G.R. No. L-10091. Jan. 29, 1958. 102 Phil. 1080

[G.R. No. L-10091, January 29, 1958. 102 Phil. 1080] BOY SCOUTS OF THE PHILIPPINES, PETITIONER, VS. JULIANA V. ARAOS, RESPONDENT. MONTEMAYOR, J.:

This is a petition to review on certiorari the decision of the Court of Industrial Relations of October 10, 1955 and the resolution of said court en banc of December 5, of the same year, denying the motion for reconsideration of the decision. Because of the view we take of the case, we deem it unnecessary to state the facts in detail.

The petitioner, Boy Scouts of the Philippines, a public corporation created under Commonwealth Act 111, is a civic and benevolent institution engaged in the promotion and development of character, patriotism, courage, self-reliance, and kindred virtues in the boys of the country. Section 4 of the Act of creation states its objectives as "solely of a benevolent character and not for pecuniary profit". Respondent Juliana V. Araos worked with the petitioner as scout executive, holding such position and rank from 1948 up to her dismissal from the service on June 1, 1954. Respondent, during her incumbency, or-ganized the BSP Employees Welfare Association, a sort of labor organization or union of employees working in the Boy Scouts of the Philippines. She became president thereof. On January 29, 1954, respondent filed charges with the National Bureau of Investigation against Exequiel Villacorta, Chief Scout Executive, for alleged "anomalous actuations of the said person in the performance of his duties in the said office." On February 1, 1954, respondent addressed a letter to the President of the Boy Scouts of the Philippines, Jorge B. Vargas, bringing to his attention the charges she had filed against Villacorta with the NBI. She also sent and distributed copies of her charges to each and every member of the Executive Board of the Boy Scouts of the Philippines, to the Presidential Complaint and Action Committee, MalacaƱang, and to the President of the Philippines, to scouters all over the Philippines, and to all the delegates to the 15th Annual Meeting, National Council, Boy Scouts of the Philippines. It is said that the NBI found Villacorta guilty of the charges filed by Araos.

Thereafter, H. B. Reyes, Chairman of the Personnel Committee of the BSP, on May 18, 1954, addressed a letter to respondent, which is self-explanatory, and which we quote below:
"Dear Madam:

"A report and complaint have been received by President Jorge B. Vargas, and the National Executive Board of the Boy Scouts of the Philippines, to the effect that you have engaged systematically in activities inimical to the best interests of the Boy Scouts of the Philippines, with total disregard and in defiance of the duly-constituted authorities of the Boy Scouts of the Philippines, consisting of the following acts:

"a. That you have filed a complaint with a request for an immediate investigation of Mr. Exequiel Villacorta, Chief Scout Executive of the Boy Scouts of the Philippines, with the President's Complaints and Action Commission (PCAC) directly, and with the National Bureau of Investigation, and have only furnished copy thereof to the President of the Boy Scouts of the Philippines.

"b. That you have reproduced the same complaints and distributed copies thereof to various newspaper offices in the City of Manila, and sent copies thereof to various Scouters in the City of Manila and the provinces, notwithstanding that you knew that the complaints were under investigation by the Committee on Personnel of the Boy Scouts of the Philippines and the NBI.

"c. That notwithstanding your knowledge and information that the Committee on Personnel has your complaints under consideration, and that the report of the NBI agent, incharge of the case, has not been submitted to nor received by the Boy Scouts of the Philippines, you have distributed copies of the same complaints to the delegates of the 15th National Council Meeting of the Boy Scouts of the Philippines, and/or mailed copies thereof to the delegates.

"d. That immediately after the closing of the 15th National Council Meeting and upon learning that no delegates had taken up the subject matter of your complaints at the Council Meeting, you proceeded to see Mr. Rafael Yabut, the radio commentator, and furnished him copy of the same charges which were under investigation with the intention to have those charges aired over the radio, as in fact they were made the subject matter of Mr. Yabut's broadcast in the morning of May 12, 1954.

"By instruction of the National Executive Board, you are hereby requested to submit your reply to the above specification of charges, and to explain within 72 hours why disciplinary action should not be taken against you for your censurable conduct against the best interests of the Boy Scouts of the Philippines and in disregard and defiance of the duly-constituted authorities of the Organization.

"Respectfully yours,

"For the National Executive Board

"(Sgd.) H. B. Reyes

Chairman

Personnel Committee" 
Respondent answered the letter, practically admitting the activities and acts imputed to her said to be inimical to the interests of the BSP, but trying to justify the same.

On May 26, 1954, the Personnel Committee of the BSP, composed of H. B. Reyes, Gabriel A. Daza, Enrique A. Lolarga, Sergio Bayan, F. E. V. Sison, Eugenio Padua, and Teodoro K. Molo, the latter reserving his vote, filed a report with the National Executive Board of the BSP. After discussing the merits of the case, the Committee came "to the unanimous conclusion that Mrs. Juliana V. Araos is guilty as charged Jind that her present conduct, judged in the light of her past record, is such that her continuation in the service of the scouting movement in the Philippines is highly prejudicial to its interest and therefore, recommends that she be dismissed from the service effective immediately." Presumably acting upon, said report and recommendation, BSP President Vargas, on June 1, 1954, sent a letter to respondent dismissing her from the service of the BSP.

