Republic of the Philippines


G.R. Nos. L-15453 and L-15723             March 17, 1961


Hilado and Hilado for petitioners.
Emilio Lumontad for respondents.

REYES, J.B.L., J.:

In two related cases (Cases Nos. 86-ULP & 3-ULP) jointly heard and decided, San Carlos Milling Co. appeals by certiorari from the decision of the Court of Industrial Relations, dated April 30, 1958, and its resolution, dated May 5, 1959, denying the motion for reconsideration filed by the aforementioned company.

It appears that on December 12, 1952, the San Carlos Milling, hereinafter referred to as the Company, concluded a collective bargaining agreement with the Allied Workers Association of the Philippines, hereinafter called AWA for short, a legitimate organization of workers employed in the Company. Included in said contract was a union shop arrangement the details of which shall be later discussed. Sometime after, another labor union, the Philippine Land-Air-Sea Labor Union, PLASLU for short, was also organized in the Company. Sinforoso Kyambor, an employee in the Company and member of AWA, appears to have joined this second union, and thereafter, actively campaigned for it to gain membership among the workers. Having received reports of Kyambo's activities for the PLASLU, the Board of Directors of AWA, on December 13, 1955, passed a resolution to investigate all members of AWA, San Carlos Chapter, who had committed acts of disloyalty to the association. Upon complaint against any investigation of Kyambo for disloyalty and expelled him from the association on December 26, 1955. Upon demand of the AWA, Kyambo was dismissed by the Company on February 18, 1956, pursuant to the union shop provisions of the contract of December 12, 1952.

On March 5, 1956, the PLASLU asked for the reinstatement of Kyambo (and another employee with whose dismissal, found by the Court of Industrial Relations to have been for cause, we are not concerned, since there is no appeal therefrom), at the same time petitioning for better terms and conditions of employment, with a warning that the PLASLU will conduct a strike if the Company failed to act on the demands within 30 days (Appendix "C", Memo for appellant). When the Company refused to entertain the demands, the PLASLU declared a a strike on April 12, 1956, in which 149 of its members joined. The strikers offered to return to work on April 27, 1956, but were refused reinstatement by the Company. Antecedently, it may be pertinent to state that on Company of its organization among the latter's workers, and that it intended to demand a certification election. On December 2, 1955, the PLASLU filed in court a petition for certification election, which, at the time of the strike, was admittedly pending.

The first issue before us is whether the Company's dismissal of Kyambo pursuant to its union shop agreement with the AWA was legally justified. Parenthetically, it should be stated that among the causes for the strike, only the dismissal of Kyambo was found by the Court of Industrial Relations to be an unfair labor practice act committed by the Company. In turn, the legality of Kyamko's dismissal depends on whether, when he was dismissed, there was an effective union shop agreement between the AWA and the Company which authorized the latter to discharge him from his employment.

The PLASLU contends that there was no longer any such agreement; that the contract between the AWA and the Company, on December 12, 1952, was only for three (3) years, or only up to December 11, 1955; that this was never renewed it; that consequently, the dismissal of Kyamko on February 18, 1956, was illegal and founded on no other reason than his membership in, and activities for, the PLASLU. On the other hand, the Company contends that through the contract of December 12, 1952 for another period of three (3) years; that, therefore, Kyamko was legally dismissed in pursuance of the union shop provision in said collective bargaining contract. The court below concluded that the contract was not renewed.

The pertinent portion of the December 12, 1952 contract reads

11. That the duration of this agreement shall be for three (3) years from December 12, 1952, and automatically renewable thereafter unless the parties hereto agree and decide otherwise. (emphasis supplied).

which subject is reiterated in the document dated July 14, 1955, as follows:

11. The parties further record their complete understanding and agreement to effect a renewal for another three years of the Collective bargaining and Union Shop Agreement entered into between them on December 12, 1952 upon its expiration on December 11, 1955. (Emphasis Supplied).

We think its clear from the above that the contract of December 12 was renewed by the parties. Only a very strained and hair-splitting reasoning could sustain that by the above provisions, the parties still did not actually renewed the contract in question. Indeed, this is only the logical explanation for the used of the word "automatically" to modify "renewable". Buttressing this interpretation, the phrase "unless the parties did not intend to accomplish another positive act to continue the contract beyond its expiry date. Whatever doubt remains is dispelled when the parties, on July 14, 1955, expressly signified their agreement to renew the contract for a period of another three (3) years. From the strict grammatical point of view, the contention that "renewable" and "to affect a renewal" do not mean actual renewal may be justified. But we are here concerned not to much with strict adherence to grammatical contraction as with the intent of the parties reflected in the agreement itself. And a construction that will unduly hamper the renewal of labor contracts appears undesirable.

Be that as it may, does the union shop agreement on December 12, 1952, by its terms, authorize the dismissal of the Kyamko under the attendant circumstances? The pertinent portion of the union shop agreement are:

4. ... New employees and laborers hired who are not members of the Workers Association will be on TEMPORARY STATUS and the EMPLOYER agrees that before they will be considered regular employees and laborers, they have to become members of the ALLIED WORKERS ASSOCIATION OF THE PHILIPPINES, SAN CARLOS CHAPTER within 30 days from the date of employment and if they refused to affiliate with the said labor organization within this time, they will be immediately dismissed by the EMPLOYER. After a laborer or employee is hired pursuant to this arrangement, and he resigns later from the WORKERS ASSOCIATION or is expelled from it due to acts committed by him contrary to By-Laws, rules and regulations of the WORKERS ASSOCIATION, the management upon advice of the WORKERS ASSOCIATION, shall dismiss the said laborer or employee.... (Emphasis supplied).

