CASE 2011-0214: HON. JUDGE JESUS B. MUPAS, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 112 AND CARMELITA F. ZAFRA, CHIEF ADMINISTRATIVE OFFICER,     DSWD VS. PEOPLE OF THE PHILIPPINES, THRU ITS DULY AUTHORIZED REPRESENTATIVE, THE LEGAL SERVICE OF THE DSWD, QUEZON CITY AND THE OFFICE OF THE SOLICITOR GENERAL (G.R. NO. 189365, 12 OCTOBER 2011, SERENO, J.) SUBJECT: ORDER OF RTC GRANTING DEMURRER TO EVIDENCE REVERSED BY CA AND SC. NOT VIOLATIVE OF DOUBLE JEOPARDY RULE. (BRIEF TITLE: JUDGE MUPAS VS. PEOPLE).

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DISPOSITIVE:

WHEREFORE, we DENY the Petition and affirm in toto the 19 March 2009 Decision of the Court of Appeals and its 28 August 2009 Resolution. Let the name of Judge Jesus B. Mupas be stricken off as petitioner, as such appellation unilaterally made by petitioner Carmelita F. Zafra, is improper.       

SO ORDERED.

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SUBJECT/DOCTRINE/DIGEST:

200 CASES OF MILK WAS TAKEN FROM DSWD WAREHOUSE ALLEGEDLY BY THE SISTER OF PETITIONER ZAFRA (A DSWD SUPPLY OFFICER)  WITH OTHER COMPANIONS. ZAFRA’S ROLE WAS TO ARRANGE FOR THE WITHDRAWAL OF SAID CASES OF MILK. CIVIL SERVICE COMMISSION FOUND ZAFRA LIABLE FOR SIMPLE NEGLECT OF DUTY. OMBUDSMAN FILED CASES FOR ANTI GRAFT AND MALVERSATION. AFTER TRIAL ZAFRA FILED DEMURRER TO EVIDENCE. JUDGE MUPAS GRANTED DEMURRER ON THE GROUND THAT THE EVIDENCE DID NOT SHOW DIRECT PARTICIPATION OF ZAFRA IN THE CRIME. C.A. RULED THAT THE ORDER GRANTING DEMURRER WAS VOID BECAUSE THE PROSECUTION PROVED AN  ELEMENT IN MALVERSATION: NEGLIGENCE BY ALLOWING ANOTHER TO COMMIT SUCH MISAPPROPRIATION AND ALSO AN ELEMENT IN ANTI-GRAFT: INEXCUSABLE NEGLIGENCE IN THE WITHDRAWAL OF THE GOODS IN QUESTION.

WAS THE REVERSAL OF THE ORDER GRANTING DEMURRER TO EVIDENCE PROPER, DESPITE THE RULE ON DOUBLE JEOPARDY?

YES. THE DISMISSAL ORDER WAS ISSUED WITH  GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR EXCESS OF JURISDICTION. SUCH DISMISSAL ORDER, BEING CONSIDERED VOID JUDGMENT, DOES NOT RESULT IN JEOPARDY.

As a general rule, an order granting the accused’s demurrer to evidence amounts to an acquittal. There are certain exceptions, however, as when the grant thereof would not violate the constitutional proscription on double jeopardy. For instance, this Court ruled that when there is a finding that there was grave abuse of discretion on the part of the trial court in dismissing a criminal case by granting the accused’s demurrer to evidence, its judgment is considered void, as this Court ruled in People v. Laguio, Jr.:^[1][34]

By this time, it is settled that the appellate court may review dismissal orders of trial courts granting an accused’s demurrer to evidence. This may be done via the special civil action of certiorari under Rule 65 based on the ground of grave abuse of discretion, amounting to lack or excess of jurisdiction. Such dismissal order, being considered void judgment, does not result in jeopardy. Thus, when the order of dismissal is annulled or set aside by an appellate court in an original special civil action via certiorari, the right of the accused against double jeopardy is not violated.^[2][35]          

In the instant case, having affirmed the CA finding grave abuse of discretion on the part of the trial court when it granted the accused’s demurrer to evidence, we deem its consequent order of acquittal void.     

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 Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

SERENO, J.:

          In this Petition for Review on Certiorari under Rule 45, private petitioner seeks the reversal of the Decision^[3][1] dated 19 March 2009 issued by the Court of Appeals (CA) in CA-G.R. SP No. 105199. The CA Decision reversed and set aside the Orders^[4][2] dated 19 December 2007 and 2 June 2008 of the Regional Trial Court of Pasay City (Branch 112), granting her demurrer to evidence in Criminal Case Nos. 02-0371 and 02-0372. Private petitioner also assails the CA Resolution dated 28 August 2009, denying her Motion for Reconsideration.

          As the records and the CA found, private petitioner Carmelita F. Zafra (petitioner Zafra) was Supply Officer V^[5][3] of the Department of Social Welfare and Development (DSWD). On 14 November 1998, she arranged for the withdrawal for replacement, of two hundred (200) cartons of Bear Brand Powdered Milk that were nearing their expiry date. She made the arrangement for their withdrawal through DSWD personnel Marcelina Beltran, Administrative Officer III; and Manuelito Roga, Laborer 1.^[6][4]

          Petitioner Zafra instructed Marcelina Beltran to have someone from the DSWD Property Division withdraw the 200 cartons of milk from the DSWD-VillamorAirbaseReliefOperationCenter(DSWD-VABROC) on 14 November 1998. Beltran relayed this instruction to Roga. On the appointed date, however, no one from the Property Division arrived to pick up the milk cases. Instead, three unidentified persons on board a four-wheeler truck came and hauled the 200 cases of milk. One of the three persons who came to pick up the milk cases at the DSWD-VABROC premises introduced herself as Ofelia Saclayan to Roga, the only DSWD employee present at that time.^[7][5] Saclayan turns out to be the sister of Zafra. The 200 cases of milk withdrawn by Saclayan and her unidentified companions were valued at three hundred six thousand seven hundred thirty-six pesos (P306,736).^[8][6]

