Labor Week 9 SC Cases

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G.R. No. 156292 January 11, 2005

ME-SHURN CORPORATION AND SAMMY CHOU, petitioners,vs.ME-SHURN WORKERS UNION-FSM AND ROSALINA * CRUZ, respondents.

D E C I S I O N

PANGANIBAN, J .:

To justify the closure of a business and the termination of the services of the concerned employees,the law requires the employer to prove that it suffered substantial actual losses. The cessation of acompanys operations s hortly after the organization of a labor union, as well as the resumption ofbusiness barely a month after, gives credence to the employees claim that the closure was meant todiscourage union membership and to interfere in union activities. These acts constitute unfair laborpractices.

The Case

Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, seeking to annul theNovember 29, 2002 Decision 2 of the Court of Appeals (CA) in CA-GR SP No. 69675, the decretalportion of which reads:

"UPON THE VIEW WE TAKE OF THIS CASE, THUS , the judgment must be, as it herebyis, AFFIRMED , and the present petition DISMISSED for lack of merit. Costs shall be taxed againstpetitioners. "3

The affirmed November 29, 2001 Decision 4 of the National Labor Relations Commission (NLRC),Third Division, disposed as follows:

"WHEREFORE, the decision appealed from is hereby SET ASIDE, and respondent Me-Shurn Corp.is hereby ordered to pay the complainants who appeared in the proceedings conducted by the Labor Arbiter their full backwages from the date their wages were withheld from them to the date of thefinality of this decision. "5

The Facts

On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation organized Me-ShurnWorkers Union-FSM, an affiliate of the February Six Movement (FSM) .6 Respondent union had apending application for registration with the Bureau of Labor Relations (BLR) through a letter datedJune 11, 1998 .7

Ten days later, or on June 17, 1998, petitioner corporation started placing on forced leave all therank and file employees who were members of the unions bargaining unit .8

On June 23, 1998, respondent union filed a Petition for Certification Election with the Med-ArbitrationUnit of the Department of Labor and Employment (DOLE), Regional Office No. 3 .9

Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a comment statingthat it would temporarily lay off employees and cease operations, on account of its alleged inability tomeet the export quota required by the Board of Investment .10
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While the Petition was pending, 184 union members allegedly submitted a retraction/withdrawalthereof on July 14, 1998. As a consequence, the med-arbiter dismissed the Petition. On May 7,1999, Department of Labor and Employment (DOLE) Undersecretary Rosalinda Dimapilis-Baldozgranted the uni ons appeal and ordered the holding of a certification election among the rank and fileemployees of the corporation .11

Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against petitionercorporation on the ground of unfair labor practice (illegal lockout and union busting). This matter wasdocketed as Case No. NCMB-RO3-BEZ-NZ-08-42-98 .12

On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner herein) and RaquelLamayra (the Filipino administrative manager of the corporation) imposed a precondition for theresumption of operation and the rehiring of laid off workers. He allegedly required the remainingunion officers to sign an Agreement containing a guarantee that upon their return to work, no unionor labor organization would be organized. Instead, the union officers were to serve as mediatorsbetween labor and management .13 After the signing of the Agreement, the operations of thecorporation resumed in September 1998 .14

On November 5, 1998, the union reorganized and elected a new set of officers. RespondentRosalina Cruz was elected president .15 Thereafter, it filed two Complaints docketed as NLRC CaseNos. RAB-III-11-9586-98 and RAB-III-09-0322-99. These cases were consolidated and assigned toLabor Arbiter Henry Isorena for compulsory arbitration. Respondents charged petitioner corporationwith unfair labor practice, illegal dismissal, underpayment of wages and deficiency in separation pay,for which they prayed for damages and attorneys fees.

The corporation countered that because of economic reversals, it was compelled to close and ceaseits operations to prevent serious business losses; that under Article 283 of the Labor Code, it had theright to do so; that in August 1998, it had paid its 342 laid off employees separation pay and benefitsin the total amount ofP1,682,863.88; and that by virtue of these payments, the cases had alreadybecome moot and academic. It also averred that its resumption of operations in September 1998had been announced and posted at the Bataan Export Processing Zone, and that some of theformer employees had reapplied.

Petitioner corporation questioned the legality of the representation of respondent union. Allegedly, itwas not the latter, but the Me- Shurn Independent Employees Union -- with Christopher Malit aspresident -- that was recognized as the existing exclusive bargaining agent of the rank and fileemployees and as the one that had concluded a Collective Bargaining Agreement (CBA) with thecorporation on May 19, 1999 .16 Hence, the corporation asserted that Undersecretary Dimapilis-Baldozs Decision ordering the holding of a certification election had become moot and academic.

On the other hand, respondents contested the legality of the formation of the Me-Shurn IndependentEmployees Union and petitioners recognition of it as the exclusive bargaining agent of theemployees. Respondents argued that the pendency of the representation issue before the DOLE

had barred the alleged recognition of the aforementioned union.

Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1) actual andexpected losses justified the closure of petitioner corporation and its dismissal of its employees; (2)the voluntary acceptance of separation pay by the workers precluded them from questioning thevalidity of their dismissal; and (3) the claim for separation pay lacked factual basis .17 1a\^/p hi1.net

On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners guilty ofunfair labor practice, the Commission ruled that the closure of the corporation shortly after
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respondent union had been organized, as well as the dismissal of the employees, had been effectedunder false pretenses. The true reason therefor was allegedly to bar the formation of the union.

Accordingly, the NLRC held that the illegally dismissed employees were entitled to back wages .18

After the denial of their Motion for Reconsideration ,19 petitioners elevated the cases to the CA via aPetition for Certiorari under Rule 65 .20 They maintained that the NLRC had committed grave abuse

of discretion and serious errors of fact and law in reversing the Decision of the labor arbiter and infinding that the corporations cessation of operations in August 1998 had been tainted with unfairlabor practice.

Petitioners added that respondent unions personalit y to represent the affected employees hadalready been repudiated by the workers themselves in the certification election conducted by theDOLE. Pursuant to the Decision of Undersecretary Dimapilis-Baldoz in Case No. RO3 00 9806 RU001, a certification election was held on September 7, 2000, at the premises of petitioner corporationunder the supervision of the DOLE. The election had the following results:

"Me Shurn Workers Union-FSM 1

No Union 135

Spoiled 2

Challenged 52

Total Votes Cast 190 "21

Ruling of the Court of Appeals

The CA dismissed the Petition because of the failure of petitioners to submit sufficient proof ofbusiness losses. It found that they had wanted merely to abort or frustrate the formation of

respondent union. The burden of proving that the dismissal of the employees was for a valid orauthorized cause rested on the employer.

The appellate court further affirmed the unions legal personality to represent the employees. It heldthat (1) registration was not a prerequisite to the right of a labor organization to litigate; and (2) thecases may be treated as representative suits, with respondent union acting for the benefit of all itsmembers.