On August 3, 1954, respondent filed charges against the BSP in the Court of Industrial Relations for unfair labor practice, alleging that her dismissal was in violation of Section 4, Subsection (a), paragraphs 4 and 5 of Republic Act No. 875, claiming that she had been dismissed due to her union activities, in filing charges against the Chief Scout Executive. On September 28 1954, acting prosecutor Ilagan of the CIR filed a formal complaint in the case. On October 4, 1954, the BSP filed a motion to dismiss the case among other grounds that the CIR had no jurisdiction over the case for the reason that the BSP was a civic, charitable, humanitarian and patriotic enterprise, not created for profit and consequently, there could be no labor dispute over which the CIR may exercise jurisdiction. By order of October 14, 1954, the CIR deferred action on the motion to dismiss, until trial, so that all questions of law and fact may be determined in a single proceeding and decided in a single decision. After hearing, Judge Jose S. Bautista, Acting Presiding Judge of the CIR, rendered decision on October 10, 1955, the dispositive part of which reads as follows:
"In view of the foregoing considerations, the respondent is hereby ordered:

1. To cease and desist from dismissing any of the employees for having filed charges against it;

2. To reinstate Mrs. Juliana V. Araos to her former or equivalent position with back pay, without prejudice to all privileges accruing in her favor, from June 1, 1954 up to her reinstatement;

3. To post a copy of the dispositive portion of this decision in its bulletin board, the same to remain posted therein for thirty (30) days from the date of this decision becomes final and executory." 
Acting upon a motion for reconsideration, Judge Bautista with Associate Judges V. Jimenez Yanson, and Arsenio I. Martinez, concurring, denied the motion for reconsideration, while Associate Judge Juan L. Lanting, took no part. As already stated, petitioner BSP is appealing from that decision and resolution.

We propose to decide the present case exclusively on the question of jurisdiction, regardless of the merits of the case.

Is the BSP an employer as contemplated by Republic Act No. 875, and was the controversy between it and the respondent a labor or industrial dispute cognizable by the Court of Industrial Relations?

In the case of U.S.T. Hospital Employees Association vs. Santo Tomas University Hospital, 95 Phil., 40, which involved the question of whether the employees of said hospital were entitled to extra compensation for working at night and whether the hospital was governed by the Eight Hour Labor Law, Commonwealth Act No. 444, this Court, through Mr. Justice Pablo, sustained the order of the Court of Industrial Relations dismissing the action filed by the U.S.T. Hospital Employees Association, for lack of jurisdiction, and we held that inasmuch as the Santo Tomas University Hospital was not established for profit or gain, but on the contrary was organized for the elevated purpose of serving suffering humanity, the posts occupied by the employees and laborers of the hospital may not be considered as industrial employment, and that their controversy with the hospital regarding additional pay cannot be considered as an industrial dispute; consequently, the action filed by said laborers and employees was not within the jurisdiction of the Court of Industrial Relations.

The doctrine laid down in the hospital case above-mentioned was reiterated in the case of San Beda College vs. National Labor Union, et al., 97 Phil., 787, 51 Off. Gaz. 5636, where this Court, through Mr. Justice Sabino Padilla, held that inasmuch as the San Beda College was not operated and maintained for profit or for purpose of gain, the persons working in said college cannot be deemed to be industrial employees and consequently, any controversy or dispute they may have with the College in connection with or arising out of their employment does not come within the purview of Commonwealth Act 103, as amended by Commonwealth Act Nos. 254 and 559.

In the cases of Quezon Institute vs. Velasco, and Quezon Institute vs. Paraso, 97 Phil., 905, 51 Off. Gaz. (12) 6175, respectively, this Court, through Mr. Justice Jugo, held, citing the Santo Tomas University Hospital case (supra), that "with greater reason the Quezon Institute should be declared as an institution not established for gain within the meaning of the Workmen's Compensation Law", and reversed the orders of the Workmen's Compensation Commissioner requiring the Quezon Institute to pay indemnities to two employees of said Institute who contracted tuberculosis due to their work there, were incapacitated for certain periods of time, and later filed claims with the Workmen's Compensation Commission.

Again, in the case of Baselides Marcelo, et al., vs. Philippine National Red Cross, 101 Phil., 544, where the employees of the Red Cross filed an action in the Court of First Instance of Manila, claiming overtime pay, including payment for services rendered on Sundays and holidays, and where the trial court, acting upon a motion to dismiss, dismissed the complaint for lack of cause of action on the ground that the Eight Hour Labor Law, Commonwealth Act No. 444, did not apply to said employees of the Red Cross, this Court affirmed the order of dismissal, and through Mr. Justice Alfonso Felix, we said that the Philippine National Red Cross performs humanitarian work and is not engaged in an industry or occupation for purposes of gain, and consequently, its employees cannot demand as a matter of right the application to them of the Eight Hour Labor Law.

In the course of the discussion of this case, particularly, the aforementioned cases of the Santo Tomas Hospital, San Beda College, Quezon Institute, and Philippine National Red Cross, supra, it was claimed that none of these cases is in point, for the reason that they do not touch upon or involve the jurisdiction of the Industrial Court. Strictly speaking, the claim is correct. However, these cases cited not exactly to support the theory that the Industrial Court has no jurisdiction over the present case, but rather to show that this high Tribunal has laid down the doctrine that labor legislation, like Commonwealth Act 103, as amended, creating the Court of Industrial Relations, the Eight-Hour Labor Law and the Workmen's Compensation Act, have no application to institutions organized and operated for charity, education, etc., and not for profit or gain, as far as the relationship between the management and its employees or laborers is concerned; that despite the solicitude shown by the Legislature for labor and its policy to promote the welfare of employees and laborers, nevertheless, it did not see fit or deem it necessary to extend to the workers in these charitable and educational organizations, the benefits of extra compensation for overtime work and work on Sundays and holidays, and for compensation for injuries suffered or illness contracted or aggravated, arising out of and in the course of employment; and that by analogy, the Industrial Peace Act, Republic Act 875, also a labor law, has no application to the Boy Scouts of the Philippines.

