PHIMCO INDUSTRIES INC. VS.

PHIMCO INDUSTRIES LABOR

ASSOCIATION (PILA)
G.R. 170830, 8/11/2010
FACTS:
PhimCo Industries (petitioner) is a corporation engaged in the production of matches. PhimCo
Industries Labor Union or PILA (respondent) is the duly authorized bargaining representative of
petitioners daily-paid workers.

Herein Petitioner and Respondents were not able to come into terms with regards on the
economic issues, mainly due to disagreements on salary increases and benefits when they had
negotiation for the renewal of their collective bargaining agreemnet.

Hence, respondent filed with the National Conciliation and Mediation Board (NCMB) a notice
of strike onthe ground of the bargaining deadlock; the union conducted a strike vote where
majority of the members of the union voted for a strike. The day after, they submitted said vote
results with the NCMB. 35 days later, the union staged a strike.

The petitioner filed a petition to enjoin the strikers from preventing through force and
intimidation and coercion the ingress and egress of non-striking employees into and from the
company. The NLRC issued and ex-parte TRO, effective for 20 days. A moth thereafter, the
petitioner sent a letter to the 36 striking union members, directing them to explain within 24
hours why they shoud not be dismissed for the illegal acts they committed. 3 days later, the 36
union members were dismissed from work.

The respondent filed a complaint for unfair labor practice and illegal dismissal with the NLRC,
where the Acting Labor Secretary ordered those striking employees to return to work within 24
hours. The secretary ordered company (herein petitioner) to accept the striking employees
under the same terms and conditions. On the same day, the strike ended.

The petitioner filed a petition before the NLRC to declare the the strike illegal contending that
the strikers prevented ingress to and egress from the PHIMCO compound, paralyzing hte
companys operations. Respondents filed their position paper contending that they have
complied with all the requirements in staging a strike, and conducted it peacefully in an orderly
lawful manner. The NLRC ruled that the strike was illegal, based on the arguments of
petitioner, and declared that the respondent employees, officers and members of the union, have
lost their employment status.

Upon appeal on the NLRC, and the decision was reversed in favor of the respondent. Upon
motion for reconsideration on the illegal strike, the labor arbiter ruled that the dismissal was
illegal, which the issue on the illegal strike was not included. Without waiting to the resolution
of the court, the petitioner elevated the case before the Court of Appeals, which was denied
stating that the picket was peaceful.

ISSUE/S:
1- Whether or not the strike was illegal.
2- Whether or not the dismissal was illegal.

RULING:
1- The Court ruled that the strike conducted was illegal.
In order for a strike to be valid, it must comply with Article 263 of the Labor Code, which
requires that:
(a) a notice of strike be filed with the Department of Labor and Employment (DOLE) 30 days
before the intended date thereof, or 15 days in case of unfair labor practice;
(b) a strike vote be approved by a majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in a meeting called for that purpose; and
(c) a notice be given to the DOLE of the results of the voting at least seven days before the
intended strike. The requirements are mandatory. The 15 to 30-day cooling-off period is
designed to afford the parties the opportunity to amicably resolve the dispute with the assistance
of the NCMB conciliator/mediator, while the seven-day strike ban is intended to give the DOLE
an opportunity to verify whether the projected strike really carries the imprimatur of the
majority of the union members.

Under Art. 264 (e) of the same Code, even if mandatory complliance was complied with, a strke
may still be held illegal where the means employed are illegal, which provides: (264) No
person engaged in picketing shall commit any act of violence, coercion or intimidation or
obstruct the free ingress to or egress from the employer's premises for lawful purposes, or
obstruct public thoroughfares.

The picket, under the evidence presented, did effectively obstruct the entry and exit points of
the company premises on various occasions.

To strike is to withhold or to stop work by the concerted action of employees as a result of an

industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking
employees outside of the company compound. While a strike focuses on stoppage of work,
picketing focuses on publicizing the labor dispute and its incidents to inform the public of what
is happening in the company struck against. A picket simply means to march to and from the
employers premises, usually accompanied by the display of placards and other signs making
known the facts involved in a labor dispute. It is a strike activity separate and different from the
actual stoppage of work.

