Union officers cannot be removed from membership and thereafter terminated from employment based on provisions on impeachment. No specific provisions on termination justify the dismissal.

United Polyresins, Inc. vs. Pinuela
G.R. No. 209555, July 31, 2017


Petitioner United Polyresins, Inc. (UPI) is a registered domestic corporation. It employed Pinuela Marcelino (Pinuela) in 1987.

Pinuela became a member of the labor union, Polyresins Rank and File Association (PORFA), and was elected President thereof in May, 2005 and slated to serve until the end of 2007.

In the CBA, the parties agreed that UPI shall grant to PORFA the amount of ₱300,000.00 free of interest as the union’s capital for establishing a cooperative to meet the needs of its members. In the event of non-payment, all officers and members will be personally accountable.

The CBA likewise contained a union security clause which provided that employees who cease to be PORFA members in good standing by reason of resignation or expulsion shall not be retained in the employ of UPI.

Upon his assumption as union President, Pinuela wrote the former union President, Geoffrey Cielo (Cielo), to turn over the records, papers, documents and financial statements of the union. Cielo surrendered the union’s bank account documents, among others, which indicated that the union had an available ₱78,723.60 cash balance. Cielo likewise submitted a Financial Report indicating that the union had ₱208,623.60 in cash and ₱l59,500.00 in receivables.

Finding that the bank documents and Cielo’s report did not match, and Cielo unable to explain the discrepancies, the union’s Executive Committee, which was headed by Pinuela, resolved to hire a certified public accountant to conduct an audit of the union’s finances. The accountant concluded that the union’s finances, income, and disbursements for the years 2003 and 2004 were not properly documented, recorded, and reported.

Meanwhile, during Pinuela’s term as PORFA President, it appeared that UPI automatically deducted from the respective salaries of PORFA members amounts representing union membership dues and loan payments. These amounts, which totalled ₱2,402,533.43, were then regularly turned over by UPI to PORFA in the form of fifty eight (58) crossed checks, made payable to PORFA. These amounts were then deposited and credited to PORFA’s account.

Several days before the ₱300,000.00 loan by UPI to PORFA became due, UPI, et al, Pinuela, and the other union officers met to discuss the proposed new CBA. Thereat, UPI, et al told Pinuela that until the ₱300,000.00 is returned, the former shall not discuss the proposed CBA.

Pinuela explained that the union did not have the finances and had only ₱78,723.60, which was the original amount turned over by Cielo to Pinuela when the latter assumed office as union President. UPI, et al then told Pinuela and the other union officers that if the amount is not returned, the same will be deducted from the salaries of the union members.

Pinuela filed a complaint before the National Conciliation and Mediation Board (NCMB), claiming that UPI, et al refused to bargain collectively. During the scheduled conferences before the NCMB, UPI, et al raised the issue of non-payment of the ₱300,000.00 owing to UPI and insisted on its payment; they also threatened to deduct the amount of ₱1,500.00 from the respective salaries of the union members.

Because of the recurring threat of failed CBA negotiations and salary deductions as means of recovering the ₱300,000.00 loaned to the union, union members began to demand the holding of a special election of union officers. They likewise accused Pinuela and the other union officers of mismanagement, unduly hanging on to their positions, and lack of accountability.

Special elections were held, and a new union President and set of officers were elected. The union’s new set of officers conducted an investigation into the fact that the union had little or no funds remaining in its bank account.

Pinuela attended the investigation, and admitted that the union had no more funds as they were “utilized in the prosecution of cases during his incumbency.” He likewise failed to make a formal turnover of documents to the new President.

Another inquiry was held where Pinuela was present. The investigation centered on Pinuela’s continued failure to account for the union’s bank accounts, documents, and deposits made during his incumbency, and his failure to formally turn over union’s papers to the new officers. After the meeting, Pinuela and the new officers proceeded to the bank, where they discovered that the PORFA account had already been closed.

The new set of union officers issued a Resolution expelling Pinuela from PORF A for being guilty of several violations which constituted an infringement of the union’s Constitution, particularly Article XV, Section 1, paragraphs (e) and (f) thereof, which specifically prohibit the misappropriation of union funds and property and give ground for the impeachment and recall of union officers.

(Article XV, Section 1, paragraphs (e) and (f) thereof refers to impeachment of union officers)

In a letter to UPI, et al, PORFA communicated Pinuela’s expulsion from the union. UPI, et al issued a letter of termination to Pinuela, to take effect immediately.

Pinuela filed a complaint against UPI, et al before the Labor Arbiter for illegal dismissal, with monetary claims and damages.

LA Ruling:

The Labor Arbiter issued a Decision dismissing Pinuela’s complaint on the finding that Pinuela was not illegally terminated.

Pinuela appealed before the NLRC.

NLRC Ruling:

The NLRC initially overturned the Labor Arbiter Decision.

However, on motion for reconsideration, the NLRC granted the motion and rendered a new Decision finding complainant’s dismissal as valid.

Pinuela filed a petition for certiorari with the CA.

CA Ruling:

The CA annulled and set aside the Decision of the CA granting UPI’s MR and reinstated the original Decision with modification.

The CA held that the submitted evidence before the Labor Arbiter showed that the same was not enough to prove the alleged charges of misappropriation against the Petitioner and neither was he properly informed thereof.

On the other hand, Pinuela showed adequate explanation about the funds of the union that came to his possession. The Memorandum of Ramon M. Martinez, a Certified Public Accountant, showed that he made an audit of the funds of the union during the previous administration and that the actual funds the union had was merely ₱34,344.25 when Pinuela took over. This amount was not even shown to have been misappropriated by the Pinuela.

UPI, et al. filed a Motion for Reconsideration, which was denied by the CA. Hence, the instant Petition.


Whether or not substantive and procedural due process requirements were complied with.

Whether or not a union officer can be expelled from membership based on provisions on impeachment.

Whether or not failure to pay the borrowed amount by the union to the company constitutes ground for dismissal of union officer.

SC Ruling:

The SC denied the petition.

The impeachment provisions provide that the officers shall simply be removed, impeached or recalled, from office, but not expelled or stripped of union membership.

It was therefore error on the part of PORFA and UPI, et al to terminate Pinuela’s employment based on Article XV, Section 1, paragraphs (e) and (f) of the union’s Constitution. Such a ground does not constitute just cause for termination.

A review by the SC of the PORFA Constitution itself revealed that the only provision authorizing removal from the union is found in Article X, Section 6, that is, on the ground of failure to pay union dues, special assessments, fines, and other mandatory charges.

Grounds for disqualification from membership were also provided such as subversive or persons who profess subversive ideas, persons who have been convicted of crime involving moral turpitude, and persons who are not employees of the company.

Learn How to Properly Dismiss Employees from the book Guide to Valid Dismissal of Employees

The SC found however, that these provisions do not apply in Pinuela’s case. Although he was eventually charged with estafa, a crime involving moral turpitude, still, he has not been convicted of the crime. For this reason, the SC concluded that he may not be disqualified as union member.

Pinuela may not be penalized with expulsion from the union, since this is not authorized and provided for under PORFA’s Constitution.

The matter of respondent’s alleged failure to return petitioners’ ₱300,000.00 which was lent to PORFA is immaterial as well. It may not be used as a ground to terminate respondent’s employment; under the Labor Code, such a contribution by petitioners to PORFA is illegal and constitutes unfair labor practice.

The union may not insist on expelling Pinuela from PORFA and assist in his dismissal from UPI without just cause, since it is an unfair labor practice for a labor organization to “cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with respect to whom membership in such organization has been denied or to terminate an employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members.

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