PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS, TRINITY STEEL PRODUCTS, INC., AND TRINITY STEEL LABOR UNION, RESPONDENTS.

Philippine Association of Free Labor Unions versus Court of Industrial Relations

The Case

This is a petition brought by the Philippine Association of Free Labor Unions, which we shall call PAFLU, against the Court of Industrial Relations, Trinity Steel Products, Incorporated, and the Trinity Steel Labor Union. PAFLU asks the Supreme Court to reverse an order of the Court of Industrial Relations directing the company to check off the questioned members in favor of the Trinity Steel Labor Union and to release to it the union dues held in trust, on the ground that PAFLU is the minority union. The case matters because it answers a novel question: after a certification proceeding has already ended, may the Court of Industrial Relations still act on a motion, akin to an action for interpleader, filed by management to resolve conflicting claims of membership between two labor unions and to determine which one is entitled to check-off dues? The Supreme Court says yes, and affirms.

Procedural History

The matter began in the Court of Industrial Relations, where the company filed a motion for the determination of union affiliation. PAFLU filed an answer, and in that answer it did not object to the power of the Court of Industrial Relations to decide the issue. The Court of Industrial Relations issued the challenged order on November 5, 1970, directing the company to check off the questioned members in favor of the Trinity Steel Labor Union, to release to it any money or union dues held in trust for PAFLU, and to refrain from checking off dues in favor of PAFLU as the minority union. PAFLU moved for reconsideration, which was denied, with a dissenting opinion by two associate judges. PAFLU then came to the Supreme Court by petition for review of the order of the Court of Industrial Relations.

Facts

On March 24, 1969, the Court of Industrial Relations issued an order certifying the Trinity Steel Labor Union as the sole and exclusive bargaining agent of the rank and file employees of Trinity Steel Products, Incorporated. On August 16, 1969, the Trinity Steel Labor Union submitted a list of its members who authorized their employer to check off their dues. Barely fifteen days later, on the first of September, 1969, PAFLU likewise submitted a list of employees claimed by it as its members, likewise authorizing a check-off in its favor. That list originally contained forty-four names, later increased to fifty-nine, and these were likewise claimed by the Trinity Steel Labor Union. There was thus a conflict of alleged membership between the two contending labor organizations.

On December 19, 1969, the company and the Trinity Steel Labor Union entered into a collective bargaining agreement containing a check-off provision. PAFLU, in a communication of January 22, 1970, asked the employer to hold in trust the union dues of employees whose affiliations were not in dispute until it had filed the proper court action. No such action was filed. Instead, on February 16, 1970, the company itself filed a motion for the determination of union affiliation with the Court of Industrial Relations, asserting that it was at a loss as to how to implement the collective bargaining agreement given the differing claims, and offering to deposit the checked-off dues with the Court until it determined which union was rightly entitled to them.

The Court of Industrial Relations resolved the matter in favor of the Trinity Steel Labor Union, and PAFLU challenged that order before the Supreme Court.

Issues

• Whether or not the Court of Industrial Relations, after the termination of a certification proceeding, still possesses the competence to act upon a motion for the resolution of conflicting claims of membership between two labor unions, to determine which is entitled to check-off dues.
• Whether or not a separate action is needed to ascertain which union has the right to the check-off dues, rather than a motion filed in the terminated certification proceeding.
• Whether or not the argument that a certification proceeding is a mere investigation of a non-adversary, fact-finding character bars the filing of a motion akin to interpleader in that proceeding.

Applicable Provisions

Section 17 of Commonwealth Act Number 103, the charter of the Court of Industrial Relations, provides:

Respondent Court may at any time during the effectiveness of an award, order or decision, on application of an interested party, and after due hearing, alter, modify in whole or in part, or set aside any such award, order or decision, or reopen any question involved therein.

This is the source of the continuing competence of the Court of Industrial Relations to act on incidents of a case even after the certification proceeding has ended, for as long as the award, order, or decision remains effective.