5. Employees and laborer presently working in any department or section of the factory or mill of the EMPLOYER, including those who are working by piece jobs or "pakiao" system, who are not members of the WORKERS ASSOCIATION shall be declared as temporary employees and laborer and shall be given thirty (30) days time from the date of this agreement within the WORKERS ASSOCIATION, and if they refuse to do so, their positions will be declared vacant and will be filled in the manner provided for in this agreement. However employees and laborers who have rendered ten (10) years continues service with the employer may not be affected by this condition, provided they are not members of, and will not joint affiliate with other labor unions or associations, although they may joint the WORKERS ASSOCIATION, if they so desire.... (Emphasis supplied).

Carefully read, nothing in the above provisions authorized the employer to dismiss old employees who, having joined the AWA, later ceased to be the members of the good standing therein. Quite explicit with respect to new employees, the contract in paragraph 4 provides that they should join the AWA WITHIN 30 days from employment, and that if, after joining, they should later resign or be expelled from the contracting union, the company shall be immediately dismiss said employee. paragraph 5, with respect to workers already employed but who are not members of the union, makes it obligatory for this workers to join within 30 days from the agreement, on pain of dismissal. Expressly exempted from the obligation to join or affiliate with the contracting union are those who have rendered ten years continues service. Conspicuously absent with respect to those already employed at the time of agreement is any provision making it a condition of continued employment that an old worker should remain a member of the good standing of the AWA. Union shop, as with close shop provisions, should be strictly construed against the existence of union shop. Sometimes harsh and erroneous, such provisions should not be extended beyond the explicit coverage of their terms, and will not be deemed to authorized by implication the dismissal of employees already working before the agreement was made (see Confederated Sons of Labor v. Anakan Lumber Co., L-12503, April 29, 1960).

Here, Kyamko had been an employee of the Company since 1948, long before the union shop established in the contract of December 12, 1952. He was therefore, an old employee on whom the particular union shop in question did not impose the obligation to remain a member of good standing in the AWA, as a condition of continued employment in the Company. It results that his dismissal founded in the union shop agreement which did not explicitly authorized such dismissal was, in legal effect, an unfair labor practice act prompted by his membership and activities in the PLASLU. Consequently, the strike on April 12, 1956 was legally justified.

Even if were assumed that kyamko's dismissal was legally founded, this fact alone would not make the strike illegal. A strike to secure better terms and conditions of employment is a legitimate labor activity recognized by law (Radio Operators Ass'n of the Phil. v. Phil. Marine Radio Officers Ass'n, L-10112, November 29, 1957), and its legality does not depend on the reasonableness of the demands. If they cannot be granted, they should be rejected, but without other reasons, the strike itself does not become illegal (Caltex vs. PLO, L-4758, May 30, 1953). Purely from the perspective of the economic demands, the strike may even have been premature, since the PLASLU itself had filed a petition for certification election on December 2, 1955, which was still pending when the strike was declared. Even so, this did not transpose the strike into something illegal, especially since the economic aspect were only one of the demands which precipitated the strike, all of which the workers believed in good faith to be meritorious (see PECO v. CIR, et al., L-7156, May 31, 1955; Radio Operators Ass'n Phil. v. Phil. Marine Radio Officers Ass'n supra). Thus regardless of Kyamko's dismissal, the strike itself was merely another legitimate exercise of what has now evolved as an institutionalized factor of democratic growth. for this, no punishment or reprisal should be due. Hence, when the strikers offered to return to work on April 2, 1956, the employer had no right to have the former's participation in the strike counted against them. When the Company refused to admit the strikers back for no valid reason shown, it was virtually applying a standard prohibited by law, i.e., the participation in due strike which, as shown, was legal. Unfair labor practice acts may be committed by the employer against workers on strike. a strike was not abandonment of employment, and workers do not ceased to be employed, in legal contemplation, simply because they struck against their employer (see Francisco's Labor laws, Vol. 1, 3rd Ed., p. 322; sec. 2 (d), R.A. 875).

The pendency of the petition for certification election, at the time the offer to return to work was made, could not legally militate against the strikers' readmission. That the result of the petition for certification election would determine whether or not the employer would be legally bound to bargain with the PLASLU on their economic demands is also beside the point. The offer to return is not shown to have been conditioned upon a commitment that the employer had to bargain with the PLASLU. If there were any conditions attached, their proof was a matter of defense for the company, since in the complaint in Case No. 3-ULP below, it was alleged, unqualifiedly, that such offer was made. In fact, the company claimed in the court below that no such offer was made, a theory which, in good faith, should now preclude it from suggesting that the offer to return was conditional. The court below found, unqualifiedly, that there was in fact an offer to return to work, and this finding is binding upon us.

Finally, the union shop itself could not have barred the strikers' readmission. It had but a limited coverage which is not shown to have covered the strikers offered to return, it does not appear that they had already been expelled from the AWA in accordance with the procedure laid down and followed with respect to Kyamko, nor that their dismissal had been advised by said union to the Company. As for the replacements, their positions should be deemed temporarily, subject to the outcome of the strike.

One last observation, however. The strike was justified; the employer acted wrongfully in dismissing Kyamko and in refusing reinstatement to the strikers. Still, as shown by the circumstances on record, the employer acted in good faith, in the belief that Kyamko's dismissal was legally justified pursuant to the union shop agreement. Considering the difficulty of the questions involved, the Company should be given the benefit of its good faith, at least with regard to back wages, which should be equitably reduced.

IN VIEW OF THE FOREGOING, the decision under appeal should be modified, the back wages counted from April 27, 1956 up to their actual reinstatement to be, as they hereby are, reduced to one-half. In all other respects, the decision appealed from is affirmed. Without costs.

Bengzon, Actg. C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes and Dizon, JJ., concur.

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