CTA Case No. 299 (Decision)

"'frUHLI(. Otl' THE I HILIPPIN,II...) CllUHT O.F '!'AX AP >�AU MAN f\...6 RVI~~ . I � � Petitioner, - versus � c.t .A. CA E � 299 L TO 0 ,o,_(\ ' --8 \ x- - - - � � � � - - � - - ~ �X D CI I0 his is an appeal froa a ecision of respon� ent ollector of Internal evenue, assese1ng and de andlng fr petitioner t � ount of , 221. 9 and edditional residence taxes and surcharge� on itt ross receipt� for the peri fr January 1, 1 48 to June , 19~ , plus penalty in the � f .co, pursuant to sections 182, 183 and 191 and ------ penalize un er sections ~8 and 9 f the National Internal evenue C e and sections 1, 2 and 5 o C on ealth ct � �6~ and penalized under section 12 tn elation to s ctlona ~ and 7 f the sa � Aot. It appears that petitioner, hol United atkera, me . (hertinatter referre to ae I for rev ty) , 11 a labor union duly reglttered with the ureau of Labor in accordance with C onwealth Act No. 21 and Republio Act o. 75, with principal office at Tagbllaran , ohol. The purpose� for which it was organized are to alleviate the conditione of .. ' t15 6

E � 299 - 2- t workers , to pro te tual help nd co per&� tion a ong t 1 ther f, to help ny e~er 1n distress, to help the e r get a viaion of ore a un ant lif , to elp the ver ent carry ut its octal Just ce gr � t help the overn� ent pr ote &tron an n tional1 � Al- though the t r �Inc.� t pet!ti er' n e , it wa org nized nor re iat r a a corporat! n with th ecuritie E ch n e !I� aion. On of h pt rs of the I ia known aa the ra 11 r n Chapter. his eh pter der v a its 1ne e r each e � ved nd c ntr1but1ona pertain- �-� ch pt r hich is e val rat '\;0 ~-l/ in to th of th ro a ag e ch . r ta ne r n unl ding cargoea n vesaels docking 1n th Tag llar n Port and the load.tn an unloadin �- 0 the sa c .rgo n trucks f r delivery 0 t � 0 � of th ca g n 1 or ip era. he of T il r n Ch pt rcon latin 0 la orera ivl e nto wo wr ups 0 ork in & i trt 4.ind e eh ~ p L "'u rvised� by � �~s o� � � r "c p taz who i� elected by the laoor"ers fr selvea. In a dit!on , each gr up elects ro on he selve group p y- � roup colle t r , a gr up treaaurer a d the a ip- ater. Th roup collect r coll t� fro pera or cargo er the � ount due t � l bor l.'S for their ork, after hich livers th aaid unt , to the group treasurer who c putes the hare cor- >t 457 :t.a

c.t.A. - - � 299 responding to eao laborer the basta of aha e �nd � are al e. tn turn :t . ney 1a tr.ns erre to t e gr u pa aster w o the 1 rers ac- cor ingly. he la rP tr aaurer I �� � �� t �lr c trl� t1on to t an itted t he tre surer eurren ly as Tr � n lf f id c nt~ t (e !v 1 nt of -II ) � credit to ICC nt f th T b 1 r n Ch r a d the other hal (2-1/ ) an en red 1n t s of I. pon X !n tlon � t � !d Ta 1 Lrln pt r , t X f In rnal venu � d t � ... lare 1 � , n rec nd d ce crdingly an d r� 1n re !on th t � n th t i l of f din s n :r nd ti ns, reep v eee er 27, ..... r c by 19 ~. an nd d � fiXe ax, p rc:ent g t x, e �- dit 1 en�� taxes nd aurchar es on its gr pta for t e p riod f:r January 1, 1 48 to Jun � t e total ount , 221. � c u d � 11 � 115

� 299 tax on rosa r 1, 19 l IX �o�n� � � 7�8� �, �� � �.2�6�������� � os r eipta fr e t. 22, 19!JO to 4une 19 �� �� � �� � ���� � ����� rota ercentage tax ����� ��� 2~ aurohar e hereon �� � � � �� fix d tax, 1948-19~ ���� ��� � ( e t t e � ove ���e� t petitioner ln coa liance efor eai ent, � stat te he ational nterna eve ue e. ... . are tit o er rein evl ence ln por of t a e.rs 0 t e ta f re- en that t � nt o e ar 27, e � his r" by res o at June 1, � actually received tltloner une 6, t or er e an e the pa nt o 60, 721. 9 pereenta e tax, surcharge and pena~ty. Hence, �- titioner filed lta pet iti for r�vie before this Court on July 18, 9 � .., . 459

