Political Law

Agricultural Credit and Cooperative Financing Administration vs Confederation of Unions in Government Corporations and Offices

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G.R. No. L-21484 – 30 SCRA 649 – Political Law – Basic Concepts – Elements of a State – Government – Two-fold Function of the Government – Free Enterprise – Ministrant vs Constituent Functions

In September 1961 a Collective Bargaining Agreement (CBA) was agreed upon by labor unions (ASA and AWA) and ACCFA (Agricultural Credit and Cooperative Financing Administration). The said CBA was supposed to be effective on July 1, 1962. Due to non-implementation of the CBA, the unions held a strike on October 25, 1962. And 5 days later CUGCO (Confederation of Unions in Government Corporations and Offices), the mother union of ASA and AWA filed a complaint against ACCFA due to unfair labor practices, among others, which CUGCO was able to win in court.

In April 1963, ACCFA appealed the decision and while the appeal was pending, Republic Act No. 3844 was passed which effectively turned ACCFA to ACA (Agricultural Credit Administration). In March 1964, ASA and AWA then petitioned that they may have sole bargaining rights with ACA. While this petition was not yet decided upon, in the same month of March 1964, Executive Order No. 75 was also passed which placed ACA under the Land Reform Project Administration (LRPA). Notwithstanding the latest legislation passed, the trial court and the appellate court ruled in favor of ASA and AWA and ruled that they have bargaining rights with ACA.

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

HELD: No. 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 Reform Program of the government is 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.

The Supreme Court also 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).

Separate Opinion on the Free Enterprise System

J. Fernando – This country never practiced the free enterprise system and it has abandoned the concept of laissez faire. It is the welfare state concept which is being followed as shown by the constitutional provision on agrarian reform, housing, protection to labor and others that provide for the social welfare.

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