Mendoza vs. Borela

A labor organization's officers commit unfair labor practices under Article 249(a) and (b) of the Labor Code when they deliberately fail to act on a member's timely appeals of suspension and expulsion as required by the union's own constitution and by-laws, thereby violating the member's right to self-organization and causing illegal termination of union membership. The existence of intra-union or inter-union aspects of a dispute does not negate a charge of unfair labor practices, which falls within the original and exclusive jurisdiction of Labor Arbiters under Article 217 of the Labor Code.

Petitioner was a member of the Manila Water Employees Union (MWEU), a DOLE-registered labor organization consisting of rank-and-file employees within Manila Water Company (MWC). The named respondents were MWEU officers during the period material to the petition, with Borela as President and Chairman of the MWEU Executive Board, Quebral as First Vice-President and Treasurer, and Cometa as Secretary. The dispute arose from the intersection of two matters: the increase in monthly union dues from ₱100.00 to ₱200.00, which petitioner contested for lack of proper check-off authorization, and the subsequent disciplinary proceedings against him for non-payment, which culminated in his expulsion from the union and his eventual affiliation with a rival labor organization, WATER-AFWC, during the CBA freedom period.

Petitioner Allan M. Mendoza was a member of the Manila Water Employees Union (MWEU), a DOLE-registered labor organization of rank-and-file employees at Manila Water Company (MWC). The respondents were MWEU officers during the relevant period, with Eduardo B. Borela serving as President and Chairman of the Executive Board, Buenaventura Quebral as First Vice-President and Treasurer, and Elizabeth Cometa as Secretary. In an April 11, 2007 letter, MWEU through Cometa informed petitioner that the union had been unable to fully deduct the increased ₱200.00 union dues from his salary due to lack of the required December 2006 check-off authorization from him. Petitioner was warned that failure to pay would result in sanctions. Quebral subsequently informed Borela, through a May 2, 2007 letter, that petitioner and several others had violated Section 1(g), Article IX of the MWEU Constitution and By-Laws for non-payment of dues, and Borela referred the charge to the grievance committee for investigation.

On May 21, 2007, a notice of hearing was sent to petitioner, who attended the scheduled hearing. On June 6, 2007, the grievance committee recommended a 30-day suspension. Borela informed petitioner through a June 20, 2007 letter of the Executive Board's unanimous approval of the suspension, effective June 25, 2007. Petitioner and his co-respondents took exception to the imposition in a June 26, 2007 letter, indicating their intention to appeal to the General Membership Assembly pursuant to Section 2(g), Article V of the union's Constitution and By-Laws. Borela denied the appeal in a June 28, 2007 reply, stating that the prescribed period for appeal had expired. Petitioner sent another letter on July 4, 2007 reiterating his arguments and demanding that the General Membership Assembly be convened, but the letter was not acted upon.

Petitioner was charged a second time with non-payment of union dues and required to attend an August 3, 2007 hearing. Thereafter, he was again penalized with a 30-day suspension through an August 21, 2007 letter from Borela, informing him of the Executive Board's unanimous approval of the grievance committee recommendation, effective August 24, 2007. Petitioner submitted a written reply invoking his right to appeal through the convening of the General Membership Assembly, but the respondents did not act on his plea. Meanwhile, MWEU scheduled an election of officers on September 14, 2007. Petitioner filed his certificate of candidacy for Vice-President but was disqualified for not being a member in good standing on account of his suspension.

On October 2, 2007, petitioner was charged with non-payment of union dues for the third time. He did not attend the scheduled hearing and was meted the penalty of expulsion from the union, per the unanimous approval of the Executive Board. His pleas for an appeal to the General Membership Assembly were once more unheeded. In 2008, during the freedom period and CBA negotiations with MWC, petitioner joined another union, the Workers Association for Transparency, Empowerment and Reform, All-Filipino Workers Confederation (WATER-AFWC), and was elected its President. Other MWEU members were inclined to join WATER-AFWC, but MWEU director Torres threatened that they would not get benefits from the new CBA. The MWEU leadership submitted a proposed CBA containing provisions that in the event of retrenchment, non-MWEU members shall be removed first, and that upon signing of the CBA, only MWEU members shall receive a signing bonus.

