TROPICAL HUT EMPLOYEES’ UNION-CGW vs. TROPICAL HUT FOOD MARKET, INC G.R. No.L-43495-99

FACTS:

1.    On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated, organized a local union called the Tropical Hut Employees Union (THEU) and elected their officers, and adopted their constitution and by-laws and immediately sought affiliation with the National Association of Trade Unions (NATU).

2.       On January 3, 1968, the NATU accepted the THEU application for affiliation. Following such affiliation with NATU, Registration Certificate No. 5544-IP was issued by the Department of Labor in the name of the Tropical Hut Employees Union —NATU. It appears, however, that NATU itself as a labor federation, was not registered with the Department of Labor.

3.           Collective Bargaining Agreement was concluded between the parties on April 1, 1968, the term of which expired on March 31, 1971.

Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining agent for all its workers and employees in all matters concerning wages, hours of work, and other terms and conditions of employment.

Sec. 1 —. . . Employees who are already members of the UNION at the time of the signing of this Agreement or who become so thereafter shall be required to maintain their membership therein as a conditionof continued employment. xxx

Sec. 3—Any employee who is expelled from the UNION for joining another federation or forming another union, or who fails or refuses to maintain his membership therein as required, . . . shall, upon written request of the UNION be discharged by the COMPANY.

4.           May 21, 1971, respondent company and THEU-NATU entered into a new Collective Bargaining Agreement which ended on March 31, 1974. This new CBA incorporated the previous union-shop security clause and the attached check off authorization form.

5.           NATU received a letter dated December 15, 1973, jointly signed by the incumbent officers of the local union informing the NATU that THEU was disaffiliating from the NATU federation.

6.           Secretary of the THEU, Nemesio Barro, made an announcement in an open letter to the general membership of the THEU, concerning the latter’s disaffiliation from the NATU and its affiliation with the Confederation of General Workers (CGW). The letter was passed around among the members of the THEU-NATU, to which around 137 signatures appeared as having given their consent to and acknowledgment of the decision to disaffiliate the THEU from the NATU.

7.           The then so-called THEU-CGW held its annual election of officers, with Jose Encinas elected as President. On January 3, 1974, Encinas, in his capacity as THEU-CGW President, informed the respondent company of the result of the elections. On January 9, 1974, Pacifico Rosal, President of the Confederation of General Workers (CGW), wrote a letter in behalf of complainant THEU-CGWto the respondent company demanding the remittance of the union dues collected by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the respondent company.

8.           A request made by the NATU federation to the respondent company to dismiss him (Encinas) in view of his violation of Section 3 of Article III of the Collective Bargaining Agreement.

9.           The respondent company applied for clearance with the Secretary of Labor to dismiss the other officers and members of THEU-CGW. The company also suspended them effective that day.

10.        NLRC Case No. LR-2521 was filed by THEU-CGW and individual complainants against private respondents for unfair labor practices.

THEU-CGW asked the employees to affirm their membership. Some did not abidenso they were informed that they will be dismissed under the CBA.

President/General Manager of respondent company, upon Dilag’s request, suspended twenty four (24) workers on March 5, 1974, another thirty seven (37) on March 8, 1974 and two (2) more on March 11, 1974, pending approval by the Secretary of Labor of the application for their dismissal.

Labor Arbiter, Arbitrator Daniel Lucas issued an orderdated March 21, 1974, holding that the issues raised by the parties became moot and academic with the issuance of NLRC Order dated February 25, 1974 in NLRC Case No. LR-2670, which directed the holding of a certification election among the rank and file workers of the respondent company between the THEU-NATU and THE CGW.

He also ordered: a) the reinstatement of all complainants; b) for the respondent company to cease and desist from committing further acts of dismissals without previous order from the NLRC and for the complainant Tropical Hut Employees UNION-CGW to file representation cases on a case to case basis during the freedom period provided for by the existing CBA between the parties.

NLRC reversed the decision. Secretary of Labor rendered a decision affirming the findings of the Commission.

ISSUE:

1) Whether or not the petitioners failed to exhaust administrative remedies when they immediately elevated the case to this Court without an appeal having been made to the Office of the President;

2) Whether or not the disaffiliation of the local union from the national federation was valid; and

3) Whether or not the dismissal of petitioner employees resulting from their Unions’ disaffiliation for the mother federation was illegal and constituted unfair labor practice on the part of respondent company and federation

RULING:

1)     The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory requirement before resort to courts can be had, but an optional relief provided by law to parties seeking expeditious disposition of their labor disputes. Failure to avail of such relief shall not in any way served as an impediment to judicial intervention. And where the issue is lack of power or arbitrary or improvident exercise thereof, decisions of the Secretary of Labor may be questioned in a certiorari proceeding without prior appeal to the President.

2)     The local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. This right is consistent with the constitutional guarantee of freedom of association.

All employees enjoy the right to self organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining and to engage in concerted activities for their mutual aid or protection. This is a fundamental right of labor that derives its existence from the Constitution.

The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is merely to stress that the THEU is NATU’s affiliate at the time of the registration. It does not mean that the said local union cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its own interests independently of the federation.

A local union owes its creation and continued existence to the will of its members and not to the federation to which it belongs. When the local union withdrew from the old federation to join a new federation, it was merely exercising its primary right to labor organization for the effective enhancement and protection of common interests. In the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union a local may sever its relationship with its parent.

Nothing in the constitution and by laws of THEU NATU, prohibits the disaffiliation from NATU. Besides NATU is not even recognized as a national federation.

3)     When the THEU disaffiliated from its mother federation, the former did not lose its legal personality as the bargaining union under the CBA. Moreover, the union security clause embodied in the agreements cannot be used to justify thedismissals meted to petitioners since it is not applicable to the circumstances obtaining in this case.

The CBA imposes dismissal only in case an employee is expelled from the union for joining another federation or for forming another union or who fails or refuses to maintain membership therein. The case at bar does not involve the withdrawal of merely some employees from the union but of the whole THEU itself from its federation. Clearly, since there is no violation of the union security provision in theCBA, there was no sufficient ground to terminate the employment of petitioners.