Case No.

45

Case Title: United Polyresins, Inc. v. Pinuela (G.R. No. 209555, July 31, 2017)

Facts:

• United Polyresins Inc (UPI) is a domestic corporation, while Marcelino Pinuela was a member of
its labor union – Polyresins Rank and File Assoc. (PORFA).
• Marcelino was elected President in 2005, slated to serve until 2007.
• The existing CBA between UPI and PORFA states that the Company shall grant to the Union
P300,000.00 free of interest as the union's capital for establishing a cooperative to meet the needs
of its members. Said loan shall fall due and become payable at the same date that the Bargaining
Agreement expires on December 31, 2007.
• In the event of non-payment, all officers and members will be personally accountable. In case of
additional funds, they can make a written request addressed to the President of the company.
• 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.
• Pinuela was impeached from his union presidency through a special election.
• The special election was called for because Pinuela was unable to explain where some of the funds
of the union were kept.
• The union informed the employer regarding Pinuela’s impeachment.
• The employer enforced the union security clause found in the CBA and terminated Pinuela’s
employment.
• Marcelino filed a case for Illegal Dismissal. He claimed that his dismissal was in bad faith.
• Pinuela showed adequate explanation about the funds that came to his possession, and that via
Certified Public Accountant, he was able to prove the actual funds turned over to him from the
previous administration, and that there was no misappropriation.

Issue:

1. Whether a union officer can be expelled from membership based on provisions on impeachment.
2. Whether failure to pay the borrowed amount by the union to the company constitutes ground for
dismissal of union officer.

Ruling:

1. No. 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 to terminate Pinuela’s employment based on the Union’s Constitution.
Such a ground does not constitute just cause for termination. A review of the PORFA Constitution
revealed that the only authorized removal is on the ground of failure to pay dues, special
assessments, fines and other mandatory charges. While grounds for disqualification are persons
who profess subversive ideas, persons convicted of crime involving moral turpitude, and persons
who are not employees of the company. These provisions do not apply to Pinuela’s case. Hence,
he may not be disqualified as union member.

2. No. In fact the contribution of the company to the union is illegal. The matter of alleged failure to
return 300,000.00 which was lent to PORFA is immaterial. It may not be used as a ground to
terminate employment; under the Labor Code, such a contribution by to PORFA is illegal and
constitutes unfair labor practice.