Republic of the Philippines

SUPREME COURT
Manila
EN BANC
UNION SECURITY STATUTORY BASIS AND RATIONALE
G.R. No. L-20764

November 29, 1965

SANTOS JUAT, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS, BULAKLAK PUBLICATIONS and JUAN
EVANGELISTA, respondents.
Vicente T. Ocampo for petitioner.
Mariano B. Tuason for respondent Court of Industrial Relations.
Rufo B. Albor for other respondents.
ZALDIVAR, J.:
This is a petition for certiorari to review the decision dated August 15, 1962 and the
resolution en banc dated October 30, 1962, of the Court of Industrial Relations in its Case No.
2889-ULP.
After investigating charges of unfair labor practice filed by petitioner Santos Juat before the
Court of Industrial Relations against respondents Bulaklak Publications and its Executive Officer,
Acting Prosecutor Alberto Cruz of the Court of Industrial Relations filed a complaint, docketed
as Case No. 2889-ULP, charging Bulaklak Publications and/or Juan N. Evangelista of unfair labor
practice within the meaning of Section 4 (a) subsections 1, 4 and 5 of Republic Act 875, alleging,
among others, that complainant Santos Juat was an employee of the respondent company
since August 1953; that on or about July 15, 1960, and on several occasions thereafter,
complainant Santos Juat was asked by his respondent employer to join the Busocope Labor
Union, but he refused to do so; that respondent employer suspended him without justifiable
cause; that two separate cases were filed by complainant against the respondents one on
March 13, 1961 for unfair labor practice, and another on March 18, 1961 for payment of wages
for overtime work and work on Sundays and holidays, the filing of which cases had come to the
knowledge of the respondents; that on March 15, 1961, respondent employer dismissed him
from the service without justifiable cause and that from the time of his dismissal up to the filing
of the complaint he had not found any substantial employment for himself.
In their answer, dated August 3, 1961, respondent alleged, among others, that complainant
Santos Juat was suspended for cause; that while Case No. 1462-V was filed with the Court of
Industrial Relations on March 13, 1961, the same came to the knowledge of respondents only

when they received the summons and a copy of the petition on March 24, 1961, and while case
No. 2789-ULP was filed on April 3, 1961, the same became known to respondents long after the
employer-employee relationship between respondent employer and Santos Juat had been
terminated, so that the suspension of the complainant on March 1, 1961 and his subsequent
separation from the service were not acts of reprisal because of the filing of those two cases;
that it was complainant Juat who had caused his separation when he ignored the letter sent to
him by Juan N. Evangelista, executive officer of respondent company, requiring him to report
for work; that the principal reason why complainant refused to work with respondent company
was because he was occupied with his work in the Juat Printing Press Co. of which he was a
stockholder and the treasurer. Respondent company thereby made a counterclaim for damages
because of complainant's having filed an unwarranted and malicious action against it.
On August 15, 1962, after hearing, Associate Judge Baltazar N. Villanueva of the Court of
Industrial Relations rendered a decision dismissing the complaint but made no pronouncement
regarding respondent's counterclaim.
Petitioner filed a motion for reconsideration of the decision, and in a resolution dated October
30, 1962, the Court of Industrial Relations en banc denied the motion for reconsideration.
Hence, this petition for certiorari to review said decision and resolution.
The facts of this case may best be gathered from the findings and conclusions of the Court of
Industrial Relations in its decision, as follows:
On December 1, 1959, a collective bargaining agreement was entered into between the
Bulaklak Publications and the BUSOCOPE LABOR UNION, to remain in effect for 3 years,
and renewable for another term of 3 years. Section 4 of said agreement contains a
closed shop proviso. On December 27, 1960, said Section 4 of said agreement was
amended to read as follows:
"All employees and/or workers who on January 1, 1960 are members of the
Union in good standing in accordance with its Constitution and By-Laws and all
members who become members after that date shall, as a condition of
employment, maintain their membership in the Union for the duration of this
Agreement. All employees and/or workers who on January 1, 1961 are not yet
members of the Union shall, as a condition of maintaining their employment,
become members of such union."
It is clear that it was by virtue of the above-mentioned closed shop provision of the
collective bargaining agreement between the Busocope Labor Union and the Bulaklak
Publications that the management of the latter required Santos Juat to become a
member of the former. In requiring Santos Juat to become a member of said Union, it
was only obeying the law between the parties, which is their collective bargaining
agreement.