Hence, this Petition .22

Issues

In their Supplemental Memorandum, petitioners submit the following issues for our consideration:

"(1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for an authorizedcause, and

(2) Whether respondents can maintain a suit against petitioners. "23

The Courts Ruling
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The Petition lacks merit.

First Issue:

Validity of the Dismissal

The reason invoked by petitioners to justify the cessation of corporate operations was allegedbusiness losses. Yet, other than generally referring to the financial crisis in 1998 and to theirsupposed difficulty in obtaining an export quota, interestingly, they never presented any report on thefinancial operations of the corporation during the period before its shutdown. Neither did they submitany credible evidence to substantiate their allegation of business losses.

Basic is the rule in termination cases that the employer bears the burden of showing that thedismissal was for a just or authorized cause. Otherwise, the dismissal is deemed unjustified.

Apropos this responsibility, petitioner corporation should have presented clear and convincingevidenc e 24 of imminent economic or business reversals as a form of affirmative defense in theproceedings before the labor arbiter or, under justifiable circumstances, even on appeal with theNLRC.

However, as previously stated, in all the proceedings before the two quasi-judicial bodies and evenbefore the CA, no evidence was submitted to sho w the corporations alleged business losses. It isonly now that petitioners have belatedly submitted the corporations income tax returns from 1996 to1999 as proof of alleged continued losses during those years. 1awphi1.nt

Again, elementary is the principle barring a party from introducing fresh defenses and facts at theappellate stage .25 This Court has ruled that matters regarding the financial condition of a company --those that justify the closing of its business and show the losses in its operations -- are questions offact that must be proven below .26Petitioners must bear the consequence of their neglect. Indeed,their unexplained failure to present convincing evidence of losses at the early stages of the caseclearly belies the credibility of their present claim .27

Obviously, on the basis of the evidence -- or the lack thereof -- the appellate court cannot be faultedfor ruling that the NLRC did not gravely abuse its discretion in finding that the closure of petitionercorporation was not due to alleged financial losses.

At any rate, even if we admit these additional pieces of evidence, the circumstances surrounding thecessation of operations of the corporation reveal the doubtful character of its supposed financialreason.

First , the claim of petitioners that they were compelled to close down the company to prevent furtherlosses is belied by their resumption of operations barely a month after the corporation supposedlyfolded up.

Moreover, petitioners attribute their loss mainly to their failure to obtain an export quota from theGarments and Textile Export Board (GTEB). Yet, as pointed out by respondents, the corporationresumed its business without first obtaining an export quota from the GTEB. Besides, these exportquotas pertain only to business with companies in the United States and do not preclude thecorporation from exporting its products to other countries. In other words, the business that petitionercorporation engaged in did not depend entirely on exports to the United States.
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All these factors strongly give credence to the contention of respondents that the real reason behindthe shutdown of the corporation was the formation of their union. Note that, to constitute an unfairlabor practice, the dismissal need not entirely and exclusively be motivated by the unions activitiesor affiliations. It is enough that the discrimination was a contributing factor .31 If the basic inspirationfor the act of the employer is derived from the affiliation or activit ies of the union, the formersassignment of another reason, no matter how seemingly valid, is unavailing .32

Concededly, the determination to cease operations is a management prerogative that the State doesnot usually interfere in. Indeed, no business can be required to continue operating at a loss, simplyto maintain the workers in employment. That would be a taking of property without due process oflaw. l^vvphi1.net But where it is manifest that the closure is motivated not by a desire to avoid further losses, butto discourage the workers from organizing themselves into a union for more effective negotiationswith management, the State is bound to intervene .33

Second Issue:

Legal Personality of Respondent Union

Neither are we prepared to believe petitioners argument that respondent union was not legitimate. Itshould be pointed out that on June 29, 1998, it filed a Petition for Certification Election. While thisPetition was initially dismissed by the med-arbiter on the basis of a supposed retraction, note thatthe appeal was granted and that Undersecretary Dimapilis-Baldoz ordered the holding of acertification election.

The DOLE would not have entertained the Petition if the union were not a legitimate labororganization within the meaning of the Labor Code. Under this Code, in an unorganizedestablishment, only a legitimate union may file a petition for certification election .34 Hence, while it isnot clear from the record whether respondent union is a legitimate organization, we are not readilyinclined to believe otherwise, especially in the light of the pro-labor policies enshrined in theConstitution and the Labor Code .35

Verily, the union has the requisite personality to sue in its own name in order to challenge the unfairlabor practice committed by petitioners against it and its members .36 "It would be an unwarrantedimpairment of the right to self-organization through formation of labor associations if thereafter suchcollective entities would be barred from instituting action in their representative capacity. "37

Finally, in view of the discriminatory acts committed by petitioners against respondent union prior tothe holding of the certification election on September 27, 2000 -- acts that included their immediategrant of exclusive recognition to another union as a bargaining agent despite the pending Petition forcertification election -- the results of that election cannot be said to constitute a repudiation by theaffected e mployees of the unions right to represent them in the present case.

WHEREFORE , the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against thepetitioners.

SO ORDERED.

G.R. No. 146728 February 11, 2004

GENERAL MILLING CORPORATION, petitioner,vs
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HON. COURT OF APPEALS, GENERAL MILLING CORPORATION INDEPENDENT LABORUNION (GMC-ILU), and RITO MANGUBAT, respondents.

D E C I S I O N

QUISUMBING, J . :

Before us is a petition for certiorari assailing the decision 1 dated July 19, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, which earlier reversed the decision 2 dated January 30, 1998 ofthe National Labor Relations Commission (NLRC) in NLRC Case No. V-0112-94.

The antecedent facts are as follows:

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General MillingCorporation (GMC) employed 190 workers. They were all members of private respondentGeneral Milling Corporation Independent Labor Union (union, for brevity), a duly certifiedbargaining agent.

On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA)which included the issue of representation effective for a term of three years. The CBA waseffective for three years retroactive to December 1, 1988. Hence, it would expire onNovember 30, 1991.

On November 29, 1991, a day before the expiration of the CBA, the union sent GMC aproposed CBA, with a request that a counter-proposal be submitted within ten (10) days.

As early as October 1991, however, GMC had received collective and individual letters fromworkers who stated that they had withdrawn from their union membership, on grounds ofreligious affiliation and personal differences. Believing that the union no longer had standingto negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and VictorLastimoso. The letter stated that it felt there was no basis to negotiate with a union which nolonger existed, but that management was nonetheless always willing to dialogue with themon matters of common concern and was open to suggestions on how the company mayimprove its operations.

In answer, the union officers wrote a letter dated December 19, 1991 disclaiming anymassive disaffiliation or resignation from the union and submitted a manifesto, signed by itsmembers, stating that they had not withdrawn from the union.

