UNION SECURITY CLAUSE CANNOT BE INVOKED BY A FEDERATION UNION

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.

Ergonomic Systems Philippines, Inc. vs. Emerito C. Enaje, et al.
G.R. No. 195163, December 13, 2017

Facts:

Respondents, Enaje, et al., were union officers and members of Ergonomic System Employees Union-Workers Alliance Trade Unions (local union). The local union entered into a Collective Bargaining Agreement (CBA with petitioner Ergonomic Systems Philippines, Inc. (ESPI)).

The local union, which was affiliated with Workers Alliance Trade Unions-Trade Union Congress of the Philippines (Federation), was not independently registered. 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.

The Federation rendered a decision finding respondents-union officers guilty of disloyalty. They were penalized with immediate expulsion from the Federation.

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.

ESPI notified Enaje, et al. of the Federation’s demand and gave them 48 hours to explain where some refused to receive. Thereafter, Enaje, et al. were issued letters of termination, which they again refused to receive. 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).

The local union staged a series of noise barrage and “slow down” activities. Forty union members ref used to submit their Daily Production Reports (DPRs). Afterwards, some union members abandoned their work and held a picket line outside the premises of ESPI. Then ten union members 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, Enaje, et al. were issued letters of termination.

Enaje, et al. filed a complaint for illegal dismissal and unfair labor practice against ESPI, Phillip C. Ng, and Ma. Lourminda O. Ng (ESPI, et al.).

LA Ruling:

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 Enaje, et al. were at fault for they were merely protecting their respective interests. In sum, the LA ordered Enaje, et al. to return to work but without back wages.

Unconvinced, ESPI, et al. and Enaje, et al. appealed before the NLRC.

NLRC Ruling:

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.

Undeterred, ESPI, et al. and Enaje, et al. moved for reconsideration. Their motions, however, were denied by the NLRC.

CA Ruling:

The CA affirmed with modification the NLRC ruling. It held that ESPI and Enaje, et al. 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.

Aggrieved, ESPI, et al. and Enaje, et al. moved for reconsideration but the same was denied by the CA. Hence, the petition.

Issue/s:

Whether or not the federation union has a right to invoke the union security clause

Whether or not a chartered local union owe its existence to the federation with which it is affiliated

Whether or not a strike held without seeking a strike vote and without submitting a report thereon to the DOLE is valid

SC Ruling:

The SC partially granted the petition.

“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 interest are a part.

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.

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.

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.

A perusal of the CBA between the parties 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. vs. NLRC.

In sum, the Federation could not demand the dismissal from employment of Enaje, et al. on the basis of the union security clause found in the CBA between ESPI and the local union.

Procedurally, for a strike to be valid, it must comply with Article 278 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.

Labor Code 2018 Edition as renumbered and updated is now available online and in all National Book Store branches nationwide

The union filed a notice of strike on 20 February 2002. The strike commenced on 21 February 2002. The strike vote was taken on 2 April 2002 and the report thereon was submitted to the NCMB on 4 April 2002. 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. 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.

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.

In the present case, Enaje, et al. 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 Enaje, et al., the ESPI, et al. 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.

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 vs. Infante, 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.

Thus, in the case at bar, Enaje, et al.’s 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.