          An internal investigation was conducted by the DSWD on the persons involved in the loss of the milk cases. On 06 August 1999, the investigating committee of the DSWD issued a Memorandum^[9][7] entitled “Report and Recommendation on the Loss of the Two Hundred (200) Cases of Bear Brand Powdered Milk from DSWD-VABROC.” In brief, the committee report dismissed petitioner Zafra and her co-employees Beltran and Roga, whom they implicated in the loss of the milk cases. The committee found substantial evidence to hold petitioner Zafra guilty of dishonesty and “negligence of duty.”^[10][8]

The report of the DSWD investigating committee finding petitioner Zafra and her co-employee Beltran guilty of dishonesty and negligence of duty was appealed to the Civil Service Commission (Commission). On 03 December 1999, the Commission promulgated Resolution No. 992652,^[11][9] which slightly modified the findings of the committee. The Resolution, while absolving petitioner Zafra of the charge of dishonesty, found her guilty of simple neglect as follows:

          The Commission has noted, however, that Zafra is not that entirely innocent. For the records disclose that it was she who made representation with the MEGA Commercial, the supplier of said milk, to withdraw and replace those cases of milk that are nearing their expiry dates. Surprisingly, however, after November 14, 1998, when the 200 milk cases of milk were actually withdrawn from VABROC she never made any contact with MEGA Commercial as to what further steps to take on the case, such as to retrieve the loss thereof and have these replaced by the company. Neither did she make any further inquiry as to the condition of milk from VABROC. This unnatural inaction or callousness displayed by Zafra and her utter apathy in the performance of her official functions calls for the imposition of sanctions on her.

                                    …                     …                     …

            Being both government employees, Zafra and Beltran are required to perform their duties and functions with the highest degree of responsibility, integrity, loyalty and efficiency. And since both of them failed on this score, they must suffer the consequences of their negligence.

            WHEREFORE, the respective appeals of Carmelita F. Zafra and Marcelina M. Beltran are hereby dismissed for want of merit. They are however, found guilty only of simple Neglect of Duty for which they are each imposed the penalty of six (6) months suspension without pay. The appealed decision is thus modified accordingly.

            Quezon City, December 03, 1999.^[12][10]  

          On 15 February 2002, the Ombudsman filed two Informations with the Regional Trial Court of Pasay (RTC-Pasay) against petitioner Zafra, Beltran and Roga, docketed as Criminal Case Nos. 02-0371 and 02-0372.

          Under Criminal Case No. 02-0371, petitioner Zafra and her co-accused Beltran and Roga were charged with violating Section 3 (e) of Republic Act No. 3019 (R.A. 3019), otherwise known as the “Anti-Graft and Corrupt Practices Act.” The Information filed in this case reads:

            The undersigned Prosecutor, Office of the Ombudsman hereby accuses Marcelina M. Beltran, Carmelita Zafra, Manuelito T. Roga and Ofelia Saclayan for Violation of Section 3 (e) of RA 3019, as amended, committed as follows: 

That on or about 13 November 1998, or for sometime, prior, or subsequent thereto, in Pasay City, and within the jurisdiction of this Honorable Court, accused Marcelina M. Beltran, Carmelita F. Zafra, Carmelito T. Roga (sic), Administrative Officer III, Supply Officer V, and Laborer I, respectively of the Department of Social Welfare and Development, while in the performance of their official duties, and in connivance with Ofelia Saclayan, a private respondent, with evident bad faith, did then and there, wilfully, unlawfully, and criminally, cause damage or undue injury to the government, particularly the Department of Social Welfare and Development in the amount of Php 306,736.00, by making it appear that the 200 cases of Bear Brand Powdered Milk stocked at the DSWD Villamor Airbase Relief Operation Center (DSWD-VABROC) are about to expire and need to be changed, and thereafter, without complying with the standard operating procedure in withdrawing goods from the bodega, did then and there arrange for the immediate withdrawal of the subject goods on the next day which was a Saturday, a non-working day, and appropriate the said goods for themselves.

CONTRARY TO LAW.^[13][11]   

          Petitioner Zafra, Beltran and Roga were charged with malversation under Article 217 of the Revised Penal Code in Criminal Case No. 02-0372. The Information reads:

The undersigned Ombudsman Prosecutor, Office of the Ombudsman hereby accuses Carmelita Zafra, Marcelina M. Beltran Manuelito T. Roga and Ofelia Saclayan for Malversation under Article 217 of the Revised Penal Code, as amended, committed as follows:

That on or about 13 November 1998, or for sometime prior, or subsequent thereto, in Pasay City, and within the jurisdiction of this Honorable Court, accused Marcelina M. Beltran, Administrative Officer III of the Department of Social Welfare and Development, Villamor Airbase Relief Operation Center (DSWD-VABROC), an accountable public officer by virtue of her being the custodian of the goods inside the DSWD-VABROC bodega, in connivance with Carmelita F. Zafra, and Manuelito T. Roga, Supply Officer IV and Laborer I, respectively of the Department of Social Welfare and Development and with the indispensable cooperation of Ofelia T. Saclayan, a private respondent, did then and there, wilfully, unlawfully, and feloniously, cause the unauthorized withdrawal of the 200 cases of Bear Brand Powdered Milk, a public property owned by the DSWD stock[ed] at VABROC, and thereafter, did then and there appropriate the said goods for themselves to the prejudice of the DSWD in the amount of Php 306,736.00.

CONTRARY TO LAW.^[14][12]

            The cases against petitioner Zafra and her co-accused were raffled to Branch 112 of RTC-Pasay. Upon arraignment, they pleaded “not guilty” to the charges.

          On 06 August 2003, the pretrial of the case was conducted, attended by only petitioner Zafra and Beltran.^[15][13] Thereafter, a joint trial for Criminal Case Nos. 02-0371 and 02-0372 ensued.