Section 20 of Commonwealth Act Number 103 provides:

Section 20 of Commonwealth Act No. 103 prescribes that in the hearing, investigation and determination of any question or controversy and in exercising any duties and power under this Act, the court shall act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms.

This frees the Court of Industrial Relations from the strict fetters of the Rules of Court, so that a motion akin to interpleader may be entertained in the terminated certification proceeding.

Article XIV, Section 6 of the Constitution, as cited in the decision, provides:

The State shall afford protection to labor, especially to working women and minors, and shall regulate the relations between landowner and tenant, and between labor and capital in industry and in agriculture. The State may provide for compulsory arbitration.

This constitutional policy of protection to labor supports the speedy settlement of disputes of this character.

Ruling

On the first issue, the Court held that the answer must be in the affirmative. The terms of a collective bargaining contract constitute the law between the parties and must be lived up to. The dues arising from a check-off provision should go to the appropriate labor union, and as an indispensable condition for the contracting union to be entitled to such dues, there must be a showing that the employees from which they were taken retained their membership with it. The Court quoted its earlier ruling in the Pagkakaisa case:

Even assuming for a moment that the irrevocability of the authorization signed by the respondents-laborers and employees for check-off within a period of one year is valid, a point which we do not now decide, it seems that said authorization to deduct from their pay and wages was good only as long as they remained members of the union Pagkakaisa, because as such members, they were supposed to pay dues and assessments to the Union. However, the moment that they separated from and left that union and joined another labor organization, then they were no longer obliged to pay said dues and assessments; naturally, there would no longer be any reason or occasion for the Company to continue making deductions.

On the second issue, the Court held that there is no need for a separate action. The matter is to be ventilated with the Court of Industrial Relations, and the failure to abide by the terms of a collective bargaining agreement amounts to an unfair labor practice cognizable by that Court. As long as the collective bargaining contract resulting from the choice of the labor union as bargaining agent in the certification proceeding is in force, the incidents thereof could still be looked into without the need of a new action being filed.

On the third issue, the Court held that the argument cuts both ways and does not persuade. While from the strict procedural standpoint it may not be entirely bereft of persuasive force, it loses sight of the comparative freedom enjoyed by the Court of Industrial Relations from the restraints imposed by the Rules of Court, as Section 20 of Commonwealth Act Number 103 makes clear. The Court also invoked sound policy: the sooner disputes of this character are settled, the more efficacious the statutory remedy, and the speedy procedure of resolving the matter by motion in a terminated certification proceeding merits approval.

Doctrine

A Bar candidate should retain these rules. First, the terms of a collective bargaining contract constitute the law between the parties and must be lived up to. Second, check-off dues go to the appropriate labor union, but only upon a showing that the employees from whom they were taken retained their membership in that union; once they leave and join another union, they are no longer obliged to pay dues to the former union. Third, the Court of Industrial Relations retains competence, under Section 17 of Commonwealth Act Number 103, to act on incidents of a case during the effectiveness of its award, order, or decision, and may resolve conflicting claims of membership by a motion akin to interpleader even in a terminated certification proceeding. Fourth, under Section 20 of the same Act, that Court acts according to justice and equity and substantial merits, without regard to technicalities or legal forms. Fifth, failure to abide by the terms of a collective bargaining agreement amounts to an unfair labor practice cognizable by the Court of Industrial Relations.

Disposition

The Supreme Court affirmed the order of November 5, 1970, without pronouncement as to costs. The Trinity Steel Labor Union prevailed.

Remember This

The single line worth memorizing is that the Court of Industrial Relations may, during the effectiveness of its award, order, or decision, resolve conflicting claims of membership and check-off dues by motion even in a terminated certification proceeding. Examiners like to use this case on the continuing competence of the Court of Industrial Relations and on the rule that check-off dues belong to the union to which the employees still belong.