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102. EMPLOYEES UNION OF BAYER PHILS. VS BAYER PHILS. G.R. No. 162943
December 6, 2010 VILLARAMA, JR., J.
DOCTRINE:
The registered CBA serves as the covenant between the parties and has the force and effect of
law between them during the period of its duration. If the employer grossly violates its CBA
with the duly recognized union, the former may be held administratively and criminally liable
for unfair labor practice. The utter disregard of the very existence of the CBA itself, is a gross
violation of the CBA per se and is an act of ULP. When an employer proceeds to negotiate with
a splinter union despite the existence of its valid CBA with the duly certified and exclusive
bargaining agent, the former indubitably abandons its recognition of the latter and terminates
the entire CBA.
FACTS:
Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of
all rank-and-file employees of Bayer Philippines (Bayer), and is an affiliate of the Federation of
Free Workers (FFW). In 1997, EUBP, headed by its president Juanito S. Facundo (Facundo),
negotiated with Bayer for the signing of a collective
bargaining agreement (CBA). During the negotiations, EUBP rejected Bayer’s 9.9% wage
-increase proposal resulting in a bargaining deadlock. Subsequently, EUBP staged a strike,
prompting the Secretary of the DOLE to assume jurisdiction over the dispute. Respondent
Avelina Remigio (Remigio) and 27 other union members, without any authority from their union
leaders, accepted Bayer’s wage
-increase proposal.
EUBP’s grievance committee questioned Remigio’s action
and reprimanded Remigio and her allies. The DOLE Secretary issued an arbitral award
ordering EUBP and Bayer to execute a CBA. Barely six months from the signing of the new
CBA, during a company-sponsored seminar, Remigio solicited signatures from union members
in support of a resolution containing the decision of the signatories to: (1) disaffiliate from FFW,
(2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP), (3) adopt
a new constitution and by-laws for the union, (4) abolish all existing officer positions in the
union and elect a new set of interim officers, and (5) authorize REUBP to administer the CBA
between EUBP and Bayer. The said resolution was signed by 147 of the 257 local union
members. With both seeking recognition from Bayer and demanding remittance of the union
dues collected from its rank-and-
file members. Remigio’s splinter group wrote Facundo, FFW and Bayer informing them of the
decision of the
majority of the union members to disaffiliate from FFW. Bayer responded by deciding not to
deal with either of the two groups, and by placing the union dues collected in a trust account
until the conflict between the two groups is resolved. EUBP filed a complaint for unfair labor
practice (first ULP complaint) against Bayer for non-remittance of union dues. EUBP later sent
a letter to Bayer asking for a grievance conference. Apparently, the two groups failed to settle
their issues. Bayer decided to turn over the collected union dues amounting to P254,857.15 to
respondent
Anastacia Villareal, Treasurer of REUBP. EUBP lodged a complaint against Remigio’s group
before the Industrial
Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts
that threaten the life of the union." Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP
complaint for lack of jurisdiction. Petitioners then filed a second ULP complaint against herein
respondents. The Regional Director of the Industrial Relations Division of DOLE issued a
decision dismissing the issue on expulsion filed by EUBP against Remigio and her allies for
failure to exhaust reliefs within the union and ordering the conduct of a referendum to
determine which of the two groups should be recognized as union officers. The
BLR reversed the Regional Director’s ruling and ordered the management of Bayer to respect
the authority of the
duly-elected officers of EUBP in the administration of the prevailing CBA.

LA RULING:
Labor Arbiter Waldo Emerson R. Gan dismissed EUBP’s second ULP complaint for lack
of jurisdiction.

NLRC RULING:
Affirmed the decision.

CA RULING:

The CA sustained both the Labor Arbiter and the NLRC’s rulings.

ISSUE:
Can the act of the management of Bayer in dealing and n
egotiating with Remigio’s splinter group, despite
its validly existing CBA with EUBP, be considered unfair labor practice?

SC RULING: YES.
It must be remembered that a CBA is entered into in order to foster stability and mutual
cooperation between labor and capital. An employer should not be allowed to rescind
unilaterally its CBA with the duly certified bargaining agent it had previously contracted with,
and decide to bargain anew with a different group if there is no legitimate reason for doing so
and without first following the proper procedure. If such behavior would be tolerated,
bargaining and negotiations between the employer and the union will never be truthful and
meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied
upon. Article 253 of the Labor Code, as amended, plainly provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement.
–
Where there is a collective bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate or modify such agreement during its lifetime. However,
either party can serve a written notice to terminate or modify the agreement at least sixty (60)
days prior to its expiration date. It shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing agreement during
the 60-day period and/or until a new agreement is reached by the parties. (Emphasis
supplied.)
This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate
labor organization that has been duly certified as the exclusive bargaining representative and
the employer becomes the law between them. Additionally, in the Certificate of Registration
issued by the DOLE, it is specified that the registered CBA serves as the covenant between
the parties and has the force and effect of law between them during the period of its duration.
Compliance with the terms and conditions of the CBA is mandated by express policy of the law
primarily to afford protection to labor and to promote industrial peace. Thus, when a valid and
binding CBA had been entered into by the workers and the employer, the latter is behooved to
observe the terms and conditions thereof bearing on union dues and representation. If the
employer grossly violates its CBA with the duly recognized union, the former may be held
administratively and criminally liable for unfair labor practice. Indeed, in Silva v. National Labor
Relations Commission, we explained the correlations of Article 248 (1) and Article 261 of the
Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter, and for the
NLRC to exercise appellate jurisdiction thereon, the allegations in the complaint must show
prima facie
the concurrence of two things, namely: (1) gross violation of the CBA; and (2) the violation
pertains to the economic provisions of the CBA. This pronouncement in Silva, however, should
not be construed to apply to violations of the CBA which can be considered as gross violations
per se, such as utter disregard of the very existence of the CBA itself, similar to what
happened in this case. When an employer proceeds to negotiate with a splinter union despite
the existence of its valid CBA with the duly certified and exclusive bargaining agent, the former
indubitably abandons its recognition of the latter and terminates the entire CBA.

2.

103. MONTAO v. VERCELES

G.R. No.168583 July 26, 2010
DEL CASTILLO, J.

DOCTRINE:
Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of
DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes
include the conduct or nullification of election of union and workers’ association officers.

It is true that under the Implementing Rules, redress must first be sought within the organization
itself in accordance with its constitution and by-laws. However, this requirement is not absolute
but yields to exception under varying circumstances.

FACTS:
Atty. Montao worked as legal assistant of FFW Legal Center. Subsequently, he joined the union
of rank-and-file employees, the FFW Staff Association, and eventually became the employees
union president in July 1997. In November 1998, he was likewise designated officer-in-charge
of FFW Legal Center.

During the 21st National Convention and Election of National Officers of FFW, Atty. Montao
was nominated for the position of National Vice-President. In a letter dated May 25, 2001,
however, the Commission on Election (FFW COMELEC), informed him that he is not qualified
for the position as his candidacy violates the 1998 FFW Constitution and By-Laws. Atty. Montao
thus filed an Urgent Motion for Reconsideration praying that his name be included in the official
list of candidates.

Election ensued on May 26-27, 2001 in the National Convention held at Subic International
Hotel, Olongapo City. Despite the pending motion for reconsideration with the FFW
COMELEC, and strong opposition and protest of respondent Atty. Ernesto C. Verceles (Atty.
Verceles), a delegate to the convention and president of University of the East Employees
Association (UEEA-FFW) which is an affiliate union of FFW, the convention delegates allowed
Atty. Montao’s candidacy. He emerged victorious and was proclaimed as the National Vice-
President.

Atty. Verceles, as President of UEEA-FFW and officer of the Governing Board of FFW, filed
before the BLR a petition for the nullification of the election of Atty. Montao as FFW National
Vice-President. He alleged that, as already ruled by the FFW COMELEC, Atty. Montao is not
qualified to run for the position the FFW Constitution and By-Laws prohibits federation
employees from sitting in its Governing Board. Claiming that Atty. Montao’s premature
assumption of duties and formal induction as vice-president will cause serious damage, Atty.
Verceles likewise prayed for injunctive relief.
Atty. Montao filed his Comment with Motion to Dismiss on the grounds that the Regional
Director of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction
over the case; that the filing of the petition was premature due to the pending and unresolved
protest before the FFW COMELEC; and that, Atty. Verceles has no legal standing to initiate
the petition not being the real party in interest.

BLR RULING: The BLR, in its Order dated August 20, 2001, did not give due course to Atty.
Montaos Motion to Dismiss but ordered the latter to submit his answer to the petition pursuant
to the rules. The parties thereafter submitted their respective pleadings and position papers.

On May 8, 2002, the BLR rendered a Decision dismissing the petition for lack of merit. While it
upheld its jurisdiction over the intra-union dispute case and affirmed, as well, Atty. Verceles
legal personality to institute the action as president of an affiliate union of FFW, the BLR ruled
that there were no grounds to hold Atty. Montao unqualified to run for National Vice-President
of FFW. It held that the applicable provision in the FFW Constitution and By-Laws to determine
whether one is qualified to run for office is not Section 76 of Article XIX but Section 26 of Article
VIII thereof. The BLR opined that there was sufficient compliance with the requirements laid
down by this applicable provision and, besides, the convention delegates unanimously decided
that Atty. Montao was qualified to run for the position of National Vice-President. Atty. Verceles
filed a Motion for Reconsideration but it was denied by the BLR.

CA RULING: CA set aside the BLRs Decision. While it agreed that jurisdiction was properly
lodged with the BLR, that Atty. Verceles has legal standing to institute the petition, and that the
applicable provision of FFW Constitution and By-Laws is Section 26 of Article VIII and not
Section 76 of Article XIX, the CA however ruled that Atty. Montao

did not possess the qualification requirement under paragraph (d) of Section 26 that candidates
must be an officer or member of a legitimate labor organization. According to the CA, since
Atty. Montao, as legal assistant employed by FFW, is considered as confidential employee,
consequently, he is ineligible to join FFW Staff Association, the rank-and-file union of FFW.
The CA, thus, granted the petition and nullified the election of Atty. Montao as FFW National
Vice-President.

Montao raised before the SC the claim that the BLR has no jurisdiction over cases involving
protests and petitions for annulment of results of elections as such jurisdiction is expressly
conferred by law to the Regional Directors of the DOLE. He also reiterated that the petition was
prematurely filed and thus must be dismissed for failure to exhaust all remedies as mandated
by the implementing rules of the Labor Code.

ISSUES:
(1) Does the BLR have jurisdiction to decide election contests despite express provision of
law granting said jurisdiction?
(2) Was the petition by respondent prematurely filed?

RULING:
(1) Yes. We find no merit in petitioners’ claim that under Section 6 of Rule XV in relation to
Section 1 of Rule
XIV of Book V of the Omnibus Rules Implementing the Labor Code, it is the Regional
Director of the DOLE and not the BLR who has jurisdiction over election protests.

Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of
DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes
include the conduct or nullification of election of union and workers association officers. There
is, thus, no doubt as to the BLRs jurisdiction over the instant dispute involving member-unions
of a federation arising from disagreement over the provisions of the federation’s constitution
and by-laws.

We agree with BLRs observation that:

Rule XVI lays down the decentralized intra-union dispute settlement mechanism.
Section 1 states that any complaint in this regard shall be filed in the Regional
Office where the union is domiciled. The concept of domicile in labor relations
regulation is equivalent to the place where the union seeks to operate or has
established a geographical presence for purposes of collective bargaining or for
dealing with employers concerning terms and conditions of employment.

The matter of venue becomes problematic when the intra-union dispute involves
a federation, because the geographical presence of a federation may encompass
more than one administrative region. Pursuant to its authority under Article 226,
this Bureau exercises original jurisdiction over intra-union disputes involving
federations. It is well-settled that FFW, having local unions all over the country,
operates in more than one administrative region. Therefore, this Bureau
maintains original and exclusive jurisdiction over disputes arising from any
violation of or disagreement over any provision of its constitution and by-laws.

(2) No. There is likewise no merit to petitioners argument that the petition should have been
immediately
dismissed due to a pending and unresolved protest before the FFW COMELEC pursuant to
Section 6, Rule XV, Book V of the Omnibus Rules Implementing the Labor Code.

It is true that under the Implementing Rules, redress must first be sought within the organization
itself in accordance with its constitution and by-laws. However, this requirement is not absolute
but yields to exception under varying circumstances. In the case at bench, Atty. Verceles made
his protest over Atty. Montaos candidacy during the plenary session before the holding of the
election proceedings. The FFW COMELEC, notwithstanding its reservation and despite
objections from certain convention delegates, allowed Atty. Montaos candidacy and proclaimed
him winner for the position. Under the rules, the committee on election shall endeavour to settle
or resolve all protests during or immediately after the close of election proceedings and any
protest left unresolved shall be resolved by the committee within five days after the close of the
election proceedings. A day or two after the election, Atty. Verceles made his written/formal
protest over Atty. Montaos candidacy/proclamation with the FFW COMELEC. He exhausted
the remedies under the constitution and by-laws to have his protest acted upon by the proper
forum and even asked for a formal hearing on the matter. Still, the FFW COMELEC failed to
timely

act thereon. Thus, Atty. Verceles had no other recourse but to take the next available remedy
to protect the interest of the union he represents as well as the whole federation, especially so
that Atty. Montao, immediately after being proclaimed, already assumed and started to perform
the duties of the position. Consequently, Atty. Verceles properly sought redress from the BLR
so that the right to due process will not be violated. To insist on the contrary is to render the
exhaustion of remedies within the union as illusory and vain.

As regards the issue of whether Atty. Montao is qualified to run as FFW National President in
view of the prohibition established in Section 76, Article XIX of the 1998 FFW Constitution and
By-Laws, the SC concurred with the CA that Atty. Montao is not qualified to run for the position
but not for failure to meet the requirement
specified under Section 26 (d) of Article VIII of FFW Constitution and By-Laws. We note that
the CAs declaration of the illegitimate status of FFW Staff Association is proscribed by law,
owing to the preclusion of collateral
 attack. We nonetheless resolve to affirm the CAs finding that Atty. Montao is disqualified to run
for the position of National Vice-President in view of the proscription in the FFW Constitution
and By-Laws on federation employees
from sitting in its Governing Board. Accordingly, the election of Atty. Montao as FFW Vice-
President is null and void.

3.

PICOP Resources Inc vs Taneca

GR 160828

Facts:

Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang
Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective
bargaining agent for the rank-and-file employees of petitioner PRI. PRI has a CBA with NAMAPRI-
SPFL. The CBA contained the following union security provisions:

Article II- Union Security and Check-Off

Section 6. Maintenance of membership.

6.1 All employees within the appropriate bargaining unit who are members of the UNION at the time
of the signing of this AGREEMENT shall, as a condition of continued employment by the
COMPANY, maintain their membership in the UNION in good standing during the effectivity of this
AGREEMENT.