          During the trial on the merits, the prosecution presented four witnesses to build up its case. The prosecution presented Consolacion Obrique dela Cruz, a utility worker at the DSWD Property and Supply; Atty. Nelson Todas, former DSWD Legal Officer V; Ruby Maligo Cresencio, the operations officer of Mega Commercial Trading, which supplied the stolen milk cases to DSWD; and Isidro Tuastumban, a security guard posted at the DSWD lobby at the time the incident happened.

          After the prosecution rested its case, petitioner Zafra filed a Motion for Demurrer to Evidence.^[16][14] She alleged therein that the prosecution failed to present proof that she and her co-accused had wilfully, unlawfully, and feloniously caused the withdrawal of the 200 cases of Bear Brand Powdered Milk and appropriated these for themselves to the prejudice of DSWD. Thus, she concluded that the prosecution failed to establish the elements of the crime of malversation under Art. 217 of the Revised Penal Code. She likewise contended that the prosecution was not able to present proof that she and her co-accused had done so in violation of Section 3 (e) of R. A. 3019.

          The lower court required the prosecution to comment on petitioner Zafra’s demurrer to evidence. In its Comment,^[17][15] the prosecution contradicted the allegations therein and claimed to have established and proved the elements of the crimes as charged against petitioner and her co-accused. It also alleged that it was able to establish conspiracy among the accused and had evidence to show that petitioner Zafra caused the withdrawal of the goods, subject matter of this case, through her sister — co-accused Ofelia Saclayan, who was an unauthorized person.

On 19 December 2007, public respondent Judge Mupas issued an Order^[18][16] granting the demurrer to evidence of petitioner Zafra. Public respondent ruled that, after evaluating the testimonies of the witnesses for the prosecution, he found them substantially insufficient to warrant the conviction of petitioner Zafra under the charges filed against her by the Ombudsman. With the grant of her demurrer to evidence, petitioner was acquitted. ^[19][17] The decretal portion of the Order reads:

WHEREFORE, the demurrer to evidence is GRANTED.

Consequently, accused CARMELITA ZAFRA y FUENTES is hereby ACQUITTED.

SO ORDERED.

On 28 January 2008, the prosecution, through its private prosecutor, filed a Motion for Reconsideration of the Order dated 19 December 2007 issued by public respondent. On 2 June 2008, the motion was denied for lack of merit.^[20][18]  

On 09 September 2008, the People filed with the CA a Petition for Certiorari under Rule 65, assailing the lower court’s grant of petitioner Zafra’s demurrer to evidence, resulting in her acquittal.^[21][19] The petition, filed through the DSWD, which was represented by its legal officers, raised the following issues:

Whether or not the Honorable Judge committed grave abuse of discretion in denying petitioner’s Motion for Reconsideration of its Order granting private respondent’s demurrer to evidence;  

Whether or not the Honorable Judge committed grave abuse of discretion when he failed to appreciate the evidence of the prosecution providing beyond reasonable doubt private respondent’s negligence which resulted to (sic) the unauthorized withdrawal of the 200 cases of Bear Brand Powdered Milk at the VABROC belonging to the government.^[22][20]

          The People’s Petition for Certiorari was docketed as CA-G.R. SP No. 105199 and was raffled to the appellate court’s Special Sixth Division. On 22 September 2008, a Resolution^[23][21] was promulgated, directing petitioner Zafra to file a Comment on the certiorari petition and thereafter instructing the Office of the Solicitor General to file a Reply thereto.

          On 06 October 2008, petitioner Zafra, as private respondent in the appeal, filed her Comment and sought to dismiss the Petition for Certiorari instituted by the prosecution.^[24][22] In her Comment, she assailed the appeal of the DSWD for being improper, having been filed directly with the appellate court instead of seeking the intervention of the Office of the Solicitor General (OSG) to act on DSWD’s behalf. She also pointed out the lack of authority of the signatory who had executed the certificate of non-forum shopping attached to the petition.

On 06 November 2008, the OSG filed a Manifestation and Motion^[25][23] adopting the Petition for Certiorari filed by the DSWD. It prayed for the relaxation of the Rules on Procedure pertaining to the authority of the person signing the Verification and Certification against forum-shopping attached to the petition filed by the DSWD. 

          On 19 November 2008, petitioner Zafra filed a Comment/Opposition^[26][24] to the OSG’s Manifestation and Motion and moved that it be expunged from the records, as it was filed out of time.

          On 23 January 2009, the CA, through its Fourth Division, issued a Resolution^[27][25] granting the OSG’s Manifestation and Motion.

          On 19 March 2009, the appellate court, through its Third Division, promulgated a Decision^[28][26] granting the People’s petition and revoking and setting aside the lower court’s Order granting private respondent’s demurrer to evidence. In its Decision reversing the trial court’s Order, the CA found that public respondent Judge Mupas committed grave abuse of discretion through his grant of private respondent’s demurrer, which consequently resulted in her acquittal. Holding that the prosecution was able to present sufficient evidence to prove the elements of the crimes in the Information filed against private respondent, the appellate court ruled as follows:

          A careful reading of the 19 December 2007 Order, supra, showed that the court a quo in granting the Respondent’s demurrer to evidence relied heavily on the ground that the Petitioner miserably failed to show that the Respondent had any direct participation in the actual withdrawal of the goods. This may be gleaned from the pertinent portion of the 19 December 2007 Order, supra, to wit:

xxx There is no denying that the prosecution, after presenting all its witnesses and documentary evidence has miserably failed to prove the guilt of the accused Carmelita Zafra beyond reasonable doubt. The prosecution has never proven any direct participation of the herein accused to the actual withdrawal of the goods. The prosecution witnesses presented testified during cross-examination that they have no personal knowledge nor did they see that the accused Carmelita Zafra actually withdraw (sic) or cause[d] the withdrawal of the goods from VABROC. The prosecution proved the relationship between Carmelita Zafra and a Ofelia Saclayan, the fact that Carmelita Zafra coordinated with the prosecution witness Ruby Crescencio for the return of the 200 cases of Bear Brand Powdered Milk which were alleged to be near expiry but it did not proved (sic) that on the day when the goods were withdrawn from VABROC[,] accused Carmelita Zafra had a direct participation for its withdrawal.