Because of the refusal of Santos Juat to become a member of said Union, Mr. Juan N.
Evangelists, the executive officer of respondent company, suspended him for 15 days.
After the expiration of the suspension of Santos Juat, Mr. Evangelista addressed a letter
to the former, ordering him to report back for duty, and in spite of said letter, Santos
Juat did not report for work, consequently, Santos Juat was dropped from the service of
the company. Juat could afford not to report for duty because he has his own business
by the name of JUAT PRINTING PRESS CO., INC. The refusal of Santos Juat to become a
member of the Busocope Labor Union as well as his refusal to report for work when
ordered by his superior officer, shows the lack of respect on the part of Santos Juat
toward his superior officer. With such attitude, the continuation in the service of the
company of Santos Juat is indeed inimical to the interest of his employer.
The charge of complainant to the effect that on March 13, 1961, he filed a petition with
this Court against respondent company which was docketed as Case No. 1462-V is of no
moment, because according to the decision of the Supreme Court in Case G.R. No. L11745, Royal Interocean Lines, et al. vs. Hon. Court of Industrial Relations, et al.,
Promulgated October 31, 1960, it was held that an employee's having filed charges or
having given testimony or being about to give testimony has no relation to union
activities. With respect to Case No. 2789-ULP, Mr. Evangelista stated that he did not
know anything about its having been filed in Court.
It is now contended by the petitioner before this Court that:
1. The Court of Industrial Relations erred, or committed a grave abuse of discretion,
when it applied to the petitioner the collective bargaining agreement with closed shop
proviso between the respondent Bulaklak Publications and the Busocope Labor Union,
he being an old employee;
2. The Court of Industrial Relations erred, or committed a grave abuse of discretion, in
holding that the respondent Bulaklak Publications did not commit unfair labor practice
when it dismissed petitioner for his refusal to join the Busocope Labor Union; and
3. The Court of Industrial Relations committed a grave abuse of discretion when it
dismissed the complaint of petitioner because its allegations; are not supported by
substantial evidence.
The contentions of the petitioner are without merit, The closed-shop proviso in a collective
bargaining agreement between employer and employee is sanctioned by law. The pertinent
provision of the law, in this connection, says:
Provided, that nothing in this Act or in any Act or statute of the Republic of the
Philippines shall preclude an employer from making an agreement with a labor
organization to require as a condition of employment membership therein, if such labor
organization is the representative of the employees as provided in said section twelve;

