2010 Labor Law, Q10

A, an employee of XYZ Cooperative, owns 500 shares in the cooperative. He has been asked to join the XYZ Cooperative Employees Association. He seeks your advice on whether he can join the association. What advice will you give him? (3%)

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What is the legal status of an employee who owns capital shares in a cooperative under labor jurisprudence?

Can a share-owning cooperative employee join an association formed exclusively for mutual aid and protection?

Which landmark Supreme Court case affirmed that employee-members of a cooperative cannot form a union for collective bargaining?

Why is an employee-member who owns capital shares in a cooperative disqualified from bargaining collectively?

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Are cooperative employees who do not own any capital shares entitled to form a labor union for collective bargaining?

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1. Cooperative Employee Status
Under settled labor law jurisprudence, employees of an electric or rural cooperative who hold capital shares or equity therein are legally considered co-owners of the cooperative enterprise. An employee-member who owns shares possesses proprietary interests and shares in the cooperative's profits, losses, and management through voting rights. Because an owner cannot bargain collectively with himself or his co-owners, share-owning cooperative employees are disqualified from joining or forming a labor union or bargaining association for collective bargaining purposes.

2. Self Organization Scope
While employee-members of a cooperative who own equity shares are disqualified from joining labor unions for collective bargaining purposes, their constitutional right to self-organization is not entirely abrogated. They remain legally entitled to form, join, or assist labor organizations or employee associations organized exclusively for mutual aid, protection, welfare, and cooperative interest. However, such associations cannot demand collective bargaining rights or engage in formal collective negotiations with the cooperative's board of directors.

3. Non Member Employees
In contrast to employee-members who hold shares in a cooperative, employees of a cooperative who do not own any capital shares or equity are treated as purely regular employees. Non-member cooperative employees do not possess co-ownership rights or proprietary stakes in the enterprise. Consequently, non-member employees enjoy the full statutory right to form, join, or assist labor unions of their own choosing and may validly engage in collective bargaining with the cooperative management.

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