                                                …                     …                     …

It bears to emphasize that the crime of malversation may be committed either through a positive act of misappropriation of public funds or property or passively through negligence by allowing another to commit such misappropriation. Thus, the Petitioner’s alleged failure to prove the Respondent’s direct participation in the withdrawal of the 200 cases of milk did not altogether rule out malversation as the dolo or culpa in malversation is only a modality in the perpetration of the felony.

Besides, even if the Information in Criminal Case No. 02-0372, supra, alleges willful malversation, this does not preclude conviction of malversation through negligence if the evidence sustains malversation through negligence. On this score, let US refer to the explicit pronouncement of the Supreme Court in People v. Uy, Jr., thus:     

          xxx Even when the information charges willful malversation, conviction for malversation through negligence may still be adjudged if the evidence ultimately proves that mode of commission of the offense. 

          Likewise, We find that the court a quo committed grave abuse of discretion in acquitting the Respondent for violation of Section 3(e) of RA 3019 …

                                    …                     …                     …

            As earlier discussed, the court a quo acquitted the Respondent of the offense charged mainly because of the alleged lack of any proof of her direct participation in the withdrawal of the 200 cases of Bear Brand powdered milk. However, in view of the People’s evidence showing Respondent’s inexcusable negligence in the withdrawal of the goods in question, Respondent cannot likewise be acquitted of violation of Section 3(e) of RA 3019 since inexcusable negligence is one of the elements of the said offense.

            In sum, We hold that the court a quo committed grave abuse of discretion in granting the Respondent’s demurrer to evidence, which resulted to her untimely acquittal.    

WHEREFORE, instant Petition is hereby GRANTED. The court a quo’s challenged Orders are REVOKED and SET ASIDE. The case is hereby REMANDED to the court a quo for further proceedings.

            SO ORDERED.^[29][27]   

          Petitioner Zafra filed a Motion for Reconsideration^[30][28] dated 31 March 2009 praying that the 19 March 2009 Decision of the CA reversing the lower court’s grant of her demurrer to evidence be set aside. She further prayed that the criminal cases filed against her be dismissed with prejudice.

          On 09 June 2009, the OSG filed its Comment^[31][29] on the Motion for Reconsideration of petitioner Zafra. It moved for the denial of her Motion for Reconsideration and prayed that the assailed Decision of the Court of Appeals in CA-G.R. SP No. 105199 be affirmed.

          The CA, through its former Third Division, issued a Resolution^[32][30] on 28 August 2009 denying petitioner’s Motion for Reconsideration. The appellate court found that the issues she raised had been sufficiently considered and discussed in its 19 March 2009 Decision. 

          On 19 October 2009, petitioner Zafra filed her Petition for Review on Certiorari^[33][31] under Rule 45 of the Rules on Civil Procedure. She assailed the 19 March 2009 Decision of the Court of Appeals in CA-G.R. SP No. 105199, as well as the 28 August 2009 Resolution denying her Motion for Reconsideration.

          We AFFIRM the entire ruling of the Court of Appeals. 

          After a thorough review of the records of this case, particularly the issues proffered by petitioner, we adopt the findings of the appellate court. We find no reversible error in the ruling which is eloquently supported by existing jurisprudence.^[34][32]

          We agree with the CA’s disquisition that the lower court’s grant of the demurrer to evidence of petitioner Zafra was attended by grave abuse of discretion. The prosecution’s evidence was, prima facie, sufficient to prove the criminal charges filed against her for her inexcusable negligence, subject to the defense that she may present in the course of a full-blown trial. The lower court improperly examined the prosecution’s evidence in the light of only one mode of committing the crimes charged; that is, through positive acts. The appellate court correctly concluded that the crime of malversation may be committed either through a positive act of misappropriation of public funds or passively through negligence by allowing another to commit such misappropriation.^[35][33]  

As a general rule, an order granting the accused’s demurrer to evidence amounts to an acquittal. There are certain exceptions, however, as when the grant thereof would not violate the constitutional proscription on double jeopardy. For instance, this Court ruled that when there is a finding that there was grave abuse of discretion on the part of the trial court in dismissing a criminal case by granting the accused’s demurrer to evidence, its judgment is considered void, as this Court ruled in People v. Laguio, Jr.:^[36][34]

By this time, it is settled that the appellate court may review dismissal orders of trial courts granting an accused’s demurrer to evidence. This may be done via the special civil action of certiorari under Rule 65 based on the ground of grave abuse of discretion, amounting to lack or excess of jurisdiction. Such dismissal order, being considered void judgment, does not result in jeopardy. Thus, when the order of dismissal is annulled or set aside by an appellate court in an original special civil action via certiorari, the right of the accused against double jeopardy is not violated.^[37][35]          

In the instant case, having affirmed the CA finding grave abuse of discretion on the part of the trial court when it granted the accused’s demurrer to evidence, we deem its consequent order of acquittal void.     

Further, we do not find any pronouncement by the trial court on whether the act or omission of petitioner under the circumstances would entail civil liability. Therefore, the CA properly ordered the remand of the case to the lower court for further proceedings to determine whether petitioner is civilly liable for the loss of the milk cartons.

WHEREFORE, we DENY the Petition and affirm in toto the 19 March 2009 Decision of the Court of Appeals and its 28 August 2009 Resolution. Let the name of Judge Jesus B. Mupas be stricken off as petitioner, as such appellation unilaterally made by petitioner Carmelita F. Zafra, is improper.       

SO ORDERED.  

