ACCFA VS CUGCO

On 4 Sept 1961 a CBA was agreed upon by labor unions (ASA and AWA) and ACCFA. The said CBA wassupposedto be effectiveon 1 July 1962. Due to non-implementation of the CBA the unions held a strike on 25 Oct 1962. And 5 days later CUGCO, the mother union of ASA and AWA filed acomplaintagainst ACCFA due to unfair laborpracticesamong others which CUGCO was able to win in court. On 25 Apr 1963, ACCFA appealed thedecisionand while the appeal was pending, RA 3844 was passed whicheffectivelyturned ACCFA to ACA. On 17 Mar 1964, ASA and AWA then petitioned that they may have sole bargaining rights with ACA. While this petition was not yet decided upon, on 19 March 1964, EO 75 was also passed which placed ACA under the Land ReformProjectAdministration. Notwithstanding the latest legislation passed, the trial court and the appellate court ruled in favor of ASA and AWA.

ISSUE:Whether or not ASA and AWA can be given sole bargaining rights with ACA.

HELD:The Unions have no bargaining rights with ACA. EO 75 placed ACA under the LRPA and by virtue of RA 3844 the implementation of the Land ReformProgramofthegovernmentis a governmental function NOT a proprietary function. Being such, ACA can no longer step down to deal privately with said unions as it may have been doing when it was still ACCFA. However, thegrowingcomplexities of modern society have rendered the classification of the governmental functions as unrealistic, if not obsolete. Ministerial and governmental functionscontinueto lose their well-defined boundaries and are absorbed within theactivitiesthatthe governmentmust undertake in itssovereigncapacity if it to meet the increasing social challenges of the times and move towards a greater socialization ofeconomicforces.

Summary: ACCFAvs.CUGCO (GR L-21484, 29 November 1969)The Agricultural Credit and Cooperative Financing Administration (ACCFA) vs. Confederation of Unions in Government Corporations and Offices (CUGCO), etc.[GR L-21484, 29 November 1969]; also The Agricultural Credit Administration (ACA) vs. ACCFA Supervisors' Association (ASA), etc. [GR L-23605]En Banc, Makalintal (J): 7 concur, 1 concurs in result, 1 concurs in separate opinion

