VIRGILIO S. CARIÑO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, HARRISON INDUSTRIAL CORPORATION AND HARRISON INDUSTRIAL WORKERS’ UNION, RESPONDENTS.

Petitioner asks the Court to declare null and void a Decision
dated 26 May 1989 of the
National Labor Relations Commission (NLRC) in NLRC Case No. NCR-00-09-03225-87
and to reinstate the Decision of the
Labor Arbiter which the NLRC had modified.

Petitioner Cariño was the former
President of private respondent Harrison Industrial Workers’ Union
(“Union”). 
Because he was widely believed to have grossly mismanaged Union affairs, the other officers of the Union formed an investigating committee and
several times invited petitioner Cariño to
answer the complaints and charges against him. 
These charges were, principally:

1.  Conspiring with the
company during the negotiation of the CBA, resulting in, among other things,
Article 22 entitled “Retirement” which provided for retirement pay of
one (1) day’s basic salary for every year of service.

2.  Paying attorney’s fees
to Atty. Federico Leynes, Union counsel, out of Union
funds without obtaining corresponding receipts therefor.

3.  Unilaterally increasing
the membership dues by an additional P17.00 per member in order to pay
increased attorney’s fees.

4.  Concealing the CBA,
failure to present and to explain the provisions of the same prior to
ratification by the union membership.

5.  Refusal to turn over the
custody and management of Union funds to the Union treasurer.

Petitioner Cariño, however, failed to
respond to the calls or invitations made by the investigating committee.  Finally, the investigating committee called a
general membership meeting on 11 June
1987.  At this general
membership meeting, the charges against petitioner were presented and discussed
and the Union decided to file a petition for special election of
its officers.

On 16 June 1987,
a petition for special election of officers was filed by the Union
with the Bureau of Labor Relations, Department of Labor and Employment.  Several hearings were held at the BLR, always
with due notice to petitioner Cariño; petitioner,
however, failed to appear even once.

On 5 August 1987,
a general Union membership meeting was held
for the impeachment of Cariño.  The general membership found Cariño guilty of the above-mentioned charges and decided to
expel him from the Union and to recommend his
termination from employment.  Atty.
Federico Leynes also ceased to be counsel for the Union.

The Union accordingly informed private respondent Harrison
Industrial Corporation (“Company”) of the expulsion of petitioner Cariño from the Union and demanded application of the Union
Security Clause of the then existing Collective Bargaining Agreement (CBA) on
15 September 1987.  Petitioner Cariño received a letter of termination from the Company,
effective the next day.

Petitioner Cariño, now represented by
Atty. Leynes, the former lawyer of the Union,
filed a complaint for illegal dismissal with the Labor Arbiter.

In a Decision dated 7
October 1988, the Labor Arbiter held that there was no just cause
for the dismissal of petitioner Cariño, none of the
causes for suspension or dismissal of Union members enumerated in the Union’s
Constitution and By-Laws being applicable to petitioner’s situation.  The Labor Arbiter also held that the manner
of petitioner’s dismissal had been in disregard of the requirements of notice
and hearing laid down in the Labor Code. 
The Labor Arbiter ordered petitioner’s reinstatement with full backwages and payment of attorney’s fees, the monetary
liability to be borne solidarily by the Company and
the Union.

The Company and the Union went on appeal
before the public respondent National Labor Relations Commission (NLRC).  The NLRC, in a Decision promulgated on 26 May 1989, reversed the Labor
Arbiter’s award.  The NLRC noted that
petitioner Cariño had merely denied the serious
charges of mismanagement proferred against him, as
set out in the affidavit of Dante Maroya, the
incumbent President of the Union, which affidavit had
been adopted by the Union as its position paper in the proceedings before the Labor
Arbiter.  The NLRC held Cariño’s silence as “tantamount to (an) admission of
guilt” and as constituting
the ultimate cause for his dismissal. 
However, the NLRC agreed with the Labor Arbiter’s finding that the
manner of petitioner Cariño’s dismissal was
inconsistent with the requirements of due process.  The NLRC accordingly found the Company and
the Union solidarily liable, “by way of penalty
and financial assistance”, to petitioner Cariño
for payment of separation pay, at the rate of one-half (1/2) month’s salary for
each year of service.

In the instant Petition for Certiorari, petitioner Cariño basically seeks reinstatement of the Decision of the
Labor Arbiter.

