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BENGUET CONSOLIDATED INC. vs.

BCI EMPLOYEES AND WORKERS UNION-PAFLU;


Gr. No. L-24711, April 30, 1968

Facts:
The Benguet-Balatoc Workers Union (BBWU) entered into a Collective Bargaining Contract with Benguet
Consolidated, Inc (BENGUET). It became effective for a period of 4-½ years, and itembodied a No-Strike, No-Lockout clause.
3 years later, a certification election was conducted among all the rank and file employees of BENGUET. BCI Employees &
Workers Union (UNION) defeated BBWU. CIR certified UNION as the sole and exclusive collective bargaining agent of all
BENGUET employees.
A Notice of Strike was filed, and the UNION members who were BENGUET employees went on strike. Picket lines
were formed, and the picketers, resorted to threats and intimidation, and use of force and violence. Some of the
properties of BENGUET were also damaged. Eventually, the parties agreed to end the dispute. BENGUET and UNION
executed an agreement. PAFLU placed its conformity thereto and said agreement was attested to by the Director of the
BLR. A collective bargaining contract was executed between UNION-PAFLU and BENGUET.
As a result of the strike staged by UNION and its members, BENGUET had to incur expenses for the repair of the
damaged properties. BENGUET sued UNION, PAFLU and their Presidents before the CFI on the sole premise that said
defendants breached their undertaking in the existing contract not to strike. The unions and their presidents put up the
following defenses: (1) they were not bound by the contract which BBWU, the defeated union, had executed with
BENGUET; (2) the strike was due to unfair labor practices of BENGUET; and (3) the strike was lawful and in the exercise of
the legitimate rights of UNION-PAFLU. CFI dismissed the complaint on the ground that the contract did not bind
defendants.

Issue:
Whether or not the contract executed between BENGUET and BBWU automatically bind UNION-PAFLU upon its
certification as sole bargaining representative of all BENGUET employees.

Ruling:
BENGUET invoked the "Doctrine of Substitution" referred to in General Maritime Stevedores' Union v. South Sea
Shipping Lines where it stated that, if bargaining agent other than the union or organization that executed the contract, is
elected, said the agent should respect the said contract. The statement was obiter dictum. BENGUET's reliance upon the
Principle of Substitution is totally misplaced.
The "substitutionary" doctrine only provides that the employees cannot revoke the validly executed collective
bargaining contract with their employer by the simple expedient of changing their bargaining agent. And it is in the light
of this that the phrase "said new agent would have to respect said contract" must be understood. It only means that the
employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to
negotiate with management for the shortening thereof. The doctrine cannot be invoked to support the contention that a
newly certified collective bargaining agent automatically assumes all the personal undertakings in the collective bargaining
agreement made by the deposed union.
When BBWU bound itself and its officers not to strike, it could not have validly bound also all the other rival unions
existing in the bargaining units in question. BBWU was the agent of the employees, not of the other unions which possess
distinct personalities. The UNION could always voluntarily assume all the personal undertakings made by the displaced
agent. But as the lower court found, there was no showing at all that, prior to the strike, UNION formally adopted the
existing contract as its own and assumed all the liability ties imposed by the same upon BBWU.
Everything binding on a duly authorized agent is binding on the principal; not vice-versa, unless there is a mutual agency,
or unless the agent expressly binds himself to the party with whom he contracts. In the case at bar, it was BBWU who
expressly bound itself to BENGUET.
UNION, the new agent, did not assume this undertaking of BBWU. Since defendants were not contractually bound
by the no-strike clause, for the simple reason that they were not parties thereto, they could not be liable for breach of
contract to plaintiff.
The judgment of the lower court appealed from is hereby affirmed.

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