G.R. No. 149552 March 10, 2010
General Milling Corporation, Petitioner, vs. Ernesto Casio, Rolando Igot, Mario Famador, Nelson Lim, Felicisimo Booc, Procopio Obregon, Jr., and Antonio Aninipok, Respondents, and Virgilio Pino, Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc, Fidel Valle, Bartolome Auman, Remegio Cabantan, Loreto Gonzaga, Edilberto Mendoza and Antonio Panilag, Respondents.

FACTS

The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter was the sole bargaining agent for rank-and-file employees of petitioner General Milling Corporation (GMC). On November 30, 1991, the union, through its officers (respondents Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with GMC containing a union security clause (Maintenance of Membership) requiring employees to be members in good standing as a condition of employment. Respondents Casio, et al. were regular employees and union members; Casio was the union president, and the others were shop stewards. On February 24, 1992, the IBM Regional Director furnished Casio, et al. with copies of affidavits charging them with “acts inimical to the interest of the union” and gave them three days to file their answers. Casio, et al. refused to acknowledge receipt. On February 29, 1992, the union officers (Pino, et al.) issued a Resolution expelling Casio, et al. from the union for failing to answer the charges, which were found substantiated after an ex parte investigation. The union then requested GMC to dismiss Casio, et al. pursuant to the CBA’s closed shop provision. Pressured by the union’s threat to file an unfair labor practice case, GMC issued a Memorandum dated March 24, 1992, terminating Casio, et al. effective April 24, 1992, and placing them under preventive suspension. Casio, et al. filed a complaint for unfair labor practice, illegal suspension, illegal dismissal, and damages against GMC and Pino, et al. The Voluntary Arbitrator dismissed the complaint, upholding the dismissal under the CBA but awarding separation pay. The Court of Appeals set aside the Voluntary Arbitration Award, ruling the dismissal was illegal due to GMC’s failure to observe due process, and ordered reinstatement with backwages. It also held Pino, et al. liable for moral and exemplary damages and attorney’s fees. GMC appealed to the Supreme Court.

ISSUE

Whether the dismissal of respondents Casio, et al. by petitioner GMC was valid.

RULING

No. The Supreme Court denied GMC’s petition and affirmed the Court of Appeals Decision. The dismissal was illegal. While the CBA contained a valid union security clause, the dismissal pursuant thereto must still comply with due process. GMC failed to observe the twin requirements of notice and hearing. GMC did not furnish Casio, et al. with a written notice stating the grounds for dismissal and giving them a reasonable opportunity to explain their side. The termination was based solely on the union’s request and resolution, without GMC conducting its own independent assessment or hearing. The union’s expulsion of Casio, et al. was also invalid as it was done without affording them a genuine opportunity to be heard, having refused receipt of the charges. Consequently, Casio, et al. are entitled to reinstatement with full backwages. However, since their positions were declared no longer existing, separation pay equivalent to one month salary per year of service, in lieu of reinstatement, was awarded. Pino, et al. were held solidarily liable with GMC for backwages, and solely liable for moral and exemplary damages and attorney’s fees, as their imputations and actuations were the direct cause of the illegal dismissal. GMC was also ordered to pay attorney’s fees to Casio, et al.