Villar vs. Inciong

A closed-shop provision in a collective bargaining agreement is a valid form of union security and does not restrict the constitutional right to freedom of association; employees who disaffiliate or are expelled from the union may be dismissed pursuant to that clause. A local union affiliated with a mother union is bound by the mother union’s constitution and by-laws, and the mother union may investigate and expel members for acts inimical to the union.

Petitioners were employees of Amigo Manufacturing, Inc. and members of the Amigo Employees Union-PAFLU, the existing bargaining agent at the company. The local union was affiliated with PAFLU, a federation, and a collective bargaining agreement containing a union security clause governed labor relations and was about to expire on February 28, 1977. Within the 60-day freedom period before expiration, some employees sought to disaffiliate from PAFLU and form an independent union, while the Labor Code and its implementing rules governed certification elections and union registration.

Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered labor organization that was the existing bargaining agent of the employees at Amigo Manufacturing, Inc. The local union was affiliated with the Philippine Association of Free Labor Unions (PAFLU). A collective bargaining agreement governed labor relations between the Company and the local union and was about to expire on February 28, 1977. Within the last sixty days of that CBA, events transpired that gave rise to the dispute.

On January 5, 1977, upon written authority of at least 30% of the employees in the company, including petitioners, the Federation of Unions of Rizal (FUR) filed a petition for certification election with the Med-Arbiter’s Office, Regional Office No. 4 of the Ministry of Labor and Employment. PAFLU opposed the petition, citing the “Code of Ethics” governing inter-federation disputes among members of the Trade Unions Congress of the Philippines (TUCP). The Med-Arbiter indorsed the case to TUCP, but before TUCP could act, petitioners disauthorized FUR from continuing the petition, and FUR withdrew it.

On February 7, 1977, the same employees who had signed the FUR petition signed a “Sama-Samang Kapasiyahan” disaffiliating from PAFLU, withdrawing their authority from FUR, maintaining the Amigo Employees Union as an independent union, and authorizing Dolores Villar to file a petition for certification election. On February 9, 1977, Villar filed a petition for certification election before Regional Office No. 4, with the Amigo Employees Union as petitioner. The Amigo Employees Union-PAFLU intervened and moved to dismiss, arguing that the petition lacked the mandatory 30% support, that Villar had no legal personality, that there was a pending case for the same subject matter, that the petition was barred by the new CBA, that there was no valid disaffiliation from PAFLU, and that the supporting signatures were procured through false pretenses. The Med-Arbiter dismissed the petition, and that dismissal was still pending appeal before the Bureau of Labor Relations.

On February 14, 1977, the Amigo Employees Union-PAFLU called a special meeting of its general membership and unanimously approved a resolution calling for the investigation of petitioners and Felipe Manlapao for maligning, libelling, and slandering the incumbent officers and the union, spreading false propaganda that the officers were merely appointees of management, and causing divisiveness. PAFLU formed a Trial Committee. On February 15, 1977, the Company and the Amigo Employees Union-PAFLU concluded a new CBA which, among other benefits, reincorporated the same union security clause as the old CBA. Petitioners were summoned to appear before the PAFLU Trial Committee but did not attend; they requested a bill of particulars. The charges were stated as disaffiliating from PAFLU and affiliating with FUR, filing a certification election petition without PAFLU’s sanction, maligning and slandering union officers, spreading false propaganda, sowing divisiveness, and conduct unbecoming a member. Petitioners refused to recognize PAFLU’s jurisdiction, filed an Answer and motion to dismiss, and argued that disaffiliation and filing a certification election were exercises of their right to self-organization and that the charges were intra-union matters governed by the local union’s constitution and by-laws. The complainants, who were the incumbent officers of the Amigo Employees Union-PAFLU, appeared and presented evidence.

On March 15, 1977, the PAFLU President rendered a decision finding petitioners guilty and ordering their expulsion from the Amigo Employees Union, except Felipe Manlapao, and requesting the Company to terminate them under the security clause of the CBA. Petitioners appealed, arguing among other things that the CBA was unratified, not certified, and entered into without authority from the union general membership. PAFLU denied the appeal on March 28, 1977. PAFLU then sent letters to the Company demanding termination under the security clause, reiterated the demand on April 25, 1977, and on April 28, 1977 requested that petitioners be placed under preventive suspension. On April 25, 1977, petitioners filed a complaint with application for preliminary injunction before Regional Office No. 4. On April 29, 1977, the Company filed a request for clearance to terminate petitioners, docketed as RO4-Case No. T-IV-3549-T, and placed petitioners under preventive suspension; the security guard was notified to refuse them entry into the work premises.

