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[G.R. No. 123782. September 16, 1997] CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA), petitioner, vs. HON.

JOSE S. BRILLANTES, in his capacity as Acting Secretary of the Department of Labor and Employment, and CALTEX (PHILIPPINES), Inc., respondents. RESOLUTION PANGANIBAN, J.: Unless shown to be clearly whimsical, capricious or arbitrary, the orders or resolutions of the secretary of labor and employment resolving conflicts on what should be the contents of a collective bargaining agreement will be respected by this Court. We realize that, oftentimes, such orders and resolutions are based neither on definitive shades of black or white, nor on what is legally right or wrong. Rather, they are grounded largely on what is possible, fair and reasonable under the peculiar circumstances of each case. Statement of the Case Petitioner Caltex Refinery Employees Association (CREA) seeks through Rule 65 of the Rules of Court reversal or modification of three orders of public respondent, then Acting Secretary of Labor of Employment Jose S. Brillantes, in Case No. OS-AJ-0044-95 i[1] entitled In re: Labor Dispute at Caltex (Phils.), Inc. The disposition of the first assailed Order ii[2] of public respondent dated October 29, 1995: iii[3] WHEREFORE, ON THE BASIS OF THE FOREGOING, the Caltex Refinery Employees Association and Caltex Philippines, Inc. are hereby directed to execute a new collective bargaining agreement embodying therein the appropriate dispositions above spelled out including those subject of previous agreements. Provisions in the old CBA, or existing benefits subject of Company policy or practice not otherwise modified or improved herein are deemed maintained. New demands not otherwise touched upon or disposed of are hereby denied. The motions for reconsideration and clarification of the above Order filed by both petitioner and private respondent were denied in the second assailed Order dated November 21, 1995, which disposed: iv[4] WHEREFORE, except the modifications hereinabove set forth, the Order dated 9 October 1995 is hereby affirmed. Moreover, pursuant to the Agreement reached by the parties on 13 September 1995 for this Office to commence the proceedings concerning the legality of strike and the termination of the union officers, after the resolution of the CBA issues, both parties are hereby directed to submit their position papers and evidence within ten (10) days from receipt of a copy of this Order. For

this purpose, Atty. Tito F. Genilo is hereby designated as Hearing Officer and authorized as such, to immediately conduct hearings and receive evidence and, thereafter, submit his report and recommendations thereon. Petitioners second motion for reconsideration of the above Order was likewise denied by the third assailed Order dated January 9, 1996, as follows: v[5] WHEREFORE, PREMISES CONSIDERED, our Order of 21 November 1995 is hereby affirmed en toto, subject to the afore-mentioned clarification on the issue of Sunday work. No further motions of this nature shall be entertained by this Office. The parties are given another ten (10) days from receipt hereof to submit their respective position papers and evidences (sic) relative to the issue of the legality of strike and termination of the union officers. The Facts Anticipating the expiration of their Collective Bargaining Agreement on July 31, 1995, petitioner and private respondent negotiated the terms and conditions of employment to be contained in a new CBA. The negotiation between the two parties was participated in by the National Conciliation and Meditation Board (NCMB) and the Office of the Secretary of Labor and Employment. Some items in the new CBA were amicably arrived at and agreed upon, but some others were unresolved. To settle the unresolved issues, eight meetings between the parties were conducted. Because the parties failed to reach any significant progress in these meetings, petitioner declared a deadlock. On July 24, 1995, petitioner filed a notice of strike. Six (6) conciliation meetings conducted by the NCMB failed to settle the parties differences. Then, the parties held marathon meetings at the plant level, but this remedy proved also unavailing. During a strike vote on August 16, 1995, the members of petitioner opted for a walkout. Private respondent then filed with the Department of Labor and Employment (DOLE) a petition for assumption of jurisdiction in accordance with Article 263 (g) of the Labor Code. In an Order dated August 22, 1995, public respondent assumed jurisdiction over the entire labor dispute at Caltex (Philippines) Inc., with the following disposition: vi[6] WHEREFORE ABOVE PREMISES CONSIDERED, this Office hereby assumes jurisdiction over the entire labor dispute at Caltex (Philippines) Inc. pursuant to Article 263 (g) of the Labor Code, as amended. Accordingly, any strike or lockout, whether actual or intended, is hereby enjoined. The parties are further directed to cease and desist from committing any and all acts which might exacerbate the situation.

To expedite the resolution of the instant dispute, the parties are further directed to submit their respective position papers and evidence within ten (10) days from receipt hereof. In defiance of the above Order expressly restraining any strike or lockout, petitioner began a strike and set up a picket in the premises of private respondent on August 25, 1995. Thereafter, several company notices directing the striking employees to return to work were issued, but the members of petitioner defied them and continued their mass action. In the course of the strike, DOLE Undersecretary Bienvenido Laguesma interceded and conducted several conciliation meetings between the contending parties. He was able to convince the members of the union to return to work and to enter into a memorandum of agreement with private respondent. On September 9, 1995, the picket lines were finally lifted. Thereafter, the contending parties filed their position papers pertaining to unresolved issues. vii[7] Because of the strike, private respondent terminated the employment of some officers of petitioner union. The legality of these dismissals brought additional contentious issues. viii[8] Again, the parties tried to resolve their differences through conciliation. Failing to come to any substantial agreement, the parties stopped further negotiation and, on September 13, 1995, decided to refer the problem to the secretary of labor and employment: ix[9] It appearing that the possibility of an amicable settlement appears remote, the parties agreed to submit their respective position paper and evidence simultaneously on 27 September 1995 at the Office of the Secretary. The parties further agreed that there will be no extension of time for filing and no further pleading will be filed. The decision of the Secretary of Labor and Employment will be rendered on or before October 9, 1995. The proceedings concerning the legal issues involving the legality of strike and the termination of the Union officers will be commenced by the Office of the Secretary after the resolution of the CBA issues. As already stated, public respondent issued as scheduled on October 9, 1995 the assailed Order resolving the deadlock, followed by two more assailed Orders on November 21, 1995 and January 16, 1996 disposing of the motions for reconsideration/clarification of both parties. Dissatisfied with these Orders issued by public respondent, petitioner sought remedy from this Court. After realizing the urgency of the case and after meticulously reviewing the Petition dated February 23, 1996; Comment by the private respondent dated April 16, 1996 which was adopted as its own by the public respondent; Reply by the petitioner dated September 7, 1996; Rejoinder dated October 3, 1996 and Sur-Rejoinder dated November 12, 1996, the Court resolved to give due course to the petition and to consider the case submitted for resolution without requiring memoranda from the parties.

The Issues Petitioner does not specifically pinpoint the issues it wants the Court to rule upon. It appears, however, that petitioner questions public respondents resolution of five issues in the CBA, specifically on wage increase, union security clause, retirement benefits or application of the new retirement plan, signing bonus and grievance and arbitration machineries. Private respondent, on the other hand, submits this lone issue: x[10] Whether or not the Honorable Secretary of Labor and Employment committed grave abuse of discretion in resolving the instant labor dispute. The Courts Ruling The petition is partly meritorious. Preliminary Matter: Certiorari in Labor Cases At the outset, we must reiterate several settled rules in a petition for certiorari involving labor cases. First, the factual findings of quasi-judicial agencies (such as the Department of Labor and Employment), when supported by substantial evidence, are binding on this Court and entitled to great respect, considering the expertise of these agencies in their respective fields. xi[11] It is wellestablished that findings of these administrative agencies are generally accorded not only respect but even finality. xii[12] Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion. xiii[13] Third, in Flores vs. National Labor Relations Commission xiv[14] we explained the role and function of rule 65 as an extraordinary remedy: It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases -- those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRCs evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench. Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record, which is certainly beyond the province of the extraordinary writ of certiorari.