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

^{ANTONIO T. CARPIO}

^{Associate Justice}

Chairperson

  ARTURO D. BRION                             BIENVENIDO L. REYES

      Associate Justice                                       Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

A T T E S T A T I O N

          I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                                                            ^{ANTONIO T. CARPIO}

                                                                                                        ^{Associate Justice}

                                                        Chairperson, Second Division

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

                                                                                                                           ^{Chief Justice}

CASE 2011-0213: BANK OF THE PHILIPPINE ISLANDS VS. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK (G.R. NO. 164301, 19 OCTOBER 2011, LEONARDO- DE CASTRO, J.) SUBJECT: RIGHT OF A UNION TO REQUEST TERMINATION OF EMPLOYEES ABSORBED BY SURVIVING CORPORATION IN A MERGER. (BRIEF TITLE: BPI VS. BPI EMPLOYEES UNION).

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DISPOSITIVE:

WHEREFORE, the Motion for Reconsideration is DENIED.  The Decision dated August 10, 2010 is AFFIRMED, subject to the qualifications that:

(a)  Petitioner is deemed to have assumed the employment contracts of the Far East Bank and Trust Company (FEBTC) employees upon effectivity of the merger without break in the continuity of their employment, even without express stipulation in the Articles of Merger; and

(b)  Aside from the thirty (30) days, counted from notice of finality of the August 10, 2010 Decision, given to former FEBTC employees to join the respondent, said employees shall be accorded full procedural due process before their employment may be terminated.

SO ORDERED.

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SUBJECTS/DOCTRINES/DIGEST:

FEBTC EMPLOYEES WERE ABSORBED BY BPI.  THE UNION SHOP CLAUSE IN THE BPI CBA PROVIDES THAT NEW EMPLOYEES WHO MAY HEREAFTER BE REGULARLY EMPLOYED BY BPI SHALL, WITHIN THIRTY (30) DAYS AFTER THEY BECOME REGULAR EMPLOYEES, JOIN THE UNION AS A CONDITION OF THEIR CONTINUED EMPLOYMENT. OTHERWISE THE UNION CAN ASK PBI TO TERMINATE THESE EMPLOYEES. DOES THIS CLAUSE COVER EMPLOYEES OF FEBTC ABSORBED BY BPI?

YES. BUT THE EMPLOYEES WHO DO NOT JOIN THE UNION ARE ENTITLED TO PROCEDURAL DUE PROCESS BEFORE THEIR EMPLOYMENT IS TERMINATED. SPECIFICALLY, THEY ARE ENTITLED TO THE TWIN REQUIREMENT OF NOTICE AND HEARING.

Although it is accepted that non-compliance with a union security clause is a valid ground for an employee’s dismissal, jurisprudence dictates that such a dismissal must still be done in accordance with due process.  This much we decreed in General Milling Corporation v. Casio,^[1][25] to wit:

The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos that:

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees’ right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company.

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 employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.

Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights 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 are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. x x x^[2][26] (Emphases supplied.)

In light of the foregoing, we find it appropriate to state that, apart from the fresh thirty (30)-day period from notice of finality of the Decision given to the affected FEBTC employees to join the Union before the latter can request petitioner to terminate the former’s employment, petitioner must still accord said employees the twin requirements of notice and hearing on the possibility that they may have other justifications for not joining the Union.  Similar to our August 10, 2010 Decision, we reiterate that our ruling presupposes there has been no material change in the situation of the parties in the interim.

XXXXXXXXXXXXXXXX

BPI ARGUES THAT  THE FORMER FEBTC EMPLOYEES WHO WERE ABSORBED BY BPI AS REGULAR EMPLOYEES SHOULD NOT BE CONSIDERED AS NEW EMPLOYEES OF BPI. IS THEIR ARGUMENT CORRECT?

NO, BECAUSE IT WOULD DEFEAT THE PURPOSE OF A UNION SHOP CLAUSE UNDER LABOR LAW. THE COURT REASONED THIS WAY:

          Even in our August 10, 2010 Decision, we already observed that the legal fiction in the law on mergers (that the surviving corporation continues the corporate existence of the non-surviving corporation) is mainly a tool to adjudicate the rights and obligations between and among the merged corporations and the persons that deal with them.^[3][14]  Such a legal fiction cannot be unduly extended to an interpretation of a Union Shop Clause so as to defeat its purpose under labor law.  Hence, we stated in the Decision that:

           In any event, it is of no moment that the former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner. This fact would not remove them from the scope of the phrase “new employees” as contemplated in the Union Shop Clause of the CBA, contrary to petitioner’s insistence that the term “new employees” only refers to those who are initially hired as non-regular employees for possible regular employment. 

The Union Shop Clause in the CBA simply states that “new employees” who during the effectivity of the CBA “may be regularly employed” by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are “absorbed” as regular employees from the beginning of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner’s new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Unionas a condition of their continued employment.^[4][15]

           Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had been the employer of the latter’s employees from the beginning it must be emphasized that, in reality, the legal consequences of the merger only occur at a specific date, i.e., upon its effectivity which is the date of approval of the merger by the SEC.  Thus, we observed in the Decision that BPI and FEBTC stipulated in the Articles of Merger that they will both continue their respective business operations until the SEC issues the certificate of merger and in the event no such certificate is issued, they shall hold each other blameless for the non-consummation of the merger.^[5][16] We likewise previously noted that BPI made its assignments of the former FEBTC employees effective on April 10, 2000, or after the SEC approved the merger.^[6][17]  In other words, the obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right of discipline and control over them only arose with the effectivity of the merger.  Concomitantly, the obligation of former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon the effectivity of the merger.  What is material is that all of these legal consequences of the merger took place during the life of an existing and valid CBA between BPI and theUnion wherein they have mutually consented to include a Union Shop Clause. 

From the plain, ordinary meaning of the terms of the Union Shop Clause, it covers employees who (a) enter the employ of BPI during the term of the CBA; (b) are part of the bargaining unit (defined in the CBA as comprised of BPI’s rank and file employees); and (c) become regular employees without distinguishing as to the manner they acquire their regular status.  Consequently, the number of such employees may adversely affect the majority status of theUnionand even its existence itself, as already amply explained in the Decision.

