G.R. Nos. L-22951, L-22952, L-22971. January 31, 1967
ALLIED FREE WORKERS’ UNION (PLUM), PETITIONER, VS. COMPANIA MARITIMA, MANAGER JOSE C. TEVES, AND COURT OF INDUSTRIAL RELATIONS, RESPONDENTS. COMPANIA MARITIMA AND MANAGER JOSE C…
BENGZON, J.P., J.:
The three cases before this Court are the respective appeals
separately taken by the parties hereto from an order[1]
of the Court of Industrial Relations en banc affirming its trial judge’s decision,
rendered on November 4, 1963, in CIR Case
175-MC and CIR Case 426-ULP. Thus L-
22971 is the appeal of MARITIMA[2] in CIR Case 175-MC; L-
22952 is AFWU’s[3]
appeal in the same case; and L-22951 refers to AFWU’s
appeal in CIR Case 426-ULP. Since these
cases were jointly tried and decided in the court a quo and they involve the same
fundamental issue – the presence or absence of employer-employee relationship
– they are jointly considered herein.
MARITIMA is a local corporation engaged in the
shipping business. Teves
is its branch manager in the port of Iligan City. And AFWU is duly registered legitimate
labor organization with 225 members.
On August 11, 1952,
MARITIMA, through Teves,
entered into a CONTRACT[4] with AFWU, the terms of which
We reproduce:
“– ARRASTRE AND STEVEDORING CONTRACT —
“KNOW ALL MEN BY THESE
PRESENTS:
“This contract made and executed this 11th day of August,
1952, in the City of Iligan Philippines, by and between
the COMPANIA MARITIMA, Iligan Branch, represented by its Branch Manager in Iligan City, and the ALLIED FREE WORKERS UNION, a duly
authorized labor union, represented by its President:
“WITNESSETH:
“1. That the Compania Maritima
hereby engage the services of the Allied Free Workers Union to do and perform
all the work of stevedoring and arrastre services of
all its vessels or boats calling in the port
of Iligan
City, beginning August 12, 1952.
“2. That the Compania Maritima
shall not be liable for the payment of the services rendered by the Allied
Free Workers Union, for the loading, unloading and deliveries of cargoes as
same is payable by the owners and consignees of cargoes, as it has been the
practice in the port of Iligan City.
“3. That the Allied Free Workers Union shall be responsible for the
damages that may be caused to the cargoes in the course of their handling.
“4. That this contract is good and valid for a period of one (1)
month from August 12, 1952,
but same may be renewed by agreement of the parties; however Compania Maritima reserves the
right to revoke this contract even before the expiration of the term, if and
when the Allied Free Workers Union fails to render good service.
“IN WITNESS WHEREOF, we hereunto sign this presents in the
City of Iligan,
Philippines,
this 11th day of August, 1952.
(SGD) SALVADOR
T. LLUCH (SGD) JOSE
C. TEVES
President Branch Manager
Allied Free Workers Union Compania Maritima
Iligan City Iligan City
“SIGNED IN THE PRESENCE OF:
1. (SGD) JOSE CUETO
2. (SGD) SERGIO
OBACH”
During the first month of the existence of the CONTRACT, AFWU
rendered satisfactory service. So, MARITIMA, through Teves, verbally renewed the
same. This harmonious relations between
MARITIMA and AFWU lasted up to the latter part of 1953 when the
former complained to the latter of unsatisfactory and inefficient service by
the laborers doing the arrastre and stevedoring
work. This deteriorating situation was
admitted as a fact by AFWU’s president. To remedy the situation – since MARITIMA’s business was being adversely affected – Teves was forced to hire extra laborers from among
“stand-by” workers not affiliated to any union to help in the
stevedoring and arrastre work. The wages of these extra laborers were paid
by MARITIMA through separate vouchers and not by AFWU. Moreover, said wages were not charged to the
consignees or owners of the cargoes.
On July 23, 1954,
AFWU presented to MARITIMA a written proposal[5]
for a collective bargaining agreement.
This demand embodied certain terms and conditions of employment
different from the provisions of the CONTRACT. No reply was made by MARITIMA.
On August 6, 1954,
AFWU instituted proceedings in the Industrial
Court[6]
praying that it be certified as the sole and exclusive bargaining agent in the
bargaining unit composed of all the laborers doing the arrastre
and stevedoring work in connection with MARITIMA’s
vessels in Iligan
City. MARITIMA answered, alleging lack of
employer-employee relationship between the parties.
On August 24, 1954,
MARITIMA informed AFWU of the termination of the CONTRACT
because of the inefficient service rendered by the latter which had adversely
affected its business. The termination
was to take effect as of September 1,
1954. MARITIMA then
contracted with the Iligan Stevedoring Union for the arrastre and stevedoring work. The latter agreed to perform the work subject
to the same terms and conditions of the CONTRACT. The new agreement was to be carried out on September 1, 1954.