Such demand is impermissible for it would involve this court in determining what evidence is entitled to belief and the weight to be assigned it. As we have reiterated countless times, judicial review by this Court in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction. We shall thus use the foregoing time-tested standards in deciding this petition. 1. Wage Increase The main assailed Order dated October 9, 1995 resolved the ticklish demand for wage increase as follows: xv[15] With this in mind and taking into view similar factors as financial capacity, position in the industry, package of existing benefits, inflation rate, seniority, and maintenance of the wage differentiation between and among the various classes of employees within the entire Company, this Office hereby finds the following improved benefits fair, reasonable and equitable: 1. Wage Increases Effective August 1, 1995 - 14% Effective August 1, 1996 - 14% Effective August 1, 1997 - 13% 2. meal subsidy - P15.00

In denying the motions for reconsideration/clarification of the above award, public respondent rules in the challenged Order dated November 21, 1995: xvi[16] First, on the matter of wages, we find no compelling reasons to alter or modify our award after having sufficiently passed upon the same arguments raised by both parties in our previous Order. The subsequent agreement on a package of wage increases at Shell Company, adverted to by the Union as the usual yardstick for purposes of developing its own package of improved wage increases, would not be sufficient basis to grant the same increases to the Union members herein considering that other factors, among which is employment size, were carefully taken into account. While it is true that inflation has direct impact on wage increases, it is not quite accurate to state that inflation as of September 1995 is already registered at 11.8%. The truth of the matter is that the average inflation for the first ten (10) months was only 7.496% and Central Bank projections indicate that it will take a 13.5% inflation for November and December to record an average inflation of 8.5% for the year. We, therefore, maintain the reasonableness of the package of wage increases that we awarded.

Petitioner belittles the awarded increases. It insists that the increase should be ruled on the basis of four factors: (a) the economic needs of the [u]nions members; (b) the [c]ompanys financial capacity; (c) the bargaining history between the [u]nion and the [c]ompany; and (d) the traditional parity in wages between Caltex and Shell Refinery Employees. xvii[17] Petitioner contends that the inflation rate rose to 11.8% in September [1995], rose further in October, and is still a double-digit figure at the time of this writing. Therefore, public respondents so-called improved benefits are in reality retrogressive. xviii[18] Petitioner tries to show private respondents immense financial capacity by citing Caltexs Banaba Housing Up-grading which would cost not less than P200,000,000.00 xix[19] Petitioner does not begrudge private respondents pampering of its [r]efinery [m]anagers and supervisors, but asks that the rank and file employees be not left too far behind. xx[20] Petitioner maintains that the salaries of Shell Refinery employees be used as a reference point in upgrading the compensation of private respondents employees because these two companies are in the same industry and their refineries are both in Batangas. Thus, the wage increase of petitioners members should be 15%/15%/15%. xxi[21] Private respondent counters with a proposed 9% 7% 7% increase for the same period with automatic adjustment should the increase fall short of the inflation rate. Hence, the Secretarys award of 14% 14% 13% increase really comes closer to the Unions position. xxii[22] Petitioners arguments fail to impress us. First, the matter of inflation rate was clearly addressed in public respondents Order dated November 21, 1995. Contrary to petitioners undocumented claim of 11.8% inflation in September of 1995, the truth of the matter is that the average inflation for the first ten (10) months was only 7.496%, and Central Bank projections indicate that it will take a 13.5% inflation for November and December to record an average inflation of 8.5% for the year. xxiii[23] Second, private respondents financial capacity has been insufficiently explained in its Comment dated April 16, 1996 in which it stated that the Banaba upgrading should not be construed as a yardstick of its financial standing: xxiv[24] It is equally amazing how the Union (petitioner) desperately justifies their demands by comparing the upgrading cost of the Companys (private respondent) Banaba Housing Facilities, a matter totally unrelated to the case, to the cost of their demands. The Union not only errs in its choice of yardstick of the Companys capacity to pay, it likewise displays its ignorance of the Banaba Housing Program. The Banaba Housing Facility is not a benefit. It is an integral part of an indispensable requirement for smooth Plant operations and assurance of an emergency response crew in times of calamities and accidents. Employees who are required to stay in the housing facility are members of the Refinerys emergency response organization. It is also not a case of upgrading. The Banaba Housing Facility was built in 1954. A significant number of its structure are dilapidated and in dire need of rehabilitation and preservation. Finally, Banaba is not a yardstick of the Companys capacity to pay, but rather, an eloquent demonstration of the Companys will to survive and remain globally competitive.

The above reasoning convinces us that such upgrading should not be equated with private respondents financial capacity to pay the proposed wage increase, but should be evaluated as a business judgment to survive and remain globally competitive. We believe that the standard proof of a companys financial standing is its financial statements duly audited by independent and credible external auditors. xxv[25] Third, the traditional parity in wages used by petitioner to justify its proposal is flimsy and trivial. Aside from its bare allegation of similarity in salaries and locations, petitioner did not proffer any substantial reason to impute grave abuse of discretion on the part of the public respondent. On the other hand, we find private respondents discussion of this matter reasonable, as the following shows: xxvi[26] It is further amazing that the Union continues to use an outmoded concept of the Shell yardstick and relative parities in wages to justify an imperative need for them to keep their traditional edge in pay over their industry counterparts. It is not just a matter of being above the rest. Sound compensation principle of higher productivity equals higher pay, as well as, recent developments in the industry have negated this argument. Both Shell and Petron continue to benefit from increasing manpower productivity. Shell, for instance, produces 155,000 barrels per day on a 120 manpower complement of operatives and rank and file; while the Company only produces 65,000 barrels per day with its 221 manpower complement. In addition, the counterpart union at Shell incurs an average overtime rate of 37%, as a percentage of base pay; the Unions overtime rate is 102%. Thus, the issue is productivity, not sales, and so far, the Companys Refinery is not as productive as Shells or Petrons. To ask for relative parity in the face of this reality is not only unreasonable, it is likewise illogical. As it is, the wage increase of 14%, 14% and 13% will result in an average basic salary of P23,510.00 at the end of the three-year cycle. The resulting pay is excessive and disproportionately high compared with the value of the jobs within the bargaining unit. Stated differently, this average salary will be unreasonably high for the skills and qualifications needed for the job. Even now, with an average monthly salary (prior to the DOLE awarded CBA increases) of P16,010 plus overtime, holiday and other premiums way above those mandated by law, the Union members are already the highest paid in the Philippines, in terms of gross income. The alleged similarity in the situation of Caltex and Shell cannot be considered a valid ground for a demand of wage increase, in the absence of a showing that the two companies are also similar in substantial aspects, as discussed above. Private respondent is merely asking that an employee should be paid on the basis of work done. If such employee is absent on a certain day, he should not, as a rule, be paid wages for that day. And if the employee has worked only for a portion of a day, he is not entitled to the pay corresponding to a full day. A contrary precept would ultimately result in the financial ruin of the employer. The age-old general rule governing relations between labor and capital, or management and employee, is a fair days wage for a fair days work. If no work is performed by the employee, there can be no wage or pay unless, of course, the laborer was ready, willing and able to work but was locked out, dismissed, suspended or otherwise illegally prevented from working. xxvii[27] True, union members have the right to