The OIC of Regional Office No. 4 rendered a joint decision on October 14, 1977, granting the Company’s application for clearance to terminate petitioners and dismissing petitioners’ complaint for preliminary injunction. The OIC found that PAFLU had authority under its constitution to investigate and expel petitioners, that petitioners were bound by PAFLU’s laws and regulations, that they were accorded due process because they were given the opportunity to be heard but refused it, and that the independent Amigo Employees Union was not registered. The Deputy Minister of Labor dismissed petitioners’ appeal on February 15, 1979. The Supreme Court noted that petitioners were a minority—only 96 of 234 union members signed the “Sama-Samang Kapasiyahan”—and that the independent union had no record of registration with the Bureau of Labor Relations.

• Freedom of Association: Petitioners argued that their preventive suspension and subsequent dismissal, imposed because they exercised their right to disaffiliate and file a certification election petition, violated their constitutional and statutory right to freedom of association and self-organization.
• Intra-Union Jurisdiction: Petitioners contended that PAFLU had no jurisdiction to investigate them because the charges were intra-union problems within the Amigo Employees Union-PAFLU and should have been investigated under the local union’s constitution and by-laws, particularly Article XI, Sections 2, 3, 4, and 5.
• Security Clause Retroactivity and Freedom Period: Petitioners maintained that the security clause of the new CBA could not be applied to offenses committed before its conclusion and within the 60-day freedom period of the old CBA, and that the new CBA was unratified, not certified, and entered into without authority from the union general membership.
• Disaffiliation Not Disloyalty: Petitioners argued that disaffiliation from PAFLU and the filing of a petition for certification election were not acts of disloyalty but legitimate exercises of their right to self-organization within the freedom period.

• Certification Election Defects: In opposing the certification election, PAFLU argued that the petition lacked the mandatory 30% support, that Dolores Villar had no legal personality to sign it, that there was a pending case for the same subject matter, that the petition was barred by the new CBA, that there was no valid disaffiliation from PAFLU, and that the supporting signatures were procured through false pretenses.
• Parent Union Authority and Due Process: PAFLU maintained that the local union was bound by PAFLU’s constitution and by-laws, that PAFLU had authority to investigate and expel petitioners for acts of disloyalty and conduct inimical to the union, and that petitioners were afforded due process but refused to participate in the investigation.
• Union Security Clause and Employer Compliance: PAFLU demanded termination of petitioners under the union security clause of the CBA and requested their preventive suspension; the Company filed the clearance application stating as cause “Demand by the Union Pursuant to the Union Security Clause.”

• Right to Self-Organization / Union Security: Whether the preventive suspension and dismissal of petitioners pursuant to the union security clause, after their expulsion for disaffiliation and related acts, violated their constitutional and statutory right to freedom of association.
• Intra-Union Dispute / PAFLU Authority: Whether PAFLU had authority to investigate and expel petitioners under the PAFLU constitution rather than under the local union’s constitution and by-laws.
• Security Clause Applicability / Freedom Period: Whether the security clause of the new CBA could be applied to offenses committed before its conclusion and within the 60-day freedom period of the old CBA.

• Right to Self-Organization / Union Security: No. The dismissal and suspension did not violate freedom of association; a closed-shop provision is a valid form of union security and is not a restriction of the constitutional right to freedom of association.
• Intra-Union Dispute / PAFLU Authority: No. PAFLU had authority under its constitution to investigate and expel petitioners; the local union’s constitution did not exclusively govern, and exhaustion of intra-union remedies was excused because the accusers were union officers.
• Security Clause Applicability / Freedom Period: No. The new CBA’s security clause merely reproduced the old one, and the new CBA was in effect when the expulsion became final; no gap in coverage permitted petitioners to escape its effects.

• Right to Self-Organization / Union Security: Disaffiliation from a labor union is not open to legal objection and is implicit in the freedom of association ordained by the Constitution. However, a closed shop is a valid form of union security, and such a provision in a collective bargaining agreement is not a restriction of the right of freedom of association. The CBA’s union security clause was clear and unequivocal: all members as of the signing of the agreement were to remain members in good standing, and any member who resigned, was expelled, or ceased to be a member could be dismissed upon written request of the union. Petitioners became non-members upon their expulsion on March 15, 1977, and the employer was bound under the CBA to dismiss them. The Court found no grave abuse of discretion in the OIC’s and Deputy Minister’s rulings. The fact that petitioners acted within the 60-day freedom period did not exempt them because the certification election petition was filed in the name of the Amigo Employees Union, which had not disaffiliated from PAFLU; petitioners were a minority and could not bind the majority. Moreover, the independent union was not registered and had no legal personality to present representation issues.