... ." (Section 4, subsection [a] par. 4 of Republic Act No. 875, known as the Industrial
Peace Act).
The validity of a closed-shop agreement has been upheld by this Court. In one particular case
this Court held:
There is no need for us to take sides and give reasons because our Congress, in the
exercise of its policy-making power, has chosen to approve the closed-shop, when it
legalized in Sec. 4, sub-section (a) paragraph 4 of Republic Act 875 (Magna Charta of
Labor) "any agreement of the employer with a labor organization requiring membership
in such organization as condition of employment," provided such labor organization
properly represents the employees (National Labor Union vs. Aguinaldo's Echague, et
al., G.R. No. L-7358, May 31, 1955.)
The foregoing pronouncement of this Court had been reiterated in the cases of Tolentino, et al.
vs. Angeles, et al., G.R. No. L-8150, May 30, 1956; Ang Malayang Manggagawa Ng Ang Tibay
Enterprises, et al., vs. Ang Tibay, et al., G.R. No. L-8259, Dec. 23, 1957; Confederated Sons of
Labor vs. Anakan Lumber Co., et al., G.R. No. L-12503, April 20, 1960; Bacolod-Murcia Milling
Co., et al. vs. National Employees Workers Security Union, 53 O.G. 615.
A closed-shop agreement has been considered as one form of union security whereby only
union members can be hired and workers must remain union members as a condition of
continued employment. The requirement for employees or workers to become members of a
union as a condition for employment redounds to the benefit and advantage of said employees
because by holding out to loyal members a promise of employment in the closed-shop the
union wields group solidarity. In fact, it is said that "the closed-shop contract is the most prized
achievement of unionism" (National Labor Union vs. Aguinaldo's-Echague, Inc. et al., supra).
Coming now to the closed-shop proviso of the collective bargaining agreement between the
respondent Bulaklak Publications and the Busocope Labor Union, it is clearly provided that "All
employees and/or workers who on January 1, 1961 are not yet members of the Union shall, as
condition of maintaining their employment, become members of such Union." The question
now before Us is whether the above-quoted proviso of the said collective bargaining agreement
applies to the petitioner Santos Juat. The contention of said petitioner is that the said proviso
cannot apply, and should not be applied to him because he is an old employee of the Bulaklak
Publications. It is not disputed that petitioner had been employed with the Bulaklak
Publications since 1953, and the collective bargaining agreement embodying the closed-shop
proviso in question was entered into only on December 1, 1959 and amended on December 27,
1960. It has been established, however, that said petitioner was not a member of any labor
union when that collective bargaining agreement was entered into, and in fact he had never
been a member of any labor union.
This Court had categorically held in the case of Freeman Shirt Manufacturing Co., Inc., et al. vs.
Court of Industrial Relations, et al., G.R. No. L-16561, Jan. 28, 1961, that the closed-shop proviso

of a collective bargaining agreement entered into between an employer and a duly authorized
labor union is applicable not only to the employees or laborers that are employed after the
collective bargaining agreement had been entered into but also to old employees who are not
members of any labor union at the time the said collective bargaining agreement was entered
into. In other words, if an employee or laborer is already a member of a labor union different
from the union that entered into a collective bargaining agreement with the employer
providing for a closed-shop, said employee or worker cannot be obliged to become a member
of that union which had entered into a collective bargaining agreement with the employer as a
condition for his continued employment. This Court in that Freeman case made this clear
pronouncement:
The closed-shop agreement authorized under Sec. 4 sub-sec. a (4) of the Industrial
Peace Act above-quoted should, however, apply only to persons to be hired or to
employees who are not yet members of any labor organization. It is inapplicable to
those already in the service who are members of another union.To hold otherwise, i.e.,
that the employees in a company who are members of a minority union may be
compelled to disaffiliate from their union and join the majority or contracting union,
would render nugatory the right of all employees to self-organization and to form, joint
or assist labor organizations of their own choosing, a right guaranteed by the Industrial
Peace Act (sec. 3, Rep. Act No. 875) as well as by the Constitution (Art. III, see. 1 [6]).
Section 12 of the Industrial Peace Act, providing that when there is reasonable doubt as
to who the employees have chosen as their representative the Industrial Court can
order a certification election, would also become useless. For once a union has been
certified by the court and enters into a collective bargaining agreement with the
employer a closed-shop clause applicable to all employees be they union or non-union
members, the question of majority representation among the members would be closed
forever. Certainly, there can no longer exist any petition for certification election, since
eventually the majority or contracting union will become a perpetual labor union. This
alarming result could not have been the intention of Congress. The Industrial Peace Act
was enacted precisely for the promotion of unionism in this country. (Emphasis
supplied)
The above-quoted ruling was reaffirmed by this Court in its decision in the case of Findlay Miller
Timber Co. vs. PLASLU, et al., G.R. Nos. L-18217 & L-18222, Sept. 29, 1962.
It should be declared, therefore, as a settled doctrine, that the closed-shop proviso of a
collective bargaining agreement entered into between an employer and a duly authorized labor
union applies, and should be applied, to old employees or workers who are non-members of
any labor union at the time the collective bargaining agreement was entered into. In other
words, the old employees or workers can be obliged by his employer to join the labor union
which had entered into a collective bargaining agreement that provides for a closed-shop as a
condition for his continuance in his employment, otherwise his refusal to join the contracting
labor union would constitute a justifiable basis for his dismissal.

