Dissension in the Court: August 2010

The following are selected decisions promulgated by the High Court in August 2010 where at least one Justice felt compelled to express his or her dissent from the decision penned by the ponente.

1.         [Union] Shop Talk (Leonardo-De Castro vs. Brion and Carpio)

Apart from the wide-spread paranoia about a possible Y2K global computer cataclysm, one other significant development occurring around the start of the twenty-first century was the merger of two giant banking institutions—Far East Bank and Trust Company (FEBTC) and Bank of the Philippine Islands (BPI)—with BPI being the surviving entity.  One of several legal issues spawned by that merger was the subject matter of Republic of the Philippines vs. Bank of the Philippine Islands penned by Justice Teresita J. Leonardo-De Castro.

At the time of the merger, the BPI Employees Union-Davao Chapter (the “Union”) constituted the exclusive bargaining agent of BPI’s rank and file employees in Davao City.  Their existing collective bargaining agreement (CBA) with BPI included a “Union Shop” clause which read as follows:

Article II:

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.

Once the FEBTC-BPI merger took effect, the Union required BPI to implement the Union Shop Clause and compel the former FEBTC employees to join the Union.  BPI took the position that the former FEBTC employees were not covered by the Union Security Clause on the ground that the former FEBTC employees were not new employees who were hired and subsequently regularized, but were absorbed employees “by operation of law” because the “former employees of FEBTC can be considered assets and liabilities of the absorbed corporation.”

While the Voluntary Arbitrator sided with BPI, the Court of Appeals reversed the Voluntary Arbitrator’s decision.  The Court of Appeals held that while there is indeed a distinction between “absorbed” employees and “new” employees, such distinction applied only with respect to recognition of the past service of the “absorbed” employees with their former employer, FEBTC.  However, for purposes of applying the Union Shop Clause, they should be deemed to be “new” employees as otherwise, inequities would arise.

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