demand wage increases through their collective force; but it is equally cogent that they should also be able to justify an appreciable increase in wages. We observe that private respondents detailed allegations on productivity are unrebutted. It is noteworthy that petitioner ignored this argument of private respondent and based its demand for wage increase not on the ground that they were as productive as the Shell employees. Thus, we cannot attribute grave abuse of discretion to public respondent. 2. Union Security Clause In the impugned Order dated October 9, 1995, public respondents contested resolution on the union [security] clause reads: xxviii[28] The relevant provisions found in Article III of the CBA, which is hereby read, thus: Section 1. Employees of the COMPANY who at the signing of this Agreement are members of the UNION and those who subsequently become members thereof shall maintain their membership with the UNION for the duration of this Agreement as a condition of employment. Section 2. Members of the UNION who cease to be members of the UNION in good standing by reason of resignation or expulsion shall not be retained in the employment of the COMPANY. x x x x x x x are sought to be amended by the Union, to read as follows: Section 1. Employees of the Company who at the signing of this Agreement are members of the Union and those who subsequently become members thereof shall maintain their membership in GOOD STANDING with the Union for the duration of this Agreement as a condition of CONTINUOUS employment. Section 2. PURSUANT TO THE FOREGOING, ANY UNION MEMBER WHO CEASES TO BE SUCH MEMBER ON GROUNDS PROVIDED IN ITS CONSTITUTION AND BY-LAWS SHALL , UPON PRIOR WRITTEN NOTICE BY THE UNION TO THE COMPANY, BUT SUBJECT TO THE OBSERVANCE OF DUE PROCESS AND THE EXPRESS RATIFICATION OF THE MAJORITY OF THE UNION MEMBERSHIP, BE DISMISSED FROM EMPLOYMENT BY THE COMPANY; PROVIDED, HOWEVER, THAT THE UNION SHALL HOLD THE COMPANY FREE AND BLAMELESS FROM ANY LIABILITY IN THE EVENT THAT THE EMPLOYEE IN ANY MANNER QUESTIONS HIS DISMISSAL. The proposed amendment of the Union gives the same substantial effect as the existing provision. Rather, the same tackles more on procedure which, to our belief, is already sufficiently provided under its constitution and by-laws. Insofar as Union security is concerned, this is sufficiently addressed by the present provisions in the CBA. Hence, we find we are not competent to arbitrarily incorporate any modification thereof. We are convinced that any amendment on this matter should be a product of mutual concern and agreement. xxix[29]

Petitioner contends that the foregoing disposition leaving to the parties the decision on the union security clause issue is contrary to the whole idea of assumption of jurisdiction. Petitioner argues that in spite of the provisions on the union security clause, it may expel a member only on any of three grounds: non-payment of dues, subversion, or conviction for a crime involving moral turpitude. If the employees act does not constitute any of these three grounds, the member would continue to be employed by private respondent. Thus, the disagreement between petitioner and private respondent on this issue is not only procedural but also substantial.

On the other hand, private respondent argues that nothing prevents petitioner from expelling its members; however, termination of employment should be based only on these three grounds agreed upon in the existing CBA. Further, private respondent explains that petitioners citation of Article 249 (a) xxxi[31] of the Labor Code is out of context. It adds that the cited section provides only for the right of a union to prescribe its own rules with respect to the acquisition and retention of membership, and that upholding the arguments of petitioner would make the private respondent a policeman of the union. xxxii[32] We agree with petitioner. The disagreement between petitioner and private respondent on the union security clause should have been definitively resolved by public respondent. The labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution. xxxiii[33] In this case, the parties have submitted the issue of the union security clause for public respondents disposition. But the secretary of labor has given no valid reason for avoiding the said issue; he merely points out that this issue is a procedural matter. Such vacillation clearly sidesteps the nature of the union security clause as one intended to strengthen the contracting union and to protect it from the fickleness or perfidy of its own members. Without such safeguard, group solidarity becomes uncertain; the union becomes gradually weakened and increasingly vulnerable to company machinations. In this security clause lies the strength of the union during the enforcement of the collective bargaining agreement. It is this clause that provides labor with substantial power in collective bargaining. The secretary of labor assumed jurisdiction over this labor dispute in an industry indispensable to national interest, precisely to settle once and for all the disputes over which he has jurisdiction at his level. In not performing his duty, the secretary of labor committed a grave abuse of discretion. 3. New Retirement Plan Public respondents contested resolution on retirement benefits (application of the new retirement plan)in the Order dated November 21, 1995 reads: xxxiv[34] Third, the matter of retirement benefits deserves a second look considering that the concerned employees were already previously granted the option to choose between the old and the new plan at the time the latter was initiated and they choose to be covered under the Old Plan. To accede to the Unions demand to cover them under the new plan entails a different arrangement under a new scheme and likewise requires the approval of a Board of Trustees. It is, therefore, understood that the new Retirement Plan does not apply to the more or less 40 employees being sought by the Union to be covered under the New Plan.

Petitioner contends that 40 of its members who are still covered by the Old Retirement Plan because they were not able to exercise the option to shift to the New Retirement Plan, for one reason or another, when such option was given in the past are included in the New Retirement Plan. Petitioner argues that the exclusion of forty employees from the New Plan constitutes grave abuse of discretion for three reasons. First, it is a case of the left hand taking away, so to speak, what the right hand had given. Second, the change was done for a very shallow reason. The new scheme was no longer new, as the New Retirement Plan had been in place for at least two years. Third, in not applying the New Retirement Plan to the 40 employees, public respondent was perpetrating his departments discriminatory practice. xxxv[35] Private respondent counters that these 40 or so employees have opted to remain covered by the old plan despite opportunities given them in 1985 to shift to the New Plan. xxxvi[36] We hold that public respondent did not commit grave abuse of discretion in respecting the free and voluntary decision of the employees in regard to the Provident Plan and the irrevocable onetime option provided for in the New Retirement Plan. Although the union has every right to represent its members in the negotiation regarding the terms and conditions of their employment, it cannot negate their wishes on matters which are purely personal and individual to them. In this case, the forty employees freely opted to be covered by the Old Plan; their decision should be respected. The company gave them every opportunity to choose, and they voluntarily exercised their choice. The union cannot pretend to know better; it cannot impose its will on them. 4. Grievance Machinery and Arbitration The public respondents contested resolution on grievance and arbitration machineries in the Order dated November 21, 1995 reads: xxxvii[37] Seventh, we are constrained to take a closer look at the existing procedure concerning grievance in relation to the modifications being proposed by the Union. In this regard, we affirm our resolution to shorten the periods to process/resolve grievances based on existing practice from (45) days to (30) days at the first step and (10) days to seven (7) days at the second step which is the level of the VP for manufacturing. We further reviewed the steps through which a grievance may be processed and in line with the principle to expedite the early resolution of grievances, we find that the establishment of a joint Council as an additional step in the grievance procedure, may only serve to protract the proceeding and, therefore, no longer necessary. Instead, the unresolved grievance, if, not settled within (7) days at the level of the VP for Manufacturing, shall automatically be referred by both parties to voluntary arbitration in accordance with R.A. 6715. As to the number of Arbitrators for which the Union proposes to employ only one instead of a panel of three Arbitrators, we find it best to leave the matter to the agreement of both parties. Finally, we hereby advise the parties that the list of accredited voluntary arbitrators is now being maintained and disseminated by the National Conciliation and Meditation Board and no longer by the Bureau of Labor Relations. Petitioner contends that public respondent derailed the grievance and arbitration scheme proposed by the Union. xxxviii[38] Petitioner argues that the proposed Grievance Settlement Council is intended to supplement the effort of the Vice President for Manufacturing in

reviewing the grievance elevated to him, so that instead of acting alone x x x he will be obliged to convoke a conference of the Council to afford the grievant a thorough hearing. Petitioners recommendation for a single arbitrator is based on the proposition that if voluntary arbitration should be resorted to at all, this recourse should entail the least possible expense. xxxix[39] Private respondent counters that the disposition on the grievance machinery is likewise fair and reasonable under the circumstances and in fact was merely a reiteration of the (u)nions position during the conciliation meetings conducted by Undersecretary Bienvenido Laguesma. xl[40] No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the Labor Code, as incorporated by RA 6715, provides for only a single grievance machinery in the company to settle problems arising from interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies. Article 260, as amended, reads: Article 260. Grievance Machinery and Voluntary Arbitration. The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrators or panel of voluntary arbitrators, include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above. We believe that the procedure described by public respondent sufficiently complies with the minimum requirement of the law. Public respondent even provided for two steps in hearing grievances prior to their referral to arbitration. The parties will decide on the number of arbitrators who may hear a dispute only when the need for it arises. Even the law itself does not specify the number of arbitrators. Their alternatives whether to have one or three arbitrators have their respective advantages and disadvantages. In this matter, cost is not the only consideration; full deliberation on the issues is another, and it is best accomplished in a hearing conducted by three arbitrators. In effect, the parties are afforded the latitude to decide for themselves the composition of the grievance machinery as they find appropriate to a particular

