LIRAG TEXTILE MILLS, INC. PETITIONER, VS. EPIFANIO D. BLANCO AND COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

Submitted for review is
the Resolution of the Court of Industrial
Relations en banc affirming the Decision
in Case No. 4219-ULP finding petitioner Lirag Textile Mills, Inc. (LITEX, for
brevity) to have committed an unfair labor practice act in dis­missing its
employee, respondent Epifanio D. Blanco, for union activities and ordering his
reinstatement with back wages.

The records disclose that
since 1957 there had existed in LITEX a union known as Litex Employees
Association (LEA, for short).  Private
respondent Epifanio D. BLANCO, who was employed by LITEX on April 3, 1959,
joined that union a few months thereafter.

On January 2, 1960, LEA
entered into its first collective bargaining agreement with LITEX for a period
of two (2) years, which was subsequently renewed for three (3) years, or up to
March 31, 1965.  The agreement contained
a closed-shop provision as follows:

“Section 1.  Union Security. ? The COMPANY recognizes the UNION AS THE SOLE and exclusive collective
bargaining representative of all its employees and/or members.

Section 2.  Union Shop. ? It is mutually agreed between the COMPANY and the
UNION that newly-hired employees on probationary basis in accordance with
Section 2, Article III of this AGREEMENT, are required as a condition or
prerequisite of continued employment on a regular basis to join and be member
of the UNION in good standing.  It is a
con­tinuing condition of employment with the COMPANY that employees coming
under this AGREEMENT should be and must remain as good standing members of the
UNION.  The UNION therefore, may from
time to time recommend to the COMPANY, the separation from the service of any
of its members for reasons that he or she is no longer a member of the UNION in
good standing.  Accordingly, those losing
their member­ship in the UNION could not be retained in the employ of the
COMPANY.”

The constitution and
by-laws of the union also provided, inter alia:

“Sec. 5, Art. III – Expulsion: ? By a majority vote of the
Board of Officers, including the President’s, any member of the union may be
expelled therefrom for any of the following grounds:

1.    Being affiliated with other labor unions.

2.    Refusal to obey constitution and by-laws and
the duly enacted rules and regulations of the union.

3.    Acts prejudicial to the interest of the
union and/or its members.

xxx                             
xxx                             xxx^[1]

Sometime in January,
1964, BLANCO and several employees organized the Confederation of Industrial
and Allied Labor Organization (CIALO). 
On April 1, 1964, CIALO filed a petition for certification election at
LITEX before the Court of Industrial Relations (Case No. 1332-MC).  The petition was dismissed, however, and said
Court certified LEA as the sole bargaining representative of the rank and file
employees of LITEX.^[2]

In the same month of
April, 1964, LEA’s grievance committee conducted an investigation of its
members suspected of having joined CIALO.

On April 24, 1964, BLANCO
was dismissed by LITEX for violation of company rules and regulations in a
letter reading as follows:

“Dear Mr. Blanco:

This is to inform you that as per report of the Security Guards dated
April 10, 1964, you were a) found distributing leaflets and reading materials
inside the Service Bus, b) subsequently apprehended at the gate with several
other leaf­lets and an envelope with leaflets for distribution to company
employees and c) refused to be searched upon entrance at the gate, in violation
of existing company rules and regulations.

Inasmuch as you were previously warned for misconduct and
inefficiency on September 27, 1961 and June 1, 1963, respectively, and
suspended twice on June 29, 1961 for act of mischief re­sulting in injury to a
co-employee and on July 29, 1963 for refusal to be searched and utterance of
bad words against the guards and other offenses contained in our letter of July
10, 1963, we have decided after giving you a definite last warning on July 11,
1963, to terminate your services effect­ive on Friday, April 24, 1964.

Very truly yours,

KHRISNAMURTI A. AFRICANO

Personnel Officer”^[3]

On April 27, 1964, LEA addressed
a letter to LITEX recommending the immediate dismissal of 18 members named
therein, who had been found to have violated the Union’s constitution and by
laws and the Revised Collective Bargaining Agreement by joining CIALO^[4], attaching thereto the minutes of a meeting
held by the Board of Officers of LEA
on April 24, 1964 adopting a
resolution of expulsion.^[5] BLANCO’s name was not included in the list
presumably because he had been dismissed by the company on April 24, 1964, or
three days before.