On October 13, 2008, petitioner filed a complaint against respondents for unfair labor practices, damages, and attorney's fees before the NLRC. The Labor Arbiter referred the case back to the union level for the General Membership Assembly to act on petitioner's appeal. The NLRC reversed and dismissed the complaint for lack of jurisdiction, holding that the causes of action constituted inter/intra-union disputes cognizable by the BLR. The Court of Appeals affirmed the NLRC's dismissal, finding the causes of action to be inter/intra-union disputes and holding that petitioner failed to present substantial evidence of unfair labor practices.

• Unfair Labor Practices: Petitioner maintained that respondents committed unfair labor practices under Article 249(a) and (b) of the Labor Code, which he clearly enumerated in his pleadings below, and that these acts fall within the jurisdiction of the Labor Arbiter.
• Jurisdiction: Petitioner argued that the Labor Arbiter, NLRC, and CA erred in simply dismissing his complaint on the ground that his causes of action were intra- or inter-union in nature, without ruling on his accusation of unfair labor practices. He admitted that some causes of action involved intra- or inter-union disputes, but contended that other acts of respondents constituted unfair labor practices.
• Procedural Violations: Petitioner argued that respondents failed to observe the proper procedure in the imposition of the increased monthly union dues and unduly imposed the penalties of suspension and expulsion against him, and that under the union's constitution and by-laws, he was given the right to appeal his suspension and expulsion to the general membership assembly.
• Bad Faith: Petitioner contended that in denying him his rights as a union member and expelling him, respondents acted with malice and evident bad faith, and were guilty of violating and curtailing his rights to vote and be voted upon within the union, and for discriminating against non-MWEU members.
• Damages: Petitioner argued that the totality of respondents' conduct showed they were guilty of unfair labor practices and should be adjudged solidarily liable for moral and exemplary damages and attorney's fees.

• Issues of Fact: Respondents maintained that petitioner raised issues of fact beyond the purview of a petition for review on certiorari, and that the findings of fact of the CA are final and conclusive.
• Uniformity of Rulings: Respondents argued that the Labor Arbiter, NLRC, and CA were one in declaring that no unfair labor practices were committed, and that petitioner's other allegations fell within the jurisdiction of the BLR as intra- or inter-union disputes.
• Intra-/Inter-Union Nature: Respondents contended that the issues arising from petitioner's right to information on increased dues, right to appeal his suspension and expulsion, and right to vote and be voted upon were essentially intra-union in nature, and that all acts questioned were covered by Section 1, Rule XI of Department Order 40-03 as intra-/inter-union disputes outside the Labor Arbiter's jurisdiction.
• No Actionable Wrong: Respondents argued that petitioner's allegations regarding supposed coercion and restraint relative to benefits in the proposed CBA did not constitute an actionable wrong.
• Insubordination: Respondents maintained that in not paying his union dues, petitioner was guilty of insubordination and deserved the penalty of expulsion.
• Failure to Exhaust Remedies: Respondents argued that petitioner failed to petition to convene the general assembly through the required signature of 30% of the union membership in good standing under Article VI, Section 2(a) of MWEU's Constitution and By-Laws, or by a petition of the majority of the general membership under Article VI, Section 3, and that for this failure, petitioner could no longer question his suspension or expulsion.

• Jurisdiction: Whether the presence of inter/intra-union conflicts negates a complaint for unfair labor practices against a labor organization and its officers, and whether the NLRC properly dismissed the case for lack of jurisdiction.
• Unfair Labor Practices: Whether respondents are guilty of unfair labor practices under Article 249(a) and (b) of the Labor Code.
• Interference vs. Restraint or Coercion: Whether threats made by a union officer against members of a rival union constitute mere "interference" and do not amount to "restraint" or "coercion."
• Sufficiency of Evidence: Whether petitioner failed to present substantial evidence proving respondents' specific acts of unfair labor practices.
• Damages: Whether respondents are solidarily liable to petitioner for moral and exemplary damages and attorney's fees.

