Associated Watchmen and Security Union vs. Hon. Judges Juan Lanting, etc., et al.

A shipping agency's refusal to employ guards affiliated with a security or watchmen agency that does not furnish a required bond does not constitute unfair labor practice where the requirement is an exercise of the employer's legitimate right to protect its own interests and is not directed at the labor union, especially after the guards abandoned a vessel without notice and exposed it to losses due to theft and pilferage.

Macondray and Company, Inc., a shipping agency in the City of Manila, obtained security guards for vessels arriving at the port of Manila and discharging cargo on its piers through three watchmen agencies: the City Watchmen and Security Agency, the K. Tagle Ship Watchmen Agency, and the Republic Ships Security Agency. Thirty-eight affiliates of the Republic Ships Security Agency belonged to the petitioner, Associated Watchmen and Security Union (PTWO). The dispute implicated the legal characterization of the relationship among shipping companies, watchmen agencies, and security guards, as well as the scope of unfair labor practice under the labor relations system administered by the Court of Industrial Relations.

Macondray and Company, Inc., a shipping agency in the City of Manila, engaged three watchmen and security agencies to guard ships or vessels arriving at the port of Manila and discharging cargo on its piers: the City Watchmen and Security Agency, the K. Tagle Ship Watchmen Agency, and the Republic Ships Security Agency. Thirty-eight affiliates of the Republic Ships Security Agency belonged to the petitioner, Associated Watchmen and Security Union (PTWO).

On or about February 18, 1956, the petitioner union and its members declared a strike against 19 shipping firms in the City of Manila. The strike was certified by the President of the Philippines to the Court of Industrial Relations, which immediately took cognizance of it. At a hearing or conference before the court on March 16, 1956, the strikers, through counsel, expressed their desire to return to work and maintain the status quo. The attorney for the respondents offered to see the shipping companies concerned and to ask them to try to have the 47 watchmen who claimed to have been discharged reemployed; the strikers agreed. On April 6, 1956, a petition was filed before the Court of Industrial Relations asking for reinstatement of 47 strikers belonging to the petitioner union.

The manager of Macondray expressed willingness to employ the strikers belonging to the petitioner union under the condition that the agency to which they belonged file a bond in the sum of P5,000 in favor of Macondray to respond for any negligence, misfeasance, or malfeasance of any of the watchmen of petitioner. The same bond requirement was demanded of the other two security agencies, K. Tagle Ship Watchmen Agency and City Watchmen and Security Agency. The Republic Ships Security Agency, to which most of the members of the petitioner union belonged, failed to comply; its manager was Fernando Derupe. Because of that failure, Macondray refused to employ watchmen from the Republic Ships Security Agency. Some members of that agency transferred to the other two agencies that had furnished a bond and, after joining them, were employed as watchmen by Macondray.

On November 15, 1956, Macondray was charged with unfair labor practice for having dismissed and refused to employ 38 members of the petitioner union. Macondray answered that the members of the petitioner union were not its employees but employees of the Republic Ships Security Agency; that it had not demanded a bond from the members of the petitioner union but from the Republic Ships Security Agency; and that it had not discriminated against members of the petitioner union.

Judge Jose S. Bautista, who tried the case, found that on February 18, 1956, three watchmen agencies were servicing Macondray; that only the members of the complainant union working under the Republic Ships Security Agency struck and abandoned vessels of Macondray; that after the strike Macondray required a P5,000 bond, whereas no bond had been required before the strike; that the K. Tagle Ship Watchmen Agency and the City Watchmen and Security Agency, which did not strike and abandon vessels, filed the required bond, while the striking union refused to file it; and that Macondray consequently stopped giving vessels to the Republic Ships Security Agency, so the watchmen under it were refused reinstatement. He also found that the 38 individuals were members of the complainant union working under the Republic Ships Security Agency; that they were compelled to join the other two agencies that had bonds and resign from the complainant union, or help Fernando Derupe post a bond, which Derupe himself did not want to post, or post the bond themselves, which they could not afford; and that by imposing the bond as a prerequisite for reinstatement, Macondray could select agencies that did not join the strike and could control Derupe, its checker and employee, not to post a bond, which in fact he did not post.

The Court also found that the demand for a bond had become necessary because on or about March 18, 1956, three guards from the Republic Ships Security Agency left the "M/V Talleyrand," a ship of which Macondray was an agent, without notice, abandoning their work, and then went on strike without giving advance notice of their intention or desire to do so. The requirement of a bond was therefore fully justified by the acts of the members of the petitioner union who were affiliated with the Republic Ships Security Agency and who struck without previous notice.

