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G.R. No. L-21484 & G.R. No. L-23605

November 29, 1969

Governmental v Proprietary function

On September 4,1961, the Agricultural Credit and Cooperative Financing
Administration (ACCFA), a government agency created under RA 821, entered into a
entered into a Collective Bargaining Agreement (CBA) effective for 1 year with the
ACCFA Supervisors Association (ASA) and the ACCFA Workers Association
(AWA). The Unions declared a strike on October 25, 1962 which ended when the
strikers voluntarily returned to work on November 26,1962.

[GR No. L-21484]

On October 30, 1962, the Unions together with mother union, Confederation of
Unions in Government Corporations and Offices (CUGCO) filed a complaint with
the Court of Industrial Relations (CIR) for unfair labor practice in violation of the
CBA in order to discourage the members of the Unions in the exercise of their right to
self-organization, discrimination against said members in the matter of promotions,
and refusal to bargain. The CIR decided in favor the Unions and ACCFA was ordered
to (1) cease and desist from committing further acts tending to discourage the
members of complainant unions in the exercise of their right to self organization, (2)
comply with and implement the provision of the CBA including Php30 a month living
allowance, and (3) bargain in good faith and expeditiously with the complainants. The
ACCFA denied the charges and among other things, questioned the jurisdiction of the
CIR, which in turn depends on whether or not the ACCFA exercised governmental or
proprietary functions.

[G.R. No. L-23605]

During pendency of abovementioned case, the President signed into law the
Agricultural Land Reform Code (RA 3844) in August 8, 1963, which among other
things required the reorganization of administrative machinery of ACCFA and
changed its name to Agricultural Credit Administration (ACA). It is stated by law that
ACA is a government office engaged in governmental, not proprietary function. They
are geared to the implementation of the land reform program of the State. The
formulation of policies plans ad programs vested no longer in a Board of Governors
as in the case of ACCFA, but in the National Land Reform Council. On March 17,
1964, the ASA and AWA filed a petition for certification election with the CIR praying
that they be certified as the exclusive bargaining agents for workers and employees in
the ACA. The Trial Court (TC) directed the Manager of Officer-in-Charge of the ACA
to allow posting of said order for the information of all employees and workers
thereof. The ACA filed an appeal with the Supreme Court (SC) that challenges the
jurisdiction of the CIR to entertain the petition of the Unions for certification election
on the ground that ACA is engaged in governmental functions. The Unions join in on
the issue, contending the ACA is engaged in proprietary functions.


Theodore Ballesteros
1. Whether or not the ACA is engaged in governmental functions. YES

On March 19, 1964, the EO. No. 75 was promulgated. Under EO No. 75, the Land
Reform Project Administration is the organization through which the field operations
of member agencies (ACA Is one) shall be undertaken by their respective personal
under a unified administration. Furthermore, the implementation of the land reform
program of the government according to RA 3844 is most certainly a governmental
not proprietary function; and fort hat purpose EO 75 has placed ACA under Land
Reform Project Administration, subject only to Civil Service laws, rules, and
regulations, position classification and wage structures.

2. Whether or not the Unions are entitled to certification of election NO

The consideration set forth above militate quite strongly against the Unions and their
petition for certification election as proper bargaining units within the context of RA
875 which prohibits the right to strike as a coercive economic weapon against the


The respondent Unions have no right to the certification election sought by them nor,
consequently, to bargain collectively with the petitioner, no further fringe benefits
may be demanded on the basis of any CBA.

Theodore Ballesteros