G.R. No. 100898 July 5, 1993
ALEX FERRER, RAFAEL FERRER, HENRY DIAZ, DOMINGO BANCOLITA, GIL DE GUZMAN, and FEDERATION OF DEMOCRATIC LABOR UNIONS (FEDLU), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI KAM CHANG (In his capacity as General Manager of Occidental Foundry Corporation), OCCIDENTAL FOUNDRY CORPORATION, MACEDONIO S. VELASCO (In his capacity as representative of the Federation of Free Workers), GENARO CAPITLE, JESUS TUMAGAN, ERNESTO BARROGA, PEDRO LLENA, GODOFREDO PACHECO, MARCELINO CASTILLO, GEORGE IGNAS, PIO DOMINGO, and JAIME BAYNADO, respondents.

FACTS

Petitioners were regular and permanent employees of Occidental Foundry Corporation (OFC). A Collective Bargaining Agreement (CBA) between OFC and the Samahang Manggagawa ng Occidental Foundry Corporation-FFW (SAMAHAN) contained a union security clause (Article II, Section 1 & 3), making continued employment conditional upon maintaining union membership in good standing. Failure to retain such membership was a ground for dismissal upon the union’s written request. An intra-union dispute arose when petitioners filed a complaint for the expulsion of certain SAMAHAN officers and later conducted a special election of officers. On September 11, 1989, a resolution expelling petitioners from the union was issued by the officers led by Genaro Capitle. The next day, Capitle sent a letter to OFC’s General Manager, Hui Kam Chang, requesting the dismissal of petitioners pursuant to the CBA’s union security clause, attaching the board resolution. Petitioners were dismissed. They filed a complaint for illegal dismissal and unfair labor practice before the NLRC. The Labor Arbiter dismissed the complaint, ruling the dismissal was a valid compliance with the CBA. The NLRC affirmed this decision in toto.

ISSUE

Whether the National Labor Relations Commission gravely abused its discretion in affirming the dismissal of petitioners, which was allegedly effected in defiance of elementary principles of procedural due process, as they were summarily dismissed without an investigation by OFC into the veracity of the union’s allegations.

RULING

Yes. The Supreme Court granted the petition and set aside the NLRC decision. While a CBA’s union security clause is valid and constitutes the law between the parties, its implementation must not violate the employees’ right to procedural due process. The union’s own constitution and by-laws required a hearing (“pandinig”) before the expulsion of a member. No such hearing was conducted by SAMAHAN before expelling petitioners. Furthermore, OFC, as the employer, had the duty to conduct its own investigation to determine the factual and legal basis for the union’s request for dismissal, especially given the existence of an intra-union conflict. By dismissing petitioners solely on the basis of the union’s request without any inquiry, OFC acted arbitrarily and violated petitioners’ right to due process. The dismissal was therefore illegal. Petitioners were ordered reinstated to their former or equivalent positions without loss of seniority rights and with full back wages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time compensation was withheld up to actual reinstatement, pursuant to Article 279 of the Labor Code, as amended.