BPI v. BPI Employees Union

 BPI v. BPI Employees Union

G.R. No. 164301

August 10, 2010


Bangkok Sentral ng Pilipinas and Securities and Exchange Commission  approved the Articles of Merger executed by and between BPI and Far East Bank and Trust Company (FEBTC). The Articles of Merger did not contain any specific stipulation with regard to the employment contracts of existing employees of FEBTC.  Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including those in its different branches across the country, were hired by the petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained. 

Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank is the exclusive bargaining agent of BPI’s rank and file employees in Davao City. The former FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger.  Prior to the effectivity of the merger, respondent Union invited said FEBTC employees to a meeting regarding the Union Shop Clause of the existing CBA between petitioner BPI and respondent Union  After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others refused.  Later, however, some of those who initially joined retracted their membership. Respondent Union then sent notices to the former FEBTC employees who refused to join, as well as those who retracted their membership, and called them to a hearing regarding the 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. After two months of management inaction on the request, respondent Union informed petitioner BPI of its decision to refer the issue of the implementation of the Union Shop Clause of the CBA to the Grievance Committee.  However, the issue remained unresolved at this level and so it was subsequently submitted for voluntary arbitration by the parties.

Whether or not the absorbed employees from FEBTC are covered by the Union Shop Clause and are “new employees.

Yes. Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had been the employer of the latter’s employees from the beginning it must be emphasized that, in reality, the legal consequences of the merger only occur at a specific date – upon its effectivity which is the date of approval of the merger by the SEC.
In other words, the obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right of discipline and control over them only arose with the effectivity of the merger. Concomitantly, the obligation of former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon the effectivity of the merger.
Hence, what is material is that all of these legal consequences of the merger took place during the life of an existing and valid CBA between BPI and the Union wherein they have mutually consented to include a Union Shop Clause.
All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms.  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; employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect; confidential employees who are excluded from the rank and file bargaining unit; and employees excluded from the union shop by express terms of the agreement.

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