G.R. Nos. L-22951 and L-22952 & L-22971 January 31, 1967
Case Parties: ALLIED FREE WORKERS’ UNION (PLUM), petitioner, vs. COMPAÑIA MARITIMA, Manager JOSE C. TEVES, and COURT OF INDUSTRIAL RELATIONS, respondents. (L-22951 & L-22952) / COMPAÑIA MARITIMA and Manager JOSE C. TEVES, petitioners, vs. ALLIED FREE WORKERS’ UNION (PLUM) and COURT OF INDUSTRIAL RELATIONS, respondents. (L-22971)

FACTS

Compañia Maritima (MARITIMA), a shipping company, entered into an “Arrastre and Stevedoring Contract” on August 11, 1952, with the Allied Free Workers’ Union (AFWU). Under this contract, AFWU agreed to perform all stevedoring and arrastre services for MARITIMA’s vessels at the port of Iligan City. The contract stipulated that MARITIMA would not be liable for payment for these services, as payment was to be made by the cargo owners/consignees, and that AFWU would be responsible for any damages to cargo. The contract was initially for one month but was verbally renewed due to satisfactory service. By late 1953, MARITIMA complained of inefficient service from AFWU’s laborers and began hiring extra “stand-by” workers, paying them directly. On July 23, 1954, AFWU presented a proposal for a collective bargaining agreement. MARITIMA did not reply. On August 6, 1954, AFWU filed a petition (CIR Case No. 175-MC) for certification as the exclusive bargaining agent. On August 24, 1954, MARITIMA terminated the contract due to inefficiency and contracted with the Iligan Stevedoring Union. On August 26, 1954, AFWU charged MARITIMA with unfair labor practices (CIR Case No. 426-ULP). On September 1, 1954, AFWU members picketed the wharf. Separate civil litigation ensued over the contract’s rescission. The Court of Industrial Relations (CIR) jointly tried the certification and unfair labor practice cases and rendered a decision on November 4, 1963, dismissing the unfair labor practice complaint but ordering a certification election among the stevedores. Both parties appealed.

ISSUE

The fundamental issue is whether an employer-employee relationship existed between MARITIMA and AFWU and/or its member-laborers, which determines the duty to bargain collectively and the propriety of the certification election.

RULING

The Supreme Court ruled that NO employer-employee relationship existed between MARITIMA and AFWU’s members. The contract was one for piece work (stevedoring and arrastre services), not a contract of employment. MARITIMA did not select, hire, or pay the individual workers; AFWU supplied the labor as a contractor. Payment came from cargo owners, not MARITIMA. The control test was not met, as MARITIMA’s interest was limited to the result (efficient loading/unloading), not the means and methods of the work. Consequently, the duty to bargain collectively under Republic Act No. 875 does not arise where no such relationship exists. Therefore, the CIR correctly dismissed the unfair labor practice charge (CIR Case 426-ULP) for lack of merit. However, the CIR erred in ordering a certification election (CIR Case 175-MC), as such an election presupposes an employer-employee relationship. The Supreme Court affirmed the dismissal of the unfair labor practice case but reversed the order for a certification election and dismissed the petition for certification.