G.R. No. L-7358 May 31, 1955
NATIONAL LABOR UNION, petitioner, vs. AGUINALDO’S ECHAGUE, INC., respondent.

FACTS

In August 1951, the National Labor Union (NLU), a registered labor organization, submitted several demands (e.g., sick leave, vacation leave, Christmas bonus) to L.R. Aguinaldo Inc. and Aguinaldo’s Echague, Inc. on behalf of its members employed by these corporations. The companies did not assent, leading the NLU to file an amended petition with the Court of Industrial Relations (CIR) on August 10, 1951. During a conference, the Aguinaldo Employees’ Association (AGEMAS) intervened, claiming it had a collective bargaining and closed-shop agreement with the respondents. Over NLU’s objection, the CIR granted the intervention. AGEMAS then moved to dismiss the NLU’s petition, arguing that under the closed-shop agreement, the NLU had no personality to negotiate for the respondents’ workers. The NLU countered that AGEMAS’s permit to operate from the Secretary of Labor had expired on May 17, 1951, and that AGEMAS was a company-established association. On September 13, 1951, Aguinaldo’s Echague Inc. manifested to the CIR that, in compliance with the closed-shop agreement and upon AGEMAS’s demand, it had discharged several employees for joining the NLU. The closed-shop agreement stipulated that any employee who joined a labor union other than AGEMAS would be discharged. The NLU protested the dismissals and sought reinstatement. After a hearing, the CIR Presiding Judge upheld the dismissals, a decision affirmed by the CIR in banc.

ISSUE

1. Whether the motion for reinstatement was decided without a proper hearing.
2. Whether the stipulation in the closed-shop agreement authorizing dismissal for joining another union is contrary to law and void.
3. Whether the dismissal was unjustified because AGEMAS members had a right to join the NLU after AGEMAS’s license expired in May 1951.

RULING

1. On the first issue: The Court found that the motion for reinstatement was properly heard on December 1, 1951, with witnesses testifying, as shown by stenographic notes. Moreover, the NLU did not claim absence of a proper hearing in its motion for reconsideration. Thus, this proposition fails.
2. On the second issue: The Court upheld the validity of the closed-shop agreement. It distinguished the case from violations of Commonwealth Act No. 213 , which penalizes dismissal for joining a union. Here, employees were dismissed for deserting AGEMAS (by joining another union), not for joining a union. The Court noted that Republic Act No. 875 (The Magna Carta of Labor) legalizes closed-shop agreements requiring union membership as a condition of employment, provided the union properly represents the employees. The Court discussed arguments for and against closed-shop agreements but deferred to legislative policy approving them.
3. On the third issue: The Court affirmed the CIR’s finding that the NLU failed to prove the dismissed employees joined the NLU only after AGEMAS’s permit expired on May 17, 1951. Key dates were: AGEMAS’s permit expired May 17, 1951; the closed-shop agreement was effective until September 17, 1951; AGEMAS applied for renewal on August 8, 1951, and was renewed on September 1, 1951; dismissals occurred on September 11, 1951. The CIR ruled the agreement was still in force until September 17, 1951, and employees were bound by it. The Supreme Court declined to decide hypothetical issues about the effect of permit expiration on the agreement, resting its judgment on the factual finding that the NLU did not prove the employees joined after May 17, 1951. Excuses for dismissal should be established by the employees, which was not done.
DISPOSITIVE: The petition is dismissed with costs.