G.R. No. 164301

G.R. No. 164301 – BANK OF PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO CHAPTER FEDERATION OF UNIONS IN BPI UNIBANK

Promulgated:

August 10, 2010

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DISSENTING OPINION

CARPIO, J.:

I dissent.

The petition calls upon this Court to review the Court of Appeals decision which reversed the decision of the Voluntary Arbitrator. The Voluntary Arbitrator ruled that the FEBTC employees absorbed by BPI are not covered by the union shop clause in the CBA between BPI and BPI Employees Union (Union) because said absorbed employees are not “new employees” and they “cannot be compelled to join the Union as it is their constitutional right to join or not to join any organization.”

In its Memorandum, petitioner BPI reiterated that “the State policy of promoting unionism should not be blindly and indiscriminately implemented at the expense of other rights as enshrined in the Constitution and the laws.” Petitioner discussed the protection of the rights of workers as provided in the Constitution and the Labor Code. We quote the pertinent portion of petitioner’s Memorandum, to wit:

Article II, [S]ection 18 of the 1987 Constitution x x x provides:

The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

One of the rights sought to be protected is the right of workers to self-organization and to form, join, or assist labor organizations of their own choosing. (Articles 3 and 243, Labor Code) In this regard, the Labor Code also declares as a policy of the State the fostering of a free and voluntary organization of a strong and united labor movement. (Article 211(A)(c), Labor Code)

Consequently, the Labor Code declares that it shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization, which includes the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection. (Article 246, Labor Code)

In Victoriano v. Elizalde Rope Workers’ Association, et al. (G.R. No. L-25246, September 12, 1974), the Supreme Court declared that the right to join a union includes the right to abstain from joining any union, for a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power, whereby an employee may, as he pleases, join or refrain from joining an association. In as much as what both the Constitution and the Labor Code have recognized and guaranteed to the employee is the “right” to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations.

Indeed, the right to abstain from joining labor organizations may be curtailed or restricted by union security agreements, such as the Union Shop Clause. However, being, in a sense, a derogation of the freedom or right NOT to join any labor organization, this Honorable Court’s strict and restrictive enforcement of union security agreements is clearly warranted and justified. (Emphasis supplied)

Respondent Union requested petitioner BPI to implement the union shop clause of the CBA against absorbed FEBTC employees who refused to join the Union, and to terminate their employment pursuant to the union shop clause.

BPI, independently of the absorbed FEBTC employees, has the right to challenge the constitutionality of the union shop clause as applied to the absorbed FEBTC employees because BPI is being compelled, against its best interests, to terminate their employment if they do not join the Union. Besides, this Court cannot adopt as part of its jurisprudence a practice that clearly violates a fundamental constitutional right just because the aggrieved employees gave up the fight to protect such right.

The Constitution guarantees the fundamental right of all workers to “self-organization.” The right to “self-organization” is a species of the broader constitutional right of the people “to form unions, associations, or societies for purposes not contrary to law,” which right “shall not be abridged.”

The right of workers to self-organization is protected under the Labor Code which provides that workers “shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purpose of collective bargaining.” The Code proscribes the abridgment of this right, stating that: “It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization. Such right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing x x x.”

The right of workers to self-organization means that workers themselves voluntarily organize, without compulsion from outside forces. “Self-organization” means voluntary association without compulsion, threat of punishment, or threat of loss of livelihood. Workers who “self-organize” are workers who on their own volition freely and voluntarily form or join a union. Compulsory membership is anathema to “self-organization.”

The right to self-organize includes the right not to exercise such right. Freedom to associate necessarily includes the freedom not to associate. Thus, freedom to join unions necessarily includes the freedom not to join unions. Reyes v. Trajano cannot be any clearer on this point:

Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to exercise such a conferred right. (Emphasis supplied)

Reyes was decided on 2 June 1992 under the 1987 Constitution. Even prior to Reyes, this Court already declared in Victoriano v. Elizalde Rope Workers’ Union, decided on 12 September 1974 under the 1973 Constitution, that:

What the Constitution and Industrial Peace Act recognize and guarantee is the ‘right’ to form or join associations. Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a ‘right,’ it can be safely said that whatever theory one subscribes to, a right comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for himself without being prevented by law; second, power, whereby an employee may, as he pleases, join or refrain from joining an association. It is therefore the employee who should decide for himself whether he should join or not an association; and should he choose to join, he himself makes up his mind as to which association he would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization at any time x x x. It is clear, therefore, that the right to join a union includes the right to abstain from joining any union. (Citations omitted) Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the employee, is the ‘right’ to join associations of his choice, it would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any association. (Emphasis supplied)

