G.R. No. L-13845. May 30, 1960
NATIONAL LABOR UNION, PETITIONER, VS. INTERNATIONAL OIL FACTORY, RESPONDENT.
BARRERA, J.:
dated March 22, 1958 of the Court of Industrial Relations (CIR),
declaring that the agreement entered into on April 6, 1957 by and
between respondent International Oil Factory and the International Oil
Factory Workers Union (FFW), another labor organization, applies to all
the employees of the Factory, including the members of petitioner NLU.
It appears that on January 18, 1949, the Undersecretary of Labor certified to the CIR[2]
the existence of a labor dispute between respondent International Oil
Factory and its workers, members of petitioner National Labor Union.
Said dispute involved 18 demands made by petitioner labor union,
regarding conditions of employment, including those on vacation and
sick leave.
In a decision rendered on May 11, 1951[3] the demand for vacation leave was granted by the CIR, as follows:
“Demanda 3.—’15 days vacation leave with full pay.’
“Segun los principios de derecho social, la concesion de la licensia de
vacacion depende de la situacion economica de la empresa y las
exigencias del bien comun. Constando que la compañia margina ganancias,
es ineludible la concecion de este privilegio. Que la recurrida, por lo
tanto, conceda a sus empleados y obreros quince (15) dias de vacacion
por cada año de servicio continuo, fiel y satisfactorio mientras su
estado financiero lo permita.”
Appeal was taken by respondent company to this Court, but was subsequently dismissed for lack of merit.
On October 4, 1955, the CIR issued an order granting petitioner labor
union’s motion for execution of the above decision. Said order was,
however, set aside by the CIR in its resolution, en banc, of
December 5, 1955 (Annex B). in order that the CIR may receive evidence
(1) on the financial condition of the respondent company from 1951 to
1955, and (2) on the continuous, loyal, and satisfactory service of the
workers, members of petitioner labor union during said period.
In April, 1956, before the court could receive evidence, 25 members of
petitioner labor union resigned from it, and with some non-union
members, formed another union, called the International Oil Factory
Workers Union (FFW), leaving around 30 members in the NLU local in
respondent company. On May 26, 1956, said new labor union requested the
CIR to substitute it in place of the NLU as party petitioner, but due
to the objection of the latter, it desisted from pursuing said request.
In the meantime, on May 8, 1956, said new labor union FFW, declared a
strike against respondent company, which was upon petition of the
latter, declared illegal by the CIR on January 26, 1957.
On
January 18, 1957, the CIR began receiving NLU’s evidence pursuant to
the court’s resolution of December, 1955 (Annex B), implementing its
decision dated May 11, 1951 providing for 15 days vacation leave.
During the hearing, members of the new FFW appeared and were
represented by their counsel. Petitioner NLU asked the CIR that
respondent company’s book be examined to determine its financial
condition to pay the 15 days vacation leave ordered by it. By
agreement, between counsel for the petitioner NLU and the members of
said new labor union (FFW), the latter began presenting its individual
members to testify on the fact that they had rendered continuous,
loyal, and efficient service. Due to the number of witnesses to be
called, counsel for NLU requested, and the same was granted, that he be
excused from attending the hearing, until his turn to present his
evidence came. After the FFW had presented several witnesses, it
reached an agreement with respondent company wherein, in consideration
for the dropping of the case against its members for the illegal strike
declared on May 8, 1956, the latter would grant to the members of the
FFW 8 days prospective vacation leave. Said agreement was made on April
6, 1957 (Annex 6) and was approved by the CIR on April 12, J957 (Annex
7), in an order of this tenor:
“On April
10, 1957, the parties, thru their respective counsel, filed with this
Court a petition praying that the agreement executed by the parties on
April 6, 1957, be approved pursuant to Sec. 4 of Commonwealth Act No.
103, as amended.“There being nothing against the law,
morals, or public policy in the said agreement, the same is hereby
approved”. This order is considered as an award or decision and the
parties are hereby enjoined strictly to comply in accordance therewith.“By agreement of the parties, let this case be, as it is hereby, DISMISSED.”
On July 9, 1957, the CIR began receiving the evidence of petitioner
NLU, as to the continuous, loyal, and efficient service of its members.
NLU called respondent company’s superintendent to testify. As the
hearing could not be finished on said date, the parties agreed that the
next hearing be held on August 5 and 6, 1957.
Before these
dates, however, or on July 15, 1957, respondent company filed a motion
asking the CIR to declare itself without jurisdiction to proceed with
the reception of evidence of NLU, because of the agreement (Annex 6)
executed by it and the International Oil Factory Workers Union (FFW) on
April 6, 1957. Said motion was heard on August 5, 1957 and, on August
26, 1957, the court denied the same, on the ground that since the CIR
had already acquired jurisdiction over the case prior to the approval
of Republic Act No. 875,[4]
it retained said jurisdiction, as said Act expressly provides that all
cases pending at the time of its passage shall be processed in
accordance with Commonwealth Act No. 103 ( See Annex C); and,
consequently, ordered the continuation of the reception of the evidence
of the NLU.
