(1)

PROGRESSIVE
DEVELOPMENT
(REQUIREMENTS OF LLO)

VS

HONORABLE

SECRETARY

FACTS: Respondent Pambansang Kilusan ng Paggawa (KILUSAN)-TUCP, alleging it is

a legitimate labor federation, issued a Charter Certificate to Progressive
Development Union. Petitioner Progressive Development Corporation (PDC) filed its
motion to dismiss contending that a local union failed to comply with the IRR which
requires the submission of: (1) constitution and by-laws (CBL); (2) names, addresses
and list of officers and/or members; and (3) books of accounts. However, the Med
Arbiter held that there was a substantial compliance with requirements for the
formation of a chapter.
ISSUE: When does a branch, local or affiliate of a federation become a legitimate
labor organization?
RULING: Ordinarily, a labor organization acquires legitimacy only upon registration
with the BLR. Under Article 234 (Requirements of Registration) and under Article 235
(Action on Application), and the requirement under the IRR that the application
should be signed by at least 20% of the employees in the bargaining unit
accompanied by a sworn statement of the applicant union that there is no certified
bargaining agent or, where there is an existing collective bargaining agreement.
But when an unregistered union becomes a branch, local, or chapter of a federation,
some of the aforementioned requirements for registration are no longer requires.
Section 3(e) of the IRR requires that a local or chapter shall have and maintain a CBL,
set of officers, and books of accounts.
A local or chapter therefore becomes a legitimate labor organization only upon
submission of the following to the BLR: (1) A charter certificate, within 30 days from
its issuance by the labor federation or national union, and (2) The constitution and
by-laws, a statement on the set of officers, and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case may be, of such local
or chapter, and attested to by its president.
Absent compliance with these mandatory requirements, the local or chapter does not
become a legitimate labor organization.
In the case at bar, the failure of the secretary of PDEU-Kilusan to certify the required
documents under oath is fatal to its acquisition of a legitimate status.
(2) ADAMSON AND ADAMSON INC. VS CIR (AFFILIATION OF RANK-AND-FILE
and SUPERVISORS IN ONE FEDERATION)
FACTS: Adamson and Adamson Inc filed a petition to set aside the decision of the
CIR holding that the Adamson and Adamson Inc. Supervisory Union (FFW) can legally
represent supervisors of the petitioner corportaion notwithstanding the affiliation of
the rank-and-file union of the same company with the same Labor Federation, the
Federation of Free Workers (FFW).
The petitioner argues that the affiliation of the respondent union of supervisors, the
salesmen's association, and the rank and file personnel with the same national
federation (FFW) violates Section 3 of the Industrial Peace Act because (1) it
results in the indirect affiliation Of supervisors and rank-and-file employees with one
labor organization; (2) since respondent union and the unions of non-supervisors in
the same company are governed by the same constitution and by-laws of the
national federation, in practical effect, there is but one union; and (3) it would result

in the respondent union's losing its independence because it becomes the alter ego
of the federation.
ISSUE: Whether or not a Supervisors Union may affiliate with a federation with
which unions of rank and-file employees of the same employer are also affiliated.
RULING: Yes, the Supervisors Union may affiliate with a federation that a rank andfile employees of the same employer are also affiliated.
Citing the case of Elisco-Elirol vs Noriel and Liberty Cottons, the court ruled that the
locals are separate and distinct units primarily designed to secure and maintain the
equality of bargaining power between the employer and their employee-member in
the economic struggle for the fruits of the joint productive effort of labor and capital;
and the association of the locals into the national union was in the furtherance of the
same end. Yet the locals remained the basic units of association; free to serve their
own and the common-interest of all, subject to the restraints imposed by the
Constitution and By-laws of the Association.
In the case at bar, The Adamson and Adamson Supervisory Union and the Adamson
and Adamson, Inc., Salesmen Association (FFW), have their own respective
constitutions and by-laws. They are separately and independently registered of each
other. Both sent their separate proposals for collective bar agreements with their
employer. There could be no employer influence on rank-and-file organizational
activities nor their could be any rank and file influence on the supervisory function of
the supervisors because of the representation sought to be proscribed.
(3) MALAYANG SAMAHAN NG MANGGAGAWA (MSMG) vs HON. CRESENCIO J.
RAMOS ET AL. (DISMISSAL FROM EMPLOYMENT DUE TO DISAFFILIATION;
INVOKED SECURITY CLAUSE OF THE CBA)
FACTS: Petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc.
(MSMG), a local union, is an affiliate of the Private Respondent United Lumber and
General Workers of the Philippines (ULGWP), a federation. A local union election was
held wherein the herein petitioner, Beda Magdalena Villanueva, and the other union
officers were proclaimed as winners. The defeated candidates filed a Petition for
Impeachment/Expulsion of the local union officers with the DOLE NCR which was
dismissed. Then the local union held a general membership meeting where several
union members failed to attend the meeting. The imposition of P50.00 fine, that the
local union wished to be deducted from the wages/salaries of the members who
failed to attend the meeting, became the subject of bitter disagreement between the
Federation and the local union culminating in the latter's declaration of general
autonomy from the former through a Resolution. The company was thus constrained
to file a Complaint for Interpleader with the Med-Arbitration Branch of the
Department of Labor and Employment. However, the officers were expelled from the
ULGWP for committing acts of disloyalty.
ISSUE: Whether or not disaffiliation from the federation is a sufficient ground for the
dismissal of employment.
RULING: No since a local union has the right to disaffiliate from its mother union or
declare its autonomy. A local union, being a separate and voluntary association, is
free to serve the interests of all its members including the freedom to disaffiliate or
declare its autonomy from the federation to which it belongs when circumstances
warrant, in accordance with the constitutional guarantee of freedom of association.

