ACCFA V CUGCO
AGRICULTURAL CREDIT AND COOPERATIVE FINANCING ADMINISTRAITON VS
CONFEREDATION OF UNIONS IN GOVERNMENT CORPORATIONS AND
OFFICES
NOVEMBER 29 1969 | MAKALINTAL, J
SUMMARY
ACCFAs administrative machinery was reorganized and it name changed to
Agricultural Credit Administration (ACA) under the Land Reform Code (RA 3844). The
ACCFA Supervisors Association (ASA) and the ACCFA Workers Associaton
(AWA)Unions, are labor organizations composed of the supervisors and the rank
and file employees, respectively, in the ACA.
On Sept 1961, a collective bargaining agreement for one year, was entered into by
and between the Unions and the ACCFA. After a few months, the Unions started
protesting for allegations of non-implementation but strikers voluntarily returned to
work after a while. On Oct 1962, the Unions with its mother union, the CUGCO, filed a
complaint with the CIR against ACCFA for having allegedly committed acts of unfair
labor practice. The CIR decided in favor of the Unions and the ACCFA moved to
reconsider but failed and file a petition for certiorari in this Court. While the case is
pending, on Aug 1963, the President signed into law the Agricultural Land Reform
Code (RA 3844). On March 1964, the ASA and AWA filed a petition for certification
election with the CIR praying that they be certified as the exclusive bargaining agents
for the supervisors and rank and file employees, in the ACA. The trial court on May
1964 certified that the AWA and ASA are the sole and exclusive bargaining
representatives of the rank and file and supervisors, respectively, in ACA. The
decision is affirmed by CIR en banc.
SC held that ACA is engaged in governmental functions. It was in furtherance of
such policy that the Land Reform Code was enacted and the various agencies, the
ACA among them, established to carry out its purposes. There can be no dispute as
to the fact that the land reform program contemplated in the said Code is beyond the
capabilities of any private enterprise to translate into reality. The growing complexities
of modern society, however, have rendered this traditional classification of the
functions of government quite unrealistic, not to say 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. Corollarily, the Union is thus not entitled
to a certification election.
FACTS
2 separate appeals by certiorari of Court of Industrial Relations (CIR) decision (MAR
25 1963) and resolution (MAY 21 1964)
ACFFA was a government agency created under RA 821
o Its administrative machinery was reorganized and its name changed to
Agricultural Credit Administration (ACA) under the Land Reform Code (RA
3844)
ACCFA Supervisors Association (ASA) and the ACCFA Workers Association
(AWA) [UNIONS] are labor organizations composed of the supervisors and the
rank-and-file employees, in the ACFFA (now ACA)
CIR DECISION
SEP 4 1961 a collective bargaining agreement (effective for 1 year from JUL 1
1961) between UNIONS and ACCFA
o A few months after, UNIONS started protesting against violations and non-
implementation of CBA
o OCT 1962 UNIONS declared a strike ended when strikers voluntarily
returned to work (NOV 26 1962)
UNIONS with mother union (CUGCO) filed complaint against ACCFA for having
committed acts of unfair labor practice, namely violation of CBA in order to
discourage members of UNIONS in exercise of their right to self-organization,
discrimination against members to matter of promotions and refusal to bargain
o ACCFA: invoked defenses (lack of jurisdiction of CIR, illegality of CBA,
expiration of contract and lack of approval by Office of the President of the
fringe benefits)
DECISION: Ordered ACCFA to ease and desist from committing acts tending to
discourage members in the exercise of their right to self organization; comply
with and implement CBA including payment of P30 a month living allowance;
bargain in good faith and expeditiously with complainants; DENIED MR
ACCFA filed appeal by certiorari issues:
o Jurisdiction of CIR (depended on WON ACCPA forecited governmental or
proprietary functions)
o Validity of CBA (if valid, WON it had already lapsed; if not, WON its fringe
benefits are already enforceable)
o Legal and Factual Basis for finding that ACCFA had committed acts of unfair
labor practice
o Competence of court to enforce CBA even if expired
CIR RESOLUTION
During pendency of case, President signed into law Agricultural Land Reform
Code (RA 3844) required reorganization of administrative machinery of ACCFA
and changed its name to ACA
ASA and AWA filed petition for certification election with CIR praying they be
certified as the exclusive bargaining agents for the supervisors and rank-and-file
employees in ACA
ORDER: certified ASA and AWA as the sole and exclusive bargaining
representatives [AFFIRMED BY CIR EN BANC]
ACA filed petition for certiorari with urgent motion to stay the CIR order
[DISMISSED] BUT later reconsidered when ACA complied with formal
requirement stated in resolution [ORDERED CIR TO STAY EXECUTION OF
ORDER]
IN PRESENT APPEAL
ACA: challenges the jurisdiction of CIR to entertain petition for certification
election; ACA engaged in governmental functions
UNIONS: ACA performs proprietary functions
ISSUES
1. WON the ACA is a government office engaged in governmental and
proprietary functions? YES
Sec 8 Agricultural Land Reform Act ACA was established to extend credit and
similar assistance to agriculture
Implementation of policy is spelled out in Sec 110-118 inclusive of the Land
Reform Code
IMPLEMENTATION OF LAND REFORM PROGRAM OF GOVERNMENT
ACCORDING TO RA 3844 IS GOVERNMENTAL, NOT PROPRIETARY FUNCTION
EO 75 PLACES ACA UNDER THE LAND REFORM PROJECT
ADMINSTRATION
Appointing authority in respect of officials and employees of ACA is the
President of the Philippines (stated 1st indorsement by his office to Chairman of
National Reform Council.