Respondent company then filed a motion for reconsideration of said order. The CIR, sitting en banc,
while unanimously holding that the court retained jurisdiction over the
case, nevertheless, sustained the contention that the agreement of
April 6, 1957 signed by respondent company and FFW alone, was
applicable to, and binding on NLU as well and, therefore, NLU could no
longer present evidence to enforce the decision of May 11, 1951
granting 15 days vacation, as this decision was superseded by the said
agreement of April 6th providing for only 8 days prospective
vacation leave. It is this resolution which is presently sought to be
reviewed. The reasoning of the majority opinion[5]
on this last point, is substantially as follows: NLU did not dispute
the legality of the disaffiliation of those who resigned from it in
April, 1956 and the formation by them with other non-members, of the
new FFW, nor did it question the majority membership of the latter
union. Consequently, when this new FFW (which, as stated, included in
its membership former members of the NLU who were themselves among the
original petitioners) signed a collective bargaining contract with the
Factory, practically repudiating the decision of May 11, 1951, and this
agreement was approved by the trial court, the same became binding on
all the workers of the Factory, including the members of the NLU,
considering that the trial court’s approval thereof did not carry any
qualification as to exclude the members of the other union (NLU).
Petitioner NLU, on the other hand, claims,—and the two dissenting
judges agree with it—that the CIR erred in holding that the petitioner
was bound by the collective bargaining agreement entered into between
the International Oil Factory Workers Union (FFW) and respondent
company.
We are inclined to agree to this contention. In
arriving at the conclusion that petitioner labor union was bound by the
agreement in question, the CIR, in effect, decreed that by the
secession of some of the members of petitioner NLU on April 2, 1956,
long after the decision in its favor in 1951 had become final, and
their organizing with non-member employees, the International Oil
Factory Workers Union (FFW), the NLU lost its identity and personality,
as well as the right of its remaining members to the 15 days vacation
leave granted to them in said decision of 1951, even if they did not
participate in, nor authorize the execution of the said agreement of
April 6, 1957. On general principle, and on the law applicable to the
case, we can not sanction such a conclusion. Contracts take effect only
between the parties, their assigns, and heirs, save some exceptions
specifically provided by law,[6]
and the agreement of April 6 in question is not one of such exceptions.
As pointed out in the dissenting opinion of Presiding Judge Bautista:
“*
* * this agreement was not a product of a collective bargaining
procedure among the Company and the International (Oil Factory) Workers
Union and the National Labor Union because this case was filed under
Commonwealth Act No. 103 and as such, Section 12 of Republic Act No.
875 was not applicable. Impliedly, under Commonwealth Act No. 103, the
issue of collective bargaining already existed but the procedures were
not so defined especially on cases where more than one union existed in
an establishment. In the absence of a definite procedure, as required
under Republic Act 875, any union, regardless of whether it is a
minority or a majority, can enter into a contract of collective
bargaining with the employer. But to say that a minority was included
as a party to the contract even though its members did not participate
nor give their consent or authority to the majority union in entering
into a contract, would certainly vitiate the freedom and right of the
minority thereby making the covenant void ab initio. * * * The
very contract in itself was very clear and explicit that the parties
are only the factory and the International Oil (Factory) Workers Union.
Nowhere from the context of such contract was a member of the National
Labor Union included or became a party thereto. * * * It could not be
assumed that the approval of the agreement on April 12, 1957 between
the International Oil (Factory) Workers Union and the Company has
amounted to the certification of the contracting union for purposes of
representing the National Labor Union. Precisely, when the
International Oil (Factory) Workers Union (FFW) presented its evidence
to prove the financial capacity of the Company to pay the fifteen (15)
days vacation leave, the trial Court granted the motion of Atty. Lerum
to be excused until the International Oil (Factory) Workers Union was
through with its evidence. The records bear out that the National Labor
Union still represents the 25 members employed at the Company. To
conclude that this Union was a party to the contract without any
sanction, either express or implied, given by them would be the height
of gross injustice which no court must condone or countenance.”
From the fact that the court’s approval of the agreement in question
did not carry any qualification excluding the NLU from its application,
it does not necessarily follow that said approval included the NLU.
What the court approved was the agreement “executed by the parties” and
enjoined said parties to strictly comply with it. Indeed, if as
admitted, NLU did not participate in, nor authorize the agreement, the
approval cannot legally bind the NLU even if it did expressly say so,
because it would be unjust and unwarranted under the circumstances.
That the trial judge who approved the agreement did not himself
consider it binding upon the NLU is evinced by the fact that after its
approval on April 12, 1957, the NLU was still permitted to present its
evidence on July 9, 1957 and would have continued on August 5 and 6,
1957, were it not for the interposition on July 15, 1957 of the motion
to declare the court without jurisdiction.
We find and
declare that the agreement entered into between the International Oil
Factory Workers Union (FFW) and the International Oil Factory approved
by the lower court on April 12, 1957, is not binding on the herein
petitioner National Labor Union, which may consequently continue
presenting its evidence in pursuance to the final resolutions of the
Court of Industrial Relations dated May 11, 1951 and December 5, 1955.
Wherefore, the resolution of March 2, 1958 appealed from, is hereby set
aside and the case remanded to the court of origin for further
proceedings, in accordance herewith, with costs against respondent
International Oil Factory. So ordered.
Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, and Gutierrez David, JJ., concur.
Reyes, J.B.L., J., on leave, took no part.
Padilla and Endencia, JJ., took no part.
[1] By a split vote of 3 to 2.
[2] Pursuant to Sec. 4, Com. Act No. 103, as amended.
[3] Thru Presiding Judge Jose S. Bautista.
[4] Industrial Peace Act, effective June 17, 1953.
[5]
Written by Judge Arsenio I. Martinez, concurred in by Judges Baltazar
M. Villanueva and Emiliano C. Tabigne, with the dissent of Presiding
Judge Jose J. Bautista and Judge Juan L. Lanting.
[6] Art. 1311, New Civil Code.