ALABANG COUNTRY CLUB v. NLRC 2008 / Velasco, Jr.

/ Discrimination to encourage/discourage unionism > Valid discrimination FACTS On June 21, 1999, the Club and the Union entered into a CBA, which provided for a union shop and maintenance of membership shop. Section 4(f) of Article 2 [Union Security] provides: Upon written demand of the UNION and after observing due process, the Club shall dismiss a regular rank-and-file employee on any of the following grounds: Malversation of union funds. In July 2001, an election was held. When the new officers conducted an audit of the union funds, they discovered some irregularly recorded entries, unaccounted expenses and disbursements, and uncollected loans. The union notified Pizarro, Braza, and Castueras (former union President, VP, and Treasurer) of the audit results and asked them to explain the discrepancies in writing. In a meeting called by the union, the three denied any wrongdoing. The three were expelled from the union and were furnished individual letters of expulsion for malversation of union funds. Attached were copies of the Panawagan ng mga Opisyales ng Unyon signed by 37/63 union members and officers, and a Board Resolution expelling them. The Union, invoking the Security Clause of the CBA, demanded that the Club dismiss the three, in view of their expulsion from the Union. The Club required the three to show cause in writing within 48 hours from notice why they should not be dismissed. The Club concluded that the three failed to refute the validity of their expulsion from the Union, so it was constrained to terminate their employment. The three filed an illegal dismissal complaint in the NLRC-NCR Arbitration Branch. LA in favor of the club: THERE WAS JUSTIFIABLE CAUSE FOR TERMINATION NLRC in favor of the three: ILLEGAL DISMISSAL; reinstatement + full backwages ordered Respondents expulsion from the Union was illegal since the DOLE had not yet made any definitive ruling on their liability regarding the administration of the Unions funds.1 CA upheld NLRC decision Even on the assumption that the union had valid grounds to expel the local union officers, due process requires that the union officers be accorded a separate hearing by the employer company. The Club avers that the dismissal was in accordance with the CBA Union security provisions. The Club also claims that the three were afforded due process, since the Club conducted an investigation separate and independent from that conducted by the Union. ISSUE & HOLDING WON the respondents were illegally dismissed. NO RATIO Under the Labor Code, an employee may be validly terminated based on just causes, authorized causes, termination due to disease or by the employees resignation. Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction. This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment, the authorized bargaining representative gains more numbers and strengthens its position as against other unions that may want to claim majority representation. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the unions decision to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the CBAs union security provision. The three respondents were expelled from and by the Union after due investigation for acts of dishonesty and malversation of Union funds. In accordance with the CBA, the Union properly requested the Club, through a letter signed by the Union President and addressed to Clubs HRD Manager, to enforce the Union security provision in their CBA and terminate said respondents. Then, in compliance with the Unions request, the Club reviewed the documents submitted by the Union, requested said respondents to submit written explanations, and afforded them reasonable opportunity to present their side. After it had determined that there was sufficient evidence that said respondents malversed Union funds, the Club dismissed them from their employment conformably with Sec. 4(f) of the CBA.

1 Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Actions arising from Article 241 of the Code. Any action arising from the administration or accounting of union funds shall be filed and disposed of as an intra-union dispute in accordance with Rule XIV of this Book. In case of violation, the Regional or Bureau Director shall order the responsible officer to render an accounting of funds before the general membership and may, where circumstances warrant, mete the appropriate penalty to the erring officer/s, including suspension or expulsion from the union.