It being established by the evidence that petitioner Santos Juat, although an old employee of
the respondent Bulaklak Publications, was not a member of any labor union at the time when
the collective bargaining agreement in question was entered into he could be obliged by the
respondent Bulaklak Publications to become a member of the Busocope Labor Union. And
because petitioner refused to join the Busocope Labor Union respondent Bulaklak Publications
was justified in dismissing him from the service on the ground that he had refused to join said
union.
We, therefore, hold that the respondent Court of Industrial Relations did not err, nor did it
commit a grave abuse of discretion, when it decided that the respondent Bulaklak Publications
did not commit unfair labor practice when it dismissed petitioner because of his refusal to join
the Busocope labor union. Moreover, as found by the respondent Court of Industrial Relations,
petitioner Santos Juat had furnished another ground for his dismissal and that was because
he refused to return to work after the end of his suspension even when he was ordered to do
so by his employer, the respondent Bulaklak Publications. The respondent Court of Industrial
Relations further found that the reason why the petitioner did not want to return to work was
because he was already working in his own establishment known as the "Juat Printing Press Co.
Inc." of which he was a stockholder and the treasurer.
Neither did the respondent Court of Industrial Relations commit a grave abuse of discretion
when it dismissed the complaint on the ground that the petitioner had not adduced substantial
evidence to support the allegations in the complaint. We have carefully examined the records,
and we believe that the factual findings of the respondent court should not be disturbed.
IN VIEW OF THE FOREGOING, the decision and resolution appealed from are affirmed, with
costs against the petitioner.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal and
Bengzon, J.P., JJ.,concur.
Barrera, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

IMPLEMENTATION OBLIGATION AND LIABILITIES

G.R. No. 91086 May 8, 1990
VIRGILIO S. CARIO petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HARRISON INDUSTRIAL CORPORATION and
HARRISON INDUSTRIAL WORKERS' UNION, respondents.
Federico C. Leynes for petitioner.
Banzuela, Flores, Miralles, Raeses Sy, Taquio & Associates for respondent Union.
Armando V. Ampil for respondent Harrison.
RESOLUTION

FELICIANO, J.:
Petitioner asks the Court to declare null and void a Decision dated 26 May 1989 of the National
Labor Relations Commission (NLRC) in NLRC Case No. NCR-00-09-03225-87 and to reinstate the
Decision of the Labor Arbiter which the NLRC had modified.
Petitioner Cario was the former President of private respondent Harrison Industrial Workers'
Union ("Union"). Because he was widely believed to have grossly mismanaged Union affairs, the
other officers of the Union formed an investigating committee and several times invited
petitioner Cario to answer the complaints and charges against him. These charges were,
principally:
1. Conspiring with the company during the negotiation of the CBA, resulting in, among other
things, Article 22 entitled "Retirement" which provided for retirement pay of one (1) day's basic
salary for every year of service.