situation. At bottom, we cannot really impute grave abuse of discretion to public respondent on this issue. 5. Signing Bonus The public respondents contested resolution on the signing bonus in the Order dated November 21, 1995 reads: xli[41] Fifth, specifically on the issue of whether the signing bonus is covered under the maintenance of existing benefits clause, we find that a clarification is indeed imperative. Despite the expressed provision for a signing bonus in the previous CBA, we uphold the principle that the award for a signing bonus should partake the nature of an incentive and premium for peaceful negotiations and amicable resolution of disputes which apparently are not present in the instant case. Thus, we are constrained to rule that the award of signing bonus is not covered by the maintenance of existing benefits clause. Petitioner asseverates that the signing bonus is an existing benefit embodied in the old CBA. xlii[42] It explains that public respondent erred in removing the award of a signing bonus which is given not only as an incentive for peaceful negotiations and amicable settlement of disputes but also as an extra award to the workers following the settlement of a CBA dispute by whatever means. xliii[43] Private respondent disagrees, contending that a signing bonus is not awarded when CBA negotiations result in a strike. There are two reasons therefor: First, the grant of a signing bonus is a matter of discretion and cannot be demanded as a matter of right; and second, the signing bonus is meant as an incentive for a peaceful negotiation. Once these negotiations result in a strike, an illegal one at that, the basis or rationale for such an award is lost. xliv[44] Although proposed by petitioner, xlv[45] the signing bonus was not accepted by private respondent. xlvi[46] Besides, a signing bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by petitioner under the principle of maintenance of existing benefits of the old CBA. However, as clearly explained by private respondent, a signing bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or unilaterally offered as an additional incentive by private respondent, the condition for awarding it must be duly satisfied. In the present case, the condition sine qua non for its grant a non strike was not complied with. In fact, private respondent categorically stated in its counter-proposal to the exclusion of those agreed upon before that new collective bargaining agreement would constitute the only agreement between the parties, as follows: SECTION 4. Scope of Agreement. The terms and conditions of employment of the employees within the appropriate bargaining unit are embodied in this Agreement. On the other hand, all such benefits which are not expressly provided for in this Agreement, but which are now being accorded, may in the future be accorded, or might have been previously accorded to employees, by the COMPANY shall be deemed as purely discretionary or pure acts of grace and magnanimity on the part of the COMPANY in each particular case, and the continuance or

repetition thereof now or in the future, no matter how long or how often, shall not be construed as establishing a right for the employee and/or obligation on the part of the COMPANY. xlvii[47] This provision on the scope of the agreement is further buttressed by the clause on waiver: xlviii[48] The parties acknowledge that during the negotiations which resulted in the execution of this Agreement, each of them had the unlimited opportunity to make demands and proposals with respect to any and all subjects and matters proper for collective bargaining and not prohibited by law; and the parties further acknowledge that the understandings and agreements arrived at by them after the exercise of that right and unlimited opportunity are fully set forth in this Agreement. Therefore, the COMPANY and the UNION during the life of this Agreement, each voluntarily and unqualifiedly waives the right and each agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter referred to or covered in this Agreement or with respect to any subject or matter not specifically referred to or covered in this Agreement even though such subject or matter may not have been within the knowledge or contemplation of either or both parties at the time they negotiated or signed this Agreement. Epilogue We have carefully reviewed the assailed Orders. Other than his failure to rule on the issue of union security, the secretary of labor cannot be indicted for grave abuse of discretion amounting to want or excess of jurisdiction. Basically, there is grave abuse of discretion amounting to lack of jurisdiction where the respondent board, tribunal or officer exercising judicial functions exercised its judgment in a capricious, whimsical, arbitrary or despotic manner. However, it has also been said that grave abuse is committed when the lower court acted capriciously, and whimsically or the petitioners contention appears to be clearly tenable or the broader interest of justice or public policy [so] require x x x. Also, grave abuse of discretion is committed when the board, tribunal or officer exercising judicial function fails to consider evidence adduced by the parties. xlix[49] In Saballa vs. National Labor Relations Commission, l[50] we ruled on how a decision of an administrative body must be drawn: The Court has previously held that judges and arbiters should draw up their decisions and resolutions with due care, and make certain that they truly and accurately reflect their conclusions and their final dispositions. x x x The same thing goes for the findings of fact made by the NLRC, as it is a settled rule that such findings are entitled to great respect and even finality when supported by substantial evidence; otherwise, they shall be struck down for being whimsical and capricious and arrived at with grave abuse of discretion. It is a requirement of due process and fair play that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. A decision that does not clearly and distinctly state the facts and the law of which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal.

In the present case, the foregoing requirements has been sufficiently met. Petitioners claim of grave abuse of discretion is anchored on the simple fact that public respondent adopted largely the proposals of private respondent. It should be understood that bargaining is not equivalent to an adversarial litigation where rights and obligations are delineated and remedies applied. It is simply a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable compromise. When parties agree to submit unresolved issues to the secretary of labor for his resolution, they should not expect their positions to be adopted in toto. It is understood that they defer to his wisdom and objectivity in insuring industrial peace. And unless they can clearly demonstrate bias, arbitrariness, capriciousness or personal hostility on the part of such public officer, the Court will not interfere or substitute the said officers judgment with its own. In this case, it is possible that this Court, or some its members at least, may even agree with the wisdom of petitioners claims. But unless grave abuse of discretion is cogently shown, this Court will refrain from using its extraordinary power of certiorari to strike down decisions and orders of quasi-judicial officers specially tasked by law to settle administrative questions and disputes. This is particularly true in the resolution of controversies in collective bargaining agreements where the question is rarely one of legal right or wrong nay, of black and white but one of wisdom, cogency and compromise as to what is possible, fair and reasonable under the circumstances. WHEREFORE, premises considered, the petition is partly GRANTED. The assailed Orders are AFFIRMED with the modification that the issue on the union security clause be REMANDED to the Department of Labor and Employment for definite resolution within one month from the finality of this Decision. No costs. SO ORDERED.


PURISMA, J.: The Petition for review on Certiorari at bar seeks to reinstate the Decision 1 of the Labor Arbiter insofar as it ordered the reinstatement and payment of backwages of the four petitioners herein. The said decision was affirmed 2 in toto by the NLRC. On February 21, 1995, however, upon motion for reconsideration of the respondent company, the NLRC came out with a Resolution 3 modifying its decision, by deleting therefrom the