The ruling in Victoriano has been reiterated in a plethora of cases, including Basa v. Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas (1974), Anucension v. National Labor Union (1977), Gonzales v. Central Azucarera de Tarlac Labor Union (1985), and Knitjoy Manufacturing, Inc. v. Ferrer-Calleja (1992). In the case of Philips Industrial Development, Inc. v. NLRC, decided on 25 June 1992, this Court held:

x x x in holding that they are included in the bargaining unit for the rank and file employees of PIDI, the NLRC practically forced them to become members of PEO-FFW or to be subject to its sphere of influence, it being the certified bargaining agent for the subject bargaining unit. This violates, obstructs, impairs and impedes the service engineers’ and the sales representatives’ constitutional right to form unions or associations and to self-organization. (Emphasis supplied)

Thus, it is the worker who should personally decide whether or not to join a labor union. The union, the management, the courts, and even the State cannot decide this for the worker, more so against his will.

The State encourages union membership to protect an individual employee from the power of the employer. A union is an instrumentality utilized to achieve the objective of protecting the rights of workers. In Guijarno v. Court of Industrial Relations, we clarified the purpose of a union:

x x x The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work." (Art. II, Sec. 9 of the Revised Constitution) Where does that leave a labor union, it may be asked. Correctly understood, it is nothing but the means of assuring that such fundamental objectives would be achieved. It is the instrumentality through which an individual laborer who is helpless as against a powerful employer may, through concerted effort and activity, achieve the goal of economic well-being. That is the philosophy underlying the Industrial Peace Act. (Republic Act No. 875 (1953)) For, rightly has it been said that workers unorganized are weak; workers organized are strong. Necessarily then, they join labor unions. (Emphasis supplied)

To further strengthen the powers of a union, the State has allowed the inclusion of union security clauses, including a “union shop” (the type of union security clause involved in this case), in collective bargaining agreements (CBA). In a “union shop,” employees who are not union members at the time of signing of the contract need not join the union, but all workers hired thereafter must join. Non-members may be hired, but to retain employment must become union members after a certain period. The ponencia points out the validity in this jurisdiction of the more stringent union security of “closed shop” and its applicability to old employees who are non-union members at the time of effectivity of the CBA. In a “closed shop,” only union members can be hired by the company and they must remain union members to retain employment in the company.

As explained in Guijarno, it was to “further increase the effectiveness of [unions] that a closed shop has been allowed.” However, this undertaking did not come without detrimental effects on the workers themselves, such that in Confederated Sons of Labor v. Anakan Lumber Co., we declared that a closed shop is “so harsh that it must be strictly construed” and that “doubts must be resolved against [it].” We also ruled in Anakan that “In order that an employer may be deemed bound, under a collective bargaining agreement, to dismiss employees for non-union membership, the stipulation to this effect must be so clear and unequivocal as to leave no room for doubt thereon.”

Guijarno elucidated the downside of a closed shop and its compulsory membership, thus:

x x x To further increase the effectiveness of such organizations, a closed shop has been allowed. It could happen, though, that such a stipulation which assures further weight to a labor union at the bargaining table could be utilized against minority groups or individual members thereof. x x x Respondent Court, it would appear, was not sufficiently alert to such a danger. What is worse, it paid no heed to the controlling doctrine which is merely a recognition of a basic fact in life, namely, that power in a collectivity could be the means of crushing opposition and stifling the voices of those who are in dissent. The right to join others of like persuasion is indeed valuable. An individual by himself may feel inadequate to meet the exigencies of life or even to express his personality without the right to association being vitalized. It could happen though that whatever group may be in control of the organization may simply ignore his most-cherished desires and treat him as if he counts for naught. The antagonism between him and the group becomes marked. Dissatisfaction if given expression may be labeled disloyalty. In the labor field, the union under such circumstances may no longer be a haven of refuge, but indeed as much of a potential foe as management itself. Precisely with the Anakan doctrine, such an undesirable eventuality has been sought to be minimized, if not entirely avoided. x x x. (Emphasis supplied)