• Jurisdiction: No. The existence of inter/intra-union aspects does not negate a charge of unfair labor practices, which falls within the original and exclusive jurisdiction of Labor Arbiters under Article 217 of the Labor Code. The NLRC improperly dismissed the complaint for lack of jurisdiction.
• Unfair Labor Practices: Yes. Respondents—except Carlos Villa, Ric Briones, and Chito Bernardo—are guilty of unfair labor practices under Article 249(a) and (b) for deliberately failing to act on petitioner's timely appeals of his suspension and expulsion, violating his right to self-organization and illegally terminating his union membership.
• Interference vs. Restraint or Coercion: Yes, as to the CA's characterization. The Court did not disturb the CA's finding that the threat by MWEU director Torres against members of a rival union was an interference not amounting to actionable restraint or coercion, as petitioner offered no substantial evidence to the contrary.
• Sufficiency of Evidence: No, as to the lower courts' finding. The documentary evidence showed that petitioner timely filed written appeals that respondents deliberately ignored, which constituted sufficient evidence of unfair labor practices.
• Damages: Yes. Respondents are liable for ₱100,000.00 moral damages, ₱50,000.00 exemplary damages, and attorney's fees equivalent to 10% of the total award, their bad faith having caused petitioner untold suffering, oppression, and ostracism from MWEU.

• Jurisdiction: The Court acknowledged that some of petitioner's causes of action—such as the right to information on increased dues, the right to appeal suspension and expulsion, and the right to vote and be voted upon—were indeed intra-union disputes cognizable by the BLR under Article 226 of the Labor Code and Section 1, Rule XI of DOLE Department Order No. 40-03. However, petitioner's charge of unfair labor practices fell within the original and exclusive jurisdiction of Labor Arbiters under Article 217 of the Labor Code, which expressly includes unfair labor practice cases. Article 247 further provides that the civil aspects of all ULP cases, including claims for damages and attorney's fees, are under the jurisdiction of Labor Arbiters. The Labor Arbiter, NLRC, and CA erred in dismissing the complaint without resolving the ULP charge, treating all causes of action as purely intra-/inter-union disputes.

• Unfair Labor Practices: The Court examined the MWEU Constitution and By-Laws provisions on appeals. Under Article X, Section 4, a suspended member has the right to appeal within three working days from notice of suspension, with the Executive Board required to act by a simple majority vote. Under Article X, Section 5, an expelled member has seven days from notice to appeal to the Executive Board, which must act by a simple majority vote and then refer the matter to the General Membership Assembly for approval or disapproval by majority vote. The documentary evidence showed that petitioner timely filed written appeals after both his second suspension (August 21, 2007 letter) and his expulsion (October 2, 2007 charge), but the Executive Board—consisting of named respondents—did not act on either appeal. The Court rejected respondents' argument that petitioner lost his right to appeal by failing to petition to convene the general assembly under Article VI, Sections 2(a) and 3, holding that the Executive Board must first act on his appeals before the matter could properly be referred to the general membership. Because respondents did not act, petitioner was illegally suspended, disqualified from running for MWEU Vice-President, and expelled without due process. These acts constituted ULP under Article 249(a) (restraining or coercing employees in the exercise of their right to self-organization) and 249(b) (causing or attempting to cause discrimination). As members of the governing board, respondents were presumed to know and observe the union's constitution and by-laws; their repeated violations and disregard of petitioner's rights connoted willfulness and bad faith.

• Interference vs. Restraint or Coercion: The CA found that the threat by MWEU director Torres—that non-MWEU members would not receive CBA benefits—was an inter-union dispute constituting interference rather than actionable restraint or coercion, citing the principle that a labor organization may interfere in the employees' right to self-organization as long as it does not amount to restraint or coercion. The Court did not disturb this characterization, as petitioner offered no substantial evidence to rebut it.

• Sufficiency of Evidence: The Court found that the documentary evidence was clear: petitioner timely filed written appeals that respondents deliberately ignored. This constituted sufficient evidence of ULP. The CA erred in requiring petitioner to prove that MWEU did not penalize other members who failed to pay the increased dues and to identify the specific MWEU representatives responsible for the proposed discriminatory CBA provisions, because the core ULP charge—the deliberate inaction on petitioner's appeals—was supported by the documentary record. The CA's finding of lack of substantial evidence was erroneous and would result in injustice.

• Damages: The Court awarded moral damages of ₱100,000.00 under Article 32 of the Civil Code, which provides that any private individual who obstructs, defeats, violates, or impairs the right of another to become a member of associations for purposes not contrary to law shall be liable for damages. Respondents' bad faith—defined as breach of faith and willful failure to respond to a plain and well-understood obligation—caused petitioner physical suffering, mental anguish, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and ostracism from MWEU. Exemplary damages of ₱50,000.00 were awarded under Article 2229 of the Civil Code to serve as a deterrent against respondents' socially deleterious behavior. Attorney's fees of 10% of the total award were granted because petitioner was compelled to litigate to protect his rights and interests.