Thus, a local union which has affiliated itself with a federation is free to sever such
affiliation anytime and such disaffiliation cannot be considered disloyalty. In the
absence of specific provisions in the federation's constitution prohibiting disaffiliation
or the declaration of autonomy of a local union, a local may dissociate with its parent
union.
In the case at bar, there is no disloyalty to speak of, neither is there any violation of
the federation's constitution because there is nothing in the said constitution which
specifically prohibits disaffiliation or declaration of autonomy. Hence, there cannot be
any valid dismissal because the union security clause in the CBA limits the dismissal
to only three (3) grounds, to wit: failure to maintain membership in the union (1) for
non-payment of union dues, (2) for resignation; and (3) for violation of the union's
Constitution and By-Laws.
(4) TROPICAL HUT EMPLOYEES UNION VS TROPICAL HUT FOOD MARKET INC
(DISAFFILIATION)
FACTS: The rank and file workers of the Tropical Hut Food Market Incorporated
organized a local union called the Tropical Hut Employees Union, known for short as
the THEU, and immediately sought affiliation with the National Association of Trade
Unions (NATU). Following such affiliation with NATU, a Registration Certificate was
issued in the name of the Tropical Hut Employees Union NATU. It appears,
however, that NATU itself as a labor federation, was not registered with the
Department of Labor.
Later, NATU received a letter jointly signed by the incumbent officers of the local
union informing the NATU that THEU was disaffiliating from the NATU federation.
Thereafter, the general membership of the so-called THEU-CGW (Confideration of
General Workers) held its annual election of officers. NATU thru its VP Marcelino
Lontok, Jr informed Encinas, the then President of THEU-NATU, in a letter, concerning
the request made by the NATU federation to the respondent company to dismiss him
(Encinas) in view of his violation of the CBA. In view of NATU's request, the
respondent company, on the same day, suspended Encinas pending the application
for clearance with the Department of Labor to dismiss him.
ISSUE: Whether or not the disaffiliation of the local union from the national
federation was valid.
RULING: Yes, the disaffiliation of the local union from the national federation was
valid.
The right of a local union to disaffiliate from its mother federation is well-settled. A
local union, being a separate and voluntary association, is free to serve the interest
of all its members including the freedom to disaffiliate when circumstances warrant.
This right is consistent with the constitutional guarantee of freedom of association.
When the local union withdrew from the old federation to join a new federation, it
was merely exercising its primary right to labor organization for the effective
enhancement and protection of common interests. In the absence of enforceable
provisions in the federation's constitution preventing disaffiliation of a local union a
local may sever its relationship with its parent.
In the case at bar, there is nothing in the constitution of the NATU or in the
constitution of the THEU-NATU that the THEU was expressly forbidden to disaffiliate
from the federation. The alleged non-compliance of the local union with the provision
in the NATU Constitution requiring the service of three months notice of intention to