1.  Petitioner Cariño contended that the NLRC had erred in taking
cognizance of the Union’s admittedly late appeal.  We agree, however, with the Solicitor General
that it is a settled principle
of remedial law that reversal of a judgment obtained by a party appealing from
it also benefits a co-party who had not
appealed, or who had appealed out of time, where the rights and
liabilities of both parties under the modified decision are so interwoven and
inter-dependent as to be
substantively inseparable.^[1]

In the instant case, the NLRC could take cognizance of the late
appeal of the Union, considering that the lawfulness of petitioner Cariño’s dismissal by the Company could be determined only after ascertaining, among other
things, the validity of the Union’s act of expelling Cariño
from its membership.  In other words, the
Company having seasonably appealed the Labor Arbiter’s Decision and the
Company’s and the Union’s liability being closely
intertwined, the NLRC could properly take account of the Union’s
appeal even though not seasonably filed.

2.  The NLRC in effect held
that there had been just cause for petitioner Cariño’s
dismissal.  The Court considers that the
NLRC was correct in so holding, considering
the following documentary provisions:

a) Article II, Sections 4
and 5 of the Collective Bargaining Agreement between the Company and the Union
provided as follows:

“SECTION 4.  Any
employee or worker obliged to join the UNION and/or
maintain membership therein under the foregoing sections who fails to do so
and/or maintain such membership shall be dismissed without pay upon formal
request of the UNION.

SECTION 5.  Any UNION member
may be suspended and/or expelled by the UNION for:

a)   Non-payment of dues or special assessment to
the UNION.

b)   Organizing or joining another UNION
or affiliating with a labor federation.

c)   Commission of a crime as defined by the
Revised Penal Code against any UNION officer in relation to activities for and
in behalf of the UNION.

d)   Participation in an unfair labor practice or any
derogatory act against the UNION or any of
its officers or members; and

e)   Involvement in any violation of this
Agreement or the UNION‘s Constitution and By-Laws.

The UNION assumes full and complete responsibility for all
dismissals of any worker/employee effected by the UNION and conceded in turn,
by the COMPANY pursuant to the provisions hereof.

The UNION shall depend and hold the COMPANY
free and harmless against any and all claims the dismissed worker/employee
might bring and/or obtain from the Company for such dismissal.”^[2]
(Underscoring supplied.)

b) The Constitution of the Union
contains the following provisions:

(i) Article X Section 5 reads:

“ARTICLE X – FEES, DUES, SPECIAL

ASSESSMENTS, FINES AND OTHER PAYMENTS

x x
x                          x x x                             x
x x

SECTION 5.  Special
assessments or other extraordinary fees
such as for payment of attorney’s fees shall be made only upon a resolution
duly ratified by the general membership by secret balloting.

x x
x                          x x
x                             x x
x“^[3]

(Underscoring supplied.)

(ii) Article XV entitled “Discipline” provides in Section
1 thereof that:

“SECTION 1.  Any
individual union members and/or union officer may be disciplined or expelled
from the UNION by the Executive Board if the latter should find the former
guilty of charges, based on the following grounds proferred
officially against him:

a)   Non-payment of dues and other assessments for
two (2) months;

b)   Culpable violation of the Constitution and
By-Laws;

c)   Deliberate refusal to implement policies,
rules and regulations, decisions and/or support the programs or projects of the
UNION as laid down by its governing organs or its officers; and

d)   Any act inimical to the interest of the UNION
and/or its officers, such as but not limited
to rumor mongering which tends to discredit the name and integrity of the UNION
and/or its officers and creating or causing to create dissension among the
UNION members thereof.”^[4]
(Underscoring supplied.)

Article XVI entitled “Impeachment and Recall”
specified, in Section 1 thereof, the grounds for impeachment or recall of the
President and other Union officers, in the following terms:

“a)  Committing or causing the commission
directly or indirectly of acts against the interest and welfare of the UNION;

 b)  Malicious
attack against the UNION, its officers or against a
fellow UNION officer or member;

 c)  Failure
to comply with the obligation to turn over and return to the UNION Treasurer
within three (3) days are [sic] unexpected sum or sums of money received an authorized
UNION purpose;

 d)  Gross
misconduct unbecoming of a UNION officer;

 e)  Misappropriation
of UNION funds and property.  This is
without prejudice to the filing of an appropriate criminal or civil action
against the responsible officer or officers by any interested party;

 f)   Willful
violation of any provisions on this Constitution or rules, regulations,
measures, resolution and decisions of the UNION.”^[5]
(Underscoring supplied.)

It appears to the Court that the particular charges raised
against petitioner Cariño, set out earlier,
reasonably fall within the underscored provisions of the foregoing
documents.  The NLRC impliedly recognized
this when it described the charges of mismanagement against Cariño
as serious.

