G.R. No. 164301 ; October 19, 2011
Bank of the Philippine Islands, Petitioner, vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, Respondent.

FACTS

Petitioner Bank of the Philippine Islands (BPI) filed a motion for reconsideration of the Court’s Decision dated August 10, 2010. The Decision held that former employees of the Far East Bank and Trust Company (FEBTC), who were absorbed by BPI pursuant to the banks’ merger in 2000, were covered by the Union Shop Clause in the existing Collective Bargaining Agreement (CBA) between BPI and respondent Union. The Union Shop Clause required new employees within the bargaining unit to join the Union within thirty days after becoming regular employees, as a condition of continued employment. The Union had requested BPI to terminate the employment of absorbed FEBTC employees who failed to join, but BPI refused. The Voluntary Arbitrator ruled in favor of BPI, but the Court of Appeals reversed this. The Supreme Court, in its August 10, 2010 Decision, affirmed the Court of Appeals, ruling the Union Shop Clause applied to the absorbed employees. In its motion for reconsideration, BPI insists the clause was intended only for new hires who later attained regular status, not for employees absorbed from a merger. BPI argues these absorbed employees are a sui generis group, and their full tenure with FEBTC was recognized, with salaries maintained. The Union, in its Comment, counters that employment relations between BPI and the former FEBTC employees were created after the merger’s approval, emphasizing the voluntary nature of the merger and the consensual nature of employment contracts.

ISSUE

Whether the Court’s August 10, 2010 Decision, which held that former FEBTC employees absorbed by BPI due to the merger are considered “new employees” under the Union Shop Clause of the CBA, should be reconsidered and reversed.

RULING

The motion for reconsideration is denied. The Court affirms its ruling that the absorbed FEBTC employees are covered by the Union Shop Clause, subject to a qualification regarding the interpretation of the merger’s effects. The Court clarifies that, in a merger, the surviving corporation automatically assumes the employment contracts of the non-surviving corporation’s employees, even absent an express stipulation in the articles of merger. This interpretation is grounded in Section 80 of the Corporation Code, which obligates the surviving entity to assume all the obligations and liabilities of the merged corporation, and is in keeping with constitutional policies of social justice and full protection to labor. This automatic assumption strengthens the security of tenure of the affected employees. However, this clarification does not impair the employer’s right to terminate employment for lawful cause or the employee’s right to resign or retire. The Court rejects BPI’s arguments for reversal, having previously addressed them, and reiterates that the policy encouraging unionism, as an instrument of social justice, subordinates the individual right to abstain from joining a union. The dispositive portion of the August 10, 2010 Decision is thus affirmed, subject to the stated qualification.