withdraw did not produce the effect of nullifying the disaffiliation for the following
grounds: firstly, NATU was not even a legitimate labor organization and therefore did
not possess and acquire the legal personality to enforce its constitution and laws,
much less the right and privilege under the Labor Code to organize and affiliate
chapters or locals within its group, and secondly, the act of non-compliance with the
procedure on withdrawal is premised on purely technical grounds which cannot rise
above the fundamental right of self-organization.
(5) VOLKSCHEL LABOR UNION VS BLR (DISAFFILIATION)
FACTS: Petitioner was once affiliated with the Associated Labor Union for Metal
Workers (ALUMETAL for short). Both unions, ALUMETAL AND Volkschel Labor Union,
using the name Volkschel Labor Union Associated Labor Union for Metal Workers,
jointly entered into a collective bargaining agreement with respondent companies.
Later, majority of petitioner's members decided to disaffiliate from respondent
federation in order to operate on its own as an independent labor group. Confronted
with the predicament of whether or not to continue deducting from employees'
wages and remitting union dues to respondent, respondent companies sought the
legal opinion of the respondent Bureau as regards the controversy between the two
unions. Respondent Bureau rendered a Resolution which in effect found the
disaffiliation legal but at the same time gave the opinion that, petitioner's members
should continue paying their dues to ALUMETAL in the concept of agency fees.
ISSUE: Whether or not the petitioner unions disaffiliation form respondent
federation is valid.
RULING: Yes, the disaffiliation was valid.
The right of a local union to disaffiliate from its mother union is well-settled. In
previous cases, it has been repeatedly held that a local union, being a separate and
voluntary association, is free to serve the interest of all its members including the
freedom to disaffiliate when circumstances warrant.
This right is consistent with the Constitutional guarantee of freedom of association.
In the case at bar, it would go against the spirit of the labor law to restrict petitioner's
right to self-organization due to the existence of the CBA. We agree with the MedArbiter's opinion that "A disaffiliation does not disturb the enforceability and
administration of a collective agreement; it does not occasion a change of
administrators of the contract nor even an amendment of the provisions thereof.".
But nowhere in the record does it appear that the contract entered into by the
petitioner and ALUMETAL prohibits the withdrawal of the former from the latter.
(6) LIBERTY COTTON MILLS WORKERS UNION VS LIBERTY COTTON MILLS
INC. (DISMISSAL FROM EMPLOYMENT DUE TO DISAFFILIATION; INVOKED
SECURITY CLAUSE OF THE CBA)
FACTS: a CBA was entered into by and between the Company and the Union
represented by PAFLU. While the Collective Bargaining Agreement was in full force,
thirty two (32) out of the 36 members of the local union disaffiliated themselves from
respondent PAFLU pursuant to their local union's Constitution and By-Laws. PAFLU
wrote to the Company invoking the "Union Security" clause in the CBA and requested
for the termination of the employment. The Company then terminated the
employment of the members expelled by the PAFLU.
ISSUE: Whether or not the dismissal of the complaining employees, petitioners
herein, was justified or not.

RULING: No, the dismissal of the employees was not justified.

The resolution of this question hinges on a precise and careful analysis of the CBA. In
these contracts, it appears that PAFLU was acting for and in behalf of its affiliate, had
the status of an agent while the local union remained the basic unit of the
association free to serve the common interest of all its members including the
freedom to disaffiliate when the circumstances warrant.
For while it is correct to say that a union security clause did exist, this clause was
limited by the provision in the Unions' CBL, which states: that the Liberty Cotton Mills
Workers Union-PAFLU shall be affiliated with the PAFLU, and shall remain an affiliate
as long as ten (10) or more of its members evidence their desire to continue the said
local unions affiliation.
Record shows that 32 out of the 36 members of the Union signed the resolution of
disaffiliation
triggered by the alleged negligence of PAFLU in attending to the needs of its local
union, particularly its failure to assign a conscientious lawyer to the local to attend to
the ULP case they filed against the Company. The disaffiliation was, therefore, valid
under the local's Constitution and By-Laws which, taken together with the Collective
Bargaining Agreement, is controlling.
(7) VILLAR VS INCIONG (DISMISSAL FROM EMPLOYMENT DUE TO
DISAFFILIATION; INVOKING SECURITY CLAUSE OF THE CBA; CLOSED SHOP
AGREEMENT)
FACTS: Petitioners were members of the Amigo Employees Union-PAFLU, a duly
registered labor organization which was the existing bargaining agent of the
employees in private respondent Amigo Manufacturing, Inc. (Company). Upon written
authority of at least 30% of the employees in the company, including the petitioners,
the Federation of Unions of Rizal (hereinafter referred to as FUR) filed a petition for
certification election with the Med-Arbiter's Office, however, later, the petitioners
disauthorized FUR from continuing the petition for certification election for which
reason FUR withdrew the petition.
Later, The same employees who had signed the petition filed by FUR signed a joint
resolution named Sama-Samang Kapasiyahan which they stated their disaffiliation
with the PAFLU. Thereafter petitioner Villar, representing herself to be the authorized
representative of the Amigo Employees Union, filed a petition for certification
election.
PAFLU sent a letter to the Company demanding to terminate the employment of the
petitioners pursuant to the security clause of the CBA, with a statement absolving
the Company from any liability or damage that may arise from petitioner's
termination. The Company filed the request for clearance to terminate the petitioners
before the Department of Labor which was granted, terminating the employment of
Villar et. al.
ISSUES: (1) Whether or not the the dismissal of the petitioners by respondent
Company due to the demand of the PAFLU which invoked the security clause of the
CBA is illegal.
(2) Whether or not the disaffiliation from PAFLU of the petitioners are acts of
disloyalty.
RULING: (1) No, the dismissal is valid.

