GR 209555; (July, 2017) (Digest)
G.R. No. 209555. July 31, 2017. UNITED POLYRESINS, INC., ERNESTO UY SOON, JR., and/or JULITO UY SOON, Petitioners, vs. MARCELINO PINUELA, Respondent.
FACTS
Respondent Marcelino Pinuela was an employee of petitioner United Polyresins, Inc. (UPI) and President of the labor union, Polyresins Rank and File Association (PORFA). The Collective Bargaining Agreement (CBA) between UPI and PORFA included a union security clause and a provision for a ₱300,000.00 interest-free loan from UPI to PORFA to establish a cooperative, which was due on December 31, 2007. During his term, Pinuela discovered financial discrepancies in the union’s records from the previous administration and engaged an accountant for an audit. UPI regularly deducted and remitted union dues and loan payments from members to PORFA, amounting to over ₱2.4 million. As the loan’s due date approached, UPI refused to negotiate a new CBA until the ₱300,000.00 was repaid and threatened salary deductions from union members. This led to discontent, a special election for new union officers, and an investigation into the union’s finances.
The newly elected union officers found the union’s bank account closed and funds unaccounted for. Pinuela admitted funds were used for union cases but failed to provide proper documentation or formally turn over records. Consequently, PORFA issued a resolution expelling Pinuela from the union for financial mismanagement and violations of the union constitution. Relying on the union security clause in the CBA, UPI subsequently terminated Pinuela’s employment. Pinuela filed a complaint for illegal dismissal.
ISSUE
Whether respondent Marcelino Pinuela was illegally dismissed.
RULING
Yes, the Supreme Court affirmed the Court of Appeals and ruled that Pinuela was illegally dismissed. The Court held that while a labor union has the right to prescribe rules for the acquisition or retention of membership under Article 249(a) of the Labor Code, the termination of employment based on loss of union membership must still comply with the statutory requirement of just or authorized cause under Article 297 (formerly Article 282) of the Labor Code. The union security clause in the CBA cannot justify dismissal absent a valid cause separate from the mere fact of union expulsion.
The Court found that Pinuela’s expulsion from PORFA was not a valid cause for termination. The union’s expulsion was based on alleged financial mismanagement during his term as President. However, these acts pertained to his conduct as a union officer, not as an employee of UPI. There was no showing that these acts constituted willful breach of trust by an employee or any other ground for termination under the Labor Code. Furthermore, the Court noted it is an unfair labor practice under Article 249(b) for a union to cause an employer to discriminate against or dismiss an employee on grounds other than the usual terms for union membership. Therefore, UPI’s reliance on the union security clause to terminate Pinuela, based solely on his expulsion from the union without an independent finding of just cause related to his employment, constituted illegal dismissal.