Case Summary (G.R. No. 156284)
Factual Background and Union Security Clause
FPSI employed Bergante and Inguillo since 1977 and 1986, respectively. FPSI and FPSILU executed a CBA effective from September 1991 to September 1996. The petitioners, who initially belonged to FPSILU, signed the ratification document of the CBA. Subsequently, both joined another rival union, the Nagkakaisang Lakas ng Manggagawa (NLM), affiliated with KATIPUNAN. This action prompted FPSILU to file an intra-union dispute with the Department of Labor and Employment (DOLE), which was resolved in favor of FPSILU. Following the final decision, a Writ of Execution was issued to recover union dues erroneously collected by NLM-KATIPUNAN from certain employees, including Inguillo.
Grounds for Termination and Petition for Dismissal
On March 18, 1996, FPSILU’s executive board petitioned FPSI’s management to terminate several employees, including Bergante and Inguillo, on grounds of disloyalty, dereliction of duty, misuse of union funds, deliberate work slowdown causing production damage, and fomenting disaffection towards FPSILU by encouraging disaffiliation. Subsequently, FPSI terminated the employment of those employees on May 16, 1996. Both petitioners filed complaints for illegal dismissal and related claims before the National Labor Relations Commission (NLRC).
Proceedings Before Labor Arbiter and NLRC
The Labor Arbiter dismissed petitioners’ complaints, upholding the legitimacy of their termination based on violation of the Union Security Clause for disaffiliating from FPSILU and engaging in activities contrary to union and employer interests. The Labor Arbiter ordered payment of separation pay and legal holiday pay but denied claims for illegal withholding of salary and other damages.
The NLRC reversed this decision, ordering reinstatement and payment of backwages, reasoning that respondents failed to prove any acts inimical to FPSILU’s interests by the petitioners and that the dismissal was summary and thus violated due process. Upon reconsideration, the NLRC set aside its reversal and upheld the legality of the dismissal, finding that the dismissals were pursuant to a valid Union Security Clause in the CBA and justified by the union’s recommendation.
Court of Appeals Ruling
The Court of Appeals affirmed the NLRC’s final resolution, reasoning that:
- The Union Security Clause, recognizing a closed-shop or union-shop arrangement, is a valid and enforceable provision.
- Such clauses require employees to maintain union membership as a condition for continued employment.
- Petitioners were bound by the CBA, having ratified the Union Security Clause.
- The union’s recommendation for dismissal due to disloyalty and disaffiliation with rival unions was lawful and necessary to maintain union cohesion and labor management relations.
- The dismissal was not an unfair labor practice or illegal, but rather a lawful exercise under the collective agreement and existing jurisprudence.
Legal Framework on Termination and Union Security Clause
Termination of employment in the Philippines under the Labor Code (Articles 282-285) is generally permissible only for just or authorized causes, including serious misconduct, redundancy, or disease. Although the CBA’s Union Security Clause is not explicitly enumerated in the Labor Code, Philippine jurisprudence recognizes its validity.
Union security agreements include closed-shop, union-shop, and maintenance-of-membership arrangements, all imposing union membership as a condition of employment. The closed-shop requires employees to be union members during the term of employment and agreement.
Requirements for Valid Dismissal Under Union Security Clause
In enforcement of such Clause, the Court identifies three requisites:
- Applicability of the union security clause;
- Request of the union for enforcement;
- Sufficient evidence supporting union’s decision to expel the employee.
All requisites were established, as petitioners were former FPSILU members who disaffiliated by joining a rival union and engaged in detrimental acts affecting the union and employer.
Necessity of Due Process in Dismissal
Despite upholding the dismissal under the Union Security Clause, the Court stressed that due process must be observed, comprising:
- Substantive due process: lawful grounds and compliance with labor laws or jurisprudence for termination;
- Procedural due process: notice and hearing prior to dismissal.
The procedural requirements, mandated by jurisprudence and the Labor Code, include two written notices:
- The first notice must specify the grounds for dismissal and afford the employee opportunity to submit a written explanation within a reasonable time.
- The second notice must inform the employee of the termination decision after considering the defense.
