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ACCFA V.

CUGCO
G.R. No. L-21484 November 29, 1969 J. MAKALINTAL,
[Art II - Sec. 1] Created by: Marj De Castro
Petitioners Respondents
THE AGRICULTURAL CREDIT and COOPERATIVE ACCFA SUPERVISORS' ASSOCIATION, ACCFA
FINANCING ADMINISTRATION (ACCFA) WORKERS' ASSOCIATION, and THE COURT OF
INDUSTRIAL RELATIONS
Recit Ready Summary
A CBA was entered into by and between the Unions and the ACCFA. Subsequently, the Unions started protesting against
alleged violations and non-implementation of said CBA. This prompted the Union together with its mother union, the CUGCO,
to file a complaint with the CIR against the ACCFA for having allegedly committed acts of unfair labor practice. The CIR,
eventually, ruled in favor of the Union and asked ACCFA to desist from committing any acts of violation to the CBA, right to
self-organization, etc.

ACCFA moved for a reconsideration but while the appeal was pending, RA 3844, Agricultural Land Reform Code, was
passed which effectively turned ACCFA to ACA. Then, ASA and AWA (part of the Union) petitioned that they obtain sole
bargaining rights with ACA. Thereafter, the trial court and the CIR ruled in favor of ASA and AWA ordering both to be the
exclusive bargaining representatives with the ACA. The ACA filed in the SC a petition for certiorari to stop the CIR order, in
effect challenging the jurisdiction of the CIR to entertain the petition on the ground that ACA is engaged in governmental
functions.

The SC ruled that it performs a governmental function. Under Section 3 of R.A 3844, ACA was established among other
governmental agencies to extend credit and similar assistance to agriculture. The implementation of the land reform program
of the government according to R.A No. 3844 is most certainly a governmental, not a proprietary, function. However, this
function may not be described strictly as “constituent”. The SC made a pronouncement which recognized the growing
complexities of modern society which have rendered the classification of the governmental functions (ministrant
and constituent) as unrealistic, if not obsolete.
Facts of the Case
1. The Agricultural Credit and Cooperative Financing Administration (ACCFA) was a government agency created under
Republic Act No. 821. Its administrative machinery was reorganized and its name changed to Agricultural Credit
Administration (ACA) under the Land Reform Code. On the other hand, the ACCFA Supervisors’ Association (ASA)
and the ACCFA Workers' Association (AWA) (hereinafter referred to as the Unions), are labor organizations
composed of the supervisors and the rank-and-file employees, respectively, in the ACCFA (now ACA).
2. On September 4, 1961 a Collective Bargaining Agreement (CBA), which was to be effective for a period of one (1)
year from July 1, 1961, was entered into by and between the Unions and the ACCFA(by this time they are not yet
the ACA). Thereafter, the Unions started protesting against alleged violations and non-implementation of said
agreement.
3. On October 30, 1962 the Unions, together with its mother union, the Confederation of Unions in Government
Corporations and Offices (CUGCO), filed a complaint with the Court of Industrial Relations (CIR) against the ACCFA
for having allegedly committed acts of unfair labor practice, namely: violation of the CBA, the right to self-
organization, discrimination against said members in the matter of promotions, and refusal to bargain.
4. The CIR rendered its decision and asked ACCFA to desist from committing any acts of violation to the CBA, right to
self-organization, etc. ACCFA moved for a reconsideration but while the appeal was pending, RA 3844, Agricultural
Land Reform Code, was passed which effectively turned ACCFA to ACA. Then, ASA and AWA petitioned that they
obtain sole bargaining rights with ACA. Thereafter, the trial court and the CIR ruled in favor of ASA and AWA
ordering both to be the exclusive bargaining representatives with the ACA.
5. The ACA filed in the SC a petition for certiorari to stop the CIR order, in effect challenging the jurisdiction of the CIR
to entertain the petition of the Unions for certification election on the ground that it (ACA) is engaged in governmental
functions. The Unions join the issue on this single point, contending that the ACA forms proprietary functions.
Issues Ruling
1. W/N ACCFA (ACA) is performing governmental functions. Yes
Rationale/Analysis/Legal Basis
1. Yes. It performs a governmental function.

Under Section 3 of R.A 3844, ACA was established among other governmental agencies to extend credit and similar
assistance to agriculture. The implementation of the land reform program of the government according to R.A No. 3844 is
most certainly a governmental, not a proprietary, function. These functions may not be strictly what President Wilson
described as "constituent" (as distinguished from "ministrant"), such as those relating to the maintenance of peace and the
prevention of crime, those regulating property and property rights, those relating to the administration of justice and the
determination of political duties of citizens, and those relating to national defense and foreign relations. Under this traditional
classification, such constituent functions are exercised by the State as attributes of sovereignty, and not merely to promote
the welfare, progress and prosperity of the people. These letter functions being ministrant is optional on the part of the
government.

The SC, in this case, made a pronouncement which recognized the growing complexities of modern society which have
rendered the classification of the governmental functions (ministrant and constituent) as unrealistic, if not obsolete.
Ministerial and governmental functions continue to lose their well-defined boundaries and are absorbed within the activities
that the government must undertake in its sovereign capacity if it to meet the increasing social challenges of the times and
move towards a greater socialization of economic forces. Hence, gone are the days where constituent functions are
exclusively performed by the government and not delegated to private institutions. In this case, a constituent function is left to
be performed by a private entity like ACA (formerly ACCFA).

Given these, the respondent Unions are not entitled to the certification election sought in the Court below. Such certification is
admittedly for purposes of bargaining in behalf of the employees with respect to terms and conditions of employment,
including the right to strike as a coercive economic weapon, as in fact the said unions did strike in 1962 against the ACCFA.
Given that ACA has a governmental character, the strike was contrary to Section 11 of RA No. 875 which prohibits strikes
against in the government.
Disposition
The decisions and orders appealed from are set aside.
Separate Concurring Opinions
FERNANDO, J.
This case effectively made a definite rejection of the "constituent-ministrant" criterion of governmental functions, followed in
Bacani v. National Coconut Corporation to which Justice Fernando agreed.