On April 27, 1964, LITEX advised LEA of its reluctance to effect the termination from the
ser­vice of the 18 employees, and asked for reconsideration.^[6] LEA insisted on the dismissal of the 18
employees threatening to go to Court should LITEX refuse to honor its
commitment under their collect­ive bargaining agreement.^[7]

The 18 employees were
dismissed on different dates.  They filed
separate complaints against LITEX.  After
investigation, Case No. 4219-ULP for Unfair Labor Practice against LITEX was
filed before the CIR on behalf of BLANCO and six others upon the following
allegations:

“4.  That the respondent company thru Khrisnamurti
Africano, discriminated against the complainants with regards to their tenure
of employment by dismissing them on the dates appearing opposite their names
listed hereunder for no other reason than their willingness to join the
complainant union and/or affiliation therein and union activities so as to
discourage membership thereto, as follows:

1)    Francisco
Pineda – April 24, 1964

2)    Antonio
S. Lalucis – April 29, 1964

3)    Eduardo
Canlas – April 28, 1964

4)    Leovigildo
Roldan – April 28, 1964

5)    Romeo
Florentino – April 28, 1964

6)    Daniel
Fontaina – April 28, 1964

7)    Epifanio
Blanco – April 24, 1964″^[8]

In its Answer, LITEX denied the charge and raised defenses.  The case was subsequently heard on the merits.

LEA endeavored to intervene but its Motion was denied by
respondent Court for lack of legal basis.

On October 17, 1966, the Court of Industrial Relations rendered
judgment, the dispositive portion of which reads:

“WHEREFORE, in the case of com­plainant Epifanio Blanco, the
court finds respondents to have violated the Industrial Peace Act and hereby
orders them to cease and desist from committing the censurable acts herein
found, to reinstate him to his former or equivalent position with­out loss of
seniority and other pri­vileges, and to pay him backwages at the rate of fifty
(50) per cent from the time of his dismissal up to his reinstatement.

With respect to all the other complainants, for lack of merit and
insufficiency of evidence, the com­plaint is hereby DISMISSED.”

Respondent Court rationalized its holding in respect of BLANCO,
thus:

‘Exhibit ‘A – Blanco’, an unobjected piece of material evidence,
shows beyond doubt that the consequent act of respondent company interfered
with the exercise of the employee’s right to self-organization.  Blanco was not even investigated by the
company to find out whether or not he did refuse to be searched, as this is the
only regulation alleged to have been violated (Exhibit ‘A-Blanco’).  Under the circumstances, the concur­rence of
other grounds, stale as they were, reeks with pretext and cannot justify the
dismissal.  It is explicitly clear that
the pre­vailing reason for his separation from the service was his union
activities.”^[9]

LITEX moved for
reconsideration, but this was denied by respondent Court en banc on November 16,
1966.  LITEX appealed to this instance
assigning the following errors to respondent CIR:

I

“The Respondent Court erred in holding that the Litex
Employees Association (LEA) did not demand the dismissal of the respondent
Epifanio Blanco pursuant to the Union Shop provision of the Collective Bargain­ing
Contract (Exhibit 2) just because his name did not appear in the letter (Exhibit
4) in spite of sufficient testimonial and documentary evidence to the contrary.

II

The Respondent Court erred in holding that the dismissal of
respondent Epifanio Blanco for violation of company rules was an unfair labor
practice just because the violation was at the same time a union activity, and
in justifying this holding to consider a just warning for inefficiency and post
violations for mis­conduct for which he was warned the first time, and for
subsequent mis­conducts for which he was twice suspended, as a result of which
he was given a definite last warning, as ‘stale’ grounds although the last
violation for which he was dismissed occurred within nine (9) months from the
time the definite last warning was issued to him.”

The petition is meritorious.

Respondent Court ruled
that the five other com­plainants (Lalucis, Canlas, Roldan, Florentino and
Fontaina) were legally separated from the service pursuant to the closed-shop
agreement and the con­stitution and by-laws of LEA, which have binding effect on
the parties, but ruled as unfair labor practice the dismissal of BLANCO, his
name not having been included in the list of member-employees who were expelled
from the union and recommended to the company for dismissal from the service.

There is no justifiable
reason to single out BLANCO.  He was in
an identical position as the five other complainants.  If his name was not included in the list of
18 employees recommended for dismissal, it was because he had been dismissed
three days before by the company.  And if
he had not been dismissed by the company, his dismissal would have been
demanded by LEA considering that he was one of those investi­gated by LEA’s
grievance committee which had approved the recommendation to dismiss them on
the charge of being members of another union. 
In fact, in paragraph 4 of the Complaint (supra) BLANCO made
common cause with the other complainants for having been dismissed “for no
other reason than their willingness to join the (CIALO) union and/or
affiliation therein and union activities so as to discourage membership thereto
x x x.” BLANCO admitted his affiliation with CIALO.  There is evidence, too, that he, together
with his co-employees organized a rival union, CIALO, in contravention of the
collective bargaining agreement and the constitution and by-laws of LEA, of
which they were then members.  These acts
of BLANCO and his co-workers of organizing a rival union and distributing
leaflets and propaganda papers, clearly constituted a ground for expulsion
under Section 5 of LEA’s constitution and by-laws, quoted hereinabove.

This Court has held that
closed-shop is a valid form of union security, and such provision in a collect­ive
bargaining agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution.^[10] Respondent Court upheld the vali­dity of the
closed-shop agreement of LEA and LITEX, when it ruled as legal the dismissal of
complainants except respondent, pursuant thereto.  Respondent Court should have also upheld as
legal the separation from the service of BLANCO on the same ground in the face
of evidence that he committed the same violation.