Justice Fernando, in his concurring opinion in Victoriano, highlighted the importance of freedom of association, while referring to closed shop and its coercive nature with manifest disapproval, viz:

x x x Thought must be given to the freedom of association, likewise an aspect of intellectual liberty. For the late Professor Howe a constitutionalist and in his lifetime the biographer of the great Holmes, it even partakes of the political theory of pluralistic sovereignty. So great is the respect for the autonomy accorded voluntary societies. Such a right implies at the very least that one can determine for himself whether or not he should join or refrain from joining a labor organization, an institutional device for promoting the welfare of the working man. A closed shop, on the other hand, is inherently coercive. That is why, as is unmistakably reflected in our decisions, the latest of which is Guijarno v. Court of Industrial Relations, it is far from being a favorite of the law. For a statutory provision then to further curtail its operation, is precisely to follow the dictates of sound public policy. (Emphasis supplied, citations omitted)

In the United States, closed shops, which require compulsory union membership for all employees, have been declared unlawful since 1947, while union shops, which allow old employees to remain non-union members but require new employees to become members after a certain period, are generally allowed. Previously, closed shops, union shops and agency shops were all permitted under Section 8(3) of the National Labor Relations Act of 1935 (NLRA), also known as the Wagner Act. But in 1947, the US Congress “reacted to widespread abuses of closed-shop agreements by banning such arrangements” through the enactment of the Labor Management Relations Act (LMRA), or the Taft-Hartley Act, which amended the NLRA by adding Section 8(a)(3). In National Labor Relations Board v. General Motors Corporation, the US Supreme Court explained that the Taft-Hartley Act amendments were intended to accomplish twin purposes, one of which is to abolish closed shop to eliminate serious abuses of compulsory unionism.

These additions were intended to accomplish twin purposes. On the one hand, the most serious abuses of compulsory unionism were eliminated by abolishing the closed shop. On the other hand, Congress recognized that in the absence of a union-security provision ‘many employees sharing the benefits of what unions are able to accomplish by collective bargaining will refuse to pay their share *741 of the cost.’ S.Rep.No.105, 80th Cong., 1st Sess., p. 6, 1 Leg.Hist.L.M.R.A. 412. Consequently, under the new law ‘employers would still be permitted to enter into agreements requiring all the employees in a given bargaining unit to become members 30 days after being hired,’ but ‘expulsion from a union cannot be a ground of compulsory discharge if the worker is not delinquent in paying his initiation fee or dues.’ S.Rep.No.105, p. 7, 1 Leg.Hist.L.M.R.A. 413. The amendments were intended only to ‘remedy the most serious abuses of compulsory union membership and yet give employers and unions who feel that such agreements promoted stability by eliminating ‘free riders’ the right to continue such arrangements.’ Ibid. As far as the federal law was concerned, all employees could be required to pay their way. The bill ‘abolishes the closed shop but permits voluntary agreements for requiring such forms of compulsory membership as the union shop or maintenance of membership ***.’ S.Rep.No.105, p. 3, 1 Leg.Hist.L.M.R.A. 409.

Union shops and agency shops are still permitted under Section 8(a)(3) of the NLRA as amended; however, Section 14(b) authorizes States to exempt themselves from Section 8(a)(3) and to enact “right-to-work” laws prohibiting union or agency shops. Where union shop agreements are allowed, workers may be required to belong to labor unions as a condition of their employment, so long as such workers are required to render nothing other than financial support to the union and so long as the unions themselves do not attempt to use union shop agreements as vehicles for imposing ideological conformity. Thus, “membership” in unions as a condition of employment is whittled down to its financial core.

Although United States laws and jurisprudence on closed shops and union shops, as they now stand, are different from our own laws, it may be worthwhile to treat them with careful regard since our Labor Code and its precursor, the Industrial Peace Act, are patterned after US labor laws. We have previously ruled that when a statute has been adopted from another state or country and such statute has previously been construed by the courts of such state or country, the statute is deemed to have been adopted with the construction given to it. Where our labor statutes are based on statutes in foreign jurisdiction, the decisions of the high courts in those jurisdictions construing and interpreting the Act are given persuasive effects in the application of Philippine law.

Union security agreements were adopted in our jurisdiction primarily to safeguard the rights of the working man. Where utilized to achieve a contrary purpose, these union devices should be curtailed and carefully maneuvered to remain within the periphery of labor protection.

In this case, the CBA between BPI and the BPI Employees Union contains a union shop clause requiring that “new employees” of BPI join the Union within 30 days after they become regularized, as a condition for their continued employment.

