National Union of Bank Employees v. Philnabank Empoyees Association G.R. No.174287

FACTS:

Philippine National Bank (PNB) used to be a government-owned and controlled banking institution established under The 1986 Revised Charter. Its rank-and-file employees, being government personnel, were represented for collective negotiation by the Philnabank Employees Association (PEMA), a public sector union.

In 1996, the Securities and Exchange Commission approved PNB’s new Articles of Incorporation and By-laws and its changed status as a private corporation. PEMA affiliated with petitioner National Union of Bank Employees (NUBE), which is a labor federation composed of unions in the banking industry, adopting the name NUBE-PNB Employees Chapter (NUBE-PEC). NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees. A collective bargaining agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the period of January 1, 1997 to December 31, 2001.

Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the monthly membership fee and other assessments imposed by the union from the salary of each union member, and agency fee from the salary of the rank- and-file employees within the bargaining unit who are not union members.

Moreover, during the effectivity of the CBA, NUBE, being the Federation union, agreed that PNB shall remit P15.00 of the P65.00 union dues per month collected by PNB from every employee, and that PNB shall directly credit the amount to NUBE’s current account with PNB.

Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed a petition for certification election among the rank-and-file employees of PNB. The petition sought the conduct of a certification election to be participated in by PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant events transpired – the independent union registration of NUBE- PEC and its disaffiliation with NUBE.

With a legal personality derived only from a charter issued by NUBE, NUBE-PEC, under the leadership of Mariano Soria, decided to apply for a separate registration with DOLE. Thereafter, the Board of Directors of NUBE-PEC adopted a Resolution disaffiliating itself from NUBE, because the latter has miserably failed to extend and provide satisfactory services and support to the former in the form of legal services, training assistance, educational seminars, and the like.

PNB informed NUBE of PEMA’s letter and its decision to continue the deduction of the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the amounts collected would be held in a trust account pending the resolution of the issue on PEMA’s disaffiliation.

NUBE replied that it remains as the exclusive bargaining representative of the PNB rank-and-file employees; by signing the Resolution (on disaffiliation), the chapter officers have abandoned and committed an act of disloyalty to NUBE-PEC and the general membership

ISSUE: Whether or not there was an effective disaffiliation?

RULING: Yes there is a valid disaffiliation from NUBE. Whether there was a valid disaffiliation is a factual issue. It is elementary that a question of fact is not appropriate for a petition for review on certiorari under Rule 45 of the Rules of Court.

A local labor union is a separate and distinct unit primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members.    

The mere act of affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency where the former acts in representation of the latter.

The purpose of affiliation by a local union with a mother union [or] a federation is to increase by collective action the bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.

Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-observance of the procedure that union members should make such determination through secret ballot and after due deliberation, conformably with Article 241 (d) of the Labor Code, as amended. Conspicuously, other than citing the opinion of a "recognized labor law authority," NUBE failed to quote a specific provision of the law or rule mandating that a local union’s disaffiliation from a federation must comply with Article 241 (d) in order to be valid and effective.

Granting, for argument’s sake, that Article 241 (d) is applicable, still, We uphold PEMA’s disaffiliation from NUBE. First, non-compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise above the employees’ fundamental right to self-organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining. Second, the Article nonetheless provides that when the nature of the organization renders such secret ballot impractical, the union officers may make the decision in behalf of the general membership.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities was completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act performed by the former that affects the interests and affairs of the latter, including the supposed expulsion of Serrana et al., is rendered without force.

Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The moment that PEMA separated from and left NUBE and exists as an independent labor organization with a certificate of registration, the former is no longer obliged to pay dues and assessments to the latter; naturally, there would be no longer any reason or occasion for PNB to continue making deductions.

On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as represented by Serrana et al. Since PEMA had validly separated itself from NUBE, there would be no restrictions which could validly hinder it from collectively bargaining with PNB.