Labor Law and Social Legislation › Labor Relations › Collective Bargaining › Collective Bargaining Agreement

c. Union Security Clauses

Usual Provisions under Yellow Dog Contract

A representation by the employee that he is not a member of a labor union;
A promise by the employee not to join a labor union; and
A promise by the employee that, upon joining a labor union, he will quit his employment (Teller, Law Governing Labor Disputes and Collective Bargaining, pp. 118-119)

Union Security

Union security is a generic term which is applied to and comprehends closed shop, union shop, maintenance of membership or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment.

It is indeed compulsory union membership whose objective is to assure continued existence of the union. In a sense, there is discrimination when certain employees are obliged to join a particular union. But if it is discrimination favoring unionism; it is a valid kind of discrimination. (Azucena, Everyone’s Labor Code, 2015 ed.)

Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. (Labor Code, Art. 259[e])

The law has allowed stipulations for 'union shop' and 'closed shop' as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-a-vis the employer. (Del Monte Philippines v. Salvidar, G.R. No. 158620, 2006)

An employer may enforce a valid union-security clause upon a proper union request, but must ascertain that the clause applies and afford the employee due process before dismissal. Good faith alone does not establish that the dismissal is valid. (Soriano v. Atienza, G.R. No. 68619, 1989) (Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, 2000)

1. CLOSED SHOP

Only union members can be hired by the company and they must remain as union members to retain employment in the company.

Employees not covered by the closed shop provision

Any employee who at the time the closed – shop agreement takes effect is a bona fide member of a religious organization which prohibits its members from joining labor unions of religious grounds.
Employees already in service and already members of a labor union or unions other than the majority union at the time the closed – shop agreement took effect.
Confidential employees who are excluded from the rank and file bargaining unit.
Employees excluded from the closed – shop by express terms of the agreement. (BPI v. BPI Employees Union-Davao Chapter, G.R. No 164301, 2010).

Generally Applicable to Persons to be Hired or Not Yet Members of Labor Organizations.

In the absence of a manifest intent to the contrary, closed – shop provisions in a collective bargaining agreement apply only to persons to be hired or to employees who are not yet members of any labor organization and that said provisions of the agreement are not applicable to those already in the service at the time of the execution.

Disaffiliation from a labor union is not open to legal objection since to do so would render nugatory the right of all employees to self – organization and to form, join or assist labor organizations of their own choosing. But a closed shop is a valid form of union security, and such provision in a CBA is not a restriction on the right. Thus, although one is entitled to disaffiliation from their union to form a new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause of the CBA. (Villar v. Inciong, G.R. No. L-50283-84, 1983; NAFLU v. Hamilton Distillery Co., et. al., G.R. No. L-18112, 1962)

2. UNION SHOP

Non-members may be hired, but to retain employment, they must become union members after a certain period. The requirement applies to present and future employees. (Azucena Vol. II-A, 9th ed., p. 346).

There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. (GMC v. Casio, G.R. No. 149552 , 2010)

3. MAINTENANCE OF MEMBERSHIP SHOP

There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for (their) continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. (GMC v. Casio, G.R. No. 149552, 2010)

Valid Dismissal Because of Application of Union Security Clause

Union security clauses in the collective bargaining agreements, if freely and voluntarily entered into, are valid and binding. Thus, the dismissal of an employee by the company pursuant to a labor union’s demand in accordance with a union security agreement does not constitute unfair labor practice. (Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, 2000; Villar v. Inciong, G.R. No. L-50283-84, 1983

Although a union security clause in a CBA may be validly enforced and dismissal pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one’s right to due process. (MSMG-UWP v. Ramos, G.R. No. 113907, 2000)

Where the employer compelled the employee to go on forced leave upon recommendation of the union for alleged violation by the employee of the closed–shop agreement, the NLRC correctly ordered the reinstatement of the employee and directed the union to pay the wages and fringe benefits which employees failed to receive as a result of her forced leave and to pay attorney’s fees. (Manila Mandarin Employees Union v. NLRC, G.R. No. 76989,, 1987)

Where the employer dismissed his employees in the belief in good faith that such dismissal was required by the closed – shop provisions of the collective bargaining contract with the union, he may not be ordered to pay back compensation to such employees although their dismissal is found to be illegal. (Confederated Sons of Labor v. Anakan Lumber, G.R. No. L-12503, 1960)

4. AGENCY SHOP

An agreement whereby employees must either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the members. (Azucena Vol. II-A, 9th ed., p. 346).

Under the agency – shop clause of a CBA, an employee is not required to join the union as a condition of continued employment, but must pay the union a service fee (usually equivalent to union dues and initiation fees). Since a union is required by statute to act as the bargaining representative of all employees, both union and non – union, within their bargaining unit, the justification for the clause is that the nonmember should contribute financially towards the cost of collective bargaining process without being required to join the union.

5. MODIFIED UNION SHOP

Employees who are not union members at the time of signing the contract need not join the union, but all workers hired thereafter must join. (Azucena Vol. II- A, 9th ed., p. 346).

