Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank
REITERATIONFacts
The Antecedents: Bank of the Philippine Islands (BPI) and Far East Bank and Trust Company (FEBTC) executed an Article and Plan of Merger, approved by the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission. Pursuant to the merger, BPI absorbed all assets and liabilities of FEBTC, and FEBTC employees were hired by BPI with their status and tenure recognized. The Respondent BPI Employees Union-Davao Chapter (Union) is the exclusive bargaining agent for BPI's rank-and-file employees in Davao City. Former FEBTC rank-and-file employees in Davao City, who were not members of any union at the time of the merger, were invited by the Union to a meeting regarding the Union Shop Clause of the existing CBA between BPI and the Union. Some FEBTC employees joined the Union, while others refused or later retracted their membership. The Union requested BPI to implement the Union Shop Clause and terminate the employment of those who refused to join or who retracted their membership. After management inaction, the issue was referred to the Grievance Committee and subsequently to voluntary arbitration. Procedural History: The Voluntary Arbitrator ruled in favor of BPI, holding that the absorbed FEBTC employees were not covered by the Union Shop Clause because they were absorbed by operation of law and not hired as new employees. The Union appealed to the Court of Appeals, which reversed the Voluntary Arbitrator's decision, ruling that the absorbed employees should be considered 'new' employees for purposes of the Union Shop Clause. The Petition: BPI filed a petition for review with the Supreme Court, questioning the Court of Appeals' ruling that former FEBTC employees should be considered 'new' employees for the application of the Union Shop Clause.
Issue(s)
Whether or not the Court of Appeals gravely erred in ruling that the former FEBTC employees should be considered 'new' employees of BPI for purposes of applying the Union Shop Clause of the CBA. Whether or not the Court of Appeals gravely erred in finding that the Voluntary Arbitrator’s interpretation of the coverage of the Union Shop Clause is 'at war with the spirit and the rationale why the Labor Code itself allows the existence of such provision.'
Ruling
The petition is DENIED. The Decision of the Court of Appeals is AFFIRMED, subject to a thirty (30) day notice requirement for former FEBTC employees to join the union before demanding termination. Former FEBTC employees who opt not to become union members but qualify for retirement shall receive their retirement benefits in accordance with law, the applicable retirement plan, or the CBA.
Ratio Decidendi
On the issue of whether former FEBTC employees should be considered 'new' employees for the purpose of applying the Union Shop Clause: The Court held that absorbed employees are considered 'new employees' under the Union Shop Clause of the CBA. The Court reasoned that the CBA does not distinguish how a regular employee attains such status, and the term 'new employees' is used broadly. The Court emphasized that the purpose of a union shop clause is to promote unionism and ensure the continued existence of the union, which would be undermined if absorbed employees were excluded. The Court found that the absorbed employees, like other new regular employees, belong to the same bargaining unit, enjoy the same CBA benefits, and entered BPI's employ after the CBA was in effect, thus they should be subject to the same obligations. The Court rejected the argument that absorbed employees are assets or liabilities, stating that human beings are not considered such and that their absorption was a voluntary act of the banks, not an operation of law. On the issue of whether the Court of Appeals' interpretation is contrary to the spirit and rationale of the Labor Code: The Court affirmed that the Court of Appeals' interpretation aligns with the spirit and rationale of the Labor Code and the policy of promoting unionism. The Court reiterated that union security clauses are not a restriction of the right to freedom of association but rather a means to encourage workers to join and support their labor union. The Court found that excluding absorbed employees would create an unfair situation where they enjoy the fruits of the union's labor without contributing, potentially disturbing industrial peace. The Court also noted that the employer, BPI, was the only party interested in pursuing the appeal, while the affected employees did not contest the Court of Appeals' decision, indicating their acquiescence.
Main Doctrine
Absorbed employees of a merged corporation are considered 'new employees' for the purpose of applying the union shop clause in the Collective Bargaining Agreement (CBA) of the surviving corporation, unless expressly excluded by the CBA's terms. The right not to join a union is not absolute and must yield to the policy of promoting unionism and maintaining industrial peace.