The ponencia points out that the absorption of FEBTC employees was purely voluntary on the part of BPI, and was not mandated by law or by a contract between the merging entities. The ponencia holds that in the absence of a stipulation in the plan of merger regarding the absorption of FEBTC’s employees by BPI, the latter has no obligation to absorb or continue the employment of said FEBTC employees.

I do not agree.

Upon merger, BPI, as the surviving entity, absorbs FEBTC and continues the combined business of the two banks. BPI assumes the legal personality of FEBTC, and automatically acquires FEBTC’s rights, privileges and powers, as well as its liabilities and obligations. Section 80 of Batas Pambansa Blg. 68, otherwise known as “The Corporation Code of the Philippines” enumerates the effects of merger, to wit:

1. The constituent corporations shall become a single corporation which, in case of merger, shall be the surviving corporation designated in the plan of merger; x x x

2. The separate existence of the constituent corporations shall cease, except that of the surviving x x x corporation;

3. The surviving x x x corporation shall possess all the rights, privileges, immunities and powers and shall be subject to all the duties and liabilities of a corporation organized under this Code;

4. The surviving x x x corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises of each of the constituent corporations; and all property, real or personal, and all receivables due on whatever account, including subscriptions to shares and other choses in action, and all and every other interest of, or belonging to, or due to each constituent corporation, shall be deemed transferred to and vested in such surviving x x x corporation without further act or deed; and

5. The surviving x x x corporation shall be responsible and liable for all the liabilities and obligations of each of the constituent corporations in the same manner as if such surviving x x x corporation had itself incurred such liabilities or obligations; and any pending claim, action or proceeding brought by or against any of such constituent corporations may be prosecuted by or against the surviving or consolidated corporation. The rights of creditors or liens upon the property of any of such constituent corporations shall not be impaired by such merger. (Emphasis supplied)

Among the obligations and liabilities of FEBTC is to continue the employment of FEBTC employees. These employees have already acquired certain employment status, tenure, salary and benefits. They are regular employees of FEBTC. Since after the merger, BPI has continued the business of FEBTC, FEBTC’s obligation to these employees is assumed by BPI, and BPI becomes duty-bound to continue the employment of these FEBTC employees.

Under Article 279 of the Labor Code, regular employees acquire security of tenure, and hence, may not be terminated by the employer except upon legal grounds. These grounds are the “just causes” enumerated under Article 282 of the Code, which include serious misconduct or willful disobedience by the employee, gross habitual neglect of duties, fraud or willful breach of employer’s trust, and commission of a crime; or “authorized causes” under Article 283, which include installation of labor saving devices, redundancy, retrenchment to prevent losses, and closing or cessation of business operations. Without any of these legal grounds, the employer cannot validly terminate the employment of regular employees; otherwise, the employees’ right to security of tenure would be violated.

The merger of two corporations does not authorize the surviving corporation to terminate the employees of the absorbed corporation in the absence of just or authorized causes as provided in Articles 282 and 283 of the Labor Code. Merger of two corporations is not one of the just or authorized causes for termination of employment. Not even a union shop agreement is just or authorized cause to terminate a permanent employee. A union shop clause is only a ground to terminate a probationary employee who refuses to join the union as a condition for continued employment. Once an employee becomes permanent, he is protected by the security of tenure clause in the Constitution, and he can be terminated only for just or authorized causes as provided by law.

The right to security of tenure of regular employees is enshrined in the Constitution. This right cannot be eroded, let alone be forfeited except upon a clear and convincing showing of a just and lawful cause. In this case, there is no showing that legal ground exists to warrant a termination of the FEBTC employees. Therefore, BPI is obligated to continue FEBTC employees’ regular employment in deference to their constitutional right to security of tenure.

Meanwhile, the FEBTC employees had no choice but to accept the absorption by way of merger. A merger is a legitimate management prerogative which cannot be opposed or rejected by the employees of the merging entities. Hence, the absorption by BPI of the FEBTC employees was not within the FEBTC employees’ control, and the latter had no choice but to be absorbed by BPI, unless they opted to give up their means of livelihood.

Upon the effectivity of the CBA in this case, BPI employees who were members of the Union were required to maintain their membership as a condition for continued employment. On the other hand, the then non-union employees of BPI were not compelled to join the Union — they were given a choice whether or not to join the Union at no risk to their continued employment. In other words, non-union BPI employees could opt not to join the Union and still retain their employment with BPI. Meanwhile, “new employees” or those who were hired by BPI after the effectivity and during the life of the CBA were automatically required to join the Union within 30 days after they were regularized.