The Labor Arbiter, however, also held that petitioner Cariño had been deprived of procedural due process
on the union level in view of alleged failure to comply with the required
procedure governing impeachment and recall proceedings set out in Article XVI,
Section 2, of the Constitution of the Union.  Article XVI, Section 2 reads as follows:

“a)  Impeachment or recall proceedings shall be
initiated by a formal petition or resolution signed by at least thirty (30%)
percent of all bona fide members of the UNION and
addressed to the Chairman of the Executive board.

b)   The Board Chairman shall then convene a
general membership meeting to consider the impeachment or recall of an officer
or a group of officers, whether elective or appointive.

c)   UNION officers against whom impeachment or
recall charges have been filed shall be given ample opportunity to defend
themselves before any impeachment or recall vote is finally taken.

d)   A majority of all members of the UNION
shall be required to impeach or recall UNION officers.

e)   The UNION officers impeached shall ipso facto
be considered resigned or ousted from office and shall no longer be elected nor
appointed to any position in the UNION.

f)    The decision of the general membership on
the impeachment or recall charge shall be final and executory.”^[6]

The NLRC, for its part, noted that while the prescribed
procedural steps had not all been followed or complied with, still,

“Be that as it may, the general membership of the Union
had spoken and decided to expel complainant as Union President and member and
ultimately, requested the company to terminate his services per CBA
prescription.  It is worthy to note
that the charges aired by Mr. Dante Maroya are
serious enough for complainant to specifically respond and explain his side at
the arbitral proceedings below.  While
it appears that due process was lacking at the plant level, this was cured by
the arbitration process conducted by the Labor Arbiter.  Despite the ample opportunity to explain
his side, complainant failed to do so and instead, relied completely on alleged denial of due process.  Complainant’s silence in this respect is
tantamount to [an] admission of guilt.”^[7] (Underscoring supplied.)

It is true that the impeachment of Cariño had not been initiated by a formal petition or
resolution signed by at least thirty percent (30%) of all the bona fide
members of the Union. 
A general meeting had, however, been called to take up the charges
against petitioner Cariño, who had been given
multiple opportunities to defend himself before the investigating committee of
the Union officers and before the general Union members as well as before the
Bureau of Labor Relations.  Petitioner Cariño, however, chose to disregard all calls for him to
appear and defend himself.  At the
general membership meeting, therefore, petitioner Cariño
was impeached and ordered recalled by unanimous vote of the
membership.  Under these circumstances,
failure to comply literally with step (a) of Article XVI Section 2 of the Union’s
Constitution must be regarded as non-material: 
the prescribed impeachment and recall proceeding had been more than
substantially complied with.

4.  Turning now to the
involvement of the Company in the dismissal of petitioner Cariño,
we note that the Company upon being formally advised in writing of the
expulsion of petitioner Cariño from the Union, in
turn simply issued a termination
letter to Cariño, the termination being made
effective the very next day.  We believe
that the Company should have given petitioner Cariño
an opportunity to explain his side of the controversy with the Union.  Notwithstanding the Union’s
Security Clause in the CBA, the Company should have reasonably satisfied itself
by its own inquiry that the Union had not been merely
acting arbitarily and capriciously in impeaching and
expelling petitioner Cariño.  From what was already discussed above, it is
quite clear that had the Company taken the trouble to investigate the acts and
proceedings of the Union, it could have very easily
determined that the Union had not acted
arbitrarily in impeaching and expelling from its ranks petitioner Cariño.  The Company
offered the excuse that the Union had threatened to go
on strike if its request had not been forthwith granted.  Assuming that such a threat had in fact been
made, if a strike was in fact subsequently called because the Company had
insisted on conducting its own inquiry, the Court considers that such would
have been prima facie an illegal strike. 
The Company also pleaded that for it to inquire into the lawfulness of
the acts of the Union in this regard would constitute
interference by the Company in the administration of Union affairs.  We do not believe so.

In Liberty
Cotton Mills Worker’s Union, et al. v. Liberty
Cotton Mills, et al,^[8]
the Court held respondent company to have acted in bad faith in dismissing the
petitioner workers without giving them an opportunity to present their side in
their controversy with their own union.

“x x x                            x
x x                             x x x

It is OUR considered view that respondent company is equally liable
for the payment of backwages for having acted in bad
faith in effecting the dismissal of the individual petitioners.  Bad faith on the part of respondent
company may be gleaned from the fact that the petitioner workers were dismissed
hastily and summarily.  At best, it
was guilty of a tortious act, for which it must
assume solidary liability, since it apparently
chose to summarily dismiss the workers at the union’s instance secure in the
union’s contractual undertaking that the union would hold it “free from
any liability” arising from such dismissal.