• Abuse of Discretion: Petitioner alleged that the respondent judges of the Court of Industrial Relations abused their discretion in making findings of fact without sufficient evidence.
• Unfair Labor Practice Charge: Petitioner charged Macondray and Company, Inc. with unfair labor practice for having dismissed and refused to employ 38 members of the petitioner union.

• Employment Relationship: Respondent answered that the members of the petitioner union are not its employees but employees of the Republic Ships Security Agency.
• Bond Demand Directed at Agency: Respondent asserted that it had not demanded a bond from the members of the petitioner union but from the Republic Ships Security Agency.
• No Discrimination: Respondent claimed that it had not discriminated against members of the petitioner union.
• Conditional Willingness to Employ: Respondent's manager expressed willingness to employ the strikers belonging to the petitioner union only if the agency to which they belonged filed a P5,000 bond in favor of Macondray to respond for any negligence, misfeasance, or malfeasance of its watchmen.

• Unfair Labor Practice: Whether Macondray and Company, Inc. committed unfair labor practice in refusing to employ guards affiliated with the Republic Ships Security Agency because that agency failed to furnish the required P5,000 bond.
• Discrimination: Whether Macondray discriminated against the petitioner union by requiring the bond and refusing to employ guards affiliated with the Republic Ships Security Agency who were members of the petitioner union.
• Abuse of Discretion: Whether the respondent judges of the Court of Industrial Relations abused their discretion in making findings of fact without sufficient evidence when they reversed the trial judge and dismissed the unfair labor practice charge.
• Relevance of Prior Rulings: Whether the rulings in United States Lines and Maligaya, holding that watchmen and security agencies are not contractors but merely agents of shipping agencies in the recruitment of guards and that employer-employee relationship exists between shipping lines and security guards, are material to the issue in this case.

• Unfair Labor Practice: No. The refusal to employ guards affiliated with a security or watchmen agency that does not furnish a bond cannot constitute unfair labor practice; it is merely the exercise of a legitimate right to protect the shipping agency's own interests, especially where the guards had abandoned a ship without previous notice and exposed it to losses due to theft and pilferage.
• Discrimination: No. The bond requirement was not demanded from any labor union or from the petitioner union, and members who transferred to the two agencies that furnished bonds were employed notwithstanding their continued membership in the petitioner union.
• Abuse of Discretion: No. The majority decision of the Court of Industrial Relations was fully supported by the evidence and by the documents and papers on record, and no sufficient reasons existed to disturb its findings.
• Relevance of Prior Rulings: No. The cited cases have no materiality or relevance to the question at issue.

• Unfair Labor Practice: The controlling rule is that a shipping agency's refusal to employ guards affiliated with a security or watchmen agency that does not furnish a bond does not amount to unfair labor practice. The bond was required of all three watchmen agencies servicing Macondray, not of the labor union. The two agencies that did not strike and abandon vessels furnished the bond; the Republic Ships Security Agency, to which most petitioner members belonged, did not. Macondray's refusal was therefore directed at the non-bonded agency, not at the union. The requirement became necessary because three guards from the Republic Ships Security Agency left the M/V Talleyrand without notice, abandoned their work, and went on strike without advance notice, exposing the ship to losses from theft and pilferage. Macondray also had no contract or agreement with the petitioner union; it secured security guards through the three watchmen agencies without reference to the unions to which the guards belonged. The guards were not ordinary permanent and continuous employees but casual guards employed only when a ship was to be guarded and during its stay in the port of Manila. Under these circumstances, no unfair labor practice was committed.
• Discrimination: The requirement of filing a bond was not demanded from any of the labor unions, or from the petitioner union. Members of the petitioner union who transferred to the two security agencies that had furnished the bond were admitted to work notwithstanding their continued membership in the petitioner union. The refusal to employ guards affiliated with the Republic Ships Security Agency thus did not constitute discrimination against the petitioner union.
• Abuse of Discretion: The CIR en banc majority found that there was never a relationship between the petitioner union and Macondray; that the agencies with which Macondray dealt were the City Watchmen and Security Agency, K. Tagle Ship Watchmen Agency, and Republic Ships Security Agency; that members of the petitioner union who transferred to the two security agencies that furnished the bond were admitted to work notwithstanding their continued membership in the petitioner union; and that if members of the petitioner union could not be employed, it was because the Republic Ships Security Agency had not furnished the bond required of it, which the two other agencies had furnished. These findings were supported by the evidence, so no abuse of discretion was shown.
• Relevance of Prior Rulings: Judge Bautista cited United States Lines and Maligaya, where the Court held that watchmen and security agencies are not contractors of shipping agencies but merely agents in the recruitment of guards, and that the relationship of employer and employee exists between the shipping lines and the security guards themselves. Those rulings have no materiality or relevance to the question at issue because the case concerns the refusal to employ guards affiliated with a security or watchmen agency that does not furnish a bond, not the employer-employee relationship between shipping lines and guards.

