G.R. No. L-14689; July 26, 1960
General Maritime Stevedores’ Union of the Philippines, et al., petitioners, vs. South Sea Shipping Line, et al., respondents.

FACTS

On February 28, 1955, the Court of Industrial Relations (CIR) ordered a certification election among the unlicensed crew of respondent South Sea Shipping Line, in which the United Seamen’s Union of the Philippines (USUP) and the petitioner General Maritime Stevedores’ Union (GMSU) were eligible. Following the election, the CIR certified USUP as the exclusive bargaining representative on June 17, 1955. A collective bargaining agreement (CBA) between USUP and the Shipping Line was entered into on June 28, 1957, effective for two years from July 21, 1957, to July 20, 1959, with a clause allowing renewal for another two-year period unless either party gave a 60-day notice of termination prior to expiration. GMSU insisted this 1957 agreement was a renewal of a prior 1955 agreement. On April 30, 1958, GMSU filed a petition for a new certification election, alleging it had the support of at least 10% of the unlicensed crew and that no certification election had been held within the preceding twelve months. USUP moved to dismiss the petition, invoking the existence of the CBA as a bar. The CIR granted the motion to dismiss, applying the “contract-bar rule,” finding the two-year CBA with reasonable terms to be valid and a bar to a new election, in the interest of stability in collective bargaining.

ISSUE

Whether the CIR correctly dismissed GMSU’s petition for a certification election on the ground that an existing collective bargaining agreement between the company and the certified union (USUP) constituted a bar under the “contract-bar rule.”

RULING

The Supreme Court upheld the CIR’s order of dismissal as valid under the circumstances at the time it was issued, recognizing the application of the “contract-bar rule” to balance the interest in stable collective bargaining against the employees’ freedom to choose their representatives. The Court noted that the CBA was for a reasonable duration (two years) and contained reasonable conditions, and there was no showing the union was company-dominated. However, the Court took cognizance that the 1957 agreement was a renewal of a prior 1955 agreement and that, with its renewal clause, it could potentially remain effective for about six years total (from 1955). Considering this lengthy period without a certification election, the Court deemed it advisable to hold a new election. Consequently, the case was remanded to the CIR with instructions to admit and give due course to the petition for a certification election. The Court directed that if a new bargaining agent other than USUP is elected, it must respect the existing CBA but is not precluded from negotiating for a shortening of its term or refusing its renewal upon expiration, within the contract’s terms. No costs were awarded.