x x x                          x x x                             x
x x

While respondent company, under the Maintenance of Membership
provision of the Collective Bargaining Agreement, is bound to dismiss any
employee expelled by PAFLU for disloyalty, upon its written request, this
undertaking should not be done hastily and summarily.  The company acted in bad faith in
dismissing petitioner workers without giving them the benefit of a hearing.  It did not even bother to inquire from the
workers concerned and from PAFLU itself about the cause of the expulsion of the
petitioner workers.  Instead, the
company immediately dismissed the workers on May 29, 1964 – in a span of only one day – stating that it
had no alternative but to comply with its obligation under the Security
Agreement in the Collective Bargaining Agreement, thereby disregarding the
right of the workers to due process, self- organization and security of tenure.

x x
x                          x
x x                             x x x

The power to dismiss is a normal prerogative of the employer.  However, this is not without
limitations.  The employer is bound to
exercise caution in terminating the services of his employees especially so
when it is made upon the request of a labor union pursuant to the Collective
Bargaining Agreement, as in the instant case.  Dismissals must not be arbitrary and
capricious.  Due process must be
observed in dismissing an employee because it affects not only his position
but also his means of livelihood. 
Employers should therefore respect and protect the rights of their
employees, which include the right to labor. 
x x x

x x x                          x x x                             x
x x“^[9]

(Underscoring supplied.)

In Manila Cordage Company v. Court of Industrial Relations, et
al.,^[10]
the Court stressed the requirement of good faith on the part of the company in dismissing
the complainant and in effect held that precipitate action in dismissing the
complainant is indication of lack of good faith.

“x x x                         x x                                x
x x

The contention of the petitioners that they acted in good faith in
dismissing the complainants and, therefore, should not be held liable to pay
their back wages has no merit.  The
dismissal of the complainants by the petitioners was precipitate and done with
undue haste.  Considering that the so-called ‘maintenance of membership’ clause
did not clearly give the petitioners the right to dismiss the complainants if
said complainants did not maintain their membership in the Manco
Labor Union, the petitioners should have raised the issue before the
Court of Industrial Relations in a petition for permission to dismiss the
complainants.

x x x                          x
x x                             x x x“^[11]

(Underscoring supplied.)

5.  We conclude that the Company had
failed to accord to petitioner Cariño the latter’s
right to procedural due process.  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
CBA.  An employee is entitled to be
protected not only from a company which disregards his rights but also from his
own Union the leadership of which could yield to the temptation of swift and
arbitrary expulsion from membership and hence dismissal from his job.

The Court does not believe, however, that the grant of separation
pay to petitioner Cariño was an appropriate response
(there having been just cause for the dismissal) to the failure of the Company
to accord him his full measure of due process. 
Since petitioner Cariño had clearly disdained
answering the charges proferred against him within
the Union, there was no reason to suppose that if the
Company had held formal proceedings before dismissing him, he would have
appeared in a Company investigation and pleaded his defenses, if he had any,
against the charges against him.  There
was no indication that the Company had in fact conspired with the Union
to bring about the expulsion and
dismissal of petitioner Cariño; indeed, the Union
membership believed it was Cariño who had conspired
with the company in the course of negotiating the CBA.  Considering all the circumstances of this
case, and considering especially the nature of the charges brought against
petitioner Cariño before his own Union, the Court
believes that a penalty of P5,000 payable to petitioner Cariño
should be quite adequate, the penalty to be borne by the Company and the Union solidarily.  The
Court also considers that because the charges raised against petitioner and unanswered by him have marked overtones
of dishonesty, this is not a case where “financial (humanitarian)
assistance” to the dismissed employee is warranted.^[12]

WHEREFORE, the Court DISMISSED the
Petition for Certiorari for lack of merit but MODIFIED the Decision of the public respondent National Labor
Relations Commission dated 26 May 1989
by eliminating the grant of separation
pay and in lieu thereof imposing a penalty of P5,000.00 payable to the
petitioner to be borne solidarily by the Company and the Union.  No pronouncement as to costs.

Fernan, C.J., (Chairman), Gutierrez,
Jr., Bidin, and
Cortes, JJ., concur.

^[1]
Government of the Philippines
v. Tizon, 20 SCRA 1186 (1967).

^[2]
Rollo, p. 82.

^[3]
Rollo, p. 151.

^[4]
Rollo, p. 153.

^[5]
Rollo, p. 154.

^[6]
Rollo, pp. 154-155.

^[7]
Decision of the NLRC, Rollo, pp. 27-28.

^[8]
90 SCRA 391 (1979).

^[9]
90 SCRA at pp. 393-395.

^[10]
78 SCRA 398 (1977).

^[11]
78 SCRA at p. 410.

^[12]
Philippine Long Distance Telephone Co.,
Inc. v. NLRC, 164 SCRA 671 at p. 681 (1988).