6.3 The COMPANY, upon the written request of the UNION and after compliance with the
requirements of the New Labor Code, shall give notice of termination of services of any employee
who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this Article

Atty. Fuentes sent a letter to the management of PRI demanding the termination of employees who
allegedly campaigned for, supported and signed the Petition for Certification Election of the Federation
of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said act
of campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a
valid basis for termination for a cause in accordance with its Constitution and By-Laws, and the terms
and conditions of the CBA, specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
On October 16, 2000, PRI served notices of termination for causes to employees whom NAMAPRIL-
SPFL sought to be terminated on the ground of “acts of disloyalty” committed against it when
respondents allegedly supported and signed the Petition for Certification Election of FFW before the
“freedom period” during the effectivity of the CBA. A Notice dated October 21, 2000 was also served
on the DOLE, Caraga Region.

Respondents then accused PRI of ULP.

Issue:

WON respondents were validly terminated.

Held:

“Union security” is a generic term, which is applied to and comprehends “closed shop,” “union shop,”
“maintenance of membership,” or any other form of agreement which imposes upon employees the
obligation to acquire or retain union membership as a condition affecting employment. There is union
shop when all new regular employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of membership shop when employees,
who are union members as of the effective date of the agreement, or who thereafter become members,
must maintain union membership as a condition for continued employment until they are promoted or
transferred out of the bargaining unit, or the agreement is terminated. A closed shop may be defined as
an enterprise in which, by agreement between the employer and his employees or their representatives,
no person may be employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part.

However, in terminating the employment of an employee by enforcing the union security clause, the
employer needs to determine and prove that: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee from the union. These requisites
constitute just cause for terminating an employee based on the union security provision of the
CBA.

As to the first requisite, there is no question that the CBA between PRI and respondents included a
union security clause. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions
demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate the employment of
respondents due to their acts of disloyalty to the Union. However, as to the third requisite, we find that
there is no sufficient evidence to support the decision of PRI to terminate the employment of the
respondents.
The mere signing of the authorization in support of the Petition for Certification Election of FFW on
March 19, 20 and 21, or before the “freedom period,” is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was actually filed during the freedom period.
Nothing in the records would show that respondents failed to maintain their membership in good
standing in the Union. Respondents did not resign or withdraw their membership from the Union to
which they belong. Respondents continued to pay their union dues and never joined the FFW.

Petition denied.

4. scribd INGUILLO

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

G.R. No. 165407

HERMINIGILDO INGUILLO AND Present:
ZENAIDA BERGANTE,
Petitioners, YNARES-SANTIAGO, J.,
Chairperson,
- versus - CARPIO,*
CORONA,**
NACHURA, and
PERALTA, JJ.
FIRST PHILIPPINE SCALES,
INC. and/or AMPARO Promulgated:
POLICARPIO, MANAGER,
Respondents. June 5, 2009
x-----------------------------------------------------x

DECISION

PERALTA, J.:

Assailed in this petition for review under Rule 45 of the Rules of Court are the Court of
Appeals (1) Decision[1] dated March 11, 2004 in CA-G.R. SP No. 73992, which dismissed
the Petition for Certiorari of petitioners Zenaida Bergante (Bergante) and Herminigildo
Inguillo (Inguillo); and (2) Resolution[2] dated September 17, 2004 denying petitioners'
Motion for Reconsideration. The appellate court sustained the ruling of the National
Labor Relations Commission (NLRC) that petitioners were validly dismissed pursuant to a
Union Security Clause in the collective bargaining agreement.
The facts of the case are as follows:

First Philippine Scales, Inc. (FPSI), a domestic corporation engaged in the manufacturing
of weighing scales, employed Bergante and Inguillo as assemblers on August 15, 1977 and
September 10, 1986, respectively.

In 1991, FPSI and First Philippine Scales Industries Labor Union (FPSILU)[3] entered into a
Collective Bargaining Agreement (CBA),[4] the duration of which was for a period of five
(5) years starting on September 12, 1991 until September 12, 1996. On September 19,
1991, the members of FPSILU ratified the CBA in a document entitled RATIPIKASYON NG
KASUNDUAN.[5] Bergante and Inguillo, who were members of FPSILU, signed the said
document.[6]

During the lifetime of the CBA, Bergante, Inguillo and several FPSI employees joined
another union, the Nagkakaisang Lakas ng Manggagawa (NLM), which was affiliated
with a federation called KATIPUNAN (NLM-KATIPUNAN, for brevity). Subsequently, NLM-
KATIPUNAN filed with the Department of Labor and Employment (DOLE) an intra-union
dispute[7] against FPSILU and FPSI. In said case, the Med-Arbiter decided[8] in favor of
FPSILU. It also ordered the officers and members of NLM-KATIPUNAN to return to FPSILU
the amount of P90,000.00 pertaining to the union dues erroneously collected from the
employees. Upon finality of the Med-Arbiter's Decision, a Writ of Execution[9] was issued
to collect the adjudged amount from NLM-KATIPUNAN. However, as no amount was
recovered, notices of garnishment were issued to United Coconut Planters Bank
(Kalookan City Branch)[10] and to FPSI[11] for the latter to hold for FPSILU the earnings of
Domingo Grutas, Jr. (Grutas) and Inguillo, formerly FPSILU's President and Secretary for
Finance, respectively, to the extent of P13,032.18. Resultantly, the amount of P5,140.55
was collected,[12] P1,695.72 of which came from the salary of Grutas, while the P3,444.83
came from that of Inguillo.

Meanwhile, on March 29, 1996, the executive board and members of the FPSILU
addressed a document dated March 18, 1996 denominated as Petisyon[13] to FPSI's
general manager, Amparo Policarpio (Policarpio), seeking the termination of the services
of the following employees, namely: Grutas, Yolanda Tapang, Shirley Tapang, Gerry
Trinidad, Gilbert Lucero, Inguillo, Bergante, and Vicente Go, on the following
grounds:[14] (1) disloyalty to the Union by separating from it and affiliating with a rival
Union, the NLM-KATIPUNAN; (2) dereliction of duty by failing to call periodic membership
meetings and to give financial reports; (3) depositing Union funds in the names of Grutas
and former Vice-President Yolanda Tapang, instead of in the name of FPSILU, care of the
President; (4) causing damage to FPSI by deliberately slowing down production,
preventing the Union to even attempt to ask for an increase in benefits from the former;
and (5) poisoning the minds of the rest of the members of the Union so that they would
be enticed to join the rival union.

On May 13, 1996, Inguillo filed with the NLRC a complaint against FPSI and/or Policarpio
(respondents) for illegal withholding of salary and damages, docketed as NLRC-NCR-Case
No. 00-05-03036-96.[15]
On May 16, 1996, respondents terminated the services of the employees mentioned in
the Petisyon.
The following day, two (2) separate complaints for illegal dismissal, reinstatement and
damages were filed against respondents by: (1) NLM-KATIPUNAN, Grutas, Trinidad,
Bergante, Yolanda Tapang, Go, Shirley Tapang and Lucero[16] (Grutas complaint, for
brevity); and (2) Inguillo[17] (Inguillo complaint). Both complaints were consolidated with
Inguillo's prior complaint for illegal withholding of salary, which was pending before Labor
Arbiter Manuel Manansala. After the preliminary mandatory conference, some of the
complainants agreed to amicably settle their cases. Consequently, the Labor Arbiter
issued an Order[18] dated October 1, 1996, dismissing with prejudice the complaints of Go,
Shirley Tapang, Yolanda Tapang, Grutas, and Trinidad.[19] Lucero also settled the case
after receiving his settlement money and executing a Quitclaim and Release in favor of
FPSI and Policarpio.[20]

Bergante and Inguillo, the remaining complainants, were directed to submit their
respective position papers, after which their complaints were submitted for resolution
on February 20, 1997.[21]
In their Position Paper,[22] Bergante and Inguillo claimed that they were not aware of a
petition seeking for their termination, and neither were they informed of the grounds for
their termination. They argued that had they been informed, they would have impleaded
FPSILU in their complaints. Inguillo could not think of a valid reason for his dismissal
except the fact that he was a very vocal and active member of the NLM-
KATIPUNAN. Bergante, for her part, surmised that she was dismissed solely for being
Inguillo's sister-in-law. She also reiterated the absence of a memorandum stating that she
committed an infraction of a company rule or regulation or a violation of law that would
justify her dismissal.
Inguillo also denounced respondents' act of withholding his salary, arguing that he was
not a party to the intra-union dispute from which the notice of garnishment arose. Even
assuming that he was, he argued that his salary was exempt from execution.

In their Position Paper,[23] respondents maintained that Bergante and Inguillo's dismissal
was justified, as the same was done upon the demand of FPSILU, and that FPSI complied
in order to avoid a serious labor dispute among its officers and members, which, in turn,
would seriously affect production. They also justified that the dismissal was in accordance
with the Union Security Clause in the CBA, the existence and validity of which was not
disputed by Bergante and Inguillo. In fact, the two had affixed their signatures to the
document which ratified the CBA.

In his Decision[24] dated November 27, 1997, the Labor Arbiter dismissed the remaining
complaints of Bergante and Inguillo and held that they were not illegally dismissed. He
explained that the two clearly violated the Union Security Clause of the CBA when they
joined NLM-KATIPUNAN and committed acts detrimental to the interests of FPSILU and
respondents. The dispositive portion of the said Decision states:
WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring respondents First Philippines Scales, Inc. (First Philippine Scales

Industries [FPSI] and Amparo Policarpio, in her capacity as President and General Manager of
respondent FPSI, not guilty of illegal dismissal as above discussed. However, considering the
length of services rendered by complainants Herminigildo Inguillo and Zenaida Bergante as
employees of respondent FPSI, plus the fact that the other complainants in the above-entitled
cases were previously granted financial assistance/separation pay through amicable settlement,
the afore-named respondents are hereby directed to pay complainants Herminigildo Inguillo and
Zenaida Bergante separation pay and accrued legal holiday pay, as earlier computed, to wit:
Herminigildo Inguillo
Separation pay ................P22,490.00
Legal Holiday Pay........... 839.00
Total 23,329.00

Zenaida Bergante
Separation pay.................P43,225.00
Legal Holiday Pay........... 839.00
Total 44,064.00

2. Directing the afore-named respondents to pay ten (10%) percent attorney's fees
based on the total monetary award to complainants Inguillo and Bergante.

3. Dismissing the claim for illegal withholding of salary of complainant Inguillo for
lack of merit as above discussed.

4. Dismissing the other money claims and/or other charges of complainants Inguillo
and Bergante for lack of factual and legal basis.

5. Dismissing the complaint of complainant Gilberto Lucero with prejudice for

having executed a Quitclaim and Release and voluntary resignation in favor of respondents FPSI
and Amparo Policarpio as above-discussed where the former received the amount of P23,334.00
as financial assistance/separation pay and legal holiday pay from the latter.

SO ORDERED.[25]

Bergante and Inguillo appealed before the NLRC, which reversed the Labor Arbiter's
Decision in a Resolution[26] dated June 8, 2001, the dispositive portion of which provides:
 WHEREFORE, the assailed decision is set aside. Respondents are hereby ordered to reinstate
complainants Inguillo and Bergante with full backwages from the time of their dismissal up [to]
their actual reinstatement. Further, respondents are also directed to pay complainant Inguillo the
amount representing his withheld salary for the period March 15, 1998 to April 16, 1998. The sum
corresponding to ten percent (10%) of the total judgment award by way of attorney's fees is
likewise ordered. All other claims are ordered dismissed for lack of merit.

SO ORDERED.[27]

In reversing the Labor Arbiter, the NLRC[28] ratiocinated that respondents failed to present
evidence to show that Bergante and Inguillo committed acts inimical to FPSILU's
interest. It also observed that, since the two (2) were not informed of their dismissal, the
justification given by FPSI that it was merely constrained to dismiss the employees due to
persistent demand from the Union clearly proved the claim of summary dismissal and
violation of the employees' right to due process.
Respondents filed a Motion for Reconsideration, which was referred by the NLRC to
Executive Labor Arbiter Vito C. Bose for report and recommendation. In its
Resolution[29]dated August 26, 2002, the NLRC adopted in toto the report and
recommendation of Arbiter Bose which set aside its previous Resolution reversing the
Labor Arbiter's Decision.This time, the NLRC held that Bergante and Inguillo were not
illegally dismissed as respondents merely put in force the CBA provision on the
termination of the services of disaffiliating Union members upon the recommendation of
the Union. The dispositive portion of the said Resolution provides:

WHEREFORE, the resolution of the Commission dated June 8, 2001 is set aside. Declaring the
dismissal of the complainants as valid, [t]his complaint for illegal dismissal is dismissed.However,
respondents are hereby directed to pay complainant Inguillo the amount representing his
withheld salary for the period March 15, 1998 to April 16, 1998, plus ten (10%) percent as
attorney's fees.

All other claims are ordered dismissed for lack of merit.

SO ORDERED.[30]

Not satisfied with the disposition of their complaints, Bergante and Inguillo filed a petition
for certiorari under Rule 65 of the Rules of Court with the Court of Appeals (CA).The CA
dismissed the petition for lack of merit[31] and denied the subsequent motion for
reconsideration.[32] In affirming the legality of the dismissal, the CA ratiocinated, thus:

x x x on the merits, we sustain the view adopted by the NLRC that:

x x x it cannot be said that the stipulation providing that the employer may dismiss
an employee whenever the union recommends his expulsion either for disloyalty
or for any violation of its by-laws and constitution is illegal or constitutive of unfair
 labor practice, for such is one of the matters on which management and labor can
agree in order to bring about the harmonious relations between them and the
union, and cohesion and integrity of their organization. And as an act of loyalty, a
union may certainly require its members not to affiliate with any other labor union
and to consider its infringement as a reasonable cause for separation.

The employer FPSI did nothing but to put in force their agreement when
it separated the disaffiliating union members, herein complainants, upon the
recommendation of the union. Such a stipulation is not only necessary to maintain
loyalty and preserve the integrity of the union, but is allowed by the Magna Carta
of Labor when it provided that while it is recognized that an employee shall have
the right of self-organization, it is at the same time postulated that such rights
shall not injure the right of the labor organization to prescribe its own rules with
respect to the acquisition or retention of membership therein. Having ratified
their CBA and being then members of FPSILU, the complainants owe fealty and
are required under the Union Security clause to maintain their membership in
good standing with it during the term thereof, a requirement which ceases to be
binding only during the 60-day freedom period immediately preceding the
expiration of the CBA, which was not present in this case.

x x x the dismissal of the complainants pursuant to the demand of the majority

union in accordance with their union security [clause] agreement following the
loss of seniority rights is valid and privileged and does not constitute unfair labor
practice or illegal dismissal.

