10.4.3. Liberty Flour Mills Employees Association v.
Liberty Flour Mills, December 29, 1989
Facts:
• Feb 1974: entered into 3-year CBA with Phil. Labor Alliance Council (PLAC), the Union of the
rank-and-file employees of Liberty
• In the CBA, parties agreed to establish a union shop by imposing "membership in good standing for
the duration of the CBA as a condition for continued employment" of workers.
• Oct. 1974: PLAC filed complaint against company for the nonpayment of emergency cost of living
allowance (ecola)
• 1975: Biascan and Evaristo (B&E) filed similar complaint as regards ecola
at this point B&E are veering away from PLAC
• 1975: B&E organized new Union for rank and file employees of Liberty B&E filed petition for
certification election as the Union among the rank and file
• PLAC expelled B&E due to disloyalty
• PLAC demanded from Liberty the dismissal from employment of B&E in accordance with the Union
Shop clause in the CBA
• The matter of the dismissal of B&E were submitted to compulsory arbitration as well as the demand
for ecola
• Meanwhile, the certification election held at the Liberty Flour Mills, Inc. on December 27, 1976, the
Ilaw at Buklod ng Manggagawa (ILAW), with which the union organized by Biascan and Evaristo was
affiliated, won overwhelmingly with
441 votes as against the 5 votes cast for PLAC
• In 1977, Liberty’s new CBA was agreed with ILAW
• B&E were terminated and claimed that they were illegally dismissed for organizing a new union
opposed to PLAC which they described as a company union o B&E’s argument: merely exercising
right to self organization
• NLRC ruled in favor of B&E, holding that the CBA was not certified hence “it was not yet in effect
and so could not be the basis of the action taken against B&E”
ISSUE: WON the COLA was absorbed and that B&E were illegally dismissed for organizing a new union
HELD:
COLA was already absorbed
● The company agreed to grant the emergency allowance even before the obligation was imposed
by the government (P.D. 525). What the petitioners claim they are being made to waive is the
additional allowance but the truth is they are not entitled to because they are already enjoying
the stipulated increases. Section 6 of the Interpretative Bulletin on LOI No. 174 specifically
provides that the allowances and other benefits may be granted unilaterally by the employer or
through collective bargaining, and may be paid at the same time as the regular wages of the
employees.
● It can be noted that the company granted a monthly increase (on the basis of 30 days) of P60.00
for 1974, to be increased by P30.00 in 1975 (to P90.00) and another P 30.00 in 1976 (to P120.00).
The first increase in 1974 was already above the minimum allowance of P50.00, which was
exceeded even more with the increases of Pl.00 for each of the next two years.
● Even if the basis used were 26 days a month (excluding Sundays), the conclusion would remain
unchanged as the raise in wage would be P52.00 for 1974, which amount was increased to
P78.00 in 1975 and to P104.00 in 1976.
Dismissal was valid
• CBA concluded in 1974 was certifiable and was in fact certified on April 11, 1975. Evaristo and
Biascan were dismissed only on May 20, 1975, more than a month after the said certification.
• The certification of the collective bargaining agreement by the Bureau of Labor Relations is not
required to put a stamp of validity to such a contract. Once it is duly entered into and signed by the
parties, a collective bargaining agreement becomes effective as between the parties regardless of
whether or not the same has been certified by the BLR.
• It is the policy of the State to promote unionism to enable the workers to negotiate with
management on the same level and with more persuasiveness than if they were to individually and
independently bargain for the improvement of their respective conditions. To this end, the
Constitution guarantees to them the rights "to self-organization, collective bargaining and
negotiations and peaceful concerted actions including the right to strike in accordance with law."
There is no question that these purposes could be thwarted if every worker were to choose to go
his own separate way instead of joining his co-employees in planning collective action and
presenting a united front when they sit down to bargain with their employers. It is for this reason
that the law has sanctioned stipulations for the union shop and the closed shop as a means of
encouraging the workers to join and support the labor union of their own choice as their
representative in the negotiation of their demands and the protection of their interest vis-a-vis the
employer.
• For all the concern of the State, for the well-being of the worker, we must at all times conform to
the requirements of the law as long as such law has not been shown to be violative of the
Constitution. No such violation has been shown here.
