G.R. No. 149552 : March 10, 2010

GENERAL MILLING CORPORATION, Petitioner, v. Virgilio Pino, et al., Respondents.



The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was the sole and exclusive bargaining agent of the rank and file employees of GMC in Lapu-Lapu City.On November 30, 1991, IBM-Local 31, through its officers and board members entered into a CBA with GMC.The effectivity of the said CBA was retroactive to August 1, 1991.

Casio,et al.were regular employees of GMC with daily earnings ranging fromP173.75 toP201.50, and length of service varying from eight to 25 years. Casio was elected IBM-Local 31 President for a three-year term in June 1991, while his co-respondents were union shop stewards.

Rodolfo Gabiana, the IBM Regional Director for Visayas and Mindanao, furnished Casio,et al. with copies of the Affidavits of GMC employees Basilio Inoc and Juan Potot, charging Casio,et al. with acts inimical to the interest of the union.Through the same letter, Gabiana gave Casio,et al. three days from receipt thereof within which to file their answers or counter-affidavits.However, Casio,et al. refused to acknowledge receipt of Gabianas letter.

Subsequently, on February 29, 1992, Pino,et al., as officers and members of the IBM-Local 31, issued a Resolutionexpelling Casio,et al. from the union.

Gabiana then informed the company of the expulsion of Casio,et al. from the union of IBM-Local 31 officers and board members.Gabiana likewise requested that Casio,et al. be immediately dismissed from their work for the interest of industrial peace in the plant.

Gabiana reiterated the demand of IBM-Local 31 that GMC dismiss Casio,et al., with the warning that failure of GMC to do so would constitute gross violation of the existing CBA and constrain the union to file a case for unfair labor practice against GMC.

Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabianas request to terminate the employment of Casio,et al.GMC terminated the employment of Casio,et al. effective April 24, 1992 and placing the latter under preventive suspension for the meantime.

On March 27, 1992, Casio,et al., in the name of IBM-Local 31, filed a Notice of Strike and alleged as bases for the strike the illegal dismissal of union officers and members, discrimination, coercion, and union busting.

Casio,et al.filed before NLRC a complaint against GMC and Pino,et al. for unfair labor practice.

Finding that NLRC Case No. RAB-VII-08-0639-92 did not undergo voluntary arbitration, the Labor Arbiter dismissed the case for lack of jurisdiction, but endorsed the same to the NCMB-RO.Prior to undergoing voluntary arbitration before the NCMB-RO, however, the parties agreed to first submit the case to the grievance machinery of IBM-Local 31.On September 7, 1994, Casio,et al. filed their Complaint with Pino, the Acting President of IBM-Local 31.Pino acknowledged receipt of the Complaint and assured Casio,et al. that they would be seasonably notified of whatever decision and/or action the Board may have in the instant case. When the IBM-Local 31 Board failed to hold grievance proceedings on the Complaint of Casio,et al., NCMB Voluntary Arbitrator Canonoy-Morada assumed jurisdiction over the same.

VA Canonoy-Morada dismissed the complaint for lack of merit, but granted separation pay and attorneys fees to Casio,et al.

On appeal, the CA granted the writ ofcertiorariand set aside the Voluntary Arbitration Award.The appellate court ruled that while the dismissal of Casio,et al., was made by GMC pursuant to a valid closed shop provision under the CBA, the company, however, failed due process in implementing the said dismissal.

The Motion for Reconsideration of GMC was denied by the CA. Hence, this petition.


Whether or not Casio, et al. was illegally dismissed?


The petition is denied.


There are two aspects which characterize the concept of due process under the Labor Code: one is substantive whether the termination of employment was based on the provision of the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural the manner in which the dismissal was effected.

In the case at bar, the dismissal of Casio, et al. was indeed illegal, having been done without just cause and the observance of procedural due process.


Union security is a generic term, which is applied to and comprehends closed shop, union shop,maintenance of membership, or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment.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. A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.

Union security clauses are recognized and explicitly allowed under Article 248(e)of the Labor Code.

It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer.For this reason, the law has allowed stipulations for union shop and closed shop as means of encouraging workers to join and support the union of their choice in the protection of their rights and interestvis-visthe employer.

Moreover, a stipulation in the CBA authorizing the dismissal of employees are of equal import as the statutory provisions on dismissal under the Labor Code, since a CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor.

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 decision of the union to expel the employee from the union.These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.

There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II.IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member.

It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to terminate the employment of Casio,et al. as a necessary consequence of their expulsion from the union.

It is the third requisite that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio,et al. which appears to be lacking in this case.

Records show that GMC terminated the employment of Casio,et al. relying upon the Resolution dated February 29, 1992 of Pino,et al. expelling Casio,et al. from IBM-Local 31; Gabianas Letters dated March 10 and 19, 1992 demanding that GMC terminate the employment of Casio,et al. on the basis of the closed shop clause in the CBA; and the threat of being sued by IBM-Local 31 for unfair labor practice.The letter made no mention at all of the evidence supporting the decision of IBM-Local 31 to expel Casio,et al. from the union.GMC never alleged nor attempted to prove that the company actually looked into the evidence of IBM-Local 31 for expelling Casio,et al. and made a determination on the sufficiency thereof.Without such a determination, GMC cannot claim that it had terminated the employment of Casio,et al. for just cause.

The failure of GMC to make a determination of the sufficiency of evidence supporting the decision of IBM-Local 31 to expel Casio,et al. is a direct consequence of the non-observance by GMC of procedural due process in the dismissal of employees.

The records of this case are absolutely bereft of any supporting evidence to substantiate the bare allegation of GMC that Casio,et al. were accorded due process by IBM-Local 31.There is nothing on record that would indicate that IBM-Local 31 actually notified Casio,et al. of the charges against them or that they were given the chance to explain their side. It was not established that said letter-complaint charging Casio,et al. with acts inimical to the interest of the union was properly served upon Casio, that Casio willfully refused to accept the said letter-notice, or that Casio had the authority to receive the same letter-notice on behalf of the other employees similarly accused.


The twin requirements of notice and hearing constitute the essential elements of procedural due process.The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employers decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.

In the case at bar, Casio,et al. did not receive any other communication from GMC, except the written notice of termination dated March 24, 1992.GMC, by its own admission, did not conduct a separate and independent investigation to determine the sufficiency of the evidence supporting the expulsion of Casio,et al. by IBP-Local 31.It straight away acceded to the demand of IBP-Local 31 to dismiss Casio,et al.