On August 26, 1954, upon the instance of AFWU, MARITIMA
found itself charged before the Industrial Court[7]
of unfair labor practices under Sec. 4(a) (1), (3), (4) and (6) of Rep. Act No. 875. MARITIMA answered, again denying the
employer-employee relationship between the parties.
On September 1, 1954,
members of AFWU, together with those of the Mindanao Workers Alliance –
a sister union -formed a picket line at the wharf of Iligan
City, thus preventing the Iligan Stevedoring Union
from carrying out the arrastre and stevedoring work
it contracted for.[8] This picket lasted for nine days.
On September
9, 1954, MARITIMA
filed an action[9] to rescind the CONTRACT, enjoin AFWU
members from doing arrastre and stevedoring work in
connection with its vessels, and for recovery of damages against AFWU
and its officers. Incidentally, this
civil case has been the subject of three proceedings already which have
reached this Court. The first[10] involved a preliminary injunction issued
therein on September 9, 1954, by the trial court prohibiting AFWU from
interfering in any manner with the loading and unloading of cargoes from MARITIMA’s vessels.
This injunction was lifted that very evening upon the filing of a counterbond by AFWU.
Subsequently, a motion to dissolve said counterbond
was filed by MARITIMA but the hearing on this incident was enjoined by
Us on March
15, 1955, upon the
institution of the petition for prohibition and injunction in said L-8876.[11] Meanwhile, AFWU members-laborers were
able to continue the arrastre stevedoring work in
connection with MARITIMA’s vessels.
On December
5, 1960, the CFI
decision in the civil case was promulgated.
It ordered the rescission of the CONTRACT and permanently
enjoined AFWU members from performing work in connection with MARITIMA’s vessels. AFWU then filed its notice of appeal, appeal bond
and record on appeal.[12] The subsequent incidents thereto gave rise
to the two other proceedings which have previously reached Us here.
On January
6, 1961, upon motion
of MARITIMA, an order of
execution pending appeal and a writ of injunction against AFWU was
issued by the trial court in the civil case.
This enabled MARITIMA to engage the services of the
Mindanao Arrastre Service to do the arrastre and stevedoring work on January 8, 1961. However, AFWU filed a petition for
certiorari, injunction and prohibition[13] here
and on January 18, 1961, was able to secure a writ of preliminary injunction ordering the maintenance
of the status quo prior to January 6, 1961. Thus,
after January 18, 1961, AFWU laborers were again back doing the same work as before.
The third incident that reached Us[14]
involved an order of the same
trial court in the same civil case, dated January 11, 1961, which amended some clerical errors
in the original decision of December
5, 1960. Upon
motion of MARITIMA, the trial court, on March 24, 1962, issued an order
for the execution of the decision of January 11, 1961, since AFWU did not appeal therefrom,
and on March 31, 1962, a writ of
execution ousting the 225 AFWU members-laborers from their work in
connection with the loading and
unloading of cargoes was issued and a levy on execution upon the properties of AFWU
was effected. Accordingly, on April 1, 1962, MARITIMA was again able to engage the services
of the Mindanao Arrastre Service.
On April 16, 1962, upon the institution of the petition
for certiorari, injunction, prohibition and mandamus, a preliminary injunction
was issued by Us against the orders of March 24 and 31, 1962. But then, on May 16, 1962, upon motion of MARITIMA, this
preliminary injunction was lifted by Us insofar as it related to the execution
of the order ousting the AFWU laborers from the stevedoring and arrastre work in connection with the MARITIMA vessels.[15]
Such then was the status of things.
On November 4, 1963, after almost 10 years of hearing
the two cases jointly, the Industrial Court
finally rendered its decision. The dispositive part provided:
“IN VIEW OF ALL THE FOREGOING CIRCUMSTANCES, the complaint of
the union for unfair labor practices against the Compania
Maritima and/or its agent Jose C. Teves
and the Iligan Stevedoring Union and/or Sergio Obach is hereby dismissed for lack of substantial evidence
and merit.
“In pursuance of the provisions of Section 12 of Republic Act
875 and the Rules of this court on certification election, the Honorable, the
Secretary of Labor or any of his authorized representative is hereby requested
to conduct certification election among all the workers and/or stevedores
working in the wharf of Iligan City who are
performing stevedoring and arrastre service aboard Compania Maritima vessels docking
at Iligan City port in order to determine their
representative for collective bargaining with the employer, whether these desire
to be represented by the petitioner Allied Free Workers Union or neither
[sic]; and upon termination of the said election, the result thereof shall
forthwith be submitted to this court for further consideration. The union present payroll may be utilized in
determining the qualified voters, with the exclusion of all supervisors.