On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of

incompetence. The union protested and requested GMC to submit the matter to thegrievance procedure provided in the CBA. GMC, however, advised the union to "refer to ourletter dated December 16, 1991." 3

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division,Cebu City. The complaint alleged unfair labor practice on the part of GMC for: (1) refusal to bargaincollectively; (2) interference with the right to self-organization; and (3) discrimination. The laborarbiter dismissed the case with the recommendation that a petition for certification election be held todetermine if the union still enjoyed the support of the workers. lawphi1.nt


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The union appealed to the NLRC.

On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article 253 -A of theLabor Code, as amended by Rep. Act No. 6715, 4 which fixed the terms of a collective bargainingagreement, the NLRC ordered GMC to abide by the CBA draft that the union proposed for a periodof two (2) years beginning December 1, 1991, the date when the original CBA ended, to November30, 1993. The NLRC also ordered GMC to pay the attorneys fees.

5

In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration of aCBA, insofar as the representation aspect is concerned, is five (5) years which, in the case of GMC-Independent Labor Union was from December 1, 1988 to November 30, 1993. All other provisions ofthe CBA are to be renegotiated not later than three (3) years after its execution. Thus, the NLRCheld that respondent union remained as the exclusive bargaining agent with the right to renegotiatethe economic provisions of the CBA. Consequently, it was unfair labor practice for GMC not to enterinto negotiation with the union.

The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of itsmembers from February to June 1993 confirmed the pressure exerted by GMC on its employees to

resign from the union. Thus, the NLRC also found GMC guilty of unfair labor practice for interferingwith the right of its employees to self-organization.

With respect to the unions claim of discrimination, the NLRC found the claim unsupported bysubstantial evidence.

On GMCs motion for reconsideration, the NLRC set aside its decision of January 30, 1998, througha resolution dated October 6, 1998. It found GMCs doubts as to the status of the union justified andthe allegation of coercion exerted by GMC on the unions members to resign unfounded. Hence, theunion filed a petition for certiorari before the Court of Appeals. For failure of the union to attach therequired copies of pleadings and other documents and material portions of the record to support theallegations in its petition, the CA dismissed the petition on February 9, 1999. The same petition wassubsequently filed by the union, this time with the necessary documents. In its resolution dated April26, 1999, the appellate court treated the refiled petition as a motion for reconsideration and gave thepetition due course.

On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:

WHEREFORE, the petition is hereby GRANTED . The NLRC Resolution of October 6, 1998is hereby SET ASIDE , and its decision of January 30, 1998 is, except with respect to theaward of attorneys f ees which is hereby deleted, REINSTATED .6

A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October 26,2000, the CA denied it for lack of merit.

Hence, the instant petition for certiorari alleging that:

I

THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NODECISION SHALL BE RENDERED BY ANY COURT WITHOUT EXPRESSING THEREINCLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS BASED.


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Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargaincollectively," thus:

ART. 252. Meaning of duty to bargain collectively. The duty to bargaincollectively means the performance of a mutual obligation to meet and convenepromptly and expeditiously in good faith for the purpose of negotiating an

agreement....

We have held that the crucial question whether or not a party has met his statutory duty tobargain in good faith typically turn$ on the facts of the individual case. 8 There is no per setest of good faith in bargaining. 9Good faith or bad faith is an inference to be drawn from thefacts. 10 The effect of an employers or a unions actions individually is not the test of good -faith bargaining, but the impact of all such occasions or actions, considered as a whole. 11

Under Article 252 abovecited, both parties are required to perform their mutual obligation to meetand convene promptly and expeditiously in good faith for the purpose of negotiating an agreement.The union lived up to this obligation when it presented proposals for a new CBA to GMC within three(3) years from the effectivity of the original CBA. But GMC failed in its duty under Article 252. What it

did was to devise a flimsy excuse, by questioning the existence of the union and the status of itsmembership to prevent any negotiation.

It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatorybecause of the basic interest of the state in ensuring lasting industrial peace. Thus:

ART. 250. Procedure in collective bargaining. The following procedures shall beobserved in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written noticeupon the other party with a statement of its proposals. The other party shall make areply thereto not later than ten (10) calendar days from receipt of such notice.(Underscoring supplied.)

GMCs failure to make a timely reply to the proposals presented by t he union is indicative of its utterlack of interest in bargaining with the union. Its excuse that it felt the union no longer represented theworkers, was mainly dilatory as it turned out to be utterly baseless.

We hold that GMCs refusal to make a counter- proposal to the unions proposal for CBA negotiationis an indication of its bad faith. Where the employer did not even bother to submit an answer to thebargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. 12

Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMCviolated its duty to bargain collectively, making it liable for unfair labor practice. Perforce, the Court of

Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction infinding that GMC is, under the circumstances, guilty of unfair labor practice.

Did GMC interfere with the employees right to self -organization? The CA found that the lettersbetween February to June 1993 by 13 union members signifying their resignation from the unionclearly indicated that GMC exerted pressure on its employees. The records show that GMCpresented these letters to prove that the union no longer enjoyed the support of the workers. Thefact that the resignations of the union members occurred during the pendency of the case before thelabor arbiter shows GMCs desperate attempts to cast doubt on the legitimate status of the union.We agree with the CAs conclusion that the ill -timed letters of resignation from the union members


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We carefully note, however, that as strictly distinguished from the facts of this case, there was nopre-existing CBA between the parties in Kiok Loy and Divine Word University of Tacloban .Nonetheless, we deem it proper to apply in this case the rationale of the doctrine in the said twocases. To rule otherwise would be to allow GMC to have its cake and eat it too.

Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to

precipitately accept or agree to the proposals of the other. But an erring party should not be allowedto resort with impunity to schemes feigning negotiations by going through empty gestures. 17 Thus, byimposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests ofequity and fair play were properly served and both parties regained equal footing, which was lostwhen GMC thwarted the negotiations for new economic terms of the CBA.

The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draftCBA proposed by the union should not be disturbed since they are supported by substantialevidence. On this score, we see no cogent reason to rule otherwise. Hence, we hold that the Courtof Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction whenit imposed on GMC, after it had committed unfair labor practice, the draft CBA proposed by the unionfor the remaining two (2) years of the duration of the original CBA. Fairness, equity, and social

justice are best served in this case by sustaining the appellate courts decision on this issue.

WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and theresolution dated October 26, 2000, of the Court of Appeals in CA-G.R. SP No. 50383,are AFFIRMED . Costs against petitioner.

SO ORDERED.

[G.R. No. 110007. October 18, 1996]

HOLY CROSS OF DAVAO COLLEGE, INC., pet i t ioner, vs . HON.JEROME JOAQUIN, in his capacity as Voluntary Arbitrator, andHOLY CROSS OF DAVAO COLLEGE UNION KA LIPUNAN NGMANGGA GAW ANG PILIPINO (KAMAPI), responden t s .

