Rizal Labor Union vs. Rizal Cement Company, Inc.

A closed-shop stipulation authorizing dismissal for non-union membership must be clear and unequivocal; a CBA clause requiring the employer to employ or hire only union members in good standing does not, without more, require the dismissal of employees who later resign or are expelled from the union.

Rizal Cement Company, Inc. and Binangonan Labor Union Local 104 maintained a collective bargaining relationship under a subsisting agreement containing union-security provisions. The case tests whether those provisions justified the company’s dismissal of employees for non-membership in the contracting union.

On February 13, 1958, Carlos Santos and 14 other employees of Rizal Cement Company, while still members of Binangonan Labor Union Local 104, formed and organized the Rizal Labor Union. The company was notified thereof on March 18, 1958.

Prior to this date or on March 15, 1958, Carlos Santos and Teofines Minguillan, president and secretary, respectively, of the newly-organized Rizal Labor Union, received identical letters from the Binangonan Labor Union, requiring them to explain in 48 hours why they should not be expelled for disloyalty. Although Santos and Minguillan requested for the convocation of a general meeting of the members of the Binangonan Labor Union to explain their side, the 15 organizers of the new union were expelled from their original union on March 21, 1958.

On the same day, the Binangonan Labor Union demanded the dismissal of the expelled members from employment, which the company did on March 22, 1958. The collective bargaining agreement between the company and the Binangonan Labor Union contained provisions that the employer agreed “to have in its employ and to employ only members in good standing of the UNION” and not to “have in its employ nor to hire any new employee or laborer unless he is a member of good standing of the UNION.”

The dismissed employees then filed unfair labor practice charges against the company and the Binangonan Labor Union.

• Closed-Shop Proviso: Respondents countered that the dismissal was justified by the alleged closed-shop proviso in the subsisting collective bargaining agreement between the Company and the Binangonan Labor Union.

• Justification for Dismissal under Closed-Shop Proviso: Whether the dismissal of the complaining 15 employees was justified by the closed-shop proviso in the collective bargaining agreement between Rizal Cement Company and Binangonan Labor Union Local 104.

• Justification for Dismissal under Closed-Shop Proviso: No. The dismissal was not justified because the proviso did not clearly and unequivocally require employees to remain union members in good standing to keep their jobs; it covered only employment or hiring.

• Justification for Dismissal under Closed-Shop Proviso: The SC began from the rule that a discharge pursuant to a closed-shop agreement is justified only if the agreement is valid, and that a stipulation authorizing dismissal for non-union membership must be clear and unequivocal. Such an undertaking is harsh and must be strictly construed, with doubts resolved against the existence of a closed shop. The CBA’s Article 1, Section 5 stated that the employer agreed “to have in its employ and to employ only members in good standing of the UNION,” while Article VII, Section 1-d stated that the employer agreed not to “have in its employ nor to hire any new employee or laborer unless he is a member of good standing of the UNION.” The CIR en banc read “employ” to mean “to retain in service,” “to suffer or permit to work,” or “to keep at work,” but the SC declined that reading. It relied on Confederated Sons of Labor vs. Anakan Lumber Company, G.R. No. L-12503, April 29, 1960, where a similar clause requiring the company to “employ or hire” only union members was held not to establish a closed shop except in the limited sense that workers engaged after the agreement must be union members; it did not affect the right to retain those already working or those hired while members but who later resigned or were expelled. Finding no substantial difference in wording, the SC held that membership was not a condition for continuation of the employment relation or retention, and the dismissal of the 15 employees after expulsion was not justified. The CIR en banc resolution was set aside, and the company and union were declared guilty of unfair labor practice.

• Closed-Shop Stipulation — Clear and Unequivocal Requirement — A stipulation in a CBA authorizing dismissal for non-union membership must be so clear and unequivocal as to leave no room for doubt; because such an undertaking is harsh, it is strictly construed and doubts are resolved against the existence of a closed shop. The SC applied this by refusing to read “employ” as “retain in service” and holding the CBA did not authorize dismissal after expulsion.
• Union Security Clause — Hiring vs. Retention — A clause requiring the employer to employ or hire only union members in good standing does not, by itself, require continued membership as a condition for retaining employment; employees hired while union members may not be dismissed solely because they later resign or are expelled. The SC applied this to the 15 employees.
• Unfair Labor Practice — Dismissal under Inadequate Closed-Shop Proviso — Dismissal of employees pursuant to a union-security clause that does not clearly establish a closed shop is unjustified and constitutes unfair labor practice; the employer and the union may be held jointly and severally liable for back wages. The SC declared respondents guilty and ordered reinstatement and back wages.

• “In order that an employer may be deemed bound, under a collective bargaining agreement, to dismiss employees for non-union membership, the stipulation to this effect must be so clear and unequivocal as to leave no room for doubt thereon. An undertaking of this nature is so harsh that it must be strictly construed, and doubts must be resolved against the existence of "closed shop."” — This sets the strict-construction rule for closed-shop dismissal clauses.
• “Membership in respondent union is not a condition for the continuation of said relation or for the retention of a laborer or employee engaged either before said agreement or while he was a member of said union.” — This distinguishes hiring from retention and supports the ruling that later expulsion did not justify dismissal.
• “There being no substantial difference between the wording of the provision involved in this case and that construed in the aforementioned case, we find no reason for the adoption of a different ruling herein.” — This applies the Anakan Lumber precedent to the CBA provisions in this case.

• Confederated Sons of Labor vs. Anakan Lumber Company et al., G.R. No. L-12503, April 29, 1960 — The SC relied on this as controlling precedent, holding that a similar clause requiring the company to employ or hire only union members did not establish a closed shop except in a limited sense and did not authorize dismissal of employees who later resigned or were expelled.

• Article 1, Section 5, Collective Bargaining Agreement — Provided that the employer agreed “to have in its employ and to employ only members in good standing of the UNION”; the SC held this did not require continued membership or justify dismissal after expulsion.
• Article VII, Section 1-d, Collective Bargaining Agreement — Provided that the employer agreed not to “have in its employ nor to hire any new employee or laborer unless he is a member of good standing of the UNION”; the SC held this applied to new employment or hiring, not retention.