While the right of employees to publicize their dispute falls within the protection of freedom of
expression and the right to peaceably assemble to air grievances, these rights are by no means
absolute. Protected picketing does not extend to blocking ingress to and egress from the
company premises. That the picket was moving, was peaceful and was not attended by actual
violence may not free it from taints of illegality if the picket effectively blocked entry to and
exit from the company premises.

2- The Court ruled that the dismissal was illegal, the petitioner failed to observed due process of
Labor Code.

Under Article 277(b) of the Labor Code, the employer must send the employee, who is about to
be terminated, a written notice stating the cause/s for termination and must give the employee
the opportunity to be heard and to defend himself. We explained in Suico v. National Labor
Relations Commission, that Article 277(b), in relation to Article 264(a) and (e) of the Labor
Code recognizes the right to due process of all workers, without distinction as to the cause of
their termination, even if the cause was their supposed involvement in strike-related violence
prohibited under Article 264(a) and (e) of the Labor Code.
To meet the requirements of due process in the dismissal of an employee, an employer must
furnish him or her with two (2) written notices: (1) a written notice specifying the grounds for
termination and giving the employee a reasonable opportunity to explain his side and (2)
another written notice indicating that, upon due consideration of all circumstances, grounds
have been established to justify the employer's decision to dismiss the employee.

DOMINADOR ANUCENSION AND 114 OTHER IGLESIA NI

CRISTO AGRICULTURAL WORKERS OF HACIENDA LUISITA
(PETITIONER) vs. NATIONAL LABOR UNION, TARLAC
DEVELOPMENT CORPORATION AND COURT OF
INDUSTRIAL RELATIONS (RESPONDENTS)

FACTS:

On July 11, 1964, then Executive Secretary Calixto, acting by authority of the President
of the Philippines, sent a letter to the Presiding Judge of the respondent court, certifying
the labor dispute between the management of the Hacienda and the 115 members of the
United Luisita Workers' Union, an affiliate of respondent Union.
Petitioner union and the Hacienda entered into a collective bargaining agreement on
August 2, 1962. (See Sec. 3-5). The said agreement provides that all employees shall be
required to be a member of the said UNION. Moreover, it provides that failure to comply
with the conditions set forth in the agreement shall be discharged immediately.
In a letter to the union president, Rufino D. Lagman, dated May 8, 1964, a group of more
than 115 person representing themselves to be members of the UNION and followers of a
religious sect known as the Iglesia ni Cristo, made manifest their 'irrevocable
resignation' from the UNION.
The followers of Iglesia ni Cristo were prompted to resign from the union because of the
circular, dated April 1, 1959, from the Iglesia ni Cristo, enjoining all members of the sect
not to join any outside association or organization of whatever kind or nature or that
if they are already members of such association or organization that they disaffiliate
themselves, otherwise they would be expelled from the church.
ISSUE:
Whether or not the petitioners be dismissed on the ground of resignation from the union.

RULING:
NO. The court ruled that the petitioners cannot be summarily dismissed from their
employment the Hacienda as a result of their resignation from the respondent Union,
notwithstanding the existence of a union shop security clause in the Collective Bargaining
Agreement.
Sec 4, par. 4 of the RA 3350, provides that, nothing in this Act or in any Act or statute of
the Republic of the Philippines shall preclude an employer from making an agreement with a
labor organization to require as a condition of employment membership therein, if such labor
organization is the representative of the employees as provided in Section twelve, but such
agreement shall not cover members of any religious sects which prohibit affiliation of
their members in any such labor organization.
MAYNILAD WATERS SUPERVISORS ASSOCIATION vs
MAYNILAD