award of backwages, ordering payment of separation pay in lieu of reinstatement, and declaring the loss of employment status of petitioner Joel Densing. The antecedent facts are as follows: Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, the petitioners herein, were casual employees of respondent CENAPRO Chemicals Corporation. In the said company, the collective bargaining representative of all rank and file employees was CENAPRO Employees Association (CCEA), with which respondent company had a collective bargaining agreement (CBA). Their CBA excluded casual employees from membership in the incumbent union. The casual employees who have rendered at least one to six years of service sought regularization of their employment. When their demand was denied, they formed themselves into an organization and affiliated with the Association of Independent unions in the Philippines (AIUP). Thereafter, AIUP filed a petition for certification election, which petition was opposed by the respondent company. The CCEA anchored its opposition on the contract bar rule. On May 4 and July 3 1990, the union filed a notice of strike, minutes of strike vote, and the needed documentation, with the Department of Labor and Employment. The notice of strike cited as grounds therefor the acts of respondent company constituting unfair labor practice, more specifically coercion of employees and systematic union busting. On July 23, 1992, the union proceeded to stage a strike, in the course of which, the union perpetrated illegal acts. The strikers padlocked the gate of the company. The areas fronting the gate of the company were barricaded and blocked by union strikers. The strikers also prevented and coerced other non-striking employees from reporting for work. Because of such illegal activities, the respondent company filed a petition for injunction with the NLRC, which granted a Temporary Restraining Order (TRO), enjoining the strikers from doing further acts of violence, coercion, or intimidation and from blocking fee ingress and egress to the company premises. Subsequently, or on July 25, 1990, to be precise, the respondent company filed a complaint for illegal strike. The day before, July 24, 1990, petitioners filed a complaint for unfair labor practice and illegal lockout against the respondent company. In a consolidated Decision, dated September 10, 1993, the Labor Arbiter declares illegal the strike staged by the petitioners, and dismissed the charge of illegal lockout and unfair labor practice. The dispositive portion of the Labor Arbiter's decision was to the following effect:
WHEREFORE, premises considered, judgment is hereby rendered finding the strike illegal and as a consequence thereto, the officers who participated in the illegal strike namely: Oscar Enicio, Jaime dela Piedra, Lino Isidro, Ariel Jorda, and Jose Catnubay are declared to have lost their employment status. CENAPRO is directed however to reinstate the other workers, except Ireneo Sagaral, Artemio Guinto, Ruben Tulod,

Marcelo M. Matura, Gilbert Holdilla, Cesar Buntol, Rey Siarot, Lucio Nuneza, Jose Basco, Gervacio Baldespinosa, Jr., Cresecente Buntol, Dennis Pepito, Florencio Pepito, Edwin Ramayrat, Daniel Canete, and Vivencio Sinadjan who executed quitclaims in favor of CENAPRO and cenapro is being absolved from the charges of illegal lockout and unfair labor practice. SO ORDERED.

In short, five (5) union officers were declared to have lost their employment status, fifteen (15) union members were not reinstated because they executed quit claims in favor of the respondent company, and six (6) workers, Rosalito Bantulan, Edward Regner, Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, ordered to be reinstated. On October 8, 1993, the Labor Arbiter issued an Order excluding Rosalito Bantulan and Edward Regner from the list of those to be reinstated and to be paid backwages. The remaining four (4) workers, Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, are the petitioners here. On October 5, 1993, the respondent company appealed the aforesaid decision insofar as it ordered the reinstatement of some of the strikers. On October 7, 1993, the petitioners also appealed the same decision of the Labor Arbiter. Pending resolution of the said appeals, petitioner AUIP filed with the Labor Arbiter a Motion for Execution of the Labor Arbiter's Decision directing reinstatement of some of its members. The motion was granted in the Order dated October 15, 1993. On December 7, 1993, respondent company presented Manifestation/Motion praying that instead of reinstatement. it be allowed to pay separation pay petitioners. On December 16, 1993, petitioners presented a motion for payroll reinstatement, which motion was opposed by the respondent company, alleging mainly that the circumstances of the case have strained the relationship of the parties herein, rendering their reinstatement unwise and inappropriate. But such opposition was overruled by the Labor Arbiter. In his Order of March 23, 1994, the same Labor Arbiter issued a second writ of execution directing actual, if not payroll reinstatement of the strikers. On April 6, 1994, respondent company appealed the second order for the reinstatement of the strikers, placing reliance on the same grounds raised in support of its first appeal. In its Decision dated August 15, 1994, the NLRC affirmed in toto the Labor Arbiter's decision, dismissed both the appeal of private respondent and that of petitioners, and reiterated the Labor Arbiter's Order for the reinstatement of the herein petitioners, Joel

Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana. The said decision disposed and directed as follows:
WHEREFORE, premises considered, these appeals are DISMISSED, and the decision of the Labor Arbiter is AFFIRMED in its entirety. Appellant Cenapro Chemical Corporation is hereby ordered to immediately comply with the Labor Arbiter's Order dated March 23, 1994 and to release the salaries of four (4) appellant-workers namely Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana from October 15, 1993 and continue paying them up to the time this decision has become final and executory, less earning earned elsewhere. SO ORDERED.

Respondent company moved for reconsideration of that portion of the NLRC's decision ordering the reinstatement of the said strikers. Acting thereupon, the NLRC modified its Decision of August 15, 1994, by ordering the payment of separation pay in lieu of the reinstatement of the petitioners, deleting the award of backwages, and declaring the loss of employment status of Joel Densing. The dispositive portion of the Amendatory Resolution, ruled thus:
WHEREFORE, the decision of the Commission promulgated on August 15, 1994 is hereby MODIFIED. In view of reinstatement to complainants Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, appellant-movant CENAPRO Chemicals corporation is directed to pay them amount equivalent to one (1) month pay for every year of service and without backwages. As regards Joel Densing, he is declared to have lost his employment status. SO ORDERED.

Hence, the present petition, theorizing that respondent NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction in: 1) Entertaining the 6 April 1994 (the first appeal dated 5 October 1993) which was based on similar grounds. 2) Reversing its earlier Resolution of the first appeal promulgated 15 August 1994 by way of another contradictory and baseless ruling promulgated on 21 February 1995. 3) Depriving Henedino Mirafuentes, Christopher Patentes, and Andres Tejana of their right to reinstatement and backwages; and 4) Depriving Joel Densing of his right to reinstatement or separation pay with backwages. It is decisively clear that although the grounds invoked in the two appeals were the same, the said appeals were the same, the said appeals were separate and distinct

remedies. Filed on October 5, 1993, the first appeal was from the decision of Labor Arbiter Nicasio Aninon, dated September 10, 1993, seeking loss of employment status of all the union members who participated in the illegal strike. The second appeal, dated April 6, 1994, was, in effect, an opposition to the second writ of execution issued on March 23, 1994. The second writ pertained to the order to effect immediate actual or payroll reinstatement of the four petitioners herein. The said appeals were acted upon separately by the NLRC, which did not act with grave abuse of discretion in entertaining such appeals. When they filed the notice of strike, petitioners cited as their grounds therefor unfair labor practice, specifically coercion of employees and systematic union busting. But the said grounds wee adjudged as baseless by the Labor Arbiter. The court quotes with approval the following findings of Labor Arbiter Aninon, to wit:
. . . In fact, in the undated Joint Affidavit of Oscar Enecio, Edgardo Regner, Christopher Patentes, Edgar Sanchez, Ariel Jorda, Jaime dela Piedra, the workers stated that what they considered as harassments and insults are those when they were scolded for little mistakes and memoranda for tardiness. These acts, if really committed cannot be considered as harassment and insults but were ordinary acts which employers have to do as part of their administrative supervision over their employees. Moreover, Oscar Enecio's testimony that some of his fellow union members like vice-president Jaime dela Piedra, Christopher Patentes and Henodino Mirafuentes, were also harass when they were made to work another eight (8) hours after their tour of duty deserves scant consideration not only because it is uncorroborated but he could not even give the dates when these workers were made to work for sixteen (16) hours, how many instances 7 these happened and whether or not the workers have actually worked.

The court discerns no basis for altering the aforesaid findings which have been affirmed by the NLRC. The court is not persuaded by petitioners' allegation of union busting. The NLRC correctly ruled that the strike staged by petitioners was in the nature of a unionrecognition-strike. A union-recognition-strike, as its legal designation implies, is calculated to compel the employer to recognize one's union, and not the other contending group, as the employees' bargaining representative to work out a collective bargaining agreement despite the striking union's doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive representative in the bargaining unit. It is undisputed that at the time the petition for certification election was filed by AUIP, petitioner union, there was an existing CBA between the respondent company and CCEA, the incumbent bargaining representative of all rank and file employees. The petition should have not been entertained because of the contract bar rule. When a collective bargaining agreement has been duly registered in accordance with Article 231 of the Labor Code, a petition for certification election or motion for intervention may be entertained only within sixty (60) days prior to the expiry date of the said agreement. 8 Outside the said period, as in the present case, the petition for certification election or motion for intervention cannot be allowed. Hence, the conclusion that the respondent company did not commit the alleged union busting.

