G.R. No. L-75037 and L-75055. April 30, 1987.
TANDUAY DISTILLERY LABOR UNION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, et al., respondents. TANDUAY DISTILLERY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), et al., respondents.

FACTS

Private respondents were rank-and-file employees of Tanduay Distillery, Inc. (TDI) and members of the Tanduay Distillery Labor Union (TDLU), the exclusive bargaining agent. A Collective Bargaining Agreement (CBA) with a union security clause was executed on March 11, 1980, effective from July 1, 1979, to June 30, 1982. In October 1980, while the CBA was in effect, the private respondents joined and organized a local chapter of a rival union, KAMPIL, and filed a petition for a certification election. TDLU, acting on a grievance filed by TDI, conducted an investigation, found the respondents guilty of disloyalty, and expelled them from the union on January 9, 1981. Pursuant to the union security clause, TDLU demanded TDI to terminate the respondents. TDI subsequently placed them under preventive suspension and filed an application for clearance to terminate their employment.
The Labor Arbiter and the National Labor Relations Commission (NLRC) ruled in favor of the dismissed employees, ordering their reinstatement with backwages. The NLRC reasoned that the dismissal was invalid because the CBA had not yet been certified by the Ministry of Labor and Employment (MOLE) at the time of the dismissal, and the subsequent order for a certification election by the Bureau of Labor Relations (BLR) implied the CBA was not a bar, thus negating the charge of disloyalty. The petitioners, TDLU and TDI, assailed this decision via certiorari.

ISSUE

Whether the private respondents were validly dismissed from employment based on the union security clause of the CBA for acts of disloyalty committed by joining a rival union during the CBA’s effectivity.

RULING

The Supreme Court granted the petitions, reversing the NLRC. The Court held the dismissal was valid. The legal logic centered on the nature of a union security clause and the concept of union disloyalty. The Court clarified that the certification status of the CBA was irrelevant to the enforcement of the union security clause between the contracting parties, TDLU and TDI. The clause was a valid contractual stipulation, and the respondents’ membership in good standing was a condition of their continued employment.
The Court rejected the NLRC’s view that the BLR’s eventual order for a certification election cleansed the respondents’ prior disloyalty. The BLR’s order was based on a supervening event—the expiration of the CBA term on June 30, 1982—which rendered the contract bar rule inapplicable for holding an election. This procedural ruling on representation did not adjudicate the merits of the disloyalty charge. The respondents’ act of forming and joining a rival union in October 1980 constituted clear disloyalty to TDLU during the CBA’s life. Upholding the union’s right to self-preservation, the Court cited precedent that members who sow dissension within their union forfeit their right to remain in it and must suffer the consequences stipulated in the CBA. Therefore, their expulsion from TDLU and subsequent termination by TDI were lawful.