G.R. No.

L-41955 December 29, 1977

ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF THE BOARD OF DIRECTORS,
petitioners
vs.
CARMELO NORIEL, in his capacity as Director of the Bureau of Labor Relations, ELIZALDE STEEL CONSOLIDATED,
INC. and NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), Respondents.

FACTS:

Petitioner ELISCO-ELIROL LABOR UNION entered into a CBA with respondent Elizalde Steel. It was later discovered
that the Elisco-Elirol Labor Union was not registered with the Bureau of Labor Relations of the Department of
Labor, and therefore not entitled to the benefits and privileges embodied in the CBA. Thus, the members of
petitioner union later decided in a resolution to register their union to protect and preserve the integrity of the
CBA between Elisco and Elizalde. By virtue of such resolution, petitioner union applied for registration with the
Bureau of Labor Relations. A Certification of Registration was later issued, and upon such issuance, the petitioner
union acquired a personality separate and distinct from any other labor union. Through its newly-acquired
personality, petitioner enforced its CBA with Elizalde as the principal party to the same, representing the workers
covered by such CBA.

Sometime later, the general membership of petitioner union, in a resolution, decided that their mother union, the
National Federation of Labor Unions, can no longer safeguard the rights of its members and that the interests and
welfare of petitioner can be served best if it will stay independent and disaffiliated from said mother union.
Petitioner union, through its president, later informed respondents of said disaffiliation by means of a letter and
subsequently requested respondents to recognize petitioner as the sole and exclusive bargaining representatives
of the employees thereof.

Respondent, without justifiable reason refused to recognize petitioner union as the sole and exclusive bargaining
representative of its employees, and subsequently dismissed the petitioner union’s officers and board members. A
complaint for unfair labor practice was later filed by petitioners against respondents for the latter’s refusal to
bargain collectively with petitioner. Petitioner union also filed a petition before the Bureau of Labor Relation
against respondents Elizalde Steel and the National Federation of Labor Unions be ordered to stop from presenting
itself as the collective bargaining agent.

The members of petitioner union, who were then still affiliated with the mother union, negotiated and executed
with respondent company a CBA. Later, the same members have formed themselves into an organization and
applied for registration as a union. A Certificate of Registration was later issued, and through a resolution, the
same members disaffiliated from the mother union.

ISSUE:

W/n petitioner union must be recognized as the sole and exclusive bargaining representative, and not the mother
union, NAFLU. (YES)
HELD:

Respondent director correctly perceived in his Resolution that "to grant to the former mother union (NAFLU) the
authority to administer and enforce their collective bargaining agreement without presumably any members in the
bargaining unit is quite absurd" but fell unto the grave error of holding that "When the employees disaffiliated
from the mother union and formed themselves into a new union, their status as employees was also terminated."
by virtue of the union security clause wherein it is a condition for continued employment in the company to
maintain membership in the union.

The employees and members of the local union did not form a new union but merely registered the local union as
was their right. Petitioner union was the principal party to the agreement. NAFLU as the mother union merely
acted as agent of the local union.

In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc., the Court expressly cited and affirmed the basic
principle that "(T)he locals are separate and distinct units primarily designed to secure and maintain an equality of
bargaining power between the employer and their employee-members in the economic struggle for the fruits of
the joint productive effort of labor and capital; and the association of the locals into the national union (as PAFLU)
was in furtherance of the same end. These associations are consensual entities capable of entering into such legal
relations with their members. The essential purpose was the affirmation of the local unions into a common
enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of
labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all,
subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence."

Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to whom the
employees owe their allegiance has from the beginning expressly avowed that it "does not intend to change
and/or amend the provisions of the present collective bargaining agreement but only to be given the chance to
enforce the same since there is a shift of allegiance in the majority of the employees at respondent company."

In formulating the "substitutionary" doctrine, the only consideration involved as the employees' interest in the
existing bargaining agreement. The agent's interest never entered the picture. In fact, the justification for said
doctrine was:

... that the majority of the employees, as an entity under the statute, is the true party in interest to the contract,
holding rights through the agency of the union
G.R. No. L-20432 October 30, 1967

JOSE MANALANG, ET AL. Petitioners, vs. ARTEX DEVELOPMENT CO., INC., ET AL., Respondents.