• Unfair Labor Practices of Labor Organizations (Article 249, Labor Code) — A labor organization, its officers, agents, or representatives commit unfair labor practices when they (a) restrain or coerce employees in the exercise of their right to self-organization, provided the organization retains the right to prescribe its own rules on acquisition or retention of membership; or (b) cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee whose membership has been denied or terminated on grounds other than the usual terms and conditions of membership. Only officers, members of governing boards, representatives, or agents who actually participated in, authorized, or ratified the ULP shall be held criminally liable. The Court applied this by finding that respondents' deliberate inaction on petitioner's appeals constituted restraint and coercion of his right to self-organization and illegal termination of his union membership.

• Jurisdictional Distinction: Intra-/Inter-Union Disputes vs. Unfair Labor Practices — Intra-union disputes (conflicts among union members, including grievances from violations of rights and conditions of membership, violations of or disagreements over the union's constitution and by-laws, or disputes from chartering or disaffiliation) are cognizable by the Bureau of Labor Relations under Article 226 of the Labor Code and Section 1, Rule XI of DOLE Department Order No. 40-03. Unfair labor practice cases, including their civil aspects (claims for damages and attorney's fees), fall within the original and exclusive jurisdiction of Labor Arbiters under Article 217. The existence of intra-/inter-union aspects does not negate a ULP charge; the two are not mutually exclusive.

• Right to Self-Organization (Article 243, Labor Code) — All persons employed in commercial, industrial, and agricultural enterprises and in religious, charitable, medical, or educational institutions have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. The right includes the right to organize or affiliate with a labor union, determine which union to join, and engage in concerted activities for collective bargaining or mutual aid and protection. The Court held that respondents' violation of this right through denial of due process in disciplinary proceedings constituted ULP.

• Bad Faith in Labor Relations — Bad faith implies breach of faith and willful failure to respond to a plain and well-understood obligation. As members of the governing board of a union, officers are presumed to know, observe, and apply the union's constitution and by-laws. Their repeated violations and disregard of a member's rights connoted willfulness and bad faith, warranting an award of moral and exemplary damages.

• Permissible Interference by Labor Organizations — A labor organization may interfere in the employees' right to self-organization as long as it does not amount to restraint or coercion. Interference by a rival union to ensure the loyalty of its members and persuade non-members to join is a function of self-organizing and is not an actionable wrong.

• "However, petitioner's charge of unfair labor practices falls within the original and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor Code." — This passage establishes the ratio decidendi on jurisdiction: the existence of intra-/inter-union aspects does not negate a ULP charge cognizable by Labor Arbiters.

• "Thus, contrary to respondents' argument that petitioner lost his right to appeal when he failed to petition to convene the general assembly through the required signature of 30% of the union membership in good standing pursuant to Article VI, Section 2(a) of MWEU's Constitution and By-Laws or by a petition of the majority of the general membership in good standing under Article VI, Section 3, this Court finds that petitioner was illegally suspended for the second time and thereafter unlawfully expelled from MWEU due to respondents' failure to act on his written appeals." — This is the Court's central finding: the Executive Board's inaction on petitioner's appeals, not petitioner's failure to petition the general assembly, was the operative violation.

• "As members of the governing board of MWEU, respondents are presumed to know, observe, and apply the union's constitution and by-laws. Thus, their repeated violations thereof and their disregard of petitioner's rights as a union member — their inaction on his two appeals which resulted in his suspension, disqualification from running as MWEU officer, and subsequent expulsion without being accorded the full benefits of due process — connote willfulness and bad faith, a gross disregard of his rights thus causing untold suffering, oppression and, ultimately, ostracism from MWEU." — This passage articulates the basis for the finding of bad faith and the award of damages, establishing that union officers' presumed knowledge of the union's constitution and by-laws makes deliberate disregard of those provisions willful misconduct.