Indeed, the Supreme Court has for so long a time already recognized a union security clause in
the CBA, like the one at bar, as a specie of closed-shop arrangement and trenchantly upheld the
validity of the action of the employer in enforcing its terms as a lawful exercise of its rights and
obligations under the contract.

The collective bargaining agreement in this case contains a union security

clause-a closed-shop agreement.

A closed-shop agreement is an agreement whereby an employer binds

himself to hire only members of the contracting union who must continue to
remain members in good standing to keep their jobs. It is the most prized
achievement of unionism. It adds membership and compulsory dues. By holding
out to loyal members a promise of employment in the closed-shop, it welds group
solidarity. (National Labor Union v. Aguinaldo's Echague Inc., 97 Phil. 184). It is a
very effective form of union security agreement.

This Court has held that a closed-shop is a valid form of union security,
and such a provision in a collective bargaining agreement is not a restriction of
the right of freedom of association guaranteed by the Constitution. (Lirag Textile
Mills, Inc. v. Blanco, 109 SCRA 87; Manalang v. Artex Development Company, Inc.,
21 SCRA 561.)[33]

Hence, the present petition.

Essentially, the Labor Code of the Philippines has several provisions under which an
employee may be validly terminated, namely: (1) just causes under Article 282;[34] (2)
authorized causes under Article 283;[35] (3) termination due to disease under Article
284;[36] and (4) termination by the employee or resignation under Article 285.[37] While
the said provisions did not mention as ground the enforcement of the Union Security
Clause in the CBA, the dismissal from employment based on the same is recognized and
accepted in our jurisdiction.[38]

Union security is a generic term, which is applied to and comprehends closed shop, union
shop, maintenance of membership or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment.[39] There is union shop when all new regular employees are required to join
the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the
effective date of the agreement, or who thereafter become members, must maintain
union membership as a condition for continued employment until they are promoted or
transferred out of the bargaining unit or the agreement is terminated.[40] A closed-shop,
on the other hand, may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be employed in any
or certain agreed departments of the enterprise unless he or she is, becomes, and, for the
duration of the agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part.[41]

In their Petition, Bergante and Inguillo assail the legality of their termination based on the
Union Security Clause in the CBA between FPSI and FPSILU. Article II[42] of the CBA pertains
to Union Security and Representatives, which provides:

The Company hereby agrees to a UNION SECURITY [CLAUSE] with the following terms:

1. All bonafide union members as of the effective date of this

agreement and all those employees within the bargaining unit who shall
subsequently become members of the UNION during the period of this
agreement shall, as a condition to their continued employment, maintain their
membership with the UNION under the FIRST PHIL. SCALES INDUSTRIES LABOR
UNION Constitution and By-laws and this Agreement;

2. Within thirty (30) days from the signing of this Agreement, all
workers eligible for membership who are not union members shall become and
to remain members in good standing as bonafide union members therein as a
condition of continued employment;

3. New workers hired shall likewise become members of the

UNION from date they become regular and permanent workers and shall remain
members in good standing as bonafide union members therein as a condition of
continued employment;
 4. In case a worker refused to join the Union, the Union will
undertake to notify workers to join and become union members. If said worker
or workers still refuses, he or they shall be notified by the Company of his/her
dismissal as a consequence thereof and thereafter terminated after 30 days
notice according to the Labor Code.

5. Any employee/union member who fails to retain union

membership in good standing may be recommended for suspension or
dismissal by the Union Directorate and/or FPSILU Executive Council for any of
the following causes:
a) Acts of Disloyalty;
b) Voluntary Resignation or Abandonment from the UNION;
c) Organization of or joining another labor union or any labor group that
would work against the UNION;
d) Participation in any unfair labor practice or violation of the Agreement,
or activity derogatory to the UNION decision;
e) Disauthorization of, or Non-payment of, monthly membership dues,
fees, fines and other financial assessments to the Union;
f) Any criminal violation or violent conduct or activity against any UNION
member without justification and affecting UNION rights or
obligations under the said Agreement.
Verily, the aforesaid provision requires all members to maintain their membership with
FPSILU during the lifetime of the CBA. Failing so, and for any of the causes enumerated
therein, the Union Directorate and/or FPSILU Executive Council may recommend to FPSI
an employee/union member's suspension or dismissal. Records show that Bergante and
Inguillo were former members of FPSILU based on their signatures in the document which
ratified the CBA. It can also be inferred that they disaffiliated from FPSILU when the CBA
was still in force and subsisting, as can be gleaned from the documents relative to the
intra-union dispute between FPSILU and NLM-KATIPUNAN. In view of their disaffiliation,
as well as other acts allegedly detrimental to the interest of both FPSILU and FPSI, a
Petisyon was submitted to Policarpio, asking for the termination of the services of
employees who failed to maintain their Union membership.

The Court is now tasked to determine whether the enforcement of the aforesaid Union
Security Clause justified herein petitioners' dismissal from the service.

In terminating the employment of an employee by enforcing the Union Security Clause,

the employer needs only to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security provision
in the CBA; and (3) there is sufficient evidence to support the union's decision to expel
the employee from the union or company.[43]

We hold that all the requisites have been sufficiently met and FPSI was justified in
enforcing the Union Security Clause, for the following reasons:
First. FPSI was justified in applying the Union Security Clause, as it was a valid provision in
the CBA, the existence and validity of which was not questioned by either
party.Moreover, petitioners were among the 93 employees who affixed their signatures
to the document that ratified the CBA. They cannot now turn their back and deny
knowledge of such provision.

Second. FPSILU acted on its prerogative to recommend to FPSI the dismissal of the
members who failed to maintain their membership with the Union. Aside from joining
another rival union, FPSILU cited other grounds committed by petitioners and the other
employees which tend to prejudice FPSIs interests, i.e., dereliction of duty - by failing to
call periodic membership meetings and to give financial reports; depositing union funds
in the names of Grutas and former Vice-President Yolanda Tapang, instead of in the name
of FPSILU care of the President; causing damage to FPSI by deliberately slowing down
production, preventing the Union from even attempting to ask for an increase in benefits
from the former; and poisoning the minds of the rest of the members of the Union so that
they would be enticed to join the rival union.

Third. FPSILU's decision to ask for the termination of the employees in the Petisyon was
justified and supported by the evidence on record. Bergante and Inguillo were
undisputably former members of FPSILU. In fact, Inguillo was the Secretary of Finance,
the underlying reason why his salary was garnished to satisfy the judgment of the Med-
Arbiter who ordered NLM-KATIPUNAN to return the Union dues it erroneously collected
from the employees. Their then affiliation with FPSILU was also clearly shown by their
signatures in the document which ratified the CBA. Without a doubt, they committed acts
of disloyalty to the Union when they failed not only to maintain their membership but
also disaffiliated from it. They abandoned FPSILU and even joined another union which
works against the former's interests. This is evident from the intra-union dispute filed by
NLM-KATIPUNAN against FPSILU. Once affiliated with NLM-KATIPUNAN, Bergante and
Inguillo proceeded to recruit other employees to disaffiliate from FPSILU and even
collected Union dues from them.

In Del Monte Philippines,[44] the stipulations in the CBA authorizing the dismissal of
employees are of equal import as the statutory provisions on dismissal under the Labor
Code, since a CBA is the law between the company and the Union, and compliance
therewith is mandated by the express policy to give protection to labor. In Caltex Refinery
Employees Association (CREA) v. Brillantes,[45] the Court expounded on the effectiveness
of union security clause when it held that it is one intended to strengthen the contracting
union and to protect it from the fickleness or perfidy of its own members. For without
such safeguards, group solidarity becomes uncertain; the union becomes gradually
weakened and increasingly vulnerable to company machinations. In this security clause
lies the strength of the union during the enforcement of the collective bargaining
agreement. It is this clause that provides labor with substantial power in collective
bargaining.
Nonetheless, while We uphold dismissal pursuant to a union security clause, the same is
not without a condition or restriction. For to allow its untrammeled enforcement would
encourage arbitrary dismissal and abuse by the employer, to the detriment of the
employees. Thus, to safeguard the rights of the employees, We have said time and again
that dismissals pursuant to union security clauses are valid and legal, subject only to the
requirement of due process, that is, notice and hearing prior to dismissal.[46] In like
manner, We emphasized that the enforcement of union security clauses is authorized by
law, provided such enforcement is not characterized by arbitrariness, and always with
due process.[47]

There are two (2) aspects which characterize the concept of due process under the Labor
Code: one is substantivewhether the termination of employment was based on the
provisions of the Labor Code or in accordance with the prevailing jurisprudence; the other
is procedural - the manner in which the dismissal was effected.

The second aspect of due process was clarified by the Court in King of Kings Transport v.
Mamac,[48] stating, thus:

(1) The first written notice to be served on the employees should contain
the specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a reasonable
period. x x x

(2) After serving the first notice, the employers should schedule and conduct
a hearing or conference wherein the employees will be given the opportunity to:
(1) explain and clarifytheir defenses to the charge against them; (2) present evidence in
support of their defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are given the chance to
defend themselves personally, with the assistance of a representative or counsel of their
choice. Moreover, this conference or hearing could be used by the parties as an opportunity
to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers

shall serve the employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered; and
(2) grounds have been established to justify the severance of their employment.

Corollarily, procedural due process in the dismissal of employees requires notice and
hearing. The employer must furnish the employee two written notices before termination
may be effected. The first notice apprises the employee of the particular acts or omissions
for which his dismissal is sought, while the second notice informs the employee of the
employers decision to dismiss him.[49] The requirement of a hearing, on the other hand, is
complied with as long as there was an opportunity to be heard, and not necessarily that an
actual hearing was conducted.[50]

In the present case, the required two notices that must be given to herein petitioners
Bergante and Inguillo were lacking. The records are bereft of any notice that would have
given a semblance of substantial compliance on the part of herein
respondents. Respondents, however, aver that they had furnished the employees
concerned, including petitioners, with a copy of FPSILU's Petisyon. We cannot consider
that as compliance with the requirement of either the first notice or the second
notice. While the Petisyon enumerated the several grounds that would justify the
termination of the employees mentioned therein, yet such document is only a
recommendation by the Union upon which the employer may base its decision. It cannot
be considered a notice of termination. For as agreed upon by FPSI and FPSILU in their
CBA, the latter may only recommend to the former a Union member's suspension or
dismissal. Nowhere in the controverted Union Security Clause was there a mention that
once the union gives a recommendation, the employer is bound outright to proceed with
the termination.
Even assuming that the Petisyon amounts to a first notice, the employer cannot be deemed
to have substantially complied with the procedural requirements. True, FPSILU
enumerated the grounds in said Petisyon. But a perusal of each of them leads Us to
conclude that what was stated were general descriptions, which in no way would enable
the employees to intelligently prepare their explanation and defenses. In addition, the
Petisyon did not provide a directive that the employees are given opportunity to submit
their written explanation within a reasonable period. Finally, even if We are to assume that
the Petisyon is a second notice, still, the requirement of due process is wanting. For as We
have said, the second notice, which is aimed to inform the employee that his service is
already terminated, must state that the employer has considered all the circumstances
which involve the charge and the grounds in the first notice have been established to justify
the severance of employment. After the claimed dialogue between Policarpio and the
employees mentioned in the Petisyon, the latter were simply told not to report for work
anymore.
These defects are bolstered by Bergante and Inguillo who remain steadfast in denying that
they were notified of the specific charges against them nor were they given any
memorandum to that effect. They averred that had they been informed that their dismissal
was due to FPSILU's demand/petition, they could have impleaded the FPSILU together
with the respondents. The Court has always underscored the significance of the two-notice
rule in dismissing an employee and has ruled in a number of cases that non-compliance
therewith is tantamount to deprivation of the employees right to due process.[51]
As for the requirement of a hearing or conference, We hold that respondents also failed to
substantially comply with the same. Policarpio alleged that she had a dialogue with the
concerned employees; that she explained to them the demand of FPSILU for their
termination as well as the consequences of the Petisyon; and that she had no choice but to
act accordingly. She further averred that Grutas even asked her to pay all the involved
employees one (1)-month salary for every year of service, plus their accrued legal holiday
pay, but which she denied. She informed them that it has been FPSI's practice to give
employees, on a case-to-case basis, only one-half () month salary for every year of service
and after they have tendered their voluntary resignation. The employees refused her offer
and told her that they will just file their claims with the DOLE.[52]
Policarpio's allegations are self-serving. Except for her claim as stated in the respondent's
Position Paper, nowhere from the records can We find that Bergante and Inguillo were
accorded the opportunity to present evidence in support of their defenses. Policarpio relied
heavily on the Petisyon of FPSILU. She failed to convince Us that during the dialogue, she
was able to ascertain the validity of the charges mentioned in the Petisyon. In her futile
attempt to prove compliance with the procedural requirement, she reiterated that the
objective of the dialogue was to provide the employees the opportunity to receive the act
of grace of FPSI by giving them an amount equivalent to one-half () month of their salary
for every year of service. We are not convinced. We cannot even consider the demand and
counter-offer for the payment of the employees as an amicable settlement between the
parties because what took place was merely a discussion only of the amount which the
employees are willing to accept and the amount which the respondents are willing to
give. Such non-compliance is also corroborated by Bergante and Inguillo in their pleadings
denouncing their unjustified dismissal. In fine, We hold that the dialogue is not tantamount
to the hearing or conference prescribed by law.
We reiterate, FPSI was justified in enforcing the Union Security Clause in the
CBA. However, We cannot countenance respondents' failure to accord herein petitioners
the due process they deserve after the former dismissed them outright in order to avoid a
serious labor dispute among the officers and members of the bargaining agent. [53] In
enforcing the Union Security Clause in the CBA, We are upholding the sanctity and
inviolability of contracts. But in doing so, We cannot override an employees right to due
process.[54] In Carino v. National Labor Relations Commission,[55] We took a firm stand in
holding that:

The power to dismiss is a normal prerogative of the employer. However, this is not
without limitation. The employer is bound to exercise caution in terminating the
services of his employees especially so when it is made upon the request of a labor
union pursuant to the Collective Bargaining Agreement x x x. Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing an employee
because it affects not only his position but also his means of livelihood. Employers
should respect and protect the rights of their employees, which include the right to labor."
Thus, as held in that case, "the right of an employee to be informed of the charges against
him and to reasonable opportunity to present his side in a controversy with either the
company or his own Union is not wiped away by a Union Security Clause or a Union Shop
Clause in a collective bargaining agreement. An employee is entitled to be protected not
only from a company which disregards his rights but also from his own Union, the
leadership of which could yield to the temptation of swift and arbitrary expulsion from
membership and mere dismissal from his job."[56]
In fine, We hold that while Bergante and Inguillo's dismissals were valid pursuant to the
enforcement of Union Security Clause, respondents however did not comply with the
requisite procedural due process. As in the case of Agabon v. National Labor Relations
Commission,[57] where the dismissal is for a cause recognized by the prevailing
jurisprudence, the absence of the statutory due process should not nullify the dismissal or
render it illegal, or ineffectual. Accordingly, for violating Bergante and Inguillo's statutory
rights, respondents should indemnify them the amount of P30,000.00 each as nominal
damages.