FACTS:

Petitioners were employees of respondent company. They were members of the Bagong Buhay Labor Union
(BBLU), which was the proper bargaining representative of the non-supervisory employees of the said company.
However, petitioners formed another union, the Artex Free Workers, and sought to engage respondent company
in a bargaining agreement through its mother union, the Federation of Free Workers (FFW). The FFW informed the
company that Artex Free Workers had begun formulating collective bargaining proposals and asked the company
to consider such proposals. Respondent company, however, called attention to the fact that it had already
recognized the BBLU as the proper bargaining representative of its employees, and that it had concluded two CBAs
with the said union. FFW then requested that it be furnished a copy of the CBA, but such request was not complied
with.

After conducting an investigation, the BBLU found that the petitioners affiliated themselves with another union
without first terminating their membership from the BBLU, and without the knowledge of the officers of the same.
The board then resolved to dismiss petitioners from the union for disloyalty to the union, and requested
respondent company to dismiss the petitioners in view of the closed-shop agreement under its CBA with the
company. The company subsequently dismissed petitioners.

Petitioners filed a complaint for unfair labor practice against the company and the BBLU, alleging that their
dismissal was brought about by their participation in concerted activities. They further alleged that they were not
aware of the closed-shop agreement between BBLU and the company since they were not furnished a copy of the
CBA.

ISSUE:

W/n petitioners were bound by the CBA, particularly the closed-shop agreement, of which they were allegedly
denied knowledge of. (YES)

HELD:

A host of circumstances can be gleaned from the record that would demonstrate persuasively that the petitioners
were not unaware of the provisions of the agreement in question prior to their organization of the Artex Free
Workers union. law library

From the admitted facts that the petitioners started working in the Company in December, 1959, and that they
succeeded in wielding sufficient influence to persuade other employees to join them in forming the Artex Free
Workers, we can reasonably infer that they knew of the existence of the first collective bargaining agreement
between the BBLU and the Company, as well especially of the fundamental provisions thereof regarding check-off
or payroll deduction of union dues and assessments, vacation and sick leaves, hospital, medical and dental care,
working hours and overtime service, union meetings, and the duration of the agreement - provisions which are
standard stipulations in collective bargaining agreements and which affect them directly, personally and
individually. They can therefore be properly charged with knowledge specifically of the expiry date of the
agreement and, consequently, of the negotiations between the BBLU and the Company before the said expiry date
toward the execution of a second agreement - which is the agreement in question.

Since in their petition they do not deny that they knew of the existence of the second agreement, it is only natural
to presume that they knew of its provisions, and that they had actually studied them in a comparative way in order
to be able to formulate the collective bargaining proposals submitted by them (the Artex Free Workers) to the
Company on May 4, 1960.chanroblesvirtualawlibrary

The record does not reveal any disavowal made by any of the petitioners of knowledge of the closed-shop
provision at any time prior to their dismissal. Disavowal came as an afterthought and was articulated only after
they had received their notices of discharge.

The petitioners' further contention that the closed-shop provision in the collective bargaining agreement is illegal
because it is an unreasonable restriction of the right of freedom of association guaranteed by the Constitution is a
futile exercise in argumentation, as this Court has in a number of cases sustained closed-shop as a valid form of
union security.

Finally, even if we assume, in gratia argumentis, that the petitioners were unaware of the stipulations set forth in
the collective bargaining agreement, since their membership in the BBLU prior to their expulsion therefrom is
undenied, there can be no question that as long as the agreement with closed-shop provision was in force, they
were bound by it. Neither their ignorance of, nor their dissatisfaction with, its terms and conditions would justify
breach thereof or the formation by them of a union of their own. As has been aptly said, "a collective bargaining
agreement entered into by officers of a union, as agent of the members, and an employer, gives rise to valid
enforcible contractual relations, against the individual union members in matters that affect them peculiarly, and
4
against the union in matters that affect the entire membership or large classes of its members," and "a union
member who is employed under an agreement between the union and his employer is bound by the provisions
thereof, since it is a joint and several contract of the members of the union entered into by the union as their
agent."
G.R. No. L-62918 August 23, 1989

FILIPINAS GOLF & COUNTRY CLUB INC., petitioner-appellant, vs. NATIONAL LABOR RELATIONS COMMISSION,
PTGWO and LOCAL CHAPTER NO. 424, respondents-appellees.

