AMERICAN PRESIDENT LINES v. HON.
CLAVE, NLRC, Ministry fo Labor, 1) W/N there existed an employer-employee relationship between the petitioner and
Mraitime Security Union, Individual Complainants headed by Advincula and
Navea
(1982|Barredo)
FACTS: The Company entered into a contract with Marine Security Agency to guard
their vessels in the port. Contract was for 1 year and may only be terminated by either
party upon 30 days notice. The arrangement was that Marine Security Agency would
hire and assign the guards, lump sum given to agency who in turn determined the
compensation of the individual watchmen.
 Contract was terminated on Jan. 4, 1961 after it expired. The Company
entered into a new contract w/ Phil. Scout Veterans Security and
Investigation Agency in the same terms and also for one year.
Union abolished themselves due to termination of contract, inability of Agency to
provide employment and inability of members and Union to provide maintenance.
 Respondents claim that that the termination of the contract, despite 10 years
of service, was because of a misunderstanding between Captain Morris (rep
of Company) and Mr. A. Tinsay, operator of said watchmen’s agency
wherein Tinsay allegedly threatened to cause the Company trouble esp.
Capt. Morris.
 Union soon passed resolution reviving itself.
The Maritime Security Union, through individual complainants headed by Julian
Advincula, filed ULP against petitioner company on March 21, 1963. Their complaint
charged that the petitioner had refused to negotiate an agreement with them and had
discriminated against them with regard to their tenure of employment by refusing to
negotiate a CBA with them and dismissing them on January 1, 1961, for no other
reason than their membership with the union and union activities, The complaint was
transferred from CIR to NLRC.
LA: Agreed they were employees and there was ULP. He ordered reinstatement and
3 years of backwages. NLRC agreed but qualified only those complainants who are
60 y/o or younger and can discharge the former duties should be reinstated w/o loss
of seniority rights and if not reinstated give separation pay + backwages. Minister of
Labor and OP affirmed.
ISSUE:
the individual watchmen of the Marine Security Agency who are alleged to be
members of the respondent union?
2) W/N the company refused to negotiate a CBA with the said individual watchmen
and discriminated against them in respect to their tenure of employment by
terminating their contract on January 1, 1961, because of their union activities.
HELD: NO. Complaint for ULP dismissed.
1. As to EE-ER relationship
To determine the existence of ER-EE rel: (1) selection and engagement of the EE (2)
payment of wages (3) power of dismissal (4) power to control the EEs conduct (most
important element)
The complaining watchmen of the Marine Security Agency cannot be
considered as employees of the petitioner. It is the agency that recruits, hires, and
assigns the work of its watchmen. Hence, a watchman can not perform any security
service for the petitioner’s vessels unless the agency first accepts him as its
watchman. With respect to his wages, the amount to be paid to a security guard is
beyond the power of the petitioner to determine. The lump suum paid to the agency
for its services is more than the wages of any oen watchman. Also no power to
dismiss (Company can ask to change guard but agency still has final say). The
Agency always stands between ER and EE and contract has clearly ended.
 SSS vs. CA: Associated Watchmen and Security Union v. US Lines where
that case “involved a determination of whether a labor dispute existed
between the watchmen and the companies to which they were assigned by
the watchmen’s agencies, and applied the Industrial Peace Act which
defined a labor dispute as ‘any controversy concerning terms, tenure
regardless of whether the disputants stand in the proximate relation of
employer and employee.’ (idk how this is relevant just including all important
jurisprudence references)
CAB: Security guards involved in the SSS case were similarly situated to the
complainants of the union. The case ruled out EE-ER relationship as guards or
watchmen render their services by allowing themselves to be assigned by the
Agency, which furnishes them arms and ammunition, to guard and protect the
properties and interests of private respondent’s clients, thus enabling that respondent
to fulfill its contractual obligations. Who the clients will be, and under what terms and
conditions the services will be rendered, are matters determined by the Agency.
Client companies cannot select which guard is assigned to them and cannot
terminate the services on their own but only through the Agency.
The argument of the respondents that the Agency can be considered the
agent of the petitioner in its relationship with the watchmen. However, this is wrong as
“an agent cannot represent two conflicting interests that are diametrically opposed.”
As the contract had expired, the management has exclusive prerogative to determine
if it should renew the contract.

 Petitioner is a foreign corporation. Under RA 5487 which was executed after

the security service contract, only Filipino citizens or 100% Filipino entities
can operate a security agency and to subject control to the Philippine
Constabulary. Thus it would have violated the law if petitioner can operate a
security and watchman’s service which would be the result if the
complainants are considered as the petitioners’ employees.

2. As to ULP

As there is no EE-ER relationship, cannot be guilty of ULP. Under RA 875,

Sec. 13, a ULP may committed only within the context of the EE-ER relationship

But to Court resolve the merits of the case: The Court finds it hard to believe
that there was a desire to negotiate a CBA since apart from their oral declaration,
respondents have not presented any written proof which is required by RA 875. At the
time the union was represented by counsel and if such requests were made the
counsel failed to advise his clients on the law.

 No proof termination of contract due to alleged union activities, the contract

validly expired.
 Letter of counsel said the basis of the termination was “misunderstanding”
between Capt. Morris and the agency.
 The most telling evidence of the shallowness of private respondents’ charge
of unfair labor practice is the respondent union’s own resolution to abolish
itself. If respondent union felt aggrieved by the unfair labor practice it had
imputed to the petitioner, why did it abolish itself? Instead of putting an end
to its own existence, why did it not prosecute its charge with dispatch
considering that an unfair labor practice by an employer is an affront against
the very integrity and existence of a union?
 What is worse is that in its resolution of abolition, the respondent union
confessed that it is the Marine Security Agency that provided employment to
its members. There can be no clearer proof that such an admission that it is
indeed the agency, not the petitioner, that is the employer of its watchmen.

DISMISSED.