• Intra-Union Dispute / PAFLU Authority: When a labor union affiliates with a mother union, it becomes bound by the laws and regulations of the parent organization; the parent’s constitution, by-laws, and rules constitute an enforceable contract between the parent and the subordinate union and among the members of the subordinate union. The local union was affiliated with PAFLU, and petitioners were members at the time of affiliation, so they were bound by PAFLU’s laws. PAFLU therefore had authority to investigate the charges filed by their co-employees and to expel them after finding them guilty. The requirement that intra-union disputes first be redressed within the organization under its constitution and by-laws is not absolute; it yields when exhaustion would be illusory or vain. Here, the complainants were the incumbent officers of the Amigo Employees Union-PAFLU and members of its Board of Directors, so if the local union’s procedure were followed, the accusers would effectively act as investigator and judge. Petitioners also admitted that two charges—disaffiliation and filing a certification election petition—were not intra-union matters and were cognizable by PAFLU. Due process in union disciplinary proceedings simply means that the parties were given the opportunity to be heard; petitioners were given that opportunity but refused to participate.

• Security Clause Applicability / Freedom Period: The union security clause in the new CBA merely reproduced or reiterated the same clause in the old CBA. Petitioners were charged for acts of disloyalty in the resolution of February 14, 1977, and the new CBA was concluded on February 15, 1977. Their expulsion became final on March 28, 1977, after the new CBA was already in effect. Petitioners could not escape the effects of the security clause under either the old or the new CBA by claiming that the old CBA had expired and that the new CBA could not be given retroactive enforcement. To allow that would create a gap during which no agreement would govern labor relations from the expiration of the old contract until a new agreement was entered into, a situation productive of confusion and breaches of law. The Court relied on Seno vs. Mendoza, which held that employees entitled to disaffiliate must nevertheless suffer the consequences of separation under the security clause of the CBA.

• Closed-Shop Union Security Clause — A closed-shop provision in a collective bargaining agreement is a valid form of union security and does not restrict the constitutional right to freedom of association. It requires union members to remain in good standing and allows dismissal upon written request of the union if they resign, are expelled, or cease to be members. The Court applied it to uphold petitioners’ termination after their expulsion.
• Disaffiliation and Its Consequences — Disaffiliation from a labor union is not open to legal objection and is implicit in freedom of association, but employees who disaffiliate or are expelled must suffer the consequences of separation under the union security clause. The Court ruled petitioners could disaffiliate but could not escape dismissal.
• Binding Effect of Parent Union Constitution — When a local union affiliates with a mother union, it becomes bound by the laws and regulations of the parent organization; the parent constitution and by-laws constitute an enforceable contract between parent and subordinate union and among members. The Court used this to uphold PAFLU’s authority to investigate and expel petitioners.
• Due Process in Union Disciplinary Proceedings — Due process in this context means the parties were given the opportunity to be heard. The Court found petitioners were afforded that opportunity but refused to participate, so they could not claim denial of due process.
• Exhaustion of Intra-Union Remedies; Exception — Redress must first be sought within the organization under its constitution and by-laws, but the requirement is not absolute. It yields when exhaustion would be illusory or vain, as when the accusers are the same officers or board members who would sit in judgment. The Court applied the exception because the complainants were incumbent local union officers and board members.
• Majority Rule in Union Disaffiliation — The action of the majority must prevail over that of the minority members. Petitioners, a small minority, could not effectively disaffiliate the local union from PAFLU or bind the majority.
• Registration as Condition for Legal Personality — A labor organization acquires legal personality and the rights and privileges of a legitimate labor organization only upon issuance of a certificate of registration. The Court held the independent Amigo Employees Union was unregistered and therefore could not validly present representation issues.
• No Gap Between Collective Bargaining Agreements — A new CBA that reproduces the union security clause of the old CBA continues the same security arrangement; parties cannot escape its effects by claiming the old CBA expired and the new one cannot be retroactively enforced, as this would create a gap in labor relations. The Court applied this to reject petitioners’ retroactivity argument.