In view of the foregoing, We see no reason to discuss the other matters raised by
petitioners.

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of

Appeals Decision dated March 11, 2004 and Resolution dated September 17, 2004, in CA-
G.R. SP No. 73992, are hereby AFFIRMED WITH MODIFICATION in that while
there was a valid ground for dismissal, the procedural requirements for termination, as
mandated by law and jurisprudence, were not observed. Respondents First Philippine
Scales, Inc. and/or Amparo Policarpio are hereby ORDERED to PAY petitioners Zenaida
Bergante and Herminigildo Inguillo the amount of P30,000.00 each as nominal
damages. No pronouncement as to costs.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
 Associate Justice
Chairperson

ANTONIO T. CARPIO RENATO C. CORONA

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Third Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice

5.

104. DIOKNO v. CADAC

G.R. No.168475 July 4, 2007
CHICO-NAZARIO, J.

DOCTRINE:
BLR has original jurisdiction on all inter-union and intra-union conflicts. Since Art. 226 declared the BLR shall
have original and exclusive authority to act on all inter-union and intra-union conflicts, there should be no doubt
as to its jurisdiction. Intra-union conflict refers to a conflict within or inside a labor union.
(Exceptions to the Doctrine of Exhaustion of Administrative Remedies)

FACTS:
Petitioners and Respondents are members of First Line Association of Meralco Supervisory Employees
(FLAMES) which is the supervisory union of Meralco.

FLAMES COMELEC rejected the candidacy of Ong et al (Ong, Alvarez, Escall, Valeriano). Ong et al filed a petition
before the med-arbitration of DOLE to nullify the order of COMELEC. Consequently, DOLE personnel were
directed to observe the conduct of the FLAMES election.

Petitioners sought the disqualification of respondents Daya et al (Daya, lucas, tabilog, espiritu, vito, de luna,
yalung, layug, pabilona, reyes, escall, alcantara, cervitillo, morelos, ermine). Petitioners alleged that Daya, et al.,
allowed themselves to be assisted by non-union members, and committed acts of disloyalty which are inimical to
the interest of FLAMES. In their campaign, they allegedly colluded with the officers of the Meralco Savings and
Loan Association (MESALA) and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue
influence on the members of FLAMES. As a result, the COMELEC disqualified Daya et al from the election. On
May 7, 2003 COMELEC proclaimed the winner of the elections which included Diokno as president. Daya et al
and Ong et al filed with the med-arbitration unit of DOLE a petition to nullify the order of disqualification, election
proceedings and counting of votes.

Another group, Jimenez et al (Jimenez Jr., Reyes, Gavino, Vidanes, Tayao, Cirujano, Cadavona, Caoc, Maclit, Acorda,
Ragasa, de Vera) filed a petition with the med-arbitration unit of dole to nullify the election on the ground that it was not
free, orderly and peaceful. Ong et al, Daya et al and Jimenez et al were eventually consolidated.

MED ARBITER RULING: Med Arbiter reversed the disqualification imposed by the COMELEC. He said that the
COMELEC accepted all the allegations of petitioners against private respondents Daya, et al., sans evidence to
substantiate the same. Also, the COMELEC erred in putting forth the the basis for the disqualification of Daya et
al as the quoted provision in the CBL applies to dismissal/expulsion of members and not to disqualification of
candidates. Petitioners appealed to the BLR Director. The Med-Arbiter also defended his jurisdiction over the
case. He concluded that even as the election of union officers is an internal affair of the union, his office has the
right to inquire into the merits and conduct of the election when its jurisdiction is sought.

BLR RULING: BLR affirmed decision of Med-Arbiter. He also ruled that the case was an exception to the rule on
exhaustion of administrative remedy, they were left with no choice but to seek the intervention of the BLR which
was declared to have jurisdiction over intra union disputes even at its own initiative under Art. 226.

CA RULING: The CA upheld the decision of the BLR.

In filing the instant petition before the SC, petitioners question the jurisdiction of the BLR on the case at
bar because of the failure of private respondents Daya, et al.,to exhaust administrative remedies within the union.
It is the stance of petitioner that Article 226 of the Labor Code which grants power to the BLR to resolve inter-
union and intra-union disputes is dead law, and has been amended by Section 14 of Republic Act No. 6715,
whereby the conciliation, mediation and voluntary arbitration functions of the BLR had been transferred to the
National Conciliation and Mediation Board.
 ISSUES:
1. Does the BLR have jurisdiction to resolve inter-union and intra-union disputes as provided under Article
226 of the Labor Code despite the supposed amendment by RA 6715?
2. Did the respondents prematurely seek the jurisdiction of the BLR?

169
4S (A.Y. 2015-2016)
That in all things, God may be glorified!
 San Beda College of Law LABOR LAW REVIEW CASE DIGESTS
SC RULING:
(1) Yes. The amendment to Art 226 simply reads: “The bureau sall have 15 days to act on labor cases
before it, subject to extension by agreement of the parties.”

BLR has original jurisdiction on all inter-union and intra-union conflicts. Since Art. 226 declared the BLR
shall have original and exclusive authority to act on all inter-union and intra-union conflicts, there should
be no doubt as to its jurisdiction. Intra-union conflict refers to a conflict within or inside a labor union. An
inter-union controversy or dispute is one occurring or carried on between or among unions.

Rule 1 of Rules implementing book V: “intra union dispute”- refers to any conflict between and among
union members, and includes all disputes or grievances arising from any violation of or disagreement
over any provision of the constitution and by-laws of a union, including cases arising from chartering or
affiliation of labor organizations or from any vi0lation of the rights and conditions of union membership
provided for in the code.

The controversy in the case at bar is an intra-union dispute. Even as the dispute involved allegations that
Daya et al sought the help of non-union members, the same does not detract from the real character of
the controversy. It remains as one which involves the grievance over the constitution and bylaws of a
union and it is a controversy involving members of the union. Moreover, the non-members of the union
are not parties to the case. BLR was properly within its cognizance, it being an intra-union dispute. Daya
et al brought the case to the BLR, it was an invocation of the power and authority of the BLR to act in an
intra-union conflict.

(2) No. We affirm the findings of the Court of Appeals which upheld the application by the BLR Director
of the
exception to the rule of exhaustion of administrative remedies. Before a party is allowed to seek the
intervention of the court, it is a pre-condition that he should have availed of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to
by giving the administrative officer concerned every opportunity to decide on a matter that comes within
his jurisdiction when such remedy should be exhausted first before the courts judicial power can be
sought. The premature invocation of courts judicial intervention is fatal to ones cause of action.

Verily, there are exceptions to the applicability of the doctrine. Among the established exceptions are: 1)
when the question raised is purely legal; 2) when the administrative body is in estoppel; 3) when the act
complained of is patently illegal; 4) when there is urgent need for judicial intervention; 5) when the claim
involved is small; 6) when irreparable damage will be suffered; 7) when there is no other plain, speedy,
and adequate remedy; 8) when strong public interest is involved; 9) when the subject of the proceeding
is private land; 10) in quo warranto proceedings; and 11) where the facts show that there was a violation
of due process. As aptly determined by the BLR Director, private respondents Daya, et al., were
prejudiced by the disqualification order of the COMELEC. They endeavored to seek reconsideration, but
the COMELEC failed to act thereon. The COMELEC was also found to have refused to receive their
written protest. The foregoing facts sustain the finding that private respondents Daya, et al., were deprived
of due process. Hence, it becomes incumbent upon private respondents Daya, et al., to seek the aid of
the BLR. To insist on the contrary is to render their exhaustion of remedies within the union as illusory
and vain. These antecedent circumstances convince this Court that there was proper application by the
Med-Arbiter of the exception to the rule of exhaustion of administrative remedies, as affirmed by the BLR
Director, and upheld by the Court of Appeals.
6.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

PICOP RESOURCES, G.R. No. 172666

INCORPORATED (PRI),
Represented in this Petition by
MR. WILFREDO D. FUENTES, Present:
in his capacity as
Senior Vice-President and
Resident Manager,
Petitioner, PERALTA, J., Acting Chairperson,

ABAD,
- versus -
MENDOZA,
RICARDO DEQUILLA, SERENO,  and
ELMO PABILANDO,
CESAR ATIENZA and PERLAS-BERNABE, JJ.
ANICETO ORBETA, JR.,
and NAMAPRI-SPFI,
Respondents.
 Promulgated:

December 7, 2011

X -----------------------------------------------------------------------------------------------------X

DECISION

MENDOZA, J.:

This is a petition for review assailing the April 14, 2005 Decision[1] of the
Court of Appeals (CA) which reversed and set aside the Resolutions[2] of the
National Labor Relations Commission (NLRC) dated December 27, 2002 and March
28, 2003, and reinstated the June 9, 2001 Decision[3] of the Labor Arbiter (LA),
which declared the dismissal of the private respondents as illegal.

The Facts

Ricardo Dequilla, Cesar Atienza and Aniceto Orbeta (private respondents) were
regular rank-and-file employees of Picop Resources, Inc. (PICOP) and members of
the NAMAPRI-SPFL, a duly registered labor organization and existing bargaining
agent of the PICOP rank-and-file employees. PICOP and NAMAPRI-SPFL had a
collective bargaining agreement (CBA) which would expire on May 22, 2000.

On May 16, 2000, the late Atty. Proculo P. Fuentes, Jr. (Atty. Fuentes), then National
President of the Southern Philippines Federation of Labor (SPFL), advised the PICOP
management to terminate about 800 employees due to acts of disloyalty,
specifically, for allegedly campaigning, supporting and signing a petition for the
certification of a rival union, the Federation of Free Workers Union (FFW) before
the 60-day freedom period and during the effectivity of the CBA. Such acts of
disloyalty were construed to be a valid cause for termination under the terms and
conditions of the CBA. Based on the CBA, the freedom period would start on March
22, 2000.

Acting on the advice of Atty. Fuentes, Atty. Romero Boniel (Atty. Boniel), Manager
of the PICOP Legal and Labor Relations Department, issued a memorandum
directing the employees concerned to explain within seventy-two (72) hours why
their employment should not be terminated due to alleged acts of disloyalty. Upon
receiving their explanation letters, Atty. Boniel endorsed the same to Atty. Fuentes
who then requested the termination of 46 employees found guilty of acts of
disloyalty.

On October 16, 2000, PICOP served a notice of termination due to acts of

disloyalty to 31 of the 46 employees. Private respondents were among the 31
employees dismissed from employment by PICOP on November 16, 2000.

Enraged at what management did to them, private respondents filed a complaint

before the NLRC Regional Arbitration Branch No. XIII, Butuan City, for Unfair Labor
Practice and Illegal Dismissal with money claims, damages and attorneys fees.

LA Ruling

On June 9, 2001, after the parties submitted their respective position papers,
the LA rendered a decision declaring as illegal the termination of the private
respondents. The dispositive portion of the LA Decision reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

2. Ordering respondents PRI and NAMPRI-SPFL to reinstate

complainants to their former or equivalent positions without loss
of seniority rights and to jointly and solidarily pay their
backwages in the total amount of ₱177,403.68, as shown in the
computation, hereto attached and marked as Annex A hereof, plus
damages in the amount of ₱10,000.00 each and attorneys fees
equivalent to 10% of the total monetary award.
 SO ORDERED. [4]

NLRC Ruling

PICOP elevated the LA decision to the NLRC but its appeal was dismissed in
the November 19, 2002 NLRC Resolution.[5] On motion for reconsideration,
however, the NLRC issued another resolution,[6] dated December 27, 2002,
reversing and setting aside its November 19, 2002 Resolution, the dispositive
portion of which reads:

WHEREFORE, foregoing premises considered, the above resolution

dated November 19, 2002, is Reversed and Set Aside. In lieu thereof, a new
judgment is rendered DISMISSING the above-entitled case for lack of merit.

SO ORDERED.[7]

CA Ruling

Upon the denial of their motion for reconsideration, the private respondents
brought the case to the CA. On April 14, 2005, the CA rendered the subject decision
reversing and setting aside the December 27, 2002 NLRC resolution and reinstating
the June 9, 2001 Decision of the LA. The decretal portion of the CA decision reads:

WHEREFORE, premises considered, [the] instant petition is GRANTED

and the assailed resolutions of the Public Respondent NLRC are hereby
REVERSED and SET ASIDE. In view thereof, ordered REINSTATED is the
Decision of Acting Executive Labor Arbiter Rogelio P. Legaspi dated 09 June
2001 which reads:

WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants dismissal illegal; and

 2. Ordering Respondents PRI and NAMPRI-SPFL to
reinstate Complainants to their former or equivalent
positions without loss of seniority rights and to jointly and
solidarily pay their backwages in the total amount
of ₱177,403.68, plus damages in the amount
of ₱10,000.00 each and attorneys fees equivalent to 10%
of the total monetary award.

SO ORDERED.[8]

The CA ruled, among others, that although private respondents signed an

authorization for the filing of the petition for certification election of a rival union,
PICOP Democratic Trade Unionist-Federation of Free Workers (FFW), such act
was not a sufficient ground to terminate the employment of private respondents. It
explained:

Ruminating from the alleged violation of the CBA, We see no reason,

sufficient and compelling enough, to sustain the Public Respondents raison
detre in overturning the Labor Arbiters ruling in favor of the Petitioners.
While it is true that Petitioners signed the authorization in support of the
Petition for certification election of FFW before the freedom period, such
act is not a sufficient ground to terminate the employment of the Petitioners
in as much as the petition itself was filed during the freedom period. Hence,
there is nil a basis to impute acts of disloyalty to Petitioners. Imputations of
an alleged violation of the CBA should not arise from a vague and all
embracing definition of alleged acts of disloyalty. Neither should it arise
from speculative inferences where no evidence appears from the record that
Respondent NAMAPRI-SPFL expressly defined acts of disloyalty. Besides,
to Our mind, signing an authorization for the filing of the petition for
certification election does not constitute an act of disloyalty per se. There
must be proof of contemporaneous acts of resignation or withdrawal of their
membership from the Respondent NAMAPRI-SPFL to which they are
members. Respondents miserably failed to present evidence to justify a
valid termination of employees in pursuance to the CBA allegedly violated.
Petitioners, in fact remained in good standing, a continuing requirement for
retaining their employment in the Respondent PRI. Petitioners neither
joined nor affiliated with FFW and continuously paid their union dues with
Respondent NAMAPRI-SPFL. Consequently, this lends credence to the
Labor Arbiters ruling that Petitioners dismissal was indeed illegal.
 Likewise, the advise of the Respondent NAMAPRI-SPFL to the
Respondent PRI to effect the termination of employees, including herein
Petitioners, finds no basis in fact and in law considering that at the time the
Respondent PRI dismissed the Petitioners, among others, on 16 November
2000, there was no more CBA to speak of after it had already expired on 22
May 2000.[9]

The CA further agreed with private respondents that Article 256 and not
Article 253, of the Labor Code applied in this case. The CA discussed this point as
follows:

We are inclined to favor Petitioners stance that Article 256, supra, is

applicable. The issue of acts of disloyalty relates more to a direct connection
on the alleged violation or breach of loyalty to the majority status of the
incumbent union than on violation of the terms and conditions of the
agreement under Article 253, supra, as the Respondents would want Us to
believe. Article 256 provides that at the expiration of the 60-day period
reckoned from the expiration date of the CBA, the employer shall continue
to recognize the majority status of the incumbent bargaining agent only
where no petition for certification election is filed. However, as earlier
pointed, a petition was already filed by the Petitioners, among others,
during the 60-day freedom period. Clearly, from the imports of said
provision, it will render nugatory the purpose of the law providing for a
freedom period for the filing of a petition for certification election should
the act of signing/filing the said petition be interpreted as an act of
disloyalty and will render farce the need for a certification election as an
instrument of ascertaining the true expression of the will of the workers as
to which labor organization would represent them.

