Wrong party - A Law Each Day (Keeps Trouble Away)

What is the relation between the mother union and its affiliate local union in a company? Will the mother union be liable for the illegal acts of its affiliate? This is one of the issues that came up in this case.

The case started when a national federation of labor union (which we shall designate as NFL) filed with the Department of Labor and Employment (DOLE) in behalf of its local chapter in a Pipe and Foundry Corporation (referred to as PFU) a notice of strike. The notice of strike was signed by the national president of NFL against the corporation for union busting and non-implementation of the collective bargaining agreement (CBA).

Without waiting for the outcome of the conciliation conference which was rescheduled, the local union PFU staged a strike on the scheduled date of the conference itself. The strike lasted for three months when a return to work agreement was reached by the PFU and the corporation.

But even before the end of the strike, the company already lodged a petition to declare the strike illegal with prayer for damages against PFU, NFL and its national president. So while the strike has ended, the case for damages continued.

While the case was pending before the Arbitration Branch of DOLE, the company moved for the partial dismissal of the complaint against PFU and its 43 officers since it was not yet a legitimate labor organization. But it maintained the action against the NFL and its president.

After finding that the strike was indeed illegal because it was staged before the expiration of the 30 day cooling off period and because the provision of the CBA was then still being sought to be implemented, the Arbitration Branch ordered the mother union, NFL and its president to pay the company actual damages in the sum of P1,000,000 damages to the good business standing and commercial credit of the company in the amount of P350,000 and exemplary damages of P250,000. Was the arbiter correct?

The arbiter is correct in finding that the strike was illegal but it is not correct in holding the NFL and its president liable for damages.

The mother union (NFL), acting for and in behalf of its affiliate, has the status of an agent while the local union remains the basic unit of the association free to serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the association. The same is true notwithstanding the failure to comply with the procedural requirements that would make it a legitimate labor organization. In this case, there is no dispute that PFU the local union is the sole and exclusive bargaining representative of the rank and file employees of the company. The union status as a legitimate labor organization is therefore of no moment. As the local union, it is considered the principal; the entity which stages the illegal strike and the one responsible for the resulting damages sustained by the company. Evidently, direct and primary responsibility for said damages fall on the local union (PFU) being the principal, and not on the NFL, a mere agent of PFU which assisted the latter in the filing the notice of strike. Being just an agent, the notice of strike which NFL filed thru its president is deemed to have been filed by its principal PFU. Having thus dismissed the claim for damages against the principal PFU, the action for damages against its agent NFL and the latter's president, has no more leg to stand on and should also be dismissed (Filipino Pipe and Foundry Corporation vs. NLRC et. al. G.R. 115180 Sept. 9, 1999).

Atty. Sison's e-mail address is: [email protected]