KAPISANAN NG MGA MANGGAGAWA NG ALAK (NAFLU) PETITIONER, VS. HAMILTON DISTILLERY COMPANY, CO BON BENG, MARIANO ANG ENG AND HAMILTON WORKERS’ UNION, RESPONDENTS.

Appeal by certiorari from a decision of the Court of Industrial
Relations dismissing the complaint herein for unfair labor practice.

Respondent, Hamilton Distillery Company or Hamilton Wine
Manufacturing Co., hereinafter referred to as the Company, is a
commercial establishment engaged in the manufacture of wine in the
Philippines, whereas respondents Co Bon Beng and Mariano Ang Eng are
the superintendent or cashier, and the manager, respectively, thereof.

On September 24, 1957, two (2) labor unions, composed of employees
and laborers of the Company, were registered with the Department of
Labor, namely, petitioner Kapisanan ng mga Mangagawa ng Alak (NAFLU),
hereinafter referred to as the NAFLU, and respondent Hamilton Workers’
Union, hereinafter referred to as the Workers’ Union. Thereupon, the
latter and the Company entered into a collective bargaining agreement,
incorporated into a private instrument purporting to have been excuted on September 24, 1957. Moreover, the Company issued a notice
bearing the same date, addressed to all of its employees, giving
non-members of the Workers’ Union thirty (30) days within which to join
the same, or else, be dismissed.

There is evidence to the effect that, upon learning that the NAFLU
was being organized, or on September 23, 1957, Co Bon Beng sent for
Francisco Dumlao, and inquired whether it was true that he had
organized said labor union and was its president; that, upon receipt of
an affirmative answer, Co Bon Beng urged Dumlao to dissolve the NAFLU,
for otherwise he would be dismissed; that when Dumlao answered that he
could not follow this advice, Co Bon Beng bade him to look for another
job; that on September 24, 1957, Co Bon Beng refused to admit him to
work, upon the ground that he was unwilling to dissolve the NAFLU;
that, subsequently, some members thereof resigned therefrom and joined
the Workers’ Union, because otherwise they would be dismissed by the
Company; that, beginning from September 30, 1957, those who remained
affiliated to the NAFLU were allowed to work only two (2) days a week;
and that on October 28, 1957, the following members of the NAFLU, who
did not join the Workers’ Union, were dismissed by the Company, namely:

These dismissed employees reported the matter to the Court of
Industrial Relations, with which a formal complaint for unfair labor
practice was, on November 28, 1957, filed, by an acting prosecutor of
said court, against the Company, its aforementioned superintendent or
cashier and manager, and the Workers’ Union. In their answer to this
complaint, respondents denied the charge and invoked, in justification
for said dismissal of members of the NAFLU, a “closed shop” clause in
the collective bargaining agreement between the Company and the
Workers’ Union.

Meanwhile, or on October 11, 1957, the NAFLU had filed with the
Court of Industrial Relations a petition for certification election
(Case No. 500 MC), in view of which said court issued an order dated
October 19, 1957, directing that copies thereof be posted for the
information of the employees and laborers concerned and that copies of
the petition be served upon the corresponding officers of the Company
and of the Workers’ Union. Still later, or on November 25, 1957, the
NAFLU filed, in the unfair labor practice proceedings, an urgent
petition for an injunctive relief, praying, among other things, that
the effectivity of the collective bargaining agreement between the
Company and the Workers’ Union be suspended and that the Company be
ordered to reinstate the dismissed employees or laborers with backpay.
This petition was denied on January 3, 1958. In due course thereafter,
or on December 29, 1960, said Court rendered a decision dismissing the
unfair labor practice case. A reconsideration of such decision having
been denied by the Court sitting en banc, the case is now before us on appeal by certiorari taken by the NAFLU.

The main issues in this appeal are: (1) whether or not the
collective bargaining agreement between the Company and the Workers’
Union had been made fraudulently; and (2) whether or not the dismissal
of members of the NAFLU who had failed and refused to join the Workers’
Union constitutes an unfair labor practice.