- C. T. A. CA NO. 299 - 5� The principal issues involved in this case 'may be stated aa followat 1. la the petition� Bohol United orkera, Inc., liable to the at ve orea fixed , percentage and residence taxes, including surcharge and penalty, impoae under the ational Internal venue Coda and Commonwealth Act No . 465, respective� ly? and if in the affi ative 2. la th tax due fo the perio from January 1, 1948 to epte ber 1949 still collectible? � Proceeding to the first iasue, in denying lia� bility for such taxea~petitioner(maintaina that it) did not act as steve ore-contractor aa provided in section 191 (a) of the Tax Code on t � ground that there n ver was any contractual relation betwe n it a d the shippers or shipowners, nd that all its acts were confined wi thin the legitimate functions of a labor union in accordance with Republic ct o . 875, otherwise known as the agna Carta of Labor.~ espondent on the other hand maintains th t petitioner through its Tagbilaran Chapter, has actually ngaged in the stevedoring usin a at the tagbilar n ort because as a condition prece ent for the employ- ment of a la orer at the Tagbi laran ort, emb r- ahip or affiliation with the B 1 is lndlspensa le and it is petitioner which fin s employment for it embers and reco n s to the ahippera or ahipown rs, who should or should not be allowed to work at the Tagbilar n Port . � pendent further cites the fol� lowing f cts to be considere in support of its con- v . 460

D CISl � C.T. A. CA � 299 l the Court of Industrial elations. e quote here- un er the pertinent portion� of ita Order ( xhibit D, petitioner) dated July 2, 19561~ "Thia is a petition fil by the ohol United orkers, Inc. , legiti� mate lebor organization, hereafter re� ferred to as Bm~I. seeking th t it be eertifi d as the ole collective bar� gaining agent of all laborers handling the cargoes of the respondents at the wharf in Tagbilaran, Bohol . "x X X ., 461

DECISIO � C. T. A. CAS NO. 299 "All the respondents, with the exception of Caltex ( hil . ) Inc ., do not dispute petitioner's allegation that its members are in their employ as handlers of respondent's goods or c�rgoes and have manifested that they will abide by whatever decision the Court may render . The Court finds , therefore, that the members of the ~ I are employees of these respon- dents � .. "x X X �ttm Poh & Sons admits that the affiliates of petitioning union have been h ndling th cargoes of its ves� sela but , nevertheless , oppose the p tition mainly on the grounds that the relation between them is not only temporary because their $ervices have been erely tolerated but Marked with di$cord as well and that the r 11 f sought by petitioner, if granted. would permit monopoly of th loading and un� loading work by only one labor group and unduly re�triet 'free enterprise for capital and labor'. It is conten- ded by the partnership that it has the absolute right to terminat at will its relation with the BU~l and determine for itself the person or persons it de- sire to employ . �the stand of respondent carrier is untenable . From its own admi�sion and as furthe~ established by the evidence. the workers affiliated with the petitio� ner are employees of Lim Poh & ons and for this ~ aaon, it ia imm1terlal whether or not their relations is temporary or harmonious . oreover. wh11� certifica- tion results in onopoly of representa- tion by one l1bor organization for pur- poaea of collectiv bargaining for some period of ttme. it does not necessarily forbid or prevent th fo ation or con- tinued existence of other la or groups within the same bargaining unit . Finally, the fact that an employer has the right to hire and fire employees does not prec� lude a union of employees from applying for certification. 462

0 CIS! � C. T. A. CAS NO. 299 - e� 0 Ther ie only one kind of work involved in this case; loading an unloa ing of cargoes on and fro ves- sels ope~atad by r�spondent L oh &Sons an h uling them f~ the dock to the warehouaes of their owners or consignees or vic��versa. The Court finds, and so hold , that the unit appropriate for ~ollective bargaining 1� that co~�aee of all the laborer� doing this work for the ben fit of all the L�spondente ~except Caltex (Ph11. ) lnc.at. "Th petitioner was o~ganiz d short� ly after liberation. lt 1� composed of not l��� than ~ laborers. moat of hom have for many years been continuously working for the respondents as stevedores . X X Under the e f eta, nd consider� a�- ing the entire record of the case, th� Court is convinced and, therefore , finds that the petitioner has been aignated or se~ected for the purpose of collective bargaining by the �ajo- rity of the lAborers i n the unit des� e.ribed above. �IN VI OF T F GOI G, the ohol United ork rs , nc . a h raby certified in ~�spondent Lim Poh & Sons a th ol and exclusive collective bargaining representative of all the orkers engage by lt for the loading and unloading of its veaaela 1n the pol't of Tagb1laran. ohol . the same l�bor organization ia likewise certi� ied as th sole and exeluaiv eollec� tiv bargaining agent of all the lebo� rera handlln~ cargoes in said ~rt, in respondent� (naMe � oa1tted) . .. he foregoing determination made by the Court of ndustrlal elations is controlling in the atter of p titioner's status. l n there, the .-hera of B I have been found to be employee� or laborer.� of the h1powners or t he owners of 463

