GR 58768; (December, 1989) (Digest)
G.R. Nos. 58768-70, December 29, 1989
LIBERTY FLOUR MILLS EMPLOYEES, ANTONIO EVARISTO and POLICARPIO BIASCAN, petitioners, vs. LIBERTY FLOUR MILLS, INC., PHILIPPINE LABOR ALLIANCE COUNCIL (PLAC) and NATIONAL LABOR RELATIONS COMMISSION (NLRC), respondents.
FACTS
On February 6, 1974, respondent Liberty Flour Mills, Inc. and respondent union PLAC entered into a three-year Collective Bargaining Agreement (CBA). The CBA provided for specified wage increases and contained a union shop clause, making union membership a condition for continued employment. It also had a compliance clause stating that the stipulated wage increases would be considered as satisfying any future statutory wage or allowance increases during the CBA’s term. Subsequently, petitioners Antonio Evaristo and Policarpio Biascan, who were PLAC members, led efforts to disaffiliate and organize a rival union. PLAC expelled them for disloyalty and demanded their dismissal, which the company effected on May 20, 1975. Separately, claims for emergency cost of living allowances under P.D. No. 525 were filed by PLAC and later by the petitioners.
ISSUE
The primary issues were: (1) whether the claim for emergency allowances was validly dismissed by the voluntary arbitrator on the ground of absorption by the CBA wage increases; and (2) whether the dismissal of petitioners Evaristo and Biascan under the union shop clause was legal, entitling them to back wages.
RULING
The Supreme Court dismissed the petition. On the first issue, the Court, exercising its certiorari jurisdiction to review questions of law, examined the voluntary arbitrator’s decision. It upheld the finding that the emergency allowances were absorbed by the wage increases stipulated in the CBA. The Court relied on the CBA’s explicit compliance clause (Section 2, Article VIII), which stated that the agreed wage increases would constitute compliance with any statutory wage or allowance increases during the agreement’s life. This interpretation was consistent with Section 6 of the Interpretative Bulletin on LOI No. 174, which treated such negotiated benefits as substantial compliance with mandated allowances if given in response to the economic crisis and made retroactive. The petitioners’ belated challenge to the voluntary arbitrator’s jurisdiction was also rejected due to estoppel, as they willingly participated in the proceedings.
On the second issue, the Court ruled that the dismissal of Evaristo and Biascan was legal. The union shop clause in the CBA was valid and enforceable. By disaffiliating from PLAC and actively organizing a rival union while the CBA was in force, the petitioners violated their condition of continued employment—membership in good standing with PLAC. The policy of the law sanctions union shop clauses to promote collective bargaining and union stability. Consequently, their termination was justified, and their claim for back wages was properly disallowed. The subsequent victory of their new union in a later certification election did not retroactively legalize their earlier breach of the existing CBA’s union shop provision.