Existing BPI employees who were non-union members were not compelled to join the Union as a condition for their continued employment, as this would violate their fundamental constitutional right not to join a union. This freedom of choice exercised by non-union BPI employees was in recognition of their fundamental constitutional right to join or not to join a union which is part of their broader constitutional right to form associations. To force these employees to join a labor union at the risk of losing their means of livelihood would violate the Constitution.

Thus, under the CBA, the BPI employees required to acquire or maintain union membership as a condition for their continued employment are (1) the union members at the time of the effectivity of the CBA and (2) the “new employees” who were hired during the effectivity of the CBA. Non-union BPI employees at the time of the effectivity of the CBA were not, and are still not, required to join the Union.

In the case of “new employees” hired by BPI during the life of the CBA, there is no violation of their constitutional right not to join a union. At the time of their application for employment with BPI, or at the latest, at the time they were hired by BPI, these employees knew that they were required to join the Union within 30 days upon regularization as a condition for continued employment with BPI. In short, the employees knew beforehand that they had to join the Union to be employed with BPI. Thus, these employees had a clear choice whether or not to be employed with BPI, which requires that they must join the Union upon regularization.

The ponencia holds that the absorbed FEBTC employees should be considered as “new employees” of BPI, and therefore, required to join the Union pursuant to the union shop clause of the CBA. The ponencia deprives the absorbed employees of their fundamental constitutional right to choose whether or not to join the Union.

I cannot subscribe to this view.

The former FEBTC employees should not be considered as “new employees” of BPI. The former FEBTC employees were absorbed by BPI immediately upon merger, leaving no gap in their employment. The employees retained their previous employment status, tenure, salary and benefits. This clearly indicates the intention of BPI to assume and continue the employer-employee relations of FEBTC and its employees. The FEBTC employees’ employment remained continuous and unchanged, except that their employer, FEBTC, merged with BPI which, as the surviving entity, continued the combined business of the two banks.

Thus, the former FEBTC employees are immediately regularized and made permanent employees of BPI. They are not subject to any probationary period as in the case of “new employees” of BPI. The 30-day period within which regularized “new employees” of BPI must join the Union does not apply to former FEBTC employees who are not probationary employees but are immediately regularized as permanent employees of BPI. In short, the former FEBTC employees are immediately given the same permanent status as old employees of BPI.

The absorbed FEBTC employees are not “new employees” who are seeking jobs for the first time. These absorbed employees are employees who have been working with FEBTC for years, or even decades, and were only absorbed by BPI because of the merger. Without the merger, these employees would have remained FEBTC employees without being required to join a union to retain their employment. These absorbed employees are recognized by BPI and even by the Union as permanent employees immediately upon their absorption by BPI because these employees do not have to go through a probationary period. These absorbed employees are different from the newly-hired employees of BPI, as these absorbed employees already had existing employment tenure, and were earning a livelihood when they were told that they had to join the Union at the risk of losing their livelihood.

To require these absorbed employees to join the Union at the risk of losing their jobs is akin to forcing an existing non-union BPI employee to join the Union on pain of termination. In the same way that an existing non-union BPI employee is given the constitutional right to choose whether or not to join a union, an absorbed employee should be equally given the same right. And this right must be conferred to the absorbed employee upon the effectivity of the merger between FEBTC and BPI.

Indisputably, the right to join or not to join a Union is part of the fundamental constitutional right to form associations. In Sta. Clara Homeowners’ Association v. Gaston, we held that, “The constitutionally guaranteed freedom of association includes the freedom not to associate. The right to choose with whom one will associate oneself is the very foundation and essence of that partnership. It should be noted that the provision guarantees the right to form an association. It does not include the right to compel others to form or join one.” Thus, to compel the absorbed FEBTC employees to join the Union at the risk of losing their jobs is violative of their constitutional freedom to associate.

To consider the former FEBTC employees not “new employees” of BPI for the purpose of the union shop clause of the CBA does not necessarily mean that the FEBTC employees are considered “old employees” of BPI, hired by BPI on the date that the employees were hired by FEBTC. The former FEBTC employees are not old BPI employees. They are former FEBTC employees absorbed by BPI upon effectivity of the merger. Nevertheless, as absorbed employees, these former FEBTC employees cannot be relegated to being “new employees” of BPI within the contemplation of the union shop clause of the CBA.