To construe the provision of law in Article 253, supra, as imposing a

restriction against the signing and filing a petition for certification election
during the freedom period, is to violate the constitutional right of the
employees to organize freely. It is a basic precept of statutory construction
that statutes should be construed not so much according to the letters
that killeth but in line with the purpose for which they have been enacted.[10]

Not in conformity with the CA decision, PICOP filed this petition for review
posing the following
 ISSUES

WHETHER [OR NOT] AN EXISTING COLLECTIVE BARGAINING

AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND EFFECT IN
ALL ITS TERMS AND CONDITIONS INCLUDING ITS UNION SECURITY
CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA HAS
YET BEEN ENTERED INTO?

WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR CONCLUSION

OF LAW FALLS WITHIN THE AMBIT OF THE EXTRA ORDINARY REMEDY OF CERTIORARI
UNDER RULE 65, REVISED RULES OF COURT.[11]

PICOP basically argues that Article 253 of the Labor Code applies in this case. Article
253 of the Labor Code provides that the terms and conditions of a CBA remain in
full force and effect even beyond the 5-year period when no new CBA has yet been
reached. It claims that the private respondents violated this provision when they
campaigned for, supported and signed FFWs petition for certification election on
March 19 and 20, 2000, before the onset of the freedom period. It further argues
that private respondents were not denied due process when they were terminated.
Finally, it claims that the decision of the NLRC on the issues raised was not without
merit. Even assuming that it erred in its judgment on the legal issues raised, its error
is not equivalent to an abuse of discretion that should fall within the ambit of the
extraordinary remedy of certiorari.

Private respondents position

Private respondents argue that the substantial arguments raised by PICOP in this
petition are basically a rehash of the same issues and arguments contained in its
Motion for Reconsideration of the CA decision. Private respondents adopted and
repleaded the ruling of the CA in their Comment[12] on this petition.
The Courts Ruling

The petition merits a denial.

There is no question that in the CBA entered into by the parties, there is a
union security clause. The clause imposes upon the workers the obligation to join
and maintain membership in the companys recognized union as a condition for
employment.

"Union security" is a generic term, which is applied to and comprehends

"closed shop," "union shop," "maintenance of membership," or any other form of
agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop when
all new regular employees are required to join the union within a certain period as
a condition for their continued employment. There is maintenance of membership
shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership
as a condition for continued employment until they are promoted or transferred
out of the bargaining unit, or the agreement is terminated. A closed shop, on the
other hand, may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be employed
in any or certain agreed departments of the enterprise unless he or she is, becomes,
and, for the duration of the agreement, remains a member in good standing of a
union entirely comprised of or of which the employees in interest are a part.[13]

There is no dispute that private respondents were members of NAMAPRI-

SPFL who were terminated by PICOP due to alleged acts of disloyalty. It is basic in
labor jurisprudence that the burden of proof rests upon management to show that
the dismissal of its worker was based on a just cause. When an employer exercises
its power to terminate an employee by enforcing the union security clause, it needs
to determine and prove the following: (1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in
the CBA; and (3) there is sufficient evidence to support the decision of the union to
expel the employee from the union.[14]

In this case, the resolution thereof hinges on whether PICOP was able to
show sufficient evidence to support the decision of the union to expel private
respondents from it.
 PICOP basically contends that private respondents were justly terminated
from employment for campaigning, supporting and signing a petition for the
certification of FFW, a rival union, before the 60-day freedom period and during
the effectivity of the CBA. Their acts constitute an act of disloyalty against the union
which is valid cause for termination pursuant to the Union Security Clause in the
CBA.

The Court finds Itself unable to agree.

Considering the peculiar circumstances, the Court is of the view that the acts
of private respondents are not enough proof of a violation of the Union Security
Clause which would warrant their dismissal. PICOP failed to show in detail how
private respondents campaigned and supported FFW. Their mere act of signing an
authorization for a petition for certification election before the freedom period
does not necessarily demonstrate union disloyalty. It is far from being within the
definition of acts of disloyalty as PICOP would want the Court to believe. The act of
signing an authorization for a petition for certification election is not disloyalty to
the union per se considering that the petition for certification election itself was
filed during the freedom period which started on March 22, 2000.

Moreover, as correctly ruled by the CA, the records are bereft of proof of any
contemporaneous acts of resignation or withdrawal of union membership or non-
payment of union dues. Neither is there proof that private respondents joined FFW.
The fact is, private respondents remained in good standing with their union,
NAMAPRI-SPFL. This point was settled in the case of PICOP Resources, Incorporated
(PRI) v. Anacleto L. Taeca,[15] where it was written:

However, as to the third requisite, we find that there is no sufficient

evidence to support the decision of PRI to terminate the employment of the
respondents.

PRI alleged that respondents were terminated from employment based on

the alleged acts of disloyalty they committed when they signed an authorization for
the Federation of Free Workers (FFW) to file a Petition for Certification Election
among all rank-and-file employees of PRI. It contends that the acts of respondents
are a violation of the Union Security Clause, as provided in their Collective
Bargaining Agreement.
 We are unconvinced.

We are in consonance with the Court of Appeals when it held that the mere
signing of the authorization in support of the Petition for Certification Election of
FFW on March 19, 20 and 21, or before the "freedom period," is not sufficient
ground to terminate the employment of respondents inasmuch as the petition itself
was actually filed during the freedom period. Nothing in the records would show
that respondents failed to maintain their membership in good standing in
the Union. Respondents did not resign or withdraw their membership from
the Union to which they belong. Respondents continued to pay their union dues
and never joined the FFW.

Significantly, petitioner's act of dismissing respondents stemmed from the

latter's act of signing an authorization letter to file a petition for certification
election as they signed it outside the freedom period. However, we are constrained
to believe that an "authorization letter to file a petition for certification election" is
different from an actual "Petition for Certification Election." Likewise, as per
records, it was clear that the actual Petition for Certification Election of FFW was
filed only on May 18, 2000. Thus, it was within the ambit of the freedom period
which commenced from March 21, 2000 until May 21, 2000. Strictly speaking,
what is prohibited is the filing of a petition for certification election outside the 60-
day freedom period. This is not the situation in this case. If at all, the signing of the
authorization to file a certification election was merely preparatory to the filing of
the petition for certification election, or an exercise of respondents right to self-
organization.[16]

Finally, PICOP insists that Article 253 of the Labor Code applies in this case,
not Article 256 thereof. The Court agrees with the CA that its argument is
misplaced. This issue was tackled and settled in the same PICOP Resources,
Incorporated (PRI) v. Taeca case, to wit:

Moreover, PRI anchored their decision to terminate respondents

employment on Article 253 of the Labor Code which states that "it shall be the duty
of both parties to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period and/or
until a new agreement is reached by the parties." It claimed that they are still bound
by the Union Security Clause of the CBA even after the expiration of the CBA;
hence, the need to terminate the employment of respondents.

Petitioner's reliance on Article 253 is misplaced.

The provision of Article 256 of the Labor Code is particularly enlightening.

It reads:
 Article 256. Representation issue in organized establishments. - In
organized establishments, when a verified petition questioning the majority status
of the incumbent bargaining agent is filed before the Department of Labor and
Employment within the sixty-day period before the expiration of a collective
bargaining agreement, the Med-Arbiter shall automatically order an election by
secret ballot when the verified petition is supported by the written consent of at
least twenty-five percent (25%) of all the employees in the bargaining unit to
ascertain the will of the employees in the appropriate bargaining unit. To have a
valid election, at least a majority of all eligible voters in the unit must have cast
their votes. The labor union receiving the majority of the valid votes cast shall be
certified as the exclusive bargaining agent of all the workers in the unit. When an
election which provides for three or more choices results in no choice receiving a
majority of the valid votes cast, a run-off election shall be conducted between the
labor unions receiving the two highest number of votes: Provided, That the total
number of votes for all contending unions is at least fifty per cent (50%) of the
number of votes cast.
At the expiration of the freedom period, the employer shall continue to
recognize the majority status of the incumbent bargaining agent where no petition
for certification election is filed.

Applying the same provision, it can be said that while it is incumbent for
the employer to continue to recognize the majority status of the incumbent
bargaining agent even after the expiration of the freedom period, they could only
do so when no petition for certification election was filed. The reason is, with a
pending petition for certification, any such agreement entered into by
management with a labor organization is fraught with the risk that such a labor
union may not be chosen thereafter as the collective bargaining representative. The
provision for status quo is conditioned on the fact that no certification election was
filed during the freedom period. Any other view would render nugatory the clear
statutory policy to favor certification election as the means of ascertaining the true
expression of the will of the workers as to which labor organization would
represent them.

In the instant case, four (4) petitions were filed as early as May 12, 2000.
In fact, a petition for certification election was already ordered by the Med-Arbiter
of DOLE Caraga Region on August 23, 2000. Therefore, following Article 256, at
the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-
SPFL as the incumbent bargaining agent does not hold true when petitions for
certification election were filed, as in this case.

Moreover, the last sentence of Article 253 which provides for automatic
renewal pertains only to the economic provisions of the CBA, and does not include
representational aspect of the CBA. An existing CBA cannot constitute a bar to a
filing of a petition for certification election. When there is a representational issue,
the status quo provision in so far as the need to await the creation of a new
agreement will not apply. Otherwise, it will create an absurd situation where the
union members will be forced to maintain membership by virtue of the union
security clause existing under the CBA and, thereafter, support another union
 when filing a petition for certification election. If we apply it, there will always be
an issue of disloyalty whenever the employees exercise their right to self-
organization. The holding of a certification election is a statutory policy that should
not be circumvented, or compromised.

Time and again, we have ruled that we adhere to the policy of enhancing
the welfare of the workers. Their freedom to choose who should be their bargaining
representative is of paramount importance. The fact that there already exists a
bargaining representative in the unit concerned is of no moment as long as the
petition for certification election was filed within the freedom period. What is
imperative is that by such a petition for certification election the employees are
given the opportunity to make known of who shall have the right to represent them
thereafter. Not only some, but all of them should have the right to do so. What is
equally important is that everyone be given a democratic space in the bargaining
unit concerned.

We will emphasize anew that the power to dismiss is a normal prerogative

of the employer. This, however, is not without limitations. The employer is bound
to exercise caution in terminating the services of his employees especially so when
it is made upon the request of a labor union pursuant to the Collective Bargaining
Agreement. Dismissals must not be arbitrary and capricious. Due process must be
observed in dismissing an employee, because it affects not only his position but
also his means of livelihood. Employers should, therefore, respect and protect the
rights of their employees, which include the right to labor. [17]

Considering that private respondents were illegally dismissed, basic law

provides that they shall be entitled to the benefit of full backwages and
reinstatement unless the latter is no longer viable, in which case, a grant of
separation pay shall be awarded equivalent to one month salary for every year of
service.
X x x Under Republic Act No. 6715, employees who are illegally dismissed
are entitled to full backwages, inclusive of allowances and other benefits, or their
monetary equivalent, computed from the time their actual compensation was
withheld from them up to the time of their actual reinstatement. But if
reinstatement is no longer possible, the backwages shall be computed from the
time of their illegal termination up to the finality of the decision X x x.[18]

Private respondents are also entitled to an award of attorneys fees

equivalent to 10% of the total monetary award as they were compelled to litigate
in order to seek redress for their illegal dismissal.
 WHEREFORE, the petition is DENIED.

SO ORDERED.

7.

8.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

ALABANG COUNTRY CLUB, INC., G.R. No. 170287

Petitioner,
Present:
- versus -
QUISUMBING, J., Chairperson,
CARPIO MORALES,
NATIONAL LABOR RELATIONS AZCUNA,
COMMISSION, ALABANG TINGA, and
COUNTRY CLUB INDEPENDENT VELASCO, JR., JJ.
EMPLOYEES UNION,
CHRISTOPHER PIZARRO,
MICHAEL BRAZA, and Promulgated:
NOLASCO CASTUERAS,
Respondents. February 14, 2008
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation
with principal office at Country Club Drive, Ayala Alabang, Muntinlupa City.
Respondent Alabang Country Club Independent Employees Union (Union) is the
exclusive bargaining agent of the Clubs rank-and-file employees. In April 1996,
respondents Christopher Pizarro, Michael Braza, and Nolasco Castueras were
elected Union President, Vice-President, and Treasurer, respectively.

On June 21, 1999, the Club and the Union entered into a Collective Bargaining
Agreement (CBA), which provided for a Union shop and maintenance of
membership shop.

The pertinent parts of the CBA included in Article II on Union Security read,
as follows:
ARTICLE II
UNION SECURITY

SECTION 1. CONDITION OF EMPLOYMENT. All regular rank-

and-file employees, who are members or subsequently become members
of the UNION shall maintain their membership in good standing as a
condition for their continued employment by the CLUB during the
lifetime of this Agreement or any extension thereof.