Facts:On 4 September 1961 a collective bargaining agreement (CBA), which was to be effectivefor a period of 1 year from 1 July 1961, was entered into by and between the Unions and theAgricultural Credit and Cooperative Financing Administration (ACCFA). Afew months thereafter, the Unions started protesting against alleged violations andnon-implementation ofsaid agreement. Finally, on 25 October 1962 the Unions declared a strike, which was endedwhen the strikers voluntarily returned to work on 26 November 1962. On 30 October 1962 the Unions, together with its mother union,the Confederation of Unions in GovernmentCorporations and Offices (CUGCO), filed a complaintwith the Court of Industrial Relations against the ACCFA (Case 3450-ULP) for havingallegedly committed acts of unfair laborpractice, namely: violation of the CBA in order to discourage the members ofthe Unions in the exercise of their right to self-organization, discrimination against said members in the matter ofpromotions, and refusal to bargain. The ACCFA denied the charges and interposed as affirmative and special defenses lack of jurisdiction ofthe CIR over the case, illegality ofthe bargaining contract, expiration of said Contract and lack of approval by the office of thePresident of the fringe benefits provided for therein. Brushing aside the foregoing defenses, the CIR in its decision dated25 March 1963 ordered the ACCFA(1) to cease and desist from committing further acts tending to discourage the members ofcomplainant unions in theexercise of their right to self organization; (2) to complywith and implement the provision of the collective bargaining contract executed on 4 September 1961, including the payment of P30.00 a month living allowance; and (3) tobargain in good faith andexpeditiously with the herein complainants. ACCFA moved to reconsider but was turned down in a resolution dated 25 April1963 of the CIR en banc. Thereupon it brought the appeal by certiorari to the Supreme Court(GR L-21484). During the pendency of the ACCFA's case, specifically on 8 August 1963, thePresident of the Philippines signed into law the Agricultural Land Reform Code (Republic Act3844), which among other thingsrequired the reorganization of the administrative machinery ofthe Agricultural Credit and Cooperative FinancingAdministration (ACCFA) and changed its name to Agricultural Credit Administration (ACA). On 17 March1964 the ACCFA Supervisors'Association and the ACCFA Workers' Association filed apetition for certification election with the Court of Industrial Relations (Case 1327-MC) praying that theybe certified as the exclusive bargaining agents for the supervisors and rank-and-fileemployees, respectively, in the ACA. The trial Court in its order dated 30 March1964 directed the Manager orOfficer-in-Charge of theACA to allow the posting ofsaid order "for the information of all employees andworkers thereof," and to answer the petition. In compliance therewith, the ACA,while admitting most ofthe allegations in the petition,denied that the Unions represented the majority ofthe supervisors and rank-and-file workers, respectively, in the ACA. It further alleged that the petition waspremature, that the ACA was not the proper party to be notified and to answer the petition, andthat the employees and supervisors could not lawfully become members of the Unions, nor be represented by them. However, in a joint manifestation of the Unions dated7 May 1964, with the conformity of the ACA Administrator and ofthe Agrarian Counsel in his capacity as suchand as counsel for the National Land Reform Council, it was agreed "that theunion in this case represent the majority of the employees intheir respective bargaining units" and that onlythe legal issues raised would be submitted for theresolution of the trial Court. Finding the remaining grounds for ACA's opposition to thepetition to be without merit, the trial Court in its order dated 21 May1964 certified the ACCFA Workers' Association and the ACCFA Supervisors' Association as the sole and exclusive bargaining representatives of the rank-and-file employees and supervisors, respectively, of ACA. Said order was affirmed by the CIRenbanc in its resolution dated 24 August 1964. On 2 October 1964 the ACA filed in the Supreme Court a petition for certiorari with urgent motion tostay the CIR order (GR L-23605). Ina resolution dated 6 October 1964, the Supreme Court dismissed the petition for 'lack of adequate allegations," but the dismissal was later reconsidered when the ACA complied with the formalrequirement stated in said resolution. As prayed for, theCourt ordered the CIR to stay the execution of its order of 21 May 1964.Issue:Whether the ACA is engaged in governmental or proprietary functions.Held:The ACA is a government officeor agency engaged ingovernmental, not proprietaryfunctions. These functions may not bestrictly what President Wilson described as "constituent"(as distinguished from "ministrant"), such as those relating to the maintenanceof peace and theprevention of crime, those regulating property and property rights, those relating to the administration of justice and the determination of politicalduties of citizens, and those relatingto national defense and foreign relations. Under this traditional classification, such constituentfunctions are exercised by the State as attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the people these latter functions being ministrant, the exercise of which is optional onthe part of the government. Thegrowing complexities of modernsociety, however, have rendered this traditional classification ofthe functions of governmentquite unrealistic, not to say obsolete.The areas which used to beleft to private enterprise andinitiative and which the government was called upon to enter optionally, and only "because itwas better equipped to administer for the public welfare than is any private individual or group of individuals" continue to losetheir well-defined boundaries and to beabsorbed within activities that the government must undertake inits sovereign capacity if it is to meet the increasing social challenges of thetimes. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization ofeconomic forces. Here of course this developmentwas envisioned, indeed adoptedas a national policy, bythe Constitution itself in its declaration of principle concerning thepromotion of social justice. It was in furtherance of suchpolicy thatthe Land Reform Code was enacted and the various agencies, the ACA among them, establishedto carry out its purposes. There canbe no dispute as tothe fact that the landreform program contemplated in thesaid Code is beyond the capabilities of any private enterprise to translate into reality. It is a purely governmental function, no less than, say, theestablishment andmaintenance of public schools and public hospitals. And when, aside from the governmentalobjectives of the ACA,geared as they are to theimplementation of the land reform program ofthe State, the law itself declares that theACA is a government office, with the formulation ofpolicies, plans and programs vested no longer in a Board of Governors, as in the case of theACCFA, but in theNational Land Reform Council, itself a government instrumentality; and thatits personnel are subject to Civil Service laws and to rules of standardization with respect topositions and salaries, any vestige of doubt as to the governmental character ofits functions disappears. In view of the foregoing premises, the Unions are not entitled to thecertification election sought in the lower Court. Such certification is admittedly for purposes of bargaining in behalf of the employeeswith respect to terms and conditions of employment, includingthe rightto strike as a coercive economic weapon, as in fact the said unions did strike in 1962 against theACCFA (GR L-21824). This is contrary to Section 11of Republic Act 875.With there organization of the ACCFA andits conversion into the ACA under the Land Reform Codeandin view of the Court's ruling asto the governmental character ofthe functions of the ACA, the decision of the lower Court, andthe resolution en banc affirming it, inthe unfair labor practice case filed by the ACCFA, which decision is the subject of the present review in GR L-21484, has become moot andacademic, particularly insofar as the order to bargaincollectively with the Unions is concerned.