“SO ORDERED.”
As already indicated, the fundamental issue involved in these
cases before Us consists in whether there is an employer-employee relationship
between MARITIMA, on the one hand, and AFWU and/or its
members-laborers who do the actual stevedoring and arrastre
work, on the other hand.
THE
UNFAIR LABOR PRACTICE CASE
(L-22951*
[CIR Case 426-ULP])
Petitioner AFWU’s proposition is
that the court a quo erred (1) in concluding that MARITIMA
had not refused to bargain collectively with it, as the majority union; (2) in
not finding that MARITIMA had committed acts of discrimination,
interferences and coercions upon its members-laborers, and (3) in concluding
that the CONTRACT may not be interfered with even if contrary to law or
public policy.
It is true that MARITIMA admits that it did not answer AFWU’s proposal for a collective bargaining
agreement. From this it does not necessarily follow that it is guilty of unfair labor
practice. Under the law16 the duty to bargain collectively arises only
between the “employer” and its “employees”. Where neither party is an
“employer” nor an “employee” of the other, no such duty would
exist. Needless to add, where there is
no duty to bargain collectively the refusal to bargain violates no right. So, the
question is: Under the CONTRACT, was MARITIMA the “employer” and AFWU
and/or its members the “employees”
with respect to one another?
The court a quo held that
under the CONTRACT, AFWU was an independent contractor of MARITIMA. This conclusion was based on the following
findings of fact, which We can no longer disturb, stated in the CIR decision:
“7.
x x x The
petitioner union operated as a labor contractor under the so-called ‘cabo‘ system; and as such it has a complete set of
officers and office personnel (Exh. ‘F’ and F-l’) and its organizational structure
includes the following: General President,
with the following under him – one vice-president, legal counsel, general treasurer,
general manager and the board of directors.
Under the general manager is the secretary, the auditor, and the office
staff composing of the general foreman, general checker, general timekeeper,
and the respective subordinates like assistant foreman, capataz,
assistant general checker, Field Checker, office timekeeper, and field
timekeeper all appointed by the general manager of the union and are paid in
accordance with the union payroll exclusively
prepared by the union in the office.
(See t.s.n.
pp. 32-36, June 9, 1960; pp. 78?80, February 16, 1961;
pp. 26-28, August 9, 1960).
The payrolls where
laborers are listed and paid were prepared by the union itself without the
intervention or control of the respondent company and/or its agent at Iligan City. The
respondent never had any knowledge of the individual names of laborers and/or
workers listed in the union payroll or in their roster of membership.
“8. The union
engaged the services of their members in undertaking the work of arrastre and stevedoring either to haul shippers’
goods from their warehouses in Iligan
City to the Maritima
boat or from the boat to the different consignees. The charges for such service were known by
the union and collected by them through their bill collector. This
is shown by the preparation of the union forms known as ‘conduci‘ or
delivery receipts. These ‘conduci‘ or receipts contain informations
as to the number and/or volume of cargoes handled by the union, the invoice number,
the name of the vessel and the number of bills of lading covering the cargoes
to be delivered. Those delivery receipts are different and separate from the bills of
lading and delivery receipts issued by the company to the consignees or
shippers. Cargoes carried from the
warehouses to the boat or from the boat to the consignees were always
accompanied by the union checker who hand carry the ‘conduci.’
Once goods are delivered to their destination the union through its bill
collectors prepare the bills of collection and the charges thereon are
collected by the union bill collectors who are employees of the union and not
of the respondent. The respondent
had no intervention whatsoever in the collection of those charges as the same
are clearly indicated and described in the labor contract, Exhibit ‘A’. There
were, however, instances when the respondents were requested to help the
union in the collection of charges for services rendered by members of the
union when fertilizers and gasoline drums were loaded aboard the Compania Maritima boats. This was necessary in order to facilitate
the collection of freight and handling charges from the government for
auditing purposes. When cargoes are to
be loaded, the shipper usually notifies the petitioner union when to load their
cargoes aboard Compania Maritima
boats calling in the port of Iligan City; and when a boat
docks in said port, the union undertakes to haul the said shipper’s goods to
the boat. In doing this work, the
union employs their own trucks or other vehicles or conveyance from shipper’s
warehouse to the boat or vice-versa. The
respondent has no truck of any kind for the service of hauling cargoes
because such service is included in the contract executed between the parties. (See Exh. ‘A’)
“9. The union members who were hired by the union to
perform arrastre and stevedoring work on
respondents’ vessels at Iligan port were being
supervised and controlled by the general foreman of the petitioner union or by
any union assistant or capataz responsible for the
execution of the labor contract when performing arrastre
and/or stevedoring work aboard vessels of the Compania
Maritima docking at Iligan
City. The foreman assigned their
laborers to perform the required work aboard vessels of the respondent. For instance, when a boat arrives, the
general foreman requests the cargo report from the chief mate of the vessel in
order to determine where the cargoes are located in the hold of the boat and to
know the destination of these car goes. All
the laborers and/or workers hired for said work are union members and are only
responsible to their immediate chief who are officers and/or employees of the
union. The respondent firm have
their own separate representatives like
checkers who extend aid to the union officers and members in checking the
different cargoes unloaded or loaded aboard vessels of the Compania
Maritima. There
were no instances where officers and employees of the respondent Compania Maritima and/or its
agent had interferred in the giving of instructions
to the laborers performing the arrastre and/or
stevedoring work either aboard vessels or at the wharf of Iligan City. As
contractor, the union does not receive instructions as to what to do, how to
do, and works without specific instructions.
