G.R. No. 164301 - Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank

On January 20, 2000, BPI and FEBTC executed an Article and Plan of Merger, approved by Bangko Sentral (March 23, 2000) and SEC (April 7, 2000).
Pursuant to the merger, FEBTC ceased to exist as a separate entity; all its assets, liabilities and employees were transferred to and absorbed by BPI, which recognized their status, tenure, salaries and benefits.

The CBA (April 1, 1996–March 31, 2001) between BPI and the BPI Employees Union-Davao Chapter covers all rank-and-file employees in Davao City, with Article II providing:

“Maintenance of Membership” – existing and subsequently joining members must maintain membership as a condition of employment.
“Union Shop” – new employees falling within the bargaining unit must join the Union within 30 days after becoming regular employees.

On March 31, 2000, the Union invited absorbed FEBTC employees to discuss the union shop clause; some refused or later withdrew membership.
The Union asked BPI to enforce the clause and terminate non-members; after grievance machinery failed, the Union sought voluntary arbitration.
Voluntary Arbitrator (Nov 23, 2001) ruled absorbed employees are not “new employees” and need not join; CA (Sep 30, 2003) reversed; BPI filed Rule 45 petition for review with the Supreme Court.

Whether absorbed FEBTC employees are “new employees” of BPI for purposes of applying the union shop clause of the existing CBA.
Whether the Court of Appeals gravely erred in finding that the voluntary arbitrator’s interpretation is “at war with the spirit and the rationale” of the Labor Code’s union security provisions.