The case of Manalang vs.
Artex Development Company, Inc., supra, is authority for the view
that:

“Even if we assume, in gratia argumentis, that the petitioners
were unaware of the stipulations set forth in the collective bar­gaining
agreement, since their membership in the BBLU prior to their expulsion
therefrom is undenied, there can be no question that as long as the agreement
with closed-shop provision was in force, they are bound by it.  Neither their ignorance of, nor their
dissatis­faction with, its terms and condi­tions would justify breach thereof
or the formation by them of a union of their own.”

In his Answer to the
present Petition, BLANCO claimed that the closed-shop provision applies only to
newly hired employees and not to old employees like himself.  He abandoned this argument in his Brief,
however.  Suffice it to say that he was
already a member of LEA when the collective bargaining agreement
containing the closed-shop provision was executed, and therefore, he was bound
by the same.

As a general rule, the
findings of facts of the Industrial Court are final and conclusive when
supported by substantial evidence.^[11] However, where, as in this case, respondent
Court ignored the evidence ad­duced by the parties, it is guilty of grave abuse
of discretion as to warrant a review by this Court of its findings of fact.^[12]

We come now to the second
assigned error.  Respond­ent Court ruled
that the prevailing reason for BLANCO’s separation from the service was his
union activities, and it considered as “stale” the other grounds for which
he was dismissed, namely, previous misconduct and violations of company rules
and regulations.  Again, this is reversible
error.

BLANCO himself admitted
that he was suspended for mischief on June 21, 1961; warned for misconduct and
inefficiency on September 27, 1961 and June 1, 1963; suspended on June 25, 1963^[13]; nearly dis­missed on July 13, 1963 pursuant
to a letter of dismissal, dated July 10, 1963, but through LEA’s intercession
was given a last warning instead on July 11, 1963, as follows:

“We are giving a reconsideration to the case of Mr. Epifanio
Blanco, on the representation of the Litex Employees Association although the
facts of the case warrant immediate termination.

Mr. Blanco, is however, to be given a maximum suspension of six (6)
working days with a last warning that any other offense will be subject to
outright dismissal for cause.

KHRISNAMURTI A. AFRICANO

Personnel Officer

ACCEPTED:

EPIFANIO D. BLANCO”^[14]

Accordingly,
a suspension order for six days, from July 29 to August 3, 1963, was duly
approved by LITEX.^[15]

It is noteworthy that one
of the grounds of dismissal cited by LITEX in its letter of April 23, 1964 was
BLANCO’s refusal to be searched upon entrance at the company gate in violation
of company rules and regulations.  This
was the same offense for which he was almost dismissed on July 13, 1963.

Prior violations,
misconduct or misdemeanors form part of an employee’s record.  BLANCO’s present infraction coupled with his
blemished employment record, with a last warning given some nine months before,
inevitably led to his dismissal on April 24, 1964.

An employee may be
dismissed on the ground of willful disobedience to rules, orders and
instructions of the employer,
which must be reasonable and lawful, known to the employee and pertain to
duties which the employee discharges.^[16]

It is true that BLANCO
denied that he refused to be searched.^[17] Even granting, however, that he could not be
dismissed on the ground of refusal to be searched for lack of sufficient
proof, he can still be legally dismissed for his affiliation with CIALO, which
is specifically prohibited by the CBA and the Constitution and by-laws of LEA,
in respect of which, evidence had been satisfactorily adduced.

WHEREFORE, the
appealed Decision in so far as it held that petitioner violated the Industrial
Peace Act in dismissing respondent Epifanio D. Blanco and order­ing his
reinstatement by petitioner, is hereby set aside.

No costs.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Fernandez, and Guerrero, JJ., concur.

^[1]
Exhibit “19”, pp. 5-6, Petitioner’s Brief.

^[2]
pp. 187 & 191, Court of Industrial Relations Record.

^[3]
p. 32, Ibid.

^[4]
Exhibit “4”, p. 96, Ibid.

^[5]
Exhibit “5”, p. 97, Ibid.

^[6]
p. 98, Ibid.

^[7]
p. 99, Ibid.

^[8]
p. 3, Ibid.

^[9]
Decision, p. 6, Court of Industrial Relations Record, p. 191.

^[10]
Manalang vs. Artex Dev. Co., Inc., 21 SCRA 562 (1967).

^[11]
Section 6, Rep. Act 875, as amended.

^[12]
Mercury Drug Co., Inc. vs. CIR, 56 SCRA 694 (1974).

^[13]
p. 2, Answer to the Petition, p. 50, Rollo.

^[14]
p. 116, Court of Industrial Relations
Record.

^[15]
p. 115, Ibid.

^[16]
Batangas-Laguna Tayabas Bus Co. vs. Court of Appeals 71 SCRA 470 (1976).

^[17]
p. 8, Brief for Respondent Blanco.