They have no fixed hours of work required by the Maritima.
“10. While cargoes were in transit either from the warehouse
to the boat or from the boat to the different consignees, any losses or damages
caused with the said cargoes were charged to the account of the union; and the
union likewise imposed the penalty or fine to any employee who caused or committed
the damages to cargoes in transit. Other
disciplinary measures imposed on laborers performing the said work were
exercised by the general foreman of the union general manager to exercise
disciplinary control over their members who were assigned to perform the work
in a group of laborers assigned by the union to perform loading or unloading
cargoes when a Compania Maritima
boat docked at Iligan City. The respondents have not at any time interferred in the imposition of disciplinary action upon
the laborers who are members of the union.
In one instance, under this situation, the president of the union
himself dismissed one inefficient laborer found to have been performing
inefficient service at the time (t.s.n. pp.
17-1d, February 15, 1961).
x x x x x x
“13. Erring laborers and/or workers who are affiliates of the
union were directly responsible to the union and never to the respondent. Respondent cannot, therefore, discipline
and/or dismiss these erring workers of the union.” (Underscoring supplied)
And in absolving MARITIMA
of the unfair labor charge on this point, the court a quo
concluded:
“From the foregoing circumstances and findings, the Court is
of the opinion that no substantial evidence has been presented to sustain the
charge of unfair labor practice acts as alleged to have been committed by
herein respondent. The Court finds no
interference in the union activities, if any, of the members of the Allied Free
Workers Union as these persons engaged in the stevedoring and arrastre service were employed by the Allied Free Workers
Union as independent contractor subject to the terms and conditions of their
then existing labor contract Exhibit ‘A’.
To construe the contract otherwise would tend to disregard the rights
and privileges of the parties intended by them in their contract. (Exhibit ‘A’). This Court believes that it may not interfere
in the implementation of the said labor contract in the absence of abuse by one
party to the prejudice of the other. x x x
“Further, the Court finds that the petitioner, aside from
its labor contract (See Exhibit ‘A’) with the respondent Compania
Maritima also has other labor contracts with other
shipping firms on the stevedoring and arrastre work;
and that this contract obligated
the petitioner as an independent labor contractor to undertake the arrastre and stevedoring service on Compania
Maritima boats docking at Iligan
City Port. The petitioner is an
independent contractor as defined in the contract Exhibit ‘A’ and in the evidence submitted by
the parties. An independent contractor
is one who in rendering services, exercises an independent employment or occupation
and represents the will of his employer only as to the results of his work and
not as to the means whereby it is accomplished; one who exercising an
independent employment, contracts to do a piece of work according to his own
methods, without being subject to the control of his employer except as to the
result of his work; and who engaged to perform a certain service for another,
according to his own manner and methods, free from the control and direction
of his employer in all matters connected with the performance of the service
except as to the result of the work.’ (see 56 C.J.S. pp. 41-43; Cruz, et al. vs. Manila Hotel, et al., G.R.
No. L-9110, April 30, 1957). These
factors were present in the relation of the parties as described in their
contract Exhibit ‘A’.
x x x x x
“In Viaña vs. Al Lagadan,
et al., G.R. No. L-8967, May 31, 1956, the Supreme Court states the rule as
follows:
“‘In determining the existence of employer-employee
relationship, the following elements are generally considered, namely: (1) the selection and engagement of the
employees; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee’s conduct – although the latter is the most
important element (35 Am. Jur. 445). Assuming that the share received by the
deceased could partake of the nature of wages – on which we need not and do
not, express our view – and that the second element, therefore, exists in the
case at bar, the record does not contain any specific data regarding the third
and fourth elements.
