Bank of the Philippine Islands vs BPI Employees Union – Davao Chapter – Federation of Unions in BPI Unibank

G.R. No. 164301 – 642 Phil. 47 / 627 SCRA 590 (2010) – 674 Phil. 609 (2011) – Labor Law – Labor Standards – Security of Tenure vs Unionism

In 2000, Far East Bank (FEB) was absorbed by the Bank of the Philippine Islands (BPI). BPI has an existing Union Shop Clause agreement with the BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (BPI Union) whereby it is a pre-condition that new employees must join the union before they can be regularized otherwise they will not have continued employment. By reason of the failure of the FEB employees to join the union, BPI Union recommended to BPI their dismissal. BPI refused. The issue went to voluntary arbitration where BPI won but the Court of Appeals reversed the Voluntary Arbitrator. BPI appealed to the Supreme Court.

ISSUE: Whether or not the Union Shop agreement violated the constitutional right of security of tenure of the FEB employees absorbed by BPI.

HELD: No. As a general rule, the State protects the workers right to security of tenure. An employee’s services can only be terminated upon just and authorized causes. In this case, the presence of a Union Shop Clause in the CBA between BPI and BPI Union must be respected. Failure of an employee to join the union pursuant to the clause is an authorized cause for BPI not to continue employing the employee concerned – and BPI must respect that provision of the CBA. In the hierarchy of labor rights, unionism is favored over security of tenure. A contrary interpretation of the Union Shop Clause would dilute its efficacy and put the certified union that is supposedly being protected thereby at the mercy of management. Nevertheless, the FEB employees are still entitled to the twin notice rule – this is to afford them ample opportunity to whether or not join the union.

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