If the absorbed employees are treated as “new employees,” and they refuse to join the Union, the Union can ask BPI to terminate their employment. And BPI can validly terminate their employment pursuant to the union shop clause. It is well-settled that termination of employment by virtue of a union security clause embodied in a CBA is recognized in our jurisdiction, and an employer who merely complies in good faith with the union’s request for the dismissal of an employee pursuant to the CBA cannot be considered guilty of unfair labor practice.

Upon such termination, the absorbed employees are not entitled to separation pay under the law. Grant of separation pay to employees dismissed pursuant to a union shop clause of a CBA is not a statutory requirement. Worse, assuming that the absorbed employees have already reached the age of 60 years or above, as “new employees” of BPI, they will not be entitled to retirement benefits under the law. For instance, an absorbed employee who is 60 years old or above, but less than 65 years which is the compulsory retirement age, cannot avail of optional retirement benefits since the law requires that the employee “has served at least five (5) years in the said establishment.” Considering that the absorbed employees are required to join the Union within 30 days from regularization, and the law requires that probationary employment shall not exceed six months from the date the employee started working, after which the employee shall be considered a regular employee, it may be assumed that the absorbed employees had not yet served BPI for at least five years when required to join the Union. If, on the other hand, the absorbed employee has already reached the compulsory retirement age of 65 years, then neither can the employee avail of any retirement benefit since the law provides that a compulsory retiree shall be entitled to “at least one-half (½) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.” Assuming that the absorbed employee has not yet rendered service in BPI for at least six months when said employee reached the compulsory retirement age of 65 years, then the employee will not be entitled to receive any retirement benefit. Thus, to consider the absorbed FEBTC employees as “new employees” of BPI can have dire consequences on the absorbed employees who refuse to join the Union, not the least of which is the forfeiture of benefits which should be properly accorded these employees after years, or probably even decades, of loyal service to FEBTC.

The ponencia points to Article 248 (e) of the Labor Code which states, thus: “x x x Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. x x x”

The above provision presupposes that the parties agreed on “requiring membership in a recognized collective bargaining agent as a condition for employment,” with the stated exception. In this case, BPI and the Union agreed on a union shop clause concerning “new employees” only. We quote:

Section 2. Union Shop – New employees falling within the bargaining unit as defined in Article I of the Agreement, who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued employment. x x x.” (Emphasis in the original)

As previously discussed, the absorbed FEBTC employees are NOT and cannot be considered as “new employees” within the contemplation of the union shop clause.

Verily, BPI and the Union never agreed on requiring the former FEBTC employees to join the Union as a condition for their employment by BPI. On the contrary, BPI is questioning the applicability of the union shop clause to said employees.

The ponencia states, “When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of a Union Shop Clause, a form of discrimination or a derogation of the freedom or right not to join any labor organization occurs but these are valid restrictions because they are in favor of unionism.” In this case, a derogation of the employees’ fundamental constitutional right not to join a union is being done without a determination of whether the employees are in favor of unionism. Certainly, the union shop clause in a CBA cannot prevail over the fundamental constitutional right of a worker to join or not to join a union.

Finally, the ponencia agrees with the Court of Appeals that sustaining petitioner’s position will result in an awkward and unfair situation wherein the absorbed employees will be in a better position than the existing BPI employees, since the latter will be required to pay monthly union dues, while the absorbed employees will “enjoy the fruits of labor of the [union] and its members for nothing in exchange.” This is not correct. Section 248(e) of the Labor Code provides that, “Employees of an appropriate collective bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement x x x.” The absorbed FEBTC employees who refuse to join the Union will not be free riders.

We held in Holy Cross of Davao College, Inc. v. Joaquin that the collection of agency fees in an amount equivalent to union dues and fees, from employees who are not union members, is recognized by Article 248 (e) of the Labor Code. The employee’s acceptance of benefits resulting from a CBA justifies the deduction of agency fees from his pay and the union’s entitlement thereto. In this aspect, the legal basis of the union’s right to agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the established principle that non-union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the bargaining union.

In the present case, since the absorbed FEBTC employees will pay all union dues and fees, there is no reason to force them to join the Union except to humiliate them by trampling upon their fundamental constitutional right to join or not to join a union. This the Court should not allow.

It is this Court’s solemn duty to implement the State policy of promoting unionism. However, this duty cannot be done at the expense of a fundamental constitutional right of a worker. We cannot exalt union rights over and above the freedom and right of employees to join or not to join a union.

Accordingly, I vote to GRANT the petition.

ANTONIO T. CARPIO

Associate Justice