It is true that disaffiliation from a labor union is not open to legal objection. It is
implicit in the freedom of association ordained by the Constitution. But this Court has
laid down the ruling that a closed shop is a valid form of union security, and such
provision in a collective bargaining agreement is not a restriction of the right of
freedom of association guaranteed by the Constitution.
In the case at bar, it appears as an undisputed fact that the Company and the Amigo
Employees Union-PAFLU entered into a CBA with a union security clause. The
stipulation for closed-shop is clear and unequivocal and it leaves no room for doubt
that the employer is bound, under the collective bargaining agreement, to dismiss
the employees, herein petitioners, for non- union membership. Petitioners became
non-union members upon their expulsion from the general membership of the Amigo
Employees Union-PAFLU pursuant to the Decision of the PAFLU national president.
(2) Yes, the acts of disaffiliation and subsequently filing of certification of elections
are acts of disloyalty.
In the first place, had petitioners merely disaffiliated from the Amigo Employees
Union-PAFLU, there could be no legal objections thereto for it was their right to do so.
But what petitioners did by the very clear terms of their "Sama-Samang
Kapasiyahan" was to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an
act which they could not have done with any effective consequence because they
constituted the minority in the Amigo Employees Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were among
the ninety-six (96) who signed the "Sama-Samang Kapasiyahan" whereas there are
two hundred thirty four (234) union members in the Amigo Employees Union-PAFLU.
Hence, petitioners constituted a small minority for which reason they could not have
successfully disaffiliated the local union from PAFLU. Since only 96 wanted
disaffiliation, it can be inferred that the majority wanted the union to remain an
affiliate of PAFLU and this is not denied or disputed by petitioners. The action of the
majority must, therefore, prevail over that of the minority members.
(8) ASSOCIATED WORKERS UNION
SUBSTITUTIONARY DOCTRINE)

VS

NLRC

(DISAFFILIATION;

THE

FACTS: Associated Workers Union ("AWU")PTGWO, filed a Notice of Strike against

respondent Metro Port Service, Inc. ("Metro"). In the NLRC, one of the demands raised
by AWU was that Metro terminate the employment of respondents Adriano Yumul and
ten (10) others (individual respondents), for having organized the Associated Workers
Union in Metroport ("AWUM") among the rank-and-file employees of Metro, ostensibly
as a local or chapter of AWU. AWU had earlier expelled individual respondents from
membership in AWU for disloyalty and, pursuant to the closed-shop provision of the
existing AWU-Metro CBA.
Metro initially resisted AWU's request to terminate the employment of individual
respondents, contending that the termination would be premature as individual
respondents had not been afforded due process, and that the termination would be
violative of the status quo agreement in NLRC. Metro, however, eventually relented
and suspended individual respondents after AWU staged a strike against it. Metro
executed a Compromise Agreement with AWU to end the strike where Metro agreed
to preventively suspend the individual respondents effective immediately.
As a result of Metro's implementation of the Agreement, individual respondents filed
a complaint against Metro in the NLRC which later held the suspension or dismissal of

individual respondents as illegal and that the formation of union for rank-and-file
employees does not constitute disloyalty for they merely exercised their right to selforganization.
ISSUE: Whether or not the respondents are illegally dismissed.
RULING: No, the respondents were validly dismissed.
While it is true that AWUM as a local union, being an entity separate and distinct
from AWU, is free to serve the interest of all its members and enjoys the freedom to
disaffiliate, such right to disaffiliate may be exercised, and is thus considered a
protected labor activity, only when warranted by circumstances. Generally, a labor
union may disaffiliate from the mother union to form a local or independent
union only during the 60-day freedom period immediately preceding the expiration of
the CBA. Even before the onset of the freedom period (and despite the closed-shop
provision in the CBA between the mother union and management) disaffiliation may
still be carried out, but such disaffiliation must be effected by a majority of the
members in the bargaining unit. This happens when there is a substantial shift in
allegiance on the part of the majority of the members of the union. In such a case,
however, the CBA continues to bind the members of the new or disaffiliated and
independent union up to the CBA's expiration date.
The record does not show that individual respondents had disaffiliated during the
freedom period. The record does, however, show that only eleven (11) members of
AWU (individual respondents) had decided to disaffiliate from AWU and form AWUM.
Respondent Metro had about 4,000 employees, and around 2,000 of these were
members of AWU. It is evident that individual respondents had failed to muster the
necessary majority in order to justify their disaffiliation.
(9) ELISCO-ELIROL LABOR UNION (NAFLU) VS NORIEL
FACTS:
ISSUE:
RULING: