BPI v BPI Employees Union

G.R. No. 164301 : August 10, 2010


BPI and FEBTC entered in a merger. Pursuant to which all employees of FEBTC shall be hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained.

The BPI EU invited said FEBTC employees to a meeting regarding the Union Shop Clause of the existing CBA between petitioner BPI and respondent Union.

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

The former FEBTC employees who refused to join, as well as those who retracted their membership was called for a hearing for that matter. When these former FEBTC employees refused to attend the hearing, the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto.

BPI argued that FEBTC employees cannot be considered new employees as BPI merely stepped into the shoes of FEBTC as an employer purely as a consequence of the merger because they are included in the term “assets and liabilities.”

The issue was submitted to VA. The Voluntary Arbitrator concluded that the former FEBTC employees could not be compelled to join the Union, as it was their constitutional right to join or not to join any organization.

The Court of Appeals reversed and set aside the Decision of the Voluntary Arbitrator.



Whether or not the former FEBTC employees should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent Union.



YES.  The Court has ruled that the individual employee’s right not to join a union may be validly restricted by a union security clause in a CBA and such union security clause is not a violation of the employee’s constitutional right to freedom of association.

The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employee’s right or freedom of association, is not to protect the union for the union’s sake.  Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer.

When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of Union Security Clauses, this condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism.  This Court, on occasion, has even held that a union security clause in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution

Employment is a personal consensual contract and absorption by BPI of a former FEBTC employee without the consent of the employee is in violation of an individual’s freedom to contract.  It would have been a different matter if there was an express provision in the articles of merger that as a condition for the merger, BPI was being required to assume all the employment contracts of all existing FEBTC employees with the conformity of the employees.  In the absence of such a provision in the articles of merger, then BPI clearly had the business management decision as to whether or not employ FEBTC’s employees. FEBTC employees likewise retained the prerogative to allow themselves to be absorbed or not; otherwise, that would be tantamount to involuntary servitude.

GR: All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. 

XPN: However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds;[21] employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect;[22] confidential employees who are excluded from the rank and file bargaining unit;[23] and employees excluded from the union shop by express terms of the agreement.

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