FACTS:
Petitioner Maynilad Water Supervisors Association(MWSA) is an association composed
of former supervisory employees of Metropolitan Waterworks and Sewerage System (MWSS).
These employees claim that during their employment with MWSS, they were receiving a
monthly cost of living allowance (COLA) equivalent to 40% of their basic pay.
The payment of these allowances and other additional compensation, including the
COLA were, however, discontinued without qualification effective 1 November 1989 when the
Department of Budget and Management (DBM) issued Corporate Compensation Circular No.
10 (CCC No. 10).
In 1997, MWSS was privatized and part of it, MWSS West, was acquired by Maynilad
Water Services, Inc. (Maynilad). Some of the employees of MWSS, which included members
of MWSA, were absorbed by Maynilad subject to the terms and conditions of a Concession
Agreement.
In 2002, MWSA filed a complaint before the Labor Arbiter praying for the payment of
their COLA from the year 1997, the time its members were absorbed by Maynilad, up to the
present. MWSA argued that since DBM CCC No. 10 was rendered ineffective, the COLA
should be paid as part of the benefits enjoyed by their members at the time of their separation
from MWSS, and which should form part of their salaries and benefits with Maynilad.

ISSUE:
Whether Maynilad bound itself under the Concessionaire Agreement to pay the COLA of the
employees it absorbed from MWSS.

RULING:
NO, after a careful review of the Concession Agreement, SC concluded that both MWSS and
Maynilad never intended to include COLA as one of the benefits to be granted to the absorbed
employees.

1 As far as their employment relationship with Maynilad is concerned, the same is not affected
by the De Jesusruling because it is governed by a separate compensation package provided for
under the Concession Agreement. (We note that the Courts ruling in the De Jesus case applies
only to government-owned and controlled corporations and not to private entities.)
2. From the aforesaid provision, we note that all allowances were deemed integrated into the
standardized salary rates except:
(1) representation and transportation allowances;
(2) clothing and laundry allowances;
(3) subsistence allowances of marine officers and crew on
board government vessels;
(4) subsistence allowances of hospital personnel; (5) hazard pay;
(6) allowances of foreign service personnel stationed abroad; and
(7) such other additional compensation not otherwise specified in Section 12 as may be
determined by the DBM.

Jurisprudental basis:
In Gutierrez v. DBM,which is a consolidated case involving over 20 government-owned and
controlled corporations, the Court found proper the inclusion of COLA in the standardized
salary rates. It settled that COLA, not being an enumerated exclusion, was deemed already
incorporated in the standardized salary rates of government employees under the general rule of
integration. In explaining its inclusion in the standardized salary rates, the Court cited its ruling
in National COA Tobacco Administration v. COA in that the enumerated fringe benefits in
items (1) to (6) have one thing in common they belong to one category of privilege called
allowances which are usually granted to officials and employees of the government to defray or
reimburse the expenses incurred in the performance of their official functions. Consequently, if
these allowances are consolidated with the standardized salary rates, then the government
official or employee will be compelled to spend his personal funds in attending to his duties. On
the other hand, item (7) is a catch-all proviso for benefits in the nature of allowances similar
to those enumerated.

3. Clearly, COLA is not in the nature of an allowance intended to reimburse expenses incurred
by officials and employees of the government in the performance of their official functions. It is
not payment in consideration of the fulfillment of official duty.
As defined, cost of living refers to the level of prices relating to a range of everyday
items[17] or the cost of purchasing those goods and services which are included in an
accepted standard level of consumption.
Based on this premise, COLA is a benefit intended to cover increases in the cost of living.
Thus, it is and should be integrated into the standardized salary rates.

4. From the aforesaid discussion, it is evident therefore, that at the time the MWSS employees
were absorbed by Maynilad in 1997, the COLA was already part and parcel of their monthly
salary. The non-publication of DBM CCC No. 10 in the Official Gazette or newspaper of
general circulation did not nullify the integration of COLA into the standardized
5. The ruling of the Labor Arbiter which MWSA insists on is also erroneous in that it seeks to
have the COLA incorporated in the monthly compensation to be received by the absorbed
employees. It failed to consider that the employment contracts of the MWSA members with
MWSS were terminated prior to their employment with MAYNILAD. Although they may have
continued performing the same function, their employment is already covered by an entirely
new employment contract.
This Court has ruled that unless expressly assumed, labor contracts such as employment
contracts and collective bargaining agreements are not enforceable against a transferee of an
enterprise, labor contracts beingin personam, thus binding only between the parties.[21]
6. No ambiguity in the Concession Agreement nothing to construe
7. Insufficiency of appeal bond: We agree with the NLRC that there was merit in the arguments
forwarded in support of the prayer for the reduction of the appeal bond.