D E C I S I O NNARVASA, C.J .:

A collective bargaining agreement, effective from June 1, 1986 to May 31,1989 was entered into between petitioner Holy Cross of Davao College, Inc.(hereafter Holy Cross), an educational institution, and the affiliate labororganization representing its employees, respondent Holy Cross of DavaoCollege Union-KAMAPI (hereafter KAMAPI). Shortly before the expiration ofthe agreement, KAMAPI President Jose Lagahit, wrote Holy Cross under dateof April 12, 1989 expressing his unions desire to renew the agreeme nt, withal


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seeking its extension for two months, or until July 31, 1989, on the ground thatthe teachers were still on summer vacation and union activities necessary orincident to the negotiation of a new agreement could not yet beconducted .[1] Holy Cross President Emilio P. Palma-Gil replied that he had noobjection to the extension sought, it being allowable under the collectivebargaining agreement .[2]

On July 24, 1989, Jose Lagahit convoked a meeting of the KAMAPImembership for the purpose of electing a new set of union officers, at whichRodolfo Gallera won election as president. To the surprise of many, and withresultant dissension among the membership, Galera forthwith initiateddiscussions for the unions disaffiliation from the KAMAPI Federation.

Galleras group subsequently formed a separate organizati on known asthe Holy Cross of Davao College Teachers Union, and elected its ownofficers. For its part, the existing union, KAMAPI, sent to the School itsproposals for a new collective bargaining contract; this it did on July 31, 1989,the expiry date of the two-month extension it had sought .[3]

Holy Cross thereafter stopped deducting from the salaries and wages ofits teachers and employees the corresponding union dues and specialassessment (payable by union members), and agency fees (payable by non-members), in accordance with the check-off clause of the CBA ,[4] promptingKAMAPI, on September 1, 1989, to demand an explanation.

In the meantime, there ensued between the two unions a full-blown actionon the basic issue of representation, which was to last for some two years. Itbegan with the filing by the new union (headed by Gallera) of a petition forcertification election in the Office of the Med-Arbiter .[5] KAMAPI responded byfiling a motion asking the Med-Arbiter to dismiss the petition. On August 31,1989, KAMAPI also advised Holy Cross of the election of a new set of officerswho would also comprise its negotiating panel .[6]

The Med- Arbiter denied KAMAPIs motion to dismiss, and ordered theholding of a certification election. On appeal, however, the Secretary of Laborreversed the Med- Arbiters ruling and ordered the dismissal of the petition forcertification election, which action was eventually sustained by this Court inappropriate proceedings.

After its success in the certification election case KAMAPI presented,on April 11, 1991, revised bargaining proposals to Holy Cross ;[7] and on July11, 1991, it sent a letter to the School asking for its counter-proposals. TheSchool replied, that it did not know if the Supreme Court had in fact affirmedthe Labor Secreta rys decision in favor of KAMAPI as the exclusive bargaining
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representative of the School employees, whereupon KAMAPIs counselfurnished it with a copy of the Courts resolution to that effect; and onSeptember 7, 1991, KAMAPI again wrote to Holy Cross asking for its counter-proposals as regards the terms of a new CBA.

In response, Holy Cross declared that it would take no action towards anew CBA without a definitive ruling on the proper interpretation of Article I ofthe old CBA which should have expired on May 31, 1989 (but, as abovestated, had been extended for two months at the KAMAPIs request). Said

Article provides inter alia for the automatic extension of the CBA for anotherperiod of three (3) years counted from its expiration, if the parties fail to agreeon a renewal, modification or amendment thereof. It appears, in fact, that theopinion of the DOLE Regional Director on the meaning and import of saidarticle I had earlier been sought by the College president, Emilio Palma Gil .[8] KAMAPI then sent another letter to Holy Cross, this time accusing it of unfair laborpractice for refusing to bargain despite the formers repeated demands; and on thefollowing day, it filed a notice of strike with the National Mediation and ConciliationBoard ..[9]

KAMAPI and Holy Cross were ordered to appear before Conciliator-Mediator Agapito J. Adipen on October 2, 1991. Several conciliation meetingswere thereafter held between them, and when these failed to bring about anyamicable settlement, the parties agreed to submit the case to voluntaryarbitration .[10] Both parties being of the view that the dispute did indeed revolvearound the interpretation of 1 and 2 of Article I of the CBA, they submitted

position papers explicitly dealing with the following issues presented by themfor resolution to the voluntary arbitrator:a. Whether or not the CBA which expired on May 31, 1989 was automatically renewed

and did not serve merely as a holdover CBA; and

b. Whether or not there was refusal to negotiate on the part of the Holy Cross ofDavao College.

On both issues, Voluntary Arbitrator Jerome C. Joaquin found in favor ofKAMAPI.

Respecting the matter of the automatic renewal of the bargaining

agreement, the Voluntary Arbitrator ruled that the request for extension filedby KAMAPI constituted seasonable notice of its intention to renew, modify oramend the agreement, which it could not however pursue because of theabsence of the teachers who were then on summer vacation .[11] He rejectedthe contention of Holy Cross that KAMAPI had unreasonably delayed (untilJuly 31, 1989) the submission of bargaining proposals, opining that the delaywas partly attributable to the Schools prolonged inaction on KAMAPIs
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extension of the Courts correcting hand through the extraordinary writof certiorari . Said finding should therefore be, and is hereby, sustained.

Now, concerning its alleged failure to observe the check-off provisions ofthe collective bargaining agreement, Holy Cross contends that this was not

one of the issues raised in the arbitration proceedings; that said issue wastherefore extraneous and improper; and that even assuming the contrary, it(Holy Cross) had not in truth violated the CBA.

Holy Cross asserts that it could not comply with the check-off provisionsbecause contrary to established practice prior to August, 1989, KAMAPI failedto submit to the college comptroller every 8 th day of the month, a list ofemployees from whom union dues and the corresponding agency fees wereto be deducted; further, that there was an uncertainty as to the recognizedbargaining agent with whom it would deal -- a matter settled only upon itsreceipt of a copy of this Courts Resolution on July 18, 1991 -- and in anycase, the Voluntary Arbitrators order for it to pay to the union the uncollectedemployees' dues or agency fees -- would amount to the unions unjustenrichment .[14]

KAMAPI maintains, on the other hand, that the check-off issue was raisedin the position paper it submitted in the voluntary arbitration proceedings; andthat in any case, the issue was intimately connected with those submitted forresolution and necessary for complete adjudication of the rights andobligations of the parties ;[15] and that said position paper had alleged themanifest bad faith of management in not providing information as to who wereregular employees, thereby precluding determination of teachers eligible forunion membership.

