Elisco-Elirol Labor Union v. Noriel (ESCAÑO) employees was also terminated.

" by virtue of the union security clause

G.R. No. L-41955| December 29, 1977| Teehankee, J. wherein it is a condition for continued employment in the company to
CBA and Disaffiliation maintain membership in the union.
Corollarily, the “substitutionary” doctrine likewise fully supports
PETITIONER: ELISCO-ELIROL LABOR UNION (NAFLU) and its petitioner’s stand. Petitioner union to whom the employees owe their
OFFICERS AND MEMBERS OF THE BOARD OF DIRECTORS allegiance has from the beginning expressly avowed that it “does not
RESPONDENTS: CARMELO NORIEL, in his capacity as Director of the intend to change and/or amend the provisions of the present collective
Bureau of Labor Relations, ELIZALDE STEEL CONSOLIDATED, INC. bargaining agreement but only to be given the chance to enforce the
and NATIONAL FEDERATION OF LABOR UNIONS (NAFLU same since there is a shift of allegiance in the majority of the employees
SUMMARY at respondent company.” As was stressed by the Court in Benguet
Consolidated Inc. vs. BCI Employees & W Union-PAFLU
FACTS:
In formulating the "substitutionary" doctrine, the only consideration
 A CBA was negotiated and executed between the Elisco-Elirol involved as the employees' interest in the existing bargaining agreement.
Labor Union-NAFLU and respondent company Elizaled Steel, The agent's interest never entered the picture. In fact, the justification for
while the former is yet to be registered with the BLR. said doctrine was:
 Sometime later, the general membership of petitioner union, in a
resolution, decided that their mother union, the National ... that the majority of the employees, as an entity under the statute, is
Federation of Labor Unions, can no longer safeguard the rights the true party in interest to the contract, holding rights through the
of its members and that the interests and welfare of petitioner agency of the union representative. Thus, any exclusive interest claimed
can be served best if it will stay independent and disaffiliated by the agent is defeasible at the will of the principal.
from said mother union. Petitioner union, through its president,
later informed respondents of said disaffiliation by means of a Hence, the petition is granted and the appealed resolution is set aside
letter and subsequently requested respondents to recognize and petitioner local union is declared to be the sole and exclusive
petitioner as the sole and exclusive bargaining representatives bargaining representative of the employees of respondent corporation.
of the employees thereof.
 That respondent company without any justifiable reason refused DOCTRINE:
and continues to refuse to recognize petitioner as the sole and NAFLU, as the mother union, in participating in the execution of the CBA
exclusive bargaining representative of its employees. By virtue acted merely as agent of the local union, which remained the basic unit
of said refusal, petitioners filed a petition before the BLR against of the association existing principally and freely to serve the common
respondent company, and NAFLU be ordered to stop from interest of all its members, including the freedom to disaffiliate when the
presenting itself as the collective bargaining agent. circumstances warrant it.