It was also asserted that our decisions in the cases of Metropolitan Water District Workers Union vs. Court of Industrial Relations, 91 Phil., 840, and Government Service Insurance System vs. Castillo, 98 Phil., 878, 52 Off. Gaz. (9) 4269, somewhat weaken and adversely affect our ruling in the Santo Tomas Hospital and San Beda College cases, for the reason that; in the two cases involving the instrumentalities of the Government, neither engaged in the production of goods nor in seeking monetary gain, the Metropolitan Water District having been established to render public service by furnishing an adequate water supply and sewerage service and the Government Service Insurance System, to promote the efficiency and welfare of the employees of the Philippine Government, still we held that the Industrial Court had jurisdiction under Commonwealth Act 103, as amended, to settle disputes between said entities and their employees. The seeming conflict in our rulings in the two sets of cases can readily be explained. In the first place, the Metropolitan Water District and the Government Service Insurance System are government corporations or entities engaged not in governmental functions, but rather in proprietary functions of the Government, and these entities are expressly not excluded from the provisions of the Industrial Peace Act, Republic Act 875, under Section 11 thereof, and that consequently, the policy of the Government against strikes for the purpose of securing changes or modifications in the terms and conditions for employment of employees in the Government, including the political subdivisions thereof, does not apply. In the second place, as regards the Metropolitan Water District it cannot be truly said that it does not seek monetary gain. For the water and sewerage service it renders, it charges compensation, sometimes at a rate which in the opinion of the consumers is above the value of said service, resulting in general complaints and petitions for reduction of rate. This profit or gain over the expenses incurred by the Metropolitan Water District is utilized to expand its facilities and resources, so that after many years, the property, resources and assets of the Metropolitan Water District will be far in excess and beyond its original capital or investment, and any time or when this entity is dissolved or its functions are taken over by a private entity, which is possible and legally permissible, and its assets are bought as an entity, there would be a sizeable, if not a tremendous gain for the Government. Besides, any increase in pay, extra compensation, bonus, etc., which may be demanded by and granted its employees and laborers, if they cannot be taken from or absorbed by the income and profits, can easily be passed on to its customers by increasing its rates. Surely, the Metropolitan Water District can in no sense be considered a charitable, benevolent, or philanthropic institution. And as to the Government Service Insurance System, it is well known that it invests its fund derived from the contributions of government employees, in huge amounts and at substantial interest, and the profits made therefrom are in part distributed as dividends among its insured. Surely, said insurance entity does not operate for charity, but in practice operates for profit or gain for the benefit of those insured by it. This, aside from the fact that insurance has been generally considered and even held by the courts to be a business.

Now, may the Boy Scouts of the Philippines, which is admittedly organized and operated not for profit or gain, be considered as engaged in an industry so that its relation with its employees may be governed by the Industrial Peace Act, Republic Act No. 875, that the dismissal of one of its employees for alleged union activities may be considered as unfair labor practice, within the meaning of said Industrial Peace Act, and consequently, cognizable by the Court of Industrial Relations?

The main issue involved in the present case is whether or not a charitable institution or one organized not for profit but for more elevated purposes, charitable, humanitarian, etc., like the Boy Scouts of the Philippines, is included in the definition of "employer" contained in Republic Act 875, and whether the employees of said institution fall under the definition of "employee" also contained in the same Republic Act. If they are included, then any act which may be considered unfair labor practice, within the meaning of said Republic Act, would come under the jurisdiction of the Court of Industrial Relations; but if they do riot fall within the scope of said Republic Act, particularly, its definitions of employer and employee, then the Industrial Court would have no jurisdiction at all.

During the discussion of this case, it was claimed that our Industrial Peace Act is partly modelled after the National Labor Relations Act, known as the Wagner Act; that said Wagner Act contains similar definitions of "employer" and "employee"; and that in a number of cases decided by the Federal courts, including the United States Supreme Court, interpreting and applying said Wagner Act, it has been consistently and uniformly held that non-profit organizations and charitable institutions fall within the scope of the term employer within the meaning of the Wagner Act, ond that consequently, if we are to follow said judicial authorities, we must perforce hold that a non-profit organization like the Boy Scouts of the Philippines comes within the scope of the definition of employer under our Industrial Peace Act, and so any unfair labor practice committed by the management of said institution would come within the jurisdiction of the Court of Industrial Relations. The point raised is quite important and deserves extended discussion and explanation.