XXXXXXXXXXXXXXXXX XXX

BUT THERE ARE DIFFERENCES BETWEEN NEW EMPLOYEES HIRED AS PROBATIONARY AND FEBTC EMPLOYEES HIRED BY VIRTUE OF THE MERGER. WOULD THIS NOT JUSTIFY THE CONTENTION THAT FEBTC EMPLOYEES SHOULD NOT BE CONSIDERED AS NEW EMPLOYEES?

THESE DIFFERENCES ARE TOO INSUBSTANTIAL. BOTH EMPLOYEES WERE HIRED/EMPLOYED ONLY AFTER THE CBA WAS SIGNED. AT THE TIME THEY ARE BEING REQUIRED TO JOIN THE UNION, THEY ARE BOTH ALREADY REGULAR RANK AND FILE EMPLOYEES OF BPI. THEY BELONG TO THE SAME BARGAINING UNIT BEING REPRESENTED BY THE UNION. THEY BOTH ENJOY BENEFITS THAT THE UNION WAS ABLE TO SECURE FOR THEM UNDER THE CBA.

          Indeed, there are differences between (a) new employees who are hired as probationary or temporary but later regularized, and (b) new employees who, by virtue of a merger, are absorbed from another company as regular and permanent from the beginning of their employment with the surviving corporation.  It bears reiterating here that these differences are too insubstantial to warrant the exclusion of the absorbed employees from the application of the Union Shop Clause.  In the Decision, we noted that:

Verily, we agree with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying the Union Shop Clause. Both employees were hired/employed only after the CBA was signed. At the time they are being required to join the Union, they are both already regular rank and file employees of BPI. They belong to the same bargaining unit being represented by the Union. They both enjoy benefits that the Unionwas able to secure for them under the CBA. When they both entered the employ of BPI, the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees, for they are undeniably similarly situated.^[7][18]

XXXXXXXXXXXXXXXXXXXX

BUT THE FEBTC EMPLOYEES HAD NO SAY IN THE MERGER OF FEBTC AND BPI. WHY SHOULD THEY BE SUBJECT TO A UNION CLOSE SHOP PROVISION IN A CBA CREATED WITHOUT THEIR PARTICIPATION?

COURTS MUST PLACE A PRACTICAL AND REALISTIC CONSTRUCTION UPON A CBA, GIVING DUE CONSIDERATION TO THE CONTEXT IN WHICH IT IS NEGOTIATED AND PURPOSE WHICH IT IS INTENDED TO SERVE.^[8][19]  IN LIKE MANNER BPI UNION LIKEWISE CANNOT PREVENT BPI TO MERGE WITH FEBTC WHICH IN THE PROCESS WOULD AFFECT THE NUMBER OF EMPLOYEES IN THE BARGAINING UNIT AND AFFECT THE UNION’S MAJORITY STATUS.

Again, it is worthwhile to highlight that 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.  For if the former FEBTC employees had no say in the merger of its former employer with another bank, as petitioner BPI repeatedly decries on their behalf, the Union likewise could not prevent BPI from proceeding with the merger which undisputedly affected the number of employees in the bargaining unit that the Union represents and may negatively impact on the Union’s majority status.  In this instance, we should be guided by the principle that courts must place a practical and realistic construction upon a CBA, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve.^[9][19] 

========================

Republic of the Philippines

Supreme Court

Manila

EN BANC

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

R E S O L U T I O N

LEONARDO-DE CASTRO, J.:

In the present incident, petitioner Bank of the Philippine Islands (BPI) moves for reconsideration^[10][1] of our Decision dated August 10, 2010, holding that former employees of the Far East Bank and Trust Company (FEBTC) “absorbed” by BPI pursuant to the two banks’ merger in 2000 were covered by the Union Shop Clause in the then existing collective bargaining agreement (CBA)^[11][2] of BPI with respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (the Union). 

          To recall, the Union Shop Clause involved in this long standing controversy provided, thus:

ARTICLE II

x x x x

Section 2.  Union Shop  – New employees falling within the bargaining unit as defined in Article I of this 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.  It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank.^[12][3]   (Emphases supplied.)

The bone of contention between the parties was whether or not the “absorbed” FEBTC employees fell within the definition of “new employees” under the Union Shop Clause, such that they may be required to join respondent union and if they fail to do so, the Union may request BPI to terminate their employment, as the Union in fact did in the present case. Needless to state, BPI refused to accede to theUnion’s request.  Although BPI won the initial battle at the Voluntary Arbitrator level, BPI’s position was rejected by the Court of Appeals which ruled that the Voluntary Arbitrator’s interpretation of the Union Shop Clause was at war with the spirit and rationale why the Labor Code allows the existence of such provision.  On review with this Court, we upheld the appellate court’s ruling and disposed of the case as follows:

WHEREFORE, the petition is hereby DENIED, and the Decision dated September 30, 2003 of the Court of Appeals is AFFIRMED, subject to the thirty (30) day notice requirement imposed herein. Former FEBTC employees who opt not to become union members but who qualify for retirement shall receive their retirement benefits in accordance with law, the applicable retirement plan, or the CBA, as the case may be.^[13][4]

Notwithstanding our affirmation of the applicability of the Union Shop Clause to former FEBTC employees, for reasons already extensively discussed in the August 10, 2010 Decision, even now BPI continues to protest the inclusion of said employees in the Union Shop Clause.