Even if NAFLU is no longer the agent of Elisco Union, the CBA remains
ISSUE/s:
in existence because the principal is present, although now in the form of
W/n petitioner union must be recognized as the sole and exclusive an independent organization
bargaining representative, and not the mother union, NAFLU. (YES)
FACTS:
RULING: Petitioner ELISCO-ELIROL LABOR UNION entered into a CBA with
respondent Elizalde Steel. It was later discovered that the Elisco-Elirol Labor
Respondent director correctly perceived in his Resolution that "to grant Union was not registered with the Bureau of Labor Relations of the
to the former mother union (NAFLU) the authority to administer and Department of Labor, and therefore not entitled to the benefits and privileges
enforce their collective bargaining agreement without presumably any embodied in the CBA. Thus, the members of petitioner union later decided in
members in the bargaining unit is quite absurd" but fell unto the grave a resolution to register their union to protect and preserve the integrity of the
error of holding that "When the employees disaffiliated from the mother CBA between Elisco and Elizalde. By virtue of such resolution, petitioner
union and formed themselves into a new union, their status as union applied for registration with the Bureau of Labor Relations. A
Certification of Registration was later issued, and upon such issuance, the Respondent director correctly perceived in his Resolution that "to
petitioner union acquired a personality separate and distinct from any other grant to the former mother union (NAFLU) the authority to administer and
labor union. Through its newly-acquired personality, petitioner enforced its enforce their collective bargaining agreement without presumably any
CBA with Elizalde as the principal party to the same, representing the members in the bargaining unit is quite absurd" but fell unto the grave error
workers covered by such CBA. of holding that "When the employees disaffiliated from the mother union and
Sometime later, the general membership of petitioner union, in a formed themselves into a new union, their status as employees was also
resolution, decided that their mother union, the National Federation of Labor terminated." by virtue of the union security clause wherein it is a condition for
Unions, can no longer safeguard the rights of its members and that the continued employment in the company to maintain membership in the union.
interests and welfare of petitioner can be served best if it will stay The employees and members of the local union did not form a new
independent and disaffiliated from said mother union. Petitioner union, union but merely registered the local union as was their right. Petitioner union
through its president, later informed respondents of said disaffiliation by was the principal party to the agreement. NAFLU as the mother union merely
means of a letter and subsequently requested respondents to recognize acted as agent of the local union.
petitioner as the sole and exclusive bargaining representatives of the In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.,
employees thereof. the Court expressly cited and affirmed the basic principle that "(T)he locals
Respondent, without justifiable reason refused to recognize are separate and distinct units primarily designed to secure and maintain an
petitioner union as the sole and exclusive bargaining representative of its equality of bargaining power between the employer and their employee-
employees, and subsequently dismissed the petitioner union’s officers and members in the economic struggle for the fruits of the joint productive effort
board members. A complaint for unfair labor practice was later filed by of labor and capital; and the association of the locals into the national union
petitioners against respondents for the latter’s refusal to bargain collectively (as PAFLU) was in furtherance of the same end. These associations are
with petitioner. Petitioner union also filed a petition before the Bureau of consensual entities capable of entering into such legal relations with their
Labor Relation against respondents Elizalde Steel and the National members. The essential purpose was the affirmation of the local unions into
Federation of Labor Unions be ordered to stop from presenting itself as the a common enterprise to increase by collective action the common bargaining
collective bargaining agent. power in respect of the terms and conditions of labor. Yet the locals
The members of petitioner union, who were then still affiliated with remained the basic units of association, free to serve their own and the
the mother union, negotiated and executed with respondent company a CBA. common interest of all, subject to the restraints imposed by the Constitution
Later, the same members have formed themselves into an organization and and By-Laws of the Association, and free also to renounce the affiliation for
applied for registration as a union. A Certificate of Registration was later mutual welfare upon the terms laid down in the agreement which brought it
issued, and through a resolution, the same members disaffiliated from the into existence."
mother union. Corollarily, the "substitutionary" doctrine likewise fully supports
petitioner's stand. Petitioner union to whom the employees owe their
ISSUE/s: allegiance has from the beginning expressly avowed that it "does not intend
W/n petitioner union must be recognized as the sole and exclusive to change and/or amend the provisions of the present collective bargaining
bargaining representative, and not the mother union, NAFLU. (YES) 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
DISPOSITIVE PORTION: WHEREFORE, the petition is granted and the company."
appealed resolution is set aside and petitioner local union is declared to be
the sole and exclusive bargaining representative of the employees of In formulating the "substitutionary" doctrine, the only consideration
respondent corporation entitled to administer and enforce any subsisting involved as the employees' interest in the existing bargaining agreement. The
collective bargaining agreement with said employer corporation. This agent's interest never entered the picture. In fact, the justification for said
decision shall be immediately executory upon its promulgation. doctrine was:

RATIO: ... 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
Yes, the local union, Elisco-Elirol Labor Union-NAFLU, NOT the mother
of the union representative. Thus, any exclusive interest claimed by the
union NAFLU must be recognized as the sole and exclusive bargaining
agent is defeasible at the will of the principal.
representative.