Illegal Dismissal and Union Busting: What SPC Power v. Santos Teaches Employers

The Supreme Court's ruling in SPC Power Corporation v. Santos (G.R. No. 202379, July 27, 2020) is a significant reminder to employers: dismissing a worker to cover up union-busting activities is illegal. The case also clarifies the heavy burden on employers to prove that a termination is valid, both in substance and in procedure.

The Facts of the Case

Gerardo Santos was hired by SPC Power Corporation in 1997 as a stock keeper. In 2002, the company offered him the position of security officer. Santos hesitated because he had no background or training for the role, but he eventually accepted after the offer was made three times. He was regularized as a security officer in 2005, yet the company never gave him a job description.

Instead of performing security duties, Santos was assigned as a personal aide to his supervisor. More importantly, the company ordered him and other employees to conduct activities designed to prevent workers from forming a union. Despite these efforts, the employees successfully formed a union after the 2007 certification election.

Soon after, Santos noticed a change in how the company treated him and his group. His supervisor was asked to resign, and Santos and others were served show cause letters. After a series of preventive suspension extensions, Santos was dismissed on May 30, 2008. He filed a complaint for illegal dismissal.

The Issue

The central question was whether Santos's dismissal was legal. The company claimed he was terminated for gross and habitual neglect of duty, serious misconduct, willful disobedience, and violation of its code of conduct. Santos, on the other hand, argued that he was dismissed as a scapegoat for the company's failed union-busting efforts.

The Ruling

The Supreme Court ruled that Santos was illegally dismissed. While the company complied with the procedural aspect of due process—sending notices and conducting a hearing—it failed the substantive requirement: there was no valid just cause for termination.

The Court emphasized that the burden of proving a valid dismissal lies with the employer. The employer must present substantial evidence that the termination was for a just or authorized cause under the Labor Code. In this case, the company failed to present a single piece of evidence linking Santos to the alleged lapses, such as stolen cables or unsolved murders inside the premises. No witness statements, no affidavits, and no criminal charges were filed against him.

The Court also found it highly suspicious that alleged infractions spanning two years were lumped together and raised only after the union was formed. The timing—investigation and dismissal immediately after the union won the certification election—strongly suggested that Santos was terminated for failing to prevent union formation.

Union Busting as an Underlying Motive

The Court noted that the company could not categorically deny its union-busting efforts. Documentary evidence showed plans to sway employees to vote "NO" in the certification election, including monetizing unused leave credits and hiring a lawyer to delay the election. These activities confirmed that the company was actively trying to prevent union formation.

When those efforts failed, the company targeted Santos and his group. The Court found this sequence of events damning: only the employees who participated in union-busting activities were investigated and dismissed. This pattern revealed that the dismissal was not based on any legitimate ground but was a retaliatory move.

Practical Takeaways

• Employers bear the burden of proof. In termination cases, the employer must present substantial evidence of a valid just or authorized cause. Vague, lumped-together accusations will not suffice.

• Substantive due process is non-negotiable. Even if the employer follows proper procedure—sending notices and conducting hearings—the dismissal is still illegal if there is no valid ground for it.

• Timing matters. Dismissing an employee shortly after a union is formed or a certification election is lost raises a strong presumption of union busting, which courts will scrutinize closely.

• Union-busting activities are illegal. Employers cannot use threats, incentives, or other means to prevent workers from forming a union. Doing so exposes the company to liability, including backwages, separation pay, and damages.

• Regularization is evidence of competence. If an employee was regularized based on "excellent performance," an employer cannot later claim the same employee was incompetent without clear and convincing evidence.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.