FACTS:

Pursuant to the decision of the executive labor arbiter resolving a CBA deadlock between petitioner and its
employees union, petitioner Filipinas Golf was ordered to grant a three-stage wage increase to its employees, as
follows:

P2.00, effective February 25,1980 law library

P2.00, effective February 25,1981 law library

Pl.00, effective February 25,1982

Petitioner and the employees union were also ordered by the executive labor arbiter to execute a CBA stipulating
such increase. Under the CBA subsequently executed, the increases granted by petitioner shall be subject to
provisions of decrees and/or legislation promulgated/approved during the effectivity of the CBA.

Meanwhile, on February 20, 1980, Presidential Decree No. 1678 was issued, granting non-agricultural workers
receiving less than Pl,500.00 a month a two-peso (P 2.00) per day increase in living allowance effective February
21, 1980. A year later, on March 25, 1981, Wage Order No. 1 was promulgated, granting an additional two-peso
(P2.00) per day increase in emergency living allowance to non-agricultural workers, effective March 22, 1981.

PD 1678 provided that employers who have given increases in wages/allowances of at least P2.00 a day on or after
February 8, 1980 shall be deemed to have complied with the said decree, and that those who have given less than
P2.00 shall pay the difference. Wage Order No. 1 contains a similar provision, crediting increases granted between
1 January and 22 March 1981.

An order of garnishment was issued against petitioner, which petitioner moved to have reconsidered since such
order of garnishment did not take into account the increases it had given pursuant to PD 1678 and Wage Order No.
1. The Labor Arbiter found no merit in the motion, stating that the increase prescribed under the CBA should be
given in addition to the legislated increases since the increases under the CBA were granted pursuant to the
government’s compulsory arbitration powers, not from a unilateral act of the employer, and that recent SC
decisions had set the rule that benefits under a CBA are entirely separate and distinct from that which the law
grants.

ISSUE:

W/n petitioner must grant separate increases pursuant to PD 1678 and Wage Order No. 1 or must it simply pay the
difference between the increases under the CBA and under the said decrees. (Only the difference must be paid)
HELD:

The cited provisions of PD 1678 and Wage Order No. 1 upon which the petition is anchored are clear and
unambiguous. In prescribing that increases granted during the periods therein specified, whether unilaterally or by
collective agreement, are creditable to the increases mandated thereby, they create an equivalence between
those legal and contractual obligations to grant increases, rendering both susceptible of performance by
compliance with either, subject only to the condition that where the increases given under agreement fall short in
amount of those fixed by law, the difference must be made up by the employer.

Further, no distinction is made under those two decrees between unarbitrated agreements and those brought
about through and only after compulsory arbitration. It is axiomatic that no distinctions may be read into the law
which are not provided for therein, or clearly implicit in its terms.

The CBA between petitioner and the union of its employees also further provide that its provisions shall be subject
to decrees and/or legislations promulgated during the CBA’s effectivity. There is nothing contrary to law, customs,
public order or public policy in a stipulation subordinating, as does the aforesaid provision in the collective
bargaining agreement, contractual wage increases to those imposed or prescribed by law. Filipinas Golf and the
respondents were therefore perfectly free to agree thereon, and having thus agreed, are bound by such stipulation
as constituting the law between them.

A survey of relevant decisions of this Court also fails to support the proposition implicit in the Labor Arbiter's
decision that benefits granted by law may be claimed separately from and in addition to those granted by
collective bargaining agreements under any and all circumstances. What seems, on the contrary, to be the
common thrust of applicable rulings is that the intention of the parties whether or not to equate benefits under a
collective bargaining agreement with those granted by law must prevail and be given effect.

The manifest will and intent of the parties to treat the legislated increases as equivalent pro tanto to those
stipulated in their collective bargaining agreement must be respected and given effect.