For purposes of reference, we shall reproduce the definitions of "employer" and "employee" in the Wagner Act and the corresponding definitions under Republic Act 875:

WAGNER ACT REPUBLIC ACT 875
"The term 'employer' includes any person acting in the interest of an employer, directly or indirectly, but shall not include[the United States or any State or political subdivision thereof, or any person subject to the Railway Labor Act, as amended from time to time], or any labor organization (other than when acting as an employer) , or anyone acting in the capacity of officer or agent of such labor organization." [Sec. 2(2)]

"The term 'employee' shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, [but shall not not include any individual employed as an agricultural laborer or in the domestic service of any family or persons at his home, or any individual employer by his parent or spouse.]" [Sec. 2 (3)]
"The term 'employer' includes any person acting in the interest of an employer, directly or indirectly but shall not include any labor organization (otherwise than when acting as an employer) or any one acting in the capacity of officer or agent of such labor organization." Sec. 2 (c)]

"The term 'employee' shall include any employee and shall not be limited to the employee of a particular employer unless the Act explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice and who has not obtained any other substantially equivalent and regular employment." [Sec. 2 (d)]
(Note: The portions in the Wagner Act included in brackets ([ ]) are not found in Republic Act 875.) 
For purposes of reference, we shall reproduce the definitions of "employer" and "employee" in the Wagner Act and the corresponding definitions under Republic Act 875: By comparison, it will be observed that the Wagner Act's definition of "employer" exempts or excludes the United States or any State or political subdivision thereof, or any person subject to the Railway Labor Act. As a matter of fact, the Labor Management Relations Act of 1947, known as the Taft-Hartley Act, amending the Wagner Act, introduced additional exemptions from the term "employer", such as Government corporations, Federal banks, and particularly corporations operating hospitals, and from the term "employee" additional exemptions, such as individuals employed as independent contractors and supervisors.

On the other hand, our Industrial Peace Act's definition of "employer" contains no such exemptions. The obvious implication is that the Wagner Act and later as amended, made an express exemption or exception in favor of all those entities, such as the United States or any States or political subdivision, which it wanted to be excluded, so that any organization, entity, or institution not so included in the exemption must naturally fall under the definition of employer. Naturally, the Federal courts in interpreting this part of the Wagner Act and finding that the exemption or exception did not expressly mention charitable or non-profit institutions, were constrained to hold that said institutions were considered employers under the Wagner Act.

The same thing may be said of the term "employee" under said Wagner Act. It contains several exemptions, such as any individual employed in the domestic service, or any person employed by his parent or spouse. Such exemptions are absent under the term "employee" used in our Industrial Peace Act; and yet those exempted under the Wagner Act's definitions of employer and employee are obviously and clearly entitled to exception or exemption under our own Industrial Peace Act. For instance, there can be no question that under our Industrial Peace Act, the Republic or any political division or subdivision, like a province or municipality, must and should also be excluded from the definition of employer. Similarly, under the term "employee" of our law, agricultural laborers or individuals employed in the domestic service, like private or domestic drivers, housemaids, kitchen help, etc., should be excluded. From this, we can logically conclude that our Legislature, in drafting the law, particularly the portion defining employer and employee, did not deem it necessary or advisable to make the obvious and necessary exemptions or exceptions, but left it to the courts for interpretation and application. For this reason, the cases decided by the United States Federal courts, interpreting the Wagner Act as regards employer and employee, are not applicable.

But there is a more important and fundamental reason why the Federal cases cited as ruling against our interpretation of Republic Act 875, cannot be considered applicable, even relevant. The Wagner Act, a Federal legislation, was promulgated for a specific purpose—to eliminate or diminish as much as possible the causes of labor disputes which may obstruct or interfere with interstate and foreign commerce.

Incidentally, it should be stated that the only justification for the United States Federal Government to promulgate the Wagner Act is that it dealt with and involved interstate commerce, otherwise, the Federal Congress would have no jurisdiction or right to act at all. Labor management relations involving institutions whose activities are entirely and exclusively within the State of the Union are governed by State legislation, or the State Labor Relations Act.

The very first part of said Wagner Act, which we reproduce below, is self-explanatory:
"An Act to diminish the causes of labor disputes burdening or obstructing interstate and foreign commerce, to create a Na-tional Labor Relations Board, and for other purposes." (Italics supplied.)
The first, second, third, and fourth paragraphs of said Wagner Act, which we reproduce below, also speak of commerce and flow of commerce:
"Section 1. The denial by employers of the right of employees to organize and the refusal by employers to accept the procedure of collective bargaining lead to strikes and other forms of industrial strife or unrest, which have the intent or the necessary effect of burdening or obstructing commerce by (a) impairing the efficiency, safety, or operation of the instrumentalities of commerce; (b) occurring in the current of commerce; (c) materially affecting, restraining, or controlling the flow of raw materials or manufactured or processed goods from or into the channels of commerce, or (d) causing dimunition of employment and wages in such volume as substantially to impair or disrupt the market for goods flowing from or into the channels of commerce.

"The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.

"Experience has proved that protection by law of the right of employees to organize and bargain collectively safeguards commerce from injury, impairment or interruption, and promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest, by encouraging practices fundamental to the friendly adjustment of industrial disputes arising out of differences as to wages, hours, or other working conditions, and by restoring equality of bargaining power between employers and employees.