Disregarding the objection of failure to seasonably set up the check-offquestion -- the factual premises thereof not being indisputable, and technicalobjections of this sort being generally inconsequential in quasi-judicialproceedings -- the issues here ultimately boil down to whether or not anemployer is liable to pay to the union of its employees, the amounts it failed todeduct from their salaries -- as union dues (with respect to union members)or agency fees (as regards those not union members) -- in accordance with

the check-off provisions of the collective bargaining contract (CBA) which itclaims to have been automatically extended.

A check-off is a process or device whereby the employer, on agreementwith the union recognized as the proper bargaining representatives, or onprior authorization from its employees, deducts union dues or agency feesfrom the latter's wages and remits them directly to the union .[16] Its desirabilityto a labor organization is quite evident; by it, it is assured of continuous
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funding. Indeed, this Court has acknowledged that the system of check-off isprimarily for the benefit of the union and, only indirectly, of the individuallaborers .[17] When stipulated in a collective bargaining agreement, orauthorized in writing by the employees concerned -- the labor Code and itsImplementing Rules recognize it to be the duty of the employer to deductsums equivalent to the amount of union dues from the employees' wages fordirect remittance to the union, in order to facilitate the collection of funds vitalto the role of the union as representative of employees in a bargaining unit tothe role of the union as representative of employees in a bargaining unit if not,indeed, to its very existence. And it may be mentioned in this connection thatthe right to union dues deducted pursuant to a check of, pertains to the localunion which continues to represent the employees under the terms of a CBA,and not to the parent association from which it has dissaffiliated .[18]

The legal basis of check-off is thus found in statute or in

contract .[19]

Statutory limitations on check-offs generally require writtenauthorization from each employee to deduct wages; however, a resolutionapproved and adopted by a majority of the union members at a generalmeeting will suffice when the right to check-off has been recognized by theemployer, including collection of reasonable assessments in connection withmandatory activities of the union, or other special assessments andextraordinary fees .[20]

Authorization to effect a check-off of union dues is co-terminous with theunion affiliation or membership of employees .[21] On the other hand, the

collection of agency fees in an amount equivalent to union dues and fees,from employees who are not union members, is recognized by Article 248 (e)of the Labor Code. No requirement of written authorization from the non-union employee is imposed. The employees acceptance of benefits result ingfrom a collective bargaining agreement justifies the deduction of agency feesfrom his pay and the unions entitlement thereto. In this aspect, the legalbasis of the unions right to agency fees is neither contractual nor statutory,but quasi-contractual, deriving from the established principle that non-unionemployees may not unjustly enrich themselves by benefiting from employmentconditions negotiated by the bargaining union .[22]

No provision of law makes the employer directly liable for the payment tothe labor organization of union dues and assessments that the former fails todeduct from its employees salaries and wages pursuant to a check -offstipulation. The employers failure to make the requisite deductions mayconstitute a violation of a contractual commitment for which it may incurliability for unfair labor practice .[23] But it does not by that omission, incur
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liability to the union for the aggregate of dues or assessments uncollectedfrom the union members, or agency fees for non-union employees.

Check-offs in truth impose as extra burden on the employer in the form ofadditional administrative and bookkeeping costs. It is a burden assumed by

management at the instance of the union and for its benefit, in order tofacilitate the collection of dues necessary for the latters life andsustenance. But the obligation to pay union dues and agency fees obviouslydevolves not upon the employer, but the individual employee. It is a personalobligation not demandable from the employer upon default or refusal of theemployer to consent to a check-off. The only obligation of the employer undera check-off is to effect the deductions and remit the collections to theunion. The principle of unjust enrichment necessarily precludes recovery ofunion dues -- or agency fees -- from the employer, these being, to repeat,obligations pertaining to the individual worker in favor of the bargaining

union. Where the employer fails or refuses to implement a check-offagreement, logic and prudence dictate that the union itself undertake thecollection of union dues and assessments from its members (and agency feesfrom non-union employees); this, of course, without prejudice to suing theemployer for unfair labor practice.

There was thus no basis for the Voluntary Arbitrator to require Holy Crossto assume liability for the union dues and assessments, and agency fees thatit had failed to deduct from its employees salaries on the proffered plea thatcontrary to established practice, KAMAPI had failed to submit to the college

comptroller every 8th

day of the month, a list of employees from whose payunion dues and the corresponding agency fees were to be deducted.

WHEREFORE , the requirement imposed on petitioner Holy Cross by thechallenged decision of the Voluntary Arbitrator, to pay respondent KAMAPIthe amount equivalent to the uncollected union dues and agency fees from

August 1989 up to the time a new collective bargaining agreement isconcluded, is NULLIFIED and SET ASIDE; but in all other respects, thedecision of the Voluntary Arbitrator is hereby AFFIRMED.

SO ORDERED.

G.R. No. L-25246 September 12, 1974

BENJAMIN VICTORIANO, plaintiff-appellee,vs.ELIZALDE ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC., defendants,ELIZALDE ROPE WORKERS' UNION, defendant-appellant.

Salonga, Ordonez, Yap, Sicat & Associates for plaintiff-appellee.


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From this decision, the Union appealed directly to this Court on purely questions of law, assigningthe following errors:

I. That the lower court erred when it did not rule that Republic Act No. 3350 isunconstitutional.

II. That the lower court erred when it sentenced appellant herein to pay plaintiff thesum of P500 as attorney's fees and the cost thereof.

In support of the alleged unconstitutionality of Republic Act No. 3350, the Union contented, firstly,that the Act infringes on the fundamental right to form lawful associations; that "the very phraseologyof said Republic Act 3350, that membership in a labor organization is banned to all those belongingto such religious sect prohibiting affiliation with any labor organization" 4 , "prohibits all the members ofa given religious sect from joining any labor union if such sect prohibits affiliations of their membersthereto" 5 ; and, consequently, deprives said members of their constitutional right to form or join lawfulassociations or organizations guaranteed by the Bill of Rights, and thus becomes obnoxious to Article III,Section 1 (6) of the 1935 Constitution. 6

Secondly, the Union contended that Republic Act No. 3350 is unconstitutional for impairing theobligation of contracts in that, while the Union is obliged to comply with its collective bargainingagreement containing a "closed shop provision," the Act relieves the employer from its reciprocalobligation of cooperating in the maintenance of union membership as a condition of employment;and that said Act, furthermore, impairs the Union's rights as it deprives the union of dues frommembers who, under the Act, are relieved from the obligation to continue as such members. 7

Thirdly, the Union contended that Republic Act No. 3350 discriminatorily favors those religious sectswhich ban their members from joining labor unions, in violation of Article Ill, Section 1 (7) of the 1935Constitution; and while said Act unduly protects certain religious sects, it leaves no rights orprotection to labor organizations. 8

Fourthly, Republic Act No. 3350, asserted the Union, violates the constitutional provision that "noreligious test shall be required for the exercise of a civil right," in that the laborer's exercise of his civilright to join associations for purposes not contrary to law has to be determined under the Act by hisaffiliation with a religious sect; that conversely, if a worker has to sever his religious connection witha sect that prohibits membership in a labor organization in order to be able to join a labororganization, said Act would violate religious freedom. 9

