unfair treatment at work

I managed to have a discussion with my immediate superior regarding the result of our latest appraisal and salary increase.

He explained my grade and about the factors on why I got a lower /deduction on my allowance.

One of the reason he said is the perception of some top management / executives because of my "association with the union". My de facto partner is a union member.
Is this a valid reason / factor for assessing my performance and as a ground to deprive me of the grade and benefits I deserve?
It sounds as if even I do everything right and do all my best, all will come to waste; that I cannot step up and be promoted (again). I am currently a supervisor.

If this is the case, I think I should resign and find another work?

You're already a supervisor, and would be difficult (or not in the interest of the company) to promote you to a Manager position because of the sensitive nature of your (future) position.