2. Paying attorney's fees to Atty. Federico Leynes, Union counsel, out of Union funds without
obtaining corresponding receipts therefor.
3. Unilaterally increasing the membership dues by an additional P17.00 per member in order to
pay increased attorney's fees.
4. Concealing the CBA, failure to present and to explain the provisions of the same prior to
ratification by the union membership.
5. Refusal to turn over the custody and management of Union funds to the Union treasurer.
Petitioner Cario, however, failed to respond to the calls or invitations made by the
investigating committee. Finally, the investigation committee caged a general membership
meeting on 11 June 1987. At this general membership meeting, the charges against petitioner
were presented and discussed and the Union decided to file a petition for special election of its
officers.
On 16 June 1987, a petition for special election of officers was filed by the Union with the
Bureau of Labor Relations, Department of Labor and Employment. Several hearings were field
at the BLR always with due notice to petitioner Cario petitioner, however, failed to appear
even once.
On 5 August 1987, a general Union membership meeting was held for the impeachment of
Cario. The general membership found Cario guilty of the above-mentioned charges and
decided to expel him from the Union and to recommend his termination from employment.
Atty. Federico Leynes also ceased to be counsel for the Union.
The Union accordingly informed private respondent Harrison Industrial Corporation
("Company") of the expulsion of petitioner Cario from the Union and demanded application of
the Union Security Clause of the then existing Collective Bargaining Agreement (CBA) on 15
September 1987. Petitioner Cario received a letter of termination from the Company, effective
the next day.
Petitioner Cario, now represented by Atty. Leynes, the former lawyer of the Union, filed a
complaint for illegal dismissal with the Labor Arbiter.
In a Decision dated 7 October, 1988, the Labor Arbiter held that there was no just cause for the
dismissal of petitioner Cario, none of the causes for suspension or dismissal of Union members
enumerated in the Union's Constitution and By-Laws being applicable to petitioner's situation.
The Labor Arbiter also held that the manner of petitioner's dismissal had been in disregard of
the requirements of notice and hearing laid down in the Labor Code. The Labor Arbiter ordered
petitioner's reinstatement with full backwages and payment of attorney's fees, the monetary
liability to be borne solidarily by the Company and the Union.

The Company and the Union went on appeal before the public respondent National Labor
Relations Commission (NLRC). The NLRC, in a Decision promulgated on 26 May 1989, reversed
the Labor Arbiter's award. The NLRC noted that petitioner Cario had merely denied the serious
charges of mismanagement preferred against him, as set out in the affidavit of Dante Maroya,
the incumbent President of the Union, which affidavit had been adopted by the Union as its
position paper in the proceedings before the Labor Arbiter. The NLRC held Cario's silence as
"tantamount to [an] admission of guilt" and as constituting the ultimate cause for his dismissal.
However, the NLRC agreed with the Labor Arbiter's finding that the manner of petitioner
Cario's dismissal was inconsistent with the requirements of due process. The NLRC accordingly
found the Company and the Union solidarily liable, "by way of penalty and financial assistance",
to petitioner Cario for payment of separation pay, at the rate of one-half (1/2) month's salary
for each year of service.
In the instant Petition for Certiorari, petitioner Cario basically seeks reinstatement of the
Decision of the Labor Arbiter.
1. Petitioner Cario contended that the NLRC had erred in taking cognizance of the Union's
admittedly late appeal. We agree, however, with the Solicitor General that it is a settled
principle of remedial law that reversal of a judgment obtained by a party appealing from it also
benefits a co-party who had not appealed, or who had appealed out of time, where the rights
and liabilities of both parties under the modified decision are so interwoven and interdependent as to be substantively inseparable. 1
In the instant case, the NLRC could take cognizance of the late appeal of the Union, considering
that the lawfulness of petitioner Cario's dismissal by the Company could be determined only
after ascertaining, among other things, the validity of the Union's act of expelling Cario from
its membership. In other words, the Company having seasonably appealed the Labor Arbiter's
Decision and the Company's and the Union's liability being closely intertwined the NLRC could
properly take account of the Union's appeal even though not seasonably filed.
2. The NLRC in effect held that there had been just cause for petitioner Cario's dismissal. The
Court considers that the NLRC was correct in so holding, considering the following documentary
provisions:
a) Article II, Sections 4 and 5 of the Collective Bargaining Agreement between the Company and
the Union provided as follows:
Sec. 4. Any employee or worker obliged to join the UNION and/or maintain
membership therein under the foregoing sections who fails to do so and/or
maintain such membership shall be dismiss without pay upon formal request of
the UNION.
Sec. 5. Any UNION member may be suspended and/or expelled by the UNION
for:

a) Non-payment of dues or special assessment to the UNION.

