Malayang Samahan ng mga Manggagawa sa M. Greenfield vs. NLRC

A union security clause in a collective bargaining agreement, while valid and enforceable, cannot be implemented in a manner that violates the employee's constitutional right to due process; the employer must conduct an independent investigation and hearing before dismissing an employee pursuant to a union's recommendation for expulsion. Furthermore, a "no strike-no lockout" clause applies only to economic strikes and cannot bar strikes based on unfair labor practice.

The case arose from a conflict between Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG), a local union, and its national federation, United Lumber and General Workers of the Philippines (ULGWP), regarding the local union's declaration of autonomy and the federation's intervention in local affairs. The dispute escalated when the federation expelled local union officers for alleged disloyalty and demanded their dismissal under the union security clause of the Collective Bargaining Agreement (CBA).

• MSMG is a local union affiliated with ULGWP (United Lumber and General Workers of the Philippines), a national federation. They have a Collective Bargaining Agreement (CBA) with M. Greenfield, Inc. containing a Union Security Clause (Art. II, Sec. 4) and a No Strike-No Lockout provision.
• On July 16, 1988, MSMG declared general autonomy from ULGWP due to disagreements over union fines and the remittance of education funds.
• On September 30, 1988, ULGWP placed MSMG under trusteeship and appointed an administrator.
• On November 21, 1988, ULGWP expelled 30 MSMG officers for alleged acts of disloyalty and violation of the federation's Constitution and By-Laws.
• On the same day, ULGWP demanded M. Greenfield dismiss the expelled officers pursuant to the Union Security Clause of the CBA.
• On March 7, 1989, M. Greenfield terminated the 30 officers without conducting a prior independent investigation or hearing, serving termination letters effective immediately.
• On March 14, 1989, union members staged a strike alleging unfair labor practice, discrimination, mass dismissal, and union busting.
• On March 13-14, 1989, the company placed 78 shop stewards under preventive suspension.
• The company sent three return-to-work notices (March 27, April 11, and April 21, 1989); 261 employees returned to work, but others were terminated on May 17, 1989 for alleged abandonment of work.
• The petitioners filed a complaint for unfair labor practice, illegal dismissal, and illegal suspension.

• The dismissal was arbitrary, hasty, capricious, and illegal because it was effected without any prior administrative investigation by the company.
• The federation was not a principal party to the CBA between the company and the local union, hence it had no authority to recommend dismissal.
• The expulsion from the union itself was unlawful for lack of due process, and the company should have conducted its own investigation rather than relying solely on the federation's allegations.
• The strike was legal because it protested unfair labor practice (the dismissal of officers), not an economic issue; thus, the "no strike-no lockout" clause did not apply.
• The employees did not abandon their work; they filed a complaint for illegal dismissal which is inconsistent with the allegation of abandonment.
• The NLRC committed grave abuse of discretion in upholding the dismissals, declaring the strike illegal, and finding no unfair labor practice.

• The dismissal was valid and legal pursuant to the union security clause of the CBA, which the company was contractually bound to enforce.
• The expelled officers were accorded due process prior to their expulsion from the federation.
• The strike was illegal because: (a) it was based on an intra-union dispute which is not a strikeable issue; (b) it violated the "no strike-no lockout" clause in the CBA; and (c) it was attended with violence, force, and intimidation.
• Employees who failed to respond to the return-to-work notices abandoned their employment.
• The company acted in good faith and within the scope of its authority in dismissing the employees upon the federation's demand and recommendation.
• The NLRC decision was valid despite Commissioner Tanodra from the Third Division sitting in the First Division, as the Chairman has the power to make temporary designations.

• Procedural: Whether the NLRC decision is valid despite the composition of the First Division with a Commissioner from the Third Division (Tanodra) sitting therein and writing the ponencia.
• Substantive Issues:
  • Whether the dismissal of the union officers pursuant to the union security clause was valid despite the lack of due process;
  • Whether the strike staged by the petitioners was illegal for being grounded on an intra-union dispute, violating the "no strike-no lockout" clause, and being attended by violence;
  • Whether the employees who failed to return to work after the strike abandoned their employment; and
  • Whether respondents committed acts of unfair labor practice.

