Yeast tRNA ligase (Trl1) is an essential trifunctional enzyme that catalyzes exon-exon ligation during tRNA biogenesis and the non-conventional splicing of HAC1 mRNA during the unfolded protein response (UPR). The UPR regulates the protein folding capacity of the endoplasmic reticulum (ER). ER stress activates Ire1, an ER-resident kinase/RNase, which excises an intron from HAC1 mRNA followed by exon-exon ligation by Trl1. The spliced product encodes for a potent transcription factor that drives the UPR. Here we report the crystal structure of Trl1 RNA ligase domain from Chaetomium thermophilum at 1.9 Å resolution. Structure-based mutational analyses uncovered kinetic competition between RNA ligation and degradation during HAC1 mRNA splicing. Incompletely processed HAC1 mRNA is degraded by Xrn1 and the Ski/exosome complex. We establish cleaved HAC1 mRNA as endogenous substrate for ribosome-associated quality control. We conclude that mRNA decay and surveillance mechanisms collaborate in achieving fidelity of non-conventional mRNA splicing during the UPR.