G.R. No. 100898 - Ferrer vs. National Labor Relations Commission

Alex Ferrer, Rafael Ferrer, Henry Diaz, Domingo Bancolita, Gil de Guzman, and the Federation of Democratic Labor Unions (FEDLU).
They were regular, permanent employees of Occidental Foundry Corporation (OFC) in Malanday, Valenzuela, Metro Manila, employed as piece workers earning between P110 to P140 a day.
Their tenure with OFC spanned approximately ten years.

The National Labor Relations Commission (NLRC – Second Division).
Hui Kam Chang, in his capacity as General Manager of OFC.
Occidental Foundry Corporation itself.
Union representatives including Macedonio S. Velasco (for the Federation of Free Workers – FFW) and the union officers (Genaro Capitle, Jesus Tumagan, Godofredo Pacheco, Marcelino Castillo, George Ignas, Pio Domingo, and Jaime Baynado) associated with Samahang Manggagawa ng Occidental Foundry Corporation-FFW (SAMAHAN).

On January 5, 1989, OFC and SAMAHAN entered into a collective bargaining agreement (CBA) effective from October 1, 1988 to September 30, 1991.
The CBA contained a union security clause which mandated that all permanent and regular factory workers must remain members in good standing of the union for the duration of the agreement.

Article II, Section 1 of the CBA required continued union membership.
Section 3 provided that failure to maintain such membership would serve as a ground for dismissal upon the union’s written request, accompanied by a verified carbon copy of the Board Resolution signed by a majority of union officers.

On May 6, 1989, petitioner Alex Ferrer, together with SAMAHAN, initially filed a complaint with the Department of Labor and Employment (DOLE) seeking the expulsion of certain union officers for alleged inattentiveness to economic demands.

The officers targeted were Genaro Capitle (president), Jesus Tumagan (vice-president), Godofredo Pacheco (auditor), and Marcelino Pacheco (board member).
This complaint was later partially withdrawn, and on September 4, 1989, petitioners Diaz and Alex Ferrer withdrew the petition regarding the expulsion.

On September 10, 1989, a special election was conducted by petitioners to replace union officers.

Despite internal controversies and subsequent questioning by the FFW, the newly elected officers attempted to influence the remittance of union dues.
Internal union squabbles deepened when, on September 11, 1989, a resolution expelling petitioners from SAMAHAN was issued by union officials (headed by Capitle along with board members George Ignas, Pio Domingo, and Jaime Baynado).

On September 12, 1989, Genaro Capitle sent a letter to OFC’s General Manager, Hui Kam Chang, invoking Article II, Section 3 of the CBA.

The letter requested the dismissal of petitioners on the ground of failing to maintain union membership in good standing.
Although the letter was received weeks later, petitioners had already learned of their termination through subsequent communications.

Petitioners, after being informed through a letter dated September 13, 1989, communicated with FEDLU and secured representation.

They subsequently filed a complaint for illegal dismissal and unfair labor practice before the NLRC, contending that their dismissal was executed without cause and without proper due process.

The Labor Arbiter dismissed the complaint on the basis that the dismissal was in strict compliance with the CBA’s mandatory provisions concerning union membership.

The labor arbiter held that a written request by the union sufficed to trigger a legal presumption for dismissal under the closed shop arrangement.

The decision of the Labor Arbiter was fully affirmed by the NLRC on June 20, 1991, leading petitioners to file a petition for certiorari alleging grave abuse of discretion and violation of procedural due process.

Whether the dismissal of petitioners was carried out without affording them a fair chance to explain their side or to defend against charges.
Whether the union (SAMAHAN) complied with its own constitutional rules and by-laws in expelling petitioners without a proper hearing.

Whether the strict application of the union security clause within the CBA justifies the dismissal when due process requirements are not strictly observed.
Whether the dismissal based solely on a union’s written request is comprehensive enough to satisfy the constitutional mandate of due process.

Whether OFC, as the employer, should have independently investigated the allegations before effecting the dismissal.
Whether the reliance solely on the union’s expulsion resolution—without an independent inquiry or proper procedural safeguards—constitutes an illegal dismissal and unfair labor practice.