"It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organiza-tion, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection." (Italics supplied.)
And paragraph six of Section 2 of the Wagner Act defines the term "commerce":
"(6) The term 'commerce' means trade, traffic, commerce, transportation or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country." (Italics supplied.)
In other words, the main concern of the United States Congress in promulgating the Wagner Act was to eliminate the causes of the interruption or obstruction to the free flow of commerce among and between the States and between the United States and foreign countries, so that any institution, regardless of the purpose of its organization and the objective of its operation, whether for profit, or whether charitable, benevolent, philanthropic, as long as its activities cross state lines, and that any-labor dispute between it and its employees may affect, obstruct, or interrupt interstate commerce or foreign commerce, must necessarily be considered as an employer within the meaning of the Wagner Act, and subject to the jurisdiction of the National Labor Relations Board. That is the reason why in the Federal cases cited, specially the cases of The Polish National Alliance vs. N.L.R.B. 322 U.S 643, and the N.L.R.B. vs. Central Dispensary Emergency Hospital, (1944) 135 F. 2d 852, the courts therein held that the fraternal and benefit society and hospital involved therein were subject to the provisions of the Wagner Act. In the first case, the National Labor Relations Board found that the Police National Alliance was engaged in unfair labor practice. On a petition for review and a cross-petition of the Board for enforcement, the Circuit Court of Appeals sustained the order, and on appeal by certiorari the United States Supreme Court found and said the following:
"The Polish National Alliance is a fraternal benefit society providing death, disability, and accident benefits to its members and their beneficiaries. Incorporated under the laws of Illinois, it is organized into 1,817 lodges scattered through twenty-seven States, the District of Columbia, and the Province of Manitoba, Canada. As the "largest fraternal organization in the world of Americans of Polish descent," it had outstanding, in 1941, 272,897 insurance benefit certificates with a face value of nearly $160,000,000. Over 76% of these certificates were held by persons living outside of Illinois. At the end of that year, petitioner's assets totalled about $30,000,000, in cash, real estate in five States, United States Government bonds, foreign government bonds, bonds of various States and their political subdivisions, railroad, public utility, and industrial bonds, and stocks. From its organization in 1880 until the end of 1940, the Alliance spent over $7,000,000 for charitable, educational, and fraternal activities among its members. During the same period, it paid out over $38,000,000 in mortuary claims."

"Petitioner directs from its home office in Chicago a staff of over 225 full and parttime organizers and field agents in twenty-six States whose traveling expenses are borne by Alliance and who receive commissions for new memberships. Since its 1939 convention, Alliance has admited no more 'social members'. Thereafter, all applicants have been required to buy insurance certificates providing various types of life, endowment, and term coverage. These policies contain the typical loan, cash surrender value, optional settlement, and dividend provisions. Petitioner spent over $10,000 for advertising outside of Illinois during-1941. It employs a Geogia credit company to report on the financial standing and character of the applicants, and reinsures substandard risks with an Indiana company.

"Alliance lodges are organized into 190 councils, 160 of which are outside the State of Illinois. The councils elect delegates to the national convention, and it in turn elects the executive and administrative officers. The Censor of Alliance is its ranking officer and he appoints an editorial staff which publishes a weekly paper distributed to members. Of the 6,857,556 copies published in 1941, about 80% were mailed to persons living outside of Illinois.

"This summary of the activities of Alliance and of the methods and facilities for their pursuit amply shows the web of money-making transactions woven across many State lines. An effective strike against such a business enterprise, centered in Chicago but radiating from it all over the country, would as a practical matter certainly burden and obstruct the means of transmission and communication across these state lines. Stoppage or disruption of the work in Chicago involves interruptions of the steady stream, into and out of Illinois, of bills, notices, and policies, the payments of commissions, the making of loans on policies, the insertion and circulation of advertising material in newspapers, and its dissemination over the radio. The effect of such interruptions on commerce is unmistakable. The load of interstate communication and transportation services is lessened, cash necessary for interstate business becomes unavailable, the business, interstate, of news-papers and radio stations suffer. Nor is this all. Alliance, it appears, plays a credit role in interstate industries, railroads, and other public utilities. In 1941, it acquired securities in an amount in excess of $11,000,000, and sold or redeemed securities costing-more than $7,500,000. Financial transactions of the magnitude can-not be impeded even temporarily without affecting to an extent not negligible the interstate enterprises in which the large assets of Alliance are invested. That such are the substantial effects on interstate commerce of dislocating labor practices by insurance companies was established before the Labor Board in at least thirteen comparable situations. The practical justification of such a conclusion has not heretofore been challenged. Considerations like these led the Board to find that petitioner's practices 'have a close, intimate, and substantial relation to trade, traffic, and com-merce among the several States and tend to lead to labor disputes burdening and obstructing' commerce,' and were therefore 'unfair labor practices affecting commerce within the meaning of Section 2(6) and (7),' and as such, prohibited by Section 10 of the Wagner Act, 29 USCA, Section 160, 9 FCA Title 29, Section 160."

* * * * * * *

"We have said enough to indicate the ground for our conclusion that the Board was not unjustified in finding that the unfair labor practices found by it would affect commerce. And the undoubted fact that Alliance promotes, among Americans of Polish descent, interest in and devotion to, the contributions that Poland has made to civilization does not subordinate its business activities, to insignficance. Accordingly, the Board could find that its cultural and fraternal activities do not withdraw Alliance from amenability to the Wagner Act." (Polish National Alliance vs. National Labor Relations Board, 322 U.S. 643; pp. 644-647, 648).
In the second case of the National Labor Relations Board vs. Central Dispensary and Emergency Hospital, the National Labor Relations Board certified to the United States Court of Appeals, District of Columbia, the enforcement of its order requiring respondent Hospital to bargain collectively with Building Service Employees' International Union, exclusive representative of respondent's employees. Respondent attacked the order on the ground that it is a non-profit charitable institution not engaged in trade, traffic, commerce, or transportation within the meaning of the National Labor Relations Act. The United States Court of Appeals, in granting the petition of the Board, held that respondent Hospital was not exempted from the operation of the Act, for the reason that its activity involved the sale of medical services and supplies for which it received about $600,000 a year and £it purchased from commercial houses material with the value of about $240,000; it em-ploys about 230 persons for non-professional services and maintenance work, and 120 technical and professional em-ployees. According to the court, "such activities are trade and commerce and the fact that they are carried on by a charity hospital is immaterial to a decision of this issue." (Italics supplied.) It cited the case of American Medical Association vs. United States, wherein the same court held that the sale of medical and hospital services for a fee has been considered as trade by English and American common law cases, going back to 1793.

