G.R. No.
L-33987 September 4, 1975
LIBERTY COTTON MILLS WORKERS UNION, RAFAEL NEPOMUCENO, MARIANO CASTILLO, NELLY
ACEVEDO, RIZALINO CASTILLO and RAFAEL COMBALICER, petitioners,
vs.
LIBERTY COTTON MILLS, INC., PHILIPPINE ASSOCIATION OF FREE LABOR UNION (PAFLU) and the
COURT OF INDUSTRIAL RELATIONS, respondents.
FACTS: The Liberty Cotton Mills Workers Union adopted its Constitution and By-laws on January 1,
1959. Among other things, the said Constitution provided that the Liberty Cotton Mills Workers Union-Paflu shall
be affiliated with the Philippine Association of Free Labor Unions, otherwise known as PAFLU, and shall remain
an affiliate as long as ten or more of its members evidence their desire to continue the said local union's
affiliation, in accordance with the Paflu Constitution, Article XI-Paragraph 11:15 thereof.
On October 1, 1959, a Collective Bargaining Agreement was entered into by and between the Company and the
Union represented by PAFLU.
On March 13, 1964, while the Collective Bargaining Agreement was in full force, Marciano Castillo and Rafael
Nepomuceno, President and Vice-President, respectively, of the local union, wrote PAFLU, its mother
federation, complaining about the legal counsel assigned by the PAFLU to assist them in a ULP case they filed
against the Company. In said letter, the local union expressed its dissatisfaction and loss of confidence in the
PAFLU lawyers, claiming that PAFLU never lifted a finger regarding this particular complaint.
On May 17, 1964, thirty two (32) out of the 36 members of the local union disaffiliated themselves from
respondent PAFLU pursuant to their local union's Constitution and By-Laws, specifically Article X thereof. A
copy of the signed resolution of disaffiliation was furnished the Company as well as the Bureau of Labor
Relations.
On May 27, 1964, PAFLU, thru its National Secretary wrote the Company a letter which states that they have
received their letter and that the members and officers who made the letter have no right to do the same under
their existing contract and under the PAFLUs Constitution and By-Laws.
And on May 29,1964, PAFLU wrote the Company again, this time quoting en toto Article III of the Collective
Bargaining Agreement on "Union Security" and requesting the termination of the employment of Rafael
Nepomuceno, Marciano Castillo, Nelly Acevedo, Enrique Managan, Rizalino Castillo and Rafael Combalicer, all
petitioners herein. PAFLU at the same time expelled the aforementioned workers from their' union membership
in the mother federation for allegedly "instigating union disaffiliation."
On May 30,1964, the Company terminated the employment of the members expelled by the PAFLU. On the last
day of May, 1964, counsel for the ousted workers wrote the Company requesting their reinstatement. This was
denied by the Company; hence the complaint for unfair labor practice filed with the Court of Industrial Relations.
ISSUE: Does the PAFLU as the mother federation of the union possess the power to expel the officers and
members of the union under the Constitution and By-Laws? And assuming it has such powers, were the
petitioner workers validly expelled from the Union in accordance with the Constitution and By-Laws?
RULING: All these questions boil down to the single issue of whether or not the dismissal of the complaining
employees, petitioners herein, was justified or not. The resolution of this question hinges on a precise and
careful analysis of the Collective Bargaining Agreements. In these contracts it appears that PAFLU has been
recognized as the sole bargaining agent for all the employees of the Company other than its supervisors and
security guards. Moreover it likewise appears that "PAFLU, represented in this Act by its National Treasurer,
and duly authorized representative, ... (was) acting for and in behalf of its affiliate, the Liberty Cotton Mills
Workers Union and the employees of the Company, etc.' In other words, the PAFLU, acting for and in behalf of
its affiliate, had the status of an agent while the local union remained the basic unit of the association free to
serve the common interest of all its members including the freedom to disaffiliate when the circumstances
warrant. This is clearly provided in its Constitution and By-Laws, specifically Article X on Union Affiliation, supra.
At this point, relevant is the ruling in an American case:
The 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 affiliation 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 also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it into existence. (Emphasis supplied)
Record shows that only four (4) out of its members remained for 32 out of the 36 members of the Union signed
the resolution of disaffiliation on May 17, 1964, triggered by the alleged negligence of PAFLU in attending to the
needs of its local union, particularly its failure to assign a conscientious lawyer to the local to attend to the ULP
case they filed against the Company. The disaffiliation was, therefore, valid under the local's Constitution and
By-Laws which, taken together with the Collective Bargaining Agreement, is controlling. The Court of Industrial
Relations likewise held in its decision that the act of disaffiliation did not have any effect as the workers retracted
from such act. As stated by the respondent court —
... it is believed that the effect of their retraction obliterates their participation in the resolution.
Hence, under Article X of the said Constitution and By-Laws, complainant union remained
affiliated with respondent union at the time termination of the services of complainant workers
was requested and when they were dismissed by the Company on May 30, 1964.