• Unfair Labor Practice — Refusal to Employ Guards of Non-Bonded Security Agency — A shipping agency's refusal to employ guards affiliated with a security or watchmen agency that does not furnish a required bond cannot constitute unfair labor practice. Such refusal is merely the exercise of the shipping agency's legitimate right to protect its own interests, especially where the guards had previously abandoned a ship they were guarding without notice and exposed the ship to losses due to theft and pilferage. In this case, the bond was required of all three watchmen agencies, not of the union; the two non-striking agencies complied, while the Republic Ships Security Agency did not, and Macondray's refusal was therefore not directed at the union.
• No Discrimination Where Bond Requirement Is Directed at Security Agency — A refusal to employ guards affiliated with a non-bonded security agency does not constitute discrimination against the labor union where the bond requirement was not demanded from any labor union or from the petitioner union, and where members of the petitioner union who transferred to bonded agencies were employed despite their continued union membership. The Court applied this principle to reject the unfair labor practice charge.
• Employer's Legitimate Right to Protect Interests — An employer may impose reasonable protective requirements, such as a bond, to answer for the negligence, misfeasance, or malfeasance of security guards, where the need is justified by prior acts of abandonment and exposure to loss. The Court found the bond requirement fully justified by the guards' abandonment of the M/V Talleyrand without notice.
• Non-Materiality of Agency/Employment Doctrine to Bond Requirement — The rulings that watchmen and security agencies are mere agents of shipping agencies in the recruitment of guards and that employer-employee relationship exists between shipping lines and security guards do not control a case involving the refusal to employ guards affiliated with an agency that failed to furnish a bond. The Court held those rulings had no materiality or relevance to the issue.

• "The refusal of the respondent to employ guards affiliated with a security or watchmen agency that does not furnish a bond can not constitute an unfair labor practice. Such refusal is merely the exercise of respondent’s legitimate right to protect its own interests, especially as the members of the petitioner had abandoned a ship they were guarding without previous notice and exposed the ship to losses due to theft and pilferage." — This is the ratio decidendi: it states the controlling rule that refusal to employ guards of a non-bonded agency is not unfair labor practice and characterizes it as a legitimate exercise of the employer's right to protect its interests.
• "It is to be noted that the requirement of filing of a bond was not demanded from any of the labor unions, or from the petitioner union herein." — This passage supports the Court's conclusion that there was no discrimination against the union because the bond requirement was directed at the security agencies, not at the labor organization.
• "We cannot conclude that because the respondent company refused to employ the guards affiliated with the Republic Ships Security Agency, which affiliates are members of the petitioner union, respondent committed an unfair labor practice or a discrimination against petitioner union." — This excerpt states the Court's ultimate conclusion on the unfair labor practice and discrimination issues.
• "The members of the petitioner union or of the shipping agencies are not ordinary permanent and continuous employees, but merely casual guards who are employed only when there is a ship to be guarded and during the stay of the ship in the port of Manila." — This passage describes the employment status of the guards and supports the Court's refusal to order reinstatement with back wages.

• United States Lines, Et. Al. vs. Associated Watchmen and Security Union (PTWO), G.R. No. L-12208-11, May 21, 1958 — Cited in Judge Bautista's dissenting opinion for the holding that watchmen and security agencies are not contractors of shipping agencies but merely agents in the recruitment of guards, and that employer-employee relationship exists between shipping lines and security guards. The Supreme Court held it has no materiality or relevance to the issue in the case at bar.
• Maligaya Shipwatchmen Agency, Et. Al. vs. Associated Watchmen & Security Union (PTWO), 55 Off. Gaz. [52] 10681, 103 Phil., 920 — Cited together with United States Lines for the same agency/employment doctrine. The Supreme Court likewise held it has no materiality or relevance to the question at issue.

Bengzon, Montemayor, Bautista Angelo, Concepción, Reyes, J. B. L., Endencia, and Gutiérrez David, JJ., concur.

• Judge Jose S. Bautista — He cited United States Lines and Maligaya, which held that watchmen and security agencies are not contractors of shipping agencies but merely agents in the recruitment of guards, and that the relationship of employer and employee exists between the shipping lines and the security guards themselves. He would hold Macondray guilty of unfair labor practice because, by imposing the bond condition on the agency and because the agency owner refused to post the bond, the latter as agent of Macondray rendered it impossible for the strikers to return to work. He ordered reinstatement with full back wages from February 18, 1956 up to actual reinstatement and prohibited further unfair labor practice. The Supreme Court rejected this position, holding that the cited cases had no materiality or relevance and that no unfair labor practice was committed.