In the case of United Polyresins, Inc. v. Marcelino Pinuela, the Supreme Court ruled that an employee’s dismissal based on a union’s constitution was invalid because the specific provisions cited did not authorize expulsion from union membership, only the removal of union officers. The Court emphasized that employers cannot terminate employees based on union actions if those actions are not explicitly justified under the union’s governing documents or the Labor Code. This decision underscores the importance of aligning dismissal procedures with both the union’s constitution and the broader legal framework protecting workers’ rights.

When Union Expulsion Leads to Illegal Dismissal: A Case of Misinterpreted Constitutions

The case revolves around Marcelino Pinuela, who was employed by United Polyresins, Inc. (UPI) and served as the president of the Polyresins Rank and File Association (PORFA). During his term, a P300,000 loan from UPI to PORFA became due, leading to disputes over the union’s finances. Following internal investigations and accusations of mismanagement, Pinuela was expelled from PORFA, which then led UPI to terminate his employment, citing the union security clause in their collective bargaining agreement (CBA). The central legal question is whether Pinuela’s dismissal was valid, given the circumstances of his expulsion from the union and the specific provisions of PORFA’s constitution.

The Labor Arbiter initially dismissed Pinuela’s complaint for illegal dismissal, but the National Labor Relations Commission (NLRC) reversed this decision, then later reversed itself again, finding the dismissal valid but awarding separation pay and nominal damages. The Court of Appeals (CA), however, sided with Pinuela, stating that there was insufficient evidence to support his expulsion from PORFA and that he was not properly informed of the charges against him. This led UPI to appeal to the Supreme Court, arguing that both substantive and procedural due process were observed in Pinuela’s dismissal.

At the heart of the issue is the interpretation of PORFA’s constitution, specifically Article XV, Section 1, paragraphs (e) and (f), which were cited as grounds for Pinuela’s expulsion. These provisions address the impeachment and recall of union officers, stating grounds such as misappropriation of union funds and willful violation of union rules. However, the Supreme Court noted that these provisions relate to removing officers from their positions, not expelling members from the union. According to the Court, any officer found guilty under these provisions should be removed from office but not necessarily stripped of their union membership. This distinction is critical because it directly impacts the validity of the dismissal under the union security clause.

“However, these provisions refer to impeachment and recall of union officers, and not expulsion from union membership. This is made clear by Section 2(e) of the same Article XV, which provides that ‘(t)he union officers impeached shall ‘IPSO FACTO’ to [sic] be considered resigned or ousted from office and shall no longer be elected nor appointed to any position in the union.’ In short, any officer found guilty of violating these provisions shall simply be removed, impeached or recalled, from office, but not expelled or stripped of union membership.”

The Supreme Court emphasized that PORFA’s constitution only authorizes removal from the union under Article X, Section 6, which pertains to the failure to pay union dues. Grounds for disqualification from membership are also listed in Article IV, which includes individuals with subversive ideas or those convicted of crimes involving moral turpitude. Since Pinuela’s case did not fall under any of these categories, his expulsion was deemed unauthorized. Even though he was charged with estafa, he had not been convicted, making his disqualification as a union member improper. The Court concluded that the termination of Pinuela’s employment based on the cited provisions of the union’s constitution was erroneous and did not constitute just cause for termination.

The Court also addressed UPI’s reliance on Cariño v. National Labor Relations Commission, clarifying that the cited case involved existing suspension and expulsion provisions within the CBA and union constitution, which were absent in PORFA’s documents. Moreover, the Court noted that UPI’s loan to PORFA could be construed as an unfair labor practice, according to Article 248(d) of the Labor Code, which prohibits employers from assisting or interfering with labor organizations, including providing financial support. This point underscores the complex interplay between employer actions, union governance, and labor law.

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

x x x x

(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;

The Supreme Court suggested that PORFA should consider amending its constitution to include specific rules on the discipline of its members. While unions have the right to prescribe rules for membership retention, they cannot expel members or cause their dismissal without just cause. According to Article 249(b) of the Labor Code, it is an unfair labor practice for a labor organization to cause or attempt to cause an employer to discriminate against an employee or terminate them without adhering to the terms under which membership is available to other members. This reinforces the principle that union security clauses must be implemented fairly and in accordance with both the union’s rules and the broader protections afforded to employees under labor law. The absence of clearly defined disciplinary procedures in the union’s constitution was a critical factor in the Court’s decision.

The ruling emphasizes that union security clauses cannot be used arbitrarily to justify the dismissal of employees. Employers and unions must ensure that any actions taken under such clauses are consistent with the union’s constitution, the CBA, and the Labor Code. The case serves as a reminder of the importance of due process and the need for clear, justifiable grounds for expulsion from a union before an employer can terminate an employee’s contract. The Supreme Court’s decision protects employees from unjust dismissal and underscores the limitations of union security clauses when applied inconsistently with union rules and legal standards.

FAQs

What was the key issue in this case?	The central issue was whether Marcelino Pinuela’s dismissal was legal, considering his expulsion from the union was based on provisions in the union’s constitution that did not authorize expulsion but only the removal of officers from their positions. This raised questions about the validity of using the union security clause to terminate his employment.
What is a union security clause?	A union security clause is a provision in a collective bargaining agreement that requires employees to maintain membership in the union as a condition of employment. It allows an employer to terminate an employee who is no longer a union member in good standing.
What did the Supreme Court rule in this case?	The Supreme Court ruled that Pinuela’s dismissal was illegal because his expulsion from the union was not based on valid grounds under the union’s constitution. The Court emphasized that the provisions cited for his expulsion only applied to removing officers from their positions, not terminating their union membership.
Why was the union’s constitution important in this case?	The union’s constitution was crucial because it defined the grounds for expulsion and disqualification from membership. The Supreme Court examined the constitution to determine whether Pinuela’s actions justified his expulsion, ultimately finding that they did not.
What is the significance of the Cariño v. NLRC case mentioned in the decision?	Cariño v. NLRC was cited by the petitioners to support their argument that Pinuela’s dismissal was valid. However, the Supreme Court distinguished this case, noting that it involved existing suspension and expulsion provisions that were absent in PORFA’s constitution.
What is unfair labor practice, and how does it relate to this case?	Unfair labor practice refers to actions by employers or unions that violate employees’ rights. In this case, the Court noted that UPI’s loan to PORFA could be seen as an unfair labor practice, as it constitutes giving financial support to a labor organization.
What was the role of due process in this case?	Due process is a fundamental right that requires fair treatment and an opportunity to be heard before adverse actions are taken. The Court of Appeals found that Pinuela was not properly informed of the charges against him, indicating a lack of procedural due process, which further supported the ruling that his dismissal was illegal.
What is the impact of this ruling on employers and unions?	This ruling emphasizes the importance of employers and unions adhering strictly to the terms of collective bargaining agreements and union constitutions when enforcing union security clauses. It also underscores the need for unions to have clear and justifiable grounds for expelling members.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: United Polyresins, Inc. v. Marcelino Pinuela, G.R. No. 209555, July 31, 2017