FREEMAN SHIRT MANUFACTURING CO., INC., AND SAW MUI, GENERAL MANAGER, PETITIONERS VS. COURT OF INDUSTRIAL RELATIONS, ET AL., RESPONDENTS.

In a certification election ordered by the Court of Industrial
Relations between the Kapisanan ng mga Manggagawa Sa Damit Balangay
(NAFLU) and Freeman Shirt Employees Labor Union, the latter won and was
certified as the sole collective bargaining representative of the
employees of the Freeman Shirt Manufacturing Co., Inc. Thereafter, the
company and the winning union entered into a collective bargaining
agreement respecting terms and conditions of employment. Included in
the agreement is a provision on union security which reads as follows:

“2.
Union Security; Union Shop.—Membership in the UNION shall be a
condition to continued employment in the COMPANY. Employees who are not
members of the UNION on the effectivity of this Agreement and who fails
to become a member of the UNION within thirty (30) days after such date
of effectivity, shall be dismissed by the COMPANY from employment upon
notice of that fact by the UNION to the COMPANY; any person hired by
the COMPANY during the term of this Agreement who fails to become a
member of the UNION within thirty (30) days after becoming a regular
employee shall likewise be dismissed upon notice of that fact by the
UNION to the COMPANY. Any employee who, during the term of this
Agreement, resigns from the UNION or is expelled therefrom in
accordance with the Constitution and By-Laws of the UNION shall
likewise be dismissed by the COMPANY upon notice of that by the UNION
to the COMPANY.”

The Collective Bargaining
Agreement was duly publicized among the employees of the company.
Before the expiration of the period of 30 days within which all
employees were required to join the union under pain of separation from
employment should they fail to do so, the union and the company warned
all employees who had not yet theretofore complied with the agreement
that the company would have no choice but to dismiss them should they
fail to join the union within the prescribed period. Ten employees,
namely, Marcela Reyes, Claudia Escobia, Leonila C. Gatus, Corazon
Velasquez, Bernardina Clarin, Remedios Jacinto, Corazon Maningas,
Isidra Paredes, Enriqueta Gapuson and Estelita Papa, refused to join
the union, and, in consequence, were dismissed by the company upon
demand by the union.

The above-named persons then initiated
the present proceedings, through the Kapisanan Ng Mga Manggagawa sa
Damit Balangay Freeman (NAFLU) of which they were members, by the
filing of a complaint for unfair labor practice against the Freeman
Shirt Manufacturing Co., its general manager and the Freeman Shirt
Employees’ Labor Union, it being charged that the company dominated the
union and that said company violated sec. 4 (a) of Republic Act No. 875
for having dismissed the ten laborers.

After due hearing,
the Industrial Court absolved the company of the charges of unfair
labor practice and ordered the dismissal of the complaint. However,
holding that the closed-shop agreement authorized in sec. 4, sub-sec,
(a) (4) of Republic Act No. 875 is applicable only to new employees to
be hired or to non-union members, and not to those already in the
company’s service, the Industrial Court ordered the reinstatement of
the dismissed employees. Reconsideration of the decision insofar as it
orders the reinstatement of the complainants having been denied by the
Court en banc, the company and its general manager brought the case to this Court through the present petition for certiorari.

We do not think the lower court committed any error in ordering the reinstatement of the dismissed employees.

A closed-shop agreement has been considered as one form of union
security whereby only union members can be hired and workers must
remain union members in good standing as a condition to continued
employment. (Francisco’s Labor Laws, Vol. 1, 3rd ed., p. 368; Handler
Case on Labor Law, p. 67.) Such union security clause embodied in
collective bargaining agreements is sanctioned under the Industrial
Peace Act, sec. 4, subsec. a (4) which provides as follows;

“To
discriminate in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage membership in any
labor organization: Provided, That nothing in this Act or in
any other Act or statute of the Republic of the Philippines shall
preclude an employer from making an agreement with a labor organization
to require as a condition of employment membership therein, if such
labor organization is the representative of the employees as provided
in section twelve;”

Indeed, its validity has already been upheld by this Court. (Tolentino, et al. vs. Angeles, et al., 99 Phil., 301; 52 Off. Gaz., [9] 4262; NLU vs. Aguinaldo’s Echague, 97 Phil., 184; 51 Off. Gaz. 2899; Ang Malayang Manggagawa Ng Ang Tibay Enterprises, et al. vs. Ang Tibay, et al., 102 Phil., 669; 54 Off. Gaz., [12] 3796; Bacolod-Murcia Milling Co., Inc., et al., vs. National Employees’ Workers Security Union, 100 Phil., 516; 53 Off. Gaz., 615; Confederated Sons of Labor vs. Anakan Lumber Co., et al., 107 Phil., 915.)

The closed-shop agreement authorized under sec. 4 sub-sec, 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 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]).

Section 12 of the Industrial Peace Act
providing that when there is reasonable doubt as to who the employees
have chosen as their representative the Industrial Court can order a
certification election, would also become useless. For once a union has
been certified by the court and enters into a collective bargaining
agreement with the employer a closed-shop clause applicable to all
employees be they union or non-union members, the question of majority
representation among the employees would be closed forever. Certainly,
there can no longer exist any petition for certification election,
since eventually the majority or contracting union will become a
perpetual labor union. This alarming result could not have been the
intention of Congress. The Industrial Peace Act was enacted precisely
for the promotion of unionism in this country.

Since a
closed-shop clause in a collective bargaining agreement is inapplicable
to employees who were already in the company’s service at the time of
its execution, the dismissal of the employees herein concerned is
unjustified. (Local 7, Press & Printing Free Workers (FFW) et al. vs. Tabigne, etc., et al., supra
p. 276; I Francisco, Labor Laws, 3rd ed., 374-375, citing Electric
Vacuum Cleaner Co., NLRB No. 75, 1939, cited in II Teller, Labor
Disputes and Collective Bargaining, 867-868.)

Petitioners
contend that the dismissal of the charges of unfair labor practices
against the company precludes any order for reinstatement. The
contention is untenable, for the dismissal here was made pursuant to a
closed shop agreement which is unauthorized by law. In short, the
dismissal was illegal. Ordinarily, the order for reinstatement should
have carried with it an award for back pay. Considering, however, that
there is no local decision on point, we are inclined to agree with the
lower court and give the company the benefit of the doubt regarding its
claim that it acted in good faith and in the honest belief that, as the
law now stands, it could dismiss the employees who refused to join the
winning or contracting union.

In view of the foregoing, the decision complained of is affirmed, with costs against the petitioners.

Bengzon, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera, and Paredes, JJ., concur.