the conduct of the petitioners toward the employees has been less than commendable.
Indeed, it is reprehensible. First, the company inveigled them to waive their claims to
compensation due them on the promise that future benefits would be paid (and to make matters
worse, there is no showing that they were indeed paid). Second, it refused to recognize the
respondent union, suggesting to the employees that they join another union acceptable to
management. Third, it threatened the employees with the closure of the company and then
actually did so when the employees insisted on their demands. All these acts reflect on the bona
fides of the petitioners and unmistakably indicate their ill will toward the employees.

The petitioners obviously regard the private respondents as mere servants simply because they
are paid employees. That is a mistake. Laborers are not just hired help to be exploited, without
the right to defend and improve their interest . The working class is an equal partner of
management and should always be treated as such.

The more labor is prevented from pursuing its legitimate demands for its protection and
enhancement, the more it is likely to lose faith in our free institutions and to incline toward
Ideologies offering a more if deceptive regime. One way of disabusing our working men and
women of this delusion is to assure them that under our form of government, the interests of
labor deserve and will get proper recognition from an enlightened and compassionate
management, no less than the total sympathy of a solicitous State.

WHEREFORE, the petition is DISMISSED and the challenged decision is AFFIRMED, with
costs against the petitioner. It is so ordered.

Narvasa (Chairman), Gancayco and Medialdea, JJ., concur.

Griño-Aquino, J., is on leave.

R.2) Discuss Gonpu Services Corporation v. NLRC, G.R. No. 111897, 27 January 1997.

R.3) Discuss Colegio de San Juan de Letran v. Association of Employees and Faculty of
Letran, G.R. No. 141471, 18 September 2000.

S.) Define and give the rationale of an agency fee [see Article 259 (e)].

Article 259. Appeal from certification election orders. Any party to an election may appeal the
order or results of the election as determined by the Med-Arbiter directly to the Secretary of Labor
and Employment on the ground that the rules and regulations or parts thereof established by the
Secretary of Labor and Employment for the conduct of the election have been violated. Such
appeal shall be decided within fifteen (15) calendar days. (As amended by Section 25, Republic
Act No. 6715, March 21, 1989).
T.)