United Polyresins v.

Pinuela
G.R. No. 116172– 31 July 2017
J. Del Casillo

Topic: Union – Member Relations; Admission and Discipline; Distinguish between grounds for DQ from membership
and grounds for removal from the union.
Doctrine:

Petitioners: United Polyresins Inc., Ernesto Uy Soon Jr, and/or Julito Uy Soon.
Respondents: Marcelino Pinuela

Case Summary:

Former union president Marcelino Pinuela was impeached from his union presidency through a special election. The
special election was called for because Pinuela was unable to explain where some of the funds of the union were kept.
The union informed the employer regarding Pinuela’s impeachment. The employer enforced the union security clause
found in the CBA and terminated Pinuela’s employment.

The Supreme Court explained that the grounds for the impeachment of union officers are not the same as the grounds
for the removal of union members. In this case, Marcelino was impeached from his presidency but was not removed
from the union. Hence, the union security clause did not apply since it only applies when an employee is removed from
the union.

Facts:
 United Polyresins Inc (UPI) is a domestic corporation in San Pedro, Laguna. Ernesto and Julito are its corporate
officers, while Marcelino was a member of its labor union – Polyresins Rank and File Assoc. (PORFA).
o Marcelino was elected President in 2005, slated to serve til 2007.
 The existing CBA between UPI and PORFA states that:
o Section 3. The Company shall grant to the Union the amount of Three Hundred Thousand Pesos
(P300,000.00) free of interest as the union's capital for establishing a cooperative to meet the needs of its
members. Said loan shall fall due and become payable at the same date that this Bargaining Agreement
expires, to wit - December 31, 2007. In the event of non-payment, all officers and members will be
personally accountable. In case of additional funds, they can make a written request [addressed] to the
President of the company.
o The CBA likewise contained a union security clause which provided that employees who cease to be
PORFA members in good standing by reason of resignation or expulsion shall not be retained in the
employ of UPI.
 When Marcelino assumed his post as union president, UPI wrote the former PORFA president Geoffrey Cielo to
turn over the documents of the union. Cielo surrendered the union’s bank account documents, among others,
which indicated that the union had an available P78,000~ cash balance. Cielo also submitted a financial report
indicating that the union had P208,623 in cash and P159,500 in receivables.
o Since the bank account and the financial reports did not match, the PORFA’s eecutive board hired a CPA
to conduct an audit. The CPA concluded that the union’s finances for the years 2003-2004 were not
properly documented.
o The CPA recommended that the officers take a seminar on basic bookkeeping and accounting, and that
they adopt or install necessary accounting and internal control systems.
 During Marcelino’s term, it appears that UPI automatically deducted amounts from the salaries of PORFA
members representing union membership dues and loan payments. These amounts would then be turned over by
UPI to PORFA through crossed checks.
 By the end of 2007, or when the CBA was about to expire, PORFA and UPI met to discuss a proposed CBA. UPI
explained that until PORFA pays the P300,000 loan, UPI will not discuss the proposed CBA.
o PORFA explained that UPI did not have the funds to pay the 300,000, saying that it only has P78,000~ in
cash.
o UPI then said that if the amount is not returned, it would be deducted from the salaries of the union
members.
  The loan was left unpaid and UPI refused to bargain. Marcelino filed a Complaint before the NCMB.
 Because of the recurring threat of failed CBA negotiations and salary deductions, the union members of PORFA
began to demand the holding of a special election of union officers.
o They’re accusing Marcelino of mismanagement, unduly hanging on to their positions, and lack of
accountability.
 Special Elections were held in March 2008. A new set of officers were elected.
 The new set of officers conducted an investigation into the fact that the union had such a small amount of money.
Marcelino explained that most of their cash was spent prosecuting cases during his incumbency. Marcelino failed
to make a formal turnover of documents to the new president.
o The new set of officers resolved to expel Marcelino from the union on the basis of the ff:
 No annual financial statement.
 No listings or ledger of union member's [sic] emergency loans.
 Unposted cheques on the Union's passbook collected from union members [sic] monthly dues.
 Our union checking account at Security Bank were [sic] Zero balance/closed account.
 No receipts/cash disbursement presented for the union operational [sic] expenses.
 Unable to return the P300,000.00 lent by the management free of interest. (Art. XXVII, Section 3
of our CBA).
 Unable to explain and present documents to support where the agency fees and union dues
collected from legitimate union members were used.
 PORFA informed UPI of its resolution. UPI sent Marcelino a Letter of Termination to take effect immediately.
 Marcelino filed a case for Illegal Dismissal. He claimed that his dismissal was in bad faith.
o LA: No illegal dismissal. Dismissal was based on the union’s investigation on how Marcelino spent its
funds.
o NLRC: Illegal dismissal initially, but reversed its own decision on reconsideration. It noted how
Marcelino could not explain nor even comment on the fact that the union’s bank account was already
closed for lack of funds. Even if the P78,000 wasn’t wrongly spent, still he could not account the
whereabouts of the said money.
 NLRC granted nominal damages since procedural due process was not observed in his
termination.
o CA: Illegal dismissal. The burden of proof to show that dismissal is made validly rests upon the
employer. An examination of the submitted evidence before the Labor Arbiter shows that the same are
not enough to prove the alleged charges of misappropriation against Marcelino.

Issues + Held:
1. W/N Marcelino’s dismissal was valid? NO.
o Marcelino’s expulsion from the union is grounded on its Constitution, which provides:

Art. XV. Impeachment and Recall

Section 1. Any of the following shall be ground for the impeachment or recall of the union officers.
e. Misappropriation of union funds and property. This is without prejudice to the filing of an appropriate
criminal or civil action against the responsible officer/(s) by any interested party;
f. Willful violation of any provision of the constitution or rules, regulations, measures, resolution(s) and
decision of the union.

o This provision refers to the impeachment and recall of union officers from their officership, and not
expulsion from union members from their membership.
 This is made clear by Section 2 (e) of the same Art. XC which provides that union officers which
have been impeached shall be “ipso facto considered resigned or ousted from office and shall no
longer be elected nor appointed to any position in the union”.
 In short, any officer guilty of these violations are merely removed from their position, but not
expelled from the union.
o Hence, it was an error on the part of PORFA and UPI to terminate Marcelino’s employment based on his
impeachment. The grounds for impeachment did not remove Marecelino from union membership. Hence,
the union security clause was not triggered.
 o Removal from Membership and Disqualification from Membership is governed by other provisions in the
Union’s constitution, none of which applied to Marcelino’s case.
 Removal - failure to pay union dues, special assessments, fines, and other mandatory charges
 DQ - Subversive or persons who profess subversive ideas; persons who have been convicted of
crime involving moral turpitude; persons who are not employees of the company
o Lastly, the failure to return the P300,000 is immaterial. The extension of such loan is illegal and
constitutes an Unfair Labor Practice

Art. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the following unfair
labor practice:

d. To initiate, dominate, assist or otherwise interfere with the formation or administration of any
labor organization, including the giving of financial or other support to it or its organizers or supporters

Ruling

WHEREFORE, for the foregoing reasons, the Petition is hereby DENIED. The December 11, 2012 Decision and October
10, 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 115402 are AFFIRMED.

SO ORDERED.