b) Organizing or joining another UNION or affiliating with a labor federation.
c) Commission of a crime as defined by the Revised Penal Code against any
UNION officer in relation to activities for and in behalf of the UNION.
d) Participation in an unfair labor practice or any derogatory act against the
UNION or any of its officers or members; and
e) Involvement in any violation of this Agreement or the UNION's Constitution
and By-Laws.
The UNION assumes full and complete responsibility for all dismiss of any worker/employee
effected by the UNION and conceded in turn, by the COMPANY pursuant to the provisions
hereof.
The UNION shall defend and hold the COMPANY free and harmless against any and all claims
the dismissed worker/employee might bring and/or obtain from the Company for such
dismissal. 2 (Emphasis supplied)
b) The Constitution of the Union contains the following provisions:
(i) Article X Section 5 reads:
ARTICLE X-FEES, DUES SPECIAL ASSESSMENTS, FINES AND OTHER PAYMENTS
xxx xxx xxx
Sec. 5. Special assessments or other extraordinary fees such as for payment of
attorney's fees shall be made only upon a resolution duly ratified by the general
membership by secret balloting.
xxx xxx xxx
(Emphasis supplied.)
(ii) Article XV entitled "Discipline" provides in Section I thereof that:
Sec. 1. Any individual union members and/or union officer may be disciplined or
expelled from the UNION by the Executive Board if the latter should find the
former guilty of charges, based on the following grounds preferred officially
against him:

a) Non-payment of dues and other assessments for two (2) months;

b) Culpable violation of the Constitution and By Laws;
c) Deliberate refusal to implement policies, rules and regulations decisions
and/or support the programs or projects of the UNION as laid down by its
governing organs or its officers; and
d) Any act inimical to the interest of the UNION and/or its officers, such as but
not limited to rumor mongering which tends to discredit the name and integrity
of the UNION and/or its officers and creating or causing to create dissension
among the UNION members thereof. 4 (Emphasis supplied.)
Article XVI entitled "Impeachment and Recall" specified, in Section 1 thereof, the grounds for
impeachment or recall of the President and other Union officers, in the following terms:
a) Committing or causing the commission directly or indirectly of acts against the
interest and welfare of the UNION;
b) Malicious attack against the UNION, its officers or against a fellow UNION
officer or member;
c) Failure to comply with the obligation to turn over and return to the UNION
Treasurer within three (3) days are [sic] unexpected sum or sum of money
received an authorized UNION purpose;
d) Gross misconduct unbecoming of a UNION officer;
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
or officers by any interested party
f) Willful violation of any provisions on this Constitution or rules, regulations,
measures, resolution and decisions of the UNION. 5 (Emphasis supplied.)
It appears to the Court that the particular charges raised against petitioner Cario, set out
earlier, reasonably fall within the underscored provisions of the foregoing documents. The
NLRC impliedly recognized this when it described the charges of mismanagement against Carino
as serious.
The Labor Arbiter, however, also held that petitioner Cario had been deprived
of procedural due process on the union level in view of alleged failure to comply with the
required procedure, governing impeachment and recall proceedings set out in Article XVI,
Section 2, of the Constitution of the Union. Article XVI, Section 2 reads as follows:

a) Impeachment or recall proceedings shall be initiated by a formal petition or

resolution signed by at least thirty (30%) percent of all bona fide members of the
UNION and addressed to the Chairman of the Executive board.
b) The Board Chairman shall then convene a general membership fee to consider
the impeachment or recall of an officer or a group of officers, whether elective
or appointive
c) UNION officers against whom impeachment or recall charges have been filed
shall be given ample opportunity to defend themselves before any impeachment
or recall vote is finally taken.
d) A majority of all members of the UNION shall be required to impeach or recall
UNION officers.
e) The UNION officers impeached shall ipso facto be considered resigned or
ousted from office and shall no longer be elected nor appointed to any position
in the UNION.
f) The decision of the general membership on the impeachment or recall charge
shall be final and executory. 6
The NLRC, for its part, noted that while the prescribed procedural steps had not all been
followed or complied with, still,
Be that as it may, the general membership of the Union had spoken and decided
to expel complainant as Union President and member and ultimately, requested
the company to terminate his services per CBA prescription. It is worthy to note
that the charges aired by Mr. Dante Maroya are serious enough for complainant
to specifically respond and explain his side at the arbitral proceedings
below. While it appears that due process was lacking at the plant level, this was
cured by the arbitration process conducted by the Labor Arbiter. Despite the
ample opportunity to explain his side, complainant failed to do so and instead,
relied completely on alleged denial of due process. Complainant's silence in this
respect is tantamount to [an] admission of guilt. 7 (Emphasis supplied.)
It is true that the impeachment of Cario had not been initiated by a formal petition or
resolution signed by at least thirty percent (30%) of an the bona fide members of the Union. A
general meeting had, however, been called to take up the charges against petitioner Carino
who had been given multiple opportunities to defend himself before the investigating
committee of the Union officers and before the general Union members as well as before the
Bureau of Labor Relations. Petitioner Cario, however, chose to disregard all calls for him to
appear and defend himself. At the general membership meeting, therefore, petitioner Cario
was impeached and ordered recalled byunanimous vote of the membership. Under these

circumstances, failure to comply literally with step (a) of Article XVI Section 2 of the Union's
Constitution must be regarded as non-material: the prescribed impeachment and recall
proceeding had been more than substantially complied with.
4. Turning now to the involvement of the Company in the dismissal of petitioner Cario we note
that the Company upon being formally advised in writing of the expulsion of petitioner Carino
from the Union, in turn simply issued a termination letter to Cario, the termination being
made effective the very next day. We believe that the Company should have given petitioner
Carino an opportunity to explain his side of the controversy with the Union. Notwithstanding
the Unions Security Clause in the CBA, the Company should have reasonably satisfied itself by
its own inquiry that the Union had not been merely acting arbitrarily and capriciously in
impeaching and expelling petitioner Cario. From what was already discussed above, it is quite
clear that had the Company taken the trouble to investigate the acts and proceedings of the
Union, it could have very easily determined that the Union had not acted arbitrarily in
impeaching and expelling from its ranks petitioner Cario. The Company offered the excuse
that the Union had threatened to go on strike if its request had not been forthwith granted.
Assuming that such a threat had in fact been made, if a strike was in fact subsequently called
because the Company had insisted on conducting its own inquiry, the Court considers that such
would have been prima facie an illegal strike. The Company also pleaded that for it to inquire
into the lawfulness of the acts of the Union in this regard would constitute interference by the
Company in the administration of Union affairs. We do not believe so.
In Liberty Cotton Mills Worker's Union, et al. v. Liberty Cotton Mills, et al. 8 the Court held
respondent company to have acted in bad faith in dismissing the petitioner workers without
giving them an opportunity to present their side in their controversy with their own union.
xxx xxx xxx
It is OUR considered view that respondent company is equally liable for the
payment of backwages for having acted in bad faith in effecting the dismissal of
the individual petitioners. Bad faith on the part of respondent company may be
gleaned from the fact that the petitioner workers were dismissed hastily and
summarily. At best, it was guilty of a tortious act, for which it must assume
solidary liability, since it apparently chose to summarily dismiss the workers at
the union's instance secure in the union's contractual undertaking that the union
would hold it "free from any liability" arising from such dismissal.
xxx xxx xxx
While respondent company, under the Maintenance of Membership prevision of
the Collective Bargaining Agreement, is bound to dismiss any employee expelled
by PAFLU for disloyalty, upon its written request, this undertaking should not be
done hastily and summarily. The company acted in bad faith in dismissing
petitioner workers without giving them the benefit of a hearing. It did not even