• Procedural: The decision is valid. Article 213 of the Labor Code empowers the NLRC Chairman to designate commissioners from other divisions when the required concurrence of two commissioners cannot be obtained due to retirement or inhibition. The territorial divisions are designed merely for administrative efficiency and do not confer exclusive jurisdiction on each division.
• Substantive:
  • Validity of Dismissal: The dismissal is illegal. While union security clauses are valid and enforceable, the employer must observe due process (notice and hearing) before dismissing an employee pursuant to a union's recommendation. The company acted hastily and summarily without independent investigation, violating the employees' right to security of tenure and due process. The right to due process cannot be waived by a union security clause.
  • Expulsion from Union: The expulsion was unjustified. A local union has the constitutional right to disaffiliate from its mother federation or declare autonomy, provided there is no specific provision in the federation's constitution prohibiting such disaffiliation. ULGWP's constitution contained no such prohibition; in fact, it respected local autonomy. The declaration of autonomy was not an act of disloyalty.
  • Legality of Strike: The strike is legal. When the company dismissed the union officers, the intra-union dispute was transformed into a termination dispute involving unfair labor practice. A "no strike-no lockout" clause applies only to economic strikes (to force wage or other concessions), not to strikes grounded on unfair labor practice. The violence was committed by both sides (management and strikers), so it cannot be solely attributed to the union to declare the strike illegal.
  • Abandonment: There was no abandonment. The company failed to prove that the return-to-work notices were actually received by the employees. The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment.
  • Unfair Labor Practice: The company is not liable for unfair labor practice regarding the union security clause itself (as it is valid), but the dismissal procedure violated due process. The federation is not liable for unfair labor practice in this context.
  • Relief: Ordered immediate reinstatement of petitioners to their respective positions, or payment of separation pay of one month salary for every year of service if reinstatement is not feasible. Ordered full backwages from time of dismissal until actual reinstatement (or until finality of decision if reinstatement not feasible) pursuant to the Serrano doctrine, to be paid by the company (for employees) and the federation (for union officers) jointly and severally.

• Union Security Clause and Due Process — While union security clauses in CBAs are valid and enforceable as they embody the sanctity of contracts, the employer must observe due process (notice and hearing) before dismissing an employee pursuant to a union's recommendation for expulsion. The enforcement cannot be arbitrary or capricious, and the employer cannot rely solely on the union's allegations without independent verification.
• No Strike-No Lockout Clause — A "no strike-no lockout" provision in a CBA applies only to economic strikes (i.e., to force wage or other concessions from the employer which he is not required by law to grant). It cannot be invoked to prohibit or declare illegal strikes grounded on unfair labor practice.
• Right of Local Union to Disaffiliate — A local union has the constitutional right to disaffiliate from its mother federation or declare autonomy. In the absence of specific provisions in the federation's constitution prohibiting disaffiliation, a local union may sever its affiliation without being guilty of disloyalty.
• Serrano Doctrine on Backwages — An employee dismissed without the requisite 30-day prior notice is entitled to full backwages from the time of dismissal until actual reinstatement (or until finality of decision if reinstatement is not feasible), regardless of whether the dismissal was for just cause or not.

• "The right 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 is not wiped away by a union security clause or a union shop clause in a collective bargaining agreement."
• "A no strike, no lock out provision can only be invoked when the strike is economic in nature, i.e. to force wage or other concessions from the employer which he is not required by law to grant. Such a provision cannot be used to assail the legality of a strike which is grounded on unfair labor practice..."
• "A local union has the right to disaffiliate from its mother union or declare its autonomy... The locals remained the basic units of association, free to serve their own and the common interest of all... and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence."

• Cariño v. National Labor Relations Commission — Established that while a company may dismiss employees expelled by the union under a maintenance of membership provision, it must not be done hastily and summarily; due process requires that the employee be given a hearing.
• Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. — Held company liable for bad faith in hastily dismissing employees at the union's instance without due process, and established that the company's duty to observe due process is independent of the union's actions.
• Serrano v. National Labor Relations Commission — Doctrine on full backwages for dismissal without prior notice (30-day requirement).
• Tropical Hut Employees' Union-CGW v. Tropical Hut Food Market Inc. — On the right of local unions to disaffiliate from the mother union.
• Panay Electric Company Inc. v. NLRC — On the scope of no strike-no lockout clauses, limiting them to economic strikes.
• Master Iron Labor Union v. National Labor Relations Commission — On the presumption of legality of strikes based on unfair labor practice.

• Article 213 of the Labor Code — Powers of the NLRC Chairman to designate commissioners from other divisions to complete the required membership of a division when the concurrence of two commissioners cannot be obtained.
• Article 277(b) of the Labor Code — Secretary of Labor's power to assume jurisdiction over labor disputes.
• Article II, Section 4 of the CBA (Union Security Clause) — Provision authorizing dismissal upon written recommendation by the union for failure to maintain membership.
• Article V, Section 6 of ULGWP Constitution — Provision respecting the autonomy of local unions in their internal affairs.

• Justice Gonzaga-Reyes — Concurred in the decision.
• Justice Melo — Concurred "in the result."
• Justice Vitug — Reiterated his separate opinion in Serrano v. NLRC regarding the computation of backwages for dismissals without prior notice.
• Justice Panganiban — Reiterated his separate opinion in Serrano v. NLRC regarding the computation of backwages for dismissals without prior notice.