Unfair Labor Practice, Discrimination, and the Legal Boundaries

1) Why this issue matters

In Philippine labor relations, the “benefits” an employee receives often come from multiple sources—statute, company policy, individual contract, and (critically) the collective bargaining agreement (CBA) negotiated by the recognized bargaining agent (the union). Problems arise when a worker resigns from or disaffiliates with the union and is thereafter denied benefits that similarly situated co-workers receive. Depending on what was withheld and why, this can implicate:

Constitutional rights (self-organization and the related right not to be compelled to associate),
Statutory protections against discrimination, and
Unfair Labor Practice (ULP) rules governing both employers and labor organizations.

The legally correct answer often turns on a single decisive question: Is the withheld benefit a bargaining-unit benefit (CBA/terms and conditions of employment) or a member-only union privilege?

2) Legal foundations in the Philippine context

A. Constitutional and policy framework

Philippine labor policy strongly protects the right of employees to self-organization—to form, join, assist labor organizations, bargain collectively, and engage in concerted activities. That protection also implies a corollary: employees cannot be coerced through workplace penalties or economic pressure into joining or staying in a union, except within narrowly recognized limits (like valid union security clauses).

B. Statutory framework (Labor Code regime)

Under the Labor Code framework governing labor relations:

Employers commit ULP when they discriminate in regard to wages, hours, and other terms and conditions of employment to encourage or discourage membership in any labor organization.
Labor organizations can also commit ULP when they cause or attempt to cause an employer to discriminate against an employee in order to encourage or discourage membership, or when they restrain/coerce employees in the exercise of the right to self-organization.
CBA administration occurs within a regime that assumes the union, as exclusive bargaining agent, represents all employees in the bargaining unit, not only its members.

Enforcement commonly proceeds through the labor arbitral system under the National Labor Relations Commission (via its Labor Arbiters), with labor-policy oversight under the Department of Labor and Employment.

3) Key concepts you must separate

A. Bargaining unit vs. union membership

Bargaining unit: the group of employees the union represents for collective bargaining (e.g., rank-and-file in a plant).
Union membership: whether an individual employee is a dues-paying member of the union.

A worker may be in the bargaining unit without being a union member. In that setup, the union still generally has the duty to represent the worker in bargaining and grievance matters.

B. CBA benefits vs. union-only privileges

CBA benefits usually include wage increases, allowances, leave improvements, premium pay rules, medical or insurance enhancements, and other negotiated economic terms. The default principle is:

CBA terms apply to all employees in the bargaining unit, regardless of union membership, unless the benefit is clearly and lawfully structured as a member-only union privilege (which is rare for core employment benefits and often legally risky if tied to employment terms).

Union-only privileges are benefits that exist because of union membership itself, not because of the employment relationship—e.g., internal union welfare distributions funded strictly by union dues, member-only strike assistance, or union social benefits administered and funded independently from employer-provided compensation.

This distinction is central to determining whether withholding benefits is lawful or constitutes ULP/discrimination.

4) When withholding benefits becomes an Unfair Labor Practice

A. Employer withholding benefits to pressure employees to remain members

If an employer denies a resigning/disaffiliating employee benefits that are part of wages/terms and conditions of employment because the employee left the union, the act can qualify as:

Discrimination in regard to wages/terms; and
A means to encourage union membership (or discourage non-membership).

That pattern aligns with ULP’s classic “discrimination to encourage/discourage membership” category.

Common indicators of unlawful motive:

Timing: benefits cut immediately after resignation/disaffiliation.
Comparator evidence: similarly situated employees still receive the benefits.
Communications: HR/management statements linking benefits to remaining in the union.
Paper trail: internal memos/policies stating “members only” for workplace benefits that are normally CBA-wide.

B. Employer action at union’s request: still risky

Sometimes the union pressures management to deny benefits to non-members. An employer is not insulated simply because the union asked. If the benefit is a bargaining-unit/CBA benefit, withholding it from non-members can still be discriminatory.