On the applicability of the Wagner Act and the Taft-Hartley Act amending it, and the jurisdiction of the Na-tional Labor Relations Board therein created, Rothenberg in his book on Labor Relations, p. 311, says the following:
"D. Interstate Commerce as a Test of Board's Jurisdiction.

"Whether one adopts the view that the primary purpose of the Act is to aid interstate commerce or the alternative view that the basic state commerce, under either position the elements of interstate commerce is an integral and indispensable consideration, and which as we shall shortly see, is one of the deciding factors in questions of applicability of the Act and jurisdiction of the Board in a given case.

"If the Act is scrutinized carefully, it will be found that the applicability of the Act itself and the jurisdiction of the Board is predicated on two elements: first, a proper subject matter, i.e., rights, wrongs or duties comprehended by the Act; second, the involvement of interstate commerce.

"The first of these two elements, viz: a proper subject matter, will be given consideration at a later and appropriate point.

"With respect to the matter of the requirement of an involvement of interstate commerce, it must be remembered that this Act was passed by Congress in exercise of its right to control and regulate interstate commerce and it was on that basis that the constitutionality of the original Act was upheld. Accordingly, to maintain its constitutional integrity, the Act can have application only to cases in which there is not only a proper subject matter, but also an involvement of interstate commerce." (Italics supplied.)
In our jurisdiction, however, the situation is entirely different. There is no interstate commerce to be considered. Republic Act 875 is concerned only with regulating relations between management and labor, not commerce or the flow of commerce. And so we feel free to interpret the term "employer" in accordance with the ruling spirit that pervades the whole Industrial Peace Act. We are convinced that this Act refers only to organizations and entities created and operated for profit, engaged in a profitable trade, occupation, or industry. The law itself is called "An Act to Promote Industrial Peace and for Other Purposes", and Section 1, paragraph (a) declares the policy of the Act to eliminate the causes of industrial unrest, and paragraph (6), to promote sound stable industrial peace. Then Section 10 entitled "Labor Disputes in Industries Indispensable to the National Interest", provides that when in the opinion of the President, there exists a labor dispute in an industry indispensable to the national interest, he may certify the case to the Court of Industrial Relations. From these, it" is obvious that what the Legislature had in mind and what it intended the law to govern were industries, whose meaning is too obvious to need explanation. Surely, institutions like hospitals, the National Red Cross, Boy Scouts of the Philippines, Gota de Leche, Philippine Tuberculosis Society, and other organizations whose purpose is not to make profit or gain, but to aid in alle-viating the suffering of humanity and in developing character in the youth of the land, in furnishing milk to babies of the indigent, etc., can hardly be considered industries.

Republic Act No. 875 is patterned after the labor relations legislation in the United States of America, particularly, the Federal Labor Relations Act, including the labor relations acts of the different States. Naturally, American authorities interpreting said American labor legislation are applicable and may be considered by us with profit.

The case of The Petition of the Salvation Army (U.S.A.), 36 A. 2d 479, involved the. application of the Pennsylvania Labor Relations Act, and particularly, whether the Salvation Army was governed by it. A union of hotel and restaurant employees filed a petition with the Labor Relations Board, asserting that the Salvation Army was engaged in the hotel and restaurant business at The Evangeline Residence in Pittsburgh, employing approximately twenty-eight employees and it had declined to bargain collectively, and asking that the Board investigate the matter. The petition was resisted by the Salvation Army. After hearing, the Board was resisted by the Salvation Army. After hearing, the Board decided that the Salvation Army was an employer within the meaning of the State Labor Relations Act, and ordered an election to ascertain repre-sentatives for the purpose of collective bargaining. Upon exceptions, the Board upon hearing, dismissed the exceptions and reaffirmed the order. A petition for review was presented to the Court of Common Pleas, and after hearing, the majority of the court, with one dissent, affirmed the order. Upon appeal to the Supreme Court of Pennsylvania, the latter cited the case of Western Pennsylvania Hospital, where it was decided that the State Labor Relations Act did not apply to non-industrial disputes. Then the court proceeded to analyze the Labor Relations Act of the State, saying that said Act was designed to protect the rights of employees to organize and bargain collectively and by express terms the Act must be liberally construed. We quote:

"Finding and Policy, (a) Under prevailing- economic conditions, individual employees do not possess full freedom of association or actual liberty of contract. Employers in many instances, organized in, corporate or other forms; of ownership associations with the aid of government authority, have superior economic power in bargaining with employee. This growing inequality of bargaining power substantially and adversely affects the general welfare of the State by creating variations and instability in competative wage rates and working- conditions within and between industries, and depressing the purchasing power of wage earners, thus—(1) creat-ing sweat-shops with their attendant dangers to the health, peace, and morals of the people; (2) increasing the disparity between production and consumption; and (3) tending to produce and aggravate recurrent business depressions. The denial by some employers of the right of employes to organize and the refusal by employers to accept the procedure of collective bargaining tend to lead to strikes, lockouts, and other forms of industrial strife and unrest, which are inimical to the public safety and welfare, and frequently endanger the public health.

