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Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-

Federation of Unions in BPI Unibank,

G.. !o. "#$%&". '(tober "), *&"".

TOPIC: Merger 

FACTS:

On March 23, 2000, the Bangko Sentral ng Pilipinas approve the Articles

o! Merger e"ec#te on $an#ar% 20, 2000 &% an &et'een BPI, herein petitioner,

an F(BTC)* This Article an Plan o! Merger 'as approve &% the Sec#rities

an ("change Co++ission on April , 2000)P#rs#ant to the Article an Plan o! 

Merger, all the assets an lia&ilities o! F(BTC 'ere trans!erre to an a&sor&e

&% BPI as the s#rviving corporation) F(BTC e+plo%ees, incl#ing those in its

i!!erent &ranches across the co#ntr%, 'ere hire &% petitioner as its o'n

e+plo%ees, 'ith their stat#s an ten#re recogni-e an salaries an &ene!its

+aintaine) .esponent BPI (+plo%ees /nion1avao Chapter Feeration o! 

/nions in BPI /ni&ank is the e"cl#sive &argaining agent o! BPIs rank an !ile

e+plo%ees in 1avao Cit%) The !or+er F(BTC rankan!ile e+plo%ees in 1avao

Cit% i not &elong to an% la&or #nion at the ti+e o! the +erger) Prior to the

e!!ectivit% o! the +erger, or on March 3, 2000, responent /nion invite sai

F(BTC e+plo%ees to a +eeting regaring the /nion Shop Cla#se o! the e"isting

CBA &et'een petitioner BPI an responent /nion A!ter the +eeting calle &%

the /nion, so+e o! the !or+er F(BTC e+plo%ees 4oine the /nion, 'hile others

re!#se)

  5ater, ho'ever, so+e o! those 'ho initiall% 4oine retracte their 

+e+&ership) .esponent /nion then sent notices to the !or+er F(BTC

e+plo%ees 'ho re!#se to 4oin, as 'ell as those 'ho retracte their +e+&ership,

an calle the+ to a hearing regaring the +atter) 6hen these !or+er F(BTC

e+plo%ees re!#se to atten the hearing, the presient o! the /nion re7#este

BPI to i+ple+ent the /nion Shop Cla#se o! the CBA an to ter+inate their 

e+plo%+ent p#rs#ant thereto) A!ter t'o +onths o! +anage+ent inaction on the

re7#est, responent /nion in!or+e petitioner BPI o! its ecision to re!er the

iss#e o! the i+ple+entation o! the /nion Shop Cla#se o! the CBA to the

8rievance Co++ittee) 9o'ever, the iss#e re+aine #nresolve at this level an

so it 'as s#&se7#entl% s#&+itte !or vol#ntar% ar&itration &% the parties)

 Altho#gh BPI 'on the initial &attle at the ol#ntar% Ar&itrator level, BPIs

position 'as re4ecte &% the Co#rt o! Appeals 'hich r#le that the ol#ntar%

 Ar&itrators interpretation o! the /nion Shop Cla#se 'as at 'ar 'ith the spirit an

rationale 'h% the 5a&or Coe allo's the e"istence o! s#ch provision)

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This 'as !ollo'e an a!!ir+ation &% the S#pre+e Co#rt o! the CA ecision

holing that !or+er e+plo%ees o! the Far (ast Bank an Tr#st Co+pan%

;F(BTC< =a&sor&e= &% BPI p#rs#ant to the t'o &anks +erger) The a&sor&e

e+plo%ees 'ere covere &% the /nion Shop Cla#se in the then e"isting

collective &argaining agree+ent ;CBA8

?(S) It is +ore in keeping 'ith the ictates o! social 4#stice an the State

polic% o! accoring !#ll protection to la&or to ee+ e+plo%+ent contracts as

a#to+aticall% ass#+e &% the s#rviving corporation in a +erger, even in the

a&sence o! an e"press stip#lation in the articles o! +erger or the +erger plan) In

his issenting opinion, $#stice Brion reasone that:

To +% +in, #e consieration o! Section @0 o! the Corporation Coe, the

constit#tionall% eclare policies on 'ork, la&or an e+plo%+ent, an the

speci!ic F(BTCBPI sit#ation i)e), a +erger 'ith co+plete &o% an so#l

trans!er o! all that F(BTC e+&oie an possesse an 'here &oth participating

&anks 'ere 'illing ;al&eit &% ee, not &% their 'ritten agree+ent< to provie !or 

the a!!ecte h#+an reso#rces &% recogni-ing contin#it% o! e+plo%+ent sho#l

point this Co#rt to a eclaration that in a co+plete +erger sit#ation 'here there

is total takeover &% one corporation over another an there is silence in the

+erger agree+ent on 'hat the !ate o! the h#+an reso#rce co+ple+ent shall &e,

the latter sho#l not &e le!t in legal li+&o an sho#l &e properl% provie !or, &%

co+pelling the s#rviving entit% to a&sor& these e+plo%ees) This is 'hat Section

@0 o! the Corporation Coe co++ans, as the s#rviving corporation has the legal

o&ligation to ass#+e all the o&ligations an lia&ilities o! the +erge constit#ent

corporation)

>ot to &e !orgotten is that the a!!ecte e+plo%ees +anage, operate an

'orke on the trans!erre assets an properties as their +eans o! livelihooD

the% constit#te a &asic co+ponent o! their corporation #ring its e"istence) In a

+erger an consoliation sit#ation, the% cannot &e treate 'itho#t consieration

o! the applica&le constit#tional eclarations an irectives, or, 'orse, &e si+pl%

isregare) I! the% are so treate, it is #p to this Co#rt to rea an interpret the

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la' so that the% are treate in accorance 'ith the legal re7#ire+ents o! +ergers

an consoliation, rea in light o! the social 4#stice, econo+ic an social

provisions o! o#r Constit#tion) 9ence, there is a nee !or the s#rviving

corporation to take responsi&ilit% !or the a!!ecte e+plo%ees an to a&sor& the+

into its 'ork!orce 'here no appropriate provision !or the +erge corporations

h#+an reso#rces co+ponent is +ae in the Merger Plan)

B% #pholing the a#to+atic ass#+ption o! the nons#rviving corporations

e"isting e+plo%+ent contracts &% the s#rviving corporation in a +erger, the Co#rt

strengthens 4#icial protection o! the right to sec#rit% o! ten#re o! e+plo%ees

a!!ecte &% a +erger an avois con!#sion regaring the stat#s o! their vario#s

&ene!its 'hich 'ere a+ong the chie! o&4ections o! o#r issenting colleag#es)

9o'ever, nothing in this .esol#tion shall i+pair the right o! an e+plo%er to

ter+inate the e+plo%+ent o! the a&sor&e e+plo%ees !or a la'!#l or a#thori-e

ca#se or the right o! s#ch an e+plo%ee to resign, retire or other'ise sever his

e+plo%+ent, 'hether &e!ore or a!ter the +erger, s#&4ect to e"isting contract#al

o&ligations) In this +anner, $#stice Brions theor% o! a#to+atic ass#+ption +a%

&e reconcile 'ith the +a4orit%s concerns 'ith the s#ccessor e+plo%ers

prerogative to choose its e+plo%ees an the prohi&ition against invol#ntar%

servit#e)

>ot'ithstaning this concession, the Co#rt !ins no reason to reverse o#r 

previo#s prono#nce+ent that the a&sor&e F(BTC e+plo%ees are covere &%

the /nion Shop Cla#se)

*See the original 1ecision ate A#g#st 0, 200, reversing the r#ling on

the a&sorption o! e+plo%ees in a +erger)E