• "It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in the freedom of association ordained by the Constitution." — The passage recognizes the right to disaffiliate but introduces the Court’s qualification that the right is not absolute and must yield to valid union security arrangements.
• "But this Court has laid down the ruling that a 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." — This is the core holding sustaining the validity of the closed-shop clause and rejecting petitioners’ constitutional challenge.
• "We, therefore, hold and rule that petitioners, although entitled to disaffiliate from their union and form a new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause of the CBA." — This states the ratio decidendi on the consequences of disaffiliation and expulsion under a union security clause.
• "When a labor union affiliates with a parent organization or mother union, or accepts a charter from a superior body, it becomes subject to the laws of the superior body under whose authority the local union functions." — Quoted in the decision, this principle supports PAFLU’s authority to investigate and expel petitioners under its own constitution.

• Kapisanan ng mga Manggagawa sa MRR vs. Hernandez, 20 SCRA 109 — Cited for the exception to exhaustion of intra-union remedies where the union’s own officers would act as investigator and judge, making exhaustion illusory or vain.
• Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40 — Cited to uphold registration as a valid condition for acquiring legal personality and the rights of a legitimate labor organization; applied to the unregistered independent union.
• Manalang, et al. vs. Artex Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561 — Cited for the rule that a closed shop is a valid form of union security and is not a restriction on freedom of association.
• Seno vs. Mendoza, 21 SCRA 1124 — Cited for the rule that dismissal under a closed-shop agreement is not an unfair labor practice and that employees who disaffiliate must suffer the consequences; also for avoiding a gap between CBAs.
• Philippine Labor Alliance Council (PLAC) vs. Bureau of Labor Relations, 75 SCRA 162 — Cited for the proposition that disaffiliation from a labor union is not open to legal objection.
• Amador Bolivar, et al. vs. PAFLU, et al., NLRC Case No. LR-133 & MC-476, December 3, 1973 — Quoted for the principle that affiliation binds the local union to the parent union’s constitution and by-laws.
• Jesalva, et al. vs. Hon. Bautista and Premiere Productions, Inc., 105 Phil. 348; Dionela, et al. vs. CIR, 8 SCRA 832 — Cited for the majority-rule principle that the action of the majority prevails over the minority in union disaffiliation.
• Lirag Textile Mills, Inc. vs. Blanco, 109 SCRA 87; Victorias Milling Co., Inc. vs. Victorias-Manapla Workers Organization-PAFLU, 9 SCRA 154 — Cited together with Manalang for the validity of closed-shop provisions as union security.

• Article 234, New Labor Code — Requires any applicant labor organization, association, or group of unions or workers to acquire legal personality and the rights and privileges granted by law to legitimate labor organizations upon issuance of a certificate of registration. The Court applied it to hold that the independent Amigo Employees Union, being unregistered, had no legal personality to present representation issues.
• Article 257, Labor Code — Provides that questions of exclusive bargaining representation are entertainable within the sixty days prior to the expiry date of an existing CBA. The Court acknowledged the freedom period but held that petitioners could not benefit because the petition was filed in the name of a union that had not disaffiliated from PAFLU and because the independent union was unregistered.
• Section 3, Rule 2, Book 2, Implementing Rules of the Labor Code — Implements the 60-day freedom period for certification elections. The Court considered it but found it did not cure the defects in petitioners’ representation petition.
• Article III, Union Security Clause, Collective Bargaining Agreement — Provides that all members of the union as of the signing of the agreement shall remain members in good standing, and that any member who resigns, is expelled, or ceases to be a member shall be dismissed upon written request of the union. The Court applied this clause to justify petitioners’ termination.
• Article XI, Sections 2, 3, 4, and 5, and Article XII, Section 1, Local Union Constitution and By-Laws — Invoked by petitioners as the procedure for intra-union disputes. The Court held that the procedure was not exclusive and that exhaustion was excused because the complainants were the local union’s incumbent officers and board members.
• Section 23, Republic Act No. 875 — Discussed in Phil. Association of Free Labor Unions vs. Sec. of Labor as requiring registration for a labor union to qualify as a legitimate labor organization. The Court used the same rationale in applying Article 234 of the New Labor Code.

Makasiar (Chairman), Concepcion Jr., De Castro, and Escolin, JJ., concurred. Aquino, J., was on leave. Abad Santos, J., concurred by minute resolution to dismiss the petition for lack of merit.