"(b) Experience has proved that protection by law of the right of employes to organize and bargain collectively removes certain recognized sources of industrial strife and unrest, encourages practices fundamental to the friendly adjustment of industrial disputes arising out of differences as to wages, hours or other working conditions, and tends to restore equality of bargaining power between employers and employees. * * * " 
The Pennsylvania Supreme Court arrived at the following; conclusion:
In the light of these plainly expressed legislative findings declaring the necessity for the law and the mischief to be remedied we are drawn irresistibly by the language used to the conclusion that the Legislature meant to limit its provisions to industrial pursuits. The phrases: 'within and between industries' 'sweat shops', 'production and consumption', 'business depressions' and 'industrial strife and unrest' certainly do not relate to charitable or eleemosynary associations. It appears too plain for argument that the Legislature intended all of the statutory provisions and regulations of the Act to apply exclusively to industrial disputes." 
It reversed the appealed order and entered one in favor of the appellant Salvation Army.

It will be noticed from the analysis made by the Pennsylvania Supreme Court of the State Labor Relations Acts that said Act and our Industrial Peace Act are similar, at least in basic purpose.

Then we have the case of St. Lukes Hospital vs. Labor Relations Commission, et al., 70 N. E. 2d .10, which is in point. It would appear that the members of a trade union, working as non-professional employees of St. Lukes Hospital, sought certification as the bargaining agent of 125 employees, including laundry workers, maids, porters, machinists, yard help, watchmen, storemen, waitresses, page girls, kitchen and cafeteria help, and orderlies. It seems that the Labor Relations Commission took action on the petition for certification. The Hospital filed action against the Commission for a declaratory decree claiming that said Commission had no jurisdiction to entertain the petition. The court issued an interlocutory decree granting a preliminary injunction, restraining the Commission from taking any further action in the certification proceedings. Acting upon the appeal, the Supreme Judicial Court of Massachusetts held that the hospital was a charitable institution, a public charity, established not for profit and was not covered by the State Labor Relations Act, and so the Labor Relations Commission had no jurisdiction over the petition for certification filed by its employees. It would also appear that the State Labor Relations Act is similar to our Industrial Peace Act, Republic Act No. 875. The Massachusetts Supreme Judicial Court describes said State Labor Relations Act as follows:
It"constitutes a complete and comprehensive legislative plan for the elimination of substantial obstructions to trade and industry arising from disputes between employers and employees by removing the basis of such disputes, by protecting the right of employees to self-organization and to join and form labor organizations, and by encouraging the practice of collective bargaining through representatives of their own choosing to negotiate the terms and conditions of their employment.

The commission is empowered to take appropriate means to ascertain and designate the representatives selected by the employees as their bargaining agency, to define the units for such representation, to decide, whether the employer has committed any unfair labor practice, and to secure enforcement of its orders by application to the Superior Court." * * *
The case of Office Employees International Union vs. National Labor Relations Board, 235 F. 2d 832, involves an interpretation of the National Labor Relations Act itself, after which, as already stated, our Industrial Peace Act is patterned. A group of organizations, mostly unions, in this case known collectively as Teamsters, was charged before the National Labor Relations Board with unfair labor practice with respect to its office and clerical employees. The Board found that the labor organizations represented by the Teamsters were employers with respect to their own employees, but inasmuch as they were not engaged in commerce, and applying to them the standards regularly applied to non-profit organizations, it refused to take jurisdiction over the case, finding 'that the policies of the Act (National Labor Relations Act) would not be effectuated by asserting jurisdiction in the proceeding". From the action of the Board, the case was finally taken up to the United States Court of Appeals, District of Columbia Circuit. Said Court upheld and affirmed the order of the Board.

It is true that there are some States in the American Union, like Wisconsin and Minnesota, the Supreme Courts of which have held that charitable institutions, like hospitals, are not exempted from the provisions of their state labor relations laws. Thus, in the case of Wisconsin Employment Relations Board vs. Evangelical Deaconess Society, 7 N. W. 2d 590, the Wisconsin Supreme Court held that the Deaconess Society was correctly held guilty of unfair labor practice for having refused to bargain with the union with which its employees were affiliated, for the reason that the said Society was not included within the exceptions in the statute whose words are broad enough to cover it. But said decision may possibly be explained in the sense that since the Labor Relations Statute of Wisconsin contained exemptions, it was presumed that any institution not excluded in said exemptions was covered by the law- Moreover, the statute of Wisconsin is entitled "Em-ployment Peace Act", which may give the idea that it covers any kind of employment, whether industrial or otherwise. On the other hand, our law on the subject is known as the Industrial Peace Act, and there is every reason to believe that it applies and was intended to apply only to industries, not to charitable institutions and others not organized or operated for profit.

Then in the case of Northwestern Hospital, Minnea?-polis, Minnesota vs. Public Building Service Employees Union, 294 N.W. 215, the Minnesota Supreme Court held that the Northwestern Hospital was not exempted from the operation of the State Labor Relations Act because neither said hospital nor its employees were included in the exemptions mentioned in the law's definitions of "employer" and "employee". What we have said about the Wisconsin Supreme Court decision about the exemptions contained in its Employment Peace Act are applicable to the Minnesota Supreme Court decision, meaning that the labor relations laws in those States expressly mentioned and enumerated all the entities and institutions which the Legislature intended to exempt, so that anyone not so exempted would naturally come under their operation. But even if we assume that the court decisions in these two States hold that charitable institutions and those organized not for profit or gain come under the provisions of labor relations laws, still we prefer to follow the rulings of the Supreme Court of Pennsylvania and Massachusetts as more reasonable and more in keeping with the spirit that pervades our Industrial Peace Act.

