G.R. No. 97092 July 27, 1992
PEPSI-COLA SALES AND ADVERTISING UNION, petitioner, vs. HON. SECRETARY OF LABOR and ROBERTO ALISASIS, respondents.

FACTS

Roberto Alisasis was an employee of Pepsi-Cola Bottling Co., Inc. (later Pepsi-Cola Products (Philippines) Inc.) from 1964 until about 1985 and a member of the petitioner union, Pepsi-Cola Sales & Advertising Union (PSAU). As a union member, he was a participant in the union’s “Mutual Aid Plan,” with contributions deducted from his wages. In 1986, Alisasis filed a complaint for illegal dismissal against his employer. The Labor Arbiter declared the dismissal illegal and ordered reinstatement with one year of backwages. The NLRC, on appeal, modified the decision by deleting the reinstatement order, finding that the employer had a valid cause for dismissal (loss of trust and confidence) but failed to comply with the due process notice requirement. Both parties accepted this NLRC decision; the employer paid the one-year backwages, and Alisasis executed a quitclaim.
Subsequently, Alisasis demanded from PSAU the monetary benefits under the Mutual Aid Plan’s by-laws. PSAU refused, citing a by-law provision disqualifying any member “dismissed for cause” from receiving benefits. Alisasis then filed a complaint against PSAU with the Med-Arbiter of the DOLE to compel payment. The Med-Arbiter assumed jurisdiction and ordered PSAU to pay. The Secretary of Labor affirmed but reduced the award. PSAU filed this certiorari petition to nullify the Med-Arbiter’s Order and the Secretary’s Resolution.

ISSUE

1. Whether the Med-Arbiter had original jurisdiction over Alisasis’ complaint against the union for Mutual Aid Plan benefits.
2. Whether Alisasis, whose dismissal was for a just cause but effected without due process, is considered “dismissed for cause” under the union’s by-laws and thus disqualified from claiming plan benefits.

RULING

1. Yes, the Med-Arbiter had jurisdiction. The controversy between Alisasis and his union regarding his rights under the Mutual Aid Plan constitutes an “intra-union conflict” under Article 226 of the Labor Code, which falls within the original and exclusive jurisdiction of the Med-Arbiter of the Bureau of Labor Relations. It is not a dispute falling under the jurisdiction of Labor Arbiters under Article 217, as it does not involve unfair labor practice, termination disputes, wages, or other terms and conditions of employment accompanied by a claim for reinstatement, among others.
2. Yes, Alisasis was “dismissed for cause” and is disqualified from receiving benefits. The Court applied the doctrine established in Wenphil Corporation v. NLRC ( G.R. No. 80587 ). The NLRC had conclusively found that Alisasis was dismissed for a just and valid cause—loss of trust and confidence—based on reasonable grounds. The defect was only in the manner of dismissal, i.e., the failure to provide written notice and a hearing, which constituted a denial of due process. Consequently, under the Wenphil doctrine, an employee dismissed for just cause but without due process is entitled only to salaries earned up to the last day of work and nominal damages (P1,000.00) for the procedural lapse, but not to reinstatement, backwages, or separation pay. Therefore, Alisasis was legally considered “dismissed for cause.” Since the union’s by-laws explicitly disqualify a member “dismissed for cause” from receiving any plan benefits, PSAU was justified in refusing payment. The Med-Arbiter and the Secretary of Labor committed grave abuse of discretion in ruling otherwise.
The petition was GRANTED. The Med-Arbiter’s Order and the Secretary of Labor’s Resolution were NULLIFIED and SET ASIDE. Alisasis’ complaint was ordered DISMISSED.