“The clear implication of the decision of the Supreme Court
is that if
the defendant has no power or ‘control’ – which, according to the
Supreme Court, is the most important element’ – there is no employer-employee
relationship.” (Underscoring
supplied)
The conclusion thus reached by the court a quo is
in full accord with the facts and the applicable jurisprudence. We totally agree with the court a quo that AFWU
was an independent contractor
and an independent contractor is not an “employee”.17
Neither is there any
direct employment relationship between MARITIMA and the laborers. The latter have no separate, individual
contracts with MARITIMA. In fact,
the court a quo found
that it was AFWU that hired them.
Their only possible connection with MARITIMA is through AFWU
which contracted with the latter. Hence,
they could no possibly be in a better class than AFWU which dealt
with MARITIMA. 18
In this connection, it is
interesting to note that the facts as found by the court a quo strongly
indicate that it is AFWU itself who is the employer of those
laborers. The facts very succinctly show
that it was AFWU, through its officers, which (1) selected and hired the laborers, (2) paid their wages, (3) exercised
control and supervision over them, and (4) had the power to discipline and dismiss them. These are the very elements constituting an
employer-employee relationship.19
Of course there is no legal impediment for a union to be an
“employer”.20 Under
the particular facts of this case, however, AFWU appears to be more of a
distinct and completely autonomous business group or association. Its organizational structure and operational
system is no different from other commercial entities on the same line. It even has its own bill collectors and
trucking facilities. And that it really
is engaged in business is shown by the fact that it had arrastre
and stevedoring contracts with other shipping firms in Iligan City.
Now, in its all-out endeavor to make an “employer” out
of MARITIMA, AFWU, citing an impressive array of jurisprudence,
even goes to the extent of insisting that it be considered a mere
“agent” of MARITIMA. Suffice
it to say on this point that an agent can not represent two conflicting
interests that are diametrically opposed.
And that the cases sought to be relied upon did not involve
representatives of opposing interests.
Anent the second point raised:
AFWU claims that the court a quo found that acts of
interferences and discriminations were committed by MARITIMA against
the former’s members simply for their union
affiliation.21 However, nowhere in the
32-page decision of the court a quo can any such finding be
found. On the contrary, said court made
the following finding:
“18. There
is no showing that this new union, the Iligan
Stevedoring Union, was organized with the
help of the branch manager Jose C. Teves. The organizer of the union like Messrs.
Sergio Obach, Labayos and
Atty. Obach and their colleagues have never sought
the intervention, help or aid of the respondent Compania Maritima or its branch manager Teves in the formation and/or
organization of the said Iligan Stevedoring
Union. It appears that these people
have had previous knowledge and experience in handling stevedoring and in the arrastre service prior to the employment of the Allied Free
Workers Union in the Iligan port. The charge of union interference
and domination finds no support from the evidence.” (Underscoring
supplied)
More worthy of
consideration is the suggestion that the termination of the CONTRACT was in bad faith. First of all, contrary to AFWU’s
sweeping statement, the court a quo did not find that the termination of the CONTRACT
was in retaliation” to AFWU’s demand for collective bargaining. On the contrary, the court a quo held that MARITIMA’s
authority to terminate the contract was right fully exercise:
“21. The evidence does not show substantially any act of
interference in the union membership or activities of the petitioner
union. The rescission of their contract
is not a union interference contemplated in the law.
x x x x x
“x x x Further, the Court is
satisfied that there is no act or acts
of discrimination as claimed by herein petitioner to have been
committed by the respondent firm or its
branch manager Teves. Evidence is clear that Teves,
in representation of the principal, the respondent Compania
Maritima, has also acted in good faith in
implementing the provisions of their existent contract (Exhibit ‘A’), and when
he advised the union of the rescission of the said contract effective August
31, 1954, he did so in the concept that the employer firm may so terminate
their contract pursuant to paragraph 4 of
Exhibit ‘A’ which at the time was
the law controlling between them. x x x” (Underscoring supplied)
We are equally satisfied
that the real reason for the termination of the CONTRACT was AFWU’s inefficient service. The court a quo drew its conclusion from the following findings:
“11. During the first month of the existence of the labor contract Exhibit ‘A’, the
petitioner union rendered satisfactory service. Under this situation, the Campania
Maritima’s representative at Iligan City
was authorized to renew verbally with the extension of the contract Exhibit ‘A’
from month to month basis after the first month of its expiration. This situation of harmony lasted up to the
latter part of 1953 when
the Compania Maritima and
its branch manager agent complained
to the union of the unsatisfactory
service of the union laborers hired to load and unload cargoes aboard Compania Maritima boats. This deteriorating situation was admitted as a fact by the union president (See Exh. ‘3′ ‘3–A’ and ‘3–B’; See also t.s.n. pp. 65-66, August 9, 1960).