But it is also claimed that the doctrines laid down by the Pennsylvania Supreme Court on the subject matter has been rejected by the United States Court of Appeals for the District of Columbia in its decision in National Labor Relations Board vs. Central Dispensary and Emergency Hospital, supra. We cannot subscribe to this claim or contention. In the said case of Central Dispensary, the Federal Court of Appeals for the District of Columbia was interpreting and applying the Wagner Act, which as we have already explained, was intended to cover only entities and institutions whose activities cross state lines, and where any labor dispute, specially when resulting in scheme of our Industrial Peace Act.

During our deliberations, attention was also called to the fact that the right to self-organization is consecrated in the Universal Declaration of Human Rights, adopted by the General Assembly of the United Nations by the the vote of many nations, including the Philippines and that by joining said Declaration, the Republic of the Philippines has undertaken to promote and secure the effective recognition of said right to self-organization among its people. We see no incompatibility between said recognition by our country of the right to self-organization and the non-application of our Industrial Peace Act to charitable institutions. The employees and laborers in these charitable institutions are not prohibited from organizing and joining a labor union. Even Section 11 of our Industrial Peace Act entitled "Prohibition Against Strikes in the Government," provides that government employees may belong to any labor organization provided that said organization does not impose the obligation to strike or to join any strike. There can be no valid legal objection to the employees and laborers of, say, the Red Cross, the Boy Scouts, or a charity hospital organizing themselves into an association or in joining a labor union. The line is drawn only when they try to compel the management to bargain and if refused, resort to coercive measures which may frustrate or paralyze the purposes and activities of these intitutions.

Digressing a bit, it may be pertinent to state our concept of some of the reasons for the promulgation of labor relations laws, not excluding our Industrial Peace Act. When a person or a group of persons organizes and operates a business or industry, for purposes of gain, the intention is to make as much profits as possible from the financial investment made, sometimes m disregard of the reasonableness of the wages paid to its employees and laborers. The state feels that when the capitalists and management make substantial and sometimes excessive profits, labor should receive a reasonable share in said profits in the form of fair wages. However, it' has been seen that unorganized labor for lack of bargaining power is in no position to demand and succeed in its bid for a reasonable share in said profits in the form of more reasonable wages, better working conditions, etc. So, labor relations acts were passed allowing, even encouraging the organization of labor unions, through which the laborers may collectively bargain with the capitalists or management, the law compelling the latter to bargain and making it an unfair labor practice for said management to refuse to bargain, or to discriminate or take measures of reprisals against the employees and laborers for union activities. Laborers are even allowed to resort to coercive measures to enforce their legitimate demands, such as strikes oftentimes accompanied by picketing. However, where entities or institutions are organized not for profit, but for humanitarian, charitable, benevolent and analogous purposes, then the situation is entirely different for there are no profits in which labor may demand a share in the form of higher wages. There is no capital invested for financial returns. The funds used to operate these institutions come from voluntary contributions, endowments, government subsidies, etc. Oftentimes, the top executives and officials in these organizations like the Red Cross and the Boy Scouts of the Philippines serve without pay in order that the funds of these institutions, most often meager, could be kept intact as much as possible and channeled to the use and benefit of the persons for whom they were intended. Naturally, the reason for the promulgation and operation of these labor relations acts to aid laborers and employees in general, is absent and there would be no excuse or occasion for resort to coercive measures like strikes, in order to force these institutions to bargain and pay higher wages. Besides, the application of these labor relations acts to these charitable institutions would in some cases be disastrous. One can, for instance, easily imagine the result and dire, consequences if the nurses, attendants and laborers of a charity hospital presented demands for higher wages and if refused, stage a strike at a time purposely sought when there was a raging epidemic of say, influenza or cholera; the activities of the hospital will then be paralyzed and if the management tried to employ, even temporarily, other nurses, attendants and laborers to attend to the patients in the crowded hospital needing immediate attention, the strikers would discourage or even prevent said employment and hiring of substitutes by picketing the hospital premises. The same would be true with employees and laborers of the Red Cross who upon the rejection of their demands for higher wages, would stage a strike, and to make it more effective, time to make it coincide with the occasion of a calamity, such as a destructive typhoon, flood, earthquake, etc., thereby paralyzing the activities of said Red Cross and preventing it from extending relief to the victims. We cannot believe that the Legislature in enacting our Industrial Peace Act could have intended the law to so operate and apply.

On the basis of the foreging considerations, there is every reason to believe that our labor legislation from Commonwealth Act No. 103, creating the Court of Industrial Relations, down through the Eight Hour Labor Law, to the Industrial Peace Act, was intended by the Legislature to apply only to industrial employment and to govern the relations between employers engaged in industry and occupations for purposes of profit and gain, and their industrial employees, but not to organizations and entities which are organized, operated, and maintained not for profit or gain, but for elevated and lofty purposes, such as, charity, social service, education and instruction, hospital and medical service, the encouragement and promotion of character, patriotism and kindred virtues in the youth of the nation, etc.

In conclusion, we find and hold that Republic Act No. 875, particularly, that portion thereof regarding labor disputes and unfair labor practice, does not apply to the Boy Scouts of the Philippines, and consequently, the Court of Industrial Relations had no jurisdiction to entertain and decide the action or petition filed by respondent Araos.

Wherefore, the appealed decision and resolution of the CIR are hereby set aside, with costs against respondent.

Paras, C.J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador and Felix, JJ., concur.
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