C. Withholding statutory benefits is almost always unlawful

Benefits mandated by law—such as minimum wage compliance, holiday pay, service incentive leave (where applicable), 13th month pay, SSS/PhilHealth/Pag-IBIG remittances, overtime rules, and other statutory entitlements—cannot be conditioned on union membership. Doing so is unlawful regardless of ULP analysis.

5) When the union itself can commit ULP or actionable discrimination

A. Union causing discrimination

A union may commit ULP if it causes or attempts to cause the employer to discriminate against an employee to encourage union membership (or punish non-membership). Examples include:

Demanding that non-members be denied CBA increases or allowances;
Refusing to support or process grievances for non-members when the issue concerns CBA rights;
Threatening employees with loss of workplace benefits unless they rejoin.

B. Duty of fair representation (practical consequence)

While Philippine doctrine is often discussed under ULP and labor-relations principles, the operational expectation is similar to the “duty of fair representation” concept: the exclusive bargaining agent should not act arbitrarily, discriminatorily, or in bad faith in representing employees in the bargaining unit—members or not—particularly in grievance administration.

6) The role (and limits) of union security clauses

A. What union security clauses are

Union security clauses (e.g., union shop, closed shop, maintenance-of-membership) are provisions that, within limits, require employees to join the union or maintain membership as a condition of continued employment.

B. Why they don’t automatically justify “benefit withholding”

Even if a union security clause exists, withholding benefits is not automatically the lawful mechanism. The usual legal consequence contemplated by union security is employment-related (e.g., potential termination upon valid union request), but that itself is tightly regulated and due process-laden. Using benefits denial as a coercive shortcut can still be discriminatory if it targets employment terms.

C. Due process and neutrality concerns

Where termination is invoked under a union security clause, jurisprudential practice expects:

A valid CBA clause;
A formal union request citing the clause;
Proof of ground (e.g., failure to maintain membership where required); and
Employer observance of procedural due process (notice and opportunity to be heard), not blind compliance.

Using benefit denial instead of (or in addition to) lawful processes can be interpreted as coercive discrimination—especially if the employee’s resignation is itself protected or if the clause is being enforced selectively.

7) Agency fees and “free rider” arguments: where confusion commonly starts

A. The “free rider” problem

Unions often argue that non-members benefit from union negotiations without paying dues. Philippine labor relations historically address this through agency fee concepts: non-members within the bargaining unit may be assessed a fee related to the costs of representation (subject to legal constraints).

B. Agency fees do not equal “benefit exclusion”

Even where agency fees are permissible in concept, the remedy is typically collection of a lawful fee, not denial of negotiated employment benefits that attach to the bargaining unit.

C. Deductions and authorization (practical compliance issue)

Payroll deductions for dues/fees (“check-off”) are heavily compliance-driven and often require proper authorization and documentation. Disputes frequently arise not only on whether a fee is chargeable, but whether the deduction method complied with legal requirements. A union’s collection dispute should not be converted into employer-led benefit denial.

8) Most common fact patterns and how Philippine law typically treats them

Scenario 1: Employee leaves the union; employer stops giving CBA wage increase

High ULP/discrimination risk. A CBA wage increase is ordinarily a bargaining-unit term. Denying it due to union resignation looks like discrimination to encourage membership.

Scenario 2: Employee leaves the union; employer stops processing the employee’s CBA grievance

High risk for both employer and union. The exclusive bargaining agent is expected to represent bargaining-unit employees in CBA administration; arbitrary refusal based on non-membership can be coercive/discriminatory.

Scenario 3: Employee leaves the union; union stops giving union-funded “members’ assistance”

Often permissible if truly internal union benefit funded by dues and not an employment term, and if the union’s rules and financial structure support the distinction. But if the “assistance” is intertwined with employer compensation or CBA-administered funds, the analysis changes.

Scenario 4: Employee leaves the union; employer removes access to company facilities or privileges not tied to the CBA

This depends on whether the privilege is a term/condition of employment and whether the classification is legitimate and non-discriminatory. If the privilege is tied to union membership to pressure association, risk rises.

Scenario 5: Union threatens employees with loss of workplace benefits unless they rejoin

High ULP risk for the union, and potential derivative exposure for the employer if it participates.

