Title
Carino vs. National Labor Relations Commission
Case
G.R. No. 91086
Decision Date
May 8, 1990
A union leader expelled for misconduct and terminated under a CBA clause; SC upheld dismissal but penalized employer for due process lapses.
union president
expulsion
termination

Case Summary (G.R. No. 118078)

Factual Background

Petitioner Virgilio S. Carino was President of the Harrison Industrial Workers Union and was accused by other union officers of serious mismanagement. The principal charges alleged that Carino conspired with the Company in negotiating the CBA to obtain favorable retirement provisions; paid attorney’s fees to Atty. Federico Leynes from Union funds without receipts; unilaterally increased membership dues; concealed the CBA and failed to present it for explanation prior to ratification; and refused to turn over custody and management of Union funds to the Union treasurer. An investigating committee repeatedly summoned Carino, but he failed to answer. A general membership meeting discussed the charges on 11 June 1987 and the Union filed for a special election on 16 June 1987.

Union Proceedings

Despite repeated notices and hearings before the Bureau of Labor Relations at which Carino was notified, he did not appear. On 5 August 1987 a general membership meeting convened for impeachment. The membership found Carino guilty, expelled him from the Union, and recommended his termination from employment. The Union also ceased retaining Atty. Leynes as counsel. The Union then invoked the Union Security Clause of the CBA in writing to the Company and requested termination pursuant to the CBA.

Company Action and Termination

On receiving the Union’s written request dated 15 September 1987, the Harrison Industrial Corporation issued a termination letter to Carino effective the next day. The Company did not itself conduct a hearing or otherwise inquire into the Union proceedings prior to effecting termination. The Company defended its action on the ground that the CBA required compliance with the Union’s request and asserted that the Union threatened to strike if the request were not immediately honored.

Labor Arbiter Decision

Petitioner Carino, represented by Atty. Leynes, filed a complaint for illegal dismissal. The Labor Arbiter, in a Decision dated 7 October 1988, found no just cause for dismissal because none of the enumerated grounds for suspension or dismissal in the Union’s Constitution and By-Laws applied. The Labor Arbiter also found that the manner of dismissal violated the notice and hearing requirements of the Labor Code. The Labor Arbiter ordered reinstatement with full backwages and payment of attorney’s fees, with liability to be borne solidarily by the Company and the Union.

NLRC Decision

The Company and the Union appealed to the National Labor Relations Commission. In its Decision promulgated 26 May 1989 the NLRC reversed the Labor Arbiter’s award of reinstatement. The NLRC described the charges of mismanagement as serious and treated Carino’s repeated silence as “tantamount to admission of guilt,” which the NLRC deemed to supply just cause for dismissal. The NLRC nevertheless agreed with the Labor Arbiter that the plant-level procedure had lacked due process and therefore awarded separation pay equal to one-half month’s salary for each year of service as “penalty and financial assistance,” to be paid solidarily by the Company and the Union.

Issues Presented

The petition for certiorari to the Supreme Court presented, inter alia, whether the NLRC properly entertained the Union’s late appeal; whether there was just cause to expel and dismiss petitioner Carino under the terms of the CBA and the Union Constitution and By-Laws; whether the Union’s impeachment and recall proceedings satisfied required procedural safeguards; and whether the Company acted in good faith or was liable for failure to accord Carino procedural due process.

The Parties’ Contentions

Petitioner Carino principally argued that the NLRC erred in taking cognizance of the Union’s late appeal and that the Labor Arbiter’s reinstatement order should be reinstated. The Company and the Union contended that the charges against Carino warranted his expulsion and dismissal and that the CBA and Union rules authorized the Company to act on the Union’s request. The NLRC relied on the seriousness of the charges and Carino’s failure to answer them.

Supreme Court’s Analysis on Jurisdictional Question

The Court held that the NLRC could properly take cognizance of the Union’s late appeal. The Court applied the principle that reversal of a judgment obtained by a timely appellant may also benefit a co-party who failed to appeal or appealed out of time where the rights and liabilities of the parties under the modified decision are substantively inseparable, citing Government of the Philippines v. Tizon. Because the Company’s appeal was seasonable and the Company’s and the Union’s liabilities were closely intertwined, the NLRC could consider the Union’s appeal for purposes of adjudicating the lawfulness of Carino’s dismissal.

Supreme Court’s Analysis on Substantive Grounds for Dismissal

The Court agreed with the NLRC that the charges against Carino reasonably fell within the disciplinary and expulsion grounds set out in the CBA and the Union Constitution and By-Laws. The Court identified pertinent provisions: Article II, Sections 4 and 5 of the Collective Bargaining Agreement (maintenance of membership and grounds for suspension/expulsion), Article X Section 5 of the Union Constitution (special assessments and attorney’s fees requiring membership ratification), Article XV Section 1 (discipline and expulsion for enumerated grounds), and Article XVI Sections 1–2 (grounds and procedure for impeachment and recall). Given the nature of the allegations, the Court found that they constituted serious charges of mismanagement and misconduct within those provisions.

Supreme Court’s Analysis on Procedural Due Process at the Union Level

The Court examined Article XVI, Section 2 of the Union Constitution which required initiation of impeachment by petition signed by at least thirty percent of members and specified procedural steps. The Court acknowledged that the thirty percent requirement had not been strictly met. Nevertheless, the Court found that the Union had more than substantially complied with the impeachment and recall procedure: Carino had been given multiple opportunities to answer before the investigating committee, at general membership meetings, and before the Bureau of Labor Relations, but he repeatedly failed to appear. Under those circumstances the Court treated the failure to meet the thirty percent petition literality as nonmaterial and held that the membership’s unanimous vote after due notice sufficed.

Supreme Court’s Analysis on Company’s Duty and Liability

The Court held that the Company erred in summarily terminating Carino without independently affording him an opportunity to explain. The Court emphasized that the presence of a Union Security Clause in the CBA did not absolve the Company from the duty to exercise caution and to reasonably satisfy itself that the Union had not acted arbitrarily. The Court cited and relied on prior authority, including Liberty Cotton Mills Worker’s Union v. Liberty Cotton Mills and Manila Cordage Company v. Court of Industrial Relations, to support the proposition that a company acts in bad faith when it dismisses employees hastily at a union’s instance without inquiry, and that precipitate action indicates lack of good faith. The Court observed that the Company’s asserted fear of a strike did not justify immediate summary dismissal and that, had the Company conducted a reasonable inquiry, it could readily have determined that the

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