• Employees Union of Bayer Phils. vs. Bayer Philippines, Inc., 651 Phil. 190 (2010) — Cited for the definition of intra-union disputes and the jurisdictional framework distinguishing intra-/inter-union disputes from other labor relations matters.
• Baptista vs. Villanueva, G.R. No. 194709, July 31, 2013, 703 SCRA 48 — Cited for the proposition that unfair labor practice relates to the commission of acts that transgress the workers' right to organize.
• Culili vs. Eastern Telecommunications Philippines, Inc., 657 Phil. 342 (2011) — Cited for the principle that all prohibited acts constituting unfair labor practice in essence relate to the workers' right to self-organization.
• Pepsi-Cola Products Philippines, Inc. vs. Molon, G.R. No. 175002, February 18, 2013, 691 SCRA 113 — Cited for the definition of unfair labor practice as offenses that at their core violate the constitutional right of workers to self-organization.
• Reyes vs. Trajano, G.R. No. 84433, June 2, 1992, 209 SCRA 484 — Cited for the scope of the right to self-organization, including the right to organize, affiliate, and engage in concerted activities for collective bargaining or mutual aid and protection.
• Vital-Gozon vs. Court of Appeals, 354 Phil. 128 (1998) — Cited for the definition of moral damages and the instances when they may be recovered, including acts referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35 of the Civil Code.
• Sanchez vs. Republic, 618 Phil. 228 (2009) — Cited for the definition of bad faith as breach of faith and willful failure to respond to a plain and well-understood obligation.
• U-Bix Corporation vs. Bandiola, 552 Phil. 633 (2007) — Cited for the definition and purpose of exemplary damages as designed to permit courts to mold behavior with socially deleterious consequences.
• Montinola vs. Philippine Airlines, G.R. No. 198656, September 8, 2014, 734 SCRA 439 — Cited for the principle that exemplary damages are designed to reshape socially deleterious behavior through negative incentives or deterrents.
• Tangga-an vs. Philippine Transmarine Carriers, Inc., G.R. No. 180636, March 13, 2013, 693 SCRA 340 — Cited for the rule that when an employee is forced to litigate and incur expenses to protect his rights and interest, he is entitled to an award of attorney's fees.

• Article 217, Labor Code — Enumerates the cases over which Labor Arbiters and the NLRC have original and exclusive jurisdiction, including unfair labor practice cases and claims for actual, moral, exemplary, and other forms of damages arising from employer-employee relations. Applied to establish that petitioner's ULP charge falls within the Labor Arbiter's jurisdiction.
• Article 247, Labor Code — Defines the concept of unfair labor practice and provides that the civil aspects of all ULP cases, including claims for damages and attorney's fees, are under the jurisdiction of Labor Arbiters. Applied to confirm that petitioner's claims for damages were properly cognizable by the Labor Arbiter.
• Article 249(a) and (b), Labor Code — Defines unfair labor practices of labor organizations, including restraining or coercing employees in the exercise of their right to self-organization, and causing or attempting to cause an employer to discriminate against an employee. Applied to find respondents guilty of ULP for their inaction on petitioner's appeals.
• Article 243, Labor Code — Guarantees the right to self-organization and to form, join, or assist labor organizations of one's own choosing for purposes of collective bargaining. Applied as the constitutional and statutory foundation of petitioner's rights.
• Article 226, Labor Code — Confers on the Bureau of Labor Relations original and exclusive authority over inter-union and intra-union conflicts. Applied to acknowledge that some of petitioner's causes of action were indeed intra-/inter-union disputes.
• Section 1, Rule XI, DOLE Department Order No. 40-03, Series of 2003 — Enumerates instances of inter/intra-union disputes, including violations of rights and conditions of union membership and validity/invalidity of expulsion of union members. Applied to classify which of petitioner's causes of action were intra-/inter-union in nature.
• Article 32, Civil Code — Provides that any public officer or private individual who obstructs, defeats, violates, or impairs the right of another to become a member of associations for purposes not contrary to law shall be liable for damages. Applied as basis for the award of moral damages.
• Article 2229, Civil Code — Provides that exemplary or corrective damages are imposed by way of example or correction for the public good. Applied as basis for the award of exemplary damages.
• MWEU Constitution and By-Laws, Article X, Sections 4 and 5; Article VI, Sections 2(a), 2(d), and 3; Article V, Section 2(g); Article IX, Section 1(g) — Govern the disciplinary procedures, appeal rights, and grounds for suspension and expulsion of MWEU members. Applied to determine that petitioner's appeals were timely and that the Executive Board was obligated to act on them before referral to the General Membership Assembly.

Carpio (Chairperson), Brion, Mendoza, and Leonen, JJ., concurred. No separate concurring opinions were noted.