With respect to the first issue, one cannot minimize the importance
of the fact that, although the Workers’ Union was registered on
September 24,1957, its collective bargaining agreement with the Company
and the notice issued by the Company—giving its employees who were not
members of the Workers’ Union thirty (30) days to join the same, Or
else be dismissed—bear the same date. Likewise, note— worthy is the
circumstance that, aside from being a Chinese, Valentin Kaw, the
president of the Workers’ Union was the timekeeper of the Company, who
as such, had supervisory authority over its employees and laborers, and
could, therefore, exercise substantial pressure upon them to induce, if
not compel, them to join the Workers’ Union, and that the treasurer
thereof was his brother Benito Kaw, another Chinese. Considering
further that said agreement was contained in a private document, and
that the NAFLU was, also, registered as a duly organized labor union,
on the date aforementioned, we find it difficult to avoid the feeling
that the Workers’ Union was, if not company dominated, at least
organized under the patronage of the Company, and that the same was in
such a hurry to bargain with the Workers’ Union, in order to beat the
NAFLU and prevent it from taking appropriate action prior thereto, that
the agreement was made in a Private instrument, thus suggesting that it
must have been made late at night. Otherwise the agreement could have
been executed before a notary public for the corresponding
acknowledgment.

Indeed, the record shows that, despite several defections from the
NAFLU, prior to the expiration of the period given by the Company to
non-members of the Workers’ Union, the Company had to dismiss 52
members of the NAFLU, apart from its president, for failure to join the
Workers’ Union within said period. Considering that the Company had
altogether around 100 employees only, it is clear that a petition for
certification election, if filed by the NAFLU prior to the execution of
the collective bargaing agreement between the Workers’ Union and the
company, would have, in all probability, barred effectively said
agreement.

Independently of the foregoing, the provisions thereof do not
legalize the dismissal of members of the NAFLU. The lower court held
otherwise, relying upon the “closed shop” clause of said agreement
reading:

“That the COMPANY shall establish the policy of
‘Union Shop’ effective October 24, 1957. All workers shall by that date
become members of the UNION, except those monthly salaries employees,
and other supervisor-employees (technical men) listed by the
Management. The COMPANY shall be free to hire new laborers with out
giving consideration to their membership or non-membership to the
UNION. However, all laborers hired must join the UNION within sixty
(60) days of employment, or face discharge, except, those selected by
the Management above. The UNION assumes responsibility of individually
signing up new laborers.”

In this connection, it is well settled in this jurisdiction that, in
the absence of a manifest intent to the contrary, “closed shop”
provisions in a collective bargaining agreement “apply only to persons to be hired or to employees who are not yet members of any labor organization” and that said provisions of the agreement are “not applicable to those already in
the service at the time of its execution” (Confederated Sons of Labor
vs. Anakan Lumber Co., 107 Phil., 915; Local 7, Press & Printing
Free Workers [FFW] vs. Judge Tabigne, 110 Phil., 276; Freeman Shirt
Manufacturing Co. vs. CIR, 110 Phil., 962; San Carlos Milling Co. vs.
CIR, 111 Phil., 323; Talim Quarry Co., Inc. vs. Bartolo, 111 Phil., 933.

The language of the above quoted “closed shop” clause is not such as
to bar necessarily the limitation of its application to new employees
or laborers, or at least, to those who were not as yet affiliated to
any labor organization. The first sentence of said clause may be
construed to refer to laborers or employees admitted after September
24, but before October 24, 1957. At any rate, if the Company and the
Workers’ Union intended, by said clause, to authorize the dismissal of
persons already in the service of said Company on or before September
24, 1957, but belonging to another labor organization, and who failed
to quit from the latter and join the Workers’ Union on or before
October 24, 1957, then such stipulation would be null and void (Findley
Millar Timber Co. vs. PLASLU, L-18217 and L-18222 (September 29, 1962).
As held in Freeman Shirt Manufacturing Co., Inc. vs. CIR (supra):

“The closed-shop agreement authorized under sec. 4
subsec. 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., that 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
self-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]).”

Wherefore, the decision appealed from is hereby reversed, and
another one shall be entered ordering the Company to cease and desist
from further unfair labor practices, to pay the members of the NAFLU
who had been discriminated against the difference between the
compensation actually paid to them and that which they would have
received had there been no discrimination, and to reinstate the
employees named above, with back wages from the time of their dismissal
until their actual reinstatement, with all of the rights and privileges
appertaining thereto, as well as to pay the costs. It is so ordered.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Reyes, J. B. L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.