D CISlO ,. C. T. A. CA � 299 cargoes handled at th Tagbilaran ort. bile the bers individually perform the work of handling the lo ding and unloading of cargoes at the Tagbilaran Port and are the stevedores them� aelv�s , UWI erely ervea as a labor union or organization to protect its embers an cannot be aid to be engaged in the t vedoring busineas it� self . Although B also supplies labo~era to casual shippers in the Tag ilaran ort , we ar inclined to agree wi th petitioner that on this matter the latter erely acted as an info ation center to auch casual shippers who are not 11 versed with th procedures followe at the iagbi� laran Port. As a matter of fact , there is no showing that a contract for handlin was entered into by petitioner and the casual shippers. In furth r support of the t eory th t peti� tioner act ae a stevedoring contractor, respondent ci ea the fact that claims for damages to car o lo ded and unloaded by union ember ar present d to the union and the latter advanced th payment for damages . However, we find this to be but a atter for �h convenience of the c a:tgo owners and for the protection of the union. it appears that the claim for damages is presented to petitioner in order that it ay investigate the same and pin� point the per on or persona reaponsibl for dam ge � .., .�

� 299 - 10 - n ost instances the union ember concerned has no ready caah to answer for the damage, hence B I advances th s&me, but the ount so paid is col- lected fro the laborer or laborers found reapon� sible therefor. Liabii1ty for such damage is borne personally by the laborer-m.mber at fault and not by petitioner. espondent presented and capit lizea upon a copy of an alleged receipt ( xhibit 6, p. 51 BI records) purportedly issued by petitioner to a erchant-sh1pper for the payment of handling service . This alleged copy of receipt b ara a certification by the rev nu ex in r th t it 1as copied from etitioner�a record. However , re pen- dent did not call upon Uy ee, th erchant�payee to testify a to the party with who he ha entered into a contract for the handling of his cargo. The receipt in question at oat shows only that payment was made by the cargo owner and received by U l which collection is in accordance with the proc.Oure of the union as outlined earl~ ove. espondent cites in support of its conten- tion thre (S) cases involving stevedoring. The first case cited isthat of Cebu Araatre ervlce v . Collector of Internal evenue, G. R. No . L� 74441 ay , 1~6. e believe this ease 1s not appli� cable to the instant case because th Cebu Ar tre erv1ce directly contr cted with cargo o ners fo 4 65

D ClSION - . 299 C.T. A. CASE - 11 - the handling of cargoes , collected pa~ntffr the cargo owners , and paid the laborer-members on its own account as an employer . In the case at bar the members w re employees of the cargo owners and the laborers themselves collect from th cargo owners for their services . The petitio- ner has further no intervention in the distribu� tion of the payment for the handling aerviee to the laborers��embers, except to insure the eollee� tion of the contribution due from each member, which it is entitled as a labor union. 'either is the ease of gusan tevedorlng Union v. Collector of I nternal evenue (C. T�� Case No . 18, November 18, 1945) applicable because, in that ease, the gusan tevedoring Union designated the �foreman�, �tallyaan� , "checkers� , �tc., who managed the loading and unloading. In the instant case, the "eapataz� and other officers of each group of laborers are elected by the members of the group and are only confirmed afterwards by B I . Hence , the responsibility of the group officers is directly towards the members of each group and not to B I . The last cas� cited is Union brera 1akabayan vs. Collector of nternal . evenue ( �T. A. Case o. 177, e~ember 22 , 19~) . ~.also find this case in� applicable to the present case because in the former case it as the petitioner organization it- self that entered into a contract of handling 466

� � 299 - 12 - cargoes with the ahippers, while in the inatant case, a aforestate , the contract of h ndling as directly entered into with the ship era or by the 1 orexa th a lv a or throu h th ir cho- � n �cap taz~ and not by etition r . as a final but co on distinction fro the thr e afore� cite cases , the laborers in t~�e caaea ere em� ployees of th� stevedoring contractor nd the latter trans ct on its own wit h the ahipown rs an cargo owner w er as ln the cas t ar, th la or rs are e loyees of the thipown rs or cargo owner � in i:n aa o old th t etition r B I ia l 1ti at labor union and not en aged in teve orin u iness, it follow th t it i a not 11 le for the p yment of fixed an p rc ntag tax a impos by Sections 182 a d 191 of th tax Co e on tev dor s nor o nee tax under ction 2 of epublic ct o. 465. n vi w of h finding th t i not a atev dor1ng contr etor u er ection 191 (a) of t t onal Intern 1 Cod and tb refore not liable for fixe � p rc ntage nd r id nee t xes. the other issu n this case - w ther or not the tax due for the period fro 5 nuary 1, 1948 to ept er 3 � 1949, may etlll b coll c� t d - beco oot and ac th cision of 467

D C Sl - � 299 C. T. A. CAS - 13 - the respondent appealed from ahould be , as it ia her by reversed , without pronouncement as to coats. anila, Philippines . August 29, 1957 . Presiding Judge 00 CURl � n ' 468