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n 2000, Far East Bank (FEB) was absorbed by the Bank of the Philippine Islands (BPI).

Now
BPI has an existing Union Shop Clause agreement with the BPI Employees Union-Davao
Chapter-Federation of Unions in BPI Unibank (BPI Union) whereby it is a pre-condition that
new employees must join the union before they can be regularized otherwise they will not
have a continued employment. By reason of the failure of the FEB employees to join the
union, BPI Union recommended to BPI their dismissal. BPI refused. The issue went to
voluntary arbitration where BPI won but the Court of Appeals reversed the Voluntary
Arbitrator. BPI appealed to the Supreme Court.
ISSUE: Whether or not the Union Shop agreement violated the constitutional right of security
of tenure of the FEB employees absorbed by BPI.
HELD: No. As a general rule, the State protects the workers right to security of tenure. An
employees services can only be terminated upon just and authorized causes. In this case,
the presence of a Union Shop Clause in the CBA between BPI and BPI Union must be
respected. Failure of an employee to join the union pursuant to the clause is an authorized
cause for BPI not to continue employing the employee concerned and BPI must respect
that provision of the CBA. In the hierarchy of labor rights, unionism is favored over security of
tenure. A contrary interpretation of the Union Shop Clause would dilute its efficacy and put
the certified union that is supposedly being protected thereby at the mercy of management.
Nevertheless, the FEB employees are still entitled to the twin notice rule this is to afford
them ample opportunity to whether or not join the union.

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