G.R. No. L-33987 September 4, 1975
LIBERTY COTTON MILLS WORKERS UNION, et al., 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 (the local union) was an affiliate of the Philippine Association of Free Labor Unions (PAFLU). A Collective Bargaining Agreement (CBA) existed between Liberty Cotton Mills, Inc. (the Company) and PAFLU, acting for the local union. The CBA contained a union security clause stipulating that employees must remain union members as a condition of employment and that the Company would dismiss any employee expelled from the union for disloyalty upon PAFLU’s written request, holding the Company free from liability. In May 1964, alleging loss of confidence, 32 of the local union’s 36 members passed a resolution to disaffiliate from PAFLU, citing their local constitution which allowed disaffiliation. They notified the Company and the Bureau of Labor Relations.
PAFLU contested the disaffiliation as invalid under its own constitution and the CBA. Relying on the union security clause, PAFLU formally requested the Company to dismiss the disaffiliating members for disloyalty. The Company complied, terminating the employment of the petitioners (the local union officers and members) without a hearing. The dismissed workers filed an unfair labor practice complaint against the Company and PAFLU with the Court of Industrial Relations (CIR), which dismissed their complaint. The workers elevated the case to the Supreme Court via certiorari.

ISSUE

Whether the dismissal of the petitioners, based solely on PAFLU’s request under the union security clause following their disaffiliation, constituted unfair labor practice.

RULING

Yes, the dismissal constituted unfair labor practice. The Supreme Court reversed the CIR decision. The legal logic centers on the primacy of the local union’s autonomy and the right to disaffiliate. The Court held that the local union’s act of disaffiliation from PAFLU was valid and lawful, as it was exercised pursuant to the local union’s own constitution which expressly permitted it. This right of disaffiliation is a fundamental attribute of the local union’s independence. Consequently, the members who disaffiliated did not commit disloyalty to their bona fide bargaining agent; they merely severed relations with the mother federation. PAFLU, after disaffiliation, ceased to be the legitimate representative of the workers and therefore had no authority to request their dismissal.
The Company’s liability arose from its failure to conduct an independent inquiry into the validity of the expulsion and the underlying disaffiliation before effecting the dismissals. It blindly relied on PAFLU’s request. While the CBA’s union security clause purported to shield the Company from liability, such a contractual stipulation cannot legalize an otherwise unlawful dismissal or oust the courts from determining unfair labor practices. The Company was thus ordered to immediately reinstate the petitioners. However, considering the Company acted primarily at PAFLU’s instance, back wages were imposed solely on PAFLU, fixed at three years’ worth without deductions, following the precedent set in Mercury Drug Co. vs. CIR to avoid protracted proceedings.