When Agricultural Reform Code was being considered by Congress, the nature
of ACA was the subject of the exposition on the Senate floor SEN TOLENTINO
[ACA not a profit making institution public service] SEN MANGLAPUS [P150M
is appropriated for ACA to intensify credit operations in barrio level THUS ACA
will concentrate entirely on facilitation of credit on barrio level]
CONSIDERATIONS MENTIONED MILITATE AGAINST RECOGNITION OF
COLLECTIVE BARGAINING PWOERS OF UNIONS WITHIN CONTECT OF RA 875
HENCE, AGAINST GRANT OF THEIR BASIC PETITION FOR CERTIFICATION
ELECTION AS PROPER BARGAINING UNITS
THE ACA IS A GOVERNMENT OFFICE OR AGENCY ENGAGED
GOVERNMENTAL, NOT PROPREITARY FUNCTIONS
TRADITIONAL CLASSIFICATION [PRESIDENT WILSON]
CONSTITUENT MINISTRANT
Those relating to the maintenance of Exercised by the State to promote the
peace and the prevention of crime those welfare, progress and prosperity of the
regulating property and property rights, people
those relating to the administration of
justice and the determination of political Exercise of which is optional on the part
duties of citizens, and those relating to of the government
national defense and foreign relations
Exercised by the State as attributes of
sovereignty
The growing complexities of modern society have rendered traditional
classification of functions of government QUITE UNREALISTIC, not to say
obsolete.
The areas which used to be left to private enterprise and initiative and which the
government was called upon to enter optionally, and only "because it was better
equipped to administer for the public welfare than is any private individual or group of
individuals," continue to lose their well-defined boundaries and to be absorbed within
activities that the government must undertake in its sovereign capacity if it is to meet
the increasing social challenges of the times.
IN CASE AT BAR, it was in furtherance of such policy that the Land Reform
Code was enacted and the various agencies, the ACA among them, established
to carry out its purposes.
The land reform program contemplated in said Code is beyond the capabilities of
any private enterprise to translate into reality
PURELY GOVERNMENTAL FUNCTION
The law itself declares that the ACA is a government office, -with the formulation
of policies, plans and programs vested no longer in a Board of Governors, as in
the case of the ACCFA, but in the National Land Reform Council, itself a
government instrumentality; and that its personnel are subject to Civil Service
laws and to rules of standardization with respect to positions and salaries, any
vestige of doubt as to the governmental character of its functions disappears.
2. WON UNIONS ARE ENTITLED TO THE CERTIFICATION ELECTION? NO
CERTIFICATION = 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 union did strike agasint ACCFA
CONTRARY to Sec 11 RA 875 Prohibition Against Strike in the Government
The terms and conditions of employment in the Government inciting after political
subdivision or instrumentality thereof, are governed by law and it is declared to
be the policy of this Act that employees herein shall not strike for the purposes of
Concurring changes or modification in their terms and conditions of employment
Such employees may belong to any labor organization whom does not impose
the obligation to strike or to join In strike: Provided, However, that this action shall
apply only to employees employed in governments, functions, of the Government
IN including but not limited to governmental corporations
With the reorganization of the ACCFA and its conversion into the ACA under the
Land Reform Code and in view of our ruling as to the governmental character of
the functions of the ACA, the decision of the respondent Court dated March 25,
1963, and the resolution en banc affirming it, in the unfair labor practice case filed by
the ACCFA, which decision is the subject of the present review in G. R. No. L-21484,
has become moot and academic, particularly insofar as the order to bargain
collectively with the respondent Unions is concerned.
RE: FRINGE BENEFITS
Since UNIONS have no right to the certification election sought by them nor,
consequently, to bargain collectively with the petitioner, no further fringe benefits may
be demanded on the basis of any collective bargaining agreement.
WE HOLD, THEREFORE, that insofar as fringe benefits already paid are concerned,
there is no reason to set aside the decision of the respondent Court. but that since the
respondent Unions have no right to the certification election sought by them nor,
consequently, to bargain collectively with the petitioner, no further fringe benefits may
be demanded on the basis of any collective bargaining agreement.