HABANA VS. NLRC

9/10/1999

FACTS:
Rodrigo Habana (petitioner) was employed at Omanfil Manpower Devt Corp (Omanfil) and
was hired to work abroad with its foreign principal Hyundai Engineering Company
Ltd.(Hyundai). The contract was for two years, however, after a year of work, Hyundai issued a
Resignation Notice terminating Habana. He was forced to return to the Philippines together
with another dismissed employee. They then filed for illegal dismissal against Omanfil &
Hyundai.
After the summons was served (which requires the defendants to file their answer within 10days
from receipt thereof), Omanfil and Hyundai failed to file their answer on time. However, 2
days beyond the period indicated in the summons, defendants filed a Motion for Bill of
Particulars. Petitioner moved that the defendants be declared in default for non-filing of their
answer, which the defendants opposed insisting that the motion be resolved first before the case
will prosper. Parties then agreed to submit their respective motions for consideration of the
Labor Arbiter.

Pending resolutions of the motions, Petitioner filed their bill of particulars, which the Labor
Arbiter rendered its decision in favor of petitioner, declaring the opposing party in default and
will render judgment based only on what is attached on record. On appeal, the NLRC set aside
the decision of the Labor Arbiter, stating that defendants were denied of due process. Thus this
case.

ISSUE/S:
Whether or not respondents were denied of due process when the Labor Arbiter rendered its
decision based only on the position paper with its documents submitted by petitioner.

RULING:
Yes. The manner in which the case was decided by the Labor Arbiter left much to be desired in
terms of respect for the right of private respondents to due process:
1. THere was only one conciliatory conference held;
2. Parties agreed to submit their respective motionsand were informed that they would be nofied
of the action of the Labor Arbiter on the pending motions.
3. No notice of action with the pending motions was received by the respondents. Thery were
not declared in defeault nor was the petitioner was requried to submit bill of particulars.
4. No order requring the respondents to file their position paper, nor infomation that the case
was already submitted for decsion.

It is clear that there was an utter absence of opportunity to be heard at the arbitration level.

The essence of due process is that a party be afforded a reasonable opportunity to be heard and
to submit any evidence he may have in support of his defense. In the case at bar, sufficient
opportunity to be heard either through oral arguments or position paper and documentary
evidence are not accorded , a denial of due process.

Bank of the Philippine Islands vs BPI Employees Union-Davao

Chapter-Federation of Unions in BPI Unibank

FACTS:
In 2000, Far East Bank (FEB) was absorbed by the Bank of the Philippine Islands (BPI). Now
BPI has an existing Union Shop Clause agreement with the BPI Employees Union-Davao
Chapter-Federation of Unions in BPI Unibank (BPI Union) whereby it is a pre-condition that
new employees must join the union before they can be regularized otherwise they will not have
a continued employment. By reason of the failure of the FEB employees to join the union, BPI
Union recommended to BPI their dismissal. BPI refused. The issue went to voluntary
arbitration where BPI won but the Court of Appeals reversed the Voluntary Arbitrator. BPI
appealed to the Supreme Court.
ISSUE:
Whether or not the Union Shop agreement violated the constitutional right of security of tenure
of the FEB employees absorbed by BPI.

RULING:
No. As a general rule, the State protects the workers right to security of tenure. An employees
services can only be terminated upon just and authorized causes. In this case, the presence of a
Union Shop Clause in the CBA between BPI and BPI Union must be respected. Failure of an
employee to join the union pursuant to the clause is an authorized cause for BPI not to continue
employing the employee concerned and BPI must respect that provision of the CBA. In the
hierarchy of labor rights, unionism is favored over security of tenure. A contrary interpretation
of the Union Shop Clause would dilute its efficacy and put the certified union that is supposedly
being protected thereby at the mercy of management. Nevertheless, the FEB employees are still
entitled to the twin notice rule this is to afford them ample opportunity to whether or not join
the union.