bother to inquire from the workers concerned and from PAFLU itself about the
cause of the expulsion of the petitioner workers. Instead, the company
immediately dismissed the workers on May 29, 1964 in a span of only one day
stating that it had no alternative but to comply with its obligation under the
Security Agreement in the Collective Bargaining Agreement thereby disregarding
the right of the workers to due process, self-organization and security of tenure.
xxx xxx xxx
The power to dismiss is a normal prerogative of the employer. However, this is
not without limitations.The employer is bound to exercise caution in terminating
the services of his employee especially so when it is made upon the request of a
labor union pursuant to the Collective Bargaining Agreement,as in the instant
case. Dismissals must not be arbitrary and capricious. Due process must be
observed in dismissing an employee because it affects not only his position but
also his means of livelihood. Employers should therefore respect and protect the
rights of their employees, which include the right to labor. . . .
xxx xxx xxx
(Emphasis supplied.)
In Manila Cordage Company v. Court of industrial Relations, et al., 10 the Court stressed the
requirement of good faith on the part of the company in dismissing the complainant and in
effect held that precipitate action in dismissing the complainant is indication of lack of good
faith.
xxx xxx xxx
The contention of the petitioners that they acted in good faith in dismissing the
complainants and, therefore, should not be held liable to pay their back wages
has no merit. The dismissal of the complainants by the petitioners was
precipitate and done with undue haste. Considering that the so-called
"maintainance of membership" clause did not clearly give the petitioners the
right to dismiss the complainants if said complainants did not maintain their
membership in the Manco Labor Union, the petitioners should have raised the
issue before the Court of industrial Relations in a petition for permission to
dismiss the complainants.
xxx xxx xxx
(Emphasis supplied.)

5. We conclude that the Company had failed to accord to petitioner Cario the latter's right to
procedural due process. The right of an employee to be informed of the charges against him
and to reasonable opportunity to present his side in a controversy with either the Company or
his own Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a CBA.
An employee is entitled to be protected not only from a company which disregards his rights
but also from his own Union the leadership of which could yield to the temptation of swift and
arbitrary expulsion from membership and hence dismissal from his job.
The Court does not believe, however, that the grant of separation pay to petitioner Cario was
an appropriate response (there having been just cause for the dismissal) to the failure of the
Company to accord him his full measure of due process. Since petitioner Cario had clearly
disdained answering the charges preferred against him within the Union, there was no reason
to suppose that if the Company had held formal proceedings before dismissing him, he would
have appeared in a Company investigation and pleaded his defenses, if he had any, against the
charges against him. There was no indication that the Company had in fact conspired with the
Union to bring about the expulsion and dismissal of petitioner Cario indeed, the Union
membership believed it was Cario who had conspired with the company in the course of
negotiating the CBA. Considering all the circumstances of this case, and considering especially
the nature of the charges brought against petitioner Cario before his own Union, the Court
believes that a penalty of P5,000 payable to petitioner Carino should be quite adequate, the
penalty to be borne by the Company and the Union solidarily The Court also considers that
because the charges raised against petitioner and unanswered by him have marked overtones
of dishonesty, this is not a case where "financial (humanitarian) assistance" to the dismissed
employee is warranted. 12
WHEREFORE, the Court DISMISSED the Petition for certiorari for lack of merit but MODIFIED the
Decision of the public respondent National Labor Relations Commission dated 26 May 1989 by
eliminating the grant of separation pay and in lieu thereof imposing a penalty of P5,000.00
payable to the petitioner to be borne solidarily by the Company and the Union. No
pronouncement as to costs.
Fernan, C.J., Gutierrez, Jr., Bidin and Cortes JJ., concur.