From the gamut of evidence on hand, it can be gathered that the strike staged by the petitioner union was illegal for reasons, that: 1) The strikers committed illegal acts in the course of the strike. They formed human barricades to block the road, prevented the passage of the respondent company's truck, padlocked the company's gate, and prevented co-workers from entering the company premises. 9 2) And violated the Temporary Restraining Order (TRO) 10 enjoining the union and/or its members from obstructing the company premises, and ordering the removal therefrom of all the barricades. A strike is a legitimate weapon in the universal struggle for existence. 11 It is considered as the most effective weapon in protecting the rights of the employees to improve the terms and conditions of their employment. 12 But to be valid, a strike must be pursued within legal bounds. The right to strike as a means for the attainment of social justice is never meant to oppress or destroy the employer. The law provides limits for its exercise. Among such limits are the prohibited activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in picketing shall: a) commit any act of violence, coercion, or intimidation or b) obstruct the free ingress to or egress from the employer's premises for lawful purposes or c) obstruct public thoroughfares. Even if the strike is valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal. For instance, the strike was considered illegal as the "strikers formed a human cordon along the side of the Sta. Ana wharf and blocked all the ways and approaches to the launches and vessels of Petitioners". 13 It follows therefore that the dismissal of the officers of the striking union was justified and valid. Their dismissal as a consequence of the illegality of the strike staged by them finds support in Article 264 (a) of the Labor Code, pertinent portion of which provides: " . . Any union officer who knowingly participates in an illegal strike and any . . union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. . ." Union officers are duty bound to guide their members to respect the law. If instead of doing so, the officers urge the members to violate the law and defy the duly constituted authorities, their dismissal from the service is a just penalty or sanction for their unlawful acts. The officers' responsibility is greater than that of the members. 14

The court finds merit in the finding by the Labor Arbiter and the NLRC that the respondent company committed no illegal lockout. Lockout means temporary refusal of the employer to furnish work as a result of an industrial or labor dispute. 15 As observed by the Labor Arbiter, it was the appellant-workers who voluntarily stopped working because of their strike. In fact the appellant workers admitted that non-striking workers who wanted to return to work were allowed to do so. Their being without work could not therefore be attributed to the employer's refusal to give them work but rather, to the voluntary withdrawal of their services in order to compel the company to recognize their union. 16 The next aspect of the case to consider is the fate of the four petitioners herein. Decisive on the matter is the pertinent provision of Article 264 (a) of the Labor Code that: ". . any worker . . who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. . ." It can be gleaned unerringly from the aforecited provision of law in point, however, that an ordinary striking employee can not be terminated for mere participation in an illegal strike. There must be proof that he committed illegal acts during the strike 17 and the striker who participated in the commission of illegal act must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. In the landmark case of Ang Tibay vs. CIR, 18 the court ruled "Not only must there be some evidence to support a finding or conclusion, but the evidence must be "substantial". Substantial evidence is more than a mere scintilla. It means such relevant evidence that a reasonable mind might accept as sufficient to support a conclusion." Respondent company contends that sufficient testimonial, documentary and real evidence, including the photographs supposedly taken by a certain Mr. Ponce, were presented at the arbitration level. It is argued that the said pictures best show the participation of the strikers in the commission of illegal acts in the course of the strike. In connection therewith, it is worthy to point out the sole basis of the NLRC for declaring the loss of employment status of petitioner Joel Densing, to wit:
ATTY. PINTOR: Q: Now, Mr. Ponce, on page 1 of your affidavit, paragraph 4 thereof, you alleged that: "While in the gate, I saw several strikers of Cenapro blocked its gate and prevented the truck from proceeding to its destination." Who were these several workers you referred to, in this affidavit of yours? WITNESS: A. The strikers. HON. LABOR ARBITER:

Q. Are you referring to the complainants in this case who are now present? WITNESS: A. Yes sir, I am referring to AIU members. HON, LABOR ARBITER: Make it of record that the witness is referring to the five persons inside the court namely: Rosalito Bentulan, Ariel Jorda, Ranulfo Cabrestante, 19 Jose Catnubay and Joel Densing. (emphasis supplied)

All things studiedly considered, the court is not convinced that the quantum of proof on record hurdled the substantiality of evidence test 20 to support a decision, a basic requirement in administrative adjudication. If the said pictures exhibited before the Labor Arbiter portrayed the herein petitioners performing prohibited acts during the strike, why were these pictures not exhibited for identification of petitioners? Petitioners could have been identified in such pictures, if they were reflected therein, in the same manner that the lawyer who examined Mr. Ponce, asked witness Armamento to identify the Sheriff Mr. Leahmon Tolo, thus:
ATTY. PINTOR: Q I refer your attention Mr. Armamento to Exhibit "16". There is a person here wearing a short sleeve barong tagalog. Can you please tell the Honorable office if you will be able to identify this person? WITNESS: A Yes, this is the Sheriff Mr. Leahmon Tolo.

The identification of the alleged pictures of the strikers, if properly made, could have been categorized as substantial evidence, which a reasonable mind may accept as adequate to support a conclusion that Joel Densing participated in blocking the gate of respondent company. Verily, the uncorroborated testimony of Mr. Ponce does not suffice to support a declaration of loss of employment status of Joel Densing. This could be the reason why the Labor Arbiter and the NLRC, in its decision dated August 15, 1994, upheld the reinstatement of Joel Densing. The contention of petitioners that the factual findings by the Labor Arbiter, as trial officer in the case, deserve much weight is tenable. The NLRC is bound by the factual findings of the Labor Arbiter as the latter was in a better position to observe the demeanor and department of the witnesses. "Absent any substantial proof that the trial court's decision was based on speculation, the same must be accorded full consideration and should not be disturbed on appeal. 22

Premises studiedly considered, we are of the ineluctable conclusion, and hold, that the NLRC gravely abused its discretion in declaring the loss of employment status of Joel Densing. As regards the other petitioners, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, their reinstatement is warranted. In its resolution, the NLRC adjudged petitioners as "not entirely faultless" in light of the following revelation of Mr. Ponce, to wit:
ATTY. PINTOR: Q. Mr. Ponce, I will refer you to a picture previously marked as our Annex "H". Showing to you the said picture. In said picture, there are persons who are lying on the road. Can you please identify who are these persons? WITNESS: A. They are the strikers. ATTY. PINTOR: Q. Are you referring to the AIU strikers the complainants in this case? WITNESS: A. Yes. Sir.

For the severest administrative penalty of dismissal to attach, the erring strikers must be duly identified. Simply referring to them as "strikers", "AIU strikers" "complainants in this case" is not enough to justify their dismissal. On the issue of reinstatement and payment of salaries, the court also find for petitioners. Telling on the monetary award is Article 223 of the Labor Code, the pertinent of which reads:
. . . In any event, the decision of the labor arbiter reinstating a dismissed employee shall be immediately executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of bond shall not stay the execution of the reinstatement provided therein. . . .

