University of the Philippines College of Law

UPL, 2-E

Topic LOCAL UNION DISAFFILIATION

Case No. G.R. No. 113907 / February 28, 2000
Case Name MSMG-UWP (plus 356 Union Members) v Hon Ramos & Greenfield
Ponente PURISIMA, j.

RELEVANT FACTS
BACKGROUND OF THE CONTROVERSY

Petitioner MSMG is a local union. It also an affiliate of United Lumber and General Workers of the Philippines
(ULGWP), the national federation. Petitioner had a local union election wherein petitioner Beda Magdalena
Villanueva and other union officers were proclaimed. Minutes of the said election were duly filed with the BLR.

A year later, a Petition for Impeachment (for anomalies in custody, handling and disposition of union funds) was
filed by the defeated candidates with ULGWP. ULGWP conducted an audit. The local union officers were cleared
of the charges of anomaly in the custody, handling and disposition of the union funds.

Then, the defeated candidates filed a Petition for Impeachment/Expulsion with the DOLE NCR. This was dismissed
by Med-Arbiter Parungo for failure to substantiate the charges and to present evidence in support of the
allegations.

Later on, the MSMG had a general membership meeting. Several members were absent. This prompted the
Executive Board to create a committee to investigate the non-attendance.

Thereafter, the local union wrote the employer Greenfield, requesting it to deduct the union fines from the
wages/salaries of those union members who failed to attend. This amounts to 50 pesos per day, as per Sections
4 and 5 of the Constitution and By-laws.

However, the secretary general of the federation issued a Memorandum where it disapproved the local union’s
imposition of fine. The local union officers protested the said disapproval through a Reply. This was followed by
a letter from the Federation advising Greenfield not to make the deductions, and that “any and all future
representations by MSMG affecting a number of members be first cleared from the federation before
corresponding action by the Company.”

Greenfield, in response, suggested that the union refer the matter to the proper government office for resolution.

As a result of the controversy, the local union made declaration of general autonomy from the Federation, as
embodied in a certain Resolution No. 10 passed by the local executive board and ratified by the general
membership.

EVENTS LEADING TO THE EXPULSION OF UNION OFFICERS BY THE FEDERATION

FIRST, The Federation asked Greenfield to stop remittance of the local union’s share in the education funds,
which was objected to by the latter, and lead to an interpleader.
 University of the Philippines College of Law
UPL, 2-E

SECOND, the national federation, in a Special National Executive Board Meeting passed a resolution: (1) placing
the MSMG under trusteeship and (2) appointing as administrator Cesar Clarete, who later informed Greenfield of
the disauthorization of the incumbent union officers from representing the employees. After their protest, the
union officers were expelled from the Federation.

THIRD, the Federation demanded their separation from employment pursuant to the Union Security Clause in their
collective bargaining agreement. Under the pressure of a threatened strike, Greenfield terminated the 30 union
officers from employment.

HOW THE UNION RESPONDED

Members of the local union demonstrated their protest for the dismissal of the said union officers. Some union
members left their work posts and walked out of the company premises.

Later, 78 union shop stewards were placed under preventive suspension by Greenfield, which caused the union
members to do another walk-out, and officially declare a strike.

DISCPLINARY ACTS BY THE EMPLOYER

The employees who participated in the strike and allegedly involved in the violent incident during the said strike
(physical injuries to employees, damage to property) were placed under preventive suspension by Greenfield.
Those who did not respond to the return-to-work notice were sent termination letters (for abandonment). Only
261 employees were eventually accepted back to work.

LEGAL ACTION

FIRST, with the Labor Arbiter: Petitioners filed a verified complaint with the Labor Arbiter, charging Respondents
of unfair labor practice which consists of union busting, illegal dismissal, illegal suspension, interference in union
activities, discrimination, threats, intimidation, coercion, violence, and oppression. Ufinding the termination to be
valid in compliance with the union security clause in the CBA, the complaint was DISMISSED.

Furthermore, the Labor Arbiter found that the union officers were justifiably expelled from the federation for
committing acts of disloyalty when it "undertook to disaffiliate from the federation by (1) charging ULGWP with
failure to provide any legal, educational or organizational support to the local; (2) and declared autonomy, wherein
they prohibit the federation from interfering in any internal and external affairs of the local union."

SECOND, with the NLRC: It affirmed the Labor Arbiter’s disposition. MR Denied.

HENCE, THIS PETITION.

