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ALLIED FREE WORKERS UNION VS.

MARITIMA & CIR


FACTS:

- MARITIMA, a local corp. engaged in shipping entered into a contract for lease of
services with petitioner Allied Free Workers’ Union (AFWU), a duly registered legitimate labor
union. In the contract, it was stipulated that 1. AFWU will do and perform all the work of
stevedoring and arrastre services of all vessels or boats of MARITIMA in Iligan City; 2. that the
contract is good and valid for 1 month starting Aug.12, 1952, but may be renewed by
agreement of the parties with the reservation that MARITIMA has the right to revoke said
contract even before the expiration of the term, if and when AFWU fails to render good service.

-Towards the end of 1953, MARITIMA complained to AFWU of unsatisfactory and


inefficient service. To remedy the situation, MARITIMA was forced to hire extra laborers from
among “stand-by” workers not affiliated to any union.

-On July 1954, AFWU sent a written proposal to MARITIMA for a CBA, but the latter did not
reply. Thereafter, AFWU instituted an action in the CIR praying that it be certified as the sole and
exclusive bargaining unit composed of all the laborers doing arrastre and stevedoring work for
MARITIMA, to which action MARITIMA answered, alleging lack of ER-EE relationship. On
Aug.1954, MARITIMA informed AFWU of the termination of the contract because of the
inefficient service rendered by the latter which had adversely affected its business. The
termination was to take effect as of Sept.1, 1954. MARITIMA then contracted with the Iligan
Stevedoring Union for the arrastre and stevedoring work. The latter agreed to perform the work.

-On Aug.26, 1954, AFWU charged MARITIMA of unfair labor practices (ULPs) before the
CIR. MARITIMA answered, again denying the ER-EE relationship between the parties. On Sept.9,
1954, MARITIMA filed an action to rescind the contract, enjoin AFWU members from doing
arrastre and stevedoring work in connection with its vessels, and for recovery of damages
against AFWU and its officers. The CFI ordered the rescission of the contract and permanently
enjoined AFWU members from performing work in connection with MARITIMA’s vessels.

AFWU was later able to secure a writ of preliminary injunction ordering the maintenance
of the status quo prior to Jan.6, 1961. Thus, after Jan.18, 1961, AFWU laborers were again back
doing the same work as before.

-On Nov.4, 1963, after almost 10 years, the CFI finally rendered its decision: In pursuance of the
provisions of Sec.12 of R.A. 875 and the Rules of this court on certification election, the
Honorable Secretary of Labor or any of his authorized representative is hereby requested to
conduct certification election among all the workers and/or stevedores working in the wharf of
Iligan City who are performing stevedoring and arrastre service aboard Compania Maritima
vessels docking at Iligan City port in order to determine their representative for collective
bargaining with the employer, whether these desire to be represented by the petitioner Allied
Free Workers Union or neither; and upon termination of the said election, the result thereof shall
forthwith be submitted to this court for further consideration. From this ruling, both parties
appealed, AFWU claiming that it should be declared outright as the majority union while
MARITIMA contends that said court could not even have correctly ordered a certification
election considering that there was an absence of ER-EE relationship between it and said
laborers.

ISSUE
WON the order of a certification election by the CIR was proper. (WON there was an ER-EE
relationship between AFWU and MARITIMA)

HELD

NO. Before a certification election can be held, there must exist an ER-EE relationship between
the ER and the petitioner union. Ratio The duty to bargain collectively exists only between the
“employer” and its “employees.” Where there is no duty to bargain collectively, it is not proper
to hold certification elections in connection therewith. Reasoning In its findings, the CIR observed
that after the rescission, the AFWU laborers continued working in accordance with the “cabo
system,” which was the prevailing custom in the place. Under this system, the union was an
independent contractor. The CIR also made a finding that prior to the contract between
MARITIMA and AFWU, the former had an oral arrastre and stevedoring agreement with another
union, the Iligan Laborers Union (ILU), which agreement was also based on the “cabo” system.
After unsatisfactory service, MARITIMA cancelled this oral contract and entered into a new
contract with AFWU, the terms and conditions of which were similar to the oral contract with ILU.
The written contract between AFWU and MARITIMA was signed under the assurance by AFWU
that the same arrangement previously had with the former union regarding performance and
execution of arrastre and stevedoring contract be followed in accordance with the custom of
such kind of work in Iligan. Thus, petitioner union operated as a labor contractor under the so-
called “cabo” system.

-From these findings, Insofar as the working agreement was concerned, there was no real
difference between the contract and the prior oral agreement. Both were based on the “cabo”
system. Hence, since the parties observed the “cabo” system after the rescission of the contract,
and since the characteristics of said system show that the contracting union was an
independent contractor, it is reasonable to assume that AFWU continued being an independent
contractor of MARITIMA. And, being an independent contractor, it could not qualify as an
“employee”. With more reason would this be true with respect to the laborers. Moreover, there is
no evidence at all regarding the characteristics of the working arrangement between AFWU
and MARITIMA after the termination of the CONTRACT. All we have to go on is the court a quo’s
finding that the “cabo” system was observed -a system that negatives employment relationship.

-Since the only function of a certification election is to determine, with judicial sanction, which
union shall be the official representative or spokesman of the “employees” will be, there being
no ER-EE relationship between the parties disputants, it follows that there is neither a duty
to bargain collectively. Thus, the order for certification election in question cannot be sustained.