Additionally, employees must be given the opportunity for a hearing or conference to clarify and defend themselves, with or without representation.
Procedural Due Process Deficiency in the Case
Here, the respondents failed to furnish the petitioners with the requisite notices. The “Petisyon” submitted by the union to FPSI’s general manager was merely a recommendation, not a proper notice of charges or termination. There was no written directive giving petitioners the opportunity to explain or a formal notice of dismissal.
The dialogue allegedly conducted by management after the union petition did not constitute a hearing or meaningful conference to present defenses. The petitioners remained uninformed of specific charges, and no memorandum of any infraction was served. The Court found these facts indicative of non-compliance with procedural due process.
Conclusion: Validity of Dismis
Case Syllabus (G.R. No. 156284)
Background and Parties Involved
- Herminigildo Inguillo and Zenaida Bergante (petitioners) were employed as assemblers by First Philippine Scales, Inc. (FPSI), a company manufacturing weighing scales. Bergante was employed on August 15, 1977, and Inguillo on September 10, 1986.
- In 1991, FPSI and the First Philippine Scales Industries Labor Union (FPSILU) entered into a five-year Collective Bargaining Agreement (CBA) effective from September 12, 1991, to September 12, 1996.
- Both petitioners were members of FPSILU and signed the ratification document of the CBA.
- During the term of the CBA, the petitioners and other FPSI employees joined a rival union called Nagkakaisang Lakas ng Manggagawa (NLM), affiliated with a federation named KATIPUNAN (NLM-KATIPUNAN).
- An intra-union dispute arose, with NLM-KATIPUNAN filing a case against FPSILU and FPSI, which resolved in favor of FPSILU, ordering the return of union dues erroneously collected.
- Following enforcement actions, salary garnishments were made against members including Inguillo.
The “Petisyon” and Grounds for Dismissal
- On March 29, 1996, FPSILU’s executive board and members submitted a “Petisyon” to FPSI’s General Manager, Amparo Policarpio, requesting the termination of several employees including Bergante and Inguillo.
- The grounds for termination included:
- Disloyalty for leaving FPSILU and affiliating with a rival union.
- Dereliction of duty for failing to conduct meetings and provide financial reports.
- Improper handling of union funds.
- Acts causing damage to FPSI’s production and union interests.
- Inciting other union members to defect to the rival union.
- On May 16, 1996, respondents terminated the services of the listed employees immediately following the Petition submission.
Legal Proceedings and Claims
- Inguillo initially filed a complaint for illegal withholding of salary; later, two complaints for illegal dismissal were consolidated, one filed by NLM-KATIPUNAN members including Bergante, and the other filed individually by Inguillo.
- Several complainants amicably settled and had their cases dismissed; Bergante and Inguillo remained litigants.
- Both argued lack of notice and opportunity to present defenses and claimed they were unaware of the Petition and grounds for dismissal.
- Respondents argued dismissal was justified under the Union Security Clause in the CBA upon FPSILU’s recommendation and to avoid labor disputes.
Labor Arbiter’s Decision
- The Labor Arbiter dismissed the complaints, holding the dismissal was not illegal.
- Decision emphasized petitioners breached the Union Security Clause by affiliating with a rival union and committing acts detrimental to FPSILU and FPSI.
- Petitioners were awarded separation pay and legal holiday pay due to lengthy service, and some attorney’s fees.
- Claims for illegal withholding of salary and other charges were dismissed.
National Labor Relations Commission (NLRC) First Resolution
- The NLRC reversed the Labor Arbiter’s decision, ordering reinstatement with full back wages and payment of withheld salary to Inguillo.
- NLRC noted respondents failed to prove disloyal acts and that petitioners were not properly informed of their dismissal, constituting denial of due process.
- Respondents’ motion for reconsideration followed.
NLRC Second Resolution
- Upon review, the NLRC overturned its prior resolution, declaring the dismissals valid.
- Held that the dismissal resulted from enforcement of a valid Union Security Clause upon the union’s recommendation.
- Ordered payment of withheld salary to Inguillo but dismissed other claims.
- Petitioners then filed a petition for certiorari before the Court of Appeals.