Fifthly, the Union contended that Republic Act No. 3350, violates the "equal protection of laws"clause of the Constitution, it being a discriminately legislation, inasmuch as by exempting from theoperation of closed shop agreement the members of the "Iglesia ni Cristo", it has granted saidmembers undue advantages over their fellow workers, for while the Act exempts them from unionobligation and liability, it nevertheless entitles them at the same time to the enjoyment of allconcessions, benefits and other emoluments that the union might secure from the employer. 10

Sixthly, the Union contended that Republic Act No. 3350 violates the constitutional provisionregarding the promotion of social justice. 11

Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargainingagreement cannot be considered violative of religious freedom, as to call for the amendmentintroduced by Republic Act No. 3350; 12 and that unless Republic Act No. 3350 is declaredunconstitutional, trade unionism in this country would be wiped out as employers would prefer to hire oremploy members of the Iglesia ni Cristo in order to do away with labor organizations. 13


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Appellee, assailing appellant's arguments, contended that Republic Act No. 3350 does not violatethe right to form lawful associations, for the right to join associations includes the right not to join orto resign from a labor organization, if one's conscience does not allow his membership therein, andthe Act has given substance to such right by prohibiting the compulsion of workers to join labororganizations; 14 that said Act does not impair the obligation of contracts for said law formed part of, andwas incorporated into, the terms of the closed shop agreement; 15 that the Act does not violate the

establishment of religion clause or separation of Church and State, for Congress, in enacting said law,merely accommodated the religious needs of those workers whose religion prohibits its members from joining labor unions, and balanced the collective rights of organized labor with the constitutional right ofan individual to freely exercise his chosen religion; that the constitutional right to the free exercise of one'sreligion has primacy and preference over union security measures which are merely contractual 16 ; thatsaid Act does not violate the constitutional provision of equal protection, for the classification of workersunder the Act depending on their religious tenets is based on substantial distinction, is germane to thepurpose of the law, and applies to all the members of a given class; 17 that said Act, finally, does notviolate the social justice policy of the Constitution, for said Act was enacted precisely to equalizeemployment opportunities for all citizens in the midst of the diversities of their religious beliefs." 18

I. Before We proceed to the discussion of the first assigned error, it is necessary to premise thatthere are some thoroughly established principles which must be followed in all cases where

questions of constitutionality as obtains in the instant case are involved. All presumptions areindulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality mustprove its invalidity beyond a reasonable doubt, that a law may work hardship does not render itunconstitutional; that if any reasonable basis may be conceived which supports the statute, it will beupheld, and the challenger must negate all possible bases; that the courts are not concerned withthe wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of theconstitution in favor of the constitutionality of legislation should be adopted. 19

1. Appellant Union's contention that Republic Act No. 3350 prohibits and bans the members of suchreligious sects that forbid affiliation of their members with labor unions from joining labor unionsappears nowhere in the wording of Republic Act No. 3350; neither can the same be deduced bynecessary implication therefrom. It is not surprising, therefore, that appellant, having thus misreadthe Act, committed the error of contending that said Act is obnoxious to the constitutional provisionon freedom of association.

Both the Constitution and Republic Act No. 875 recognize freedom of association. Section 1 (6) of Article III of the Constitution of 1935, as well as Section 7 of Article IV of the Constitution of 1973,provide that the right to form associations or societies for purposes not contrary to law shall not beabridged. Section 3 of Republic Act No. 875 provides that employees shall have the right to self-organization and to form, join of assist labor organizations of their own choosing for the purpose ofcollective bargaining and to engage in concerted activities for the purpose of collective bargainingand other mutual aid or protection. What the Constitution and the Industrial Peace Act recognize andguarantee is the "right" to form or join associations. Notwithstanding the different theoriespropounded by the different schools of jurisprudence regarding the nature and contents of a "right", itcan be safely said that whatever theory one subscribes to, a right comprehends at least two broad

notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employeemay act for himself without being prevented by law; and second, power, whereby an employee may,as he pleases, join or refrain from Joining an association. It is, therefore, the employee who shoulddecide for himself whether he should join or not an association; and should he choose to join, hehimself makes up his mind as to which association he would join; and even after he has joined, hestill retains the liberty and the power to leave and cancel his membership with said organization atany time. 20 It is clear, therefore, that the right to join a union includes the right to abstain from joining anyunion. 21 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, andguaranteed to the employee, is the "right" to join associations of his choice, it would be absurd to say that


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the law also imposes, in the same breath, upon the employee the duty to join associations. The law doesnot enjoin an employee to sign up with any association.

The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to refrain from joining is withdrawnby operation of law, where a labor union and an employer have agreed on a closed shop, by virtue

of which the employer may employ only member of the collective bargaining union, and theemployees must continue to be members of the union for the duration of the contract in order tokeep their jobs. Thus Section 4 (a) (4) of the Industrial Peace Act, before its amendment by Republic

Act No. 3350, provides that although it would be an unfair labor practice for an employer "todiscriminate in regard to hire or tenure of employment or any term or condition of employment toencourage or discourage membership in any labor organization" the employer is, however, notprecluded "from making an agreement with a labor organization to require as a condition ofemployment membership therein, if such labor organization is the representative of the employees".By virtue, therefore, of a closed shop agreement, before the enactment of Republic Act No. 3350, ifany person, regardless of his religious beliefs, wishes to be employed or to keep his employment, hemust become a member of the collective bargaining union. Hence, the right of said employee not to

join the labor union is curtailed and withdrawn.

To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introducedan exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso:"but such agreement shall not cover members of any religious sects which prohibit affiliation of theirmembers in any such labor organization". Republic Act No. 3350 merely excludes ipso jure from theapplication and coverage of the closed shop agreement the employees belonging to any religioussects which prohibit affiliation of their members with any labor organization. What the exceptionprovides, therefore, is that members of said religious sects cannot be compelled or coerced to joinlabor unions even when said unions have closed shop agreements with the employers; that in spiteof any closed shop agreement, members of said religious sects cannot be refused employment ordismissed from their jobs on the sole ground that they are not members of the collective bargainingunion. It is clear, therefore, that the assailed Act, far from infringing the constitutional provision onfreedom of association, upholds and reinforces it. It does not prohibit the members of said religious

sects from affiliating with labor unions. It still leaves to said members the liberty and the power toaffiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members ofsaid religious sects prefer to sign up with the labor union, they can do so. If in deference and fealtyto their religious faith, they refuse to sign up, they can do so; the law does not coerce them to join;neither does the law prohibit them from joining; and neither may the employer or labor union compelthem to join. Republic Act No. 3350, therefore, does not violate the constitutional provision onfreedom of association.

