64 Liberty Cotton Mills Workers Union V Liberty Cotton Mills Inc.
64 Liberty Cotton Mills Workers Union V Liberty Cotton Mills Inc.
64 Liberty Cotton Mills Workers Union V Liberty Cotton Mills Inc.
, PHILIPPINE
ASSOCIATION OF FREE LABOR UNION (PAFLU)
G.R. No. L-33987 September 4, 1975 | ESGUERRA, J.
Contract of Agency
Nature: Petition for Certiorari
PARTIES:
LIBERTY COTTON MILLS WORKERS UNION, RAFAEL NEPOMUCENO, MARIANO CASTILLO,
NELLY ACEVEDO, RIZALINO CASTILLO and RAFAEL COMBALICER, petitioners
LIBERTY COTTON MILLS, INC., PHILIPPINE ASSOCIATION OF FREE LABOR UNION (PAFLU)
and the COURT OF INDUSTRIAL RELATIONS, respondents
DISPUTED MATTER: Petition for Certiorari to review the decision dated March 30, 1971 of the
Court of Industrial Relations in Case No. 4216, dismissing petitioners' complaint for unfair
labor practice.
SYNOPSIS:
The local union affiliated itself with PAFLU, a national union to act as its agent in the CBA that was
entered into with the respondent corporation. Later on, members of the local union were alleged
that the PAFLU was negligent in handling their ULP case against the corporation and thus sought
to disaffiliate themselves from PAFLU. PAFLU wrote a letter to the corporation stating that the act
of disaffiliation of the local union constituted grounds for the termination of the employees pursuant
to the Union Security Clause provided for in the CBA. The corporation dismissed the petitioner-
employees pursuant to the letter sent by PAFLU thus prompting them to file an unfair labor
practice case against the corporation. The SC held that the disaffiliation was valid and that there
was no cause for the termination of the petitioners. It ordered the company to immediately
reinstate the said employees and held PAFLU liable to pay the backwages of the employees.
FACTS:
● The Liberty Cotton Mills Workers Union (the Union) adopted its Constitution and By-laws
which among other things, affiliated itself with PAFLU. A CBA was then entered into between
the Company and the Union, represented by PAFLU. In the CBA, a Union Security Clause
was included which stated in part, that as a condition for continued employment, those
employees which are members of the union or those who may join the union, must remain
members while the CBA is in force; and any member who resigns from the union shall be
dismissed from employment by the Company upon request in writing by the Union which
shall hold the Company free from any liability.
● While the CBA was then in full force and effect, the petitioners wrote to the PAFLU
complaining about the legal counsel assigned by PAFLU to assist them in a ULP case
against the Company. They expressed their dissatisfaction and loss of confidence in the
PAFLU lawyers, and sought to disaffiliate themselves from PAFLU.
● PAFLU then wrote a letter to the Company stating that the petitioners have no right to
disaffiliate themselves from PAFLU and requested that the Company terminate them. The
Company followed the request of PAFLU and terminated the petitioners thus prompting them
to file a complaint for unfair labor practice.
ISSUES/HELD:
● WON the dismissal of the complaining employees was justified. NO.
● The Court found that PAFLU was acting for and in behalf of its affiliate, the Liberty Cotton
Mills Workers Union, thereby an agent of the latter. However, the Court opined that the local
union remained the basic unit of the association free to serve the common interest of all its
members including the freedom to disaffiliate when the circumstances warrant.
● PAFLU contends that the dismissal was proper owing to the existence of a Union Security
Clause provided for in the CBA. However, the Court was quick to point out that this was
limited by a provision found in the Constitution and By-laws which states, “that the Liberty
Cotton Mills Workers Union-PAFLU shall be affiliated with the PAFLU, and shall remain an
affiliate as long as ten (10) or more of its members evidence their desire to continue the said
local unions affiliation.”
● The Record shows that only 4 out of its members remained, 32 out of 36 members signed
the resolution for disaffiliation. Therefore, the disaffiliation was valid under the local union’s
Constitution and By-laws, which taken together with the CBA, is controlling.
● As to the dismissal of the employees, the Court found that it was hastily and summarily done.
The PAFLU received the resolution to disaffiliate on 25 May 1964. Then 2 days later, PAFLU
wrote to the Company telling the latter to ignore the said resolution submitted by the
Petitioners. Then on 30 May 1964, the Company terminated the employees.
● However, as to the liability of the Company, the Court found it fair to limit its liability to
immediate reinstatement of the workers as the dispute revolved mainly around the mother
federation and its local union. The Court imposed upon the mother federation (PAFLU) the
obligation to pay the workers their backwages.
DISPOSITIVE:
WHEREFORE, the decision appealed from is reversed and set aside and the company is hereby
ordered to immediately reinstate complainant workers, within thirty (30) days from notice of this
decision and failure to so reinstate the workers without valid and just cause shall make respondent
company liable to the workers for the payment of their wages from and after the expiration of such
thirty-day period. The mother federation respondent PAFLU is sentenced to pay complainants-
workers the equivalent of three (3) years backwages without deduction or qualification.
OPINIONS:
xxx
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HELPFUL INFORMATION
DOCTRINE:
Local unions remain the basic units of association, free to serve their own and the common interest
of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and
free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement
brought it into existence.
In this case, The PAFLU, acting for and in behalf of its affiliate, had the status of an agent while the
local union remained the basic unit of the association free to serve the common interest of all its
members including the freedom to disaffiliate when the circumstances warrant.
DEFINITION OF TERMS:
HISTORICAL CONTEXT:
Example: World War 2, 1935 Constitution
ANNEX: xxx For laws or other long quotes that would be helpful to refer to when reviewing the
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