          In seeking the reversal of our August 10, 2010 Decision, petitioner insists that the parties to the CBA clearly intended to limit the application of the Union Shop Clause only to new employees who were hired as non-regular employees but later attained regular status at some point after hiring. FEBTC employees cannot be considered new employees as BPI merely stepped into the shoes of FEBTC as an employer purely as a consequence of the merger.^[14][5] 

Petitioner likewise relies heavily on the dissenting opinions of our respected colleagues, Associate Justices Antonio T. Carpio and Arturo D. Brion. From both dissenting opinions, petitioner derives its contention that “the situation of absorbed employees can be likened to old employees of BPI, insofar as their full tenure with FEBTC was recognized by BPI and their salaries were maintained and safeguarded from diminution” but such absorbed employees “cannot and should not be treated in exactly the same way as old BPI employees for there are substantial differences between them.”^[15][6]  Although petitioner admits that there are similarities between absorbed and new employees, they insist there are marked differences between them as well.  Thus, adopting Justice Brion’s stance, petitioner contends that the absorbed FEBTC employees should be considered “a sui generis group of employees whose classification will not be duplicated until BPI has another merger where it would be the surviving corporation.”^[16][7]  Apparently borrowing from Justice Carpio, petitioner propounds that the Union Shop Clause should be strictly construed since it purportedly curtails the right of the absorbed employees to abstain from joining labor organizations.^[17][8] 

          Pursuant to our directive, the Unionfiled its Comment^[18][9] on the Motion for Reconsideration.  In opposition to petitioner’s arguments, the Union, in turn, adverts to our discussion in the August 10, 2010 Decision regarding the voluntary nature of the merger between BPI and FEBTC, the lack of an express stipulation in the Articles of Merger regarding the transfer of employment contracts to the surviving corporation, and the consensual nature of employment contracts as valid bases for the conclusion that former FEBTC employees should be deemed new employees.^[19][10]  The Union argues that the creation of employment relations between former FEBTC employees and BPI (i.e., BPI’s selection and engagement of former FEBTC employees, its payment of their wages, power of dismissal and of control over the employees’ conduct) occurred after the merger, or to be more precise, after the Securities and Exchange Commission’s (SEC) approval of the merger.^[20][11]  TheUnion likewise points out that BPI failed to offer any counterargument to the Court’s reasoning that:

The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employee’s right or freedom of association, is not to protect the union for the union’s sake. Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer. x x x.

x x x Nonetheless, settled jurisprudence has already swung the balance in favor of unionism, in recognition that ultimately the individual employee will be benefited by that policy. In the hierarchy of constitutional values, this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an instrument of social justice.^[21][12]

          While most of the arguments offered by BPI have already been thoroughly addressed in the August 10, 2010 Decision, we find that a qualification of our ruling is in order only with respect to the interpretation of the provisions of the Articles of Merger and its implications on the former FEBTC employees’ security of tenure.

          Taking a second look on this point, we have come to agree with Justice Brion’s view that it is more in keeping with the dictates of social justice and the State policy of according full protection to labor to deem employment contracts as automatically assumed by the surviving corporation in a merger, even in the absence of an express stipulation in the articles of merger or the merger plan. In his dissenting opinion, Justice Brion reasoned that:

To my mind, due consideration of Section 80 of the Corporation Code, the constitutionally declared policies on work, labor and employment, and the specific FEBTC-BPI situation — i.e., a merger with complete “body and soul” transfer of all that FEBTC embodied and possessed and where both participating banks were willing (albeit by deed, not by their written agreement) to provide for the affected human resources by recognizing continuity of employment — should point this Court to a declaration that in a complete merger situation where there is total takeover by one corporation over another and there is silence in the merger agreement on what the fate of the human resource complement shall be, the latter should not be left in legal limbo and should be properly provided for, by compelling the surviving entity to absorb these employees. This is what Section 80 of the Corporation Code commands, as the surviving corporation has the legal obligation to assume all the obligations and liabilities of the merged constituent corporation.

Not to be forgotten is that the affected employees managed, operated and worked on the transferred assets and properties as their means of livelihood; they constituted a basic component of their corporation during its existence. In a merger and consolidation situation, they cannot be treated without consideration of the applicable constitutional declarations and directives, or, worse, be simply disregarded. If they are so treated, it is up to this Court to read and interpret the law so that they are treated in accordance with the legal requirements of mergers and consolidation, read in light of the social justice, economic and social provisions of our Constitution. Hence, there is a need for the surviving corporation to take responsibility for the affected employees and to absorb them into its workforce where no appropriate provision for the merged corporation’s human resources component is made in the Merger Plan.^[22][13]

          By upholding the automatic assumption of the non-surviving corporation’s existing employment contracts by the surviving corporation in a merger, the Court strengthens judicial protection of the right to security of tenure of employees affected by a merger and avoids confusion regarding the status of their various benefits which were among the chief objections of our dissenting colleagues.  However, nothing in this Resolution shall impair the right of an employer to terminate the employment of the absorbed employees for a lawful or authorized cause or the right of such an employee to resign, retire or otherwise sever his employment, whether before or after the merger, subject  to existing contractual obligations.  In this manner, Justice Brion’s theory of automatic assumption may be reconciled with the majority’s concerns with the successor employer’s prerogative to choose its employees and the prohibition against involuntary servitude.

          Notwithstanding this concession, we find no reason to reverse our previous pronouncement that the absorbed FEBTC employees are covered by the Union Shop Clause.

          Even in our August 10, 2010 Decision, we already observed that the legal fiction in the law on mergers (that the surviving corporation continues the corporate existence of the non-surviving corporation) is mainly a tool to adjudicate the rights and obligations between and among the merged corporations and the persons that deal with them.^[23][14]  Such a legal fiction cannot be unduly extended to an interpretation of a Union Shop Clause so as to defeat its purpose under labor law.  Hence, we stated in the Decision that:

           In any event, it is of no moment that the former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner. This fact would not remove them from the scope of the phrase “new employees” as contemplated in the Union Shop Clause of the CBA, contrary to petitioner’s insistence that the term “new employees” only refers to those who are initially hired as non-regular employees for possible regular employment. 