“12. There was a showing that the laborers employed by the union were inefficient
in performing their jobs, and the business
of the respondent company
in Iligan City suffered adversely during the year
1954; and this was due to the
fact that respondents’ vessels were forced to leave cargoes behind in order
not to disrupt the schedule of departures.
The union laborers were slow in loading and/or unloading freight from
which the respondent Compania Maritima
secured its income and/or profits. At times, cargoes were left behind
because of the union’s failure to load them before vessel’s departure. In order to solve this inefficiency of the
complaining union, the branch manager of the Compania
Maritima was forced to hire extra laborers from
among ‘stand-by’ workers not affiliated to any union for the purpose of helping
in the stevedoring and arrastre work on their vessels
because, at that time, the union was not performing and/or rendering efficient
service in the loading and unloading of cargoes. x x x
x x x x x
“14. Because of the
deterioration of the service rendered to the respondent, the branch manager of
the respondent Compania Maritima
informed the union of its intention to rescind the contract ‘Exhibit ‘A’
because the company had been suffering losses for such inefficient service. (See Exhibit ‘N’). Respondent Teves
reported to the Maritima’s head office on the
financial losses of the company in its operations. (See Exhibits ‘Y’, ‘Y-1’ to ‘X-5’).
“15. On August 24, 1954,
branch manager Jose C. Teves of the Iligan City Maritima Branch,
wrote the petitioner union informing them of the termination of their contract,
Exhibit ‘A’. (See Exhibit ‘N’). This
step was taken after the company found the union lagging behind their work
under the contract, so much so that Maritima boats
have to leave on schedule without loading cargoes already contracted to be
transported.” (Underscoring
supplied)
Perhaps, AFWU
might say that this right to terminate appearing in paragraph 4 of the CONTRACT is contrary to law,
morals, good customs, public order, or public policy.22 However, it has not adduced any argument to
demonstrate such point. Moreover, there
is authority to the effect that the insertion in a contract for personal
services of a resolutory condition permitting the
cancellation of the contract by one of the contracting parties is valid.23 Neither
would the termination constitute “union-busting”. Oceanic Air Products vs. CIR,24 cited by AFWU, is not in
point. That case presupposes an employer-employee
relationship between the parties disputants – a basis absolutely wanting in
this case.
AFWU’s third point is again that
MARITIMA’s act of terminating the CONTRACT
constituted union interference. As
stated, the court a quo found as a fact that there is no
sufficient evidence of union interference.
And no reason or argument has been advanced to show that the fact of
said termination alone constituted union interference.
THE CERTIFICATION
ELECTION CASE (L-22952* & L-22971 [CIR Case No. 175-MC])
In the certification election case, the court a quo
directed the holding of a certification election among the laborers then doing arrastre and stevedoring work. Both MARITIMA and AFWU have
appealed from that ruling. The latter maintains that the lower court should have directly certified it as the
majority union, entitled to represent all the workers in the arrastre
and stevedoring work unit, whereas MARITIMA contends that said court could not even have
correctly ordered a certification election considering that there was an
absence of employer-employee relationship between it and said laborers.
There is no question that certification election could not have
been proper during the existence of the CONTRACT in view of the court a
quo’s finding that there was no employment relationship thereunder between the parties. But after the termination of the CONTRACT
on August 31, 1954, what
was the nature of the relationship between MARITIMA and the
laborers-members of AFWU?
From the finding that after the rescission of the CONTRACT, MARITIMA continued to avail of the services of AFWU, the court a
quo concluded that there came about an employer-empIoyee relationship between the
parties. This conclusion cannot be
sustained.
First of all, it is contradicted by the established facts. In its findings of fact, the court a quo
observed that after the rescission, the AFWU laborers continued working in accordance with the “cabo” system, which was prevailing customs
in the place. Said
the court:
“20. After the rescission of the contract Exhibit ‘A’ on
August 31, 1954, the Allied Free Workers Union and its members were working or
performing the work of arrastre and stevedoring
service aboard vessels of the Compania Maritime
docking at Iligan City port under the ‘cabo system’ then prevailing in that territory; and the
customs and conditions then prevailing were observed by the parties without
resorting to the conditions of the former labor contract Exhibit ‘A’.”
(Underscoring supplied)
Under the “Cabo” system, the union was an independent
contractor. This is shown by the court a
quo’s own finding that prior to the CONTRACT between MARITIMA and AFWU, the former had an oral arrastre and stevedoring
agreement with another union. This
agreement was also based on the “cabo”
system. As found by the court a quo:
“4. That prior
to the execution of Exhibit ‘A’, the arrastre and
stevedoring work was performed by the Iligan Wharf
Laborers Union headed by one Raymundo Labayos under a verbal agreement similar to the nature and
contents of Exhibit ‘A’; and this work continued from 1949 to 1952.