Union Security

An employer may enforce a valid union-security clause upon a proper union request, but must ascertain that the clause applies and afford the employee due process before dismissal. Good-faith compliance with the union’s request alone does not establish that the dismissal is valid. (Soriano v. Atienza, G.R. No. 68619, 1989) (Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, 2000)

1. CLOSED SHOP

Only union members can be hired by the company and they must remain as union members to retain employment in the company.

Employees not covered by the closed shop provision

Any employee who at the time the closed – shop agreement takes effect is a bona fide member of a religious organization which prohibits its members from joining labor unions of religious grounds. (Conscientious Objector Doctrine)
Employees already in service and already members of a labor union or unions other than the majority union at the time the closed – shop agreement took effect.
Confidential employees who are excluded from the rank and file bargaining unit.
Employees excluded from the closed – shop by express terms of the agreement. (BPI v. BPI Employees Union-Davao Chapter, G.R. No 164301, 2010).

Generally Applicable to Persons to be Hired or Not Yet Members of Labor Organizations.

Disaffiliation from a labor union is not open to legal objection since to do so would render nugatory the right of all employees to self – organization and to form, join or assist labor organizations of their own choosing. But a closed shop is a valid form of union security, and such provision in a CBA is not a restriction on the right. Thus, although one is entitled to disaffiliation from their union to form a new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause of the CBA. (Villar v. Inciong, G.R. No. L50283-84, 1983; NAFLU v. Hamilton Distillery Co., et. al., G.R. No. L-18112, 1962)

2. UNION SHOP

There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. (GMC v. Casio, G.R. No. 149552 , 2010)

3. MAINTENANCE OF MEMBERSHIP SHOP

4. AGENCY SHOP

An agreement whereby employees must either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the members. (Azucena Vol. II-A, 9th ed., p. 346).

Under the agency – shop clause of a CBA, an employee is not required to join the union as a condition of continued employment, but must pay the union a service fee (usually equivalent to union dues and initiation fees). Since a union is required by statute to act as the bargaining representative of all employees, both union and non – union, within their bargaining unit, the justification for the clause is that the nonmember should contribute towards the cost of collective bargaining process without being required to join the union.

5. MODIFIED UNION SHOP

Employees who are not union members at the time of signing the contract need not join the union, but all workers hired thereafter must join. (Azucena Vol. II-A, 9th ed., p. 346).

Requisites

In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that:

The union security clause is applicable
The union is requesting for the enforcement of the union security provision in the CBA
There is sufficient evidence to support the union’s decision to expel the employee from the union; and
The employer must comply with due process:
Notify the employees that their dismissal is being requested by the union;

Termination Due to Union Security Provision

Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction. This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment, the authorized bargaining representative gains more numbers and strengthens its position as against other unions which may want to claim majority representation. (Alabang Country Club v. NLRC, G.R. No. 170287, 2008)

To validly dismiss an employee because of a union shop or closed-shop provisions, there should be a clear and unequivocal statement that loss of good standing in the union would be a cause for dismissal. (Confederated Sons of Labor v. Anakan Lumber Co., G.R. No. L-12503, 1960)

Requirement of Due Process

Substantive and procedural due process requirements in determining whether or not an employee was validly terminated must still be followed even if the termination is based on a (union security clause) of the CBA.

Further, in order that any CBA-mandated dismissal may receive the warrant of the courts and labor tribunals, the causes for dismissal as provided for in the CBA must satisfy to the evidentiary threshold of the NLRC and the courts. (Del Monte v. Saldivar, G.R. No. 158620, 2006)

Obligations and Liabilities

Where the employer dismissed his employees in the belief in good faith that such dismissal was required by the (union security provision) of the collective bargaining agreement with the union, he may not be ordered to pay back compensations to such employees although their dismissal is found to be illegal. (Confederated Sons of Labor v. Anakan Lumber Co., G.R. No. L-12503, 1960)

As dictated by fairness, [...] the union shall be liable to pay their backwages. This is because management would not have taken the action it did had it not been for the insistence of the labor union seeking to give effect to its interpretation of a closed shop provision. (Guijarno v. CIR, G.R. Nos. L-28791-93, 1973)

Arbitrary use of union security clause

The broad rule is that the union has the right to determine its membership and to prescribe the conditions for the acquisition and retention thereof. Consequently, admission to membership may not be compelled.

This rule, however, is qualified in the case of labor unions holding a monopoly in the supply of labor, either in a given locality, or as regards a particular employer by reason of a closed – shop or similar agreements. In such case, qualified applicants may not be barred by unreasonable rules. Salunga v. CIR (G.R. No. L-22456, 1967)

The Court held that labor unions are not entitled to arbitrarily exclude qualified applicants for membership. A closed-shop provision will not justify the employer in discharging, as well as a union insisting upon the discharge of an employee whom it refuses to admit, without any reasonable ground thereof. Having been dismissed from service owing to unfair labor practice on the part of the union, petitioner is entitled to reinstatement as member of the union and to his former or substantially equivalent position in the company, without prejudice to his seniority and/or rights and privileges, and with back pay. Union security clauses are also governed by law and by principles of justice, fair play, and legality. Union security clauses cannot be used by union officials against an employer, much less their own members, except with a high sense of responsibility, fairness, prudence and judiciousness. (Manila Mandarin Employees Union v. NLRC, G.R. No. 76989, 1987)