The Union Shop Clause in the CBA simply states that “new employees” who during the effectivity of the CBA “may be regularly employed” by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are “absorbed” as regular employees from the beginning of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner’s new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Unionas a condition of their continued employment.^[24][15]

           Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had been the employer of the latter’s employees from the beginning it must be emphasized that, in reality, the legal consequences of the merger only occur at a specific date, i.e., upon its effectivity which is the date of approval of the merger by the SEC.  Thus, we observed in the Decision that BPI and FEBTC stipulated in the Articles of Merger that they will both continue their respective business operations until the SEC issues the certificate of merger and in the event no such certificate is issued, they shall hold each other blameless for the non-consummation of the merger.^[25][16] We likewise previously noted that BPI made its assignments of the former FEBTC employees effective on April 10, 2000, or after the SEC approved the merger.^[26][17]  In other words, the obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right of discipline and control over them only arose with the effectivity of the merger.  Concomitantly, the obligation of former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon the effectivity of the merger.  What is material is that all of these legal consequences of the merger took place during the life of an existing and valid CBA between BPI and theUnion wherein they have mutually consented to include a Union Shop Clause. 

From the plain, ordinary meaning of the terms of the Union Shop Clause, it covers employees who (a) enter the employ of BPI during the term of the CBA; (b) are part of the bargaining unit (defined in the CBA as comprised of BPI’s rank and file employees); and (c) become regular employees without distinguishing as to the manner they acquire their regular status.  Consequently, the number of such employees may adversely affect the majority status of theUnionand even its existence itself, as already amply explained in the Decision.

          Indeed, there are differences between (a) new employees who are hired as probationary or temporary but later regularized, and (b) new employees who, by virtue of a merger, are absorbed from another company as regular and permanent from the beginning of their employment with the surviving corporation.  It bears reiterating here that these differences are too insubstantial to warrant the exclusion of the absorbed employees from the application of the Union Shop Clause.  In the Decision, we noted that:

Verily, we agree with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying the Union Shop Clause. Both employees were hired/employed only after the CBA was signed. At the time they are being required to join the Union, they are both already regular rank and file employees of BPI. They belong to the same bargaining unit being represented by the Union. They both enjoy benefits that the Unionwas able to secure for them under the CBA. When they both entered the employ of BPI, the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees, for they are undeniably similarly situated.^[27][18]

Again, it is worthwhile to highlight that 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.  For if the former FEBTC employees had no say in the merger of its former employer with another bank, as petitioner BPI repeatedly decries on their behalf, the Union likewise could not prevent BPI from proceeding with the merger which undisputedly affected the number of employees in the bargaining unit that the Union represents and may negatively impact on the Union’s majority status.  In this instance, we should be guided by the principle that courts must place a practical and realistic construction upon a CBA, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve.^[28][19] 

We now come to the question:  Does our affirmance of our ruling that former FEBTC employees absorbed by BPI are covered by the Union Shop Clause violate their right to security of tenure which we expressly upheld in this Resolution?  We answer in the negative.

In Rance v. National Labor Relations Commission,^[29][20] we held that:

It is the policy of the state to assure the right of workers to “security of tenure” (Article XIII, Sec. 3 of the New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of social justice. When a person has no property, his job may possibly be his only possession or means of livelihood. Therefore, he should be protected against any arbitrary deprivation of his job. Article 280 of the Labor Code has construed security of tenure as meaning that “the employer shall not terminate the services of an employee except for a just cause or when authorized by” the Code.  x x x (Emphasis supplied.)

We have also previously held that the fundamental guarantee of security of tenure and due process dictates that no worker shall be dismissed except for a just and authorized cause provided by law and after due process is observed.^[30][21]  Even as we now recognize the right to continuous, unbroken employment of workers who are absorbed into a new company pursuant to a merger, it is but logical that their employment may be terminated for any causes provided for under the law or in jurisprudence without violating their right to security of tenure.  As Justice Carpio discussed in his dissenting opinion, it is well-settled that termination of employment by virtue of a union security clause embodied in a CBA is recognized in our jurisdiction.^[31][22]  In Del Monte Philippines, Inc. v. Saldivar,^[32][23] we explained the rationale for this policy in this wise:

Article 279 of the Labor Code ordains that “in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by [Title I, Book Six of the Labor Code].” Admittedly, the enforcement of a closed-shop or union security provision in the CBA as a ground for termination finds no extension within any of the provisions under Title I, Book Six of the Labor Code. Yet jurisprudence has consistently recognized, thus: “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 interests vis-a-vis the employer.”^[33][24] (Emphasis supplied.)

Although it is accepted that non-compliance with a union security clause is a valid ground for an employee’s dismissal, jurisprudence dictates that such a dismissal must still be done in accordance with due process.  This much we decreed in General Milling Corporation v. Casio,^[34][25] to wit:

The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos that:

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees’ right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company.

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 employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.

Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights 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 are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. x x x^[35][26] (Emphases supplied.)

In light of the foregoing, we find it appropriate to state that, apart from the fresh thirty (30)-day period from notice of finality of the Decision given to the affected FEBTC employees to join the Union before the latter can request petitioner to terminate the former’s employment, petitioner must still accord said employees the twin requirements of notice and hearing on the possibility that they may have other justifications for not joining the Union.  Similar to our August 10, 2010 Decision, we reiterate that our ruling presupposes there has been no material change in the situation of the parties in the interim.

WHEREFORE, the Motion for Reconsideration is DENIED.  The Decision dated August 10, 2010 is AFFIRMED, subject to the qualifications that:

(a)  Petitioner is deemed to have assumed the employment contracts of the Far East Bank and Trust Company (FEBTC) employees upon effectivity of the merger without break in the continuity of their employment, even without express stipulation in the Articles of Merger; and

(b)  Aside from the thirty (30) days, counted from notice of finality of the August 10, 2010 Decision, given to former FEBTC employees to join the respondent, said employees shall be accorded full procedural due process before their employment may be terminated.

SO ORDERED.

WE CONCUR:

RENATO C. CORONA

Chief Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

C E R T I F I C A T I O N

          Pursuant to Article VIII, Section 13 of the Constitution, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.