“5. Under the oral contract, the Iligan
Laborers Union acting as an independent labor contractor engaged
[in/] the services of its
members as laborers to perform the contract work of arrastre
and stevedoring service aboard vessels of the Compania
Maritima calling and docking at Iligan
City; and for the services therein rendered the union charged shippers and/or
consignees in accordance with the consignment or place, and the proceeds
thereof shall be shared by the union members in accordance with the union’s internal
rules and regulations. This system of
work is locally known as the ‘cabo system’. The laborers who are members of the union and
hired for the arrastre and stevedoring work were paid
on union payrolls and the Compania Maritime has had
nothing to do with the preparation of the same.
“6. Because of
unsatisfactory service rendered by the Iligan Wharf
Labor Union headed by Labayos, the Compania Maritime through its agent in Iligan
City cancelled their oral contract and entered into a new contract, Exhibit ‘A’
with the Allied Free Workers Union (PLUM) now petitioner in this case. The terms and conditions of the same
continued and was similar to the oral contract entered into with the union
headed by Labayos. x x x
“7. The
cancellation of the oral contract with the Iligan
Wharf Labor Union headed by Labayos was due to the
inefficient service rendered by the said union. The labor contract entered into by the
petitioner herein (Exh. ‘A’) was negotiated through
the intervention of Messrs. Salvador Lluch, Mariano
Ll. Badelles, Laurentino
Ll. Badelles, Nicanor T. Halivas and Raymundo Labayos. The contract
was prepared by their legal panel and after several negotiations, respondent Teves reluctantly signed the said written contract with the
union with the assurance however that the same arrangement previously had with
the former union regarding the performance and execution of the arrastre and stevedoring contract be followed in accordance
with the custom of such kind of work at Iligan City. The petitioner union, operated as a labor contractor
under the so-called ‘cabo‘ system; x x x” (Underscoring
supplied)
From the above findings, it is evident that, insofar as the
working arrangement was concerned, there was no real difference between the CONTRACT
and the prior oral agreement. Both were
based on the “cabo” system. Under both, (l) the union was an independent
contractor which engaged the services of its members as laborers; (2) the
charges against the consignees and owners of cargoes were made directly by the
union; and (3) the laborers were paid on union payrolls and MARITIMA had
nothing to do with the preparation of the same.
These are the principal characteristics of the “cabo” system on which the parties based their
relationship after the termination of the CONTRACT.
Hence, since the parties observed the “cabo”
system after the rescission of the CONTRACT, and since the characteristics
of said system show that the contracting union was an independent contractor,
it is reasonable to assume that AFWU continued being an independent
contractor of MARITIMA. And,
being an independent contractor, it could not qualify as an
“employee”. With more reason
would this be true with respect to the laborers.
Moreover, there is no evidence at all regarding the
characteristics of the working arrangement between AFWU and MARITIMA
after the termination of the CONTRACT.
All we have
to go on is the court a
quo’s finding that the “cabo” system
was observed – a system that negatives employment relationship. The four elements generally regarded as
indicating the employer-employee relationship – or at the very least, the
element of “control” – must be shown to sustain the conclusion that
there came about such relationship. The
lack of such a showing in the case at bar is a fatal to AFWU’s
contention.
Lastly, to uphold the court a quo’s conclusion
would be tantamount to the imposition of an employer-employee relationship
against the will of MARITIMA.
This cannot be done, since it would violate MARITIMA’s
exclusive prerogative to determine whether it should enter into an employment
contract or not, i.e., whether it should hire others or not25 In Pampanga
Bus Co. v. Pambusco
Employees Union,26 We said:
“x
x x The general
right to make a contract in relation to one’s business is an essential part of
the liberty of the citizens protected by the due process clause of the
constitution. The right of a laborer
to sell his labor to such person as he may choose is, in its essence, the same
as the right of an employer to purchase labor from any person whom It chooses. The employer and the employee have thus an
equality of right guaranteed by the constitution. ‘If the employer can compel the employee
to work against the latter’s will, this is servitude, If the employee can
compel the employer to give him work against the employer’s will, this is
oppression.'” (Underscoring
supplied)
Therefore, even if the AFWU laborers continued to perform arrastre and stevedoring work after August 31, 1954, it cannot be correctly concluded
– as did the court a quo – that an employer-employee relationship
– even impliedly at that – arose when before there never had been any. Indeed, it would appeal unreasonable and
unjust to force such a relationship upon MARITIMA when it had clearly
and continuously manifested its intention not to have any more business
relationship whatsoever with AFWU because of its inefficient
service. It was only to comply with
injunctions and other judicial mandates that MARITIMA continued to abide
by the status quo, extending in fact and in effect the operation
of the MARITIMA–AFWU contract.