SECTION 2. [COMPULSORY] UNION MEMBERSHIP FOR

NEW REGULAR RANK-AND-FILE EMPLOYEES

a) New regular rank-and-file employees of the Club shall join

the UNION within five (5) days from the date of their appointment as
regular employees as a condition for their continued employment
during the lifetime of this Agreement, otherwise, their failure to do so
shall be a ground for dismissal from the CLUB upon demand by
the UNION.
b) The Club agrees to furnish the UNION the names of all new
probationary and regular employees covered by this Agreement not
later than three (3) days from the date of regular appointment showing
the positions and dates of hiring.

xxxx
 SECTION 4. TERMINATION UPON UNION DEMAND. Upon
written demand of the UNION and after observing due process, the Club
shall dismiss a regular rank-and-file employee on any of the following
grounds:

(a) Failure to join the UNION within five (5) days from the
time of regularization;
(b) Resignation from the UNION, except within the period
allowed by law;
(c) Conviction of a crime involving moral turpitude;
(d) Non-payment of UNION dues, fees, and assessments;
(e) Joining another UNION except within the period allowed
by law;
(f) Malversation of union funds;
(g) Actively campaigning to discourage membership in
the UNION; and
(h) Inflicting harm or injury to any member or officer of
the UNION.

It is understood that the UNION shall hold the CLUB free and
harmless [sic] from any liability or damage whatsoever which may be
imposed upon it by any competent judicial or quasi-judicial authority as a
result of such dismissal and the UNION shall reimburse the CLUB for any
and all liability or damage it may be adjudged.[1] (Emphasis supplied.)

Subsequently, in July 2001, an election was held and a new set of officers was
elected. Soon thereafter, the new officers conducted an audit of the Union funds.
They discovered some irregularly recorded entries, unaccounted expenses and
disbursements, and uncollected loans from the Union funds. The Union notified
respondents Pizarro, Braza, and Castueras of the audit results and asked them to
explain the discrepancies in writing.[2]

Thereafter, on October 6, 2001, in a meeting called by the Union, respondents

Pizarro, Braza, and Castueras explained their side. Braza denied any wrongdoing
and instead asked that the investigation be addressed to Castueras, who was the
Union Treasurer at that time. With regard to his unpaid loans, Braza claimed he had
been paying through monthly salary deductions and said the Union could continue
to deduct from his salary until full payment of his loans, provided he would be
reimbursed should the result of the initial audit be proven wrong by a licensed
auditor. With regard to the Union expenses which were without receipts, Braza
explained that these were legitimate expenses for which receipts were not issued,
e.g. transportation fares, food purchases from small eateries, and food and
transportation allowances given to Union members with pending complaints with
the Department of Labor and Employment, the National Labor Relations
Commission (NLRC), and the fiscals office. He explained that though there were no
receipts for these expenses, these were supported by vouchers and itemized as
expenses. Regarding his unpaid and unliquidated cash advances amounting to almost
PhP 20,000, Braza explained that these were not actual cash advances but payments
to a certain Ricardo Ricafrente who had loaned PhP 200,000 to the Union.[3]

Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan and
cash advances. He claimed his salaries were regularly deducted to pay his loan and
he did not know why these remained unpaid in the records. Nonetheless, he likewise
agreed to continuous salary deductions until all his accountabilities were paid.[4]

Castueras also denied any wrongdoing and claimed that the irregular entries
in the records were unintentional and were due to inadvertence because of his
voluminous work load. He offered that his unpaid personal loan of PhP 27,500 also
be deducted from his salary until the loans were fully paid. Without admitting any
fault on his part, Castueras suggested that his salary be deducted until the
unaccounted difference between the loans and the amount collected amounting to a
total of PhP 22,000 is paid.[5]

Despite their explanations, respondents Pizarro, Braza, and Castueras were

expelled from the Union, and, on October 16, 2001, were furnished individual letters
of expulsion for malversation of Union funds.[6] Attached to the letters were copies
of the Panawagan ng mga Opisyales ng Unyon signed by 37 out of 63 Union
members and officers, and a Board of Directors Resolution[7] expelling them from
the Union.
In a letter dated October 18, 2001, the Union, invoking the Security Clause of the
CBA, demanded that the Club dismiss respondents Pizarro, Braza, and Castueras in
view of their expulsion from the Union.[8] The Club required the three respondents
to show cause in writing within 48 hours from notice why they should not be
dismissed. Pizarro and Castueras submitted their respective written explanations on
October 20, 2001, while Braza submitted his explanation the following day.

During the last week of October 2001, the Clubs general manager called respondents
Pizarro, Braza, and Castueras for an informal conference inquiring about the charges
against them. Said respondents gave their explanation and asserted that the Union
funds allegedly malversed by them were even over the total amount collected during
their tenure as Union officersPhP 120,000 for Braza, PhP 57,000 for Castueras, and
PhP 10,840 for Pizarro, as against the total collection from April 1996 to December
2001 of only PhP 102,000. They claimed the charges are baseless. The general
manager announced he would conduct a formal investigation.

Nonetheless, after weighing the verbal and written explanations of the three
respondents, the Club concluded that said respondents failed to refute the validity of
their expulsion from the Union. Thus, it was constrained to terminate the
employment of said respondents. On December 26, 2001, said respondents received
their notices of termination from the Club.[9]

Respondents Pizarro, Braza, and Castueras challenged their dismissal from the Club
in an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-00130-
02 filed with the NLRC, National Capital Region Arbitration Branch. In his January
27, 2003 Decision,[10] the Labor Arbiter ruled in favor of the Club, and found that
there was justifiable cause in terminating said respondents. He dismissed the
complaint for lack of merit.

On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an Appeal
docketed as NLRC NCR CA No. 034601-03 with the NLRC.

On February 26, 2004, the NLRC rendered a Decision[11] granting the appeal,
the fallo of which reads:

WHEREFORE, finding merit in the Appeal, judgment is hereby rendered

declaring the dismissal of the complainants illegal. x x x Alabang Country
Club, Inc. and Alabang Country Club Independent Union are hereby
 ordered to reinstate complainants Christopher Pizarro, Nolasco Castueras
and Michael Braza to their former positions without loss of seniority rights
and other privileges with full backwages from the time they were
dismissed up to their actual reinstatement.

SO ORDERED.

The NLRC ruled that there was no justifiable cause for the termination of
respondents Pizarro, Braza, and Castueras. The commissioners relied heavily on
Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Sec. 2
provides:
SEC. 2. Actions arising from Article 241 of the Code. Any action arising
from the administration or accounting of union funds shall be filed and disposed of
as an intra-union dispute in accordance with Rule XIV of this Book.

In case of violation, the Regional or Bureau Director shall order the

responsible officer to render an accounting of funds before the general membership
and may, where circumstances warrant, mete the appropriate penalty to the erring
officer/s, including suspension or expulsion from the union.[12]

According to the NLRC, said respondents expulsion from the Union was illegal
since the DOLE had not yet made any definitive ruling on their liability regarding
the administration of the Unions funds.

The Club then filed a motion for reconsideration which the NLRC denied in its June
20, 2004 Resolution.[13]

Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition
for Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of
Appeals (CA).
The CA Upheld the NLRC Ruling
that the Three Respondents were Deprived Due Process
On July 5, 2005, the appellate court rendered a Decision,[14] denying the petition and
upholding the Decision of the NLRC. The CAs Decision focused mainly on the
Clubs perceived failure to afford due process to the three respondents. It found that
said respondents were not given the opportunity to be heard in a separate hearing as
required by Sec. 2(b), Rule XXIII, Book V of the Omnibus Rules Implementing the
Labor Code, as follows:

SEC. 2. Standards of due process; requirements of notice.In all cases

of termination of employment, the following standards of due process
shall be substantially observed:

For termination of employment based on just causes as defined in Article

282 of the Code:

xxxx

(b) A hearing or conference during which the employee concerned, with

the assistance of counsel if the employee so desires, is given opportunity
to respond to the charge, present his evidence or rebut the evidence
presented against him.

The CA also said the dismissal of the three respondents was contrary to the doctrine
laid down in Malayang Samahan ng mga Manggagawa sa M. Greenfield v.
Ramos (Malayang Samahan), where this Court ruled that even on the assumption
that the union had valid grounds to expel the local union officers, due process
requires that the union officers be accorded a separate hearing by the employer
company.[15]

In a Resolution[16] dated October 20, 2005, the CA denied the Clubs motion for
reconsideration.

The Club now comes before this Court with these issues for our resolution,
summarized as follows:
1. Whether there was just cause to dismiss private respondents, and
whether they were afforded due process in accordance with the
standards provided for by the Labor Code and its Implementing
Rules.

2. Whether or not the CA erred in not finding that the NLRC

committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it ruled that respondents Pizarro, Braza, and
Castueras were illegally expelled from the Union.
 3. Whether the case of Agabon vs. NLRC[17] should be applied to this
case.

4. Whether that in the absence of bad faith and malice on the part of
the Club, the Union is solely liable for the termination from
employment of said respondents.

The main issue is whether the three respondents were illegally dismissed and
whether they were afforded due process.

The Club avers that the dismissal of the three respondents was in accordance with
the Union security provisions in their CBA. The Club also claims that the three
respondents were afforded due process, since the Club conducted an investigation
separate and independent from that conducted by the Union.

Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the Club
failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII, Book V
of the implementing rules of the Code.

First, we resolve the legality of the three respondents dismissal from the Club.

Valid Grounds for Termination

Under the Labor Code, an employee may be validly terminated on the following
grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3)
termination due to disease under Art. 284; and (4) termination by the employee or
resignation under Art. 285.

Another cause for termination is dismissal from employment due to the

enforcement of the union security clause in the CBA. Here, Art. II of the CBA on
Union security contains the provisions on the Union shop and maintenance of
membership shop. There is union shop when all new regular employees are required
to join the union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when employees who are
union members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the
agreement is terminated.[18] Termination of employment by virtue of a union security
clause embodied in a CBA is recognized and accepted in our jurisdiction. [19] This
practice strengthens the union and prevents disunity in the bargaining unit within the
duration of the CBA. By preventing member disaffiliation with the threat of
expulsion from the union and the consequent termination of employment, the
authorized bargaining representative gains more numbers and strengthens its
position as against other unions which may want to claim majority representation.

In terminating the employment of an employee by enforcing the union

security clause, the employer needs only to determine and prove that: (1) the union
security clause is applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient evidence to support
the unions decision to expel the employee from the union. These requisites constitute
just cause for terminating an employee based on the CBAs union security provision.

The language of Art. II of the CBA that the Union members must maintain
their membership in good standing as a condition sine qua non for their continued
employment with the Club is unequivocal. It is also clear that upon demand by
the Union and after due process, the Club shall terminate the employment of a
regular rank-and-file employee who may be found liable for a number of offenses,
one of which is malversation of Union funds.[20]

Below is the letter sent to respondents Pizarro, Braza, and Castueras,

informing them of their termination:

On October 18, 2001, the Club received a letter from the Board of
Directors of the Alabang Country Club Independent
Employees Union (Union) demanding your dismissal from service by
reason of your alleged commission of act of dishonesty, specifically
malversation of union funds. In support thereof, the Club was furnished
copies of the following documents:

1. A letter under the subject Result of Audit dated September 14,

2001 (receipt of which was duly acknowledged from your end),
 which required you to explain in writing the charges against you
(copy attached);

2. The Unions Board of Directors Resolution dated October 2,

2001, which explained that the Union afforded you an
opportunity to explain your side to the charges;

3. Minutes of the meeting of the Unions Board of Directors

wherein an administrative investigation of the case was
conducted last October 6, 2001; and

4. The Unions Board of Directors Resolution dated October 15,

2001 which resolved your expulsion from the Union for acts of
dishonesty and malversation of union funds, which was duly
approved by the general membership.

After a careful evaluation of the evidence on hand vis--vis a thorough

assessment of your defenses presented in your letter-explanation dated
October 6, 2001 of which you also expressed that you waived your right
to be present during the administrative investigation conducted by the
Unions Board of Directors on October 6, 2001, Management has reached
the conclusion that there are overwhelming reasons to consider that you
have violated Section 4(f) of the CBA, particularly on the grounds of
malversation of union funds. The Club has determined that you were
sufficiently afforded due process under the circumstances.

Inasmuch as the Club is duty-bound to comply with its obligation

under Section 4(f) of the CBA, it is unfortunate that Management is left
with no other recourse but to consider your termination from service
effective upon your receipt thereof. We wish to thank you for your
services during your employment with the Company. It would be more
prudent that we just move on independently if only to maintain industrial
peace in the workplace.

Be guided accordingly.[21]

Gleaned from the above, the three respondents were expelled from and by
the Union after due investigation for acts of dishonesty and malversation of Union
funds. In accordance with the CBA, the Union properly requested the Club, through
the October 18, 2001 letter[22] signed by Mario Orense, the Union President, and
addressed to Cynthia Figueroa, the Clubs HRD Manager, to enforce the Union
security provision in their CBA and terminate said respondents. Then, in compliance
with the Unions request, the Club reviewed the documents submitted by the Union,
requested said respondents to submit written explanations, and thereafter afforded
them reasonable opportunity to present their side. After it had determined that there
was sufficient evidence that said respondents malversed Union funds, the Club
dismissed them from their employment conformably with Sec. 4(f) of the CBA.

Considering the foregoing circumstances, we are constrained to rule that there is

sufficient cause for the three respondents termination from employment.

Were respondents Pizarro, Braza, and Castueras accorded due process before their
employments were terminated?

We rule that the Club substantially complied with the due process
requirements before it dismissed the three respondents.

The three respondents aver that the Club violated their rights to due process
as enunciated in Malayang Samahan,[23] when it failed to conduct an independent
and separate hearing before they were dismissed from service.

The CA, in dismissing the Clubs petition and affirming the Decision of the NLRC,
also relied on the same case. We explained in Malayang Samahan:

x x x Although this Court has ruled that union security clauses

embodied in the collective bargaining agreement may be validly enforced
and that dismissals pursuant thereto may likewise be valid, this does not
erode the fundamental requirements of due process. The reason behind the
enforcement of union security clauses which is the sanctity and
inviolability of contracts cannot override ones right to due process. [24]

In the above case, we pronounced that while the company, under a

maintenance of membership provision of the CBA, is bound to dismiss any
employee expelled by the union for disloyalty upon its written request, this
undertaking should not be done hastily and summarily. The company acts in bad
faith in dismissing a worker without giving him the benefit of a hearing.[25] We
cautioned in the same case that the power to dismiss is a normal prerogative of the
employer; however, this power has a limitation. The employer is bound to exercise
caution in terminating the services of the employees especially so when it is made
upon the request of a labor union pursuant to the CBA. Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing employees
because the dismissal affects not only their positions but also their means of
livelihood. Employers should respect and protect the rights of their employees,
which include the right to labor.[26]

The CA and the three respondents err in relying on Malayang Samahan, as its
ruling has no application to this case. In Malayang Samahan, the union members
were expelled from the union and were immediately dismissed from the company
without any semblance of due process. Both the union and the company did not
conduct administrative hearings to give the employees a chance to explain
themselves. In the present case, the Club has substantially complied with due
process. The three respondents were notified that their dismissal was being requested
by the Union, and their explanations were heard. Then, the Club, through its
President, conferred with said respondents during the last week of October
2001. The three respondents were dismissed only after the Club reviewed and
considered the documents submitted by the Union vis--vis the written explanations
submitted by said respondents. Under these circumstances, we find that the Club had
afforded the three respondents a reasonable opportunity to be heard and defend
themselves.