2. Appellant Union also contends that the Act is unconstitutional for impairing the obligation of itscontract, specifically, the "union security clause" embodied in its Collective Bargaining Agreementwith the Company, by virtue of which "membership in the union was required as a condition foremployment for all permanent employees workers". This agreement was already in existence at thetime Republic Act No. 3350 was enacted on June 18, 1961, and it cannot, therefore, be deemed tohave been incorporated into the agreement. But by reason of this amendment, Appellee, as well asothers similarly situated, could no longer be dismissed from his job even if he should cease to be amember, or disaffiliate from the Union, and the Company could continue employing himnotwithstanding his disaffiliation from the Union. The Act, therefore, introduced a change into theexpress terms of the union security clause; the Company was partly absolved by law from thecontractual obligation it had with the Union of employing only Union members in permanentpositions, It cannot be denied, therefore, that there was indeed an impairment of said union securityclause.


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The questioned Act also provides protection to members of said religious sects against twoaggregates of group strength from which the individual needs protection. The individual employee, atvarious times in his working life, is confronted by two aggregates of power collective labor,directed by a union, and collective capital, directed by management. The union, an institutiondeveloped to organize labor into a collective force and thus protect the individual employee from thepower of collective capital, is, paradoxically, both the champion of employee rights, and a new

source of their frustration. Moreover, when the Union interacts with management, it produces yet athird aggregate of group strength from which the individual also needs protection the collectivebargaining relationship. 31

The aforementioned purpose of the amendatory law is clearly seen in the Explanatory Note to HouseBill No. 5859, which later became Republic Act No. 3350, as follows:

It would be unthinkable indeed to refuse employing a person who, on account of hisreligious beliefs and convictions, cannot accept membership in a labor organizationalthough he possesses all the qualifications for the job. This is tantamount topunishing such person for believing in a doctrine he has a right under the law tobelieve in. The law would not allow discrimination to flourish to the detriment of thosewhose religion discards membership in any labor organization. Likewise, the lawwould not commend the deprivation of their right to work and pursue a modestmeans of livelihood, without in any manner violating their religious faith and/orbelief. 32

It cannot be denied, furthermore, that the means adopted by the Act to achieve that purpose exempting the members of said religious sects from coverage of union security agreements isreasonable.

It may not be amiss to point out here that the free exercise of religious profession or belief is superiorto contract rights. In case of conflict, the latter must, therefore, yield to the former. The SupremeCourt of the United States has also declared on several occasions that the rights in the First

Amendment, which include freedom of religion, enjoy a preferred position in the constitutionalsystem. 33 Religious freedom, although not unlimited, is a fundamental personal right and liberty, 34 andhas a preferred position in the hierarchy of values. Contractual rights, therefore, must yield to freedom ofreligion. It is only where unavoidably necessary to prevent an immediate and grave danger to the securityand welfare of the community that infringement of religious freedom may be justified, and only to thesmallest extent necessary to avoid the danger.

3. In further support of its contention that Republic Act No. 3350 is unconstitutional, appellant Unionaverred that said Act discriminates in favor of members of said religious sects in violation of Section1 (7) of Article Ill of the 1935 Constitution, and which is now Section 8 of Article IV of the 1973Constitution, which provides:

No law shall be made respecting an establishment of religion, or prohibiting the free

exercise thereof, and the free exercise and enjoyment of religious profession andworship, without discrimination and preference, shall forever be allowed. No religioustest shall be required for the exercise of civil or political rights.

The constitutional provision into only prohibits legislation for the support of any religious tenets or themodes of worship of any sect, thus forestalling compulsion by law of the acceptance of any creed orthe practice of any form of worship, 35 but also assures the free exercise of one's chosen form of religionwithin limits of utmost amplitude. It has been said that the religion clauses of the Constitution are alldesigned to protect the broadest possible liberty of conscience, to allow each man to believe as his


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conscience directs, to profess his beliefs, and to live as he believes he ought to live, consistent with theliberty of others and with the common good. 36 Any legislation whose effect or purpose is to impede theobservance of one or all religions, or to discriminate invidiously between the religions, is invalid, eventhough the burden may be characterized as being only indirect. 37 But if the stage regulates conduct byenacting, within its power, a general law which has for its purpose and effect to advance the state'ssecular goals, the statute is valid despite its indirect burden on religious observance, unless the state canaccomplish its purpose without imposing such burden. 38

In Aglipay v. Ruiz 39 , this Court had occasion to state that the government should not be precluded frompursuing valid objectives secular in character even if the incidental result would be favorable to a religionor sect. It has likewise been held that the statute, in order to withstand the strictures of constitutionalprohibition, must have a secular legislative purpose and a primary effect that neither advances nor inhibitsreligion. 40 Assessed by these criteria, Republic Act No. 3350 cannot be said to violate the constitut ionalinhibition of the "no-establishment" (of religion) clause of the Constitution.

The purpose of Republic Act No. 3350 is secular, worldly, and temporal, not spiritual or religious orholy and eternal. It was intended to serve the secular purpose of advancing the constitutional right tothe free exercise of religion, by averting that certain persons be refused work, or be dismissed fromwork, or be dispossessed of their right to work and of being impeded to pursue a modest means of

livelihood, by reason of union security agreements. To help its citizens to find gainful employmentwhereby they can make a living to support themselves and their families is a valid objective of thestate. In fact, the state is enjoined, in the 1935 Constitution, to afford protection to labor, andregulate the relations between labor and capital and industry. 41 More so now in the 1973 Constitutionwhere it is mandated that "the State shall afford protection to labor, promote full employment and equalityin employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relationbetween workers and employers. 42

The primary effects of the exemption from closed shop agreements in favor of members of religioussects that prohibit their members from affiliating with a labor organization, is the protection of saidemployees against the aggregate force of the collective bargaining agreement, and relieving certaincitizens of a burden on their religious beliefs; and by eliminating to a certain extent economicinsecurity due to unemployment, which is a serious menace to the health, morals, and welfare of thepeople of the State, the Act also promotes the well-being of society. It is our view that the exemptionfrom the effects of closed shop agreement does not directly advance, or diminish, the interests ofany particular religion. Although the exemption may benefit those who are members of religioussects that prohibit their members from joining labor unions, the benefit upon the religious sects ismerely incidental and indirect. The "establishment clause" (of religion) does not ban regulation onconduct whose reason or effect merely happens to coincide or harmonize with the tenets of some orall religions. 43 The free exercise clause of the Constitution has been interpreted to require that religiousexercise be preferentially aided. 44

We believe that in enacting Republic Act No. 3350, Congress acted consistently with the spirit of theconstitutional provision. It acted merely to relieve the exercise of religion, by certain persons, of aburden that is imposed by union security agreements. It was Congress itself that imposed that

burden when it enacted the Industrial Peace Act (Republic Act 875), and, certainly, Congress, if it sodeems advisable, could take away the same burden. It is certain that not every conscience can beaccommodated by all the laws of the land; but when general laws conflict with scrupples ofconscience, exemptions ought to be granted unless some "compelling state interest" intervenes. 45 Inthe instant case, We see no such compelling state interest to withhold exemption.