The NLRC Resolution of February 21, 1995 does not state any plausible ground or basis for deleting the award for backwages. The mere fact that the petitioners were "not entirely faultless" is of no moment. Such finding below does not adversely affect their entitlement to backwages. As opined by the NLRC in its Decision of August 15, 1994, affirming in its entirety the conclusion arrived at by the Labor Arbiter "the only option left

to the appellant-company is whether to physically reinstate appellant workers or to reinstate them on the payroll." The unmeritorious appeal interposed by the respondent company, let alone the failure to execute with dispatch the award of reinstatement delayed the payroll reinstatement of petitioners. But their long waiting is not completely in vain, for the court holds that their (petitioners') salaries and backwages must be computed from October 15, 1993 until full payment of their separation pay, without any deduction. This is in consonance with the ruling in the case of Bustamante vs. NLRC, 24 where payment of full backwages without deductions was ordered. The four petitioners herein are entitled to reinstatement absent any just ground their dismissal. Considering, however, that more than eight (8) years have passed since subject strike was staged, an award of separation pay equivalent to one (1) month pay for every year of service, in lieu of reinstatement, is deemed more practical and appropriate to all the parties concerned. WHEREFORE, the petition is GRANTED; the Resolution of NLRC, dated February 21, 1995, is SET ASIDE, and the Decision of the Labor Arbiter of October 8, 1993 REINSTATED, with the modification that the petitioners, Joel Densing, Henedino Mirafuentes, Christopher Patentes, and Andres Tejana, be paid full backwages computed from October 15, 1993 until full payment of their separation pay. The payment of separation pay in lieu of reinstatement, is hereby authorized. No pronouncement as to costs. SO ORDERED.

Case Digest on Association of Independent Unions in the Philippines v. NLRC, 305 SCRA 219, 25 March 1999- Labor Law Q: The original owners of AAC were driven by mounting financial loses to sell the majority rights of the company to PH. To thwart further losses, PH implemented a re-organizational plan. Workers occupying redundant positions that were abolished were terminated. PH duly paid their separation pay and other benefits. Six of the union members who were terminated filed a case for illegal termination alleging that the retrenchment program was a subterfuge for union busting. They claimed that they were singled out for their active participation in union activities. They also asserted that AAC was not bankrupt, as it has engaged in an aggressive scheme of contractual hiring. Were the union members validly dismissed?

A: Yes. The condition of business losses is normally shown by audited financial documents. It is the Courts ruling that financial statements must be prepared and signed by independent auditors. In the instant case, the employees never contested the veracity of the audited financial documents presented by AAC to the Labor Arbiter, neither did they object to the documents admissibility. It is only necessary that the employees show that its losses increased through a period of time and that the condition of the company is not likely to improve in the near future. The allegation of union busting is also bereft of proof. The records show that the position on 51 other non-union members were abolished due to business loses. The Court generally holds quitclaims to be contrary to public policy. Yet as in the instant case, as there is no showing that the quitclaims were executed in duress, they are binding on the parties.

MSF TIRE AND RUBBER, INC., petitioner, vs. COURT OF APPEALS and PHILTREAD TIRE WORKERS UNION, respondents. DECISION MENDOZA, J.: Petitioner seeks a review of the decisionl[1] of the Court of Appeals, dated March 20, 1997, which set aside the order of the Regional Trial Court of Makati, dated July 2, 1996, in Civil Case No. 95-770, granting petitioners application for a writ of preliminary injunction. The facts are as follows: A labor dispute arose between Philtread Tire and Rubber Corporation (Philtread) and private respondent, Philtread Tire Workers Union (Union), as a result of which the Union filed on May 27, 1994 a notice of strike in the National Conciliation and Mediation Board-National Capital Region charging Philtread with unfair labor practices for allegedly engaging in union-busting for violation of the provisions of the collective bargaining agreement. This was followed by picketing and the holding of assemblies by the Union outside the gate of Philtreads plant at Km. 21, East Service Road, South Superhighway, Muntinlupa, Metro Manila. Philtread, on the other hand, filed a notice of lock-out on May 30, 1994 which it carried out on June 15, 1994. In an order, dated September 4, 1994,l[2] then Secretary of Labor Nieves Confesor assumed jurisdiction over the labor dispute and certified it for compulsory arbitration. She enjoined the Union from striking and Philtread from locking out members of the Union. On December 9, 1994, during the pendency of the labor dispute, Philtread entered into a Memorandum of Agreement with Siam Tyre Public Company Limited (Siam Tyre), a subsidiary of Siam Cement. Under the Memorandum of Agreement, Philtreads plant and equipment would be sold to a new company (petitioner MSF Tire and Rubber, Inc.), 80% of which would be owned by Siam Tyre and 20% by Philtread, while the land on which the plant was located would be sold to another company (Sucat Land Corporation), 60% of which would be owned by Philtread and 40% by Siam Tyre. This was done and the Union was informed of the purchase of the plant by petitioner. Petitioner then asked the Union to desist from picketing outside its plant and to remove the banners, streamers, and tent which it had placed outside the plants fence. As the Union refused petitioners request, petitioner filed on May 25, 1995 a complaint for injunction with damages against the Union and the latters officers and directors before the Regional Trial Court of Makati, Branch 59 where the case was docketed as Civil Case No. 95770.

On June 13, 1995, the Union moved to dismiss the complaint alleging lack of jurisdiction on the part of the trial court. It insisted that the parties were involved in a labor dispute and that petitioner, being a mere alter ego of Philtread, was not an innocent bystander. After petitioner made its offer of evidence as well as the submission of the parties respective memoranda, the trial court, in an order, dated March 25, 1996, denied petitioners application for injunction and dismissed the complaint. However, on petitioners motion, the trial court, on July 2, 1996, reconsidered its order, and granted an injunction. Its order read:l[3] Considering all that has been stated, the motion for reconsideration is granted. The Order dated March 25, 1996 is reconsidered and set aside. Plaintiffs complaint is reinstated and defendants motion to dismiss is DENIED. As regards plaintiffs application for the issuance of a writ of preliminary injunction, the Court finds that the plaintiff has established a clear and subsisting right to the injunctive relief, hence, the same is GRANTED. Upon posting by the plaintiff and approval by the Court of a bond in the amount of One Million (P1,000,000.00) Pesos which shall answer for any damage that the defendants may suffer by reason of the injunction in the event that the Court may finally adjudge that the plaintiff is not entitled thereto, let a writ of preliminary injunction issue ordering the defendants and any other persons acting with them and/or on their behalf to desist immediately from conducting their assembly in the area immediately outside the plaintiffs plant at Km. 21 East Service Road, South Superhighway, Muntinlupa, Metro Manila, and from placing and/or constructing banners, streamers, posters and placards, and/or tents/shanties or any other structure, on the fence of, and/or along the sidewalk outside, the said plant premises until further orders from this Court. SO ORDERED.l[4] Without filing a motion for reconsideration, the Union filed on August 5, 1996 a petition for certiorari and prohibition before the Court of Appeals. On March 20, 1997, the appellate court rendered a decision granting the Unions petition and ordering the trial court to dismiss the civil case for lack of jurisdiction. Hence, this petition for review. Petitioner makes the following arguments in support of its petition: a. The Court of Appeals erred in not summarily dismissing the Unions petition for its false certification of non-forum shopping and the Unions failure to file a motion for reconsideration before going up to the Court of Appeals on a petition for certiorari. b. The Court of Appeals gravely erred in dismissing Civil Case No. 95-770 for lack of jurisdiction and merit on the alleged ground that MSF did not have a clear and unmistakable right to entitle it to a writ of preliminary injunction. c. The Court of Appeals pronouncement that it has not touched upon the issue of whether or not private respondent is a mere innocent bystander to the labor dispute between Philtread and the