ISSUE AND RATIO DECIDENDI

 University of the Philippines College of Law
UPL, 2-E

Issue Ratio
RELEVANT ISSUE: WON the NO.
federation had reasonable
CLAIM OF PETITIONERS: the federation cannot recommend the dismissal of the
grounds to expel the union officers because it was not a principal party to the CBA.
petitioner union officers
PROCEDURAL NOTE: First, the SC notes and clarifies that it is the BLR which has
original and exclusive jurisdiction over intra-union conflicts. However, SC takes
cognizance of this issue because remanding it to the BLR would be to intolerably
delay the case.

RULE: A local union has the right to disaffiliate from its mother union or declare
its autonomy. A local union, being a separate and voluntary association, is free
to serve the interests of all its members including the freedom to disaffiliate or
declare its autonomy from the federation to which it belongs when
circumstances warrant, in accordance with the constitutional guarantee of
freedom of association.

- The purpose of affiliation by a local union is to increase by collective

action the bargaining power in respect of the terms and conditions of
labor. Nevertheless a local union is free to sever such affiliation anytime
and such disaffiliation cannot be considered disloyalty. In the absence
of specific provisions in the federation’s constitution prohibiting
disaffiliation or the declaration of autonomy of a local union, a local may
dissociate with its parent union.

APPLYING: No provision in the Federation’s constitution that prohibits

disaffiliation.

- Article V, Section 6, of the Federation’s constitution in fact bolsters the

local union’s autonomy: “Section 6. The autonomy of a local union
affiliated with ULGWP shall be respected insofar as it pertains to its
internal affairs, except as provided elsewhere in this Constitution.”

- There cannot be any valid dismissal because Article II, Section 4 of the
union security clause in the CBA limits the dismissal to only 3 grounds:
failure to maintain membership in the union (1) for non-payment of
union dues, (2) for resignation; and (3) for violation of the union’s
Constitution and By-Laws.

- The fact that the Petitioners filed for registration as a national

federation had occurred when the Federation already expelled the
union officers. Therefore, the act of establishing a different federation,
entirely separate from the federation which expelled them, is but a
normal retaliatory reaction to their expulsion.
 University of the Philippines College of Law
UPL, 2-E

CONCLUSION: Federation had no reasonable grounds to expel union officers.

ISSUE: WON Greenfield was NO.

justified in dismissing the
CLAIM: Petitioner’s dismissal from work was undertaken without any prior
union employees merely administrative investigation; (2) that
upon the Federation’s
demand for the enforcement RULE: 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
of the union security clause terminating the services of his employees especially so when it is made upon
embodied in the CBA. 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 respect and protect the rights of their
employees, which include the right to labor

Although 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 requirement of due
process

APPLYING:

- The ff facts must be considered:

o upon demand of the Federation, the company terminated them
without conducting a separate and independent investigation,
and relying merely upon the federations allegations

o Also, the termination was effective on the same day that the
termination notice was served to them.)

- respondent company terminated petitioners from employment when a

separate inquiry could have revealed if the federation had acted
arbitrarily and capriciously in expelling the union officers.

- The issue of expulsion of the union officers from the Federation is intra-
union in character, but it was converted into a termination dispute due
to the officers being dismissed from work without the benefit of
separate notice and hearing.

CONCLUSION: There was lack of due process in terminating the union officers
from work
 University of the Philippines College of Law
UPL, 2-E

NOTE: The SC clarifies that the dismissal of an employee by the company

pursuant to a labor union’s demand in accordance with a union security
agreement does not constitute unfair labor practice.

Union security clauses in collective bargaining agreements, if freely and

voluntarily entered into, are valid and binding. Corrolarily, 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.

WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations
Commission in case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the
respondent company is hereby ordered to immediately reinstate the petitioners to their
respective positions. Should reinstatement be not feasible, respondent company shall pay
separation pay of one month salary for every year of service. Since petitioners were terminated
without the requisite written notice at least 30 days prior to their termination, following the
recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and
Isetann Department Store, the respondent company is hereby ordered to pay full backwages
to petitioner-employees while the Federation is also ordered to pay full backwages to
petitioner-union officers who were dismissed upon its instigation. Since the dismissal of
petitioners was without cause, backwages shall be computed from the time the herein
petitioner employees and union officers were dismissed until their actual reinstatement. Should
reinstatement be not feasible, their backwages shall be computed from the time petitioners
were terminated until the finality of this decision. Costs against the respondent company.