9) Elements and proof in a ULP/discrimination case

A. What generally must be shown

While case specifics vary, a typical ULP-discrimination theory revolves around proving:

Adverse differentiation: the employee was denied something tied to wages/terms/conditions;
Causation: the denial was because of union resignation/non-membership (or to pressure membership); and
Intent/effect: the act tends to encourage union membership or discourage non-membership (direct proof is helpful but often inferred from circumstances).

B. Types of evidence that matter

Copy of the CBA and benefit provisions;
Payroll records showing who received the benefit and who did not;
Resignation/disaffiliation documents and timeline;
HR emails, memos, notices, chat messages;
Witness statements from co-workers;
Union communications to management requesting differential treatment.

10) Remedies and consequences

A. Labor case remedies

If withholding benefits is found unlawful, typical labor-law outcomes can include:

Payment of withheld amounts (wage differentials, benefits, allowances);
Restoration of benefits prospectively;
Damages in appropriate cases (especially where bad faith or oppressive conduct is established);
Attorney’s fees where legally justified.

B. ULP’s dual character

ULP is traditionally treated as both:

A labor relations violation remedied through labor proceedings; and
A potential criminal offense component (historically triggered after final judgment in the labor case, following the statutory approach).

C. Prescription periods (practical watch-outs)

Different causes of action can carry different filing deadlines (e.g., ULP often has a shorter prescriptive period than ordinary money claims). This matters because mislabeling a claim can be fatal if filed late. A worker may plead alternative causes (e.g., money claims plus ULP) where facts support both.

11) Employer compliance: how to avoid liability

A. Treat CBA benefits as bargaining-unit benefits

As a default, implement CBA economic provisions for all employees covered by the bargaining unit classification, unless a benefit is clearly and lawfully structured otherwise.

B. Don’t outsource employment decisions to union pressure

Maintain employer neutrality and independent compliance review. If the union demands member-only allocation of a bargaining-unit benefit, that demand is a red flag.

C. Be careful with union security enforcement

If a union security clause is invoked:

Verify the clause’s scope and validity;
Require a formal union request and supporting basis;
Provide due process to the employee;
Avoid “creative punishments” like benefit withholding that can be seen as coercive discrimination.

12) Union compliance: how to avoid liability

A. Separate representation duties from membership incentives

A union may legitimately encourage membership, but it must not weaponize bargaining-unit employment benefits or grievance access to punish non-membership.

B. Keep “union-only” benefits truly internal

If the union offers member-only assistance, ensure:

It is funded by union dues or legitimate union funds;
It is administered as an internal union matter;
It is not a disguised employment term;
It is not used to coerce bargaining-unit employees through workplace penalties.

C. Use lawful fee mechanisms, not benefit exclusion

Address “free rider” concerns through lawful agency fee/assessment mechanisms and proper documentation, not by pushing employers to deny CBA benefits.

13) Practical litigation framing in the Philippines

A. Common pleadings

A complaining employee often frames the case as:

Money claims (unpaid differentials/benefits), plus
ULP (discrimination to encourage/discourage union membership), plus
Where applicable, a claim of illegal deduction or improper check-off.

B. Identifying the correct respondents

Depending on the conduct:

Employer may be respondent for implementing discriminatory denial;
Union may be respondent for coercion or for causing discrimination;
Individual officers are sometimes named where personal participation and bad faith are alleged (subject to doctrinal limits).

C. Relief sought

The most direct relief is usually:

Release/payment of withheld benefits;
A cease-and-desist against discriminatory implementation;
In severe cases, damages and other statutory relief.

14) The core rule to remember

Withholding benefits because an employee left a union is legally hazardous in the Philippines when the benefits are tied to wages, hours, or terms and conditions of employment, particularly when those benefits arise from a CBA covering a bargaining unit. That pattern fits the legal concept of discrimination that encourages union membership—an Unfair Labor Practice risk for employers, and potentially for unions that instigate or enforce it.

The narrower safe zone is where what’s withheld is a genuinely internal, dues-funded union privilege that does not function as a term or condition of employment and is not used as a coercive lever over bargaining-unit rights.