Union or upon the issue of whether or not private respondent is a mere dummy or continuity of Philtread is contrary to its own conclusions in the body of the decision, which conclusions are erroneous. d. The Court of Appeals gravely abused its discretion when it disallowed the injunction based on Philtreads remaining operations in the country and allowed the Union to exercise its right to communicate the facts of its labor dispute within MSFs premises, given the percentage of interest Philtread has in both MSF and the corporation which owns the land bearing said plant. The issues are (1) whether the Unions failure to disclose the pendency of NCMB-NCR-NS-05167-96 in its certification of non-forum shopping and its failure to file a motion for reconsideration of the order, dated July 2, 1996, of the trial court were fatal to its petition for review before the Court of Appeals; and (2) whether petitioner has shown a clear legal right to the issuance of a writ of injunction under the innocent bystander rule. First. Forum shopping is the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition.l[5] It is an act of malpractice and is prohibited and condemned as trifling with courts and abusing their processes.l[6] As held in Executive Secretary v. Gordon:l[7] Forum-shopping consists of filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus, it has been held that there is forum-shopping (1) whenever as a result of an adverse decision in one forum, a party seeks a favorable decision (other than by appeal or certiorari) in another, or (2) if, after he has filed a petition before the Supreme Court, a party files another before the Court of Appeals since in such case he deliberately splits appeals in the hope that even as one case in which a particular remedy is sought is dismissed, another case (offering a similar remedy) would still be open, or (3) where a party attempts to obtain a preliminary injunction in another court after failing to obtain the same from the original court. In determining whether or not there is forum-shopping, what is important is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same reliefs and in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issues.l[8] Petitioner asserts that the Court of Appeals should have dismissed the Unions petition for review on the ground that the certification of non-forum shopping was false and perjurious as a result of the Unions failure to mention the existence of NCMB-NCR-NS-05-167-96, a

proceeding involving the same parties and pending before the National Conciliation and Mediation Board. The argument is without merit. Petitioner was a party to the proceedings before the National Conciliation and Mediation Board in which an order, dated September 8, 1994, was issued by then Secretary of Labor Nieves Confesor, enjoining any strike or lock-out by the parties.l[9] It was petitioner which initiated the action for injunction before the trial court. Aggrieved by the injunctive order issued by the lower court, the Union was forced to file a petition for review before the Court of Appeals. We cannot understand why petitioner should complain that no mention of the pendency of the arbitration case before the labor department was made in the certificate of non-forum shopping attached to the Unions petition in the Court of Appeals. The petition of the Union in the Court of Appeals was provoked by petitioners action in seeking injunction from the trial court when it could have obtained the same relief from the Secretary of Labor. Indeed, by focusing on the Unions certification before the appellate court, petitioner failed to notice that its own certification before the lower court suffered from the same omission for which it faults the Union. Although the body of petitioners complaint mentions NCMB-NCRNS-05-167-96, its own certification is silent concerning this matter.l[10] It is not in keeping with the requirements of fairness for petitioner to demand strict application of the prohibition against forum-shopping, when it, too, is guilty of the same omission. Second. Petitioner asserts that its status as an innocent bystander with respect to the labor dispute between Philtread and the Union entitles it to a writ of injunction from the civil courts and that the appellate court erred in not upholding its corporate personality as independent of Philtreads. In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel,l[11] this Court, through Justice J.B.L. Reyes, stated the innocent bystander rule as follows: The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the constitution. If peacefully carried out, it can not be curtailed even in the absence of employer-employee relationship. The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise of free speech, we believe the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. Thus the right may be regulated at the instance of third parties or innocent bystanders if it appears that the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection or interest exists between them and the picketing union or constitute an invasion of their rights. In one case decided by this Court, we upheld a trial courts injunction prohibiting the union from blocking the entrance to a feed mill located within the compound of a flour mill with which the union had a dispute. Although

sustained on a different ground, no connection was found between the two mills owned by two different corporations other than their being situated in the same premises. It is to be noted that in the instances cited, peaceful picketing has not been totally banned but merely regulated. And in one American case, a picket by a labor union in front of a motion picture theater with which the union had a labor dispute was enjoined by the court from being extended in front of the main entrance of the building housing the theater wherein other stores operated by third persons were located.l[12] (Emphasis added) Thus, an innocent bystander, who seeks to enjoin a labor strike, must satisfy the court that aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof. For instance, in PAFLU v. Cloribel, supra, this Court held that Wellington and Galang were entirely separate entities, different from, and without any connection whatsoever to, the Metropolitan Bank and Trust Company, against whom the strike was directed, other than the incidental fact that they are the banks landlord and co-lessee housed in the same building, respectively. Similarly, in Liwayway Publications, Inc. v. Permanent Concrete Workers Union,l[13] this Court ruled that Liwayway was an innocent bystander and thus entitled to enjoin the unions strike because Liwayways only connection with the employer company was the fact that both were situated in the same premises. In the case at bar, petitioner cannot be said not to have such connection to the dispute. As correctly observed by the appellate court: Coming now to the case before us, we find that the negotiation, contract of sale, and the post transaction between Philtread, as vendor, and Siam Tyre, as vendee, reveals a legal relation between them which, in the interest of petitioner, we cannot ignore. To be sure, the transaction between Philtread and Siam Tyre, was not a simple sale whereby Philtread ceased to have any proprietary rights over its sold assets. On the contrary, Philtread remains as 20% owner of private respondent and 60% owner of Sucat Land Corporation which was likewise incorporated in accordance with the terms of the Memorandum of Agreement with Siam Tyre, and which now owns the land were subject plant is located. This, together with the fact that private respondent uses the same plant or factory; similar or substantially the same working conditions; same machinery, tools, and equipment; and manufacture the same products as Philtread, lead us to safely conclude that private respondents personality is so closely linked to Philtread as to bar its entitlement to an injunctive writ. Stated differently, given its close links with Philtread as to bar its entitlement to an injunctive writ. Stated differently, given its close links with Philtread, we find no clear and unmistakable right on the part of private respondent to entitle it to the writ of preliminary injunction it prayed for below. . We stress that that in so ruling, we have not touched on the issue of . . . whether or not private respondent is a mere dummy or continuation of Philtread. . . .l[14]

Although, as petitioner contends, the corporate fiction may be disregarded where it is used to defeat public convenience, justify wrong, protect fraud, defend crime, or where the corporation is used as a mere alter-ego or business conduit,l[15] it is not these standards but those of the innocent bystander rule which govern whether or not petitioner is entitled to an injunctive writ. Since petitioner is not an innocent bystander, the trial courts order, dated July 2, 1996, is a patent nullity, the trial court having no jurisdiction to issue the writ of injunction. No motion for reconsideration need be filed where the order is null and void.l[16] WHEREFORE, petition is hereby DENIED and the decision of the Court of Appeals is AFFIRMED. SO ORDERED. ase Digest on MSF Tire and Rubber, Inc. v. CA, 311 SCRA 784, August 5, 1999- Labor Law

Q: M was employed by petitioner as a truck driver. One day, he was accused of tampering with the vale sheet and he was subsequently barred from entering company premises. M filed a complaint of illegal dismissal against private respondent before the NLRC. A copy of the summons was sent to petitioners by registered mail and was duly received and signed. The petitioner was also notified of the hearing date by registered mail but no one appeared for the petitioner. The Labor Arbiter deemed petitioners non-appearance as a failure to controvert the facts as claimed by M and decided the case ex-parte. The petitioners allege that they never received copies of summons or notices and that the Labor Arbiter never acquired jurisdiction over them, as there was no valid service of summons. Were the petitioners denied due process?

A: No. The bare assertion of petitioner that the persons who signed the summons which were sent by registered mail were impostors or persons unknown to them requires substantiation by competent evidence. In quasi-judicial proceedings of the NLRC, procedural rules governing service of summons are not strictly construed and substantial compliance is therefore sufficient. Further, official duty is presumed to have been performed regularly unless the contrary is proven. In administrative proceedings, due process simple means the opportunity to explain ones side or seek a reconsideration of the action complained of. Petitioners were able to file an appeal before the NLRC of the Labor Arbiters decision and a party who has availed of the opportunity to present his position cannot claim to have been denied due process. The Court also ruled that M was constructively dismissed when he was accused of tampering with the vale sheet and prevented from going to work. The assertion of petitioner that M abandoned his work is also without merit as it is highly illogical for an employee to abandon his employment and thereafter file a complaint for illegal dismissal. Even assuming that there was

abandonment, there was non-compliance with the statutory requirement of notice; therefore M is entitled to separation pay and backwages.