On the applicability of Agabon, the Club points out that the CA ruled that the
three respondents were illegally dismissed primarily because they were not afforded
due process. We are not unaware of the doctrine enunciated in Agabon that when
there is just cause for the dismissal of an employee, the lack of statutory due process
should not nullify the dismissal, or render it illegal or ineffectual, and the employer
should indemnify the employee for the violation of his statutory rights.[27] However,
we find that we could not apply Agabon to this case as we have found that the three
respondents were validly dismissed and were actually afforded due process.

Finally, the issue that since there was no bad faith on the part of the Club,
the Union is solely liable for the termination from employment of the three
respondents, has been mooted by our finding that their dismissal is valid.
 WHEREFORE, premises considered, the Decision dated July 5, 2005 of the
CA and the Decision dated February 26, 2004 of the NLRC are
hereby REVERSED andSET ASIDE. The Decision dated January 27, 2003 of the
Labor Arbiter in NLRC-NCR Case No. 30-01-00130-02 is hereby REINSTATED.

No costs.

SO ORDERED.

9.
DEL MONTE PHILIPPINES, INC. and WARFREDO C. BALANDRA, vs. Petitioners, MARIANO
SALDIVAR, NENA TIMBAL, VIRGINIO VICERA, ALFREDO AMONCIO and NAZARIO S.
COLASTE, Respondents.

FACTS

The Associated Labor Union (ALU) is the exclusive bargaining agent of plantation workers of petitioner
Del Monte Philippines, Inc. (Del Monte) in Bukidnon where respondent is an employee and a member
of the said union. Timbal was charged by ALU for disloyalty to the union, particularly for encouraging
defections to a rival union.

Timbal filed an Answer before the Disloyalty Board, denying the allegations in the complaint and the
averments in Artajo’s Affidavit. Nevertheless, the ALU Disloyalty Board concluded that Timbal was
guilty of acts or conduct inimical to the interests of ALU. It found that the acts imputed to Timbal were
partisan activities, prohibited since the “freedom period” had not yet commenced as of that time.
Thus, the Disloyalty Board recommended the expulsion of Timbal from membership in ALU, and
likewise her dismissal from Del Monte in accordance with the Union Security Clause in the existing
CBA between ALU and Del Monte. The Disloyalty Board also reached the same conclusions as to the
co-employees, expressed in separate resolutions also recommending their expulsion from ALU. Del
Monte, then, terminated Timbal noting that the termination was upon demand of ALU pursuant to
Sections 4 and 5 of Article III of the current Collective Bargaining Agreement.

Timbal filed a complaint against Del Monte and ALU with the NLRC-RAB for illegal dismissal, unfair
labor practice and damages.

ISSUE

Whether or not there is a sufficient cause for the dismissal of a rank-and-file employee through the
enforcement of a Collective Bargaining Agreement between the employer and the union.
HELD

The SC held that even if the dismissal of an employee is conditioned not on the grounds for termination
under the Labor Code, but pursuant to the provisions of a CBA, it still is necessary to observe
substantive due process in order to validate the dismissal. As applied to the Labor Code, adherence
to substantive due process is a requisite for a valid determination that just or authorized causes existed
to justify the dismissal. As applied to the dismissals grounded on violations of the CBA, observance of
substantial due process is indispensable in establishing the presence of the cause or causes for
dismissal as provided for in the CBA.

Substantive due process, as it applies to all forms of dismissals, encompasses the proper presentation
and appreciation of evidence to establish that cause under law exists for the dismissal of an employee.
This holds true even if the dismissal is predicated on particular causes for dismissal established not by
the Labor Code, but by the CBA. Further, in order that any CBA-mandated dismissal may receive the
warrant of the courts and labor tribunals, the causes for dismissal as provided for in the CBA must
satisfy to the evidentiary threshold of the NLRC and the courts.

It is necessary to emphasize these principles since the immutable truth under our constitutional and
labor laws is that no employee can be dismissed without cause. The Agabon case may have tempered
the procedural due process requirements if just cause for dismissal existed, but in no way did it
eliminate the existence of a legally prescribed cause as a requisite for any dismissal. The fact that a
CBA may provide for additional grounds for dismissal other than those established under the Labor
Code does not detract from the necessity to duly establish the existence of such grounds before the
dismissal may be validated. And even if the employer or, in this case, the collective bargaining agent,
is satisfied that cause has been established to warrant the dismissal, such satisfaction will be of no
consequence if, upon legal challenge, they are unable to establish before the NLRC or the courts the
presence of such causes.

The Court sees the danger to jurisprudence and the rights of workers in acceding to Del Monte’s
position. The dismissal for cause of employees must be justified by substantial evidence, as
appreciated by an impartial trier of facts.

The Disloyalty Board may have appreciated Piquero’s testimony in its own finding that Timbal was
guilty, yet the said board cannot be considered as a wholly neutral or dispassionate tribunal since it
was constituted by the very organization that stood as the offended party in the disloyalty charge.
Without impugning the integrity of ALU and the mechanisms it has employed for the internal discipline
of its members, we nonetheless hold that in order that the dismissal of an employee may be validated
by this Court, it is necessary that the grounds for dismissal are justified by substantial evidence as
duly appreciated by an impartial trier of facts. The existence of Piquero’s testimony was appreciated
only by the Disloyalty Board, but not by any of the impartial tribunals which heard Timbal’s case. The
appreciation of such testimony by the Disloyalty Board without any similar affirmation or concurrence
by the NLRC-RAB, the NLRC, or the Court of Appeals, cannot satisfy the substantive due process
requirement as a means of upholding Timbal’s dismissal.

All told, The SC sees no error on the part of the Court of Appeals when it held that Timbal was illegally
dismissed.

Petition is denied.
10.

THIRD DIVISION

[ G.R. No. 195163, December 13, 2017 ]

ERGONOMIC SYSTEMS PHILIPPINES, INC., PHILLIP C. NG AND MA. LOURMINDA O.

NG, PETITIONERS, V. EMERITO C. ENAJE, BENEDICTO P. ABELLO, ALEX M.
MALAYLAY, FRANCISCO Q. ENCABO, JR., RICO SAMSON, ROWENA BETITIO,
FELIPE N. CUSTOSA, JAIME A. JUATAN, LEOVINO J. MULINTAPANG, NELSON L.
ONTE, EMILIANO P. RONE, ROLIETO LLAMADO, AMORPIO R. ADRIANO, JIMMY
ALCANTARA, BERNARDO ANTONI, HERMINITO BEDRIJO, ROMEO BELARMINO,
YOLANDA CANOPIN, ALMELITO CUABO, RICARDO DEL PILAR, ELMER
DESQUITADO, WINEFREDO DESQUITADO, DEMETRIO DIAZ, ERICK ECRAELA,
QUINTERO ENRIQUEZ, CRISANTO FERNANDEZ, ROMMEL FLORES, NELSON FRIAS,
PEDRITO GIRON, DOMINADOR C. GUIMALDO, JR., AMBROSIO HENARES,
TERENCIO HENARES, ALBERT LACHICA, ALBERTO LORENZO, JOEL MALAYLAY,
SUSAN MALBAS, ROLANDO MAMARIL, TEDDY MONTIBLE, FERNANDO OFALDA,
RONNIE V. OLIVAY, RAUL PAGOLONG, LORENZO RANIEGO, AMADO V. SAMSON
IV, ROEL P. SORIANO, JONATHAN SUALIBIO, ESTEBAN SUMICAO, JOSEPH
TABADAY, EPIFANIO TABAREZ, REGIE TOTING, REYNALDO TOTING, NORMAN
VALENZUELA, ROLANDO YONSON, DIOSCORO BALAJADIA, NERRY BALINAS,
NOEL BALMEO, ARNALDO A. CASTRO, GERONCIO DELA CUEVA, ALBERTO
GAPASIN, JULIUS GENOVA, LORETO GRACILLA, JR., ROBERTO S. INGIENTE,
ROQUE JOVEN, PATERNO LINOGO, ISAGANI MASANGKA, ANGELITO MONTILLA,
PECIFICO NIGPARANON, NOBE SALVADOR, MANUEL OAVENGA, REYNADO
ORTIZ, ROMEO QUINTANA, JERNALD REMOTIN, REYNALDO ROBLESA, SAMUEL
ROSALES, ROBERTO SANTOS, RONALDO M. SANTOS, ROCKY TALOLONG, EMILIO
TONGA, BERNARDO VALDEZ, DANTE L. VELASCO, RENE V. VICENTE, JAIME
BENTUCO, MARINO CACAO, CARLITO DELA CERNA, CHRISTOPHER MASAGCA,
CHRISTOPHER PALOMARES, ROLANDO PATOTOY, ASER PESADO, JR., LEONILO
RICAFORT, FELIX SANCHEZ AND FRANCIS O. ZANTUA, RESPONDENTS.

DECISION
MARTIRES, J.:
This is a petition for review on certiorari assailing the Decision,[1] dated 21 September 2010, and
Resolution,[2] dated 14 January 2011, of the Court of Appeals (CA), in CA-G.R. SP No. 102802,
which affirmed with modification the decision,[3] dated 31 October 2007, and resolution,[4] dated 21
December 2007, of the National Labor Relations Commission (NLRC) in NLRC NCR No. RAB IV-01-
16813-03-L. The NLRC, in turn, affirmed the decision,[5] dated 31 January 2005, of Labor Arbiter
Generoso V. Santos (LA) in NLRC NCR No. RAB IV-01-16813-03-L, a case for illegal dismissal and
unfair labor practice.
THE FACTS
Respondents were union officers and members of Ergonomic System Employees Union-Workers
Alliance Trade Unions (local union). On 29 October 1999, the local union entered into a Collective
Bargaining Agreement (CBA)[6] with petitioner Ergonomic Systems Philippines, Inc. (ESPI),[7] which
was valid for five (5) years or until October 2004. The local union, which was affiliated with Workers
Alliance Trade Unions-Trade Union Congress of the Philippines (Federation), was not independently
registered. Thus, on 15 November 2001, before the CBA expired, the union officers secured the
independent registration of the local union with the Regional Office of the Department of Labor and
Employment (DOLE). Later on, the union officers were charged before the Federation and
investigated for attending and participating in other union's seminars and activities using union
leaves without the knowledge and consent of the Federation and ESPI as well as in initiating and
conspiring in the disaffiliation before the freedom period.[8]
On 10 January 2002, the Federation rendered a decision[9] finding respondents-union officers
Emerito C. Enaje, Benedicto P. Abello, Alex M. Malaylay, Francisco G. Encabo, Jr., Rico Samson,
Rowena Betitio, Felipe N. Custosa, Jaime A. Juatan, Leovino Mulintapang, Nelson L. Onte, Emiliano
P. Rone, and Rolieto Llamado guilty of disloyalty. They were penalized with immediate expulsion
from the Federation.[10]
On 11 January 2002, the Federation furnished ESPI with a copy of its decision against respondents-
union officers and recommended the termination of their employment by invoking Sections 2 and 3,
Article 2 of the CBA.[11]
ESPI notified respondents-union officers of the Federation's demand and gave them 48 hours to
explain. Except for Nelson Onte, Emiliano Rone, and Rico Samson, the rest of the officers refused to
receive the notices. Thereafter, on 20 February 2002, respondents-union officers were issued letters
of termination, which they again refused to receive. On 26 February 2002, ESPI submitted to the
DOLE a list of the dismissed employees. On the same day, the local union filed a notice of strike
with the National Conciliation and Mediation Board (NCMB).[12]
From 21 February to 23 February 2002, the local union staged a series of noise barrage and "slow
down" activities. Meanwhile, on 22 February 2002, 40 union members identified as: Amorpio
Adriano, Jimmy Alcantara, Bernardo Antoni, Herminito Bedrijo, Romeo Belarmino, Yolanda Canopin,
Almelito Cuabo, Ricardo Del Pilar, Elmer Desquitado, Winefredo Desquitado, Demetrio Diaz, Erick
Ecraela, Quintero Enriquez, Crisanto Fernandez, Rommel Flores, Nelson Frias, Pedrito Geron,
Dominador Guimaldo, Ambrosio Henarez, Terencio Henares, Albert Lachica, Alberto Lorenzo, Joel
Malaylay, Susan Malbas, Rolando Manaril, Teddy Montible, Fernando Ofaldo, Ronie Olivay, Raul
Pagolong, Lorenzo Raniego, Amado Samson-Ty, Roel Soriano, Jonathan Sualibio, Esteban
Sumicao, Joseph Tabaday, Epifanio Tabarez, Regie Toting, Reynaldo Toting, Norman Valenzuela
and Rolando Yonson refused to submit their Daily Production Reports (DPRs).
On 26 February 2002, 28 union members namely Dioscoro Balajadia, Nerry Balinas, Noel Balmeo,
Arnaldo Castro, Geroncio Dela Cueva, Alberto Gapasin, Julius Genova, Loreto Gracilla, Roberto
Ingiente, Jr., Roque Joven, Paterno Linogo, Isagani Masangka, Angelito Montilla, Pecifico
Nigparanon, Salvador Nobe, Manuel Oavenga, Reynaldo Ortiz, Romeo Quintana, Jemard Remotin,
Reynaldo Roblesa, Samuel Rosales, Roberto Santos, Ronaldo Santos, Rocky Talolong, Emilio
Tonga, Bernardo Valdez, Dante Velasco and Rene Vicente abandoned their work and held a
picket line outside the premises of ESPI.
Then, from 26 February 2002 to 2 March 2002, 10 union members, namely Jaime Bentuco, Marina
Cacao, Carlito Dela Cerna, Christopher Masagca, Christopher Palomares, Rolando Patotoy, Aser
Pesado, Jr., Leonilo Ricafort, Felix Sanchez and Francis Santua did not report for work without
official leave. The union members were required to submit their explanation why they should not be
sanctioned for their refusal to submit DPRs and abandonment of work, but they either refused to
receive the notices or received them under protest. Further, they did not submit their explanation as
required. Subsequently, for refusal to submit DPRs and for abandonment, respondents-union
members were issued letters of termination.[13] On 27 January 2003, the respondents filed a
complaint for illegal dismissal and unfair labor practice against ESPI, Phillip C. Ng, and Ma.
Lourminda O. Ng (petitioners).[14]
The Labor Arbiter's Ruling
In a decision, dated 31 January 2005, the LA held that the local union was the real party in interest
and the Federation was merely an agent in the CBA; thus, the union officers and members who
caused the implied disaffiliation did not violate the union security clause. Consequently, their
dismissal was unwarranted. Nevertheless, the LA ruled that since ESPI effected the dismissal in
response to the Federation's demand which appeared to be justified by a reading of the union
security clause, it would be unjust to hold ESPI liable for the normal consequences of illegal
dismissal.
The LA further opined that there was no ground for the dismissal of the union members because the
refusal to submit DPRs and failure to report for work were meant to protest the dismissal of their
officers, not to sever employer-employee relationship. He added that neither ESPI nor the
respondents were at fault for they were merely protecting their respective interests. In sum, the LA
ordered all the respondents to return to work but without back wages. The fallo reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering the

complainants to report back to their former jobs within ten (10) days from receipt
of this Decision and the respondent company is in turn directed to accept them
back but without back wages. In the event however, that this is no longer
possible, the respondent company is ordered to pay the complainants their
separation pay computed at one-half (1/2) month salary for every year of service,
a fraction of at least six (6) months to be considered as one (1) whole year. The
respondent is likewise ordered to pay complainants attorney's fees equivalent to
ten (10%) percent of the total thereof as attorney's fees.
All other claims are dismissed for lack of merit.
SO ORDERED.[15]
Unconvinced, petitioners and respondents appealed before the NLRC.
The NLRC Ruling
In a decision, dated 31 October 2007, the NLRC affirmed the ruling of the LA. It adjudged that the
dismissal of the union officers was effected only in response to the demand of the Federation and to
comply with the union security clause under the CBA. The NLRC concluded that since there was no
disloyalty to the union, but only disaffiliation from the Federation which was a mere agent in the
CBA, the cause for the respondents' dismissal was non-existent. It disposed the case in this wise:

WHEREFORE, premises considered, the appeals separately filed by

complainants and respondents from the Decision of Labor Arbiter Generoso V.
Santos dated January 31, 2005 are both DISMISSED for lack of merit.
The appeal filed by complainants from the Order dated January 4, 2007 is
likewise DISMISSED for lack of merit.
The assailed Orders are hereby AFFIRMED.
SO ORDERED.[16]
Undeterred, petitioners and respondents moved for reconsideration. Their motions, however, were
denied by the NLRC in a resolution, dated 21 December 2007.
The CA Ruling
In its decision, dated 21 September 2010, the CA affirmed with modification the NLRC ruling. It held
that ESPI and the respondents acted in good faith when the former dismissed the latter and when
the latter, in tum, staged a strike without complying with the legal requirements. The CA, however,
pronounced that the concept of separation pay as an alternative to reinstatement holds true only in
cases wherein there is illegal dismissal, a fact which does not exist in this case. The dispositive
portion reads:

WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision of

the Labor Arbiter, as sustained by the National Labor Relations Commission,
reverting the employer-employee position of the parties to the status quo ante is
AFFIRMED, with MODIFICATION, in that the provision on the award of
separation pay in lieu of reinstatement is deleted.
SO ORDERED.[17]
Aggrieved, petitioners and respondents moved for reconsideration but the same was denied by the
CA in a resolution, dated 14 January 2011.
Hence, this petition.
ISSUES

I. WHETHER THE FEDERATION MAY INVOKE THE UNION SECURITY CLAUSE IN

DEMANDING THE RESPONDENTS' DISMISSAL;

II. WHETHER THE STRIKE CONDUCTED BY THE RESPONDENTS COMPLIED WITH THE
LEGAL REQUIREMENTS;

III. WHETHER THE RESPONDENTS' DISMISSAL FROM EMPLOYMENT WAS VALID.

The petitioners argue that the respondents failed to comply with two (2) of the procedural
requirements for a valid strike, i.e., taking of a strike vote and observance of the seven-day period
after submission of the strike vote report; that mere participation of union officers in the illegal strike
is a ground for termination of employment; that the union members committed illegal acts during the
strike which warranted their dismissal, i.e., obstruction of the free ingress to and egress from ESPI's
premises and commission of acts of violence, coercion or intimidation; that the respondents are not
entitled to reinstatement or separation pay because they were validly dismissed from employment;
that the union members who unjustly refused to submit their DPRs and abandoned their work were
rightfully terminated because their acts constituted serious misconduct or willful disobedience of
lawful orders; and that reinstatement is no longer possible because the industrial building owned by
Ergo Contracts Philippines, Inc. was totally destroyed by fire on 6 February 2005.[18]
In their comment,[19] the respondents counter that they were not legally terminated because the
grounds relied upon by the petitioners were non-existent; that as ruled by the NLRC, they merely
disaffiliated from the Federation but they were not disloyal to the local union; that reinstatement is
not physically impossible because it was the industrial building owned by Ergo Contracts Philippines,
Inc. that was gutted down by fire, not that of ESPI; that even if the manufacturing plant of ESPI was
indeed destroyed by fire, the petitioners have other offices around the country where the
respondents may be reinstated; and that having failed to comply with the order to reinstate them and
having ceased operations, the petitioners must be ordered to pay their separation pay.
In their reply,[20] the petitioners aver that the respondents violated the union security clause under the
CBA; that their termination was effected in response to the Federation's demand to dismiss them;
that they did not comply with the requisites of a valid strike; that they refused to submit their DPRs
and abandoned their work; and that the award of separation pay had no basis because the
respondents had been legally dismissed from their employment.
THE COURT'S RULING
Only the local union may invoke the union
security clause in the CBA.
The controversy between ESPI and the respondents originated from the Federation's act of expelling
the union officers and demanding their dismissal from ESPI. Thus, to arrive at a proper resolution of
this case, one question to be answered is whether the Federation may invoke the union security
clause in the CBA.
"Union security is a generic term, which is applied to and comprehends 'closed shop,' 'union shop,'
'maintenance of membership,' or any other form of agreement which imposes upon employees the
obligation to acquire or retain union membership as a condition affecting employment. There is union
shop when all new regular employees are required to join the union within a certain period as a
condition for their continued employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the agreement, or who thereafter
become members, must maintain union membership as a condition for continued employment until
they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed
shop, on the other hand, may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be employed in any or certain
agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of a union entirely comprised of or of which the
employees in interest are a part."[21]
Before an employer terminates an employee pursuant to the union security clause, it needs to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to
support the decision of the union to expel the employee from the union.[22]
In this case, the primordial requisite, i.e., the union is requesting the enforcement of the union
security provision in the CBA, is clearly lacking. Under the Labor Code, a chartered local union
acquires legal personality through the charter certificate issued by a duly registered federation or
national union and reported to the Regional Office.[23] "A local union does not owe its existence to the
federation with which it is affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act independently of the local
union. It only gives rise to a contract of agency, where the former acts in representation of the latter.
Hence, local unions are considered principals while the federation is deemed to be merely their
agent."[24]
The union security clause in the CBA between ESPI and the local union provides:

SECTION 1. Union Shop. All regular, permanent employees covered by this

Agreement who are members of the UNION as of the date of effectivity of this
Agreement as well as any employees who shall subsequently become members
of the UNION during the lifetime of this Agreement or any extension, thereof,
shall as a condition of continued employment, maintain their membership in the
UNION during the term of this Agreement or any extension thereof.
xxxx
SECTION 3. The COMPANY shall terminate the services of any concerned
employee when so requested by the UNION for any of the following reasons:
a. Voluntary Resignation from the Union during the term of this Agreement or any
extension thereof;
b. Non-payment of membership fee, regular monthly dues, mutual aid benefit and
other assessments submitted by the UNION to the COMPANY;
c. Violation of the UNION Constitution and Bylaws. The UNION shall furnish the
COMPANY a copy of their Constitution and Bylaws and any amendment
thereafter.
d. Joining of another Union whose interest is adverse to the UNION, AWATU,
during the lifetime of this Agreement.
e. Other acts which are inimical to the interests of the UNION and AWATU.[25]
There is no doubt that the union referred to in the foregoing provisions is the Ergonomic Systems
Employees Union or the local union as provided in Article I of the CBA.[26] A perusal of the CBA
shows that the local union, not the Federation, was recognized as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages, hours of work,
and other terms and conditions of employment. Consequently, only the union may invoke the union
security clause in case any of its members commits a violation thereof. Even assuming that the
union officers were disloyal to the Federation and committed acts inimical to its interest, such
circumstance did not give the Federation the prerogative to demand the union officers' dismissal
pursuant to the union security clause which, in the first place, only the union may rightfully invoke.
Certainly, it does not give the Federation the privilege to act independently of the local union. At
most, what the Federation could do is to refuse to recognize the local union as its affiliate and revoke
the charter certificate it issued to the latter. In fact, even if the local union itself disaffiliated from the
Federation, the latter still has no right to demand the dismissal from employment of the union officers
and members because concomitant to the union's prerogative to affiliate with a federation is its right
to disaffiliate therefrom which the Court explained in Philippine Skylanders, Inc. v. NLRC,[27] viz:

The right of a local union to disaffiliate from its mother federation is not a novel
thesis unillumined by case law. In the landmark case of Liberty Cotton Mills
Workers Union vs. Liberty Cotton Mills, Inc., we upheld the right of local unions to
separate from their mother federation on the ground that as separate and
voluntary associations, local unions do not owe their creation and existence to
the national federation to which they are affiliated but, instead, to the will of their
members. The sole essence of affiliation is to increase, by collective action, the
common bargaining power of local unions for the effective enhancement and
protection of their interests. Admittedly, there are times when without succor and
support local unions may find it hard, unaided by other support groups, to secure
justice for themselves.
Yet the local unions remain the basic units of association, free to serve their own
interests subject to the restraints imposed by the constitution and bylaws of the
national federation, and free also to renounce the affiliation upon the terms laid
down in the agreement which brought such affiliation into existence.[28]
In sum, the Federation could not demand the dismissal from employment of the union officers on the
basis of the union security clause found in the CBA between ESPI and the local union.
A strike is deemed illegal for failure to take a
strike vote and to submit a report thereon to
the NCMB.
A strike is the most powerful weapon of workers in their struggle with management in the course of
setting their terms and conditions of employment. As such, it either breathes life to or destroys the
union and its members.[29]
Procedurally, for a strike to be valid, it must comply with Article 278[30] of the Labor Code, which
requires that: (a) a notice of strike be filed with the NCMB 30 days before the intended date thereof,
or 15 days in case of unfair labor practice; (b) a strike vote be approved by a majority of the total
union membership in the bargaining unit concerned, obtained by secret ballot in a meeting called for
that purpose; and (c) a notice be given to the NCMB of the results of the voting at least seven days
before the intended strike. These requirements are mandatory, and the union's failure to comply
renders the strike illegal.[31]
The union filed a notice of strike on 20 February 2002.[32] The strike commenced on 21 February
2002.[33] The strike vote was taken on 2 April 2002[34] and the report thereon was submitted to the
NCMB on 4 April 2002.[35] Indeed, the first requisite or the cooling-off period need not be observed
when the ground relied upon for the conduct of strike is union-busting.[36] Nevertheless, the second
and third requirements are still mandatory. In this case, it is apparent that the union conducted a
strike without seeking a strike vote and without submitting a report thereon to the DOLE. Thus, the
strike which commenced on 21 February 2002 was illegal.
Liabilities of union officers and members
Article 279(a)[37] of the Labor Code provides:

Art. 279. Prohibited activities. - (a) x x x

xxxx
Any union officer who knowingly participates in an illegal strike and any worker or
union officer who knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.
In the determination of the consequences of illegal strikes, the law makes a distinction between
union members and union officers. The services of an ordinary union member cannot be terminated
for mere participation in an illegal strike; proof must be adduced showing that he or she committed
illegal acts during the strike. A union officer, on the other hand, may be dismissed, not only when he
actually commits an illegal act during a strike, but also if he knowingly participates in an illegal
strike.[38]
In the present case, respondents-union officers stand to be dismissed as they conducted a strike
despite knowledge that a strike vote had not yet been approved by majority of the union and the
corresponding strike vote report had not been submitted to the NCMB.
With respect to respondents-union members, the petitioners merely alleged that they committed
illegal acts during the strike such as obstruction of ingress to and egress from the premises of ESPI
and execution of acts of violence and intimidation. There is, however, a dearth of evidence to prove
such claims. Hence, there is no basis to dismiss respondents-union members from employment on
the ground that they committed illegal acts during the strike.
Dismissed respondents-union members are
not entitled to back wages.
While it is true that the award of back wages is a legal consequence of a finding of illegal dismissal,
in G & S Transport Corporation v. Infante,[39] the Court pronounced that the dismissed workers are
entitled only to reinstatement considering that they did not render work for the employer during the
strike, viz:

With respect to back wages, the principle of a "fair day's wage for a fair
day's labor" remains as the basic factor in determining the award thereof. If
there is no work performed by the employee there can be no wage or pay unless,
of course, the laborer was able, willing and ready to work but was illegally locked
out, suspended or dismissed or otherwise illegally prevented from working. While
it was found that respondents expressed their intention to report back to work,
the latter exception cannot apply in this case. In Philippine Marine Officers' Guild
v. Compañia Maritima, as affirmed in Philippine Diamond Hotel and Resort v.
Manila Diamond Hotel Employees Union, the Court stressed that for this
exception to apply, it is required that the strike be legal, a situation that does
not obtain in the case at bar.[40] (emphases supplied)
Thus, in the case at bar, respondents-union members' reinstatement without back wages suffices for
the appropriate relief. Fairness and justice dictate that back wages be denied the employees who
participated in the illegal concerted activities to the great detriment of the employer.[41]
Nevertheless, separation pay is made an alternative relief in lieu of reinstatement in certain
circumstances, like: (a) when reinstatement can no longer be effected in view of the passage of a
long period of time or because of the realities of the situation; (b) reinstatement is inimical to the
employer's interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best
interests of the parties involved; (e) the employer is prejudiced by the workers' continued
employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained
relations between the employer and employee.[42]
Given the lapse of considerable time from the occurrence of the strike, the Court rules that the award
of separation pay of one (1) month salary for each year of service, in lieu of reinstatement, is in
order. This relief strikes a balance between the respondents-union members who may not have
known that they were participating in an illegal strike but who, nevertheless, have rendered service
to the company for years prior to the illegal strike which caused a rift in their relations, and the
employer who definitely suffered losses on account of respondents-union members' failure to report
to work during the illegal strike.
WHEREFORE, the petition is PARTIALLY GRANTED. The 21 September 2010 Decision and 14
January 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 102802 are AFFIRMED with
MODIFICATION in that petitioners are hereby ORDERED to pay each of the above-named
individual respondents, except union officers who are hereby declared validly dismissed, separation
pay equivalent to one (1) month salary for every year of service. Whatever sums already received
from petitioners under any release, waiver or quitclaim shall be deducted from the total separation
pay due to each of them.
SO ORDERED.
Velasco, Jr., (Chairperson), Leonen and Gesmundo, JJ., concur.
Bersamin, J., on official leave.