Appellant bewails that while Republic Act No. 3350 protects members of certain religious sects, itleaves no right to, and is silent as to the protection of, labor organizations. The purpose of Republic

Act No. 3350 was not to grant rights to labor unions. The rights of labor unions are amply provided


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practice because they agree with one another in certain particulars. A law is not invalid because ofsimple inequality. 52 The very idea of classification is that of inequality, so that it goes without saying thatthe mere fact of inequality in no manner determines the matter of constitutionality. 53 All that is required ofa valid classification is that it be reasonable, which means that the classification should be based onsubstantial distinctions which make for real differences; that it must be germane to the purpose of the law;that it must not be limited to existing conditions only; and that it must apply equally to each member of the

class.54

This Court has held that the standard is satisfied if the classification or distinction is based on areasonable foundation or rational basis and is not palpably arbitrary. 55

In the exercise of its power to make classifications for the purpose of enacting laws over matterswithin its jurisdiction, the state is recognized as enjoying a wide range of discretion. 56 It is notnecessary that the classification be based on scientific or marked differences of things or in theirrelation. 57 Neither is it necessary that the classification be made with mathematical nicety. 58 Hencelegislative classification may in many cases properly rest on narrow distinctions, 59 for the equal protectionguaranty does not preclude the legislature from recognizing degrees of evil or harm, and legislation isaddressed to evils as they may appear.

We believe that Republic Act No. 3350 satisfies the aforementioned requirements. The Act classifiesemployees and workers, as to the effect and coverage of union shop security agreements, into those

who by reason of their religious beliefs and convictions cannot sign up with a labor union, and thosewhose religion does not prohibit membership in labor unions. Tile classification rests on real orsubstantial, not merely imaginary or whimsical, distinctions. There is such real distinction in thebeliefs, feelings and sentiments of employees. Employees do not believe in the same religious faithand different religions differ in their dogmas and cannons. Religious beliefs, manifestations andpractices, though they are found in all places, and in all times, take so many varied forms as to bealmost beyond imagination. There are many views that comprise the broad spectrum of religiousbeliefs among the people. There are diverse manners in which beliefs, equally paramount in thelives of their possessors, may be articulated. Today the country is far more heterogenous in religionthan before, differences in religion do exist, and these differences are important and should not beignored.

Even from the phychological point of view, the classification is based on real and importantdifferences. Religious beliefs are not mere beliefs, mere ideas existing only in the mind, for theycarry with them practical consequences and are the motives of certain rules. of human conduct andthe justification of certain acts. 60 Religious sentiment makes a man view things and events in theirrelation to his God. It gives to human life its distinctive character, its tone, its happiness or unhappinessits enjoyment or irksomeness. Usually, a strong and passionate desire is involved in a religious belief. Tocertain persons, no single factor of their experience is more important to them than their religion, or theirnot having any religion. Because of differences in religious belief and sentiments, a very poor person mayconsider himself better than the rich, and the man who even lacks the necessities of life may be morecheerful than the one who has all possible luxuries. Due to their religious beliefs people, like the martyrs,became resigned to the inevitable and accepted cheerfully even the most painful and excruciating pains.Because of differences in religious beliefs, the world has witnessed turmoil, civil strife, persecution,hatred, bloodshed and war, generated to a large extent by members of sects who were intolerant of otherreligious beliefs. The classification, introduced by Republic Act No. 3350, therefore, rests on substantialdistinctions.

The classification introduced by said Act is also germane to its purpose. The purpose of the law isprecisely to avoid those who cannot, because of their religious belief, join labor unions, from beingdeprived of their right to work and from being dismissed from their work because of union shopsecurity agreements.


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Republic Act No. 3350, furthermore, is not limited in its application to conditions existing at the timeof its enactment. The law does not provide that it is to be effective for a certain period of time only. Itis intended to apply for all times as long as the conditions to which the law is applicable exist. Aslong as there are closed shop agreements between an employer and a labor union, and there areemployees who are prohibited by their religion from affiliating with labor unions, their exemption fromthe coverage of said agreements continues.

Finally, the Act applies equally to all members of said religious sects; this is evident from itsprovision. The fact that the law grants a privilege to members of said religious sects cannot by itselfrender the Act unconstitutional, for as We have adverted to, the Act only restores to them theirfreedom of association which closed shop agreements have taken away, and puts them in the sameplane as the other workers who are not prohibited by their religion from joining labor unions. Thecircumstance, that the other employees, because they are differently situated, are not granted thesame privilege, does not render the law unconstitutional, for every classification allowed by theConstitution by its nature involves inequality.

The mere fact that the legislative classification may result in actual inequality is not violative of theright to equal protection, for every classification of persons or things for regulation by law producesinequality in some degree, but the law is not thereby rendered invalid. A classification otherwisereasonable does not offend the constitution simply because in practice it results in someinequality. 61 Anent this matter, it has been said that whenever it is apparent from the scope of the lawthat its object is for the benefit of the public and the means by which the benefit is to be obtained are ofpublic character, the law will be upheld even though incidental advantage may occur to individualsbeyond those enjoyed by the general public. 62

6. Appellant's further contention that Republic Act No. 3350 violates the constitutional provision onsocial justice is also baseless. Social justice is intended to promote the welfare of all thepeople. 63 Republic Act No. 3350 promotes that welfare insofar as it looks after the welfare of those who,because of their religious belief, cannot join labor unions; the Act prevents their being deprived of workand of the means of livelihood. In determining whether any particular measure is for public advantage, itis not necessary that the entire state be directly benefited it is sufficient that a portion of the state be

benefited thereby.

Social justice also means the adoption by the Government of measures calculated to insureeconomic stability of all component elements of society, through the maintenance of a propereconomic and social equilibrium in the inter-relations of the members of the community. 64 Republic

Act No. 3350 insures economic stability to the members of a religious sect, like the Iglesia ni Cristo, whoare also component elements of society, for it insures security in their employment, notwithstanding theirfailure to join a labor union having a closed shop agreement with the employer. The Act also advancesthe proper economic and social equilibrium between labor unions and employees who cannot join laborunions, for it exempts the latter from the compelling necessity of joining labor unions that have closedshop agreements and equalizes, in so far as opportunity to work is concerned, those whose religionprohibits membership in labor unions with those whose religion does not prohibit said membership. Social

justice does not imply social equality, because social inequality will always exist as long as social

relations depend on personal or subjective proclivities. Social justice does not require legal equalitybecause legal equality, being a relative term, is necessarily premised on differentiations based onpersonal or natural conditions. 65 Social justic

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