The only remaining question now is whether, in the particular context of what We have
said, the lower court’s ruling ordering a certification election can be
sustained. As already stated, the duty
to bargain collectively exists only between the “employer’ and its
“employees”. However, the
actual negotiations – which may possibly culminate in a concrete collective
bargaining contract – are carried on between the “employer” self and
the official representative of the “employees”27 – in
most cases, the majority labor union.
Since the only function of a certification election is to determine,
with judicial sanction, who this official representative spokesman of the
“employees” will be,28 the
order for certification election in question cannot be sustained. There being no employer-employee relationship
between the parties disputants, there is neither a “duty to bargan collectively” to speak of. And there being no such duty, to hold
certification elections would be pointless.
There is no reason to select a representative to negotiate when there
can be no negotiations in the first place.
We therefore hold that where – as in this case – there is no duty to
bargain collectively, it is not proper to hold certification elections in
connection therewith.
The court a quo’s objective in imposing the employer- employee
relationship may have been to do away with the “cabo”
system which, although not illegal, is in its operation regarded as disadvantegeous to the laborers and stevedores. The rule however remains that the end cannot
justify the means. For an action to be
sanctioned by the courts, the purpose must not only be good but the means
undertaken must also be lawful.
A true and sincere
concern for the welfare of AFWU members-laborers would call for reforms
within AFWU itself, if the evil of the so-called “cabo” system is to be eliminated. As We
suggested in Bermiso v. Hijos de Escaño,29 the remedy against the “cabo”
system need not be sought in the courts but in the laborers themselves who
should organize into a closely-knit union “which would secure the
privileges that the members desire thru the election of officers among
themselves who would not exploit them.”
WHEREFORE, the appealed decision of the Court of Industrial
Relations is hereby affirmed insofar as it dismissed the charge of unfair
labor practice in CIR Case 426-ULP, but reversed and set aside insofar as it
ordered the holding of a certification election in CIR Case No. 175–MC, and the petition for certification in said case should be, as it is
hereby, dismissed. No costs.
SO ORDERED.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Ruiz Castro, JJ., concur.
[1]
Dated February 4, 1964.
[2]
Short for Compania
Maritima and Manager Jose C. Teves.
[3]
Short for Allied Free Workers’ Union (PLUM).
[4]
Short for the arrastre and stevedoring contract.
[5]
See Annex “B” of Petition in L-22951-52.
[6]
CIR Case No. 175-MC.
[7]
CIR Case No. 426-ULP.
[8]
Subsequently, this union was dissolved and its registration cancelled because
of its failure to carry out its agreement with MARITIMA.
[9]
Civil Case No. 577 in the court of First Instance of Lanao
del Norte.
[10]
Allied Free Workers’ Union (PLUM)
vs. Judge Apostol, G.R. No. L-8876, Oct. 31, 1957.
[11]
We finally declared the preliminary injunction issued by the Court of First
Instance as invalid. (Decision of
Supreme Court in L-8876, Oct. 31, 1957)
[12]
CFI of Lanao del Norte has since been ordered by this
Court in L-19651 to proceed considering these steps taken to appeal its
decision. See infra, Note 15.
[13]
Allied Free Workers’ Union (PLUM)
vs. Hon. Estipona, G.R. No. L–17934. Our decision was
promulgated on Dec. 28, 1961, wherein We set aside the said order
of January 6, 1961.
[14]
Allied Free Workers’ Union (PLUM)
vs. Hon. Estipona, G.R. No. L–19651, June 30, 1966.
[15]
In L–19651, We held the orders of March 24 and 31, 1962 as
invalid because the decisions of January 11, 1961 and December 5, 1960 were the same, and We also ordered
the Court of First Instance to proceed to the hearing for the approval of the AFWU
appeal.
* Same roIlo as L-22952.
16 Sec. 13, Rep. Act No.
875.
17 Cruz v. Manila
Hotel, G.R. No. L-9110, April 30, 1957.
18 Cruz v. Manila Hotel, supra, see also Chuan
& Sons v. CIR, 85 Phil. 365.
19 Viaña v. Al Lagadan, G.R. No. L-8967, May
31, 1956; 99 Phil. 408.
20 Sec. 2(c), Rep. Act No. 875.
21 Petition in L-22951-52,
p. 14.
22 Art. 1306, Civil Code of
the Philippines
23 Taylor v. Uy Tieng, 43 Phil. 873.
24 G.R. Nos. L-18704-05, January 31, 1963.
* Same rollo
as L-22951.
25 Fernandez & Quiason, Law Of Labor Relations, 1963 ed. pp. 43-48.
26 68 Phil. 541, 543.
27 Secs.
12(2) and 13, Rep. Act No. 875.
28 Sec. 12(b), Rep. Act No. 875
29 G.R. No. L-11606, February 28, 1959.